What we are witnessing may be the greatest destruction of financial wealth that the world has ever seen — paper losses measured in the trillions of dollars. Corporate wealth. Oil wealth. Real estate wealth. Bank wealth. Private-equity wealth. Hedge fund wealth. Pension wealth. It’s a painful reminder that, when you strip away all the complexity and trappings from the magnificent new global infrastructure, finance is still a confidence game — and once the confidence goes, there’s no telling when the selling will stop.
Steven Pearlstein, Washington Post
The economy is fundamentally sound, Senator McCain? Forget Sarah Barracuda. It’s the economy, stupid!
5 responses so far ↓
1
Brian A. Graham
// Sep 18, 2008 at 10:15 am
The bigger point is that this crisis is the fruit of modern conservatism since the ascension of Ronald Reagan, and the movement’s zeal to dismantle the Depression era regulations that prevented such occurances in the past. As a taxpayer, I’M SO GLAD TO OWN A PIECE OF AIG. SOCIALIZED INSURANCE YES! SOCIALIZED MEDICINE NO! I guess tax money is only to be used to bail out the wealthy and connected, not Harry and Louise. Of course, I seriously doubt there are many in the MSM who’ll connect the dots and seriously put the G.O.P. candidate for Congress’ feet to the fire and ask him about his failed ideology. Lastly, aren’t you glad we didn’t privatized Social Security three years ago?
2
Knight in Dragonland
// Sep 18, 2008 at 11:47 am
I think the current crisis finally puts the lie to the “let the markets decide” philosophy. Yes, the markets do eventually decide … brutally and without remorse, and it’s always the little guy that gets screwed the most. The problem with laissez-faire capitalism is that we don’t have ideal markets where information is freely accessible and readily communicated. That’s a requisite of all the fundamental theories of capitalist markets – complete transparency and free flow of information. Even though access to information has improved with the internet age, it has also become harder to interpret.
Then there’s the fundamental flaw of laissez-faire capitalism … people. People lie and conceal information and give preferential treatment to certain groups, and executives and boards of directors are not immune to those flaws. In fact, they have a large financial incentive (at least in the short-term) to lie and conceal bad news to inflate stock prices or to maintain credit ratings. The accountants overlook glaring inconsistencies because they’re too much in bed with the companies whose books they’re supposed to be policing.
These companies obviously cannot police themselves. The temptations of easy money are just too enticing. You’d think we would have learned that after Enron & Tyco & WorldCom … but apparently not.
Adam Smith recognized that monopoly and cronyism were the true enemies of a market “system of perfect liberty.” Obviously the extremes of a command economy such as that in the old Soviet Union are deadly to an economy, but that doesn’t mean a complete lack of regulation is the solution! Market regulation must be done intelligently, but it clearly must be done to avoid the extremes that we have seen in recent years.
John McCain won’t do what’s necessary to combat Wall Street cronyism, and he won’t target the right people to help through the current crisis. He’ll help out the millionaire “middle class”, but not the REAL middle class. Barack Obama is clearly, without question, the best man to handle this task.
3
Kevin
// Sep 22, 2008 at 2:47 pm
What would make you think Barack is the man for that job? If we are going to declare the current economic woes on the powers that be…shouldn’t we be targeting the Democratic controlled legislature as well?? What in Barack’s past suggests he is a force for real change. It seems to me he is a master of staying “out of sight and out of mind”
My vote is for Bob Barr. We need to get out of the two party system. It seems to me neither of the two mainstream party candidates will follow through with any real change…the two party system is a sham that only exists to stifle real change….return power to us on the local level and we can live in the U.S. that our original congress dreamed for us when they studied and quoted Adam Smith.
4
postsimian
// Sep 23, 2008 at 10:31 pm
So, let me get this straight… the current congress is able to pass exactly squat without the president threatening to veto, then when he finally does sign something in the law, he uses unconstitutional signing statements to add things on or change entire meanings… and you want to pin that on the Dems?
5
BJ Stone
// Sep 23, 2008 at 10:45 pm
…it’s the Republican way.
BTW, I’m sure Bush’s misuse of signing statements is Bill Clinton’s fault.
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