Political Cortex: Brain Food for the Body Politic

The cost of conducting the Iraq War is, we were told during President Obama's election campaign, $10 billion a month.

The national debt clock reveals that the national debt has skyrocketed to $10,771, 107, 905 trillion.  

George W. Bush has the dubious distinction of being the U.S. White House resident who catapulted the national debt to the highest in history, greater than all the other national debts combined since the U.S. was founded as a nation.  

No wonder Bush's popularity plunged the farthest, down to 23 percent as voters said goodbye and good riddance emphatically.  Now, George can retreat to his Dallas, Texas mansion, where he can think about what his 8 years achieved.

When Alan Greenspan lowered the interest rate to the lowest in 40 years, was the drastic step coincidence or conspiracy for dollar destruction?  Of course, it drastically cut down on U.S. citizens saving their dollars.  

When 2 percent interest prevailed at banks, savers were losing money.  The stock market soared when Greenspan sliced those interest rates.  It is understandable that people don't want to lose money saving money.

Greenspan's other "Doublespeak" took place when he repeatedly declared inflation was low as everything from cars to homes to food was skyrocketing.  

The stock market Wall Street speculators were aided tremendously by Mr. Alan Greenspan making saving in a U.S. bank a sure way to lose money.  By cornering the market for investing or spending, the U.S. currency was damaged, but Wall Street and the other investment businesses took off joyously!

The housing bubble was helped enormously when bankers hastily jumped on the bubble bandwagon by telling loan officers to make worthless loans.  The December 28 Seattle Times reported:

"During the tenure of Chief Executive Officer Kerry Killinger, Washington Mutual pressed sales agents to pump out loans while disregarding borrowers' incomes and assets, according to former employees."

Now, another factor was involved regarding the honesty and integrity of millions of U.S. citizens who knowingly took out big mortgages they knew they could never repay.

They fall into two categories.  Some buyers of these sub-prime mortgages possibly were unable to calculate their income and future payments when the principal kicked in if it was an interest only purchase which lured them to take a loan they couldn't afford.  Others might have thought they could flip (sell rapidly) and profit.

But the real slick economic tricksters were highly sophisticated.

In "$700 Billion Bailout" Paul Muolo explains:

"A credit default swap is an insurance contract that allows an investor to bet or hedge against losses.  There were $44 trillion worth (that's not a typo) of these contracts outstanding in the United States at last count.  By comparison, the U.S. government debt, owes just over $10.2 trillion (at that time) on outstanding treasury bonds."

In the March, 2009 Esquire Magazine an editorial stated:  "A good description of credit default swaps and other financial instruments that caused the economic crash -- 'financial weapons of mass destruction,' as Warren Buffet called them."

Bush's Iraq War found no weapons of mass destruction.  But his administration overlooked the financial weapons of mass destruction.  

Operating without close government regulation, U.S. banks and financial institutions created this U.S. economic crash!