In recently released information about the extent of the federal government bailout of US financial institutions, it has been reported that total lending peaked to $1.2 trillion dollars in December of 2008. It is interesting that the titans of corporate finance had failed to effectively lead their organizations and there was very little effort at risk mitigation in arriving at investment and lending decisions. What has effectively happened is the creation of two separate aspects of the free enterprise system in America. The Wall Street chieftains were prepared to take high risk to obtain the high rewards that went with such decisions, as reflected in the stratospheric bonuses that were doled out for year end results during the period prior to the financial meltdown. However, these so called leaders were prepared to access as much of the largesse made available by the Federal Reserve when the future viability of their companies were at stake.

  It certainly speaks volumes that the CEOs were prepared to take the fruits in the good times but in the bad times there were no adverse consequences, since the power of the free market had no corrective action on them. The availability of unlimited federal money ensured the elimination of the risk of failure, which other business enterprises would be required to deal with in the economic environment. Going forward we need to ensure that the financial institutions in this country are unable to hamstrung the American people in this fashion. The big banks like the concept of too big to fail and the synonymous business model of high risk / high rewards and high risks / no consequences of failure, which has evolved over the past 15 – 20 years. As revealed by their recent efforts to lobby Congress to water down certain provisions of the Dodd-Frank Act on the financial industry, the debacle of the past and the consequences we are still facing has not been learned and understood by Wall Street.