George W. Bush and Congress pushed banks to make home loans to individuals who were credit risks. Fannie Mae and Freddie Mac bought up the subprime mortgages and bundled them together into securities. Big banks traded them like gilt-edged bonds. When the whole house of paper collapsed in 2008, the banks screamed: "We're too big to fail. If we go down, the country goes down."
They were rescued. The Fed bought up the bad paper, tripled the money supply and lent at near zero interest to the banks. Profits soared.
But Middle America was not rescued. Middle America has gone through four years of deprivation without precedent since the 1930s.
But now something beyond the incompetence of the financial elite and the big banks may be putting capitalism in peril -- an unmistakable odor of amorality, sleaziness and corruption.
With the "Robber Barons," one could see a connection between the wealth of the Rockefellers, Harrimans, Carnegies and Henry Ford, and their contributions.
Railroads were tying America together. Oil was fueling industry. America was surpassing Britain in steel production. Ford was putting the nation on wheels. When J.P. Morgan took to the floor of the New York Stock Exchange in 1907 to issue a buy order, he stopped a panic.
There was perceived to be a connection between the wealth of these men and their achievements. They were helping make America the most awesome industrial nation known to man.
But as scholar William Quirk writes in his essay "Saving the Big Casino," our big banks now seem to rise and fall on profits and losses from the trading of "derivatives," "credit default swaps" and "exotic securities" that not one man in a thousand understands.
Fortunes are lost and made overnight. Names appear on the list of richest Americans no one has ever heard of. Cheating and corner-cutting are constantly being unearthed. Broker- and banker-gamblers in their 30s amass and flaunt nine-figure fortunes.
Were the rest of America doing well, this might not matter.
But America is not doing well. And Americans are coming to believe that a system where high-rollers rake in tens of millions playing Monopoly while workers who build things and make things never see a pay raise is rigged and wrong.
Few begrudge a Bill Gates his fortune. But where vast wealth accrues to people whose actions seem unrelated to any contribution to society or country, and to have come simply from rigging the system for their own benefit, that system will not endure.
Our casino capitalists are playing with fire.