Conservatives are opposed to government welfare, and liberals are opposed to big business, so you would think that one thing they would be able to agree on is opposition to government welfare for big business.
But Democrats and Republicans in Congress are just the opposite. They just enacted a budget bill stuffed with benefits for big business, including a provision that allows big banks to gamble on with government-insured deposits.
Senator Elizabeth Warren, in a speech recorded in the video above, told how Citicorp leveraged its influence in Congress and the executive branch to bring this about.
Letting a bank such as Citicorp put insured deposits into inherently risky speculations, such as swaps and derivatives, is the equivalent of me wanting to bet my saving Las Vegas casinos and expecting the government to compensate me for my losses.
This is not was federal deposit insurance was intended to do. Deposit insurance was intended to cover normal banking activity in the real economy, such as home mortgages, auto insurance loans and business loans.
Federal deposit insurance never was intended to cover swaps and derivatives, which are just bets on which way the markets will go. They are not backed by real collateral and they do not contribute to the real economy.
Phil Ebersole's Blog 