Cults of the Culture Wars (part 3) (A.Glass 2021)

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Financial crisis of 2008

On the 15th September 2008, the prestigious Wall Street investment bank Lehman Brothers declared bankruptcy, as a non-interventionist token, it was allowed to go bust.   Denied access to the Federal Reserve Bank interbank lending program and a taxpayer bailout, the collapse of Lehman Brothers was a shudder felt throughout the banking sector and financial markets,  despite the millions of Americans of that time that had lost their jobs and houses due, specifically, to the greed of Wall Street and investment banks, trading entangled debt instruments and selling them onto the global banking system.   The ‘writedowns’ on investments for global banks caught up in the crisis attributed to over two hundred billion dollars, while the American banking sector, the epicenter of the mortgage collapse, spiked to over 800 billion dollars.   Banking industry lobbyists, reinforced by the Federal Reserve chairperson, at the time, Ben Bernanke, a monetarist and believer that markets should be backed by massive and widespread intervention to offset a second Great Depression.  Pushed by the Republicans who held the balance of power and presiding President Bush to release 700 billion dollars of taxpayers monies to be used in underwriting and shoring up the American financial system.  It was approved in late September 2008, as the biggest tax payer bailout of the private banking system ever orchestrated – including the investment banks, that by definition should not have been bailed out, changing quickly into public bank holdings, all the while what is known as main street, continued to take the hit as a recession took hold.  The lost of houses of the middle and working class and their livelihoods continued to wreak havoc across America.

The discord of the bailouts of the general populous of American continued on throughout 2008 with democratic president elect Barak Obama offering, at the time, an ideal of a more liberal and open approach to dealing with America’s woes both overseas as its militaristic operations begin to overstretch congressional budgets and domestic problems, promising to close down former President Bush’s largely unpopular Guantanamo Bay military prison for terrorist suspects and winding down the disastrous war on terror, he also had to contain an inherited economic mess that was still reeling after the mortgage markets had collapsed and threatened to shutdown lending and credit throughout America and the world.  

Yet, despite the promises of egalitarian hope, the growing divide between the rich and poor in America widened, as did the distrust of government policies particularly economic.   The libertarian viewpoints of the detriment of big government and social policies mixed with Austrian economic theory, ala Rothbard’s mantra; that printing money and flowing more credit into an overstretched  economy – would further create a natural unbalance of markets, began, at least from a theorized aspect, to ring true.  But it would be the social scapegoats which became polarized amidst a dissatisfaction of Obama’s tenure, that, even though after the 2008 market meltdown, the nation skirted with a recession – it nevertheless caused a widening schism between demographics, solidified as the two major camps of liberalism and conservatism.  Both, with commentators, economists and politicians on both sides either urging for more stimulus for the American economy or less, to which the libertarian aspects of politics began to shine through, the core of the philosophy held an attractive viewpoint that an overabundance of big business and bank bailouts as an attempt patching together a broken economy will only lead to larger government, over regulation and what libertarians feared the most; statism and corruption, with rights of the individual to become more and more stifled.

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Authored:  A.Glass 2021