Comments: Another Triumph For American Journalism

WE wuz robbed!!!

Posted by Mike Meyer at July 9, 2009 05:28 PM

SHOCK and AWE!!! Wasn't that Bush's official strategy? Let's keep everyone scared...it makes the passage of our agendas that much easier.

Posted by Bob Bobberson at July 9, 2009 06:41 PM

Every single "financial crisis" for which Treasury bailout $$$ were given was completely foreseeable by those who claimed to have been bushwhacked by "unforeseen events" in the all-hallowed "market." Anyone who thinks this wasn't a massive swindle... needs to call the Tooth Fairy.

Posted by Juan Seis-Olla at July 9, 2009 07:41 PM

It's pretty astounding how, since, oh, about 1918, things that have been completely foreseeable and anticipated (GDI, WWII, Korea, Vietnam, Iraq I, 11.9.2001, Iraq II, GDII) nonetheless appear to have managed to catch those in charge utterly by surprise — almost as though....

And, of course, the gormless masses who are actually caught by surprise never seem to learn.

Posted by NomadUK at July 10, 2009 07:34 AM

Are you saying the financial collapse was an inside job?

And that TARP and progeny are the financial equivalent of the Patriot Act?

Posted by Oarwell at July 10, 2009 09:17 AM

I'm saying that it's just awfully odd how things that anyone paying attention saw coming seem to escape the attention of those in charge.

If you see a train hurtling down a track and you know there's a schoolbus stuck on the crossing ahead and you don't pick up a phone to let someone know, does that count as an 'inside job'?

What if you had made it a point earlier to take insurance out on all the kids that ride that schoolbus?

And what if you had long ago encouraged the train company to cut costs by laying off the signal inspectors?

Just wondering.

Posted by NomadUK at July 10, 2009 09:35 AM

Oarwell, I think anyone who has worked in any aspect of the "financial sector" at top corporate levels will tell you that there was nothing unforeseeable in any of these supposedly "unexpected" developments for which bailouts were sought. There's absolutely no doubt in my mind that AIG was not sandbagged by unforeseen developments. No doubt in my mind that banks and trading houses could foresee the incredible volatility and failure-prone nature of derivative financial interests like credit default swaps and other machinations of on-paper value.

This recent wave of "unforeseen" developments is just a repeat of the cycle related to arbitrage, hostile takeovers, junk bonds, and over-leveraged finances during Reagan/Bush. It was not a surprise back then, it's not a surprise now.

That doesn't stop lawyers and shills from arguing that they couldn't see this coming, though. That's what lawyers and shills do -- they create plausible arguments regardless of the arguments' veracity. The whole point of advocacy is to make the conclusions one-sided and not balanced or objective. This is why lawyers commonly are found in politics -- they are skilled at selling their supporters' programs as if there were no other legitimate choices available.

Posted by Juan Seis-Olla at July 10, 2009 01:59 PM

dunno. without new authority to act without oversight, the banks would have been recapitalized via FDIC or such, involving the twin perils:

1) full disclosure of past deeds
2) full disclosure of which parties got bailed out

anyway they got what they wanted: zombie banks and no perp walks except madoff. we'll never really know how much that cost hundreds of millions of people around the world in health and well-being. certainly roubini and others thought implosion was in the cards before the fire bell was officially rung.

Posted by hapa at July 10, 2009 09:30 PM

hapa: EXACTLY!

Posted by Mike Meyer at July 10, 2009 09:43 PM

hapa, your theory is bizarre. why would you think it has anything at all to do with oversight?

for that to be remotely relevant, we would need true objectivity and a consumer-protection focus from at least one segment of the federal government.

I'm afraid I can't place what entity it is you're referring to, which entity would engage in consumer-oriented oversight. can you remind me what branch of the fed govt currently serves as a protector of the common man's interests?

Posted by Juan Seis-Olla at July 11, 2009 01:30 PM

I've been reading The Great Financial Crisis, and the authors argue that "financialization", or the movement of capital from productive investment to speculative finance, is built into late-stage capitalism, and so our problems can't be remedied by more regulation (and so the causes go deeper than Bush administration officials "talking down" the economy.)

The fundamental problem, as they see it, is that vast amounts of capital (tens of trillions of dollars) have been concentrated in the hands of a few, and the owners of this capital can't get a return on investments in productive enterprises because all of our industries are already at overcapacity. So the only way for the economy to grow is for the financial sector to grow, and for speculative finance to grow, and we're doomed to go through one speculative bubble after another, until the state appropriates this accumulated wealth through taxes, and spends it on social needs.

In their view, we'll probably be able to limp through this latest crisis, but eventually we will hit a crisis that's too large to the state to fix through its role as "lender of last resort." Then things get interesting, and ideas, like massive redistribution of wealth, that are currently outside the bounds of "serious" discussion may become possible.

Posted by SteveB at July 11, 2009 02:05 PM

SteveB -- Kevin Phillips wrote about the same phenomenon. All empires eventually invest overseas such that their moneyed classes can keep making money. Chesterton was right: redistribution of wealth is the only ethical answer. (He pointed out that it was also the only Christian answer, but everyone pointedly ignored that.)

Posted by No One of Consequence at July 12, 2009 02:01 AM

SteveB -- Kevin Phillips wrote about the same phenomenon. All empires eventually invest overseas such that their moneyed classes can keep making money. Chesterton was right: redistribution of wealth is the only ethical answer. (He pointed out that it was also the only Christian answer, but everyone pointedly ignored that.)

Posted by No One of Consequence at July 12, 2009 02:01 AM

SteveB, the authors of that book are far too optimistic. The present collapse is the one that will end American capitalism. It's already ended it if you consider what it's done to the value of the US Dollar globally. It's already ended if you see what we are doing to maintain global "prestige" (read: appearance of dominance).

If our system was on the rebound, we would not see the "bailouts" which are basically a fleecing of the Treasury.

If our system was on the rebound, we would not be creating wealth by expanding our military presence beyond sustainable levels.

If our system was on the rebound, we would not have widespread unemployment. You really think the current numbers are accurate? That we're only at about 12%? Think again!

The jobs that do exist are meaningless, soul-crushing work. This is not a rebounding system. This is a system that is dead, but since its functions creep by on the score (20 years) rate of time, people don't notice the death. If it were a patient it would be on "the plug" and that would be the only reason it still had life signs. Pull the plug (growth via value-massage), kill the vegetative patient.

Posted by Juan Seis-Olla at July 12, 2009 10:48 AM

I'm not exactly sure what an end-of-American-capitalism economic crisis would look like, but I think it would involve the government offering up trillions in T-bills to cover Wall Street's losses in the latest speculative bubble collapse, and not finding any takers. That's not happening now, because in a time of economic uncertainty, large investors flock to US government securities as relatively safe place to park their money. Some day, this may no longer be the case, but obviously, that day isn't here yet.

As for this:
If our system was on the rebound, we would not see the "bailouts" which are basically a fleecing of the Treasury.

The bailouts are a feature, not a bug. The authors of The Great Financial Crisis describe our current phase as "Monopoly finance capitalism," and a regular feature of the system is that the government is called upon frequently to act as "lender of last resort" to keep the system going.

Posted by SteveB at July 12, 2009 03:45 PM