When Banks = Government

I recently came across Matt Taibbi's feature "The Great American Bubble Machine." In this article he examines the existentially corrupt relationship between banks and government:

The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage.

This is a phenomenal piece because Taibbi begins with the right questions in mind. The default assumption for most media analysis is that the old policies were flawed and the question is how to better control the economy. This article suggests that the real problem is the government-banking complex, in which rent-seeking banks and corporations can exploit our system - if they have power.

The relevance of this observation is downplayed as the majority* of the country, towing the Obama party line, demands more regulation on banks. In banking fashion, this will of course come down to a mere 10,000 page bill in Congress; complete with plenty of garbage to hide the "riders" and amendments attached to create more loopholes. Just wait until there is a carbon bubble, where every credit is being traded 20 times before it reaches a consumer. You'll wish you hadn't gone along.