There’s an excellent article on energybulletin.net that you should read.
Written by ecological economist Brian Davey, he explains how while we need to fix the problems of peak oil and climate change, we’re not going to get anywhere until we deal with the psychopathic elite of bankers who have control of the world economy.
They created the financial crisis, and are now working to protect themselves from any damage from it – at our expense.
But in fact while in the US and UK there is righteous anger as bankers keep getting large bonuses from their bailed out companies, there are three crises, not one:
There is certainly a crisis of the financial system largely created by a massive amount of elite fraud during the “euphoric economy” of the bubble years. However there is also a crisis of uneven development where competitive imbalances between many parts of the world have reached their outer limits. Also, probably most important of all, there is a crisis caused by the global economy reaching the limits to economic growth – with constraints in resource availability, and destructive pressure on overused ecological sinks.
But…
without dealing with the bankers and the banking system we will not get far in resolving the other problems. During the boom a massive inflation of financial assets was created that only has value, ultimately, if these assets are able to function as claims on real wealth and real economic activity. But there is no prospect of expansion of real productive capacity. There is no sign whatsoever that a robust economic growth will get going again to make possible a servicing and repayment of the debts out of rising income. The result is that societies are being turned into debtors’ prisons for a psychopathic elite – although this process is being contested. As the Occupy Movement clarifies what it stands for it is to be hoped that the contest with the financial system takes a more definite form. In this respect we need some kind of manageable debt jubilee that is fair to all, including those who are not in debt. We need to take away from the banks the right to extend credit by creating new money. And we need to investigate and clean up the chief perpetrators of banking crime and fraud.
And there was massive fraud:
The “liars’ loans” in the sub prime market were criminal fraud. Lying on the loan applications was fraud. Giving loans when it was known there was no chance that they could be serviced to earn a brokerage fee was fraud. Overvaluing houses, so that even larger loans could be given out and even larger broker fees received, was fraud. Failing to keep adequate and truthful documentation about these loans was fraud. Packaging these ‘toxic assets’ and selling them on was fraud. Giving them AAA ratings without really looking was fraud or grave negligence.
Then knowingly taking out multiple credit default insurance and shorting these assets in the knowledge that these loans were toxic was fraud, as was using friends in the US government to ensure that AIG paid up on the credit default swaps when it went bust. At each step of the chain people made money by issuing and packaging up so called ‘toxic assets” that they knew were worthless – and by not taking out sufficient provisions against what was obviously going to be an avalanche of bad debts.
As early as 2004 the FBI warned of an epidemic of fraud in the home loans market and of the likely consequences. So what was done?
Nothing. Yet, Professor of Economics and Law, William K Black, estimates that there must have been at least a half million felonies committed.
Why the failure to act?
In part nothing was done because toxic economic theory said that nothing needed to be done – because markets were efficient and could price in risk for themselves. When it was assumed that nothing needed to be done the markets could be taken over by criminals.
Read the whole article (which of course recommends you watch Inside Job). Without getting rid of these impediments – indicting the banksters for their crimes – this planet is going to get nowhere…
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