William Greider has written the article Elizabeth Warren Uncovered What the Govt. Did to ‘Rescue’ AIG, and It Ain’t Pretty.
The subheading is The government’s $182 billion bailout of insurance giant AIG should be seen as the Rosetta Stone for understanding the financial crisis and its costly aftermath.
The article is very long, so I can save you some trouble by cutting to the chase.
Lots of ordinary citizens have figured this out. If some banks are too big to fail, then government should compel them to become smaller banks. The harsh reality is that our bloated financial sector is too large for the economy it serves, its power too concentrated at the top. Neither the president nor either political party is yet ready to face the imperative of breaking up the mega-banks. Until they do, the system will remain unstable and prone to excesses, maybe worse.
Notice no mention of the favorite secondary players against whom Faux Noise likes to whip up public outrage. If they keep the outrage misfocused this way, the primary players can go unblamed.
With post after post, I have been trying to shift the public’s view of the blame for the financial crisis from Dodd and Frank and from Fannie Mae and Freddie Mac to The Fed, Goldman Sachs, and the mortgage lenders.
Do not make the mistake of thinking I am doing this to absolve Dodd, Frank, Fannie, and Freddie from their rightful share of the blame.
I am doing this because a focus on the secondary players causes us to lose focus on the primary players. If we don’t fix the problems with the primary players first, then fixing the problems with the secondary players leaves us vulnerable to a bigger collapse than the one we just saw.
Help me figure out how to phrase the problem so that people will finally understand what is at stake. It is fun to beat up on our favorite villains, but we cannot afford to miss who the real trouble makers are.
Put politics aside, and solve the real problem. After that, if there is any energy left, play all the politics you want. Blame it on big Government, blame it on Dodd, and Frank. Why should I worry about the fairness of it all, if the world is saved from having to live through a catastrophic financial collapse?