Sunday, January 10, 2010

The Other Plot to Wreck America

Frank Rich - NY Times:
". . . in the 16 months since that other calamity in downtown New York — the crash precipitated by the 9/15 failure of Lehman Brothers — most of us are still ignorant about what Warren Buffett called the “financial weapons of mass destruction” that wrecked our economy. Fluent as we are in Al Qaeda and body scanners, when it comes to synthetic C.D.O.’s and credit-default swaps, not so much.

What we don’t know will hurt us, and quite possibly on a more devastating scale than any Qaeda attack. Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. Without that reckoning, there will be no public clamor for serious reform of a financial system that was as cunningly breached as airline security at the Amsterdam airport. And without reform, another massive attack on our economic security is guaranteed. Now that it can count on government bailouts, Wall Street has more incentive than ever to pump up its risks — secure that it can keep the bonanzas while we get stuck with the losses."

The political ability to do effective reform may turn out to be greater than is commonly supposed, and the stability of the unreformed system may be greater. But, I think conventional wisdom, at this moment, is quite the opposite. Political will, to do reform, appears absent, but the stability of the plutocracy's financial system is highly questionable.

The people most harshly affected by the Great Recession are apparently unaware that their suffering is a political choice -- a policy choice. Or, if they are aware, individually, they lack any ability to organize or promote an elite advocate for themselves.

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