Kevin Drum takes a look at the financial crisis from a different perspective:
It's about the way that lobby—with the eager support of a resurgent conservative movement and a handful of powerful backers—was able to fundamentally change the way we think about the world. Call it a virus. Call it a meme. Call it the power of a big idea. Whatever you call it, for three decades they had us convinced that the success of the financial sector should be measured not by how well it provides financial services to actual consumers and corporations, but by how effectively financial firms make money for themselves. It sounds crazy when you put it that way, but stripped to its bones, that's what they pulled off.
If the case against self-regulation was strong then, it's stronger now. Far from being chastened by last year's meltdown, banks are back to their old tricks. The sliced-and-diced mortgage securities that caused so much trouble during the credit bubble are being re-sliced and -diced via something called a RE-REMIC (resecuritization of real estate mortgage investment conduit)—and business is booming. At Goldman Sachs, leverage in the first half of 2009 was at its highest level in its history. Even more astonishingly, the Wall Street Journal estimates that overall pay on Wall Street will rise to record levels in 2009, higher than at the height of the bubble. It's as if the global collapse that nearly destroyed them has been completely forgotten.
Post a Comment