He had several exceptions to his idea — e.g., that the poor should refrain from stealing from small businesses.
Well, his heart was in the right place even if his economic theories weren’t all that coherent or welcome to the general public in the UK.
Now along comes an economic theorist with a moral argument to make in defense of this man’s idea. I think you’ll sympathize with his outrage at the real thieves who have yet to be called to account (and don’t hold your breath for that unlikely event):
Let’s examine this a bit.
We have a society that allegedly has laws that we all must follow. They include the general premise of not [redacted]ing people: honest and fair dealing, disclosure of material facts you know would influence another’s decision to do business with you — and certainly, an expectation that you would not intentionally misrepresent the truth.
So what has happened over the last 20 or 30 years when it comes to business, banking and credit?
- - - - - - - - -
- The Federal Reserve has intentionally held liquidity — that is, “excess cash” in the system, too high for extended periods, even though this was intended to and did produce multiple asset bubbles.
- Officials from The Fed (and others) made statements that were reckless in their disregard for the truth. Claims that housing prices reflected “sound fundamentals” where homes were selling for two or even three times sustainable prices are just one of many examples — even when prices were taking on 20, 30, or even 50% gains in a year.
- Greenspan claimed there was “irrational exuberance” in the stock market but then did absolutely nothing about it for the succeeding four years! The result was a huge stock market bubble in Nasdaq stocks that subsequently burst.
- Investment and Commercial Banks willfully and intentionally made loans to people who they either knew could not pay (other than by refinancing into another loan) or worse, simply didn’t give a damn if you could pay or not — because they assumed they would simply steal the house!
- This wasn’t limited to houses — it was found in literally every sort of lending and commercial activity. PIK/Toggle bonds, “covenant light” loans, leveraged buyout money, all of it was the same basic scam — we don’t care if you can pay because we will unload this garbage on some other bagholder before it all blows up!
- Some borrowers got involved in the fraud machine too. Why tell the truth when you can “state” that you make $200,000 a year — cutting hair! Why if you want that million dollar house and can get an OptionARM at 2% interest-only (against a real rate of 6%) for the first two years, go for it! You can always refinance before the “teaser” expires, right?
Now if this was just some banks [redacted]ing each other, so what? If it was just speculators in the markets playing with one another, who cares? All consenting adults playing “stick that hand grenade down the other guy’s pants before the fuse runs out”, right?
What happened to the price of houses? Milk? Gasoline? Steak? Health insurance? What happened to the prices that people who had no hand in the fraud had to pay — as a consequence of the fraud?
You and I had no hand in this massive corruption. We don’t belong to the political class, a class which includes all those crooks on Wall Street and in the government who play revolving door — think of little Timmy Geithner — skipping lightly from one place to the other, enriching themselves while they pontificate at the rest of us.
These are shameless people. Only a man without shame could push to become the Secretary of the Treasury when he owed so much in taxes. Only politicians without shame could endorse his appointment to that post.
Our expert goes on to remind us:
So now we find ourselves with a situation where the wealth of entire nations have been looted. This wasn’t an accident, it wasn’t an oversight, it wasn’t happenstance.
It was a series of intentional acts, and along the way a literal million felonies and other improprieties occurred. From the “homeowner” who lied about incomes to the Real Estate “professional” who leaned on an appraiser to “hit a number” to the seller and buyer who colluded to kick back money and inflate a purchase to the lender who “helped” a buyer fraudulently overstate their income to the “securitizer” who had 1003s for their loans but failed to verify tax returns (and couldn’t have possibly believed that a Greeter at WalMart made $200,000 a year!) to the ratings agencies that ran no scenarios in which home prices would ever decline.
So that’s how it worked. He’s right. That is a literal million felonies all in the name of putting the poor in homes they couldn’t afford but were too ignorant to understand with any real depth how thoroughly they were being used. Did these prospective buyers knowingly cheat? They sure did. Are they as blameworthy as the people who led them down this primrose path to purported home ownership? No they were not.
They were drinking the kool-aid, but the “professionals” were making it and urging them to have a few glasses. We believe the experts, especially when what they tell us makes our future sound so easy.
The whole horrible carnival ride is over and now we’re all trying to walk on wobbly legs; even those of us who didn’t go for the ride are feeling the effects.
He boldly reminds us:
NOT ONE OF THESE ACTS IS CURRENTLY UNDER INDICTMENT, NOT ONE DOLLAR HAS BEEN CLAWED BACK AND NOT ONE OF THE PEOPLE RESPONSIBLE FOR THIS IS IN PRISON.
And why aren’t they under indictment? Because they’re part of the cancer eating us up. They are the tumor on the brain of the commonweal, the one that makes sure we don’t understand, don’t notice, while getting enough crumbs from their gateaux so that we’ll leave them alone to eat the rest in luxury.
And we still find it impossible to comprehend the depth and breadth of their utter evil and indifference to our fates:
Perhaps the reason we have not seen a massive uprising — and the institution of “citizen trials” — is that the American People simply don’t get it. They never learned compound interest and earnings in school, as it is simply not taught. Tout TV never talks about the total systemic debt load and how it has grown … vs. GDP. The truth about The Fed basically paying people to borrow (we have real negative interest rates right now!) as a means of trying to intentionally inflate bubbles is never discussed.
Our expert is unsure what is going to happen next but he is not hopeful unless we begin to take back our government from these leeches. However, the systemic rot is as hard to comprehend as, say, the physics theories about black holes. Not knowing the theories is, unfortunately, not going to save us.
For how long will The People remain in the dark?
Are they ignorant — or stupid?
Ignorance can change in a day, or a week — with catastrophic results.
To both State and Federal Government Officials: I know I have said this before, but I will repeat it — The lawless actions of the past 20 years must not be allowed to stand — you must not allow The People to discern that you are a felon rather than a cop.
To Father Jones: While I cannot square your advice with The Ten Commandments, I am reminded that The Bible tells us that even Jesus had his limits when it came to those Commandments, and the one time he exceeded those limits was with THE MONEYCHANGERS in The Temple. The very same robber barons — of the time — who were cheating the people. My, how similar the situation seems to be.
To The People: Wake the hell up. Demand prosecution. Back that demand up with your vote, and while you’re at it, pray that this is enough, for if it is not, where your neighbor or countryman who has lost everything may turn is a dark place neither you or I wish to see our nation descend to.
I wonder if, as this unholy mess unrolls in front of us, there won’t be a groundswell of demands that every single office holder be replaced. That they be replaced only with people who give their oath that they will prosecute the criminals, that little Timmy will be removed from his post, that the current swinging door between/among Wall Street, academia, and Capitol Hill will be permanently nailed shut.
Take your choice of career, Mr. Geithner. Would you like to be a public servant instead of a public thief? Then swear a public oath that you will not return to Wall Street at all, ever, after your turn at the public trough. Further swear that you will not become a paid public commentator or speech giver for a full five years after you leave office. Promise on your mother’s life or grave that you will stay away from hollowed-out ivy-covered academe. Nor will you hold public office of any kind or work for any organization that has dealings of any sort with any part of our government, be it local, state or federal.
If the crooks continue to make the rules and run the show and enrich themselves at our expense, we must rebel en masse. If we don’t then we’re tacitly agreeing to our own enslavement. Make fun of the Tea Parties, but they demonstrate that rebellion is both possible and practical.
Just to give you an idea how closely this man’s economic ideas hew to reality, look at this page from last year. It starts by examining what he’d predicted for 2008. Those forecasts were mostly right, as he notes:
…16 predictions, two clean misses and one half-miss, the rest either panned out or were proved tremendously conservative. That’s not bad. Anyone else got a public scorecard? Cramer? Kudlow?…
Halfway down that page — and though it’s long, it’s worth your time and education to go through it — he made his predictions for 2009 (he wrote the page in December 2008). Read what he thought was going to happen and tabulate it against what you saw go down during the past year.
Then bookmark that site because next week sometime he will give us his predictions for 2010. I intend to be there to see what he has to say.
The rule of law is dissolving because of the sulfuric acid dripping down from the top of our governmental pyramid. This is what happens when leaders pretend to be free market supporters. In reality they’re nothing but oligarchs, and their effluvia is poison.