Things Explained: The Meltdown

[Omaha Steve]

http://www.star-telegram.com/ed_wallace/story/1216334.html

If you’re waiting for Washington to declare war on financial malfeasance, don’t hold your breath
Special to the Star-Telegram

On September 11, 2001, our world changed; the memory of that day will forever be etched in the minds of those who lived through it. Something fundamental altered in all of us when we realized that we were now each vulnerable to having our lives shattered by international terrorism. Exactly seven years and five days later America and the world were hit a second time. The latest attack will never be known as 9/16, nor will we as a nation decide to eradicate the perpetrators of that event. But if 9/11 forced us to envision the remote possibility that one day we too might be victims of terrorism, 9/16 turned us all into victims right where we stood.

In the days after 9/11 the American economy locked up; that day’s events literally shocked most consumers into inaction. Suddenly lacking any paying passengers, airlines flew "ghost flights" – planes carrying only minimal flight crews – lest the already shaken public drive past our airports and be frightened even worse at seeing no flights taking off or landing.

Automobile dealerships quickly found their showrooms echoing and empty, and many of the nation’s great malls went nearly silent. However, within 10 days of 9/11, Detroit had stepped up to jog consumers out of their catatonia by offering no-interest loans to buy their products. And by the end of September Detroit had literally resuscitated our economy: October 2001 still holds the record as the biggest month for new car sales in American history.

The events of 9/16, on the other hand, would cripple Detroit and the auto industry worldwide. The financial terrorists responsible used different weapons, but they dealt what may well have been a killing blow to many automakers everywhere.

Stolen: Not Lives but Livelihoods

A few individuals lost their lives as a direct result of this second attack on America, mostly in suicides. However, over the next 120 days nearly 2 million Americans lost their jobs as a direct result of the paralysis of our consumerism – and our formerly normal buying habits accounted for 70 percent of the nation’s economy.

Unlike the heads of Al Qaeda, hunted to this day, the heads of Goldman Sachs, Morgan Stanley, Citigroup and others still maintain their positions and incomes. Some, at World Savings, Wachovia, Bear Sterns, Lehman Bros. and others, lost their jobs as their firms failed and were absorbed by those the government chose to save. But if the truth be told, all of them were equally guilty of infecting the world with financial stupidity.

FULL story at link.