“The Big Short”, the movie the Conservatives don't want you to see.
(I apologize for the length and disjointedness)
So what happened in 2008? (Spoiler alert: If you don't know what happened in 2008 and want to be surprised by the movie, don't read any farther)
When the artificially inflated housing bubble (Ponzi Scheme) burst in 2008,
2.6 million people lost their jobs and
8 million people found themselves under-employed.
The foreclosure process was started on over 2 million homes.
$5,000,000,000 (that's 5 trillion with a T) was stolen and re-distributed from the People (the 99%) to the American
Aristocrats (1%).
People were kicked out of their homes, many to live in their cars or share a house with a relative or friend. Not only did they suffer losing their homes, but thanks to the banks they were saddled with the debt making it almost impossible to get an apartment or buy a car.
When Goldman-Sacs and other financial institutions lost our money, it was replaced with our money and then they said thanks by giving themselves bonuses with our money, and giving us the “bird”.
How did it happen?
Any idiot can see what happened even though the Conservatives want to tell us lies. The Conservatives, in both Parties had been undoing the New Deal controls that were put into place to prevent crashes like this. They were following their god Ayn Rand's disciple Alan Greenspan who preached that Wall Street would be more efficient if left unregulated. Conservative Democratic President Clinton signed the repeal of Glass-Steagall which made the Republicons very happy. Now the Conservatives (like H. Clinton) are trying to distract us from this disaster and say that the repeal of Glass-Steagall wasn't “directly” responsible for the crash. That's bull and I don't mean a rising stock market. Watch the movie and see that banks and hedge funds were all gambling against each other and guess whose money they were using? Not their own. Glass-Steagall prohibited this behavior for banks with depositor's cash.
And so in 2008 the Housing Ponzi scheme crashed, and the banksters got bonuses.
So who was responsible?
It would be nice to be able to blame one man, Alan Greenspan who for decades was looked upon as the god of financial markets. Alan Greenspan, the disciple of Ayn Rand believed that if you gave the Golden Goose to Wall Street without restrictions, they would optimize the amount of golden eggs laid to everyone's benefit. Alan expressed his shock at a Congressional hearing in 2008 when he found out that Wall Street tore the Golden Goose from limb to limb, attempting to get more and more gold for themselves. Alan admitted he didn't anticipate that. What he was really saying is that he was wrong and had been wrong all along. But we can't blame Alan as he was just a tool set up as a god by the greedy to justify their looting of our economy.
Congress and our presidents Clinton and Bush hold a lot of responsibility. Supposedly they were working for us the People instead of their close friends in the American Aristocracy.
In 1999 the New York Times reported that the Clinton Administration was pressuring Fanny Mae, the nation's biggest underwriter of home mortgages, to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. They were being encouraged to make more loans to so-called subprime borrowers. (2) They were boosting the bubble.
Ben Bernanke, Henry Paulson, Larry Summers, and Tim Geitner should be held responsible as they were in charge of the economy. They failed miserably and were run out of town on rails. Oops. In my dreams I guess. You see while they failed us in the 99% they did very well for their friends in the 1%, themselves, and their political puppets. These same characters have been popular with Democratic and Republican administrations alike for decades, including the current Obama Administration. We haven't seen the last of them if H. Clinton is elected.
As the movie shows, as the bundled bonds (or whatever new clever name they have) started to fail, the banks continued to tell (read, “they deceived”) investors, including your pension fund, that the products were still very low risk. This was a lie yet the rating corporations of Moody and S&P went along, essentially selling their souls for profits. And the Securities and Exchange Commission looked the other way because of lack of funding from Congress, poor oversight, and also some of their own greed.
Of course Goldman-Sachs and other banks, insurance companies and the big gambling houses (called investment companies), knew they were doing wrong but like all Ponzi schemes no one wanted out until they got theirs.
An example of the over-leveraging that epitomizes a Ponzi scheme, “For every $1 of equity, the $22bn Carlyle Capital Corporation fund was leveraged with $32 of loans. “ (1)
Fanny Mae was intended to help those in the 99% get into homes but they were corrupted by their Wealthy 1% investors and politicians and worried more about profits than helping the People.
What happened to those responsible?
They got bonuses from our money, they paid off their political puppets nicely and they continue their gambling knowing we will back their loses.
So what should happen now?
Here is where the candidates Clinton and Sanders disagree.
Sanders wants to hold those responsible accountable. He wants strong new regulations enacted and budget provided for enforcement . Like Teddy Roosevelt, he wants to solve the “too big to fail” problem by breaking up the banks that have gained more and more power since the “crash”. He wants Glass-Steagall, a regulation that for decades prevented this type of crash, reinstated.
Clinton however doesn't agree at all. In a speech to Goldman-Sachs (a big participant in the crash), she told them that she thought the banksters were being unfairly criticized. They applauded and handed her a check for $200,000 for her personal fortune. She defends her husband's action of signing away Glass-Steagall and rejects the idea of reinstating it because she says it wouldn't be enough. She did publish her “plan” which contains nothing substantial but mostly rhetoric. In a recent column Robert Reich said, “Most of Clinton's proposals could already have been put into effect by the Fed and Securities Exchange Commission, but they haven't been – presumably because of the Street's muscle.” In other words, her proposal means more of the same.
So what can you do?
Well if you want to continue the current culture of Wall Street corruption that will undoubtedly lead to another major bank wealth heist (crash), then vote for H. Clinton who has amassed a $50 million dollar personal wealth in this culture and whose campaign is financed by those that would profit from a continuation of this corrupt culture.
However, if you've had enough of the corruption of our government by Wall Street and if you want to help the millions out of work, those kicked out of their homes, those struggling under crushing debts, those on Social Security, etc. then support the People's candidate, Senator Sanders.
1. http://www.theguardian.com/business/2008/dec/28/markets-credit-crunch-banking-2008
2. https://en.wikipedia.org/wiki/Financial_crisis_of_2007–08
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LiberalArkie
(16,498 posts)rhett o rick
(55,981 posts)
glinda
(14,807 posts)Thank you for this.
NV Whino
(20,886 posts)rhett o rick
(55,981 posts)Person 2713
(3,263 posts)
rhett o rick
(55,981 posts)I wouldn't think it would matter but some might want to come to this conclusion on their own. Don't read further if you don't want to know what happened.
And maybe others are sharper than me (actually likely) and figure this out ahead of time. During the movie, I found myself rooting for those people that were taking advantage of the stupidity of the banks for their own gain (and their investors). But in the end I realized as they did also that they really weren't any better than the banks. That may not make sense so let me try a bad analogy. Let's say you see a person robbing another person and you run over and take the money from the robber and run off with it. You are no better than the robber. I hope that makes sense.
KingCharlemagne
(7,908 posts)Trump or Cruz need only invest two hours watching this film. (The book is fantastic too, but will require about 4-5 hours of concentrated reading time.)
rhett o rick
(55,981 posts)Democrats that life would be terrible under the leadership of the Republicons, but a more important message that I believe is brought out by this film is that this so-called "bank crisis" was caused by those supported by both the Republicons and the Conservative Democrats. This is extremely important because some Democrats don't understand this and are ready to put another Clinton, another Conservative Democrat in the White House. This so-called crisis was so successful in making the wealthy wealthier, that it may become the business model for the Conservatives including some Democrats like H. Clinton.
KingCharlemagne
(7,908 posts)collaborating with the oligarchy as of middling concern. But a President Cruz or Trump with a Republican Congress? Jesus H. Christ, the leash would come off in ways this country hasn't seen since the glory days of 1928-29.
WillyT
(72,631 posts)