'we have poured money into the banks, without restrictions, without conditions and without a vision'
from Vanity Fair:
The Book of Jobs
Forget monetary policy. Re-examining the cause of the Great Depressionthe revolution in agriculture that threw millions out of workthe author argues that the U.S. is now facing and must manage a similar shift in the real economy, from industry to service, or risk a tragic replay of 80 years ago.
By Joseph E. Stiglitz
It has now been almost five years since the bursting of the housing bubble, and four years since the onset of the recession. There are 6.6 million fewer jobs in the United States than there were four years ago. Some 23 million Americans who would like to work full-time cannot get a job. Almost half of those who are unemployed have been unemployed long-term. Wages are fallingthe real income of a typical American household is now below the level it was in 1997.
We knew the crisis was serious back in 2008. And we thought we knew who the bad guys werethe nations big banks, which through cynical lending and reckless gambling had brought the U.S. to the brink of ruin. The Bush and Obama administrations justified a bailout on the grounds that only if the banks were handed money without limitand without conditionscould the economy recover. We did this not because we loved the banks but because (we were told) we couldnt do without the lending that they made possible. Many, especially in the financial sector, argued that strong, resolute, and generous action to save not just the banks but the bankers, their shareholders, and their creditors would return the economy to where it had been before the crisis. In the meantime, a short-term stimulus, moderate in size, would suffice to tide the economy over until the banks could be restored to health.
The banks got their bailout. Some of the money went to bonuses. Little of it went to lending. And the economy didnt really recoveroutput is barely greater than it was before the crisis, and the job situation is bleak. The diagnosis of our condition and the prescription that followed from it were incorrect. First, it was wrong to think that the bankers would mend their waysthat they would start to lend, if only they were treated nicely enough. We were told, in effect: Dont put conditions on the banks to require them to restructure the mortgages or to behave more honestly in their foreclosures. Dont force them to use the money to lend. Such conditions will upset our delicate markets. In the end, bank managers looked out for themselves and did what they are accustomed to doing.
....(snip)....
The fact is the economy in the years before the current crisis was fundamentally weak, with the bubble, and the unsustainable consumption to which it gave rise, acting as life support. Without these, unemployment would have been high. It was absurd to think that fixing the banking system could by itself restore the economy to health. Bringing the economy back to where it was does nothing to address the underlying problems. ................(more)
The complete piece is at: http://www.vanityfair.com/politics/2012/01/stiglitz-depression-201201
Uncle Joe
(58,328 posts)Thanks for the thread, marmar.
MichiganVote
(21,086 posts)russspeakeasy
(6,539 posts)Not many ideas and damn few dollars toward fixing the real problems; infastucture, banking regulation and single payer health care...The underlying problems have not changed and it becomes more and more obvious that nobody fuckin cares..
Why not Sorbane Oxly, why not Glass Segal. Instead we get dodd frank....
I've seen the list, so don't bother posting it...
tomg
(2,574 posts)Spot fucking on.
truedelphi
(32,324 posts)You said it all.
And we know the answer, as to why it is this way: The Halls of Power are occupied by those who serve the Upper One Percent.
kenny blankenship
(15,689 posts)That was the only vision. Save the banks, fuck everything else.
prepperdad
(103 posts)The banks at this point is effectively runs the government. They control everything, the politicians, the military, the MSM...
[url]http://www.survivingeconomiccollapse.net/[/url]
bhikkhu
(10,714 posts)Here and there some have grown since 2009, but for the most part the banking sector has failed to recover, and is down to a much more manageable and sane size.
kenny blankenship
(15,689 posts)Only setting aside the post-Enron/Arthur-Andersen accounting rules allows these firms to appear as anything but smoking craters of bad debt. Bank bondholders ought to have been forced to take haircut as well, but their stocks should have gone to zero, and the Govt should have taken them into receivership. Instead the Fed and the Govt made them whole, taking trillions of their fraudulent crap onto the Fed's balance sheet, at the expense of everyone else who works for a dollar. By allowing the banksters to get away with it and keep the loot, the Govt and the Fed have maintained the dominance of this criminal elite over the real economy which it smothers. Though they put all the big banks on the government dole, they didn't even oust a single Bankster CEO (not even ML's John Thain who was ousted by an purely internal Bank of America power struggle), as they would do to General Motors when they bailed out that company.