For those of us who were really paying attention to financial matters prior to 2008 and understood the destructive nature of the Federal Reserve and the government in the financial sector generally, the Crash has almost no silver lining. (For the record it was the LIBERTARIANS who predicted the crash, everyone else denied we were headed for trouble. Almost without exception.)
1. The Crash was incredibly painful. We felt the reality of 2008 head on here at The Sorrentino.
2. The bailouts that came from the government, that bailed out banker friends on The Street were not only grossly unfair but also propped institutions that deserved to fail and fail in a way where the big shots were disgraced. But the big shots were saved from disgrace by their buddies in government in both the GOP and in the Democratic Party.
It was THEY who failed. But because these guys had connections in government they were saved and in some instances even lionized.
3. These bailouts deeply undermined what was left of the free economy in this country. Capitalism has profit and losses. Success and failure. In the crony capitalist revolution initiated by a cold cocked Bush and an out of his depth Obama, people saw that the rich and the connected got to remain rich while the middle class and the poor were left to languish.
Consider that Goldman Sachs was leveraged in some instances 100 to 1, and in other instances much more than that. Goldman deeply deserved to be wiped clean from the financial world. However, the middle class family that might have had a home equity line (and often not even that) was foreclosed on. OFTEN BY THE BANKS THAT RAN THEIR BOOKS WAY WORSE THAN THE STRUGGLING FAMILY.
And there are a million other factors that we are not going to go into on this snowy Sunday afternoon. Perhaps we will update the above list in the days ahead. In fact I think we will do that so keep an eye out. But if there is absolutely one thing to remember it is that 2008 WAS CREATED BY GOVERNMENT. This is absolutely the case. It wasn’t the free market or “capitalism” in any way. It was GOVERNMENT that brought the destruction we saw. But this reality is very inconvenient for the crony capitalists AND the neo-socialists who want to pin the Great Recession on “capitalism.” It was government intervention, crony capitalism, SOCIALISM that is to blame for the worse financial catastrophe of our lifetimes – to date.
Never ever forget this. Because if we don’t reform and liberalize the economy the next crash will be worse.