What does it say about our system of economic organization

It says "This is what you get with poorly regulated, barely regulated capitalism."

Until the release of its first quarter profits in April, it seemed inconceivable that a firm owing the US government $10bn would be looking to break all-time records in 2009.

David Williams, an investment banking analyst at Fox Pitt Kelton, said: "This year is shaping up to be the best year ever for investment banks, or at least those that have emerged relatively unscathed from the credit crisis.

"These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business."

Last week, the firm predicted that President Barack Obama's government could issue $3.25tn of debt before September, almost four times last year's sum. Goldman, a prime broker of US government bonds, is expected to make hundreds of millions of dollars in profits from selling and dealing in the bonds.

http://www.guardian.co.uk/business/2009/jun/21/goldman-sachs-bonus-payments

Given his decision not to accept public financing, Mr. Obama is counting on his bundlers to help him raise $300 million for his general-election campaign and another $180 million for the Democratic National Committee.

An analysis of campaign finance records shows that about two-thirds of his bundlers are concentrated in four major industries: law, securities and investments, real estate and entertainment. Lawyers make up the largest group, numbering roughly 130, with many of them working for firms that also have lobbying arms. At least 100 Obama bundlers are top executives or brokers from investment businesses: nearly two dozen work for financial titans like Lehman Brothers, Goldman Sachs or Citigroup. About 40 others come from the real estate industry.

http://www.nytimes.com/2008/08/06/us/politics/06bundlers.html?_r=1&scp=1&sq=obama%20bundlers&st=cse

I voted for Obama. I like him and think that he is and will continue to make a positive difference in foreign affairs. I hoped that he would make a difference in reversing the concentration of wealth and he has--so far, the rate of concentration to the top is increasing! This is a huge disappointment to many of us.

James Kunstler put it very well in his article this morning:

"Notice the two words largely absent from whatever public discussion exists around these matters -- "swindle" and "fraud." The reason they're missing is because if they happened to enter the conversation, something would have to be done about them, namely investigations and prosecutions. The president is the person in the best position to set the terms of this public discussion, and by avoiding these two words he's blowing the chance to begin the process of correcting the tragic course we're on.

These swindles and frauds range from malfeasance at the highest levels to indecency in the lowliest cubicles -- i.e. the collusion of a revolving cast of cabinet-level officials with Wall Street executives to loot the US Treasury, the probable criminal dereliction at the mid-level of agencies like the Federal Reserve's oversight office and the SEC, to certain and outright street grifting in the traffic of securities known to be worthless at their creation. The current fiction that the public seems to be swallowing (for the moment) is along the lines of the old "mistakes were made" locution, which is an easy way to avoid holding individuals responsible for misdeeds."

http://kunstler.com/blog/2009/06/a-snake-eating-its-own-tail.html

It says that nothing succeeds like failure - the bigger the better.

The big banks have always had enormous financial incentives to crash the economy. That's why they did it, and that's why they'll do it again.

"You say yer life's a bum deal and you're up against the wall...

Well, people, you ain't even got no Deal at all

'Cause what they do, In Washington, They just takes care of NUMBER ONE.

An' NUMBER ONE ain't YOU. You ain't even NUMBER TWO"

- excerpt from "The Meek Shall Inherit Nothing" by Frank Zappa

They're better at running their business than the government is running theirs.

You can count on Goldman Sachs being among the most vociferous critics of any effort to lift "Main Street" out of the sink hole Wall Street helped detour it through. So what if they repaid the measly 10bn in TARP hush money? Is anyone so naive as to imagine there wasn't maybe upwards of a trillion for Goldman Sachs in the Federal Reserve's secret slush fund? Bottom line: bottom line. They got theirs - and they don't want Main Street f**king up their ill-gotten gains by coming around for a handout too. Because, in laissez-faire America, an everyday hand reaching out for help just might get chopped off. After all, if you have to stand in line for a handout from Congress and the White House, you clearly can't afford it.

They're better at running their business than the government is running theirs.

In fact, the banks are so good at running their businesses they needed trillions in government bailouts, plus changes to the rules so they could cheat more efficiently.

"What does it say about our system of economic organization..."

What you mean to say is, "what does it say about capitalism."

People need to stop being so terrified to call it by its name. Then we can ask the real questions, and perhaps get real answers.

As I wrote in response to Andrew's post last week about the growth of concern among the populace about our crazy deficits, it's hardly surprising that the general public is starting to protest against the level of deficit spending the government is doing when this is the outcome. The government borrows untold billions, pays it out to Goldman Sachs (via AIG), who then turn around and post record profits. Meanwhile Joe Average, who has lost his job, is fighting to avoid foreclosure and is petrified of getting sick and falling into a black hole of medical debt, is seeing nothing from all this deficit spending except the prospect of watching his children spend their lives being unable to live any better than he does because the government is mortgaged to the hilt and can't help them attend college or provide them with a socialized medical plan or mortgage assistance to help them buy a home.

Why should we support anything such a government does, or trust anything that such a government says?