By utter greed, recklessness, and myopia. They've busted the economy! And the thought that they'll be with us, as if they've done absolutely nothing to smash the markets, is even more troubling than the $700 billion bailout.
Prominent essayist Nancy Gibbs writes: "When societies sin -- dismissing the poor, despoiling the planet -- who exactly, should pay, and how?"
There ought to be, I'd like to think, a retribution due each one of those responsible for this financial disaster. In other cultures where one is lynched for writing childish obscenities on walls, they'd all hang really high!
It's said that when one of these CEO's sneezes, the ordinary guy down Main Street loses a buck; when he coughs, the Dow plunges and the country panics. That's how powerful they are. Many even among their Wall Street buddies now think harshly of what they've done to the economy. They truly believe they're criminals, no less. In Mohandas Gandhi's words, "commerce without morality is sin." There ought to be indictments against these CEOs in time. If the mainstream media fails to get the real story behind this economic catastrophe, federal investigators will. There will be a lot more about it when conspiracy theorists begin to dig up dirt.
Like many, I've always been wary of people in Wall Street, they who orchestrate structuring of loans, mortgages, investments, and other instruments of commerce, people who virtually run our economy. "Wall Street has always been a greedy place," Time says.
What really happened?
"If you're having trouble unraveling what really happened to the financial system, you need not feel bad -- even the savviest people running the US Treasury and the Federal Reserve Board haven't seen anything like this," business reporter Allan Sloan writes.
All we know that not so long ago -- the markets rode triumphantly high, houses sold like hot cakes in Las Vegas. Nevada, and other places. We now call that time the 'housing price bubble'. Wall Streeters launched what economic writer Andy Serwer called 'spiffy nouveau products' like credit default swaps, no down payment, low initial interest rates, and a host of creative financing schemes that in time created a 'financial Frankenstein.'
The media quoting Treasury Secretary Henry Paulson reported: "the financial firms grew and morphed and created financial instruments no one really understood well enough to oversee. Not understanding these financial instruments, lawmakers and politicians looked the other way. When the house prices caught fire, the big financial players jumped in with borrowed money that they in turn lent out to homebuyers that didn't have the means to pay. Then the banks diced those loans as exotic securities which left everyone naked when the market crashed."
In a nutshell, "credit, the access to cash that keeps US and other economies oiled simply dried up," explains financial writer Karen Tumulty. . In a sense, credit is the sine qua non for which economic engines run. In an ailing economy, credit becomes unavailable. That's how economists would explain the biggest economic meltdown since the creation of money
What does this means to the small guys?
If you're running a business, it could very well go under.
If you're employed, you could lose your job and maybe all benefits that go with it.
If you need a car, you couldn't get a loan from your bank to buy it because banks could fail.
All this, according to financial writer Massimo Calebressi, could happen so fast you wouldn't know what hit you.
To the point - in times like this one you could wake up in the morning and discover, sadly enough, that you're certifiably broke. Giant firms like Lehman Brothers, AIG (International Insurance Group) Bear Sterns, Washington Mutual, and others thought they couldn't fail - but they did - in a quick, short rout.
*****
Cris D. Kabasares writes a column for a New York newspaper.
