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The Fire Bell in the Night and Our Real Terror

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Message Danny Schechter

While We Debate Reverend Wright, The Economy Goes To Hell

New York, May Day: Thomas Jefferson used a phrase in a letter that is still ringing all these years later. Here’s his thought, a candidate for “THE WORD,” segment on the Colbert Report;  

I had for a long time ceased to read the newspapers or pay any attention to public affairs, confident they were in good hands, and content to be a passenger in our bark to the shore from which I am not distant, but this momentous question like A FIREBELL IN THE NIGHT (caps mine), awakened and filled me with terror.” 

So many of us were content like that in the years leading up to the slow motion crash that rocked our economy in August 2007, and many still remain comatose like that today.  

We were, all too many of us, confident also that we were “in good hands.” On May 2, just a year ago, our President told America’s general contractors—so many of whom are out of work today-- “we're proving that pro-growth economic policies with fiscal discipline can work. And our budgets are shrinking [sic]. The best way to keep them shrinking is keep the economy growing and be wise about -- and setting priorities with your money.” 

There was a fire bell ringing that very night, and he didn’t hear it, that is, if he could ever hear much besides his own voice. (Now he says the economy defies a quick fix!) Wall Street was making money by the ton just a year ago, and our regulators were cheering them on while most of our media was dozing. Worthless securities were being pedaled globally with stamps of approval from credible ratings agencies. Predatory lenders scammed customers. Protests from advocates for the victims were ignored. 

At the same time, Credit card debt rose 7.6%--almost $3000 a person. There were warnings of an impending collapse but few paid any heed. 

A one time Republican strategist named Kevin Phillips was already ringing a fire bell about our mounting debt. He had documented the rise of the Financialization of our economy in which a credit and loan complex—using debt as its driver—was dominant, soon controlling over 20% of GDP. He warned of the consequences, of the hijacking of our future and our economy.  Our system had become, he argued, a house of cards. Who listened? 

In a new book, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, he documents how those cards started tumbling in painful detail.  

This reality should, in Jefferson’s words, wake us up and “fill us with terror.” (Odd that thought of  “terror,” written centuries ago. How prophetic!) Perhaps we are fearing the wrong terrorists?  

Yet even now, most of the media would rather debate Reverend Jeremiah’s Wright’s words or Miley Cyrus’s photos than examine the calamity facing us and our world. Where are the investigations of the greedy and unscrupulous? That’s who gave us the subcrime crisis or in Phillips words, the “reckless finance,” that brought the market down, sending prices and joblessness up.  

You can’t really track these mounting problems by watching TV or even reading many of our newspapers who failed to cover the crisis as it was building steam from 2002 to 2006, and when it might have been stopped. 

It is usually only after the fact that we realize that the official response to these crises is also making things worse, 

Example: A former top Federal Reserve official now says that the Fed's bailout of Bear Stearns will come to be viewed as the "worst policy mistake in a generation.” 

Reported the Wall Street Journal: “Vincent Reinhart, who used to be the Fed's director of monetary affairs and the secretary of its policy making panel, said the event would be compared to "the great contraction" of the 1930s and "the great inflation" of the 1970s.” 

Run that by me again—“the great contraction?” Duh?  Does he mean the Great Depression? Then, we had a government that tried to end it. As of this week, only 2000 homeowners facing the threat of foreclosure have been helped by our government. As many as three million homeowners face homelessness! 

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News Dissector Danny Schechter is blogger in chief at Mediachannel.Org He is the author of PLUNDER: Investigating Our Economic Calamity (Cosimo Books) available at See
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