Banksters were bit players

Reader comment on: Blaming the Bankers

Submitted by Mikiel de Bary (United States), Jul 11, 2017 21:19

I don't believe the "highly paid bankers" or the "Wall Street Titans" wrecked "the economy."

Yes, there was a financial crisis, and it caused uncommon disruption, including unemployment, a shock to homeowners, and a need for businesses to make adjustments. But the system of production in the U.S. has not yet been quite "wrecked." It continues to be the envy of most of the world in its productivity despite laboring, as it has for many decades, under severe regulatory and tax burdens and despite being now threatened by bizarre Federal Reserve policies born in the crisis.

This financial crisis notably involved the bursting of a colossal bubble in real estate values. Every financial crisis has its own characteristics. This one hit real estate hardest, but it also hit the stock market and many other corners of finance. The parties who caused the bubble, which was destined to burst sooner or later, will be found not in the bit players (here, the "banksters"), but higher up, in the money and credit system itself. On this system we find low-paid bankers (members of the Federal Reserve Board) and the U.S. Congress, creator and overseer of the Fed. It is the system that causes and allows serious over-valuations to grow by its cumulative monetary inflations and credit expansions over many, many years.

(I spoke above of the bubble "bursting," but this is likely a bad metaphor. Can a bubble stumble? The over-valuations have hardly been fully corrected. If they had been, the Fed would not have become the owner of $1.7 trillion mortgage-backed securities since the crisis. The bubble survives.)

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