After we've all vented and finished our shouts and screams of: "You f*#cking idiots", to mortgage bankers & brokers, bank managers, regulators, MBS originators, bent law-makers, ideologically-challenged regulators, hubristic risk-managers, and bank shareholders (especially the largest institutional ones of the mutual and pension fund variety who owned the big slugs), we can get down to learning Swedish, for it appears that there is no avoiding the fact that we are all Swedish now. It's early days and there is undoubtedly outrage from taxpayers, who sadly shed their ignorance (and ultimate responsibility, for they elected the administration that encouraged, enabled and avoided prevention) only after the fact. And early days means debate must convene over the pro's and con's of further nationalisation and RTC-like fixes before the buoy of US Federal support is tossed. But its inevitability is so-to-speak a done deal sparing only the most virtuous and least encumbered whoever they may be. In Japan, this took nearly a decade and spared few, so adept were they at avoiding confrontation, and so afraid were they of public wrath. In America and western Europe, we will prove more impatient for solutions and more magnanimous with other people's money and so rescue more quickly. Then there will be the little matter of settling scores with the agents responsible. Sadly they will be hard to pinpoint directly, but I can tell you one thing: IF the public is to be saddled with the bill, they deserve the appointment of a Financial Truth & Reconciliation Commission. And it should be frank as possible. It should document graft, greed, tom-foolery and stupidity; it should locate the guilty and haul them before the People, and it should spare no one including themselves who are just as culpable for believing in "something for nothing" and enabling crony capitalism to [temporarily] triumph under the banner that "no public interest is in your best public interest". Shameful as it will be, America needs a dose of the sobriety it will provide if done properly, before it can move on. The guilty need to admit their sins and plead forgiveness - something that is not assured given the economic carnage and dislocation that will ensue.
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5 comments:
Right on!
Oh yeah, Sweden... or Finland in the early 90's.
http://www.irishtimes.com/newspaper/finance/2008/0912/1221138433311.html
More like the unravelling of the "Stockholm Syndrome" on a ginormous scale =-)
Btw: it should read "Jag är en stockholmare"!
Anchorman,
That's a good article on the banking crisis in Finland, though apparently told through the perspective of a selectively amnesiac central bank. My main quibble is that it fails to mention the Bank of Finland's revaluation of the Finnish markka in 1989, despite a negative trade balance. That not only made those foreign loans even more attractive but also put the export sector in a pinch. I still don't understand how they figured appreciation could serve as an anti-inflationary measure, except in the sense of tanking the economy. The situation was compounded when in the middle of the unfolding crisis the markka was pegged to the European Exchange Rate mechanism. After that it became a matter of "international credibility" to defend the value of the markka. Good thing we have people like Soros to prick the egos of central bankers. Kudos also to those selfish unions that saw depreciation instead of across the board paycuts as the better way to handle trade imbalances.
My father used to say "If this country ever shifts to fascism, it will arrive from the Left."
He never did state the corollary: If this country ever shifts to socialism, it will arrive from the Right.
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