I just finished watching "Inside the Meltdown"

[Renew Deal]

All I can say is that if you haven't seen it, you must. But don't watch it before sleep. It's terrifying. I hate to give away the ending, but basically "we're fucked." I have two lines of thought on this that I want to go through.

First, "Systemic Risk." This basically goes back to the "Too big to fail" concept. Bear Stearns was TBTF. So was Fannie/Freddie. Lehman probably was too, but Paulson didn't want to bail them out because it was against his ideology, and partly because the Lehman CEO is an asshole. AIG is apparently "way too big to fail." And the rest is history. It appears that Bank of America and Citi are also TBTF. What does this tell us? It tells us that a company's goal should be to expand to a certain point where the entire economy would collapse without them. If they get to that point, then no worries. Take all the risk you want. Privatize the profits and socialize the risk. Brilliant!

Second, "free market capitalism." I can't find a way to convince myself that "free market capitalism" as ideological "capitalists" put it, isn't a failure. Nearly unrestricted capitalism was allowed to run wild in the US over the last 8 years and what happened?

• Companies engorged themselves to a point where they are "too big to fail."
  
• Companies hid their assets and risks from the public. (which is not uncommon)
  
• Companies took nearly unlimited risk.
  
• Companies were allowed to get into conflicting businesses such as mortgages and insurance against those mortgages.
  
• And finally, the government had to bail them out or the "system would be lost."

Well, if the system is so flawed that it is even possible that it can be lost, then is it really a system worth saving? This entire episode is a pretty strong lesson that "free market capitalism" as it's described by ideological capitalists (i.e. republicans) is unworkable. At some point this needs to be accepted by everyone. We cannot go on this way. So what is the solution?

I still believe that regulated capitalism is workable. This means that as Bernie Sanders said "If they are too big to fail, they are too big to exist." That means that banks can't also do investments, and insurance. We cannot ever be in a position where we cannot allow a company to fail. This is just unacceptable. And we have to bring back "moral hazard." Companies need to know that the American people will not be used to "socialize the risk" anymore.

It's sad that we have come to this point. There were people that predicted that Bush would wreck the country. In many ways they were right. I don't see how the "system" that is the economy can ever be the same.

[elocs]

1. My PBS station was begging for money so I won't see it on tv until Tuesday. n/t

[Renew Deal]

3. You can watch it online

http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

[elocs]

10. I figured I could and PBS has good quality of its online video compared to some,

and I still might watch it online, but I wanted to record it so I can save it on a dvd.

[Renew Deal]

13. I actually got it from a secondary PBS channel in NY

Check listings. It seems to be on a lot, mostly on a non-PBS station.

[elocs]

14. Actually I just found it is on right now, but I missed the first half.

I see by the tv listing it will also be on where I live on the next two Tuesday nights.

[Zorro]

2. It's a seriously disturbing show

and we're not out of the woods yet.

[sandnsea]

4. More in this thread

Read Idealism's posts. He/She explains how the rating agencies were involved in this, and some other things as well. They knew what they were doing and the people who got stuck in these mortgages are not at fault.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5087285

[Renew Deal]

6. There's a lot of great stuff in there.

Thanks for sharing! :bounce:

[Ichingcarpenter]

5. I'm glad you saw all that out of that show

I didn't see that out the show but
you've been on DU for a while and maybe
it woke you up.

Great write up you did.

[Renew Deal]

7. Thanks

Some of it is connecting the dots with things I know like the change to Glass-Steagal, and Bush forcing Greenspan to keep interest rates artifically low.

What did you get out of it?

[kentuck]

8. I think Obama should read up on the other Roosevelt, Teddy...

the "trust buster". That sounds like what needs to be done with these banks??

[jwirr]

12. Even without see this program I have thought that we need to break

up the monopolies. To big to fail IS to big to exist.

[juno jones]

16. Funny how noone seems to want to be known as

'Roosevelt Republicans' :evilgrin:

[defendandprotect]

9. Thank . . . I'll look for it . . . but ...

It amazes me that everytime the taxpayers' risk in banks is increased . . .

there's some kind of a celebration.

Taxpayers have to understand that we are better off with accounts only being insured

for up to $15,000-$20,000 each is better than extending the covering to unbelievable

amounts now . . . what is it, actually, I'm not sure anymore per account/????


The intention of the insurance was to protect against the isolated case of theft or

embezzlement at a bank. Not for wholesale theft and embezzlement as we saw in the

S&L scandal a while back -- and not for reckless investment by a major part of the

banking industry. All we have done is increase the attraction for corrupt

capitalists to create problems. And they sure have!!!



Second, "free market capitalism." I can't find a way to convince myself that "free market capitalism" as ideological "capitalists" put it, isn't a failure. Nearly unrestricted capitalism was allowed to run wild in the US over the last 8 years and what happened?

Where is talk of RE-REGULATION . . . ??

Renew Glass-Steagall -- http://en.wikipedia.org/wiki/Glass-Steagall_Act

Why are our anti-trust/anti-monopoly laws not being enforced . . . ???

Capitalism is over -- let's bury it -- and move on to economic democracy --

democratic socialism.

We've've had welfare for the rich and free enterprise for the poor.

Capitalism has only been with us a few hundred years ---

It was invented by the Vatican when Feudalism was no longer sufficient to

run their Papal States.

Unregulated capitalism is merely organized crime ---

Capitalism is intended to move a nation's assets and natural resources from

the many to the few - and it does that exceedingly well!

[Tatiana]

11. We had this same situation after the Gilded Age which ushered in the Progressive era.

Corporations running rampant, industry monopolies and the infamous trusts. It took a reformist (and activist) President like Teddy Roosevelt to take the corporations head on and force Congress to pass legislation to restore some fairness to the capitalist system.

I'm sure Obama knows his history and I hope he is getting the bully pulpit ready.

[Renew Deal]

17. Unfortunately, Obama isn't talking tough about this.

And I'm not sure why. He's smart enough to recognize the "system risk" problem. He's also very calculating and has said that regulation is coming. We'll see.

[ConcernedCanuk]

15. I remember reading years ago how the USA was never really intended to be a country

.
.
.

but just a "base" for certain powers to take over the World

that would explain a lot

how there is almost no concern for the citizens, just to take their taxes and turn them into dollars for the War-Machine

Prescott Bush was helping out the Nazis

The Bush Family has ruled the USA for over 4 decades, yes even behind Bill Clinton -

who do you think funded the big fuss over Billy's bj??

doh

and JFK?

ONE president tried to change things, well that's not true either - there were a few others, they ended up dead too . .

CRIMINALS are running the USA - have been for centuries -

I'm concerned about President Obama -

If Barack is the real thing

Thugs are gonna try to kill him

It's the American way ..

[JackRiddler]

18. Am I the only one who saw this as propaganda for the TARP and FED bailouts?

The chronological framing is fixed to skew the story. We open breathlessly at a point that is actually seven months after the crisis first manifested in Aug. 2007, with Bear Stearns going under and Timmy Geithner riding to the rescue. This is treated like some outbreak or contagion that hit the market from nowhere. Bernanke and Paulson are both brilliant minds and brothers in arms, fighting to rescue the world from a meltdown. A few origins of the crisis and flaws of the system are detailed only incidentally as we follow these heroes. The world is burning, they must do something! The TARP finally appears as the only possible solution, none of its opponents are allowed to speak for themselves in interviews. The initial House rejection of TARP is a great disaster brought on by right-wing Republicans, who are granted brief snippets speaking from the House floor. As for the 90 Democrats who voted against TARP, they are mentioned once and not one gets to speak at all. No critic of the TARP or of the system, none of the many who warned of the inevitability of the crisis years in advance are acknowledged. In the end it kills Paulson to have to back away from his deep free market ideology and sit down with the nine big bank presidents one morning to force the poor bastards to take hundreds of billions in direct cash injections from taxpayers, which they do only reluctantly so as to save the world, since it's on fire. How generous of them, let's hope it will be enough, but by implication be ready to flood in some more.

Puh-lease.

PS - The CNBC 2-hour documentary was far, far superior. Had some key omissions (for example: the role of the media, such as CNBC!), but started from 2002 to give at least a partial history and took a broad perspective on the housing market and economy. Hard to believe that PBS is inferior in this case to CNBC.