Greed Gave Us The GFC & We Have Been Paying Ever Since
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The Global Financial Crisis (GFC) grew out of the wage suppressing impacts of neoliberalism and its response to the lack of domestic economic demand and growth this engendered within Western economies in the late Eighties and Nineties. Manufacturing jobs were moved offshore to cheaper labour markets in the developing world. The cheaper consumer goods which were manufactured in China were promoted to the folks back home and credit was encouraged so that they could purchase them. Do you remember how easy it became to get credit in the 1990’s? Greed gave us the GFC and we have been paying ever since.
Financialization Fuelled The GFC
US dollars from China’s exports came back to the US, via the sale of Treasury Bonds and were used to fuel a credit boom where Americans were encouraged to go into debt to buy these consumer goods. A credit/debt spiral would fund economic growth and financialization would emerge out of this. Banks would securitize debt products and on-sell them to other financial institutions, pension funds, and these spread throughout the globalized financial services sector. It would become a perfect storm of unregulated, subprime mortgage loans which poisoned the well for everyone. Banks and insurance companies would bet on billion dollar derivatives in their bid to make ever greater profits for their investors.
F*cking The Economy & Getting Away With It
The amazing thing about the GFC is that no banker was ever prosecuted for their fraudulent and illegal behaviour in securitizing financial products which were destined and designed to fail. The absence of oversight was criminal in itself across the sector. Stock brokers and merchant bankers were bailed out by the federal government in the US. Socializing the hundreds of billions of dollar losses by Goldman Sachs, Merrel Lynch, and insolvent banks like Citi and Bank of America. ‘Too big to fail’ should have been tattooed across their foreheads for life.
It is a feature of the failures of neoliberal economics that losses were socialized and profits went into the pockets of their wealthy investors. Billionaires have sprung up like weeds following a downpour.
The Rise Of The Oligarchs
Capitalism and its ‘so called’ free market is a phony story. The companies involved in today’s free market abhor competition and do everything possible to rig the game. Monopolies, duopolies, and oligopolies are so prevalent throughout western economies they attract little notice these days. Price setting and profit gouging is the norm and the standard in the 21C. Consumers have been shafted and have long lost their power in the market. The Silicon Valley tech corporations control the lives of modern folk, as they operate in a largely unregulated space. These companies and their oligarchs make the devices and software at the centre of our lives in the digital age. Social media tells hundreds of millions of people what to think every moment of every day. Generations of human beings stare in wonder into the small screens held in their hands. Elon Musk, the world’s richest man, has his X platform to communicate across the globe with 198 million followers. There are billionaires with strident agendas wishing to remake the world in their view. Facebook, Instagram, Tik Tok and the other social media platforms are purveyors of gossip and opinion made misinformation via their standing in the 21C community. The old media channels are dying off and their influence has become bespoke for various strands of demographics within markets and populations.
American Democracy Under Threat
Politics is at its lowest ebb and a popularity contest for merchants of grievance within a culture of complaint. Trump has been the king of this kind of thing over the last 9 years. He has degraded the American republic to such a level, it is on the nose globally for all to see. Perhaps, this has ultimately been a good thing in that it has forced a reinvigoration of what we call democracy. The Democrats through President Joe Biden and now Vice president Kamala Harris are campaigning on the importance of democracy to American life. It is akin to good vs evil, as the GOP is mired in the MAGA Trump cult and a reactionary party dedicated to policies designed to turn the clock back to a 1950’s style white America. The demographics of 21C America are a multiracial democracy and a land of liberated women who are not best served by any futile attempt at regressing the nation. History tells us that reactionary parties rarely win for long and that progress in inevitable in the larger scheme of things. Entitled white men wanting to live in a world where they do not have to share is not a future for a prosperous humanity. America’s past was the enslavement of captured Africans and the genocide of the continent’s Indigenous population. No matter how hard right wing folk want to deny this history it stands. It is time to even the playing field for real in terms of economic opportunities for all Americans. Donald Trump’s lies about immigration are more mistruths aimed at sewing fear among the white population. Ignorance about history, the actual history of a nation, allows convenient BS to infiltrate the collective consciousness. Demonizing Haitians is just another chapter in a long American tradition of telling lies to ignorant and lazy thinking folk.
Elon Musk will facilitate the spread of this stuff, as it suits his purposes in manipulating the masses for a political outcome in getting a crooked President elected who will look after his economic interests.
Neoliberal Economics & The Rigged Game
America has long been in the grip of vested interests to the detriment of ordinary working people. Tens of millions of citizens aspiring to become billionaires feeds into easy manipulation by those political forces selling the kind of unregulated state they want, so as to protect and foster their own economic interests. The Reagan premise that government is the problem rather than the solution is a con, a scam, designed to fool ignorant folk. Good government is essential to a free and functioning society. Neoliberalism has given over the economy to market forces but these are not free market forces. No, they are large corporations, which have neutered their competition through mergers and take overs. The success of these corporate behemoths has created billionaires and more powerful companies. Their lobbying efforts have been huge in spending to ensure laws and legislation that feeds their bottom line. The few occasions when these giants have gone belly up, as in the GFC, government has stepped in and bailed them out. Socializing their huge losses, which means we the tax payers foot the bill. Super profits go to investors and super losses are borne by ordinary folk. This is neoliberalism, which Ronald Reagan ushered in back in the 1980’s and has been with us ever since. This is the economic system running the show right now and has fed the financialization of everything. Every part of your life, from healthcare, education, shelter, work, and recreation is driven according to financial markets and the concerns of private equity. Hospitals are owned by profit seeking firms. Life saving drugs are determined by companies hell bent on chasing super profits. Property is being defined by these giant companies financializing the economic levers like land values and rents. Higher education sees Harvard University worth some $50 billion and this is no outlier.
“Ivy League colleges and universities like Stanford and MIT have amassed massive endowments, with wealthy alumni exerting considerable influence on university policy and even curricula. Harvard’s endowment, at more than $50 billion, is the biggest among U.S. universities and is larger than the GDP of more than 120 nations, including countries such as Tunisia, Bahrain and Iceland.”
What is wrong with this? If money markets dwarf the sectors they purport to serve then we lose sight of what the ultimate purpose of these areas of life. Education is about educating our kids and young adults. A home is supposed to be about providing shelter and security. Healthcare should be about healing the sick. If all of these things become unaffordable for large parts of society we have lost our way via the financialization of these vital aspects of our lives. Governments have allowed corporations and their rigged markets to overwhelm the basic aspirations of their citizens. Profits over people. The financial interests of a few wealthy people shitting on the hopes of ordinary folk. Governments have been bought off in the past and this has to stop. If we are going to back Kamala Harris for a new future, this has to be front and centre in the Democratic platform.
It is time to turn off the unregulated taps syphoning off the wealth of the nation to these billionaires and their companies. America must find new and fairer ways to succeed in the world. Financialization is a crock of shit and no layer of golden eggs for the majority of the people. Stop ripping off other Americans and start operating within the confines of what is good for the most people.
Robert Sudha Hamilton is the author of America Matters: Pre-apocalyptic Posts & Essays in the Shadow of Trump.
©MidasWord
