The End of the First Debacle or the Beginning of the Second

We have just barely begun to turn the corner in the worst financial crisis in 60 years and the big banks are determined to plant the seeds of the next one. They haven’t learned a thing, except that the big brother government they all love to rail against will bail them out of any crisis they create. So the cycle begins anew. The banks are raising salaries again. This may seem like nothing at first glance. The banks have been through a harrowing experience, they have been humbled and they need to bounce back. It’s a truly capitalist phenomenon. It’s also very sad to see.

Anyone who thinks that the big banks recklessness will stop at raising salaries back to pre-crisis level is obscenely naïve. The culture of greed is still thriving. As we begin to put some distance between ourselves and the bottom of this crisis, the old risk taking behaviors will resurface. The so-called geniuses who designed the financial derivatives that brought us to the brink of disaster want another shot at it. This time, they will think they can correct their mistakes and we won’t end up back in the same situation. Their financial models will help them hide the truth that once the dice start tumbling in the wrong direction, they lose control. It doesn’t really matter to them, they feel no responsibility. They’ve never apologized for creating the crisis in which we are now mired. Remember the executives from AIG who blamed the regulations for their failure.

President Obama cannot ignore the implications of this return to normalcy. His biggest responsibility to the American people is to make sure that no later generation of Americans has to go through what we are going through now. The big banks don’t care about us. They are a bureaucracy like any other and the only purpose they serve is to perpetuate themselves. Unless President Obama issues a clear signal the excesses in risk that brought us here need to be eliminated from the system, it is inevitable that we will have to suffer through a crisis like this again at some point. The question will then be, will the United States have the financial ability and the world support we need to pull us through again? When we arrive at that moment in the future, President Obama’s legacy will then be blackened (no pun intended) for all time, in the same way that Alan Greenspan’s has been. That is not the way a man of vision like President Obama should be remembered.