Sorry for this off-topic, topic but I find it hard to believe that among all the well manicured, blue suited CEO’s, Federal Banking officials and Hedge Fund dictators ‘no one saw this crisis coming’.
Plenty of people did. Many economists certainly did. And us regular Joe-Starbucks certainly did. When houses started costing so much that it would take two people making six-figure plus salaries to buy an ‘average’ house, something seemed out of whack. In Los Angeles we watched as the average house was no longer able to be purchased by the average worker. Geez…that seems, ah, something to look into. When the average priced house could only be purchased by about 19% of the population.
And now that the first tiles have fallen from the house that Greed built and no elected official, no CEO of a publicly traded company had any idea this would happen. Perhaps not the speed with which the ‘deleveraging’ has come on, but certainly almost anyone with a heartbeat and a brain signal in finances knew things were not right. But their was money to be made.
Here’s an excellent article by Michale Lewis that anyone with any interest in what has happened and what we are in for should read. It clearly spells out the culture of pathological greed that runs the financial sector of our economy. And now that we face depression like circumstances, isn’t it interesting that Government backing is handed out to the one sector in an economy that doesn’t produce a single tangible item in the economy? The financial sector doesn’t build cars, they make interest from the money they lend to the car-makers and loans to people who buy cars. They don’t innovate electronics, they make huge profits from taking an innovative company public. They don’t develop new methods of green power generation, they make vast sums of money from betting against companies that try and establish new methodologies.
Along the way they have passed off a pathological condition (a greed so ingrained, a lust for money so overwhelming that it would have to be defined as a mental illness.) as part of the American dream. These folks aren’t trying to find a comfortable way to make a living, pay for their kids college and not worry about the cost of car repairs. They let their desire for a completely ridiculous level of wealth drive them into lies and scams so big, it very well might bring down the entire world financial system.
The financial sector gets bailouts while companies that actually produce goods get nothing. The tax payer saves all these amazing, free-market celebrating seven figure CEO’s. Welfare? More like a hold-up.
So much for modern American capitalism. Get ready for the ultimate Reality Show. How to survive the next 8 or 9 years.
And this just in – Citigroup might fail. But wise men, very wise men (?) are saying they are too important to fail. Where did we get the ‘They can’t be allowed to fail’ mantra from and how do I get in on that!? I wasn’t aware the free market system had companies that were placed outside all other business with special ‘No Chance to Fail’ backing. Especially when they are 100% privately owned, publicly traded companies that have fought against regulation for years. Citigroup never seemed to give a damn about me failing if I ran up a debt with billions of their never ending credit card offer junk mails? And I would guess those ‘business leaders’ at Citigroup were BIG fans of cuts in Estate Taxes and Capital Gains taxes. I mean really, what god is the Government? If we had higher taxes at least they could take more of them so as to avert their failing.
“There is no question that Citigroup will not be allowed to fail,” said Wallison, who was Treasury Department general counsel under former President Ronald Reagan. ‘
Well so much for the free market right? After they lose 20 billion in the past four quarters, the American people are expected to help them out so they don’t pay a price for being really bad at their job. I want that deal.