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Credit has become the drug of choice
We look at the 100-year history of secret collusion between Washington and the financial industry. Corporate profits and stock prices have mostly recovered and, in many cases, surpassed their levels from before the financial crisis.
On Wall Street, bonuses are now the highest they’ve been since before the 2008 crash. Just last year, payouts increased 15 percent to $26.7 billion. How a small number of bankers have played critical roles in shaping a century’s worth of financial, foreign and domestic policy in the United States. For a good part of the 20th century, bankers and presidents presided over a financial system that was relatively stable. But as Wall Street grew increasingly outside of Washington’s control, financial speculation has exploded, leading to the financial crisis of 2008.in 1929.
The men that sat in the room at Morgan was Tom Lamont, who was the acting chair of Morgan, Some of the six banks we have today. The ones that were absent were Goldman Sachs and Bank of America, but they came in through other avenues and personal connections to bankers, from FDR and forward since that time. J.P. Morgan, who is arguably—not even arguably, who is the most powerful banker this country has ever known and the most powerful political, financial actor—he died a hundred years ago, but his legacy, his family and what he created and the constellation of relationships between him and, at the time, Teddy Roosevelt, as far back as 1907, through Jamie Dimon’s relationship with Obama more recently, has been a very apparent apparatus in the connection of politics and finance, which I believe has no separation line.
The root of the problem is the same as it has been for centuries: credit, which leads to debt that spirals into ever greater debt. Then those who are lenders gamble that they can make even more money by devising new and more lucrative ways for people to go more deeply into debt, while the people themselves gamble on what they consider a sure thing, just what they need to pay off their debts, or set themselves up for retirement, or finance their lifestyles, etc. Credit has become the drug of choice of the modern world, far more widespread than any other. Individuals, companies and governments must have their fix of it, for they are addicted to it, and the withdrawal symptoms are too painful to endure. Life without credit means no future debt is possible, and often their present debt is so large and overwhelming that they cannot go on without another credit fix.
Like many drug users, however, they do not see that they have a problem. They’re surrounded by other users who are in similar situations. “Credit and debt are just the way of the world, a necessity, and nothing to worry about. Everyone does it and no one’s especially concerned about it. Besides, it feels good and helps make life more enjoyable. I need it. I’ve got to have it.”
Occasionally the “users,” the debtors, feel the pain of their addiction and regret what they’ve gotten themselves into; but a fresh infusion of credit brings relief and temporary surcease from the pain.
Ted Rudow III,MA