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February 16th, 2011 at 11:47 pm
I don’t agree.
The phony investment boom was the crime, and it was created by the U.S. government as a means of maintaining higher U.S. living standards than would otherwise obtain if Americans actually were on a pay-as-you-go plan of resource consumption. But the U.S. economy has been one, long, government-sponsored Ponzi scheme since U.S. GDP peaked out as a percentage of the global total in the 1960s.
Since then, the governments, elected by the people, have permitted a sequence of income-boosting schemes, or, failing that, consumption price-reduction schemes [cutting import tariffs, lowering taxes, outsourcing jobs to cheaper venues] to prop up American living standards that began to evaporate in the 1970’s as Japan, Europe and China began to recover from the devastation of the last World War.
This sequence of living standard maintenance" maneuvers led inevitably to leverage. When it was no longer possible to sell off any more of America’s former competitive advantages, the U.S. government, on the request of its citizens, decided to borrow from the future.
Medicare, Medicaid, a defense establishment far larger than required, [that amounted to a giant jobs and industrial support program], and the extension of Social Security benefits to an overfed generation of baby boomers, who hadn’t saved for their own retirement, were already in place.
But jobs were scarce and social security wouldn’t pay enough. So the U.S. embarked on the Original QE, which involved permitting the mass securitization of mortgages in order to sponsor a housing boom. Half of all new jobs created were real estate agents and mortgage brokers. And a perfectly democratic method of spreading the wealth was adopted: anyone could borrow and own a house. Down to the dog with a credit card over the internet.
And, like all Ponzis, it worked for awhile and collapsed under its exponential need for fresh funds.
Ever since then, recrimination has been hurled thick and fast in the direction of the likes of Blankfein, Wall Street, the "Banksters", the SEC, ratings agencies — the whole superstructure of institutions erected to protect the citizens from the financial excesses of markets and the irrational exuberance of crowds.
This is fantastically hypocritical calumny against these fine professionals. They did exactly what they were asked to do, and did it with extraordinary imagination and coordination. Forgot about a chicken for every pot; they managed to put a mortgage on any American balance sheet that wanted one. They created trillions, shared among hundreds of millions, to enjoy for almost a decade. They took an America whose competitive advantage has been shrinking for a generation, and held the line against the forces of economic entropy for an improbably long time.
And your complaint is that none are in jail? That would be extending this monstrous hypocrisy a bridge too far. Let them live quietly in their painful ignominy with their billions, languishing in their mansions, and give them a quiet wink for a job well done, in the service of their government and the people of these United States..