August 01, 2010
The Welfare Queens of Wall Street

Here’s David Stockman, Reagan’s budget chief:

…The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector. Here, Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation. As a result, the combined assets of conventional banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008.

But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn’t been able to obtain virtually free money from the Fed’s discount window to cover their bad bets…



Posted by Jerome Doolittle at August 01, 2010 01:22 PM
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no shit.

Posted by: John Gall on August 1, 2010 7:18 PM

"Here’s David Stockman, Nixon’s budget chief."

FWIW, Stockman was director of the Office of Management and Budget during the Reagan administration.

Posted by: S.W. Anderson on August 2, 2010 2:42 AM

Oops, sorry. What was I thinking? Nothing, that's what. Anyway, it's fixed now.

Posted by: Jerry Doolittle on August 2, 2010 8:33 AM
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