When the history of the financial crash is written, this
is what will be said:
1. The federal reserve
and its serial bubble-blowing policy, fractional
reserve banking, the loss of America’s manufacturing
base, huge debts, spending trillions on imperial
adventures in Iraq and elsewhere, and insane
leverage and speculation using exotic instruments
like credit default swaps were the biggest long-term
causes of the crisis
2. The government could have prevented the crisis if
it had heeded the warnings of those speaking the
truth, but because it was politically easier,
politicians pretended that they didn’t understand
what was going on, and tried to “kick the can down
the road” so that it would be someone else’s problem
3. Had the government let the markets deleverage,
and let cancer of malinvestment clear itself out of
the market, we would have been through most of the
worst by the end of 2009. But by borrowing, printing
and spending many trillions of dollars we didn’t
have, by artificially propping up leverage, and by
taking other counter-productive actions, the
government ensured a full-scale depression,
and ensured that it would continue for years
4. Economies cannot prosper when the rule of law is
destroyed and the government routinely lies. The
current crash would have ended much sooner had the
government been honest, and people trusted the
government. The government’s lies about the Iraq
war, torture, spying, 9/11, and just about
everything else destroyed people’s trust that
anything the government said was true. Even with
sophisticated propaganda methods, one too many lies
will destroy a government, a country and an economy.
In addition, there were many Madoffs - titans of
industry and finance and investment who were
dishonest. Under the weight of dishonesty, no one
trusts each other enough to do business, and the
free market shuts down.
