I recently wrote to James Howard Kuntsler, author of the Clusterfuck Nation blog and of the book The Long Emergency to ask that he take a look at my Google Knol entitled The Bull Market Caused the Economic Crisis.
In response to my assertion that “much of the public responded negatively to President Obama’s health reform initiative largely because of a resentment that our political leaders are failing to address the more serious problem,” Jim responded by saying “that’s an astute observation.”
In response to my assertion that “The question ‘How precisely did the bankers do this to us?’ has never been answered by those seeking to make the bankers the fall guys,” Jim responded by saying “This does not persuade me. The mischief within-and-without the banks is well known, e.g. the Magnetar case and the GS case… as well as the bailouts, the ZIRP carry trade, the Repo 105 shenanigans, the FASB rule 157, AIG’s swaps division, etc etc etc. Essentially, what the bankers did was divert the deployment of capital from productive activity to rackets, swindles, and frauds. One could also say that oil cheapening through the 90s caused the bull market. (Energy inputs to the economy.) It seems to me that you are talking about markets in purely technical trading terms without application to the question of whether our business activity produces real things of value. To discuss “buy-and-hold” in relation to financial businesses is pure abstraction.”
I told Jim that “I’m grateful for your feedback.” I added that: “I still believe what I believe. But I am going to make an effort to reflect on your feedback and the feedback that I hear from others and perhaps over time I will be pulled closer to your views. In any event, your being willing to take the time to let me know your thinking on all this was obviously a kindness on your part.”