One Free Market System for Wall Street, Another Free Market System for Main Street.

Washington is paralyzed by snow and partisanship. Nothing is getting done -- even as the Great Recession pulls more Americans into its maw.

In the midst of this paralysis, the president was asked about the giant pay packages of Jamie Dimon, CEO of JP Morgan Chase & Co. ($17 mullion for 2009) and Lloyd Blankfein, CEO of Goldman Sachs ($9 million). “First of all, I know both those guys,” Obama said. “They’re very savvy businessmen. And I, like most of the American people, don’t begrudge people success or wealth. That’s part of the free market system.”

Free market system? As I remember it, American taxpayers forked out hundreds of billions to keep JPMorgan, Goldman, and other big Wall Street banks afloat through most of 2009. Had we not done so, Dimon, Blankfein, and most other top executives on Wall Street would not have earned a dime last year. In fact, some would be out on the street, rather than sitting pretty on the Street.

The free market system has been unleashed instead on average Americans. According to real-estate data firm First American CoreLogic, about one-fourth of American households with a mortgage are under water -- owing more on their homes than their homes are worth. Mortgage-bond trader Amherst Securities estimates that 7.1 million of the 7.9 households now behind on their mortgage payments will lose their homes to foreclosure if nothing is done to modify their loans. Already cities and towns are littered with foreclosure sales, pulling down the values of all homes in the area.

More after the jump.

--Robert Reich

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