Who To Blame
Oct 7th, 2008 at 1:17 pm by Susie
Michael Walzer at Dissent:
Bankers are, simply put, money merchants, and they too do not trade for the public good but only for their private good. That is what they have always done. According to Smith, and according to most defenders of free enterprise in America today, we have all benefited from their trading, so it is sheer hypocrisy to denounce them now. Or, worse, it makes Wall Street traders into scapegoats. But scapegoats for whom? Who are the beneficiaries of this hypocrisy?
The truth is that the invisible hand doesn’t always work, and so it requires some help from a visible hand—and that is the hand of the state. There is no other agency capable of protecting us from ruthless or reckless gain-seekers, for capitalist institutions too often reward both ruthlessness and recklessness. State regulation is, therefore, a necessary feature of—even if it is also a social-democratic addition to—the capitalist system. When regulation fails, we are all in trouble. Deregulation is the major cause of the current crisis. And the cause of deregulation is what? Well, we might say that the cause is greed, which certainly motivates political as well as economic behavior. But that won’t do, since greed was no less prevalent when the regulative regime, which we have been dismantling since the 1980s, was first put together in the New Deal years. The difference was that the political forces that believed in greed, and in the free market, and in the invisible hand, were less dominant then. The ideology of laissez faire had fewer true believers.
If we are looking for people to blame for the current crisis, the right people are the market ideologues and the politicians they seduced. They are the ones who will benefit from scape-goating the bankers. And the appropriate response to them is political, not moral. We don’t have to abolish greed (good luck!), but we do have to find our way to a better understanding of the role of the state in the economy. We have to take state power away from people who despise the state. We have to defeat the champions of deregulation. The place to begin is in the debate over the bailout, but this is a long political struggle.
Everyone is just in too much of a hurry to move this financial crisis on to fixing whatever went wrong and move on the the next f–k up. I want to know where the money went. The people who took loans they could not pay back have nothing to show for all the morgage payments they did pay. The banks appear to unsolvent because they gave money to people who could not pay. So just who got rich and how?????
So just who got rich and how?????
Realtors, mortgage brokers, financial rating firms (Moody’s, S&P, et al.), commercial banks, investment banks, all gamed and milked the system and got a lot of money out before things hit the fan.