Friday, December 10, 2010

Green: It Ain't Pretty

The Green Economy Is Here, and It Ain't Pretty

December 6th, 2010 - Many of us have long advocated a green economy where jobs were generated in sectors like alternative energy and recycling. It was our hope that this economy could be both environmentally friendly and offer opportunities for high and rising living standards. Well, we've now got a green economy and there's plenty of recycling, but it's not exactly what most of us had in mind.

In a remarkable coincidence, last week we saw President Obama's deficit commission hold its final hearing. Just two days earlier, the Federal Reserve Board released data revealing the specifics of the trillions of dollars of secret loans it made at the peak of the financial crisis in 2008 and 2009.

While the specifics of the Fed loans may not have been especially surprising to most observers, it was still striking to finally know for sure what many of us had long suspected: the Fed had made trillions of dollars of loans, at well below market rates, to Goldman Sachs, Morgan Stanley, Citigroup and Bank of America. Without this bailout from the government, these Wall Street behemoths would have gone under. This would have wiped out their stockholders, left their creditors with big losses and sent their high-flying executives to the unemployment lines.

However, as a result of the taxpayers' generosity, the Wall Street banks are back on their feet again. The financial sector is again reporting record profits and the top executives at these companies are once more pocketing salary and bonuses in the tens of millions of dollars a year.

The fact that Wall Street's prosperity comes at a time when the rest of the country is experiencing near double-digit unemployment is undoubtedly annoying to many. But the Wall Street titans don't just take their money and walk away. The Wall Street gang recycles their money, supporting the politicians who ensured that they would have the government loans and guarantees necessary to get them through the crisis they had created. {continued}

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