Tuesday, February 23, 2010
Economic Meltdown--Connecting the Global Dots
There are some startling claims made in Matt Taibibi's latest piece for Rolling Stone Magazine on the financial collapse that led to the economic meltdown.
Here is just one paragraph from his compelling piece:
"The bottom line is that banks like Goldman have learned absolutely nothing from the global economic meltdown. In fact, they're back conniving and playing speculative long shots in force — only this time with the full financial support of the U.S. government. In the process, they're rapidly re-creating the conditions for another crash, with the same actors once again playing the same crazy games of financial chicken with the same toxic assets as before."
As the ramifications of this crisis ripple out in the world we now see some of the larger macro effects not just in terms of high unemployment, increased poverty and economic dislocation but in terms of the way entire nations and federations of states function. For example, the financial crisis now faced by countries like Greece, Italy and Spain seems to be about to threaten European unity. This is well described by Mathew Yglesias in American Prospect
The 21st-century effort to broaden and deepen that project, through the expansion of the European Union and the more robust political integration of its members, is one of the most ambitious efforts of our own time. The result is the world’s largest economic area and a continent that features a kinder, gentler social model than the one prevailing on this side of the Atlantic. In a number of ways, this united body has weathered the economic downturn better than the United States. But as the recession drags on, the EU’s underlying approach is showing some serious flaws—experienced most acutely as a crisis over the Greek budget deficit—and threatening both the viability of the EU and the global economy as a whole.
As Zach Carter makes clear all of this could spread and creating "a very real risk that the investor “unease” could spread to Portugal, Ireland, Spain, Italy, and by extension the European Union and the global economy. The bonuses at Goldman Sachs and J.P. Morgan Chase this year were not a sign of renewed strength in the global economy."
What is even more worrying that the Wall Street operators have not learned many lessons and are still engaged in risky behavior. Why have Congress and the President have been so slow to act to ensure that the 2008 meltdown is never repeated? Could it be that as Robert Kuttner points out because too many (politicians)were complicit.
We can at least expect the media to point out the yawning gaps in our national and international security--but so far only Rolling Stone seems to be prepared to tell the truth about what is occuring. Why?