It’s two years since Lehman collapsed. Two years since the world’s economies looked over the edge of the crisis that banking created, and were pulled back with public money, just in time.
Two years on the lessons have not been learned, indicated in two articles in the FT this morning:
If US President Barack Obama and the Democrats are punished as brutally in the mid-term elections as seems likely, their handling of the banks will be one reason for it. The administration’s critics come from every point on the political spectrum but they agree about this: the banks pushed the country into a crisis, got bailed out and walked away scot-free.
And:
Two years after the fall of Lehman Brothers, and a massive bank bail-out agreed by European governments, the eurozone’s financial sector is still fragile. As we have seen in recent weeks, the Irish banking sector is insolvent, and there are questions about the capacity of the Irish state to absorb those losses. J?ºrgen Stark, in charge of the monetary policy section of the European Central Bank, last week raised questions about the solvency of the German banking sector. Wherever you look, two years have passed and nothing has been resolved.
Two wasted years.
Two years when politicians would not stand up to the destructive power of neo-liberal banking.
Two years when the culture of our societies has not moved on.
Two years when politics has moved to the right as a result.
Two years that may cost us more than the first crisis.
Don’t say I didn’t say so.
And we can still take action. But it will take political courage — courage that would, none the less, be massively rewarded.
The time for that alternative is now. Obama has two years to adopt it. The Labour Party a week or so.
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Couple of things:
First, these are not “articles in the FT”, these are op-ed pieces by Clive Crook and Wolfgang Munchau. Not the same thing.
Second, with respect to Clive Crook, I have nothing for or against the guy (rather the opposite) but as a Brit, and despite his best efforts, he has a fundamental problem understanding America.
The notion that the issue of bank regulation is a factor in Obama’s upcoming incineration on November 2 is simply laughable. The key underlying factor is that Obama and his accomplices in Congress under the leadership of Pelosi and Reid have spent two years and a couple of trillion Dollars on things most Americans find unnecessary (healthcare), irrelevant (the auto bail-out) or even offensive (the stimulus), all laced with a good dose of Congressional pork. And this has produced precious nothing in terms of long-term economic recovery.
In fact, the words “stimulus” or “deficits” have become so unpopular, and so closely associated with the Democrats that even in the states that have run into serious troubles under Republican governors and/or legislatures (CA, FL among others) and which have most benefited from the Federal support to the mortgage market, the GOP is leading comfortably in both the gubernatorial and Senate races, often with a strong Tea party influence.
@Ted G.
And your problem as an anarcho capitalist is understanding the human condition
Which is why I am increasingly inclined to delete most of the complete rubbish you write
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