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During the last decade, the United States has become a nation of predators vs. the rest of us. As Galbraith explains it, neoconservatives in Washington and on Wall Street have conspired to steal elections and occupy the most powerful political and financial institutions in the land so that they might abuse that power. How does it work? When times are good, extol the virtues of privatization. Then reward politicians for betraying the public trust. Finally, let the robber barons rob the country blind. When times are bad, extol the virtues of socialism. Say you're asking for bailouts not for yourself but for the greater good. Nationalize whole industries, like the financial sector, whatever the cost.
Here's a quick economics lesson from Galbraith: Wall Street reinvented itself after the Glass-Steagall Act (which instituted banking controls in the Depression) was repealed in 1999. Then-Sen. Phil Gramm proceeded to deregulate every damn market you can think of: stocks, bonds, commodities, etc. Every form of debt was also "securitized" in exotic financial instruments like CMOs, CDOs and SIVs (like many military acronyms, these acronyms are innocent-sounding names for things that are harmful). Eventually, a newfangled market called swaps and derivatives was ushered in, a market that has a notional value in the hundreds of trillions of dollars—a market as esoteric as it is unregulated. Think of it as make-believe money that made very real people really, really rich. Printing this make-believe money on Wall Street was a new species of bankers called "prime brokers."
Things were good until last summer, when Bear Stearns went bust. Then things turned bad because those really, really rich people went crazy speculating in make-believe money at the encouragement of prime brokers—and at the encouragement of the banks and broker dealers the prime brokers worked for. Words like "value" and "risk" became meaningless. Something had to give. Banks and broker dealers started going bust. First, one by one, then, in waves. But those really, really rich people were allowed to keep their money. A funny thing happened at the same time, too. Those very same ruthless capitalist archetypes became hypocrites. "We're too big to fail," they hollered. "You've got to save the rich to save the poor."
Don't call them neoconservatives or conservative anything, says Galbraith. Call them by their true name: predators. And Galbraith continues, predators are almost entirely responsible for the problems confronting us at this moment in history: the subprime crisis, our new national debt ceiling of 14 digits; the deepening divide between the rich and the poor; the still-persistent inequality across the spectrum of race, gender and immigration status; climate change; our collapsing bridges and other infrastructure deficit; and, last but not least, the falling dollar.