Public Values

Economic crisis result of decades of deregulation

Left to their own devices, markets create crises - George Soros

George SorosCBC News: Sunday recently re-ran a short documentary about the origins of the economic crisis that provides a reminder of the dangers of letting business police itself.

The Great Wall Street Swindle "is a story about how globalization and deregulation allowed a huge speculative bubble to be built that wildly overvalued certain investments and ended up burning individuals like you and I", host Evan Solomon tells his audience. "In an effort to sustain the lucrative profits and fees that the financial industries earn from this bubble, much of it now stands accused of fraud. And if you think the Canadian economy is immune to all this, think again."

Solomon interviewed financial guru George Soros, who told him he believes we are now seeing the financial result of decades of deregulation, with the financial community now having trillions of dollars of potentially toxic investment ready to explode. "The belief that markets are best left to their own devices is a false belief," Soros told the Solomon. "Left to their own devices, markets create crises."

Solomon traces how the firewall between banks and speculation was broken down due to the deregulatory trend, which the financial industry and right-wing politicians promoted.

"After the Great Depression, banks and brokerages were forced to put aside reserves when they issued mortgages or made loans. All that started to change in the 1980s. Now when banks sell a mortgage, they take that debt and they give it to Wall Street investment houses. Bundle into funds. Sell shares. What's safer than real estate became known as mortgage-backed-investments."

The sorry outcome of the process is now well-known: millions of families losing their homes, businesses gone bust, double-digit unemployment, boarded-up malls and houses, all fueling a vicious cycle of decline with no end in sight.

The documentary can be viewed online at the link below.

Privatization vs. Public Values Frame
  Markets create opportunities. / Markets create crises.
  The marketplace is a self-sustaining entity. / Unregulated markets eat until they explode.

Links and sources
  Link to CBC Sunday documentary "The Great Wall Street Swindle"

Posted: January 09, 2009

Categories:
  News
  Politics
  Public services
  Front lines
  Voices of privatization
  Feedback and dialogue

Public Values (PublicValues.ca) is a project of the Golden Lake Institute and the online publication StraightGoods.ca


Public Values
 
HOME
CONTACT US
SEARCH
FREE BULLETIN
FRANÇAIS
Search PublicValues.ca
Donate to PublicValues.ca
News
Research
Politics
Campaigns
Health care
Public services
Natural resources
Energy
Education
Front lines
Voices of privatization
Feedback and dialogue
Visit StraightGoods.ca
About Us
Donations
Newswire/RSS
What is framing?
Saturday, October 21, 2017
Updated frequently
To view photo captions, run your mouse over the photo
 
Bookmark and Share

© Golden Lake Institute/PublicValues.ca, 2007-11
PublicValues.ca owns copyright on all staff-written articles.
We encourage others to freely distribute material from this website but, without explicit permission,
Web publishers may only use short excerpts that also include credit to us and a reference to our site for the full article.
This site is managed by the Golden Lake InstituteVisit Golden Lake Institute Website and Straight Goods NewsVisit Straight Goods News Website
For comments or suggestions, please contact the PublicValues.ca Editor
For technical issues, please contact the PublicValues.ca Webmaster