James K Galbraith asks who were the economists that understood the problems in the economy, because so many economists have no clue. And one point what jumped out from this paper was this:
In the present crisis, the vapor trails of fraud and corruption are everywhere: from the terms of the original mortgages, to the appraisals of the houses on which they were based, to the ratings of the securities issued against those mortgages, to gross negligence of the regulators, to the notion that the risks could be laid off by credit default swaps, a substitute for insurance that lacked the critical ingredient of a traditional insurance policy, namely loss reserves. None of this was foreseen by mainstream economists, who generally find crime a topic beneath their dignity. In unraveling all this now, it is worth remembering that the resolution of the savings and loan scandal saw over a thousand industry insiders convicted and imprisoned. Plainly, the intersection of economics and criminology remains a vital field for research going forward.So, just how many people have been convicted and imprisoned in this cycle of corruption and financial scandal? From what I’ve seen, hardly any.
After I read this article, I got to thinking about the last several months. We’ve been on the road – Thanksgiving in North Carolina, then three weeks in the Middle East, then huddled in front of a fireplace during a [very] cold snap recovering from the Egyptian Epizeutics AKA "walking pneumonia." I’ve been comfortable to join the whiny dialog about what a disappointing year we’ve had with the relics of the Bush Administration littering the landscape like some post-apocalyptic movie set, and our continued disillusionment as our idols strut their feet of clay eg Tiger Woods, Brit Hume.
But when I read this Galbraith article, I felt rejuvenated. I didn’t agree with everything he said, but that didn’t matter. He was talking about history, and ideas, and making a plea for change. He was damning the establishment, but there was a hopeful twist – something better to aim for. In his negativity, there was a spark. What I thought about was how gloomy the dialog has been this year – the trivial antics of the hopelessly ideological Republicans, the mopey disappointment of the utopian Progressives, the in-fighting among the fragmented and traumatized Democrats. Obama looks tired. I feel tired. The year seems lost in a blah-blah of politics soon to be forgotten in the scope of time. It reminds me of Richard Farina’s book title from an old Fuzzy Lewis blues song – Been down so long, it looks like up to me, or Ray Charles’ – If it wasn’t for bad luck, I wouldn’t have no luck at all. In the history books, my fantasy is that 2009 will be summarized in a single line:
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