I almost don’t want to read economic news at this point. It’s like a litany of disaster. I am naturally interested in seeing good decisions lead us out of this mess without it getting significantly worse. But what I really want to know is if we are every going to identify the people responsible for losing all the money that exists in the world and then losing more money that never existed in the first place.
About The Author
BooMan
Martin Longman a contributing editor at the Washington Monthly. He is also the founder of Booman Tribune and Progress Pond. He has a degree in philosophy from Western Michigan University.
25 Comments
Recent Posts
- Day 14: Louisiana Senator Approvingly Compares Trump to Stalin
- Day 13: Elon Musk Flexes His Muscles
- Day 12: While Elon Musk Takes Over, We Podcast With Driftglass and Blue Gal
- Day 11: Harm of Fascist Regime’s Foreign Aid Freeze Comes Into View
- Day 10: The Fascist Regime Blames a Plane Crash on Nonwhite People
I think you may have just summed up quite nicely how crooked these bankers and their enablers all were.
Of course the people responsible are not going to be identified. That is because the people responsible are the voters, all across this grand and glorious land, who have for decades cast their votes for any primate that could grunt “Deregulate! NO big gummint! Get the gummint of people’s backs! Let the market handl’it!”
Those people are spread across the West, Midwest, Southwest, Southeast, Northeast. And they are, needless to say, protected, as they should be, by the secrecy of the ballot.
Clearly — CLEARLY — those are the people who are ultimately responsible for this misery.
The profiteers and the ideologues — Madoffs and Greenspans — would’ve got nowhere without their massive, uncritical support.
Well, be that as it may, there is a relatively small universe of people that designed these financial instruments and really understood how they created phantom money where eight different people had a claim on the same dollar. And, at its simplest, is how all the money in the world was lost (and more) when the value of those instruments plummeted.
However, I think your point in on target in this sense…
We allowed the rich to horde so much money and let the poor use so much credit that when credit dried up there was no consumer demand left. And that was definitely long term result of (mostly) Republican policies.
Thanks for both responses. I’m learning here. Can I contribute something further?
The novel financial instruments you referred to in your previous post were noticed, long ago, by people other than those who created or expected to profit by them. Regulation of them was considered: AG (the other AG, not Arthur Gilroy) put the kibosh on the whole attempt, insisting that Market Processes will smoothen everything out. Is this not correct? (If it isn’t, please tell me. And please tell Alan himself, who, as you know, did a mea culpa — somewhat feeble, but still a mea culpa — on precisely this regard.)
A more responsible Fed Chair — or, for that matter, Treasury Secretary or “economic advisor” — would’ve pushed in a different direction. But there weren’t such … and why not?
Voters.
Too many voters cast their votes for patent bullshit, for too many years.
Those voters built up not just a political majority, but a rhetorical wall-of-berlin.
Those voters — not Reagan, not the Republican Party, not the Democratic Party, not even Bush — brought this about.
Now many of those same voters hate the way things are, but refuse to acknowledge that the way things are is in any way an outcome of their political choices.
Excuse it if you will, explain it if you will, dissemble it, even if you will, but please, in the name of truth, don’t deny it.
My usual concern: how were the voters led (or bred) to vote as they have? Their decisions haven’t been made in a vacuum, Jeebus knows.
The issue seems less a matter of dichotomy than a loop.
Working backward through your thoughtful response …
“The issue seems less a matter of dichotomy than a loop. “
Agreed. A symbiosis is what I would call it. If I appeared to be saying otherwise, that’s because I was stressing the side of the symbiosis that seems, to me, most in need of stressing — most commonly overlooked or downplayed.
“Their decisions haven’t been made in a vacuum, Jeebus knows.”
Agreed again! One implication of which is that voters weren’t just passively sucked into all this.
The salient point being that they were, indeed, decisions.
“[H]ow were the voters led (or bred) to vote as they have?”
This, I think, is the wrong question. It rather chivies us into the picture of one set of (uniquely responsibility-bearing) agents exerting top-down manipulation on a bunch of passive (non-responsible) recipients. What I see is, again, a symbiosis: a cynical and mutually self-serving alliance. (People forget that the “Reagan revolution” began as a middle- and upper-middle-class populist revolt — remember Prop. 13?) Of course, many of those voters’ real interests were not being served; but they still got what they wanted, I’ll wager.
I’m just really tired of hearing people who’ve been voting for nitwit free-market policies for the last thirty years bitch now about how “those clowns in Washington” have mucked everything up … as if those clowns were just some set of aliens that descended in a saucer on the White House lawn and took over … as if the clowns, and the muck, were not the direct extensions, expressions, and products of these very people’s own wills.
And I’m not going to take that any more!
Thanks for writing, and for reading!
$62 Trillion stolen worldwide? Accountability? You’re nuts!
Tonight on Frontline, it’s perfectly clear a bunch of nuns were in charge of the Federal Treasury, while the savvy predators looted the planet dry.
Makes Madoff at $50,000,000,000,000 look like Mother Theresa asking for an alms handout.
Talk an=bout masters of the Universe!
I AM impressed!
“$62 Trillion stolen worldwide”
that’s just CDS in the grand pile called derivatives…designed by the U.S. banksters and exported worldwide.
Derivatives; in 2003 Warren Buffett said derivatives were the financial WMDs —- were the greater threat than Bin Laden. In 2000, derivatives stood at $900 billion. In 2004, April 28 that famous day, Paulson and friends had the SEC lift the last remaining rule. At November 2008, derivatives reached a quadrillion, 269 trillion dollars or 1,269 trillions. Bets upon bets. Leveraging 40:1. A 2% decline in underlying value makes for a wipe out…..bankrupt zombies.
The guy who told Bear Stearns derivatives would sink them and their colleagues was laughed out the board room. In 2005 Chicago Fed printed a paper on derivatives. It was not read.
Yesterday Greenspan said banks should be nationalised.
Quite foxy of him. ya think. Put this guy in an orange suit. Greenspan is leading the pack to get us conditioned to bank nationalsation by autumn.
Consider world GDP is only $50 trillion!
The dollar is burnt as the printing continues…nearing $20 trillion but $100 trillion won’t cure the problem. It’s like giving transfusion to the dead.
We dare not admit. It was derivatives that killed capitalism….capitalism built on debt.
a new currency regime cometh. Gold goes to heaven.
We have scapegoats (Madoff, some Stanford fellow, the woman with 14 children). For the masses, this is sufficient.
Exactly. There need not be any others identified.
And with that name of hers, she’s an illegal alien, ain’t she?
what’s with the woman with 14 children all about. Just goes to show Republican hypocrisy, love the fetus hate the baby…and the mother too.
I think the soup-line is one more big-f**up–by a bank or banker we don’t know about.
You forgot A-Rod and even Sen. Burris. I don’t begin to give a damn about either of them.
I mean, really–clutch the pearls, there’s steroids in professional ball? And there are fundraising requests in politics?
OhmyGAWD…you don’t say?
Whatever. Deal with the massive threat that can sink our country. I don’t give a rat’s booty about this small stuff. I said when our beer-drinking buddy took office that his administration would usher in an era where they’d ignore the economic smash and grab from their good friends. I just didn’t realize how massive it would be.
I want to know what the hell Roland Burris’s malfunction is.
I have no idea. I really don’t.
But between him and 600K jobs lost in January, the foot-dragging on making these @#$#%&! banks accountable as they shed money (while the execs hoard plenty for themselves), the fact that money is tight but grips on the jobs that exist (for now) are loose, I honestly don’t care.
I should say, I don’t care about the breathless coverage about Burris.
Let me see some breathless coverage of the wholesale theft that’s gone in this country. I won’t be holding my breath.
Well, I agree with your sentiment but I’d but Burris in a different category than news about sports figures or minor celebrities or chimpanzees on the rampage. We only have 100 of these senators and they’re pretty important.
As I said before, the problem is for the human race to maintain our current lifestyle, humanity must sell more than humanity can buy.
There is no way out of that that doesn’t lead to reducing standards of living.
I wrote an appreciation of your comment and it turned into a stand-alone post.
We Have Met The Enemy, And It Is Fatmerica.
Yup.
Thanks.
AG
We have identified them.
Losing all the money that exists in the world – George W. Bush and the 2003-2007 Republican Congress. Does $5 trillion do it?
Losing more money that never existed in the first place: Robert Rubin, Sandy Weill, Bernard Madoff,…and the list goes on.
So you were screaming abouth ow the bailout for bankers had to go through at all costs just several months ago. How has your intellectual position changed on this, or has it?
Real Money isn’t truly lost:
The actual market value of a house, for instance, doesn’t exist until you sell it. So equity loans were based on assumptions and paid to some homeowners who now can’t pay them back. But, the homeowners didn’t lose the money, as in misplacing it. They spent it on granite countertops, in-ground pools, trips to Hawaii and/or college for their kids. The banks/firms that made the loans don’t have the money anymore (they gambled and lost) but the money itself didn’t just dissappear. Understand my point?
Even when the money was consumed on vacations it didn’t evaporate. It ended up in the pockets of hotels, airlines and room service workers. The wealth got spread around from the Few to the Many. The crybabies on Wall St. are wailing cause they haven’t gotten it back with interest but it didn’t cease to exist.
Or take that electronic run on the Money Market Funds. The money didn’t go up in smoke. It got cashed in and transfered to individual or institutional bank accounts. The MMFs don’t have it anymore but it didn’t cease to exist; it’s just hiding in Tresury Bonds or gold or sitting in account ledgers and not being re-invested in the Stock Market Game at the moment.
Now, yes, false valuation does evaporate. The relative worth of houses and stocks goes up on hope and down on real sales prices. Therefore, there were assumptions about “money” that never existed and the assumptions are now indeed quite lost. You’re right about this kind of “money that never existed in the first place.”
Thinking about all this makes me dizzy… and then I get pissed off.
In a way, I don’t think that’s true. I don’t think there is someone somewhere who has six times more money than ever existed in the world. When people say 50 trillion dollars evaporated in the last sixth months, it’s literally true. There are many analogies you can draw to try to describe what happened, but it wasn’t as simple as overvaluation. It was more like we double, triple, quadruple counted the same dollars so that we thought there were 4 dollars when there was only one. Then we all pretended those 4 dollars were getting a good rate of return.
I’m thinking that the financial mess is too big and too complex to unwind. The solution is going to be something innovative and sorta cosmic– like giving everyone $100K and let’s pretend we’re playing Monopoly and start from scratch.