The Other Meltdown Connection

Does any one remember the meltdown of the dot coms on the NASDAQ in late 2000 and 2001?  Unless one forgets, that was also about Wall Street greed.  Technology stocks were popping up all over just as subprime mortgages were doing the same with the housing boom. 

 

Wall Street brokers and financial institutions were offering IPO's (Initial Public Offerings) on newly created dot coms that had no balance sheet, no record of earnings, no record of revenue and no prior record of experience.  Those dot coms were promoted by Wall Street and the public had faith in what they were hearing.  Wall Street caution in those IPO's and dot coms were gone with the wind. 

 

Wall Street was making money offering those stocks and selling them, just like they were making money lending to non banks who originated trillions of dollars in subprime mortgages and then bought those subprime mortgages and packaged them as bonds and other instruments and sold to investors, many overseas.  Wall Street was not concerned about the viability of the dot coms as they were not concerned about the financial health of the subprime borrowers.  Then all came tumbling down.  Greed was the driving force on both accounts.

 

The NASDAQ lost over 60% of its value because of the dot coms crash and investors in those stocks were devastated.  In the mean time the DJIA was loosing only about 3%. Not many dot coms there.  The American people need to adjust their thinking when it comes to investing their hard earned money.  Don't pay any attention to those on cable news who have shows concerning the economy and the financial markets.  They have a proven record of being impotent on the subject.

 

The Savings and Loan meltdown of the 1980's, the dot coms meltdown and the present financial meltdown of 2008 all had the same common denominator, greed, big time.

Another First For Politidose

Bob Herbert, a writer for the New York Times whose editorials are published in many of the nations major newspapers, was right on target with his editorial published in the Times Picayune of 3/12/09.

 

In the article, "Smothering The Dream," Mr. Herbert pointed out public officials were part of the reckless and shockingly shortsighted alliance of conservatives and corporate leaders that rigged the economy in favor of the rich and ultimately brought it down completely.  Mr. Herbert continued, "working people were not just abandoned by big business and their ideological henchmen in government, they were exploited and humiliated.  They were denied the productivity gains that should have rightfully accrued to them."

 

If all of this seems familiar it is because you read it here first on politidose way back in November 2007 and in other post this writer has written since then about corporate leaders and the transfer of wealth.  This was way before the collapse of the economy in 2008. 

 

Mr. Herbert continued, "the right wingers were crafty: you smother the dream by crippling the programs that support it by starving the government of money to pay for them by funneling the governments revenues to the rich through tax cuts and other benefits, by looting the government the way gangsters loot legitimate businesses and then pleading poverty when it comes time to fund the services required by the people."

 

This writer has pointed out on more that one occasion in politidose that the purpose of the massive deficit spending and debt of Reagan, Bush 41 and Bush 43 over the 20 years they served was to bankrupt the federal government so programs like Social Security, Medicare and other needed programs for the people would go unfunded.  Also how the CEO's and their executives received billions of dollars in bonuses instead of sharing those benefits with their average worker.

 

The readers of politidose were alerted to our economic and fiscal problems caused by greed, trickle down economics, the conservative ideology and lies of Corporate America long before the current economic collapse and fiscal disaster the country is going through today.  And the alert came long before the facts became public by our leaders.  It was not heard on the cable news networks or Wall Street.  They beat the same drum as the Bush administration. " The fundamentals of the economy is strong and sound."  Yea, tell me another fairytale. 

 

The American people can not depend on the so called experts two deal with the facts that affect their own lives.

 

Note:  Past politidose commentary dealing with the subject matter listed below.

 

11/23/07     Corporate America:  Leaving The Average American In The Dust

 

1/27/08, 2/17/08,2/25/08 and 3/2/08  The U.S. Economy:  Which Party Performs Best.  3 part series with

                                                      conclusion.

 

4/6/2008     Republican Administrations, Fiscal Disasters

 

5/16/08      The Republican Trademark:  High Oil and Gasoline Prices

 

7/9/08        The Roadblock to job creation and a Sustained Economy, Conservatives

 

7/23/08      Innovation:  Lost in America

 

8/3/08       The Republican Cycle of Record Federal Deficits and Debt