We’ve heard much of it: Mortgage backed securities i.e. bonds, touted as spreading the risk for high-risk, would-be home owners to abet home owning, but relieving the lending banks of the risk of default by off loading that risk to the bond holders. Credit default swaps, called swaps after intense lobbying by the big banks to avoid the name “insurance,” to avoid being required to hold reserves against prospective losses. Rating agencies paid by the very companies whose credit-worthiness they rate. The finance committees of both Houses of Congress that, according to Bill Moyer’s journal, received $120,000,000.
Names should be named: Alan Greenspan explained to Congress recently that he had no effective influence on Congress. But he and Larry Summers successfully helped block in Congress a Clinton Administration effort to investigate the derivatives market. No influence? My foot. Greenspan lobbied for giant Pimco after he stepped down as Fed Chairman, to save a class of Fannie May bond holder’s bonds. One wonders just what fee was earned. Larry Summers earned several million consulting for a hedge fund while President of Harvard. He is President Obama’s Economic Advisor. If he now favors “regulation”, where was he when he argued to Congress against investigating the derivative market? It seems no one was responsible. No one. Greenspan, Summers, our Treasury Secretary, the presidents of the big banks. Our Titans were, well, so persuaded of their world view, or so greedy, that they were blinded. But look at the havoc they have wrought. Is that accepting responsibility? Is that “leadership?” Is that moral? I don’t notice that the answer is “Yes.”
Read more at: NPR.org
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{Photography by Anonymous Account}
