Here’s the Big Picture of How They Did It.
Back in the Olden Days, the United States suffered financial “panics” every 20 years or so.
Yes, that’s what they were called. “Panics.”
From 1929 through 1931 came the biggest panic of them all. It was termed the “Great Depression.” (The term “Depression” was adopted to avoid using the term “panic.”)
In its post mortem, it was discovered that the financial system of the 1920s was based on air.
Financiers were buying and selling air.
As long as no one noticed they were selling air, prices and “wealth” continued to increase.
Once the air was discovered (the stock market crash of 1929), the whole damn pile went to hell.
In response, the United States created watchdogs (“regulatory agencies”) to ensure that, when someone bought a box of “financial instruments” (aka, stocks and bonds), there was something in the box other than air.
Under regulated capitalism, the United States economy flourished. Yeah, there were speed bumps from time to time, but it was basically sound from the end of World War II until today. Well, yesterday. Well, a few years ago.
(By the way, the term “recession” was coined to avoid having to use the term “depression.” Recession = Depression = Panic.)
In the mid-1980s, the Republican Party began to castrate the regulatory agencies.
In the late 1990s, they accelerated their actions; in the early 2000s, they reached their political climax of releasing wolves in the hen house.
They used two primary strategies.
In some cases, they exempted certain types of “financial instruments” and financial organizations from regulation.
In other cases, they reduced the size of the agencies’ staffs and restricted their activities so that they were unable to discharge their duties.
Once again, air returned to the markets.
And, once again, this fall, persons finally opened their boxes of stocks and bonds and “securitized” “financial instruments” and found their boxes, well, full of air.
The Great Crash of 2008 is not an accident.
It did not result from some mystical inevitable “business cycle.”
Republicans did it.
And they did it to all of us.
And to the rest of the world. Q. E. D.
Also posted at the Great Orange Satan.