Bought and Paid For Read Free Page B

left-leaning mainstream media has generally chosen to ignore, was the role that government played in bringing about the downfall of the American economy and the propping up of the one business that caused the trouble in the first place.
    Without that in mind, it’s easy to see why Wall Street, even in its beaten-down and broken state, spared almost no expense to elect Barack Obama, who, as we shall see, promised a partnership with the Wall Street money men. Wall Street certainly got what it paid for: It has benefited disproportionately from that support in the two years since Obama became president. The big multibillion-dollar firms of Manhattan have been given guarantees no small businesses (the linchpins of our economy) would get, including but not limited to support from the Federal Reserve to keep interest rates near zero—a policy that President Obama fully endorses—which virtually guarantees titanic profits at places like Goldman Sachs even as small businesses are denied loans and unemployment remains close to 10 percent.
    And of course, the same bias that causes so many in the mainstream media to ignore the negative side of government often causes many of the best reporters to miss Big Government’s warped relationship with Big Business and Wall Street.
    For decades government has been enriching the thousands of white-collar Wall Street bankers at the expense of millions of ordinary Americans. It began in the 1970s, with the transformation of Wall Street from a musty advisory-driven business focused on matching up those with money to invest with those who needed it into a wild, risk-taking, anything-goes world where twentysomething recent college graduates were risking tens, even hundreds of millions of dollars each on increasingly exotic and difficult-to-understand bets.
    And there was no better investment to bet on than the mortgage bond. It not only allowed more people to get access to credit, but it also became Wall Street’s way of fueling Big Government’s desire to extend homeownership to almost everyone by giving banks the opportunity to extend mortgages to more and more people, regardless of whether they could afford them. The banks could make these loans and sell them to government-backed mortgage corporations, who would in turn sell them to Wall Street and then to investors. The invester demand was so great for the products that Wall Street invented increasingly risky and complicated new forms of mortgage bonds so they could make even more money. And the harder it was to understand a product, the more the bankers could charge for them.
    Despite their complexity, the mortgage bonds (and their more exotic cousins) were considered supersafe. Rating agencies slapped their much desired triple-A ratings on them and presto, investors had a supersafe bond. Yet mortgage bonds periodically did what other high-risk bonds do—they blew up. And each time, as we’ll see, government stepped in to lend a hand.
    When it all came crashing down, all the blame in the mainstream, left-leaning media came down on the bankers—the ones who took helicopters to their weekend houses in the Hamptons, soaring over thousands of homes bought by investors without the money to pay back their loans—loans whose fat fees paid for the helicopter rides. But what the liberal media ignored was the other half of the story: that these bankers’ destructive risk taking was encouraged, enabled, and funded by politicians in Washington, politicians who had been bought and paid for by fat campaign checks from Lower Manhattan.
    To be fair, this wasn’t just a Democratic Party thing—politicians on both sides of the fence happily took Wall Street’s cash and ignored the broader interests of their voters in favor of keeping the money spigot wide open and flowing. But it was a Big Government thing: Wall Street made bundles off its role in fulfilling the dreams and desires of Big Government, even if