Lois & Clark Forums Forums General Discussion Off Topic Possible reason for Wall Street crisis

Roger, you said this about our Swedish right-wing governments:

Indeed, they do support tax cuts. And every right-wing Swedish government has cut taxes. Every time, that has led to decreasing tax revenue, and every time, it has led to a growing national debt. All right, this time the right-wing alliance was riding the wave of a bullish economy when they were instated in 2006, so until now tax revenue hasn't gone down. But every time the right-wing parties have ruled, the less fortunate in our society have ended up being even worse off than before. That is going to be more true than ever this time, when our government has done their best to punish those who don't have a job. If unemploynment is going to rise in response to the Wall Street crisis, the present government will have created the worst situation for unemployed Swedes than we have seen since, well, perhaps since the 1930s.

Regarding the United States' war on Iraq, you said:

Well, they used the context of 9/11 to find a reason to attack Saddam Hussein and Iraq. If President Bush had pointed his finger at Saddam Hussein and Iraq before 9/11 and said that America needed to send at least 100,000 troops to Iraq to attack and occupy that country, I very much doubt that most Americans would have thought that this was a good idea. In fact, I'm 99% sure that most Americans would have been shocked at the idea, and then they would have protested so loudly that it would have been impossible for Bush to carry out his plan.

And make no mistake, Roger. To most people in the world outside the United States, it seems plain as day that the United States attacked Iraq because the Bush Administration blamed Saddam Hussein for 9/11.

After 9/11, I read as many newspapers as I could, and saw as many TV documentaries and listened to as many TV and radio commentators as I could, in an attempt to understand what had happened on 9/11, who was to blame, and what would be the most sensible response to the awful attack. Not one of those newspapers, not one of those documentaries, not one of those commentators ever mentioned Saddam Hussein in connection with the actual attack. What is more, not one of those newspapers, documentaries or commentators ever mentioned Saddam Hussein when they tried to paint a broader picture of terrorism in the world.

I remember very well the very first time I heard Iraq mentioned by the Bush Administration after 9/11. It was after the Afghanistan war was considered victorious - big mistake, that - and I was on my commuter train, reading my morning paper. And I saw that rather small article mentioning the Bush Administration's wish to attack Iraq. I remember that I almost cried out right then and there on the packed train, among all the other commuters, almost shouting, "What???? Iraq!!!!!"

Saddam Hussein was known for harboring terrorists? No, Roger, he was not. After it was clear that the Bush Administration wanted to attack Iraq, all the newspapers and documentaries and commentators that had used to discuss 9/11 in general now rushed to discuss Iraq. I remember very well listening to international experts who said that whatever horrible things Saddam Hussein had done to his own people, particularly to the Iraqi Kurds, he had never harbored any international terrorists at all. The reason, explained the experts, was that Saddam Hussein ruled a country that was divided along religious lines, between Sunni Muslims and Shia Muslims, and he knew that his country could erupt if he allowed foreign religious warriors to enter his country and, perhaps, stoke religious fires there. Therefore, the experts said, if there is one Arab country where you will not find any foreign Islamist terrorists, it is Iraq!

Of course, that was before America attacked Iraq. After the United States launched its war on Iraq in March 2003 (if I remember correctly), terrorists streamed into that country like bees and flies to lumps of sugar.

Nevertheless, I will go so far as to say that you lie when you claim that Saddam Hussein was known for harboring terrorists, and that that was one of the reasons why Bush attacked him.

Anyway, who harbored the terrorists? Several of the 9/11 terrorists had spent quite some time in Germany, so Germany had harbored them. Should your country have attacked Germany? And let's not forget that the terrorists had spent quite some time in the United States too, before the attack. You yourself had harbored them. Should you have attacked yourself?

No, Roger. The thing is that after 9/11 much of the world was busy discussing how this attack could have happened and what could be done to prevent anything like that from happening again. No one mentioned Iraq, until the Bush Administration named Iraq as its new target.

In the present Wall Street crisis, Fannie and Freddie were mentioned, yes. Freddie, in particular, was in deep trouble. And the Administration promised to bail out both Freddie and Fannie. I remember it well.

But Freddie and Fannie was not what most newspapers articles, editorials and commentators talked about most. They talked about derivatives and swaps, about the housing bubble and about the problems of deregulations.

Those commentators who tried to explain George W. Bush's obsession with Iraq said that Bush had long wanted to attack Iraq, and 9/11 gave him a reason to do so. And at least one of the articles that Alcyone has given us links to has said that Republicans have long disliked Fannie Mae - Ronald Reagan, for example, tried to sever the bonds between Fannie and the public and federal domain - and the Wall Street crisis gave Republicans a chance to single out Fannie as the reason for the crisis. In particular, it became possible to single out the CRA and subprime loans to poor people as the reason for the crisis.

Well, Barry Ritholtz from the Big Picture claimed in the commentary that Alcyone gave us a link to that the worst of the defaults had not come from subprime loans, but from loans given to people whose economy was regarded as much sounder. And Ritholtz also claimed that one of the two major reasons for the housing bubble was the ultra-low rates, which made it so tempting for people from all walks of life to try to get themselves a loan so they could buy a house, and which also made house prices soar so that it seemed that everybody who had a mortgage would soon own a house that was worth more than any mortgage. The second major reason for the present crisis, according to Ritholtz, was a general lack of interest on the part of the Fed to regulate anything at all when it came to banking and loans.

I can feel that I'm beginning to repeat what I have said before, so let me just repeat two of my main points again. George Bush, who wanted to attack Iraq anyway, used 9/11 as a reason to attack it. Republicans, who disliked Fannie Mae anyway, used the Wall Street crisis to single out Fannie (and Freddie) as the sole causes of the crisis.

But both George Bush and today's Republicans are out of line, because they prefer to chase their own sworn enemies rather than try to understand what is really going on in the world.

As for what I have said about taxes, Reaganomics, the redistribution of wealth from lower- and middle-income families to very high-income families, the declining income of most Americans, the way tax cuts for the rich have led to declining tax revenue and forced the Administration to borrow from abroad so that America's debt is now by far the biggest debt that any country has had in recorded history, the way ultra-low rates and mad borrowing has papered over most Americans' declining purchasing power and at the same time has fueled the mad housing bubble that has now exploded - well, all of what I have said about that still stands.

And now I really hope that this will be my last post here. But if you feel the need to post again, Roger, I would really appreciate it if you would comment on the incredible redistibution of wealth from the poor to the rich in America, on most Americans' declining income, and on the huge debts that most American households have incurred (and certainly not only those who have taken subprime loans) and the incredible national debt of the United States.

Ann