Two years later and still nothing has been learned

[Robert Oak]

There is a post on The Economic Populist that is a must read.

Two years ago Friday the financial crisis started.

Most financial media pundits and politicians didn't recognize that we had a problem until Lehman Brothers went under on September 15, 2008. The official start of the recession is marked at December 2007.

But the real start of the financial crisis was July 31, 2007, when Bear Stearns filed for Chapter 15 bankruptcy protection on its two major hedge funds (High-Grade Structured Credit Fund and High-Grade Structured Credit Enhanced Leveraged Fund).

And yet 24 months later, after all the job and capital losses, after all the heartbreak and stress on the average Americans, the financial media, the politicians, Wall Street, and most of the blogosphere still refuses to even acknowledge, much less address the root causes of our economic problems.

The article does on on what kind of policy areas should be addressed. But don't you feel this is true? All of the demands, things people voted for are now being ignored? Things like trade policy, labor rights going to hell in a hand basket, no retirement?

Go to the site to read the whole thing.

Raw link:

http://www.economicpopulist.org/content/two-years-later-and-still-nothing-has-been-learned

[ixion]

1. another good snip, one that really sums it up well, imo

And yet every policy response to the financial crisis, without a single exception, has been designed to:
a) cut taxes and interest rates,
b) boost the money supply, as well as government and consumer spending, and most of all,
c) to prevent the asset class in question from returning to real market prices.

It's insanity. Plain and simple.

[Robert Oak]

2. at the risk of self promotion

Well, more a site promotion, all of those who are super econ bloggers, you might consider creating an account on EP and commenting so the author can see your thoughts. I don't want to "pull" anyone from DU, lord knows I've been here forever, but EP is a community site devoted to all things econ and that's different from your typical economics blog.

[4dsc]

3. Good analogy here...

To make a simple analogy, let's say you purchase a used car for $10,000. Afterward you discover that the transmission is shot, the engine needs to be rebuilt, and there is rust under the paint.
You then try to sell the car to someone else, but no one will pay more than $2,000 for it. "But I paid $10,000 for it. Therefore that is what it is worth," you say. You then take the car off the market and announce on your income tax forms that it is still worth $10,000. Meanwhile the car continues to rust in your driveway.

That's what the Wall Street banks are doing with toxic mortgage-backed securities on (and off) their books. They then claim that their investments haven't lost any money so they can claim large profits, which in turn become large bonuses for the executives.

Next time I see anyone from my congressional delegation, I'm going to bring this up.. Lets see what they have to say about it..

[fasttense]

4. And nothing has changed.

No real regulations have been signed into law, no investigations have held anyone accountable, the same types of people are still exactly in the same type of positions in government and business. Banks, Wall Street and Insurance firms are doing what they did before only this time they have our tax dollars to play with.


So our economy is ripe for the exact same thing that happened in Sept 2008 to happen again...and again...and again....

The DJIA may be up now, but just wait.

[econoclast]

5. Let's see if I have this right....

We are in deep trouble because easy money policies fueled an asset bubble. A giant spending spree founded on a base of borrowed money ... Money we didn't have. Those chickens have now come home to roost.

So now, to fix the problem, we are going on a giant spending spree founded on borrowed money that we don't have.

Yep. Nothing has changed at all.