Market Overview

Revisionism Run Amok (FCIC)


Rewriting history to suit one's own view of how you wish it was seems to be a national sport.

Three years ago this week, the financial system came unhinged. In rapid-fire succession, one major financial institution after another crumpled as years of recklessness on Wall Street and regulatory neglect in Washington took their toll. Before it was over, the federal government had committed trillions of dollars to bail out the nation's largest banks and the economy was in tatters, with gnawing questions remaining about what went wrong and who was responsible.

Actually, that's not correct. The federal government didn't have to bail out the nation's largest banks. We need a banking system to clear payments. We don't need the specific banks that committed the acts in question.

The unraveling had dire consequences. Twenty-four million Americans are unemployed or unable to find full-time work, with wages as a share of gross domestic product at the lowest level since the 1930s. Meanwhile, the banks barely skipped a beat, with compensation at publicly traded Wall Street firms reaching a record $135 billion in 2010.

The demand represented by the 30-year old credit bubble was not real. Therefore, neither were the...

Read the full analysis here.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: economics FCIC Federal GovernmentTopics Economics Markets General


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