There's a new story in Rolling Stone magazine about the global economic crisis. It isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution.
Portions of the story are written in salty language and will probably be offensive to those over 30, but the message by author Matt Taibbi is very powerful.
He starts with the rise of Joseph Cassano as head of AIG Financial Products (London) just when Senator Phil Gramm of Texas was pushing laissez-faire deregulation through Congress. Gramm and his pals seriously changed the Glass-Steagall Act, passed after the Great Depression, to allow commercial banks to get into the investment banking business. Those changes also allowed these same banks to get into the insurance business. This allowed Cassano and AIG to bundle and sell collateralized-debt obligations (CDOs). Another change pushed by Gramm allowed AIG and others insure these obligations with Credit Default Swaps (CDSs). Both of these instruments were fluff.
Taibbi's story goes on to tell how Congress and the Executive Branch protected this sham when the Europeans and others were beginning to have doubts in 2007. Hank Paulson, formerly with Goldman Sachs, protected all his pals.
What disturbes me the most from reading Taibbi's story is the lack of accountability from so many people and organizations who knew this was all wrong. If there was ever a need for transparancy in government and financial institutions, this was it. Those who took us for a ride have walked away very, very wealthy.
1 comments:
Dennis:
Right on. They walked away with a lot of money gaming the system. They won. We lost. Today, they have the audacity to scream that they have to pay taxes. I don't get it. I don't like it. It's not fair.
Greg Hutchins
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