"What do the oil catastrophe and the Wall Street collapse have in common? In both cases, a powerful, politically protected industry invented something that could not easily be repaired when it broke."-- Robert Kuttner, The American Prospect
I agree.
But why'd they do it?
In a market, sellers do things because of what buyers want them to do.
In the case of the Wall Street meltdown, every TomDickandSally wanted their stock to go up and they might even sue if it didn't. Greed wasn't imposed from on-high, but it was exploited and then suddenly John McCain had to rush to Washington by way of Katie Couric's make-up room.
In the case of the BP gusher, every HarryAbdulandLaQuonna wanted cheap driving, cheap plastic, cheap heat, and every what-all petroleum is used for, and wanted it now and threatened to vote you out of office if you told them it might cost more and feel a colder and smaller world if you didn't deliver now now now. Environmental disaster wasn't the goal of BP nor anyone else, but it was a perhaps unavoidable consequence of the modern thirst for all things oil-based (and that includes everything you know in this world except maybe that antique wooden coffee-grinder you bought at the flea market, and that's only if you pretend it got to the flea market in a horse-drawn carriage).
So we have by common consent contracted with these major, politically connected interests to systematize what they do and not tell us the details but just satisfy our hunger for universal comfort in a world where every day is necessarily a roll of the dice and where we each, personally, need to try and load the dice as heavily as we dare in our favor.
Much as the fate of every system, the complex interlocked units that drive such enterprise work well for a time; until they don't.
And now they just don't any more.
We have two signal disasters to let us know we have loaded one too many blocks onto the Jenga tower--first on Wall Street and then 50 miles out in the water south of the Big Easy--and in each case, with a single block pulled out, the tower comes down and the game is all but over.
Of course its not really over. There will be shouts and murmurs for a long time about both derivative finance and easy oil, but for all intents and purposes the era that grew these and enabled a certain fat and stupid attitude on the part of pretty much every non-impoverished person in the West, is now drawing to an ignominious close.
"Greed is good"? "Drill Baby Drill?"
What's that you say?
Have not heard those in a while.
