Another Inside Job

What I hate about all of this is that, to the baby boomer generation, any point of view that wants to hold banks and Wall St. accountable for what they have done is "communism" or "socialism" or "fascism" or some other nonsense. It's like anything that goes against any business is automatically discredited.<p>It is absolutely plainly obvious that banksters basically <i>hate you</i> and the government is right along with them. Look at the UBS whistleblower Bradley Birkenfeld, who is in prison right now while <i>every single one</i> of the <i>19,000</i> tax cheats who diverted <i>billions</i> in taxes are free (save for one guy on a two-year probation). He was wealthy right along with his clients... but he went against the grain. It's interesting to note that Eric Holder was a lawyer and represented UBS at one point, and won't touch the case.<p>But you just can't make this point in some circles.

This is just an observation about such distress calls, but I am trying to learn economics, and something shocks me every time I read up about it.<p>Absolutely no major book, be it pop or a college text touches on the role of power in the relationship. It might be easier to project and create models by assuming human beings to be rational beings, but that still doesn't mean you need to ignore the calculus of power.<p>What we have over here is something most economists simply don't study. Systematic use of power. These banks strut like mafia bosses, because they're exactly like mafia bosses.<p>Their strength and survival depends on having power to push the consumer into beneficial deals. Their survival <i>also</i> depends on pulling the carpet from underneath when the consumer fails to jump through enough hoops.<p>Yes, it's all related to capital in the markets etc., but it's all driven by power.<p>I don't know why we want to ignore this, but as a society these power relationships lurk everywhere. It doesn't mean that they are immoral or anything like that. They're just a fact of human nature. Every contract signed or transaction made is made with the assumption that someone with power will ensure that it will go off without a hitch.<p>What is a contract except for the threat of violence sublimated into abstruse jargon? Think about the robber barons and their ideological descendants wall street bankers. The only difference is that now they're holding a gun made out of paper (or a database).<p>In this case, of course the law makers and everyone else are on their side, but like everything else it's all a matter of time. As things change power will get redistributed from Morgan to Milken.<p>What I'm trying to say is that I think that economics doesn't make sense without this variable. These people call the shots, because they have power. Not capital assets. Those are just symbols of power they have accumulated by various means.<p>Yes, this can't explain everything, but it's just a very different way to look at it and things just make sense after this.

This is an example of why I think the next crisis won't be many decades into the future, but much sooner. Basically, nothing changed after the crisis of 2008 - no one was punished, laws were not changed (they were tweaked at best) and the most important, the culture of fraud and criminality on wall street has only been emboldened.<p>I don't expect Wikileaks to change anything either. They may have helped the Tunisian revolution along, but no matter how complete and damning their evidence against BoA is, nothing will be done against BoA.

I'm so old I can remember when Krugman was an economist, rather than an op-ed columnist.

Tragically unsurprising. And the tip of the iceberg, considering that private banks basically create money out of thin air, then loan it <i>at an interest</i>.<p>We could, I dunno, give back the control of the money to elected people?

Where are the accounts from the people who maned the phones and signed the letters that made all this possible? I doubt any BOA executive picked up the phone and told a customer to default on their mortgage. That would have been someone like me or you just doing their job, doing what they're told.<p>Where are their accounts of what the were told to do?<p>I'm worried that these people don't care about the people they helped screw over. I hope thats not the case, but I'm worried that it is.