"Wall Street banks are wards of the state, not private enterprises"

That's not Guambat's characterization, though he might share it. That's Ronald Reagan's head of OMB, David Stockman talking.

You remember Reagan. The Middle Class' "Great Communicator"; in other words, a populist.

Republicans do not consider him, unlike the current President, to be a socialist. He's the economic hero of the Republican Party, the architect of Supply Side Economics. Banks as wards of the state !!? Surely Stockman has committed GOP treason here.

Stockman said that in a NYT Op-Ed, which, if you are a non-subscriber could soon cost you to read, so read this one whilst you can. Some appetisers for you:

Taxing Wall Street Down to Size

WHILE supply-side catechism insists that lower taxes are a growth tonic, the theory also argues that if you want less of something, tax it more. The economy desperately needs less of our bloated, unproductive and increasingly parasitic banking system. In this respect, the White House appears to have gone over to the supply side with its proposed tax on big banks

Make no mistake. The banking system has become an agent of destruction for the gross domestic product and of impoverishment for the middle class. To be sure, it was lured into these unsavory missions by a truly insane monetary policy. It was an unprecedented exercise in market-rigging with printing-press money, and it gave a sharp boost to the price of bonds and other securities held by banks.

Meanwhile, by fixing short-term interest rates at near zero, the Fed planted its heavy boot squarely in the face of depositors, as it shrank the banks’ cost of production — their interest expense on depositor funds — to the vanishing point.

In supplying the banks with free deposit money (effectively, zero-interest loans), the savers of America are taking a $250 billion annual haircut in lost interest income.

The resulting ultrasteep yield curve for banks is heralded, by a certain breed of Wall Street tout, as a financial miracle cure. With this monetary fuel, the banks manufactured, aggressively at first and then recklessly, a tide of new loans and deposits. [I.e., a financial rocket scientist's alphabet soup of derivatives and other securitizations, much backed by dubious debt, including subprime real estate.]

But these profits were not evidence of Mr. Market doing God’s work, greasing the wheels of commerce and trade by facilitating productive financial transactions. In fact, they represented the fruits of hyperactive gambling in the Fed’s monetary casino — a place where the inside players obtain their chips at no cost from the Fed-controlled money markets, and are warned well in advance, by obscure wording changes in the Fed’s policy statements, about any pending shift in the gambling odds.

It is a vast and capricious reallocation of national income, which would be hooted down in the halls of Congress, were it properly brought to a vote.

The baleful reality is that the big banks, the freakish offspring of the Fed’s easy money, are dangerous institutions, deeply embedded in a bull market culture of entitlement and greed. This is why the Obama tax is welcome: its underlying policy message is that big banking must get smaller because it does too little that is useful, productive or efficient.

Interesting to read of a bankers' "culture" of entitlements. Usually, when lawmakers and Wall Street types talk about cutting back on "entitlements", they're talking about the "culture" of welfare and other so-called handouts to the poor and others in need of a helping hand.