Ownership Society

Since the bank crash and economic meltdown that began in 2007, I have been struck by the disparity in coverage.

Relying on television or print media, one might have come to believe that the crisis was brought on by government and, or greedy homeowners, and the banks made some remediable mistakes that are now solved with the latest settlement between the federal government and the banks.

The blogosphere, however, has been providing a much different narrative. Yves Smith at Naked Capitalism, David Dayen at Fire Dog Lake, and Duncan Black, aka–Atrios, among many others, have been doing a superlative job of illustrating this crisis, especially in identifying the true perpetrators of the crash and deconstructing this “shit sandwich” of a settlement, which now appears to be fucking over investors of the mortgage backed securities, in addition to the illegally foreclosed upon homeowners.

Pam Martens, long time internet economic blogger and former Wall Street investment professional, maintains that there appears to be another rational for the US Justice Departments lack of prosecution against the too big to fail banks and this latest charade of a settlement. “The banks are the Federal Governments bond brokers, the primary dealers who contractually agree to buy Treasury Bills or notes or bonds at every US Treasury auction. They may be serially corrupt, but the Uncle Sam needs those contractual guarantees of its primary dealers to be sure it can pull off its debt auctions. And the US government cannot engage in contracts with convicted financial felons.”

And, of course, there could always be a more simple explanation.

In what has to be one of the most telling episodes in the crisis, Illinois Senator Dick Durbin, blurted out what more than a few of us have long suspected in regard to the banks. Said Durbin–“frankly, they own the place.”

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