It's getting to feel a little like the 1930s, when President Franklin Roosevelt inveighed against "the economic royalists," and congressional investigator Ferdinand Pecora slapped subpoenas on the biggest bankers in the country. As a token of humiliation, J.P. Morgan had to endure a dwarf plunked in his lap by a circus employee as he waited to testify.
Once again, as often in the past, America vents its anger against what President Obama calls the "fat-cat bankers." The billions of dollars in bonuses and other compensation voted to themselves by executives of banks, some of them using government bailout money, has left Americans almost gasping in outrage.
The banking industry is taking defensive action. In some cases, bonuses are being paid out in stocks. The Bank of America, which paid out billions to employees before taking over Merrill Lynch, is offering to settle shareholders' claims.
But anger with the banks extends beyond compensation avarice. As Wall Street was blamed for the 1929 stock market crash and the ensuing Depression, so now the mortgage bubble is seen as the root of a recession that poised America, and the world, on an economic precipice.
We may not see the kind of wave of regulatory zeal that propelled the Roosevelt era, but President Obama finds the climate conducive to proposing a levy on big banks designed to recover up to $120 billion in bailout funds. There is also talk of a special tax on executive bonuses. And the Federal Deposit Insurance Corporation wants to punish banks for risky compensation practices.
Back in the 1930s, FDR could rally the nation to a crusade against the "unscrupulous money changers." Since then, the banking industry has improved its lobbying skills and may be able to fend off an era of punitive regulation.
But in the public mind, banks are linked with recession.