Send a Tweet
Most Popular Choices
Share on Facebook 8 Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H2'ed 1/12/16

"The Big Short" and Bernie's Plan to Bust Up Wall Street

By       (Page 1 of 3 pages)     (# of views)   16 comments
Author 47089
Follow Me on Twitter     Message Robert B. Reich
Become a Fan
  (128 fans)

Reprinted from Robert Reich Blog


(Image by HOT NEW TRAILERS)   Details   DMCA
- Advertisement -
>
If you haven't yet seen "The Big Short" -- directed and co-written by Adam McKay, based on the non-fiction prize-winning book by Michael Lewis about the housing and credit bubble that triggered the Great Recession -- I recommend you do so.

Not only is the movie an enjoyable (if that's the right word) way to understand how the big banks screwed millions of Americans out of their homes, savings, and jobs -- and then got bailed out by taxpayers. It's also a lesson in why they're on the way to doing all this again -- and how their political power continues to erode laws designed to prevent another crisis and to shield their executives from any accountability.

Most importantly, the movie shows why Bernie Sanders's plan to break up the biggest banks and reinstate the Glass-Steagall Act (separating investment from commercial banking) is necessary -- and why Hillary Clinton's more modest plan is inadequate.

I'll get back to Bernie and Hillary in a moment, but first you need to know why Wall Street wants us to forget what really happened.

- Advertisement -

The movie gets the story essentially right: Traders on the Street pushed highly-risky mortgage loans, bundled them together into investments that hid the risks, got the major credit-rating agencies to give the bundles Triple-A ratings, and then sold them to unwary investors. It was a fraudulent Ponzi scheme that had to end badly -- and it did.

Yet since then, Wall Street and its hired guns (including most current Republican candidates for president) have tried to rewrite this history.

They want us to believe the banks and investment houses were innocent victims of misguided government policies that gave mortgages to poor people who shouldn't have got them.

- Advertisement -

That's pure baloney. The boom in subprime mortgages was concentrated in the private market, not in government. Wall Street itself created the risky mortgage market. It sliced and diced junk mortgages into bundles that hid how bad they were. And it invented the derivatives and CDOs that financed them

Next Page  1  |  2  |  3

 

- Advertisement -

Well Said 7   Supported 6   Must Read 4  
Rate It | View Ratings

Robert B. Reich Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Trump Cornered

The Republican's Big Lies About Jobs (And Why Obama Must Repudiate Them)

Paul Ryan Still Doesn't Get It

What Mitt Romney Really Represents

What to Do About Disloyal Corporations

The Gas Wars