Michael Hirsh, author of Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street, recently appeared on Morning Joe to talk about Wall Street’s pre-crisis, decades-long encroach upon Washington that would eventually end in financial crisis.
In his estimation, the gradual takeover was about 30 years in the making. It got underway when the ideals of free market revolution were sweeping mainstream economics and all common sense of boom and bust cycles — how markets are prone to wild swings of manias and panics – was abandoned to instead funnel increasing power to financial services in hopes of ever-greater returns and economic growth.
The outcome he describes is a “hollowing out of the middle class,” where Wall Street and Washington both played key roles in creating the “illusion of prosperity” while actually force-feeding the public with debt and artificially inflating asset prices. Until finally, the duped middle class — expected to sustain the US economy and even serve as “consumer of last resort for the whole world” — ended up broke.
This insightful clip came to our attention via a Naked Capitalism post covering Hirsh’s perspective on the roots of the financial crisis.
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let?s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
This was the dumbest analysis ever in this video ! Everyone knows that it was government that was the source of this country’s economic troubles through it’s constant and destructive distortions of the free market through institutions like the Federal Reserve, Fannie Mae, Freddie Mac, government backed student loans, high taxation, etc. politicians first cause the problems and then try to blame something other than their own failied policies. It’s an old game, but people still fall for it.
There you go again, drinking the kool-aid. The government is controlled by Wall St., and its called MONEY. The Federal Reserve was created by the BANKERS. HELLO?
The politicians work for the Bankers, always have, always will.
Pingback: this site
More than a decade ago, Addison Wiggin helped co-found the Daily Reckoning with Bill Bonner. Today, he recalls this life-changing experience, and explains how - despite being rooted in the world of finance - it is and will always be about much more than money. Read on...
Halloween is tonight! And just in case you waited until the last second to think about what you're going to wear, here are four costume ideas you can easily put together in about 10 minutes or less. With these costumes you'll be the hit of your friend's party - provided you're friends with a bunch of economists. (Downloadable masks included...) Happy Halloween!
The financial news is full of misinformation - reported by unreliable pundits and taken at face value by an easily swayed public that doesn't really no better. That's why today, Bill Bonner relays the four basic truths he's discovered during his 30 year career in the financial industry to help you make sense of it all. Read on...
For those who doubt the effectiveness of the Swiss Gold Initiative, Grant Williams has a few startling charts to show you. Today, he relays just how popular this movement is, and how you can actually influence the outcome... no matter where in the world you call home. Read on...
For most of the year, no one wanted small cap stocks in their portfolios. But over the last three weeks, few sectors of the market have performed better than small caps. Greg Guenthner explains how to use this to your advantage... and what to expect for the rest of 2014. Read on...