Oh, That Trillion Dollar Financial Bubble, It's Leaking!
It's here! Author Charles R. Morris calls it: "The greatest credit bubble in history!" He insists that the "writedowns and defaults" of credit devices will "come out about $1 trillion." Problem: President George W. Bush, Jr. is in denial about the crisis. Like that amiable dunce, President Ronald Reagan, he contributed to this horrible mess by turning the country over to the Vulture Capitalists and also by launching the Iraq War with its price tag of $3 trillion!
"Credit is the air that financial markets breathe, and when the air is poisoned, there's no place to hide." - Charles R. Morris
"I hadn't heard that!" This is how the President, George W. Bush, Jr., responded, when he was asked his thoughts on the prospect that gasoline could go over $4 a gallon this summer. At the White House press conference, on Feb. 28, 2008, he also denied the country was headed into a recession. President Bush is a dimwit, a crude frat house wise guy, who never grew up. It's fair to say that President Bush is also a one-man-train wreck, not only with respect to the Iraq War, the loss of Civil Liberties, (some of which predate the U.S. Constitution), but to the faltering economy as well. What he doesn't know about basic economics could fill volumes. Following the lead of the late President Ronald Reagan, Bush turned the country over to the Vulture Capitalists to exploit. This was like putting the fox in charge of the chicken coop. (1)
In his just released book, "The Trillion Dollar Meltdown: Easy Money, High Rollers and the Great Credit Crash," author, attorney and former banker, Charles R. Morris, walks the readers through the massive financial chicanery, shady corporate insiders' dealings, really stupid government policies, predatory lending practices, stockholders' conning schemes and the outright fantasies, that have created "the greatest credit bubble in history." This is scary stuff! What makes it even scarier is that one of the most culpable parties to this ongoing crash, President Bush, is in total denial. And, he's going to be in office for another nine months! (2)
Mr. Morris writes: "The sad truth...is that [the] subprime [mortgage market] is just the 'first big boulder' in an avalanche of asset writedowns that will rattle on through much of 2008. An overhaul of subprime-like assets, at least as large, is sitting in corporate debt, commercial mortgages, credit cards, and other portfolios. Even municipal bonds may be at risk. Loss estimates of $400 billion to $500 billion barely get your halfway there...When large wobbly objects tumble, they go very fast...I lay out...the likely course of writedowns and defaults on the whole asset gamut--residential mortgages, commercial mortgages, high-yield bonds, leverage loans, credit cards, and the complete bond structure that sits atop them. IT COMES OUT TO ABOUT $1 TRILLION."
Background: It's hard to believe that oil was once selling, in 1998, on the international market for around $15 a barrel. Today, it cost $104.50 a barrel. In a decade, the price of oil had increased by 680 percent! (3) The Persian Gulf Wars, thanks to the hawkish Bush Cabal, and others, have not only destabilized the Middle East, but the U.S., too. (4) As I write, the Bush-Cheney Gang's plot to grab most of the oil of Iraq to benefit an Anglo-American Oil clique is well underway. (5) However, in 1981, it was President Reagan, who "ELIMINATED THE LAST VESTIGE OF OIL PRICE CONTROLS." No wonder the pundit Nicholas von Hoffman said of that overrated, now wrongly canonized, air head: "It was humiliating to think of this unlettered, self assured bumpkin being our president."
This is the same bumpkin, a stooge for the powerful Wire Pullers, who maliciously "busted" the striking PATCO union, in 1981, while many in the Labor Movement, who should have known better, chose to look the other way. Workers' "solidarity" took a holiday as PATCO became history, union power began its steep decline in America and the grasping rich got even richer. (6)
Author Morris warns that to continue "to downplay and to conceal" the current crisis`will lead the country on "A PATH TO DISASTER." He points an accusing finger again at the amiable dunce Reagan for originating a big share of the present economic chaos. He underscores: "The current conservative, free-market cycle, [think flawed guru Milton Friedman], that commenced with the Reagan presidency [1981-89]...seems to have long since foundered in the oily seas of 'gross excess.' If nothing else, a restoration of reasonable financial regulation is imperative."
How many times have we heard from Reagan, and Bush, too, this dubious mantra: "Government is the problem!" The truth is that it was their pro-corporate polices which empowered the Vulture Capitalists. They are the ones who cut the taxes for the filthy rich, while increasing the burden on the fading middle class. They also brought us the Racket of Deregulation, along with the "Enrons and WorldComs, and now the CDO mess," and widespread corporate fraud on a scale that shames the devil. (7) And, it was Bush, who recklessly launched the Iraq War, whose costs are now estimated at a mind-bending $3 trillion dollars! (8)
One of the consequences of all of the above are higher energy prices that are beyond the scope of many on fixed incomes to deal with in today's society. Plus, there has been the out sourcing of millions of middle class jobs to foreign countries. The author cites this damning example: "By 1980, for all practical purposes, America no longer manufactured televisions or radios, the Germans and Japanese controlled the machine tool industry, and 'American steel and textile industries were a catastrophe.'"
Finally, in his insightful tome, Mr. Morris goes into great detail, citing specifics across a wide range of financial issues, some in the arcane categories, to argue his case about how this present crisis has come about. He believes: "This is a crash with no firebreaks...After a quarter of century of antiregulatory zealotry...the credibility of...American markets is at risk...Market dogmatism has become the problem, rather than the solution...It's time for the pendulum to swing in the other direction."
1. link to www.new-enlightenment.com
2. link to www.indystar.com
3. link to www.wtrg.com
4. See, "The Sorrows of Empire," "Blowback," and "Nemesis" by Chalmers Johnson
5. http://www.youtube.com/watch?v=ZTb3SLa_2VE and
6. http://www.isreview.org/issues/49/patco.shtml and
William Hughes is a video and print journalist. His videos can be found at: http://www.youtube.com/profile?user=liamh2. (This article was originally posted on or about March 5, 2008)
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