HIGHTOWER: Bailing Out Wall Street Gamblers

Let's say you own Big Bubbas Used Car Lot, or maybe Bertha's Big-Hair Beauty Barn, and your business goes belly-up.Do you think that a top Federal Reserve banker would arrive like Superman in a red cape and a pair of tights to rescue you financially? Not a prayer.But if you have a super-big, international speculative fund that goes belly-up ... here comes the government's central bank, faster than a speeding bullet, to arrange a bailout. This just happened for Long-Term Capital Management, a so-called "hedge fund" that makes billions of dollars worth of unregulated, high-risk "investments," which really are nothing but Las Vegas gambles.This fund was led by a group of Wall Street Wizards who promised huge annual profits to those who put money into it. Sure enough, the world's wealthy elites and big bankers flocked to give money to them. The minimum ante to play this game was $10 million each, and the fund amassed a total of more than $90 billion bucks.Long-Term Capital's whiz-bang managers didn't invest in factories, research and development, home building, or anything else productive. Instead, they played a form of Wall Street roulette. In essence, they placed bets, gambling that the interest rates on treasury bonds would go one way, while the interest rates on corporate bonds would go another, allowing them to rake-in tons of money on the spread. But they bet wrong... and crapped out, leaving them and all those wealthy backers facing humongous losses.The rich are different from you and me, though -- they get bailouts. The government assembled a consortium of big banks and brokerage firms like Merrill Lynch and Goldman Sachs to pump $3.5 billion more into this gambling venture, hoping to stem the losses and "get lucky" on the next spin of the wheel.This is Jim Hightower saying ... Why should our government lift a finger to bailout these gamblers, and why is so much of our nation's capital being frittered away through these totally non-productive hedge funds?

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