Happy Meltdown Day
OK, not so “happy.”
But this is the anniversary of the collapse of the house of cards that was Lehman Brothers.
One year ago today, the economic time bomb that George Bush and Dick Cheney had spent two terms constructing – on a platform of deregulations furnished by Bill Clinton and Newt Gingrich – blew up. The explosion created the deepest economic downturn since the Great Depression. And it sent unemployment rates soaring to the highest levels in a quarter century.
It also created an opening that the worst players on Wall Street and on Capitol Hill have used to allocate trillions of dollars in US assets to multinational corporations and banks.
According to the New York Times, “government spending [now] accounts for a bigger share of the nation’s economy – 26 percent – than at any time since World War II.” Deficits are right, debt is up. Teabaggers are screaming. But it is not programs that care for the children of immigrants or aid to poor countries that emptied the Treasury, and it is not the “threat” of healthcare reform that worries serious economists.
It is the fact that the federal government has become “the guarantor against risk for investors large and small” while doing little to restrain CEO greed or to protect the citizens, consumers and communities that have been battered by banksters.
Things have not gone well over this past year, despite what “reluctant shareholder” Barack Obama suggested in an anniversary-marking presidential visit to Wall Street.
Obama described the Bush-Cheney administration’s bailout of the banks as a “necessary response” and hailed the “outstanding” leadership of bailout-friendly aides such as Treasury Secretary Tim Geithner and White House economic advisor Larry Summers. That was the disappointing part of the speech. The better part came when the president explicitly recognized the dangers inherent in allowing banks to be “too big to fail” and talked tough about the need for CEOs to recognize that they have social responsibilities. The president went out of his way to suggest that federal interventions on behalf of behemoth banks and colossal corporations are temporary and highlight the need for more oversight of banks and financial institutions — as part of the “most ambitious overhaul (of regulations) since the Great Depression.” Those were both good messages, and the president delivered them well and wisely. But his fine rhetoric was a tad unsettling, as it followed upon a year of missed opportunities, mistakes and marauding by CEOs and their lobbyists.