The real derivative in play this week is the financial contribution to members of Congress in return for future favors. While there is no official, if unregulated, market in hedges against congressional revolts against finance, insurance and real estate (FIRE) speculation in the free market of members of Congress, the New York Stock Exchange’s gyrations are obviously tending in that direction at the moment. FIRE has been buying congresspersons for several decades. Not so many years ago, former House Speaker Newt Gingrich (R-GA) was preaching to America about the wisdom of Samuelson’s 101 Economics text, the intellectual equivalent of pre-DNA biology. It is a long, degrading story. The main target was American unions and the main tactic was “globalization,” i.e. the off-shoring of millions of American jobs. Meanwhile, Wall Street was peddling the illusion of universal home ownership, “the ownership society” promoted by our president, the neo-crusader.
John Kenneth Galbraith’s 1954 reflections in The Great Crash 1929 are instructive:Read More »