Back in March, Elizabeth Warren blogged about a hearing by the Subcommittee on Financial Institutions and Consumer Credit on credit card tricks and traps for consumers. The consumers who showed up to testify were told "they couldn't talk unless they would sign a waiver that would permit the credit card companies to make public anything they wanted to tell about their financial records, their credit histories, their purchases, and so on." This was a deal by the Republicans and Democrats on the committee "to be fair to the credit card lenders."
This was back in March. I blogged about it as follows.
For some time going forward, there's going to be lots of econo-speak about bail-outs and Federal Reserve tools to manage insolvent banks, but remember one basic fact. You can't run a political system and an economy based on loan-sharking, intimidation, and socialism for the rich and powerful. Now, that might sound like a screed, but it's not. I'm not just saying that the rich stealing from the public is a bad thing, I'm saying that it no longer works because there isn't enough left to steal such that the theft can be hidden. Our policy apparatus is falling apart when it has to resort to bribery and threats.
As the large financial shocks continue, focus on who is going to pay. That's the key. There will be a cramdown of consumption in this country, and this is the part of the constitutional restoration when the monetary order collapses and political shockwaves drive a new set of actors into the decision-making elite. Policies right now are designed to benefit the wealthy and powerful at the expense of everyone else. This can no longer be hidden, which means that we are at the point where change is really possible.
I'm not some incredible seer, I got suckered into the dot com bubble like a lot of young people at that time. But when I saw the greed and corruption of this decade in the housing bubble, and friends buying houses on spec, I realized very early on, as did many others, that greed and corruption don't work when they become system-wide. They aren't efficient, they don't produce things people want, and they can only succeed as long as subterfuge holds up, and then brute force beyond that.
There's a lot of techno-babble from experts around our economy, but at the end of the day, if you didn't see the housing bubble by 2005 you are an idiot or a conservative (but I repeat myself). The $700 billion bailout, proposed and run by these people, is similarly a moment of failure for these elites. Ultimately, an economy won't work unless it has some measure of accountability and feedback that corresponds to productive work.
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