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Borrow and Bet: Welcome to Wall Street Socialism!

 
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Anmeldungsdatum: 10.09.2006
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BeitragVerfasst am: Mo Sep 22, 2008 11:50 am    Titel: Borrow and Bet: Welcome to Wall Street Socialism! Antworten mit Zitat

Borrow and Bet: Welcome to Wall Street Socialism!
Eric S Margolis

The world’s financial and banking systems had a near death experience this past week that began with the collapse of the venerable in vestment bank, Lehman Brothers, and quickly spread to Europe and Asia.

It was New York’s City equivalent of Hurricane Katrina that nearly de stroyed New Orleans in 2005. The financial panic sweeping the globe, and frantic rescue efforts by governments to pump liquidity into their financial systems, is maddeningly complex, but the cause of the worst financial crisis since the 1930’s Great Depression is clear.

For the last 20 years, America has revelled for two decades in an orgy of debt fuelled by absurdly low interest rates. The US national debt is now twice its net worth. From Wall Street’s ‘masters of the universe’ financial powerhouses, like Goldman Sachs, Merrill Lynch, Lehman, and Morgan Stanley, to the humblest homeowners, America’s national motto became ‘borrow and bet.’ The traditional regulated banking system was pushed aside by Wall Streets new financial titans who created their own money in the form of complex securities, and furiously traded these exotic instruments. Unregulated hedge funds borrowed recklessly against them with little government regulation or oversight.

As Kevin Phillips points out in his prophetic book, ‘Bad Money,’America’s primary business became non-productive finance. Manufacturing fell to only 12 per cent of GDP. Wall Street titans grew obscenely rich by simply passing around paper. Inflated or semi-worthless securities increased in bogus value at each stage of the trading process.

Wall Street was allowed to virtually print money and peddle toxic securities around the globe because the big financial houses and hedge funds bought the politicians of both parties. Equally important, the mammoth financial and housing bubble thus created was hailed by the Bush administration as proof of Republican free market philosophy and the road to prosperity. More cautious European and Asian bankers were dismissed by Republican chest-thumpers as timid financial pygmies.

This fraudulent scheme worked so long as markets kept rising. When the music stopped, disaster ensued.

It’s uncertain how far damage from America’s financial meltdown will spread, or how successful US government bailouts will be. Hedge funds, money market funds, and auto makers could be next. Real estate losses may reach $636 billion by 2012. All stock market gains of the past 10 years have been wiped out in the most dangerous crash since the 1930’s.

The ‘free market’ Republican administration has ended up nationalising $1.5 trillion worth of businesses, including the federal mortgage agencies Fannie Mae and Freddie Mac, Bear Sterns, global insurer AIG and money market funds. Welcome to Wall Street socialism.

When great empires run onto the financial rocks, their power quickly ebbs. France’s Sun King, Louis XIV, ended his once glorious rein in near bankruptcy caused by his long, ruinous wars with the British and Dutch.

Louis XVI’s runaway borrowing to finance the American Revolution helped ignite the French Revolution. The Soviet Union’s collapse was caused by spending half its national income on arms, and failure to modernise industry.

Over the past decade, the US foreign debt doubled. Japan and China now hold 47 per cent of the US foreign debt and finance Washington’s wars in Iraq, Afghanistan, and Somalia. The assumption by the US Treasury of $1.5 trillion in new debt or guarantees may cause interests to rise and the dollar to weaken. Even the US government’s AAA credit rating is now in question.

Washington may no longer be able to account for half of all global military spending. The $12-13 billion a month wars in Iraq and Afghanistan will ending up costing $750 billion by December, 2008. There will be less cash in Washington’s coffers to prop up allies in the Middle East and Central Asia. Less cash to pay for little wars in Africa. Less for exotic anti-missile systems, not to mention America’s underfunded social programmes.

America’s enormous global power is based as much on its financial might as military muscle. Wall Street has been the vehicle and policeman of America’s hegemony. It shaped the destiny of the globe, and made many nations subservient to the demands of New York’s titan-bankers. One should feel no sympathy for Wall Street’s sharks, but a great deal for all the working people whose lives are being ruined by their greed and dishonesty. This is the Bush administration’s final disaster.

Eric Margolis is a veteran US journalist who reported from the Middle East and Asia in ’80s and ’90s


http://70.86.22.210/khaleejtimes/kt/kt/2008/09/22/index.shtml?Search=Y&ArtId=034_006


Kommentar!

"This is the Bush administration’s final disaster."

Und niemand hat es mehr verdient als dieses idiotische amerikanische Volk das diesen Hammel Bush sogar zweimal gewaehlt hatte.

Ben Laden hat es geschafft!
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