Kevin Phillips: The "Disaster Stage" of U.S. Financialization

[marmar]

from TPM Cafe:



The "Disaster Stage" of U.S. Financialization
By Kevin Phillips - April 7, 2009, 3:34PM


Thirty to forty years ago, the early fruits of financialization in this country - the first credit cards, retirement accounts , money market funds and ATM machines - struck most Americans as a convenience and boon. The savings and loan implosion and junk bonds of the 1980s switched on some yellow warning lights, and the tech bubble and market mania of the nineties flashed some red ones. But neither Wall Street nor Washington stopped or even slowed down.

In August, 2007, the housing-linked crisis of the credit markets predicted the arriving disaster-stage, the Crash of September-November 2008 confirmed the debacle, and now an angry, fearful citizenry awaits a further unfolding. There is probably no need to fear a second coming of nineteen-thirties Depression economics. This is not the same thing; the day-to-day pain shouldn't be as severe.

Indeed, for all that the 1930s evoke national trauma, that decade was in fact a waiting room for national glory and wellbeing. World War Two ushered in American global ascendancy, the "Happy Days" of the 1950s and an unprecedented middle-class prosperity.

Today's disaster stage of American financialization - the bursting of the huge 25-year, almost $50 trillion debt bubble that helped underwrite the hijacking of the U.S. economy by a rabid financial sector -- won't be nearly so kind. It is already ushering in the reverse: a global realignment in which the United States loses the global economic leadership won in World War Two. The ignominy deserved by Wall Street after 1929-1933 is peanuts compared with the opprobrium the U.S. financial sector and its political and regulatory allies deserve this time. ...........(more)

The complete piece is at: http://tpmcafe.talkingpointsmemo.com/2009/04/07/the_disaster_stage_of_us_financialization/

[bemildred]

1. Greed makes you stupid. nt

[4dsc]

2. Consumerism spelled out..

This a great tale of American consumerism for sure.. And what the future hold's for the sheeple of American consumerism isn't going to be very pretty.. Its going to be interesting to see how more and more American's survive on less..

[acmavm]

3. There was an excellent thread here the other day about 'credit'

and how it was used against the American people.

<snip>

"Easy credit was substitute for higher wages...."
Barbara Ehrenreich just made that statement on the C-SPAN II panel of The Nation magazine. Think about it. She is absolutely right!

If consumers, you and I, don't have the money to buy the products on the market, then the producers of those products do not make any profits. And the sad fact is that, for years, the minimum wage was stuck at about $5.15 per hour and millions of American "consumers" were stuck in the $8-$12 dollar range. So how could people buy anything with those types of wages?

Simple. The big banks would give them credit cards. They would pay off one credit card with another credit card and this cycle could go on for years. So long as the people were "buying". They were even offered new homes with no money down. Then they could re-finance those homes and get $20-$30,000 dollars and continue buying the products our economy was selling. But then, the housing market stopped dead in its tracks. People could no longer re-finance. They could no longer pay off their credit cards. But they were still stuck with their low wages. And no matter what the banks do or what this Administration does, people will still be stuck with their low wages and no money to buy the products to keep our economy going.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=5396536

We have all been screwed around for so long that we don't even recognize all the ways that the Predator Class has made sure that we no longer have a strong 'middle' class. It's just us and them now.