Economics

Words, words, and more words.

In a world of increasing disinformation, it’s more important than ever to be armed with actual information. And being curious about the meaning, nature, and origins of things is a rewarding journey in and of itself.

Think of these dictionaries as tools for your mind — they can help you make connections between concepts, understand the terminology being used in the media and all around you, and feel less lost in a sea of dizzying complexity and rapid change. A fantastic vocabulary also helps you connect with people near and far — as well as get outside your comfort zone and learn something new.

Dictionaries List

This section includes dictionaries and definitions of important terms in important realms — and is continually being built out. Stay tuned!

Terms and Concepts

Psychology

Definitions and terms relating to the study of the mind, including ideas from social psychology and political psychology.

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I’ve been reading Erich Fromm’s Escape from Freedom and it’s synthesizing a few things together for me in new ways — prime among them the realization that collective narcissism is the shared root ideology of both Christian nationalism and Nazism. First off, I’d recommend it:

Next, I’d like to thank it for reminding me about the insidious dangers of Calvinism and the Protestant Work Ethic, as described in sociologist Max Weber‘s most cited work in the history of the field. Beyond the problematic authoritarianism of John Calvin as a person himself, the ideology of predestination coupled with a paradoxical obsessive compulsion with working yourself ragged is a noxious brew that fed the Protestant extrusion of American capitalism as well as the murderous violence of its Manifest Destiny.

Reformation Ideologies

Calvin — like Luther before him — was reacting to the social and economic upheavals of his day which, during the Reformation, were all about the middle class emerging from the security and certainty of feudalism into a far more dynamic world of competition, isolation, and aloneness. It held promise but also peril — hope along with, inescapably, fear.

During the Middle Ages, humankind had retreated from the aspirational virtuousness of the Greek and Roman civilizations and descended into almost 1000 years of darkness, as compared to the dazzling intellectual brilliance of the millennium before it. Those who would prefer cultish cowering in self-righteous ignorance over the humility of fallible science and critical thinking managed to topple a glittering civilization and scatter it to the wolves. It was a return to cruel and arbitrary happenstance, a horrifying Hobbesian world of pestilence and pathology.

Continue reading Collective narcissism is a bad solution to modern anxiety
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Motivated reasoning is a common daily phenomenon for all of us, assuming we’re human and/or interact with other humans. It’s a cognitive science term that refers to a type of emotional bias in which we have a tendency to prefer decisions or justifications based on their personal desirability vs. an unbiased examination of the facts.

Thinking and feeling aren’t anywhere near as “separate” in the brain as is commonly believed — they are very intertwined, and it’s also incredibly difficult for us to understand or detect from moment to moment which parts of our stream of consciousness are “thinking” and which are “feeling.”

What’s worse, we have other biases that exacerbate the motivated reasoning bias — like the “Lake Wobegon Effect” wherein we tend to overestimate our own abilities vs. others. So, we’re overconfident — at the same that we are less rational than we think we are. That can be a volatile combination — especially when found in individuals who hold a lot of power, and make decisions that affect people’s lives.

For we know not what we do

It can be infuriating to deal with people who are using motivated reasoning to make decisions instead of critical thinking: they tend to work backwards from the conclusion they wish to reach, and ignore evidence that contradicts their pre-existing beliefs. The way they deal with the cognitive dissonance of conflicting information is simply to toss the new information out, instead of evaluating it. Generally, though, they are unaware that their brain is in the habit of making that easier choice, and tend to get angry when this is pointed out.

Examples of motivated reasoning:

  • Bigotry and prejudice
  • Belief that you can “reduce covid cases” by not testing
  • Belief that you can get Republicans elected by refusing to count Democratic votes either outright or via procedural means

Related concepts:

  • Emperor’s New Clothes
  • Potemkin Village
  • tautology
  • foregone conclusion
  • Catch-22
  • ouroborous
  • self-fulfilling prophecy
  • revealed wisdom
  • divine right of rule
  • teleological thinking
  • self-interest bias
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President Biden and Vice President Harris commemorated the 1 year anniversary of the January 6 attack on our democracy with morning speeches and a day of remembrance inside the Capitol rotunda with Representatives and Senators giving a number of moving speeches in their respective chambers. The tone on TV news and blue check Twitter was somber and reflective. The President referred to the violent events of Jan 6, 2021 as a terrorist attack on our democracy, and said that the threat was not yet over — that the perpetrators of that event still hold a “dagger at the throat of America.”

Only two Republicans were present in chambers when the moment of silence was held for the nation’s traumatic experience one year ago — Representative Liz Cheney and her father, Dick Cheney, the former VP and evil villain of the George W. Bush years. That this man — a cartoonish devil from my formative years as a young activist — was, along with his steel-spined force of nature daughter, one half of the lone pair that remained of the pathetic tatters of the once great party of Lincoln.

What do you do if you’re in a 2-party system and one of the parties is just sitting on the sidelines, heckling (and worse!?)? How do you restore confidence in a system that so many people love to hate, to the point of obsession? Will we be able to re-establish a sense of fair play, as Biden called on us to do today in his speech?

The Big Lie is about rewriting history

We don’t need to spend a ton of time peering deeply into discerning motive with seditionists — we can instead understand that for all of them, serving the Big Lie serves a function for them in their lives. It binds them to their tribe, it signals a piece of their “identity,” and it signals loyalty within a tight hierarchy that rewards it — all while managing to serve their highest goal of all: to annoy and intimidate liberals. Like all bullies, their primary animating drive is a self-righteous conviction that “I am RIGHT!” at all times and about all things, and that disagreement is largely punishable by death or, in lieu of that, dark twisted fantasies of death passed off lamely and pathetically as “just joking, coworker!”

Continue reading January 6 Attack: A “dagger at the throat of America”
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Majority Leader Schumer is right to come around to the idea that the filibuster must be changed in order to pass voting rights and save our democratic republic from the forces of authoritarianism.

The filibuster is an archaic rule that was at first only there by accident, then whittled into a sharp blade of minority rule by Southern plantation owner John C. Calhoun — a man credited with laying the groundwork for the Civil War.

The South Carolina plutocrat strategized on behalf of wealthy aristocratic ambitions in the 1820s and 30s. Dubbed the “Marx of the master class” by historian Richard Hofstadter, Calhoun consumed himself with an obsession over how to establish permanent rule by his 1% brethren. He was an early proponent of property over people — the original “just business” kind of cold calculating supremacist that would come to typify the darker southern shadow culture of America.

Calhoun came to the conclusion that the Founders had made a grave mistake when creating the nation, and had put in too much democracy and too little property protection. He had a conviction that collective governance ought to be rolled back, because it “exploited” the wealthy planter class such as himself. During his time in the Senate he engineered a number of clever devices for the minority to rule over the collective will of the public — dubbed a “set of constitutional gadgets” for restricting the operations of a democratic government by a top political scientist at the time.

Public choice theory and Charles Koch

Slaveholding Senator John C. Calhoun inspired a series of men in the future to take up the torch of minority rule and its apparatus. James McGill Buchanan combined ideas from F. A. Hayek with fascist strains of Calhoun’s ministrations in the Senate to pack a conservative economic punch with public choice theory.

A young Charles Koch was exposed to Buchanan’s re-interpretation of Calhoun’s re-intepretation of the founders’ intentions, and embarked on a lifelong mission to indoctrinate the world in the religion of hyper-libertarian Ayn Randian fiscal austerity.

New lie, same as the old lie. The old lie is that America was never intended to be a democracy — which is doublespeak nonsense. But “conservatives” have been fighting fervently for this original Big Lie since time immemorial.

So: Charles Koch is the new John C. Calhoun. He and his vast navel-gazing empire of “think tanks” and other organs of self-regurgitation have managed to brainwash enough people and operate enough bots to make it almost a coin toss whether the average citizen believes the nation was founded as a democratic republic or an authoritarian theocracy.

The filibuster is one of the strongest minority rule tools in their toolbox.

We must bust the filibuster.

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The term Christian nationalists brings together a number of radical religious sects seeking to overthrow the democratic republic of the United States and installing a strict theocracy, from dominionists to orthodox Catholics to Evangelicals and many more.

Here are some of the people and groups involved in the modern day movement to establish a Christian theocratic government in America:

  • 700 Club
  • Howard Ahmanson Jr.
  • Awake 88
  • Alexander Acosta
  • Alex Azar
  • Alliance Defending Freedom
  • American College of Pediatricians
  • American Enterprise Institute
  • American Family Association
  • American Family Radio Network
  • American Heritage Girls
  • American Legislative Exchange Council
  • Americans of Faith
  • America Wake Up
  • Robert Arnakis
  • Arlington Group
  • Larry Arnn
  • Edward Atsinger III
  • Marcus Bachmann
  • Michele Bachmann
  • Jim Bakker
  • Steven Bannon
  • Baptist Press
  • George Barna
  • Jeff Barke
  • Mari Barke
  • Stephen Barney — conservative philanthropist
  • David Barton
  • Gary Bauer
  • Glenn Beck
  • David Benham
  • Jason Benham
  • Philip “Flip” Benham
  • Robert J. Billings
  • Dr. Henry Blackaby
  • Sen Marsha Blackburn (R-TN)
  • Morton Blackwell
  • Bob Jones University
  • Bolthouse Foundation
  • Dick Bott
  • Bott Radio Network
  • Lt. Gen. William Boykin (ret.)
  • Lynde and Harry Bradley Foundation
  • Bob Branch
  • Lincoln Brewster
  • Jim Bridenstine
  • Harold O. J. Brown
  • Brown v. Board of Education
  • Pat Buchanan
  • Mark Bucher
  • Building a Nation
  • Jonathan Cain
  • Capitol Ministries
  • Cardinal Mindszenty Foundation
  • Ben Carson
  • CBN University
  • A Choice Not an Echo
  • Christian Broadcasting Network (CBN)
  • Christian Coalition
  • Christian homeschooling movement
  • Christian Satellite Network
  • J. C. Church
  • Church United
  • Church Voter Lookup
  • Tom Coburn
  • Mary Colbert
  • Concerned Women for America
  • Conscience and Religious Freedom Division
  • Conservative Caucus
  • Kellyanne Conway
  • Cornwall Alliance for the Stewardship of Creation
  • Council for National Policy
  • Culture Impact Teams (CITs)
  • Jan Crouch
  • Paul Crouch
  • Ted Cruz
  • Dr. Kenyn M. Cureton
  • Robert Lewis Dabney
  • The Daily Signal
  • Marjorie Dannenfelser
  • Jeff Denham
  • Betsy DeVos
  • Richard DeVos
  • Richard DeVos, Sr.
  • James Dobson
  • Mark Drever
  • Karen Rudolph Drollinger
  • Ralph Drollinger
  • Dinesh D’Souza
  • Alan P. Dye
  • Eagle Forum
  • Stuart Epperson
  • Equal Rights Amendment
  • Frank Erb
  • Tony Evans
  • Jerry Falwell
  • Faith & Freedom Coalition
  • The Family
  • Family Christian Academy (FCA)
  • Family Life Radio
  • Family Policy Alliance
  • Family Policy Councils
  • Family Research Council (FRC)
  • Family Worship Center
  • Fellowship Foundation
  • Reverend Wilber Fisk
  • Tami Fitzgerald
  • Florida Family Action
  • Florida Family Action PAC
  • Florida Family Policy Council
  • Focus on the Family
  • Foster Friess
  • Free Congress Foundation
  • Lynn Friess
  • Jim Garlow
  • Rosemary Schindler Garlow
  • W. Barry Garrett
  • Godspeak Calvary Chapel
  • Barry Goldwater
  • Peggy Goldwater
  • Grace Community Church, Sun Valley
  • Billy Graham
  • The Green family
  • Ken Ham
  • Abraham Hamilton III — host of American Family Radio’s “Hamilton Corner” who described the 2017 mass shooting in Las Vegas as “Satan’s work” that was “immune to legislation.” He went on to claim that the Democrats were “exploiting” the victims by calling for hearings on gun control
  • Mark Harris
  • Kristan Hawkins
  • Carl F. H. Henry
  • Heritage Academy
  • Heritage Action
  • Heritage Foundation
  • Eric Heubeck
  • Hugh Hewitt
  • Jack Hibbs
  • Rob Hilarides
  • The Hillsdale Collegian
  • Kay Hiramine
  • A. A. Hodge
  • John Henry Hopkins
  • Humanitarian International Services Group (HISG)
  • Nelson Bunker Hunt
  • Institute on Religion and Democracy
  • Larry Jackson
  • David Jeremiah
  • Bob Jones Sr.
  • Bob Jones Univeristy
  • Kingdom Warriors
  • KMMJ
  • C. Everett Koop
  • Ku Klux Klan
  • Beverly LaHaye
  • Tim LaHaye
  • Wayne LaPierre
  • Bill Lee — Governor of Tennessee
  • Leonard Leo
  • Mark Levin
  • Liberty University
  • LifeWay Research
  • Rush Limbaugh
  • Elias Loera
  • Nathan Lord
  • Dave Louden
  • Barry Loudermilk
  • John MacArthur
  • Rachel MacNair
  • Danielle Madison
  • March for Life
  • Ed McAteer
  • The Moral Majority
  • Jeanne Mancini
  • Manhattan Declaration
  • Rob McCoy
  • Mark Meadows
  • Mark Meckler — Tea Party activist and co-funder of Convention of States
  • Janet Mefferd
  • Roy Moore
  • Museum of the Bible
  • The Naked Communist
  • Penny Young Nance
  • National Center for Constitutional Studies
  • National Christian Foundation
  • National Conservative Student Conference
  • National Federation of Republican Women
  • National Right to Life Committee
  • Richard John Neuhaus
  • New Christian Right
  • Kristi Noem — Governor of South Dakota
  • Gary North
  • North Carolina Family Policy Council
  • Michael Novak
  • Old Time Gospel Hour
  • John M. Olin
  • Organicgirl
  • Joel Osteen
  • Sarah Palin
  • “Pastors Briefings”
  • Mike Pence
  • Pentecostals
  • Sonny Perdue
  • Tony Perkins
  • Rick Perry
  • Howard Phillips
  • Buddy Pilgrim
  • Mike Pompeo
  • Art Pope
  • Reverend J. C. Postell
  • POTUS Shield
  • The Power of the Positive Woman
  • Dennis Prager
  • Praise Network
  • Tom Price
  • Erik Prince
  • Scott Pruitt
  • Quiverfull movement
  • Oleg Rachkovski
  • Ronald Reagan
  • Ralph Reed
  • Carolyn Richards
  • Road to Majority Conference
  • Pat Robertson
  • Jim Robison
  • Roe v. Wade
  • Rousas Rushdoony
  • Karl Rove
  • John Rustin
  • SAGE Cons
  • Sarah Huckabee Sanders
  • Salem Radio
  • Richard Scaife
  • Jeff Sessions
  • Francis Schaeffer
  • Phyllis Schlafly
  • Alan Sears
  • Jay Sekulow
  • Ben Shapiro
  • W. Cleon Skousen
  • SonLife Broadcasting Network (SBN)
  • SonLife Radio Network
  • Springs Community Church
  • Horatio Robinson Storer
  • R.J. Rushdoony
  • Southern Presbyterian Church
  • Southern Strategy
  • Darla St. Martin
  • Stop ERA
  • Students for Life of America
  • Susan B. Anthony List
  • Donnie Swaggart
  • Gabriel Swaggart
  • Jimmy Swaggart
  • Jimmy Swaggart Bible College (JSBC)
  • Jimmy Swaggart Telecast
  • Bruce Taylor
  • Jeff Taylor
  • Steve Taylor
  • Taylor Farms
  • Thomas Road Baptist Church
  • James Henley Thornwell
  • Robert Tilton
  • Unity Project
  • “Values Bus”
  • Values Voters Summit
  • Richard Viguerie
  • Young America’s Foundation
  • C. Peter Wagner
  • Chester Ward
  • Washington Watch
  • The Watchmen
  • Doug Wead
  • Well Versed
  • Paul Weyrich
  • Paula White
  • Donald Wildmon
  • Farris Wilks
  • Dan Wilks
  • World Ag Expo
  • World Congress of Families

See also: Christian nationalism terms

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Mythology has it that “reckless Democratic spending” is to blame for the ballooning of the national debt — though the historical record shows otherwise.

In fact, the conservatives‘ beloved demi-god Ronald Reagan was the first President to skyrocket the debt, thanks to some bunk ideas from an old cocktail napkin that linger to this day — the Republican monetary theory in a nutshell is (I shit you not) that we should take all our pooled tax money and give it to… billionaires. Because, you know, they’re clearly the most qualified people to make decisions affecting the 99% poor people. Supposedly they’re the smartest folks to entrust with our money.

Trickle down, debt up

Except it’s not true, as year after year and study after study shows. Nor for all their finger-waggling at Democrats over the national debt has the GOP turned in a balanced budget since Nixon. Republicans are the most gigantic hypocrites on economics writ large, but particularly so for the national debt — with Reagan, Bush I, Bush II, and Trump all turning in record debt increases, primarily through tax cuts for the wealthy and the Gulf and Afghanistan wars.

Meanwhile, Bill Clinton balanced the budget, created a surplus, and reduced the debt during his 8 years in office, and Obama inherited the deepest recession since the 1929 Great Depression.

The financial crisis of 2008-09, itself caused by the reckless Republican zeal for deregulation — this time of financial derivatives — was a wholly GOP-owned debacle that the next president paid for politically. Nevertheless, President Obama had the debt again on a reduction path as a percentage of GDP — but then Donald “I bankrupted a series of casinos!” Trump oozed his way into the highest office in the land.

It’s weird how “reckless Democratic spending” always happens under Republican administrations!

During the Trump administration, Republicans patted themselves on the back for giving a $2.7 trillion tax cut to billionaires for no reason, while the economy was relatively hot already (after being rescued by Obama). Not only was no progress made on diminishing the debt, but the national debt actually increased (both nominally and as a percentage of GDP) under Trump’s first term even before the sudden arrival of a novel coronavirus caused it to leap into the stratosphere like a 21st century American tech oligarch.

Only when President Biden arrived on the scene and took the helm of fiscal and monetary policy did the national debt begin cooling off once again — all while dramatically and quickly scaling up covid-19 vaccine production and distribution and passing over $3 trillion in Keynesian legislation meant to get the dregs of the middle class reoriented to a place on the map vis-a-vis the 1% once again.

Republican national debt bullshit

I am hereby calling bullshit on Republicans’ crocodile tears over the national debt, which they suddenly remember only when a Democrat is in town and summarily ignore while their guy is in the hot seat burning through cash like it’s going out of style.

We need to have a better collective narrative for Democratic success on the economy. The Republicans are no longer the kings of the economic world — if they ever were. It feels more like smoke and mirrors each passing day, with climate change denial, the Inflationary Boogeyman, and other GOP Greatest Hits playing ad nauseum on the AM social media waves.

Here are at least a few things to remember about the national debt, that Republicans generally get wrong:

  • wars are very expensive
  • booms in social services are expensive too; but not as expensive as wars
  • there is not any perceivable truth in the old GOP party line that Democrats always overspend and Republicans are always thrifty
    • Reagan and both Bushes presided over two of the biggest spikes in public debt in recorded history, outside of FDR who had both the Great Depression and WWII to contend with
    • Clinton, Carter, Johnson, Kennedy, and Truman all decreased the debt
  • be wary of graphs that don’t “normalize” to GNP — it’s an attempt to “lie with statistics” by obfuscating the roles of inflation and the growth of the economy itself
  • there is more than one way to look at and evaluate the level of public debt
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Bootlicker Kevin McCarthy showboated his way through an evening of scorn and ridicule for his audience of one: Herr Trump. His sad evening comedy routine for the “just joking!” crowd was an act of political theater given no votes in his caucus were ever in danger of voting for the bill, thus no need to persuade them. McCarthy’s speech sparked jeers and heckles from the chamber itself as well as the wider outside world, as tweets poured forth from inside and out of the Capitol.

Fortunately, the GOP Leader failed to stop Biden’s Build Back Better plan while gifting the Democrats with a healthy dose of both comedy gold and some irresistable mid-term slogans:

Continue reading McCarthy’s speech stunt gives gift of Democratic midterm slogans
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Or capital vs. labor, oligarchs vs. plebes, plutocrats vs. proles, rich vs. poor — however you want to narrate it, the property vs. people struggle continues on in new and old ways, each and ere day.

Here in America, the plutocrats have devised many clever methods of hiding the class struggle behind a race war smokescreen, that is both real and manufactured — instigated, exacerbated, agitated by the likes of schlubby wife abusers like Sloppy Steve Bannon, wrinkly old Palpatines like Rupert Murdoch, and shady kleptocrats like Trump and Putin.

The United States has nursed an underground Confederacy slow burning for centuries, for sociopathic demagogues to tap into and rekindle for cheap and dangerous political power. Like The Terminator, racist and supremacist troglodytes seem always to reconstitute themselves into strange and twisted new forms, from slavery to the Black Codes to sharecropping to convict leasing to Jim Crow to Jim Crow 2.0 — the psychopaths want their homeland.

The political left loves people, and our extremists for the most part destroy capital or property that insurance companies will pay to make shiny and new again — unlike the right wing extremists who bomb federal buildings, killing hundreds of people and costing taxpayers’ money to replace.

Meanwhile, the right wing claims to be the righteous party for its extreme fixation on life before birth, yet its regulation-allergic capitalists destroy people and the natural world more broadly, from factory farming to deforestation, the destruction of habitats, strip-mining and other toxic extraction practices, and on into climate change itself. Being in fact the chief architects of manmade atmospheric devastation, they have managed to make themselves invisible from the deed by simply (wink wink!) denying it exists.

WWJD?!

Certainly, not anything the Republican Party is up to. Jesus would be sad.

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Another big legislative win crossed the line for Biden’s agenda late this Friday night: the $1.2T bipartisan infrastructure bill passed the House with 6 Democrats dissenting and a whopping 13 Republicans joining to finally bring Infrastructure Week to the American people. Still to come is the other partner to the twin bills circulating in Congress, the Build Back Better reconciliation bill that would add another $2T to the most Keynesian U.S. budget in decades.

Nevertheless, the bill is largely paid for via various means including adding significantly to economic growth and GDP over the next 10 years. The Biden infrastructure bill will not raise taxes on any families making less than $400,000, a campaign promise the president consistently made and has now delivered upon.

The bipartisan infrastructure bill is the second significant piece of legislation passed under Biden’s tenure in the White House, following the $1.9T American Rescue Plan back in March to successfully tame the covid-19 pandemic.

Infrastructure Bill 2021: Breakdown

What’s in the bill? A slate of sorely needed national funds to modernize our transportation, energy, and broadband systems, including provisions for increasing renewables and lowering emissions on a large scale to combat climate change. Here’s a list of what’s included in the largest single infrastructure investment in American history:

  • $110B for roads, bridges, & other infra
  • $11B for transportation safety
  • $39B to modernize public transit, including replacing 1000s of vehicles with zero-emission models
  • $66B to modernize passenger and freight rail
  • $12B for high-speed rail
  • largest federal investment in public transit in history
  • $65B in broadband
  • $42B in airports and ports, including emissions reduction and low-carbon technologies
  • $7.5B for 0- and low-emissions buses (including school buses) and ferries
  • $7.5B for national network of EV chargers
  • $65B to rebuild the electric grid
  • $55B to upgrade water infrastructure
  • $50B to critical infrastructure cybersecurity
  • $21B to clean up toxic waste
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Colloquially known as “throwing good money after bad,” sunk cost is a concept from behavioral economics that reflects our tendency to keep going with an investment long after it turns south, because we are psychologically unable to let go of a once good thing.

Sunk cost is considered a fallacy, because it represents an example of behavior that is technically irrational while being culturally ubiquitous.

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A national banking crisis in America that eventually spread to threaten economies around the globe, the economic crisis of 2007-8 was precipitated by the financial industry getting deeper and deeper into highly leveraged risk with a specific type of financial product called a subprime mortgage.

The loans were not of very high quality, due to the effects of predatory lending and of companies “pushing their luck” in a deregulated market by knowingly offering mortgage credit to Americans who couldn’t really afford to buy the homes they were encouraged to purchase. Mortgage underwriters were often incentivized with large bonuses for subprime signups, and even relatively well-off home buyers were often shepherded into subprime loans with worse terms than the traditional 30-year mortgages they would have qualified for.

Financial “hot potato”

The mortgages were securitized as complicated new types of assets, re-packaged into large bundles of derivatives to better obscure the sources, and rated far more favorably than warranted by the nation’s credit rating agencies. Sold swiftly around the world and especially here in the U.S. to institutional investors (who manage, among other securities, the pensions and retirement funds of the country), the game of financial “hot potato” ensured that almost no one in the complex chain of exchange had any incentive to take responsibility for the actual solvency of the underlying loans.

Eventually, the bubble popped and the house of cards came tumbling down. The downturn is widely regarded as the worst economic disaster in American history since the Great Depression of the 1930s, brought on by the stock market crash of 1929.

Moral hazard: Does commercial and investment banking under one roof create the wrong incentive?

In post-recovery, much scrutiny remains over the question of whether one specific law — the Glass-Steagall Act of 1933 which separated commercial banking from investment banking in response to the Great Depression — should be reinstated. Following its passage, the U.S. was able to stop the previous historical cycle of banking crises with regularity about every ~15 years:

…Until “stagflation” (high inflation coupled with stagnant growth) plagued the American economy in the 1970s, and the political establishment began to adopt policies heavily influenced by Milton Friedman and the Chicago School of economic thought, which borrowed heavily from an earlier wave of economic philosophy in the 1930s loosely congealed under the term “neoliberalism.” Widespread financial deregulation ensued, leading to the full repeal of Glass-Steagall in 1999. Many economists now point to the deregulation spree as the ultimate cause of the 2007-8 financial crash.


For a great resource on this, check out Matt Taibbi (of Rolling Stone fame)’s book Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History

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