Spitzer gives us a rare glimpse of reality amongst the propaganda...

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Spitzer Says Banks Made ‘Bloody Fortune’ on U.S. Aid

By Laura Marcinek, Michael McKee and Deirdre Bolton

July 14 (Bloomberg) -- Eliot Spitzer, the former New York governor and attorney general, said U.S. banks made a “bloody fortune” while receiving taxpayer money without a proven benefit to the wider economy.

Politicians understand the “populist rage” with excesses in the financial industry and in this case the “public is right,” Spitzer said in a Bloomberg Television interview today. “We have saved financial services, we have not created a single job. We are still bleeding jobs.”

As New York attorney general, Spitzer was known as “the sheriff of Wall Street.” He changed business practices and collected billions of dollars in settlements from financial corporations such as Merrill Lynch & Co., American International Group Inc. and Marsh & McLennan Cos. He later became governor, resigning in March 2008 after he was identified as a client of the Emperors Club VIP, a high-priced prostitution ring.

Spitzer said rules proposed by President Barack Obama’s administration are irrelevant because agencies failed to enforce existing regulations.

“Regulatory agencies already had the power to do everything they needed to do,” he said. “They just affirmatively chose not to do it.”

“You don’t need new regs to do it, you just need the will to do what they were supposed to do,” he said.

Former Federal Reserve Chairman Alan Greenspan had “avowed a theory of hands off” and didn’t consider himself a regulator, Spitzer said.

“What we’re seeing now is a new regulatory spirit,” he said.

Spitzer said the lessons of the financial crisis will only be remembered over a short period of time.

“Over and over we fall into the same trap,” he said. “Ten years from now we will have forgotten.”

California, New Jersey

Governors of states like California, where the government is in a deadlock over a $26 billion budget deficit, are ’’intensely unpopular right now because they’re working for an impossible situation,’’ Spitzer said.

New Jersey Governor Jon Corzine, who Spitzer said is also in an “impossible position,” has an all-time high disapproval rating of 60 percent of registered voters four months before Election Day, according to a Quinnipiac University poll. In June, Corzine signed a $29 billion budget that raises taxes on the wealthy and implements worker furloughs and wage freezes.