How could the captains of our industry be so oblivious? How could they be so short-sighted as to build such a house of cards? True, the value of real estate in the US had never dropped before, but it never climbed 80% in six years against a backdrop of very low inflation either (2000-2006). These are educated men, these leaders, and highly experienced ones as well. CEOs of major banks and insurance companies, bond-rating analysts, successive chairs of the Federal Reserve, not one of them apparently anticipated a phenomenon which, in hindsight, appears to have been inevitable. In what world does any of this make sense?
This didn't just happen in the USA; the phenomenon was a global one. No civilized corner of the earth was spared. Today, national governments everywhere are drowning in debt and cutting core services in desperate attempts to keep up on the interest payments.
How could the financial elite naively buy into a culture of infinite growth? Mass hallucination? Unlikely (the phenomenon itself is suspect). Short-term profit taking (for lord knows, there was a lot of that)? No. There was no evidence that anyone was hedging or planning to reign in the spiral; in fact, they were escalating expectation right up to the inevitable end. Even a child could see that values can not rise, unconstrained, forever. Some insiders tried to raise the alarm but were shunned by their peers. Fortunately, there were well-compensated yes-men aplenty to form the cheerleading squad.
When pressed for detail, we're told it's too complicated for us to understand, not to worry our pretty little heads as they have everything comfortably under control now. This is partially true: they do have everything comfortably under control. What isn't true is that it is too complex to be scrutinized. Scrutiny simply does not happen to be in their best interest so they throw shadow monsters at us to make us fearful of looking behind the doors.
As with many mysteries, the solution to this great puzzle of our time is sitting right in front of us. A trick of the mind prevents us from seeing it as it lies in the realm of the unthinkable. There was no accident; they made no mistake. This, ladies and gentlemen, was the plan. Trillions in public capital disappeared into private purses and today we see that these enterprises are flourishing while governments dismantle social infrastructure and use the police to punish the resulting social unrest.
And they are doing it again. Why shouldn't they? It worked out so well the first time. Not one of them even lost their job, much less faced prosecution. No new regulations were put in place. Older regulations designed to prevent this sort of abuse were systematically unwound and no initiative is in the works to reinstate them. It's back to business as usual.
As their riches skyrocketed, the middle class was significantly impoverished, their economic clout having already been steadily eroded since 1980. The Reagan era of trickle-down economics unfettered the financial industry in unprecedented ways. His administration oversaw both the unleashing of the Savings and Loan industry and it's publicly-funded bailout. That crisis eventually took nearly 88 billion dollars from public coffers and put it in private hands, setting new precedents in terms of public debt as well as the socialized rescue of private interests. For all of those public dollars, no one's home was saved. In hindsight, it now looks like that fiasco was a dry run for the present one.
Ostensibly, this has weakened the ability of the middle class to fight back, to organize and resist. That is precisely why we must resist. We have more power now than our children will tomorrow and they deserve better than lives of slavery.
