By Robert Scheer
Editor’s note: This excerpt originally ran on The Huffington Post.
Excerpted from “The Great American Stickup.”
Editor’s note: This excerpt originally ran on The Huffington Post.
Excerpted from “The Great American Stickup.”
They did it.
Yes, there is a “they”: the captains of finance, their lobbyists, and allies among leading politicians of both parties, who together destroyed an American regulatory system that had been functioning splendidly for most of the six decades since it was enacted in the 1930s.
The big cop-out in much of what has been written about the banking meltdown has been the argument by those most complicit that there was “enough blame to go around” and that no institution or individual should be singled out for accountability. “How could we have known?” is the refrain of those who continue to pose as all-knowing experts. “Everybody made mistakes,” they say.
Nonsense. This was a giant hustle that served the richest of the rich and left the rest of us holding the bag, a life-altering game of musical chairs in which the American public was the one forced out. Worst of all, legislators from both political parties we elect and pay to protect our interests from the pirates who assaulted us instead changed our laws to enable them.
The most pathetic of excuses is the one provided by Robert Rubin, who fathered “Rubinomics,” the economy policy of President Clinton’s two-term administration: The economy ran into a “perfect storm,” a combination of unforeseen but disastrously interrelated events. This rationalization is all too readily accepted by the mass media, which is not surprising, given that it neatly absolves the majority of business reporters and editors who had missed the story for years until it was too late.
The facts are otherwise. It is not conspiratorial but rather accurate to suggest that blame can be assigned to those who consciously developed and implemented a policy of radical financial deregulation that led to a global recession. As President Clinton’s Treasury secretary, Rubin, the former cochair of Goldman Sachs, led the fight to free the financial markets from regulation and then went on to a $15-million-a-year job with Citigroup, the company that had most energetically lobbied for that deregulation. He should remember the line from the old cartoon strip Pogo: “We have met the enemy and he is us.”
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Three key myths consistently propagated about the financial markets proved devastating in this event. The first is that buyers and sellers are all logical and well informed about what they are doing, so the markets will always be “corrected” to provide accurate price values. The second is that whatever happens in these “free markets,” the general public will not be hurt—only irresponsible gamblers will lose their shirts. The third is that whenever the government gets involved, it will only screw things up; even if regulators only ask questions, it will poison the pond and spook the fish, to everybody’s detriment. ~ Robert Scheer
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