by Peter A. Belmont / 2011-04-08
© 2011 Peter Belmont

RSS Recent Essays (All Topics)

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•(01/23) The Purpose of "Conservatism"

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This book (about the American bubble economy, economics, and politics) starts with some of the funniest political commentary I’ve ever read regarding America’s political system. I hope that the copyright rules will permit me, as a reviewer, to quote enough to get you all to read this devastating (and to my sensibility, this so very truthful) report on Homo Politicus Americanus. But I’ll allow you to find the humor in the book itself. Below, some bitter satire on American politics.

However: the best part of the book is its chapter 3, “Hot Potato-The Great American Mortgage Scam”, pp. 78-123, which spells out the inner workings of this most duplicitous of inter-connected scams; a “must read”. Some of his conclusion below.

At p. 10: “The presidential election is a drama that we Americans have learned to wholly consume as entertainment, divorced completely from any expectations about concrete changes in our own lives. * * * [Our] stake in the electoral game isn’t a citizen’s interest, but a [PAB: sport’s analogy alert!] rooting interest. * * * That’s why voters still dream of politicians whose primary goal is to effectively govern and maintain a thriving first world society with great international ambitions. What voters don’t realize, or don’t want to realize, is that that dream was abandoned long ago by this country’s leaders, who know the more prosaic reality and are looking beyond the fantasy, into the future, at an America plummeted into third world status.

”These leaders are like the drug lords who ruled America’s ghettos in the crack age, men (and some women) interested in just two things: staying in power, and hoovering up enough of what’s left of the cash on their blocks to drive around in an Escalade or a 633i for however long they have left.”

At p. 11: “It’s the same in our new ghetto. We don’t get real political movements and real change; what we get, instead, are crass show-business manipulations * * * If American politics made any sense at all, we wouldn’t have two giant political parties of roughly equal size perpetually fighting over the same 5-10 percent swatch of undecided voters, blues versus reds. Instead, the parties should be broken down into haves and have-nots—a couple of obnoxious bankers on the Upper East side running for office against 280 million pissed-off credit card and mortgage customers. That’s the more accurate demographic divide in a country in which the top 1 percent has seen its share of the nation’s overall wealth jump from 34.6 percent before the crisis, in 2007, to over 37.1 percent in 2009. * * * But we’ll never see our political parties sensibly aligned according to these obvious economic divisions, mainly because its so pathetically easy to set big groups of voters off angrily chasing their own tails in response to media-manufactured nonsense, with the Tea party being a classic example of the phenomenon.”

This is great stuff. Humor all the way. No relation to political or any other reality? Maybe Alan Greenspan would say that. Taibbi takes some mean digs at the Hon. Greenspan. But accurate diagnosis or not, “Griftopia” is a great read.

But what are others saying? What does Google turn up?

Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America is a book by the political journalist Matt Taibbi that reviews and analyzes the events that led to the financial crisis of 2008. The book was published in November 2010. Its main thesis is that the crisis was not an accident of the free market but the result of a complex and on-going politico-financial process taking place in the United States whereby wealth and power is transferred to a super-rich “grifter class” that holds a grip on the political process. The book has been described as a “necessary ... corrective” of the assertion that bubbles are inevitable in the market system[1], and contests the notion that the greed of the American consumer was a primary cause of the problem.[2] Taibbi maintains that “all of us, conservatives and progressives, are being bled dry by a tiny oligarchy of extremely clever criminals and their castrato henchmen in government.”[3]

In the meantime, and this is the second thing that’s so amazing, almost everyone who touched that mountain turned out to be a crook of some kind. The mortgage brokers systematically falsified information on loan applications in order to secure bigger loans and hawked explosive option-ARM [adjustable rate mortgages] mortgages to people who either didn’t understand them or, worse, did understand them and simply never intended to pay. The loan originators cranked out massive volumes of loans with plainly doctored applications, not giving a [...] about whether or not the borrowers could pay, in a desperate search for short-term rebates and fees. The securitizers used harebrained math to turn crap mortgages into AAA-rated investments; the ratings agencies signed off on that harebrained math and handed out those AAA ratings in order to keep the fees coming in and the bonuses for their executives high. But even the ratings agencies were blindsided by scammers who advertised and sold, openly, help in rigging FICO scores to make broke and busted borrowers look like good credit risks. The corrupt ratings agencies were undone by ratings corrupters.

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