U.S. stocks saw their biggest gains in over a month after European leaders signaled a willingness to tackle the financial crisis brewing there.
Over the weekend, French President Nicolas Sarkozy and German Chancellor Angela Merkel announced in Berlin that they would come up with a plan to help stabilize and recapitalize struggling European banks.
In financial journalism parlance here, "tackle the crisis" means "bail out the banks." So of course traders on Wall Street are rallying. There's news from abroad that the taxpayers of Germany, France and Belgium will be on the hook for hundreds of billions of dollars in financial losses of some of the biggest banks! This was started off by the bailout of Dexia, Belgium's biggest bank. Announced today, Dexia will receive up to $120 billion from France and Belgium to restructure and guarantee depositors.
The title of this post is obviously tongue-in-cheek. Complete incoherence on the part of the Occupy Wall Street protesters renders moot any semblance of a point that they may have. But there is a point to be made, and it is, as Joe Biden said, one that Tea Partiers could get behind: the incredibly cozy relationship between huge financial institutions and governments everywhere is a problem for the market economy. Not because (as the Occupiers would have you believe) capitalism is itself an injustice, but because of the market distortions created when giant institutions capture the regulators supposed to be looking out for them.
The "solution" we got from the Left was Dodd-Frank, a law that does little to nothing to solve the key problems of the financial crisis (government failures everywhere) and enshrines, rather than ends, too-big-to-fail. But I have yet to see a sign carried by any of the Occupiers proclaiming the impotency of Dodd-Frank and a call for real reform.
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