A sea of toxic oil washes ashore in the Gulf of Mexico, and a sea of toxic debt clots the Adriatic on the shores of Greece. Over here officials speculate that the oil could enter the Gulf Loop current and be carried out into the Atlantic. Over there officials worry the toxic debt will spill out of the Adriatic and into the Mediterranean Sea, infecting the already struggling economies of Portugal, Spain, Italy...
One problem stems from our insatiable thirst for oil and the lack of any sustainable energy solution. The other arises from our insatiable thirst for profit, as our economies have been running on the sludge of debt for over a decade now. Instead of real productive growth we got "financial innovation," where digital ones and zeros created phantom trillions and packaged them up in great pools of dark matter securities and derivatives, all largely unregulated, and combining to equal the staggering sum of $600 trillion.
In both cases the same question presents itself: when will the cleanup begin? BP was on the hook for only $75 million for the Gulf cleanup mess, though legislation in in the works to raise that loss limit to $10 billion. It's clear who was responsible for the oil in the Gulf of Mexico, and who is responsible for the cleanup. BP didn't come whining to the US government and demand taxpayer dollars, but it remains ironic that fishermen who can no longer fish the Gulf waters will now be seekng cleanup contracts to try and save their businesses.
By the same token it should be all too obvious who is responsible for all the toxic debt choking the world's economies--just two words--"the banks." With the most unique scheme for making money ever devised, banks get to "create" ten times the amount of money they actually have in their vaults, in effect, "originating" and funding loans at their whim. Every loan made is just the creation of more debt. So the banks created all this massive debt, and then leveraged themselves so deeply in the securities trading game that even a small default rate will sink them, effectively wiping out their equity and rendering them insolvent. When this happened the accounting rules were all simply changed so they could continue to pretend they were still solvent, but accounting semantics cannot cure the underlying sludge of bad debt.
Now when we look to options for cleanup of this terrible mess, why is it that the banks are not held responsible? Instead the taxpayer was asked to foot the bill as governments rushed to bail out Wall Street and its big banking brethren. In the greatest calamity to strike the financial markets in over 60 years, the banks still reaped record profits and bonus money.
The people of Greece know who is responsible for the demise of their pensions, civil services, standard of living. They have taken to the streets to make it clear that they do not want their government to commit public funds in the rescue of private corporations holding the public in debt servitude.
Even a year after the great crisis of 2008-09 what has really been done to hold banks accountable for the enormous harm they have done to society? Nothing. And so the question remains: when will we demand that those responsible for the crisis take full responsibility for the cleanup? It is clear that congress will not do what is in the interest of the people, for senators and representatives are too easily bought by the banks. And if Greece is any indicator of where we are headed it is becoming equally clear that we will have to take this to the streets over here before anything gets done about it.
In the meantime, we watch thousand point swings in the markets, blasting through stops like toxic oil blasting through well heads, blowing out retirement portfolios one after another. When will Americans stop being idle spectators and start mounting real and effective pressure on their elected officials with a singular demand: start the cleanup, NOW, and hold the people who designed and delivered this crisis responsible for the mess...The Banks.
