September 10, 2013
5 Years Later, We’ve Learned Nothing from the Financial Crisis

No.
Five years ago, Lehman Brothers, AIG, and the global financial system were not blown up by subprime mortgages, collateralized debt obligations, or credit default swaps. They were not blown up by greed or fraud, alone. The financial crisis that left millions of people still out of work was caused by an idea: the idea that unregulated financial markets are always good and that we can rely on the self-interest of bankers to improve all of our lives.
The ideology of free financial markets gained sway in the 1990s, with Alan Greenspan at the Federal Reserve and Robert Rubin at Treasury, and was not seriously contested in Washington before 2008. It was a Wall Street-to-Washington consensus that spanned bankers, lawyers, lobbyists, journalists, college career counselors, legislators, regulators, and the highest reaches of the Clinton and Bush administrations. It gave us derivatives non-regulation, consumer non-protection, the end of Glass-Steagall, creative capital accounting, regulatory arbitrage, and, ultimately, tens of thousands of empty houses rotting in the desert. Ultimately it delivered a financial shock from which the world has still not recovered. 
For a brief moment, when it seemed the economy could grind to a halt, it was unthinkable that we would ever return to business as usual. At a low point, even Greenspan admitted that he had made a mistake. Five years later, however, the ideology of financial deregulation is back. And while not completely uncontested, it appears to be comfortably ensconced everywhere that matters.
Read more. [Image: Reuters]

5 Years Later, We’ve Learned Nothing from the Financial Crisis

No.

Five years ago, Lehman Brothers, AIG, and the global financial system were not blown up by subprime mortgages, collateralized debt obligations, or credit default swaps. They were not blown up by greed or fraud, alone. The financial crisis that left millions of people still out of work was caused by an idea: the idea that unregulated financial markets are always good and that we can rely on the self-interest of bankers to improve all of our lives.

The ideology of free financial markets gained sway in the 1990s, with Alan Greenspan at the Federal Reserve and Robert Rubin at Treasury, and was not seriously contested in Washington before 2008. It was a Wall Street-to-Washington consensus that spanned bankers, lawyers, lobbyists, journalists, college career counselors, legislators, regulators, and the highest reaches of the Clinton and Bush administrations. It gave us derivatives non-regulation, consumer non-protection, the end of Glass-Steagall, creative capital accounting, regulatory arbitrage, and, ultimately, tens of thousands of empty houses rotting in the desert. Ultimately it delivered a financial shock from which the world has still not recovered.

For a brief moment, when it seemed the economy could grind to a halt, it was unthinkable that we would ever return to business as usual. At a low point, even Greenspan admitted that he had made a mistake. Five years later, however, the ideology of financial deregulation is back. And while not completely uncontested, it appears to be comfortably ensconced everywhere that matters.

Read more. [Image: Reuters]

  1. kickerofelves reblogged this from remierk
  2. byappointmentonly reblogged this from theatlantic
  3. patrickdijusto reblogged this from patrickdijusto
  4. thedustatdawn reblogged this from thebicker
  5. plasmadragon reblogged this from thebicker
  6. lobstahpotts reblogged this from truth-has-a-liberal-bias
  7. spontaneousmusicalnumber reblogged this from thebicker
  8. everbright-mourning reblogged this from madmaudlingoes
  9. pippenpaddlopsicopolisthethird reblogged this from thebicker
  10. notesofawanderingdaughter reblogged this from howtobeterrell
  11. madmaudlingoes reblogged this from loscannbruthmar
  12. toudousenpai reblogged this from oak23
  13. oak23 reblogged this from vesperblade
  14. gettingknowledge reblogged this from howtobeterrell
  15. torukun1 reblogged this from howtobeterrell
  16. sydney-a-belle reblogged this from howtobeterrell
  17. purple-cabbages reblogged this from thebicker
  18. tittytape reblogged this from howtobeterrell
  19. loscannbruthmar reblogged this from howtobeterrell
  20. vesperblade reblogged this from talesofthestarshipregeneration
  21. stopthecyborgs reblogged this from howtobeterrell
  22. young-blk-panda reblogged this from howtobeterrell
  23. howtobeterrell reblogged this from talesofthestarshipregeneration
  24. andishouldhavekissedyou reblogged this from talesofthestarshipregeneration
  25. talesofthestarshipregeneration reblogged this from latinagabi
  26. mor8idlycerulean reblogged this from officialbioware