OPINION AND EDITORIAL
AMERICA’S FINANCIAL SYSTEM:
Spawns a new
set of abuses
March 20, 2011
Have you not felt abused enough lately by Wall Street’s highest, biggest, baddest, richest players who, with help from bankers, regulators, lobbyists, elected officials and economists (yes, economists) says economist Paul Krugman, laid the Great Recession on America and the rest of the world?
CLICK TO ENLARGE
Well, if you’ve been feeling less abused than you have a right to feel, Krugman says not to worry: America’s economic crisis has spawned yet a whole new set of abuses, many of them illegal as well as immoral.
And to add insult to injury he says political figures in American life who at long last are showing some outrage, predictably are not aiming that outrage where it belongs but at those that are “trying to hold banks accountable for these abuses.”
Krugman’s piece on how the rich are different than the average American (“when they break the law, it’s the prosecutors who find themselves on trial”) is found HERE
And a new piece by Rick Holmes in the JournalStandard.com here makes it clear the Great Recession was no accident.
Quoting from a report that “is the product of more than a year of research by the Financial Crisis Inquiry Commission, which held public hearings, subpoenaed and examined millions of documents and interviewed more than 700 witnesses,” found the Great Recession was caused by:
- "A combination of excessive borrowing, risky investments, and lack of transparency put the financial system on a collision course with crisis."
- "Widespread failures in financial regulation and supervision proved devastating to the stability of the nation's financial markets."
- "Dramatic failures of corporate governance and risk management at many systemically important financial institutions were a key cause of this crisis."
- "Compensation systems - designed in an environment of cheap money, intense competition, and light regulation - too often rewarded the quick deal, the short-term gain - without proper consideration of long-term consequences."
- "The government was ill prepared for the crisis, and its inconsistent response added to the uncertainty and panic in the financial markets."
- "The failures of credit rating agencies were essential cogs in the wheel of financial destruction." From 2000 to 2007, Moody's rated nearly 45,000 mortgage-related securities as triple-A, which means they were so secure they didn't even have to be reported on corporate balance sheets. It turns out they were anything but.
You can read the government report on the Great Recession online at www.fcic.gov