The 2008 Financial Crisis Will Happen Again (Probably In The 2020s)

Forty reasons:

  • Risk-taking alpha males.
  • Coke using.
  • Hookers.
  • Nihilism.
  • Amorality.
  • The rich will turn their backs on society.
  • Emotional blackmail: “You need us! Without us the economy will crash!”
  • Abusers of the financial system will have well-prepared lawyers.
  • The culture rewards risk-takers and impulsivity.
  • Shell games.
  • Technology, as it complexifies still more, will tend to even greater levels of mystification and obfuscation than in 2008.
  • Gambling.
  • Never enough. More.
  • People tend to outsource their critical thinking to authority figures: “Things are under control–trust us!”
  • Those in power will make claims without supports under cover of authority.
  • Motivated reasoning and financially rewarded reasoning will continue to guide decision-making.
  • Regulators won’t be looking. They will deliberately not look. They will be asleep at the wheel. And what they do identify, they will not wholly understand.
  • Disinterested experts will not be sought out, and will be ignored if they speak out.
  • There will be no lobbying money on the other side to provide push-back against the financial sector.
  • Not risking their own money, financial sector workers will risk other people’s money, and there will be no penalty to them for the losses they incur.
  • The big money players will call what they’re doing “risk adjusted performance,” but it will actually be “more performance for more risk.”
  • Regulators will befriend those they are regulating. There will be a revolving door between Washington and Wall Street. There will be conflicts of interest.
  • People will be paid off for their silence.
  • People responsible for policing the financial sector won’t be talking or consulting with one another.
  • Dubious investment instruments will be given a high investment grade (AAA) by investment rating agencies.
  • Because of greed, the masses of people will be made complicit with the financial sector, and will thus be vulnerable to impulsive sales techniques: “Are you missing the real estate boom?” Selling will be driven by emotion, not reason.
  • Someone or something will be too big to fail.
  • Fraud. Bullshit. There will be no moment where regulators say to the financial sector’s leadership, “No bullshit, what’s the data?” False signals will be sent to investors.
  • Statements made in public will not be those made in private. People will thus invest based on false information and misleading statements.
  • Powerful people will make themselves inaccessible to scrutiny and contact. They will be untouchable. They’ll hire the best lawyers. You won’t even see photos of them. They will move about like phantoms.
  • The financial industry will donate to and lobby both parties in Washington, providing carrots and sticks to elected officials to look the other way. For every congressperson, there will be multiple lobbyist-lawyers assigned to them.
  • Academic experts will be for hire. Bright intellectuals will run cover for the financial industry, making money sitting on boards and writing reports. Economics, as a discipline, will go on being corrupted by money.
  • Bureaucracy–federal and corporate–will make buck-passing easy. There will be no lines of direct accountability. When the catastrophe hits, no one will claim to have had their hands on the wheel.
  • What regulatory agencies exist will be slowly starved for funds.
  • New ideologies will emerge to support the greed and corruption, and old ones will be trotted out and given a contemporary retread (Atlas Shrugged 2.0, etc.).
  • People will believe they can create something from nothing.
  • It will be hard to speak against the new banking shenanigans. Whistle blowers will be severely punished (as will politicians who support regulation). It will be very, very expensive to speak–both personally and financially. Those with a conscience will know bullying and isolation.
  • There will be no separation of powers balancing one another. It will all be incestuous. A free-for-all. A form of store-front looting on a global scale.

The script writes itself, doesn’t it?

I made this list, by the way, while watching Inside Job. None of the behaviors in that film have really changed. None of them. Things other than critical thinking and public spiritedness are aligning for a financial crisis replay.

About Santi Tafarella

I teach writing and literature at Antelope Valley College in California.
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7 Responses to The 2008 Financial Crisis Will Happen Again (Probably In The 2020s)

  1. Mikels Skele says:

    The economy is for the players, period. They just keep the rest of us fed and thinking we have a shot at joining them to keep us from open rebellion.

  2. Staffan says:

    Most of this boils down to capitalism and human nature. We can change one of those.

    • Santi Tafarella says:

      I don’t agree with you here, Staffan. I think you can set up structures in which you get better behavior out of people than what we’re getting from those in the financial industry. There are ways to structure things, in other words, that might invoke the “better angels of our nature” more readily than the way things are structured today.

      What’s going on in the financial industry is not a problem of capitalism qua capitalism, but of failures in checks and balances, etc.

      An environment has been created in which people are not accountable for their actions, and this demoralizes everyone because it seems there are people who are freeloaders on other people’s hard work and above the law.

      • Staffan says:

        Yes, but the whole point of capitalism is that it regulates itself. If you “structure” it you get something else, like for instance democratic socialism. Perhaps this is just semantics, or perhaps you’re not as into capitalism as you think.

  3. conservative and free Christian says:

    staffan, What capitalism? Capitalism without a strong ethical and moral foundation, that’s what. As long as capitalism had a culture with a Christian ethical basis to influence it, it went well. People had a much higher standard of living in capitalist countries in the 1950 or 1980s, than they did in Eastern Europe and Russia, China, North Korea and Cuba. There was still traditional influence on the way people did business back then, more than today. That’s not to say there were no crooks and greed back then; but those problems have always been around, they are part of human nature and you can’t regulate or stop that, unless there’s an inner spiritual transformation, it’s called being born again, Jesus said it, see John chapter 3. That’s far more efficient than anything socialists might be able to accomplish.

    There are clear teachings in the Bible, telling owners to pay what they owe to their employees. It’s in the Old and the New Testament. It’s an obligation they have, and God commands it. But those who think God is just an abstract idea, that ethics don’t matter and that society can rewrite the rules as we go along, shouldn’t be surprised at the crony capitalism we have now.

  4. conservative and free Christian says:

    It’s funny you bring up these things, but you refuse to see them when left wingers or progressives do them, santi. The financial crisis may be sooner than you think.

    “Powerful people will make themselves inaccessible to scrutiny and contact.” That’s what Obama and other Democrats are doing. I’m not saying that some Republicans aren’t doing the same thing, but if this pisses you off, it should piss you off always, not just when some people do it. Amorality and nihilism, those are coming from the secular Left, the moral relativist crowd. They created this kind of culture. Marx and Nietzsche are mostly responsible for it. Nietzsche, one of the philosophers you admire, was a nihilist. Marx, another idiot. So, you’re seeing the problems, but you don’t want to distance yourself from the source of the problems. I can’t understand that.

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