You might have missed it but sometime last week Treasury Secretary Tim Geithner unveiled the Obama administration’s latest installment of the bank bailout.
The number floated was somewhere close to $2.5 trillion and scattered reports suggested that a laissez faire approach to the banks had won the day. That is, irresponsible, reckless Wall Street financiers i.e. Citigroup, Goldman Sachs, AIG would be bailed out handsomely and hardly held to account for what they do with taxpayer money. Even if behind them trailed a record of irresponsible gambling on risky financial products for massive return. And even if they repeatedly lied about the solidity of their portfolios.
When it comes to homeowners and the auto industry, however, it’s a different story. There, oversight and sacrifice rule the day. For GM and Chrysler that means cutting tens of thousands of jobs and slashing worker benefits: that’s the sacrifice. The oversight means treating the employers — and the union — like adolescents asking for a little more allowance.
In the president’s foreclosure prevention plan, the word responsible comes up a lot. The plan won’t reward homeowners deemed "irresponsible," the President goes to some pains to point out. As for lenders, Barack Obama is very firm: "The plan will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market…It will not help dishonest lenders…"
Great. Now when are we going to apply the same standard to Wall Street’s gamblers? Just wondering. Just wondering.