Headlines splashed across news pages today inform us a “rogue” trader in the London office of Swiss bank UBS has lost $2 billion of the bank’s money.
Americans would be right to wonder if those two billion lost dollars were really our dollars and not the bank’s. That’s because documents a U.S. court forced the Federal Reserve to release show hundreds of billions of dollars of America’s money went to bailout overseas banks — including $77.2 billion to UBS.
In a capitalist system, a company that had no clue what one of its employees was doing would have to pay the price for that failure. In today’s crony capitalist system, where bailouts of large and politically connected companies has become the norm, one hundred rogue traders could have lost $2 billion each, and UBS management would still have reasonable hope of rescue.