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How Much Did Crisis Cost Economy? Begins with a T

Posted by Larry Doyle on January 29, 2013 2:05 PM |

Have you ever wondered what a best guesstimate might be as to how much the 2008 crisis cost our economy? Well, not that many outlets around here may care to highlight this information, so let’s navigate to a Russian site, Rianovosti, at which we can read and learn,

The absence of criminal accountability for a crisis that cost the U.S. economy trillions of dollars in GDP and wiped out billions more in personal wealth amplifies the risk of a similar financial meltdown in the future, according to securities experts and former regulators.

Trillions?? That is a large number even by today’s standards where many in Washington throw the “t-word” around like it is no big deal. Can we get more specific? 

Let’s continue navigating.

The U.S. government’s “entire response to 2008 suggests this could happen again someday,” said John Coffee, a professor at Columbia Law School in New York and a prominent expert on securities law and white collar crime.

“It’s clear that the Justice Department has not been able to find criminal charges it could prosecute, either because it is very hard to prove complex criminal cases in the financial world or because they were under pressure not to bring such cases, or simply because no one committed fraud,” Coffee said. “I think that last explanation is a little too simple.”

Too simple, you think? Can you say, firms deemed “too big to fail” are “too big to regulate”, and ultimately “too big to prosecute”. Is that capitalism?  No, that is crony capitalism and that is what we have in our country circa 2013. But how much has it cost?

The crisis, which began in 2007 and was accelerated by Lehman’s filing for bankruptcy protection, has cost the U.S. economy at least $12.8-trillion, according to a report released by the independent financial reform watchdog Better Markets—which called its estimate conservative.

$12.8 trillion. . . at least.

But no fraud, right? How do you feel about our elected representatives? Looking out for your interests?

$12.8 TRILLION later. . . . navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

 

  • Mark J. Novitsky

    Are we counting the $16 TRILLION+++ coming from the last FED audit?

  • Ed Pefferman

    Larry,
    When you arrive at that figure we need to set
    a “financial transaction tax” that will sunset
    when the figure is reached……deficit gone.

    Ed

  • Ed Pefferman

    Larry,
    Maybe we aught to exempt, Community Banks,Brokerages etc.
    that could prove they weren’t part of the problem

    Ed

  • Geoff

    Interesting that the Justice dept is suing S&P over ratings during financial crisis. What took so long? Also ironic however that the regulatory agents made the same claims back then, as pointed out by the defense.

    Bernanke in 2007: “All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.

    Is that a defense to claim that somebody suing you for saying something also said the same thing? What a mess, helicopter Ben prints not just cash but get out of jail free cards too.






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