The Bill For The 2008 Financial Collapse: Who Is To Blame?

The bill for the U.S. bailouts will come to $4.6165 trillion according to Barry Ritholtz,a market commentator.If you put that figure into historical perspective,it is bigger than the Marshall Plan,the Louisiana Purchase,The Apollo moon landings,the 1980 savings and loan crises,the Korean War, the New Deal,the invasion of Iraq,the Vietnam War and the total cost of NASA's space fights all together.To compound this desperate picture,we also have a huge level of personal debt arising from the credit bubble.Countries around the world are contracting and everyone seems to still be in economic trouble two years after the 2008 collapse.Spain has an 17.4 unemployment rate while powerful USA has close to 10%.Anger is coming and will continue to come towards the banks and government.Laws are coming to try to fix the banking problems but it can't change the culture where securitization took place.The power and complexity of modern financial instruments combined with the will to profit and the reality of (To Big To Fail )to create a situation in which,as soon as rules are made,people will be looking for ways around them. Some countries will always try to seek a competitive advantage by having looser banking laws and some banks will always try to exploit that fact.Finance is completely transnational and see national frontiers as places to be exploited via their differing legislation.

The level of state intervention in the U.S. and United Kingdom is comparable to that of wartime expenses.The huge bailouts of major institutions means that the Anglo-Saxon model of capitalism has failed.It is a 100% pure form of socialism for the rich.The unregulated boom where all the upside went into private hands(top 10% income levels) is followed by a gigantic bust in which losses were socialized. The Western world can't afford another bust like this one for another generation.On a political level,we have the chance to insist that our governments change the rules to make sure that this never happens again.

Free-market capitalism's victory party(last twenty years) has come to an end. We have to slow down and decide how to make the finance industry back into something which serves the rest of society rather than preying on it.Citizens have to start thinking about when we have sufficient money,sufficient stuff and start worrying about our neighbors who might be without.In a world running out of resources,the most important ethical,political and ecological idea can be summed up in one word:"enough". Credit bubbles(low rates) and asset bubbles(CDO's) didn't happen without people joining in the process. Citizens borrowed and spent more(junk),bet assets would grow higher in price,used credit cards like ATM's and became greedy through increased materialism

Maybe the West should have listened to the ideas and perspectives of the counter culture movement forty years ago. The movement rejected materialism by building owner designed small scale housing(under 1000 sq.ft.),limiting purchasing of  new clothing,furniture,appliances,haircuts,food(welcomed vegetarianism),automobiles,costly heating and air conditioning systems,vacation trips and entertainment. The movement grew gardens and explored "free" nature in the public parks and rivers of our nation.Many mothers and fathers stayed home to raise their children and make them their priority.They worked at jobs that they found interesting and avoided workplaces that focused on profits before people.  As the media talked about buying new consumer goods, the movement recycled and formed coops for health and food needs.The same media(their revenue coming from capital companies  thru advertising) trashed the movement as drug infested and self serving at every opportunity. Traditional Christian religions joined the attack because the movement found peace in nature,not in the buildings of man. The greed for the new and better didn't come from the counter culture because we knew America could do better.

I highly recommend"I.O.U" by John Lanchester for all its insights.