There are several methods which government uses to cover up the severity of the downturn, here are a couple before delving into the meat of the article by the blogger at Washington’s blog:
I recall a history professor of mine in undergrad saying that the way unemployment was measured in the great depression is different than it is now. His point was that in the great depression was “real unemployment” not like the way they measure it now.
The news media and the government seem to be downplaying the seriousness of the recession by portraying statistics in a positive light. They also use other events as distractions. Have you ever seen the movie “wag the dog” ? They fabricate a war with another country to evade the public’s attention from a sex scandal reminiscent of Bill Clinton’s fling with Lewinsky. Besides the astonishing fact that we have President Obama, shows that it is possible for bankers to steal the money a second time. To have this happening must teach the American people once and for all, they live in a plutocracy rather than a democracy.
The Ongoing Cover Up of the Truth Behind the Financial Crisis May Lead to Another Crash
Thursday, October 15, 2009
William K. Black – professor of economics and the senior regulator during the S & L crisis – says that that the government’s entire strategy now – as during the S&L crisis – is to cover up how bad things are (“the entire strategy is to keep people from getting the facts”).
Indeed, as I have previously documented, 7 out of the 8 giant, money center banks went bankrupt in the 1980’s during the “Latin American Crisis”, and the government’s response was to cover up their insolvency.
Black also says:
There has been no honest examination of the crisis because it would embarrass C.E.O.s and politicians . . .
Instead, the Treasury and the Fed are urging us not to examine the crisis and to believe that all will soon be well.
PhD economist Dean Baker made a similar point, lambasting the Federal Reserve for blowing the bubble, and pointing out that those who caused the disaster are trying to shift the focus as fast as they can:
The current craze in DC policy circles is to create a “systematic risk regulator” to make sure that the country never experiences another economic crisis like the current one. This push is part of a cover-up of what really went wrong and does absolutely nothing to address the underlying problem that led to this financial and economic collapse.
Baker also says:
“Instead of striving to uncover the truth, [Congress] may seek to conceal it” and tell banksters they’re free to steal again.
Economist Thomas Palley says that Wall Street also has a vested interest in covering up how bad things are:
That rosy scenario thinking has returned to Wall Street should be no surprise. Wall Street profits from rising asset prices on which it charges a management fee, from deal-making on which it earns advisory fees, and from encouraging retail investors to buy stock, which boosts transaction fees. Such earnings are far larger when stock markets are rising, which explains Wall Street’s genetic propensity to pump the economy.
The media has largely parroted what the White House and Wall Street were saying. As a Pew Research Center study on the coverage of the crisis found:
The gravest economic crisis since the Great Depression has been covered in the media largely from the top down, told primarily from the perspective of the Obama Administration and big business, and reflected the voices and ideas of people in institutions more than those of everyday Americans…
Citizens may be the primary victims of the downturn, but they have not been not the primary actors in the media depiction of it.
A PEJ content analysis of media coverage of the economy during the first half of 2009 also found that the mainstream press focused on a relatively small number of major story lines, mostly generating from two cities, the country’s political and financial capitals.
A companion analysis of a broader array of media using new “meme tracker” technology developed at Cornell University finds that phrases and ideas that reverberated most in the coverage came early on, mostly from government, particularly from the president and the chairman of the Federal Reserve…
- Three storylines have dominated: efforts to help revive the banking sector, the battle over the stimulus package and the struggles of the U.S. auto industry. Together they accounted for nearly 40% of the economic coverage from February 1 through August 31. Other topics related to the crisis have been covered much less. As an example, all the reporting of retail sales, food prices, the impact of the crisis on Social Security and Medicare, its effect on education and the implications for health care combined accounted for just over 2% of all the economic coverage.
- Actions by government officials and business leaders drove much of the coverage. The White House and federal agencies alone initiated nearly a third (32%) of economic stories studied through July 3. Business triggered another 21%. About a quarter of the stories (23%) was initiated by the press itself and did not rely on an external news trigger. Ordinary citizens and union workers combined to act as the catalyst for only 2% of the stories about the economy.
- Fully 76% of the datelines on economic stories studied during the first five months of the Obama presidency were New York (44%) or metro Washington D.C. (32%). Only about one-fifth (21%) of the stories originated in any other city in the U.S., and about a quarter of those emanated from two other major media centers: Atlanta and Los Angeles.
You can read the full enlightening article at Washington’s Blog