I’d like nothing more than to give the bailout scandal a rest — but the bankers won’t let me! They just keep coming at us with ever-more-clever inventions of greed and deceit.
Their latest bit of hocus-pocus, accompanied by big puffs of smoke, is a dazzling show of profits. Yes, Goldman Sachs, Citigroup, Bank of America, JPMorgan Chase and other financial giants that only yesterday were insolvent basket cases now report that — poof! — in the first quarter of this year, they magically produced blockbuster profits. Absolutely A-mazing!
Of course, it’s a con job. After all, magicians don’t perform magic. They create illusions.
Hoping to con investors and the public into believing that the wizards running Wall Street have quickly and brilliantly restored these banks to financial health, the wizards did exactly what they’ve done in the past: They goosed up their books with accounting tricks and sleights of hand.
First — and most obvious — the “profits” are made possible only because you and I have stuffed the banks with massive infusions of tax dollars. Indeed, they wouldn’t even be standing without our money. I don’t mean merely the $700 billion straightforward bailout approved by Congress, but also the nearly $2.5 trillion in such backdoor subsidies as dirt-cheap loans and government guarantees quietly extended by the Federal Reserve and the Treasury Department.
Second, the banks lobbied for and won a regulatory break that lets them pretend that all of those bad housing investments weighing down their books like a load of toxic waste are worth … well, worth whatever the bankers say they’re worth. So — Shazam! — huge losses are wiped clean by banker fantasy.
Please contact your local newspaper editor if you want to read Jim Hightower’s column in your hometown paper.