GOD, I love clarity!!
Last week on the Jon Stewart show came one of the most refreshing and cogent moments in the last six month regarding the financial debacle caused by the crooks and liars in our country over the last three decades. Elizabeth Warren, overseer of the Troubled Asset Relief Program ("TARP"), outlined in unvarnished terms the real economic history of booms and busts in the U.S., and what kind of attitude and approach has caused them. It's beautiful.
"In 1792, in our young country, George Washington is president in his first term, and there's a credit freeze, a financial panic. Every 10 to fifteen years since then, there's been a financial panic in our history, a big collapse, people losing their farms, wiped out... until we hit the Great Depression. We came out of the Great Depression and we said: 'We can do better than this. We don't have to go back to this boom and bust cycle.' We came out of the Great Depression with three main regulations: the F.D.I.C - which made it safe to put your money in banks, Glass-Steigel - which prevented banks from doing crazy things, and S.E.C. regulations. We go FIFTY YEARS without a panic.
Then comes 1980 and "we started pulling the threads out of the regulatory fabric and what's the first thing we get? We get the Savings & Loan Crisis. Seven hundred financial institutions fail. Ten years later what do we get? Long Term Capital Management, where we learn that when something collapses in one place in the world it collapses everywhere else. Early 2000s, we get Enron, which tells us the books are dirty. And what is our repeated response? We just keep pulling the threads out of the regulatory fabric.
"So we have two choices - we are going to make a big decision, probably over about the next six months. And the big decision we are going to make is to go one way or another. We are going to decide, basically, 'Hey, we don't need regulation. You know, it is fine. Boom and bust, boom and bust, boom and bust... and good luck with your 401K!' Or alternatively we are going to say, you know, 'We are going to go out with some smart regulation that is going to adapt to the fact that we have new products and what we are going to have going forward is we are going to have some stability and real prosperity for ordinary folks."
"And that," Jon Stewart offered with a sarcastic tip of the tongue, "is socialism!"