Whose Fault Is It Anyway?
Now we know - courtesy of Rolling Stone magazine: it's all Goldman Sachs's fault. The destruction of untold wealth, jobs and all the global economic pain of the past two years? All down to one firm. So let's smash the evil empire and move on. But wait, this isn't a movie. This is real life. And in real life, nothing is simple and straightforward and there's very rarely an single scapegoat.
The financial crisis of 2008 was the culmination of a shift in Western societies toward financially-driven economies; a shift that began with the various Big Bangs of liberalization of financial markets in the 1980s, that was driven forward by central banks' success in taming inflation and that hit several small peaks - the S&L crisis in the U.S., the Russian default/Asian crisis, the dotcom bubble, the Enron/WorldCom collapse, the massive teleco debt accumulated in Europe - before exploding in our faces in late 2008.
At every turn, after every crisis, we as a society - here & abroad - had the chance to put a halt to the economy's inexorable progress toward the cliff's edge. Most recently in 2002 when credit markets froze after the Enron/WorldCom debacle. Had supervisors and regulators then done more than just fret over ratings agency incompetence, taken action instead of twiddle their thumbs over the dangers posed by off-balance-sheet vehicles, perhaps some of the more egregious abuses could have been prevented.
But they didn't and why should they have? We as a society decided that financial markets should rule unfettered, we voted into power the politicians who supported the view, we tuned into CNBC, we wanted to get rich by buying low and selling high - and the devil take the hindmost. Politics boiled down to tax cuts and the demonization of any kind of state action. And even when left-wing parties came to power, the kow-tows to the financial markets continued.
We're all responsible for what happened in the past year - not just the bankers. And getting out of this will the recognition that a stable, balanced economy comes at a price: higher taxes, bigger government involvement in the economy and far smaller profits - for all. Not just the bankers at Goldman Sachs.
The financial crisis of 2008 was the culmination of a shift in Western societies toward financially-driven economies; a shift that began with the various Big Bangs of liberalization of financial markets in the 1980s, that was driven forward by central banks' success in taming inflation and that hit several small peaks - the S&L crisis in the U.S., the Russian default/Asian crisis, the dotcom bubble, the Enron/WorldCom collapse, the massive teleco debt accumulated in Europe - before exploding in our faces in late 2008.
At every turn, after every crisis, we as a society - here & abroad - had the chance to put a halt to the economy's inexorable progress toward the cliff's edge. Most recently in 2002 when credit markets froze after the Enron/WorldCom debacle. Had supervisors and regulators then done more than just fret over ratings agency incompetence, taken action instead of twiddle their thumbs over the dangers posed by off-balance-sheet vehicles, perhaps some of the more egregious abuses could have been prevented.
But they didn't and why should they have? We as a society decided that financial markets should rule unfettered, we voted into power the politicians who supported the view, we tuned into CNBC, we wanted to get rich by buying low and selling high - and the devil take the hindmost. Politics boiled down to tax cuts and the demonization of any kind of state action. And even when left-wing parties came to power, the kow-tows to the financial markets continued.
We're all responsible for what happened in the past year - not just the bankers. And getting out of this will the recognition that a stable, balanced economy comes at a price: higher taxes, bigger government involvement in the economy and far smaller profits - for all. Not just the bankers at Goldman Sachs.
Labels: financial crisis, Goldman Sachs, Rolling Stone
posted by D. Soars at
5:48 PM
0 Comments
