Finance Political

Inside Job: How the Global Financial Crisis was “Made in America”

Yesterday, November 21, I went to see a documentary called “Inside Job” narrated by Matt Damon. It was a riveting chronology of good intentions gone bad. It started with Ronald Reagan in the early 1980’s, who wanted to reduce the size of the federal government and it’s intrusion on individual rights. The intentions were good, but the economists and the financial gurus were ready to take advantage of the situation.

Deregulation of financial institutions were put into first gear with Ronald Reagan, and each US President since then has contributed to the downward spiral that culminated in the crash of 2008. It began with the insolvency of Lehman Brothers Financial Institition. All the presidents had the help of financial advisors who had lots to gain from deregulation on a personal basis. Federal regulations were continually subject to adjustments that allowed financial institutions to reduce their capital reserves during economic downturns to the point where their ability to survive an economic crisis was impossible. It doesn’t matter if the president was Republican or Democrat; they all listened to economic advisors from Ivy League universities who didn’t understand sound banking principles. The real controllers of this economy had been handed to the financial community with billions to be spent to get their way, regardless of who is in office. The documentary pointed out that today, there are 5 financial lobbyists for every congressman and they have the spending power to keep those in office who believe in their goals. Folks…that’s how incumbents get re-elected!

It’s all about greed and the loss of objectivity of sound economics. The melt down was the culmination of economic professors who didn’t understand economics, but had the leadership positions in revered universities such as Harvard and Columbia, that became advisors to our presidents and politicians and had the backing of Wall Street gurus who were only interested in their own personal gains. It’s all about egos and those that win with the most toys. One guru wound up with seven jets to fly him off to exotic places. The only way he could use seven jets at one time is if he was dismembered.

Ronald Reagan believed in free enterprise and the idea that risk takers should be rewarded. When risk takers go beyond the ethical and moral boundaries, it is called greed and that is why sound strict financial rules that were in place for 100 or more years in the United States have to be reinstituted. Without them there is no future for the American economy. There is a rule of law with boundaries, except when congress bends them or breaks them with bad economic advice.

The sad ending to this documentary is that the ethical and moral will of those in Congress is weak and it is business as usual. It looks like nothing will be done to fix the financial regulations that caused this problem. It appears to be business as usual when the payout to the financial managers is just as large in 2010 as it was before the economic downturn that has harmed millions of families in this country.

Since “Inside Job” is a documentary with a limited budget to advertise their existence, with just a few theaters running the film, it will soon be lost to oblivion. Folks. There is no sex in this film, so it doesn’t play well with the theaters. Go see it before it disappears, and you will be as mad as hell as I am. I don’t care about sex; I care about what we are leaving to our children and grandchildren. The way it is going, it isn’t much!

T. Braun, Pharmacist, Buyer, Marketing Executive for a Major Drug Chain. Active for over 45 years in Pharmacy.

Legal Stuff: Disclaimer – This document is informational in nature. Medical advice should be secured through your physician.

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