You need to read the entirety of Devilstower's "Three Times is Enemy Action." It lays out the whole history of the Republicon rape of this country's economy, from Keating to the present day. I'm just going to share the paragraphs that left me incandescent with rage.
One:
Following the S&L crisis, the Resolution Trust Company was formed to swallow up the debt of Lincoln and 746 other S&Ls gone wild, and taxpayers were left with the $125 billion bill. The resulting budget deficit forced cutbacks in other programs. The artificial real estate boom collapsed and housing starts fell to their lowest levels in decades. Finally, the whole nation settled in for a period nasty enough that three years later someone could still campaign around the idea "It's the economy, stupid."
Two:
Thanks to this fortunate trifecta of Gramm-crafted legislation, Enron was able to create "EnronOnline" and trade electricity in California with absolutely no oversight or transparency. They quickly worked out how to game the system. Previously, there had been only one Stage 3 rolling blackout in the history of California. Within months, the system had been manipulated by traders to generate 38 such blackouts and wholesale electrical prices had gone up more than 3000%. Despite production capacity equal to four times the demand during winter, energy traders even engineered a blackout in mid-January.
During the confusion of these deliberate "shortages" and "price spikes," the California administration of Gray Davis -- blind to speculator manipulations because of the walls erected by Gramm's legislation -- was forced to sign energy contracts at enormous rates. There was little choice, because most of California's public utilities were on the brink of bankruptcy from the rising wholesale prices.
Three:
Credit default swaps did allow the banks to share risks. So much so, that banks raced each other in an effort to find more risks. They made it possible for the down payment on homes to become 3%, 1%, 0%. Skip the credit check, avoid the employment requirements, damn the torpedoes, full speed ahead! We've got a credit default swap, we can do anything!
[snip]
How big did this market become? Here's business correspondent Bob Moon and host Kai Ryssdal on American Public Media's Marketplace from back in the spring.
BOB MOON: OK, I'm about to unload some numbers on you here, so I'll speak slowly so you can follow this.
The value of the entire U.S. Treasuries market: $4.5 trillion.
The value of the entire mortgage market: $7 trillion.
The size of the U.S. stock market: $22 trillion.
OK, you ready?
The size of the credit default swap market last year: $45 trillion.
KAI RYSSDAL: That's a lot of money, Bob.
As in three times the whole US gross domestic product, Bob. And the truth is that Moon probably underestimated. The unregulated and poorly reported credit default swaps may have actually passed $70 trillion last year, or about $5 trillion more than the GDP of the entire world.
So, are you starting to get an idea of just how big a genie Phil Gramm and his pals unleashed?
Bang.
This is enemy action. This is a bullet deliberately fired into the economy by men willing to exercise their ideology regardless of the cost to taxpayers. Men who have every expectation that they can plunder the system again and again, while the public picks up the tab. John McCain may not have had his finger directly on the trigger, but he was there. He assisted. These were his personal friends and philosophical comrades. He may not be the high priest, but he has been a loyal acolyte in the cult of deregulation.
They destroyed our standing in the world. They eviscerated our civil liberties and our Constitution. They've laid our economy to waste.
Three times, Republicons have pulled the trigger, and America bleeds. I'm staring down the barrel of a gun aimed at my country, and it's held by smiling Republicons getting ready to deliver the coup de grace into America's head.
If our country survives this assault, we can never again place these criminals in charge of her again.
Never. Again.
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ReplyDeleteToday's Three Panel Soul with Bernake sums it up well.
ReplyDeleteIt's hard to believe the people who created this mess, like McCain's economic spirit guide Phil Gramm, didn't know that this was exactly the sort of thing that would happen. There's nothing about greed and little about speculation that's changed since the first of these economic crises back in the 19th Century. We've had four of them that I know about, and I'm reasonably sure they at least were aware of the most recent one.
ReplyDeleteI'm just waiting for all the excuses the Democrats in Congress will come up with for giving the Bush Administration exactly what they wanted on this one. I ha en't had a good rueful laugh in a day or two.