Our flock seems to be guarded by a couple of wolves

March 28th, 2009 at 07:53pm Annette LaCross

There seems to be a financial Bad Cop/Bad Cop scenario playing out these days.

And I’m not sure which is worse.

On the one hand, the federal government is telling me not to worry because it’s keeping an eye on my money — and not just my taxpayer dollars. It’s also keeping a close watch on banks these days.

This, of course, is the same federal government that has racked up a multitrillion dollar deficit and spent most of the last two quarters sprinkling free money — our money! — over Wall Street like so much pixie dust.

It’s not exactly confidence-inspiring.

In the meantime, the country’s tottering financial institutions are telling me not to worry because they’re keeping my money safe — in between shouts of “nationalization!” at the top of their lungs to keep Bad Cop No. 1 from spending any more time than absolutely necessary in their midst.

(“Any more time than absolutely necessary,” by the way, is code for “just long enough to hand out more pixie dust.”)

As I suspected, the financiers of Wall Street — Bad Cop No. 2 — opened themselves up to a hell of their own making last year when they begged the government for a little monetary intervention … undoing nearly two decades of fierce lobbying for looser regulations in the process.

They’re getting their intervention. With a vengeance.

Last week, Treasury Secretary Tim Geithner rolled out his plan to impose stricter standards on financial institutions, the derivatives market, and hedge and private equity funds.

In other words, the federal government — and by extension, taxpayers, many of whom can’t balance their own checkbooks — are now firmly entrenched in the banking business.

So who should be watching your money?

Like I said, I’m not sure which is worse.

The financial sector is contritely pointing out its expertise in money management — forget that little subprime mortgage issue that collapsed the global economy. It has learned its lesson, its titans claim.

And the federal government, which isn’t quite sure where all its pixie dust is, just wrapped up a banner week in which it first bowed to popular rage by excoriating the Obama administration, Geithner and American International Group executives — then meekly backing off at the realization that it needs the financial sector to help solve the financial crisis.

That leaves us taxpayers — presumably those who have balanced their checkbooks at least once.

Contact Business Editor Annette LaCross at alacross@rrstar.com or 815-987-1295.

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