Worse than the US budget: the shadow financial industrial governmental complex

[marmar]

from the Christian Science Monitor:



Worse than the US budget: the shadow financial industrial governmental complex

By Rocky Vega
Guest blogger / February 19, 2010

This was a surprising concept to come across in the Wall Street Journa l… the “shadow government, the financial industrial complex.” Yet, what sounds at first like conspiracy theorizing is actually a sound criticism of the fact that the US government has basically ignored the lessons of the financial crisis and is more or less gearing up for a round two.

Despite entering into the first downturn so recently, and currently watching the Greek meltdown unfold, the US economy is still a mess. Worse still, the financial system has only grown larger, more complex and interconnected, and increasingly risk-seeking in different and dangerously innovative ways.

As described by the Wall Street Journal:

“Our budget deficit is a problem, but it’s not the core issue.

“Our shadow government, the financial industrial complex, is our potential Greece. High unemployment lingers, higher interest rates are on the horizon and U.S. aid to the mortgage markets is coming to an end. Government guarantees in the markets will be withdrawn leaving them exposed to the whims of confidence.

“Amid that uncertain state, Wall Street is chugging along as if the last few years were merely a blip. At Citigroup Inc., the financial innovators are readying a new, complex derivative that would act as kind of financial crisis insurance. Citigroup believes the derivative, dubbed CLX, won’t put Citi or taxpayers at risk, but they concede the contracts aren’t foolproof, a story we’ve heard before.” ............(more)

The complete piece is at: http://www.csmonitor.com/Money/The-Daily-Reckoning/2010/0219/Worse-than-the-US-budget-the-shadow-financial-industrial-governmental-complex

[glowing]

1. They would have been better giving every person $1million... Then the

banks and wall street would have been saved.. and new business started. What would most people do with a "windfall"... Pay off the mortgage/ credit cards (banks saved from their idiocy), investment in Wallstreet (I would invest in Green Energy), and start up capital for small businesses (free money is great for a small business or start-up ideas). Giving small tax breaks resulting in $10.00 to $20.00 extra per pay period doesn't really add up to more than an extra movie from block buster or an extra grocery item).