The Financial Industry Takes Too Much and Gives Too Little

The Wall Street Bailout is quickly reaching into the the trillions-of-dollars, and many analysts are speculating as to the current running total of the outlays thus far, while other financial experts like John Bogle, the founder of the Vanguard Group, are questioning the legitimacy and impact of the costs to maintain this overly-complicated system even when economic conditions are good.

Henry Paulson today presented his latest in a series of bewildering press conferences, each of which seems to be orchestrated to reveal - in only an incremental fashion - the true extent of the damage to our financial system. 

Today's installment from Paulson in summary:  Things are really bad, and they will get worse.  Whatever we told you our plan to stop the markets from further hemorrhaging was last time, we have since changed our mind.  We will let you know when we change our minds again. 

In the mean time, the Dow dropped enough to more or less erase the gains realized in trading the last two weeks, posting the third worst point drop in history with the DOW closing down nearly 680 points.

So what are the mounting costs of the bailout to the public in total?  Some estimates would have the bailout costs as high as $8.5 Trillion Dollars, while more conservative estimates are a mind-boggling $4.6 Trillion Dollars. 

But these costs only represent the liquid assets the Federal Government has pumped into the system in the last few months through FDIC insurance payouts, FHA loan guarantees, Federal Reserve cash injections, the direct Treasury bailouts of public and private firms, and the equity stakes taken in others.

What about the non-bailout costs?  What do we as consumers, as private companies, and as taxpayers actually pay on an annual basis to support this system?  How much have businesses and consumers already given to the Financial Industry that now demands we put our grandchildren into debt to save their Golden Parachutes today?

John Bogle illustrated in his recent book Enough: True Measures of Money, Business and Life, the damage to, and dangers inherent in, today's financial industry.

Continued:  The Financial Industry Takes Too Much and Gives Too Little