The Laughable Myth That Taxes and Regulations Are Hurting Economic Recovery: Bank Profits Rebound To 2006 Levels, But Bankers Still Complain About Regulations

The Laughable Myth That Taxes and Regulations Are Hurting Economic Recovery: Bank Profits Rebound To 2006 Levels, But Bankers Still Complain About Regulations

In the last four quarters, the six largest Wall Street banks have made $63 billion, the most they’ve made since 2006. Despite having pushed the nation to the brink of economic collapse, and after receiving billions of taxpayer dollars, the banks are back to where they were when the housing bubble inflating.

However, according to Bloomberg News, a return to sky-high profits isn’t enough for the banking industry, which reacted to the numbers by whining about regulation and “a backlash against bankers“:

    Those billions of dollars in profits aren’t enough, according to interviews with more than a dozen bank executives and analysts. The lowest leverage in a decade, return on equity at a third of 2006 levels, higher capital requirements, shares trading below book value, declining bonuses, job cuts, the European sovereign-debt crisis and a backlash against bankers have damped the joys of profit, they said.

These six banks — Citigroup, Bank of America, JP Morgan Chase, Wells Fargo, Goldman Sachs, and Morgan Stanley — “will have combined profits of $9.9 billion in the third quarter, $17.4 billion in the last three months of the year and $75.8 billion in 2013? according to estimates. “When the banks say, ‘We’re doing very well but not getting a return on our capital,’ it’s completely incomprehensible, and it’s angering to the average American,” said Michael Greenberger, a former regulator who now teaches at the University of Maryland’s law school.

The banks’ return to massive profitability also refutes the argument that the Dodd-Frank financial reform law will cripple the ability of financial services companies to make money. According to a recent study, the nation’s banks went right back to making risky loans after receiving their taxpayer-funded bailout.

Higher taxes have actually helped with past economic recoveries.

Excellent satire on the Romney mentality: A manifesto for the entitled

Paul Ryan Fears the 30 Percent

RERUN: Fox, Carlson, Drudge Attacked Obama's Hampton Speech Five Years Ago. Carlson, Fox, Drudge and Hannity have hyped so much pure bullsh*t that has hurt America, one wonders how they can possibly think of themselves as patriots. Yet they never apologize or correct themselves. It is always onward to the next faux scandal, the next set of immoral lies, the next wave of racist tinged talking points.

JPMorgan's $2 billion blunder makes Mitt's pledge to repeal Obama's bank reform look dumb

JPMorgan's $2 billion blunder makes Mitt's pledge to repeal Obama's bank reform look dumb

The whole point of the infamous “Volcker Rule” included in the Dodd-Frank bank reform act is to restrict the banking sector’s ability to clobber the economy by doing dumb things. As the Huffington Post’s Mark Gongloff noted, if  a strict version of the Volcker rule had been in place, JPMorgan, quite possibly, would have been prevented from making a bet that would lose the bank $2 billion — or more.

However, the Volcker Rule is not yet in effect. The final details are still being hammered out, and the brutal truth is that financial sector lobbyists have almost undoubtedly ensured that the kind of “hedging” bet JPMorgan just made would be technically legal under the new rules. There’s a remote possibility that the blowback from Morgan’s disaster might strengthen the final version of the rule, but don’t hold your breath. The worst financial crisis in 80 years resulted in bank reform that at best can be categorized as tepid and perhaps fatally compromised. One bad stumble by JPMorgan that, lucky for us, doesn’t seem likely to ignite a system-wide crash isn’t going to make a dent in Washington regulatory policy.

On the other hand, there could well be real political repercussions. Because if anyone is going to come out of this mess looking even stupider than Jamie Dimon, it’s got to be Mitt Romney — the presidential candidate actively campaigning on a pledge to repeal Dodd-Frank.

Barack Obama has been rightly dinged from the left for his soft approach to Wall Street, but there’s a reason why Big Capital is shunning him and pouring money into Romney’s campaign. Romney’s answer to the financial meltdown is to do absolutely nothing; to abandon even any pretense of reining in Wall Street bad behavior, to return us to the pre-crash regulatory status quo.

That’s suicidal. The U.S. economy may well skip over JPMorgan’s folly without any serious long-term damage. But that’s not the point. What we learned from the financial crisis is that the real danger inherent in Wall Street’s endless orgy of speculative trading is the prospect that multiple bets could go bad simultaneously when there is a big external shock to the system — like the housing bust. That’s when a downturn becomes a crash.

I can’t say with certainty that Dodd-Frank will do a good job of protecting us from a replay of the great financial crash of 2008. But the prospect of electing someone as president who is promising Wall Street that he will let them blithely self-regulate? That seems even stupider than JPMorgan’s $2 billion bad bet.

We're not left with the best choices. You can get Obama's watered down regulation ( thanks to Scott Brown (R-MS) or you can get Romney and conservatives letting Wall St run completely wild with the nation's money. Yes, while some of JP's money might be theirs, we they and a few other banks lose big it suddenly becomes the nation's lose.So weird and ironic that when Democrats make any move to make the banks more accountable they're accused of being socialists. None of the textbooks I've read say that socialists should make banks responsible for their bad behavior.

How the Ayn Rand-Loving Conservative Republican Right Is Like a Bunch of Teen Boys Gone Crazy.