Does anyone else remember the Savings & Loan disaster from the 80′s? That wonderful Federal Reserve, under Paul Volcker (why does his name always seem to come up with these financial disasters)in an effort to wring inflation out of the economy, began a series of rises in short-term interest rates. (look for more of same this year)Which, of course, caused increases in the short-term cost of funding higher than the return on portfolios of mortgage loans, most of which was dubbed, asset-liability mismatch). Do you think? Just like the 2008 housing disaster, S&L’s were deregulated in 1980. Gee, that worked so well, let’s continue to deregulate the banking industry. Just like in the 2008 housing disaster, deposit brokers were paid a commission to find the best CD rates and put their customers money in them. To make money off of this, the S&L’s had to lend at even higher rates, meaning it had to make more riskier investments. And just like in 2008, it finally caught up with them. Hmm, would that be anything similar to loan officers on commission loaning money for homes to people who had no hope of being able to pay for them, especially after the ADJUSTABLE interest rates skyrocketed? These bankers just don’t learn. Or maybe they do. Why not take a risk if the government (aka American taxpayer) is going to bail you out if you lose your a**? But at least in the eighties, around a thousand bankers went to jail, many others were forced to resign in disgrace and several banks failed. There is no such accountability today. No consequences for bad behavior. I haven’t seen one banker go to jail over the housing scandal. Although I’m seeing some ‘suicide’ lately.I’ve watched in amazement as several bankers and CEO’s of huge companies lose millions of dollars of their investors money and get a raise the next year. Unbelievable! I apparently went into the wrong profession. I would never get such a break in my work. It would be a pink slip instead. For more on this story by Jim Hightower go to:www.nationofchange.org/mobsters-wall-street-1392224146
