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Remember the Lehman Brothers Crisis. We Need Wall Street Rules, Not Trump's Deregulation


#1

Remember the Lehman Brothers Crisis. We Need Wall Street Rules, Not Trump's Deregulation

Morris Pearl

Lehman Bros., one of the largest investment banks in the USA, filed for bankruptcy protection a decade ago Saturday and triggered the worst financial crisis in modern American history. In the aftermath of the financial system’s collapse, as the excesses of Wall Street were revealed to the American public, people were shocked that banks had been allowed to make such reckless bets with their money. It seemed absurd that there were no rules in place to prevent these bankers from playing roulette with the U.S. economy on the line.


#2

Mr. Pearl, you didn’t see it coming is understandable if you believe the collapse was caused by “risky behavior”.
Try “theft”, “fraud”, these words added to risky behavior are going to get you much closer to what happened. Was is risky behavior when they bought off the financial rating bureaus, that allowed the theft of so many working peoples’ retirements ? Sad when someone who worked in the industry, knows so little about the largest financial theft in modern history.


#3

Wall Street needs to be closed permanently!


#4

Recall Illinois Senator Dick Durbin noting that “Wall Street owns the place (Washington DC)” in 2004, so there is no excuse for not having “seen it coming”.


#5

Hmmm???..are we to forget that it was the Democrat’s deregulation that largely contributed to how the 2008 Recession spread like a contagious infection?

The truth of the matter is that this is a rich man’s State and a rich man’s government. The State is there to act on behalf of finance capital and to protect its interests against the people. The government is the executive committee of business.

Bankers and brokers, hedge fund managers, real estate speculators— they do not produce anything essential to human life although they have the lion’s share of control over production. As a matter of fact, they produce nothing. They transfer “paper” from hand to hand. That paper — call it checks or deeds or shares — is a claim to the fruits of somebody else’s labour. Wall Street and the City of London were doing its bit. Wall Street is the popular name for the greatest combination of financial manipulators, and it was boosting stock prices sky high. The price of stocks is based upon the estimated earning capacity of the unit that issues the stocks. This earning capacity was declared by the advocates of Wall Street to be unlimited. Prosperity was to go up and up in an unending spiral. The big sharks of the stock exchange were making billions. The fat cats of Wall Street were having the time of their lives. Everybody praised the glory of the market. The structure was built on sand. The crash came. It was inevitable. Stocks tumbled down. Capitalist propagandists asserted that it was only a violent “downward readjustment.” It was more than that. It was a disaster.

They wish us to believe it was just an accident, or at worse, the malpractice of a few out of control individuals yet the business corporations were garnering in the profits and issuing out the rewards to their executives in huge bonuses and stock options. Then with the recession they complained of hard times and although not a single chairman of the board of directors of the large corporations went begging in the streets they held out their hands for alms from the government - and got it . Whereas the wages of the workers were cut mercilessly and the benefits for unemployed turned them into beggars at food-banks and charities.

It is the outcome of a system where wealth is owned, not by those who produce it, but by those who do not produce anything, who have amassed it out of the work of others under the protection of the law; a system where production is directed, not towards satisfying human wants, but towards making profits for the owners of wealth; a system where the primary purpose of labor — to satisfy the basic needs of humanity — is completely lost sight of in the scramble for fatter investments fortunes.

The capitalists can only look for the solution in fiercer competition and in cheapening their own costs of production, by cutting wages against their competitors, in increasing their own workers’ productivity , in fighting to enlarge their own share of the market. But these measures are pursued by the capitalists in every country. Although one capitalist or another may gain a temporary advantage for a short time, the net effect can only be to deepen the crisis. The net effect of every advance of technique, of every wage-cut, of every cheapening of costs and intensification of production, is to intensify the world crisis for the worker. Increased output is demanded from every worker for less reward. Speeding up and rationalisation are the order of the day, leading directly to worsening work conditions, mounting health problems, and rising numbers of industrial accidents, along with increasing rate of unemployment or underemployment.


#6

Wall Street is regulated quite heavily as is. And risk is always associated with investments.

I think risk of this sort needs to be maximally unamsked. Then the size of Wall Street and its influence will decrease which will be good for the whole society (save for those who feed off of Wall Street).


#7

“Wall Street is regulated quite heavily as is. And risk is always associated with investments.”

The problem was–and continues to be–is that there is no “risk” to what is passing for “investments” on Wall Street these days. As the article makes plain at least twice, if the “investment” paid off, the people behind it reaped all of the profits, but if the “investment” was a big bust–as happened–then the “investors” simply walked away and left the American taxpayer to take the hit.

Where’s the risk in that? More like a guarantee.

And this isn’t a “Democrat vs. Republican” issue as both bands of piggies are feeding at the trough. This is a “rich person vs. the rest of us” issue.


#8

Don’t close it, regulate it, to within an inch of its life, nationalize the larger entities, turning it inside-out, ie making it work in the interest of all Americans!


#9

I rich immoral piece of crap!


#10

Nah, close it- most people in the USA do not invest- cannot afford to- if you are so close to Wall Street, you must be rich!


#11

That is correct- and this is a great post. This was no accident- predatory lenders did not walk out one day and say , “Hmm- that 's a good idea.” Nope, this was planned probably a good ten years before it happened- and the Graham Leech Bliley Act of 1999 with Clinton’s signature was the start of the demise. Did Clinton or congress care as a whole? Nope. Bernie voted to keep Glass Steagall as did a few others- but most voted to deregulate. Anybody who is a predator needs to go to jail.


#12

We need a coop system where those who produce also own such as those in the Mondragon system . In our system the wealth is owned by invisible “investors” who could care less about the workers.