Archive for October, 2008

The Upside of a Down Economy

October 12th, 2008

There’s not much good news in the slow-motion global market crash we’ve witnessed over the past couple of weeks, but what is positive is the growing recognition that what matters is not the mostly fictitious Wall Street economy of credit default swaps and mortgage-backed securities but the “real” economy and the disastrous consequences of deregulation for the folks on Main Street. The fact is, as NYU economist Nouriel Roubini has pointed out, ordinary people have pretty much run out of money, stopped buying cars and homes, watched their retirement savings get cut in half, and begun to pull whatever they have left out of the stock market. We are witnessing a worldwide panic that will not be halted by Wall Street bailouts or technical manipulations of the money supply; we need fundamental reform of the economic system, and a reinvestment in infrastructure, jobs, and sustainable energy and other technologies.

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The Trickle-Up Economy

October 1st, 2008

We are currently living through the worst financial crisis since the great depression. This is a result not so much of a failure on Wall Street as a failure on Main Street in terms of the subprime mortgage mess. Mortgage brokers, many of them very local businesses, wrote no-doc loans for eager buyers and placed them with banks and finance companies, who in turn re-sold them to other lenders and institutional investors in “bundles,” which these lenders resold to private investors in the form of fractional securities.

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