This is one of the more interesting – and forthright – general interpretations of the financial crisis. Partly because of cottoning on to the political structure:
As complex as all the finances are, the politics aren’t hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future.
But mainly for doing the legwork to investigtae things I haven’t heard mentioned anywhere else:
[from May 2008] the Fed had simply stopped using relatively transparent devices like repurchase agreements to pump its money into the hands of private companies. By early 2009, a whole series of new government operations had been invented to inject cash into the economy, most all of them completely secretive and with names you’ve never heard of. There is the Term Auction Facility, the Term Securities Lending Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (boasting the chat-room horror-show acronym ABCPMMMFLF). For good measure, there’s also something called a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.
While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments).
I’m intrigued that this article is printed by Rolling Stone. I’d somehow always thought of Rolling Stone as being fairly superficial, despite the ancient history of Hunter S. Thompson, but it now carries not only this, but also much of Naomi Klein’s best work.
And the author of the piece above? Matt Taibbi, who – I’ve belatedly realised – was one of the founders of Moscow magazine [The Exile](http://exiledonline.com/). The Exile was what all expat magazines aspired to become. Racist, sexist, and reliably offensive in all ways possible, it also carried political analysis that put mainstream correspondents to shame. It was closed down last summer, through some murky combination of government raids and lack of money, leaving only a [ghost presence](http://exiledonline.com/) online. Its remaining staff are now exiled themselves, [supposedly](http://exiledonline.com/the-exiled-were-back-and-were-very-pissed-off/) in Panama, although founder Mark Ames also popped up in Georgia to cover the war there last year. It’s nice to see the overlap between mainstream journalism and the porn-and-bile of the exile.