Monday, 17 November 2008

G-20 Wants Quick Action on Credit Default Swaps, But Bush Talks Them Into Toothless Regulation

America's financial elite - the very people who allowed the exponential expansion without oversight of CDS and other " murky investment tools"- pushed for an approach which would would not hold accountable those who created the CDS hurricane in the first place . (Paulson and Greenspan were obviously big derivatives cheerleaders. But the U.S. Congress aided and abetted this mess, as did some of Obama's top economic advisors; and see this).

Bush and company pushed an approach which is so incremental and toothless that it will probably not prevent future catastrophic failures stemming from CDS which are already out there.

This is similar to the Neocon approach to the Iraq war debate. Any Neocon talking head asked about how we got into the Iraq war says "let's not talk about the past, let's talk about what we should do now." This is a way to try to escape blame for a massively illegal war and to try to change the subject away from getting out of Iraq, towards some mythical successful end-game.

Similarly, America's financial elite are trying to talk about the "future" of CDS and how to "safely regulate them", instead of talking about who got us into this financial mess, and how to cancel the suckers before they drag the global economy down into a black hole.

[Posted at the SpookyWeather blog, November 17th, 2008.]

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