In an interview with Jon Stewart on Comedy Central's The Daily Show Tuesday evening, Vice President Joe Biden acknowledged the anger and frustration many taxpayers feel over the way financial institutions seem to have favored status in Washington D.C.
Pointing to the hundreds of billions of government dollars that have been spent to keep banks from failing, he recalled a "great expression" of his grandfather, Ambrose Finnegan: "It's socialism for the rich and capitalism for the poor," Biden said.
But he defended his administration's decisions to rescue Wall Street institutions from the brink of failure. "Because if we did not bail them out, we would have been in a position where there was a literal depression, not a recession."
The vice president noted that some of the money paid out to the endangered banks is now being returned to the Treasury. He said he expects another $50 billion to be returned in the next year. But Biden also acknowledged that the TARP bailout has not spurred an increase in lending to small businesses -- one of, if not the main goal, of the program.
And Biden issued an early warning to Republicans in Congress not to be knee-jerk in their opposition to regulatory reform. "We're getting all kinds of resistance from the very guys [who say] there is now too much government regulation...
"Banks should be doing things more like banks. You want to be a hedge fund, be a hedge fund. But don't be a banking hedge fund," he added. "That's going to be a giant fight. That's underway now. This is going to take the better part of a year to settle out."
In the end, Biden saved his sharpest words for the Wall Street titans he described as having a "cowboy mentality" before the financial system collapse.
"I was in Arizona the other day and said I would get more support in the Congress saying 'Let's pass a law restoring rattlesnakes in the desert' [than helping Wall Street again]," he said. "These guys are not the most likeable guys in the world. But here are the facts... Had we not bailed out the largest bank institutions in the world there would have been a flat depression, a flat-out depression."