The company he ran (into the insolvency) was bought out by JPMorgan using $30 billion of American citizen’s money. Remember folks, it doesn’t matter if they tax it, borrow it, or print it, at the end of the day it is all about the reducing your purchasing power.
Nobody expects an investment bank to be a charitable institution, but Bear has a particularly nasty reputation. As Gretchen Morgenson of The New York Times reminds us, Bear “has often operated in the gray areas of Wall Street and with an aggressive, brass-knuckles approach.”
Bear was a major promoter of the most questionable subprime lenders. It lured customers into two of its own hedge funds that were among the first to go bust in the current crisis. And it’s a bad financial citizen: the last time the Fed tried to contain a financial crisis, after the collapse of Long-Term Capital Management in 1998, Bear refused to participate in the rescue operation.
Bear, in other words, deserved to be allowed to fail — both on the merits and to teach Wall Street not to expect someone else to clean up its messes.
But the Fed is rescuing them anyway, with your purchasing power. And people like Cayne will still be on top, completely unaccountable. As Krugman explains, we have to save the system. Yeah, well this system is flawed and it is taking us all to destruction anyway. Maybe it is time to recognize that it has failed and move on to something better. A system that values the environment, social equality, human rights and dignity. One that isn’t based on asset ownership, but rather labor and contribution. This isn’t idealism talking, it is pragmatism. As FDR noted, “we have always known that heedless self-interest was bad morals; we know now that it is bad economics.” So, why did we build the whole system based on heedless self-interest again?