Welfare for billionaires

By Libby

Some might think the chairman and former chief executive of Bear Stearns, James Cayne, deserves some sympathy. As the NYT notes today, "The value of his stake in Bear Stearns collapsed from about $1 billion a year ago to as little as $14 million at the price JPMorgan Chase offered for the teetering bank on Sunday." Poor Mr. Cayne, he'll have to make ends meet on that $14 mill and the $40 million or more he bled out of the system prior to the meltdown caused by his mismanagement. My heart is really bleeding for him.

Meanwhile, the editorial connects the dots between the meltdown and the Bush regime.

Compared to the cold shoulder given to struggling homeowners, the cash and attention lavished by the government on the nation’s financial titans provides telling insight into the priorities of the Bush administration. It’s not simply a matter of fairness, though. The Fed is probably right to be doing all it can think of to avoid worse damage than the economy is already suffering. But if the objective is to encourage prudent banking and keep Wall Street’s wizards from periodically driving financial markets over the cliff, it is imperative to devise a remuneration system for bankers that puts more of their skin in the game.

As Krugman put it today, these financial titans have been partying like it's 1929 and thanks to a regulatory system that has grown increasingly lax as people forgot the lessons of 1930, we're living in that same house of cards again. Only this time, instead of the financiers jumping out of the windows of Wall Street, it's the honest homeowners who are trying to honor their obligations that are left feeling suicidal.