From a convo in the channel last night–“we are all responsible.”
I don’t buy it. We are not all responsible, when the only information that the ordinary man in the street could get–or comprehend–was all in favor of doing exactly what they all did. I was shocked when I saw the Rep. Byron Dorgan video below–I *remember* that time period. As far as I know, his statements, or any like them, weren’t reported in the mainstream media at all. Mainstream media, financial advice columns, advertising, bank reps, *every* source of information was all on the same page…”house prices always rise”, risk has been banished, “you can refi in two years, don’t worry about it!” “The Great Moderation–no more recessions!”
And in reality, housing prices had been rising for 10 years. It simply was not an unreasonable assumption to expect them to continue in most places.
And I hear “but people were stupid to take out their equity to buy TV’s and cars.” Perhaps, but at least they have TV’s and cars to show for it–the rest are losing their equity anyway and have nothing to show for it. In a system that penalizes saving, who was stupid?
Sorry, folks, it was *not* the fault of the American people. With most sources of information controlled by those who benefited most from the scam, it was not our fault. People can only make decisions based on the information they can get. Sure there were a few, Rep. Dorgan, Nouriel Roubini, Paul Krugman..voices denounced as spoilsports and naysayers publicly and loudly, if anyone ever heard of them at all (I never did, and I read everything,) who tried to alert us..but where on earth was the average guy buying a house ever going to hear of their existence, let alone seek them out?
“Nothing goes up forever” it’s been said to me. Such is hindsight. But that’s not what the economists and financial advisors were saying in the 80’s and 90’s. “Everything’s changed! We know how to prevent recessions now. Long term, everything goes up! The Great Moderation has fixed all that!” All the experts, the University wogs, the banking advisors, the mainstream financial shows were all cheerleading the fantastic, never before seen opportunities! So…how were all us “idiots” to know differently? In the absence of information, in the face of *misinformation*–intelligence doesn’t do much for you.
This is as much a failure of freedom of speech as anything. Having all outlets controlled by one group–the business sector, is no more free than say, China, where all media is controlled by government. The simple fact is, markets do *not* deliver anything in an efficient nor egalitarian manner, and the most vital functions of public life, including information, must not be left in it’s grasping, invisible hand. If there is to be real change, real stability, we must return to truly public media, and a truly public government. With business and especially finance put firmly into a much smaller place.