FIRE

Finance + Insurance + Real Estate = FIRE

"Thirty years ago we could still write of a dichotomy– industry versus finance—and categorize GE and GM as industrial firms, with Goldman Sachs as a financial firm. Those days are gone, with GM requiring a bail-out because of its financial misdealings (auto production was just a sideline business used to burden households with debt owed to GMAC, the main business line), and Goldman Sachs buying up all the grain silos to run up food prices in a speculative bubble. Obamacare simply fortifies the Vampire Squid’s control of the healthcare industry as it inserts its strangling tentacles into every facet of life. 

Food? Financialized. Energy? Financialized. Healthcare? Financialized. Homes? Financialized. Government? Financialized. Death? Financialized. There no longer is a separation of the FIRE (finance, insurance, and real estate) and the nonFIRE sectors of the economy. It is all FIRE."

This excerpt is from a post authored By Professor L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stability and Senior Research Scholar at The Levy Economics Institute. It originally appeared at Economonitor's Great Leap Forward Blog.

What seems near criminal in Encinitas is that seeming lack of cognition from the council majority and the city staff of how seriously complicit and corrupt the FIRE forces are in the global financial crisis the envelopes our little Encinitas community.  The public keeps trying to confront the city's vulnerabilities in unfunded liabilities with pensions, municipal bonds, the recent revenue lease bond scheme and more and they get bupkus in response.

It is as though Jim Bond rambling and scoffing in his revisionist reveling at each meeting, or Jerome Stocks being sneeringly superior when any financial scheme is questioned, or Mark Muir mouthing naive observations for the camera or Kristin Gaspar rifling through her pink-highlighted spreadsheet notes are supposed to give any well-read adult in Encinitas confidence.

Of course the majority strategy always was and will be a deep commitment to public apathy and indifference.  They are loyal party vassals who have followed their own leaders ahead in the clown car. They also can count on the 24% clueless vote who just need to hear some dog whistle words to vote against their own best interests.  The council majority serves the tiny group where their funding comes from (and it's primarily out of town and large scale, corporate) and these donors are concentrated as players with FIRE where the money lives. The council encumbants' role is to make a display of caring about public intent and no more. For the mayor even a showing of that it is stretch.

Professor Wray begins his post with this bit of background.

As the Global Financial Crisis rumbles along in its fifth year, we read the latest revelations of bankster fraud, the LIBOR scandal. This follows the muni bond fixing scam detailed a couple of weeks ago, as well as the J.P. Morgan trading fiasco and the Corzine-MF Global collapse and any number of other scandals in recent months. In every case it was traders run amuck, fixing “markets” to make an easy buck at someone’s expense. In times like these, I always recall Robert Sherrill’s 1990 statement about the S&L crisis that - “thievery is what unregulated capitalism is all about.” 

After 1990 we removed what was left of financial regulations following the flurry of deregulation of the early 1980s that had freed the thrifts so that they could self-destruct. And we are shocked, SHOCKED!, that thieves took over the financial system. 

Nay, they took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.

A very despairing perspective, it's agreed.  Here is the challenge.  Are there enough people in Encinitas willing to hear the new voices like Lisa Shaffer and Tony Kranz? We are lucky enough to have these two dedicated citizens running against these entrenched FIRE breathers?  The FIRE folks will throw a lot of money at the boys to buy this election like they bought a seat at the last election.  Only engaged people, people fired up will best that kind of an undemocratic approach.  Fighting FIRE with our own kind of fire.