(UPDATED) Why The Global Financial Meltdown Is Like A Conflagration On A Distant Planet
I haven’t invested in stocks since the dot com bubble burst in March 2000 and my 401(k) was pretty much wiped out even though my investments were toward the conservative side. When the dust had settled, I was out about $60,000, a not inconsiderable sum that would have come in handy when it came time to retire in 2009. Well, I’m still working.
Nearly half of American households owned stocks in 2000, but that number has headed steadily south as the wealthiest Americans consolidate their grip on practically everything of value that can’t be nailed down and our trust in financial institutions ebbs. Today less than 20 percent of the bottom 90 percent of Americans wealth-wise own stocks, and come to think of it, none of my closer friends are invested in the markets, while the Dear Friend & Conscience, who had considerable holdings, didn’t like the omens she was seeing beginning in 2005 — or her Merrill Lynch stockbroker lying through his teeth — and converted her stocks into CDs.
All of this makes the current global financial turmoil seem like a conflagration on a distant planet.
I find the widely-accepted view that the turmoil is due in large part to the U.S. debt crisis and the subsequent downgrade of Uncle Sam’s bonds by Standard & Poors to be unconvincing. The bigger problem has been and remains the economies of European countries. Besides which, the U.S. economy has been in the crapper for several years, Congress has been abrogating its financial responsibilities for many years, the financial markets have been robust in the last year or so, and big corporations have been making obscene profits.
So why now?
Speaking of besides whiches, S&P is a criminal enterprise that like its competitors, you probably don’t recall, whistled past the graveyard as Enron self immolated and one Wall Street firm after another went on a subprime junk buying spree but kept their triple-A ratings. The toxic mess that Wall Street created helped deepen the Bush Recession and more or less led to where we are today.
Where we — that is to say you and I — are on the 9th day of August is screwed, glued and tattooed, and I am not heartened by President Obama’s assertion on Monday that “we’ve always been an always will be a triple-A country.”
Methinks once the turmoil passes — and there was a big sign on Wall Street yesterday that it already has in the form of a 429-point leap in the Dow — it is time to get real serious about raising the taxes of the super rich, either directly or by closing loopholes, and Obama will be abrogating his responsibilities if he doesn’t push hard on that.
Americans of most stripes have lost faith in the political system just as my friends and I have lost faith in the financial system, and compelling the super rich to ante up is a long overdue corrective. Besides which, it will be a terrific campaign theme against those wealthy-coddling Republicans in 2012.