Wall Street 1929 vs 2008

by Dave

wall_st_1929vs2008.jpg (JPEG Image, 389×500 pixels)

Professor Roubini weighs in on the validity of the above cartoon: ““spending $700 (increased now to $810) billion of public money is the best way to recapitalize
banks has absolutely no factual basis or justification. This way of
recapitalizing financial institutions is a total rip-off that will
mostly benefit – at a huge expense for the U.S. taxpayer – the
shareholders and even unsecured creditors of the banks. ….The pockets
of reckless bankers and investors (will) have been made fatter under
the fake argument that bailing out Wall Street was necessary to rescue
Main Street from a severe recession.”

He continues “the Treasury plan is a disgrace: a bailout of reckless bankers, lenders
and investors that provides little direct debt relief to borrowers and
financially stressed households and that will come at a very high cost
to the US taxpayer
. And the plan does nothing to resolve the severe
stress in money markets and interbank markets that are now close to a
systemic meltdown. It is pathetic that Congress did not consult any of
the many professional economists that have presented – many on the RGE Monitor Finance blog forum
- alternative plans that were more fair and efficient and less costly
ways to resolve this crisis. This is again a case of privatizing the
gains and socializing the losses
; a bailout and socialism for the rich,
the well-connected and Wall Street.”