How Wall Street and Its Backers on Capitol Hill Silenced a Critic Calling for Greater Regulation of Derivatives

From Democracy Now!:

Last month, when the a subcommittee of the House Financial Services Committee held a hearing on the derivatives market, Robert Johnson was the only non-industry expert invited to speak. The former economist at the Senate Banking Committee and the Senate Budget Committee was invited just sixteen hours before the hearing. His testimony was cut short after five minutes by Congresswoman Melissa Bean, and the committee has since refused to post online his full testimony along with the statements of the other panelists. Robert Johnson comes on Democracy Now! to explain what he tried to tell Congress.

My commentary:

"Well, many people felt the crisis that we experienced in 2007 and '08 was the collapse of a multi-year bubble; but the response, which I'll call forbearance, by government's big expansion of the Fed money supply, interest rates cut to zero, and so forth, rather than being directed to productive investment for the non-financial economy, things that would make your and my livelihood better, is being poured into financial speculation; and what we're seeing is a simultaneous rise of emerging markets and stock markets and bank stocks as if we're reinflating the bubble." — ROBERT JOHNSON (November 2, 2009), director, Economic Policy Initiative, Franklin and Eleanor Roosevelt Institute; member, United Nations Commission of Experts on Finance and International Monetary Reform

That's exactly what I've been saying ever since the bankster started bailing themselves out (all pre-planned) rather than plowing the money into the real economy where you and I live. Robert Johnson is wrong on one thing there. There's no "as if we're reinflating the bubble." They are definitely re-inflating the speculative bubble that is based upon worthless gambling IOU's. Since they are still deliberately sitting on their hands, there is another real estate wave coming that will be worse than the last one. The stock markets will fall to new record lows. Then, Mr. Potter will buy up more of everything at pennies on the dollar.

Obama must clean economic house, end the wars, and bring in people who tell the truth and want to do what's best for the common people. If he doesn't clean economic house, he'll be a one-term President and the next one could be twice as bad if the "conservatives" continue building momentum.

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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