Taxing grandma to pay Goldman Sachs

By Peter Morici

Goldman Sachs' report this week of much larger than expected first-quarter profits came hard on the heels of Wells Fargo's strong earnings. No one should be surprised.

The US Federal Reserve has provided the banks with lots of cheap funds through its various emergency lending facilities and quantitative easing. The Fed has permitted the banks and financial houses to park vast sums of unmarketable paper on its books - securities made nearly worthless by the misjudgment and avarice of bankers. In return, the Fed has provided these scions of finance with fresh funds, cheaply, that they may lend at healthy rates on credit cards, auto loans and even mortgages.