~ Aristotle Sabouni |
If you're on the wrong side of history, and the truth proves it, what do you do? Politicians (Democrats) lie, distract, or attack. So rather than look at things that will fix it, they scapegoat their favorite demons:
- Capitalism: as if borrowing/loaning money and private ownership was the problem.
- Greed/overleverage (when leverage was less than before)
- Under-regulation/de-regulation when there were more regulations after elimination of Glass-Steagall than before.
- Unified Banks: which all other countries had, and outperformed commercial or investment.
- Republicans: who were warning about problems with Fannie-Freddie and other things for decades.
There are a few books that preyed on the desire for it to be the fault of Capitalism/Greed/Deregulation by Wall St., and then uses technical mumbo-jumbo, to sounds credible. But they are flim-flam. Like these:
The whole theory is that GS, "prevented the banks from using insured depositories to underwrite private securities and dump them on their own customers. This ability along with financing provided to all the other players was what kept the bubble-machine going for so long". Or so he claims.
But again:
- If Unified Banks could over-leverage themselves and sell bad instruments to their customers, which will go bad, and cause a credit crunch (in their own company), then why didn't this happen to any of the Unified banks?
- We know that this didn’t happen in 2008, it was the Investment banks (not Unified banks) that had the problems.
- More than that, the bubble was inflated in Real Estate Sector (Commercial bank territory), not in Unified or Investment bank areas. So the theory is disproven by reality.
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❝ "The GAO confirmed that leverage at the CSE Holding Companies had been higher at the end of 1998 than at the end of 2006 just before the financial crisis began.” ❞
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If the problem was over-leverage, we should have had the Financial crisis in 1998, not in 2007
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Tags: Glass-Steagall/all
