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Are We Entering an Economic Depression?

I’ve written about this before and noted the similarities between what is happening now and what has happened in the past but I’m no economist. I can’t speak as an expert but the things I’m seeing now are reminding me of what my father said to the TV in the early 80s. When Reagan became president and the safeguards put in place during the last economic depression in the 1930s started to fall the by way, my father, while watching a news report on the topic, pounded his fist on his recliner and said, “Those bastards, they’re going to make it all happen again.” I think my dad was right.

The republicans have systematically deregulated our financial institutions and said repeatedly that the market will regulate itself. I’m sure it will but how many people will be ruined in the process? The market is not a deity. The market is people. People are greedy. People make mistakes. People cheat. To protect the innocent, we built a system of laws and regulations. This system has been destroyed over the last 30-40 years. We have a disaster.

How much is it going to cost the individual to save these failing institutions? How many millions will the CEOs make at our expense? I don’t think I can count that high. People need to wake up and read the history books. What’s happening is not new. It’s happened before. Our leaders, in the past, made laws to protect us from this happening again. The Neo-cons disabled those protections.

An article I read yesterday makes an important point about what is happening. The article asks, why isn’t anyone being led away from these institutions in handcuffs? From the First Post:

The enduring image of Wall Street’s last systemic scandal, the insider-trading crimes of the mid-1980s, was that of a young trader sobbing as he was led off the trading floor in handcuffs. As the tears dribbled down onto his red braces, his peers gazed on in both pity and terror that they might be next.

Those guys stole a few million. The current Wall Street criminals are stealing billions and it’s going to come right out of the common citzen’s pocket. The article continues:

…They built a pyramid scheme of debt, charging fees for every misguided layer they added until they lost sight of what was going on at the foundation: bad loans being issued to people who should never have been borrowing to buy assets they could not realistically afford.

And so where are the handcuffs? The trials? The plea bargains for just a few months in a country club jail? Nowhere.

How can it not be a crime to mismanage a business to the point where the US Treasury has to step in with more than £100bn in taxpayer funded credit lines, as it did with Freddie Mac and Fannie Mae? Or to tell investors that your business was robust, even as it was disappearing down the plughole, as Lehman’s executives did? At what point does incompetence become so disastrous it turns criminal?

Why is no one in the government or in the media discussing criminal prosecution of the folks involved in these scandalous failures?

And, the answer to the question I posed here? Are we entering an economic depression? I think we are. I think the war debt and the financial market melt down combined with the overpopulation of the planet are creating the perfect storm. I think we’re looking at very hard times ahead.

September 17, 2008   No Comments

The Economic Depression of 1894 and Bear Stearns

“The causes were complex. They included a public panic to cash in paper currency for gold, a subsequent depletion in the country’s gold reserve and bankers calling in their loans to private industry as the value of the dollar continued to decline.”

Sound familiar?

March 14, 2008   No Comments