In 2008, free-wheeling, unfettered markets toppled, erasing $11 trillion of American’s net worth and 8.5 million jobs. Right, don’t blame Bush; blame the entire bankrupt, oversimplified “conservative philosophy” and its blind eye to history. It all will become clearer in this election year, the bad hand Barack Obama was dealt.
Yet another reason for Republicans to attack public broadcasting: Frontline’s series: Money, Power, and Wall Street is helping set the record straight. Incompetence, malfeasance, and reliance on an economic philosophy that rationalizes policy rather than providing safeguards against illegitimate market action are the underlying themes. All of this complements of Republican and private sector influence.
The first episode of this “Election 2012 Special Event” provides an engaging glimpse into the development of a new unregulated market in the securities sector built on an instrument that spread like poisonous kudzu throughout the financial world. From humble beginnings at JP Morgan in an effort to abate the risk exposure to an Exxon line of credit following the Exxon-Valdez disaster, credit default swaps (a kind of derivative that insures a loan against default) became common instruments even in the predatory lending galaxy, usually insulated and isolated in the legitimate financial universe. The stage was set.
The fuse that triggered the financial crisis was the bursting real estate bubble, ignited by the kindling of irresponsible sub-prime loans whose risk investors thought mitigated by these new derivatives. No, Virginia, it wasn’t progressive home loan and housing policy that coerced lenders into taking unreasonable risks, despite claims by conservative hacks, it was the lenders themselves. But the details of the collapse are only a fraction as interesting as the characters involved: Bernanke, Paulson, Geithner, and, of course, President Bush. Episode two is a roller coaster ride through a market led reactive response ending at a precipice over which the financial world teetered. A panicked Paulson discarded his libertarian cloak and took a government ownership stake in the world’s largest banks.
Enter candidate Obama. In that moment, he demonstrated the Obama cool. Even Republicans were impressed. How foolish a choice McCain had been became apparent even to George Bush. By the fall of 2008, the trillions of dollars of future debt were set in stone. No, it wasn’t all George Bush. It began as long ago as Richard Nixon and Reagan shares significant responsibility. Future historians will scoff at today’s charges about Obama’s ownership of the national debt.
The second half of this documentary begins airing tomorrow and Republicans won’t rest easy (or happy with public broadcasting; who says we don’t need it?). If you don’t have time to view the two hours already aired, they are summarized on Blue Virginia here:
But when you have the time, take it to view this study of a financial train wreck choreographed by free market fools.