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September 29, 2008 at 04:57:24
Promoted to Headline (H2) on 9/29/08: by Stephen Lendman Page 1 of 9 page(s) |
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The crime of the century. The greatest one ever. Author Danny Schechter calls it "Plunder." The title of his important new book on the subprime and overall financial crisis. Economist Michael Hudson and others refer to a kleptocracy. A Ponzi scheme writ large. Maybe an out-of-control Andromeda Strain. An economic one. Deadly. Unrecallable. Science fiction now real life. Potentially catastrophic. World governments trying to contain it. Trying everything but not sure what can work. Maybe only able to paper it over for short-term relief. Buy time but in the end vindicate the maxim that things that can't go on forever, won't.
The world as we know it is changing. Industrial capitalism. The entire global economic system. Interconnected. What affects one nation touches others. If the troubled country is America it reaches everywhere, and if the crisis is great enough, the disease may be fatal and human wreckage catastrophic. Precisely the current dilemma that world leaders and financial experts are scrambling to figure out. Desperate to contain, and not sure what, if anything, can work. How did this happen and why?
The result of unfettered capitalism's fatal flaw - unbridled greed in a rigged system that rewards the few at the expense of most others. First an explanation of how it works. Free-wheeling, "free market" Chicago School fundamentalism the way economist Milton Friedman championed it in his 1962 book "Capitalism and Freedom" and taught it to students for decades. He believed that government's sole function is "to protect our freedom both from (outside) enemies....and from our fellow-citizens." Preserve law and order. Enforce private contracts. Protect private property and "foster competitive (unregulated) markets." Everything else in public hands is "socialism....blasphemy." Not to be tolerated.
He said "free markets" work best. Unfettered by rules, regulations, onerous taxes or any at all, trade barriers, entrenched interests, and human interference. That anything government does, business does better, so let it. That the best government is one that governs least. That public wealth should be in private hands. The accumulation of profits unrestrained. Corporate taxes abolished. Social services also, and that "economic freedom is an end to itself....and an indispensable means toward (achieving) political freedom."
He called most all government interference a restriction of freedom. Opposed foreign aid. Subsidies. Import quotas and tariffs, and illicit drug laws for being a subsidy to organized crime, but he found no fault with major banks laundering their profits. He believed business should be unrestrained in maximizing them, even the illegal kind apparently.
He opposed the minimum wage and right of unions to bargain collectively on equal terms with management. He believed high wages and benefits harm everyone. They raise prices, and in the end, hurt workers as well as management. He called Social Security "The Biggest Ponzi Scheme on Earth," even though it's been the most effective poverty reduction program ever for millions of seniors who'd be desperate without it. Especially today given a deepening economic crisis. The nation's social safety net disappearing, and heading everyone toward managing on his or her own. Dependent on their ingenuity, resources, and good fortune. Milton Friedman's ideal world. For those who can't make it, it's their own fault. It's everyone for him or herself in his judgment, and let the devil take the hindmost.
As for today's largest ever unraveling Ponzi scheme, it's just the workings of the "free market." Creative destruction. "Freedom to choose." The best of all possible worlds, and unfettered capitalism will figure out the right solutions. Provided government gets out of the way and gives it free reign. Free money also to wreck world economies and human lives even more than what's already done.
The Chickens Are Home to Roost
Are they ever, and here's what we've got. A global asset bubble. A predictable crisis allowed to build and mushroom. Begun after Chicago School economics took hold under Ronald Reagan. Continued under GHW Bush. Became religion under Bill Clinton, and ultimately fundamentalism under GW Bush.
The result - a "slow motion train wreck" gaining speed. Banks and other financial institutions failing globally. On September 25, the largest bank failure in US history with Washington Mutual's collapse. Earlier it was giant insurer AIG. Before that Fannie Mae and Freddie Mac, Lehman Brothers, Bear Stearns, and Merrill Lynch a forced liquidation to Bank of America.
Others are now teetering on the edge. Strapped by toxic debt. The result of out-of-control greed for easy profits. Massive fraud to get them. Thinking they're the best and brightest, and only mere mortals mess up. Knowing Fed moral hazard will cushion them if they do. True for some. Not for others, and learning that the Federal Reserve (the world's key central bank) failed in its primary job. To protect the country's financial system from insolvency. By contributing to a financial crisis and one of confidence. By creating near-limitless amounts of capital. Fueling a housing bubble. Outsized consumer debt, and irresponsible investments free from government oversight. Fraudulent ones involving multi-trillions of dollars.
Partnering with government to make it easy. Risking a global economic meltdown as a result. Scrambling to find solutions. Unsure if there are any. The present crisis is unparalled. Maybe it can be fixed, and maybe not. The problem is multi-fold. A perfect storm involving:
-- residential housing;
-- commercial real estate;
-- consumer over-indebtedness;
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Of course you are right
Wall Street and The Banks printed their own money via securitization and then charged a fee for every transaction. They created counterfeit insurance to gain top ratings. They issued plenty of it. All the bailout does is prop the system up and worse, legitimze it. That is the true shame. Much of this junk should be removed, permanently, instead we prop it up until better times when confidence returns to the confidence game. What is a mystery is the fanatacism around not resolving the housing crisis. Perhaps that is the next asset play, history to repeat itself only this time they won't be holding any of the paper. They won't be trading for their account, it will be all other people's money with them collecting the fees. There is no downside risk. by Bernard (0 articles, 0 quicklinks, 0 diaries, 59 comments [1 recommended, 0 rejected]) on Monday, Sep 29, 2008 at 11:07:35 AM  (0+)
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Stop bush/paulson today
Write, call, do whatever you can to stop this latest scare by the current administration to pass a useless bill which steals more from the USTreasury. It will cripple any economic development with more of the same payout of our money to corrupt entities. Also, reference people to read opednews. It is the most honest and relevant site on the web. by zephyr (0 articles, 0 quicklinks, 0 diaries, 74 comments [4 recommended, 0 rejected]) on Monday, Sep 29, 2008 at 11:22:13 AM (0+)
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Prevent Further Disasters: support Whistleblowers Protection
Prevent Further Disasters: support Whistleblowers Protection I was impressed by your article. One important aspect that should not be missed is that Whistleblowers Tried to Stop Market Meltdown & Need to be Protected in Any Fix. http://www.opednews.com/articles/Whistleblowers-Tried-to-St-by-Jesselyn-Radack-080924-582.html I hope that you will support the Whistleblower protection act, and ask all your friends and public interest groups to also support it. This whole fiasco could have been avoided, should have been avoided. It must be avoided in the future. Please see: by James Murtagh (42 articles, 0 quicklinks, 0 diaries, 117 comments) on Monday, Sep 29, 2008 at 11:29:47 AM (0+)
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Well said
Stephen, Government forces must be gathering now. When this stuff hits the fan, the only solution for the administration will be to steall all our babies, assasinate the witnesses(us) and start the con all over. Moms watch your kids(keep them out of school too,before they are turned against you) they are already taking children in Vancouver by kato krause (2 articles, 0 quicklinks, 3 diaries, 216 comments [1 recommended, 0 rejected]) on Monday, Sep 29, 2008 at 11:44:23 AM (0+)
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a last 'hurrah'
Neo-cons needed one more shot at plundering before they're out of office, and this is it. Just as in 9/11, take a tragedy and turn it into profits for the super-rich. I don't see how we give this administration a dime after what they've done. How about a jail cell instead of a 700 billion dollar check! by Jim Prues (15 articles, 33 quicklinks, 10 diaries, 81 comments [3 recommended, 0 rejected]) on Monday, Sep 29, 2008 at 1:17:58 PM (0+)
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Royalty is Criminal
We have too much royal privilige already. As it is now, the crooks just collect their rents. This would have made it official. by John Hanks (1 articles, 0 quicklinks, 0 diaries, 1760 comments [39 recommended, 0 rejected]) on Monday, Sep 29, 2008 at 1:34:29 PM (0+)
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Grand Theft indeed
Thanks for your article, Stephen, and for telling it like it is. The attitude of the Masters of the Universe - and of their more circumspect seniors, who appear to have shrugged themselves into acquiescence at the new order of things financial (What kids will get up to, these days) - seemed to be that money-making is good for the economy, so it's all systems go; why hold back. Which attitude didn't take into account the kind of money-making being engaged in. I.e., risk-taking big time. Casino capitalism looking only at the upside, and let the taxpayers carry the can if the downside comes into play. Uncle Sugar will take care of it. After all, he's not going to let the economy fold. Is he? Anyway: not my problem. Of course not, for someone whose maturity is so stunted as not to consider the consequences of his actions. A teenager revving his dad's car up for a good ol' time. Yippee, watch me lay some smoke... We entrusted ourselves into the hands of the feckless. It's time for the adults to take back control of the vehicle. And make damn sure the lesson is learned. By them. And us. by kibitzer2 (0 articles, 0 quicklinks, 0 diaries, 49 comments) on Monday, Sep 29, 2008 at 4:47:03 PM (0+)
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Bail out fails --oil goes down ummm
Halliburton and Cheney took a big loss today! by Lew Ranger (0 articles, 0 quicklinks, 1 diaries, 48 comments) on Monday, Sep 29, 2008 at 6:32:49 PM (0+)
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That is, IF they ever get out of office!
Today, Oct 1st, is the day OUR troops are to be stationed here in OUR country, to "Quell possible civil Unrest". What are they planning? Another "Tri-fecta"? Another stolen election...or just a cancelled one? I'm thinking that 700 Billion would be the downpayment to financing Bush/Cheney's Amurkan Police State! by Bia Winter (6 articles, 2 quicklinks, 14 diaries, 756 comments [119 recommended, 0 rejected]) on Wednesday, Oct 1, 2008 at 9:22:03 AM (0+)
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