Having just seen "Inside Job", the documentary film by Charles Ferguson on the 2008 financial meltdown, the revelations (though mostly known) of how and why it happened were still breathtaking and brought a renewed feeling of revulsion and infuriation (on the part of this viewer) by the entanglements and scope of it all.
This was no natural disaster like an earthquake erupting in the sea that creates a tsunami that results in massive death and destruction.
No what happened in 2008 was strictly a man made disaster caused by greed, hubris, denial and rejection of history and a belief by the new "masters of the universe" that things were now different and the old rules didn't apply, especially to them and caution wasn't necessary.
Though the sub prime mortgage market collapse was the catalyst that burst the bubble, this disaster began many years earlier in the Reagan administration when they initiated the idea that government was the problem and specifically government regulation was the real culprit of American malaise (at that time) and needed to get off the back of American business. Thus began the era of government deregulation and lax oversight particularly over the financial industry which lobbied hard so it could expand and bring new prosperity (which we subsequently found out was mostly to benefit itself).
Thus "trickle down" economics became the new mantra as "greed became good" and something to be embraced as part of the American dream.
But there were tell tale signs even then when income distribution between the top 1% and the bottom 60 % began to widen significantly where middle class wages began to flatten and didn't keep up with inflation. It was also a time of big mergers and acquisitions, the consolidation of industries and the movement of our manufacturing base to 3rd world countries and with it the subsequent decline of domestic manufacturing. Thus began our new "gilded age" of an outrageously rich few along with an ever expanding decline of the middle and working class.
So by the time of the financial crisis in 2008 globalization had long since withered most domestic industry in the older manufacturing areas of east coast cities as well as the rust belt cities and smaller towns in the heartland of America.
Sure there had been recessions, the savings and loan collapse in the late 80's, the short term mirage of prosperity during the Clinton years, the Enron debacle and the dot com boom let and bust that followed.
Meanwhile Wall Street feeling emboldened in its ability to escape culpability for its role in these dislocations and never feeling recalcitrant, remorseful and certainly not feeling the need for atonement, became enamored with ever more sophisticated financial products particularly the securitization of assets. Thus began the purchasing and bundling of mortgages, packaging them (derivatives) into securities (which received triple A ratings from the likes of "Moody's" and "Standard and Poor's") and then sold these securities to pension funds, governments (states and foreign countries), Fannie Mae and Freddie Mac, smaller local banks and credit unions et al which were then insured by the likes of AIG (with tentacles world wide) creating a system of no real responsibility and vulnerability if the original assets (those sub prime mortgages which this system was built upon) were no longer valuable as people went into default, walked away and were no longer paying their mortgages.
This is exactly what happened and created our current "great recession" (to which Ferguson was able to capture in his myth shattering documentary). It should be required viewing by all Americans so there is no mistaking who the perpetrators were and are behind our current economic misery.
There is no mystery here, just the need for the Justice Department to arraign the culprits and bring them to justice.
That's something which could bring some serious bi-partisanship on the left and the right.
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