Thomas L. Friedman is a guy who has long-winded opinions -- that's meant as a description, not an insult -- and has made a thorough living, since the 1970s, with his writing, including opinion. He's a Pulitzer winner, several times. In this piece, though, he leaves out the one small group of Americans who, along with the business leaders, the finance companies, the Fannie Mae and Freddie Mac operators, and financially sunken mortgage takers, took our free market and turned it into a free-for-all hedged on a permanently positive economy.
The current economic crisis makes me think -- metaphorically -- of the starving masses when Marie Antoinette said, "Let them eat cake." Smug politicians, and business leaders, have led us down a wrong path, and now presumably informed and intelligent writers such as Friedman say is is everyone who must pay the way.
That's paying homage to an undeserving status quo, I suspect. We are not at an economic crossroads right now, we are at a civilization crossroads. Friedman likely recognizes that the rich and powerful will always be the rich and powerful. I do too. But unlike Friedman, at least in this piece, I think that not merely business leaders and average Joes will suffer these consequences, but our politicians must be held accountable, must own up to their culpability.
All Fall Down - NYTimes.com
This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.It is a very basic tenet of common economic teaching that economies move in cycles. It is also an obvious fact that a lot of people get into the money business to make ridiculous amounts of money on speculation. For years, the Bush Administration, from Treasury to other finance-relevant departments, urged Congress to act to rein in subprime loans. Nothing happened with the GOP in leadership; nothing happened after 2006 with Dem leaders. They are all to blame. So who do we trust? Who can we trust?So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so.
Citigroup was involved in, and made money from, almost every link in that chain. And the bank’s executives, including, sad to see, the former Treasury Secretary Robert Rubin, were clueless about the reckless financial instruments they were creating, or were so ensnared by the cronyism between the bank’s risk managers and risk takers (and so bought off by their bonuses) that they had no interest in stopping it.
These are the people whom taxpayers bailed out on Monday to the tune of what could be more than $300 billion. We probably had no choice. Just letting Citigroup melt down could have been catastrophic. But when the government throws together a bailout that could end up being hundreds of billions of dollars in 48 hours, you can bet there will be unintended consequences — many, many, many.
The most horrendous error in this whole debacle, which is causing the biggest, most historic global economic upheaval since 1929, is that financiers, banks and government leaders were ignoring that knock on the door. In other words, everyone who should have known, or at least had some idea, of the complexities of markets and economic paths, proved they did not know or did not care. Most to blame are the leaders of our government, who are the only ones who can tell anyone what to do in the self-centered and greed-oriented banking and finance industries, for assuming that hard-to-believe products were, indeed, unbelievable.
- jR
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