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The Financial Crisis Was Entirely Foreseeable
Posted By Washingtons Blog On December 10, 2011 @ 6:54 am In Bailouts,Really, really bad calls | Comments Disabled
I noted  in April:
Whenever there is a disaster, those responsible claim it was “unforeseeable” so as to escape blame.
- It happened with 9/11 
- It happened with the Japanese nuclear accident 
The big boys gamble with our lives and our livelihoods , because they make a killing by taking huge risks and cutting costs. And when things inevitably go South, they aren’t held responsible (other than a slap on the wrist), and may even be bailed out by the government.
Actually, it might have been slightly foreseeable for a little while before the financial crisis.
We’ve known for 1,900 years  that that rampant inequality destroys societies.
We’ve known for thousands of years  that debasing currencies leads to economic collapse.
We’ve known for hundreds of years  that the failure to punish financial fraud destroys economies.
We’ve known for hundreds of years  that monopolies and the political influence which accompanies too much power in too few hands is dangerous for free markets.
We’ve known for hundreds of years  that trust is vital for a healthy economy.
We’ve known since 1988  that quantitative easing doesn’t work to rescue an ailing economy.
We’ve known since 1998  that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.
We’ve known since 2007  or earlier that lax oversight of hedge funds could blow up the economy.
And we knew before the 2008 financial crash  and subsequent bailouts that:
Given the insane levels of debt, rampant inequality, currency debasement, failure to punish financial fraud, growth of the too big to fails, repeal of Glass-Steagall, refusal to rein in derivatives, crony capitalism and other shenanigans … the financial crisis was entirely foreseeable.
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2011/12/the-financial-crisis-was-entirely-foreseeable/
URLs in this post:
 noted: http://www.washingtonsblog.com/2011/04/are-most-nuclear-power-plants-vulnerable.html
 9/11: http://www.washingtonsblog.com/2008/04/911-was-foreseeable.html
 this: http://www.timesonline.co.uk/tol/news/environment/article7136969.ece
 this: http://motherjones.com/blue-marble/2010/06/rigs-fire-i-told-you-was-gonna-happen
 this: http://www.washingtonsblog.com/2010/05/despite-knowing-it-had-damaged-blowout.html
 this: http://www.washingtonsblog.com/2010/07/did-bp-keep-drilling-even-though-it-had.html
 this: http://www.mcclatchydc.com/2010/05/26/94884/bp-could-be-held-criminally-liable.html
 Japanese nuclear accident: http://www.washingtonsblog.com/2011/03/japanese-seismologist-in-2004-on-risk.html
 gamble with our lives and our livelihoods: http://www.washingtonsblog.com/2011/04/japans-nuclear-melt-down-economic.html
 the financial crisis wasn’t foreseeable: http://www.washingtonsblog.com/2009/01/cheney-no-one-could-have-predicted-the-financial-crisis-just-as-no-one-foresaw-911.html
 this: http://www.washingtonsblog.com/2010/03/greenspan-the-financial-crisis-was-caused-by-a-once-in-a-century-event-%e2%80%a2-taleb-any-pilot-who-doesnt-know-about-storms-shouldnt-be-in-the-cockpit.html
 thousands of years: http://www.washingtonsblog.com/2011/07/we-have-forgotten-what-the-ancient-sumerians-and-babylonians-the-early-jews-and-christians-the-founding-fathers-and-even-napoleon-bonaparte-knew-about-money.html
 this: http://www.washingtonsblog.com/2011/07/economics-professor-well-have-never.html
 1,900 years: http://www.washingtonsblog.com/2011/04/1900-year-old-wisdom-an-imbalance-between-rich-and-poor-is-the-oldest-and-most-fatal-ailment-of-all-republics.html
 thousands of years: http://www.washingtonsblog.com/2009/06/debasing-the-currency-is-leading-to-financial-collapse-just-as-it-has-for-thousands-of-years.html
 hundreds of years: http://www.washingtonsblog.com/2011/10/senior-s-l-prosecutor-bank-of-america-pulling-a-decades-old-scam.html
 hundreds of years: http://www.washingtonsblog.com/2010/02/grading-free-market-capitalism-and-the-invisible-hand.html
 hundreds of years: http://www.washingtonsblog.com/2011/11/real-free-market-capitalists-demand-that-financial-fraud-be-prosecuted.html
 this: http://dealbook.nytimes.com/2009/11/12/10-years-later-looking-at-repeal-of-glass-steagall/
 this: http://www.youtube.com/watch?v=y2RzRv8yQXQ
 this: http://www.youtube.com/watch?v=kNmQDOVrLOM
 this: http://www.youtube.com/watch?v=4SSvy16nkTA
 1988: http://www.washingtonsblog.com/2010/10/bernanke-knew-back-in-1988-that.html
 1993: http://www.washingtonsblog.com/2009/09/credit-default-swaps-love-em-ban-em-or-tax-em.html
 see this: http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html
 1998: http://www.nytimes.com/2011/10/27/opinion/kristof-crony-capitalism-comes-homes.html
 2007: http://www.washingtonsblog.com/2008/11/the-meltdown-of-the-hedge-funds-and-its-effect-on-the-market-%E2%80%93-was-foreseeable.html
 before the 2008 financial crash: http://www.washingtonsblog.com/2010/03/no-wonder-the-economy-isnt-improving.html
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