- May 26 & 27 - All libraries CLOSED for Memorial Day
What was the prime cause of the Great Recession that we are still suffering from on Main Street:
A. High taxes?
B. Frivolous lawsuits?
D. Public employee pensions?
E. Big government deficits?
F. A corporate financial system where the inmates run the asylum thanks to “self-regulation” introduced in 1981 and expanded since then by massive lobbying and cronyism involving both major political parties?
G. Social Security?
If you answered anything but F, it might be helpful if you turn off Fox News, CNBC, or (while you're at it) Real Housewives, and instead check out these titles from the Library:
Narrated by actor Matt Damon, the 2010 Academy Award-winning documentary Inside Job makes a solid and entertaining case that the answer above is indeed item F, which coincidentally is also the grade earned by Washington politicians for promoting economic fairness since 1980.
Interesting tidbits from the movie:
• In the mid-1980’s, Alan Greenspan gave convicted Lincoln Savings and Loan cheat Charles Keating a green light to bilk investors after Keating paid him $40,000, shortly before Greenspan became Fed Chairman under Reagan-Bush-Clinton-Bush.
• In the late 1990’s, regulation of the $50 trillion derivatives market was stopped by Clinton and the Senate at the behest of investment banks and Alan Greenspan.
• Use of subprime mortgages skyrocketed not to help the poor afford their own homes but because investment banks liked these mortgages’ high returns on investment.
• Henry Paulson paid zero tax on profits from $485 million in Goldman Sachs stock that he had to sell when he left Goldman to become Treasury Secretary in 2006.
• Average annual compensation of a Goldman Sachs employee after the 2008 meltdown and taxpayer bailout: $600,000.
ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism (2010) by Yves Smith explains the current situation and its causes better and more entertainingly than any book that I have read, adding mostly right-wing economists to the usual perps (bankers and politicians) responsible for the financial crisis.
The economists are called out here because they gave a necessary, scholarly patina to the otherwise ignorant but heeded calls for dismantling the important New Deal-era restraints (read: regulations) that protected the U.S. economy from 1933 through the 1980's.
Smith also runs the Naked Capitalism blog on economic and financial news.
The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America — and Spawned a Global Crisis (2010) by Michael Hudson focuses blame for the collapse on the predatory lenders that Wall Street relied upon for a steady supply of loans that it could bundle into its toxic assets.
This is an easy-to-read, non-technical book that illustrates the predatory business model, free to operate without regulatory oversight, that helped cause the worldwide financial crisis that we are still suffering from.
This book puts the lie to the claim that these mortgage lenders were somehow unwillingly victimized by government programs aimed at helping poor people buy larger houses than they could afford.