Since the sub-prime mortgage debacle, I’ve been awaiting the next scam that will enable Wall Street tycoons to get richer while making the rest of us poorer. I fear I’ve found it in the current stalemate in Washington and the impending crisis over a failure to raise our national debt ceiling. With all the expert concerns about not raising the debt ceiling (see, for example, Bruce Bartlett’s article in the NY Times), why are politicians playing with fire? Is it because some of them really want to destroy our government? Is it because John Boehner simply wants to keep his job as Speaker – or that others fear a crazier right-wing Republican may replace him? Is it because Democrats are merely petulant? On the surface, these explanations are attractive enough to garner a knee-jerk following, but there may be a deeper game afoot here.
It’s getting more and more difficult to make huge amounts of money in our free market system. After all, new laws and regulations stem old schemes, so new schemes must be invented in a more restricted market. But here’s a simple fact: Whenever there is a financial crisis, not everyone loses; some win – and sometimes win very big, especially when the crisis is enormous. Just look at all the new billionaires who came out of the multi-trillion dollar world mortgage debacle.
So how about disrupting the world’s economic system by having the U.S. default on its debts? That certainly sounds like it would be a big enough crisis to provide a new opportunity for some to make vast fortunes while the rest of the world loses. With unlimited political contributions – our country’s form of legalized bribery – market movers and shakers can buy politicians to do their bidding and cause such a crisis.
Is this a grand conspiracy theory? No, it doesn’t take a conspiracy for politicians to be complicit. Lobbyists and big contributors have access and deliver rational-sounding arguments to elected officials. And politicians and their staff don’t need – or care – to look deeper, beyond those arguments, as long as those contributions keep coming to meet their primary objective: staying in power. Indeed, given the extreme polarization of our political system, it appears each side hears only what they want to hear, listening solely to their own side’s news media.
Given the stakes at hand here – both for the potential big winners and many losers – I fear we’re all being fooled by increasingly strident statements that keep us from seeing what may be the more fundamental objective at play: providing a diversion for another massive theft of our money by a few at an enormous cost to the many. In football, we’d call it a “head fake.”
The ownership of the media by a few, focused interests helps ensure that probing reporters and analysts don’t investigate or discuss such possibilities.
So here we go again. Another bubble may be about to burst, and this time before we’ve had a chance to recover from the last one. I just wish I were knowledgeable enough to know how to take financial advantage of this one.