Corrupt Financiers Should Stop Their Assault on U.S., World Economy

Which mega-corporations are next?

The recent downfall of a number of major U.S. corporations has cost the American taxpayers huge amounts of money. Some who applaud the federal bailout of these failed corporations should realize that it is the taxpayer that is being further saddled with the burden of paying off these corporate “debts.”

But are these “debts” real? Are they the result of honest mistakes? Or are they the by-products of greed and sugar-coated “mismanagement?”

One of the reasons may lie in the fact that in late 1990’s, the Republican-controlled Congress and Democratic President Clinton “reshaped the financial landscape. That 1999 legislation removed Depression-era barriers between commercial banks and investment firms and allowed the creation of financial behemoths where years later the risks of underwriting sub-prime mortgages were somewhat hidden,” wrote Liz Sidoti of the Associated Press on Sept. 16.

On September 15 the Wall Street’s Dow Jones took a historic plunge with the loss of 504 points. Although the drop was only 4.42% it made enough damage to make us realize that in today’s financial climate the economy of the United States is so weakened that even a minor loss in the percentage of its business volume, may send financial shockwaves.

In a Sept. 15 article titled “Economic slump: Ethics loom large,” David R. Francis of the Christian Science Monitor wrote that the cause of the mild 2001 recession and the current slump “has been dishonesty, greed, and weak business ethics. … Today’s sinking economy … is the result of sagging real estate values and the bad behavior of many in the mortgage industry and on Wall Street. … In mature, highly developed countries like the US, individual acts of malfeasance are unlikely to have a widespread effect on the economy, notes Frank Vogl, cofounder of Transparency International, a nonprofit group which ranks nations each year by their degree of corruption, as perceived by investors. (Its next report is scheduled for release next week.) But, he adds, when ‘so many people engaged in so many aspects of finance have lost their ethical compass and put their short-term personal gains above other considerations,’ such as was the case in the sub-prime mortgage market in the US, it can have a ‘profound macroeconomic impact.’ In other words, the broad economy gets hurt by greed and selfishness as ensuing financial losses mount and trust fades.”

The bottom line is that the American middle class is being subjected to double or even quadruple taxation.

It is high time for the reinstatement of the Depression-era safety checks and barriers so that the corrupt financiers do not dip their hands deep in the American taxpayers’ pockets.