Book Report: The Crash of 2016 by Thom Hartmann
A fairly quick read of 272 pages well worth the time. Mr. Hartmann details why the coming crash is inevitable. Basically, the same problems that brought on the last crash are still there with banks even bigger and the entire financial sector shot through with schemes very similar to those that crashed the economic systems of the world. He shows how the actions taken last time merely postponed the complete disaster that is fast coming.
The country has been taken over by the â€œroyalistsâ€ or the elites who now have more power to do more damage than ever. â€œLawmakers are no longer listening to their constituencies but instead to the technocrats on Wall Street and the Royalist shadow government manifested in 'think tanks' such as the Mackinac Center and ALEC.â€ Democracy is defamed as voters are kicked off the rolls and the â€œSupremesâ€ encourage more and more domination by the very rich and by corporations. The result is one of the most corporate-friendly House of Representatives since the Gilded Age.
In a quote of Chris Hedges by Hartmann:
â€œWe have powerful corporate interests that have commodified everything,â€ including human labor which means â€œhuman beings no longer have any intrinsic value in the ethics of the corporations. They are commodities to exploit until exhaustion or collapse. The same is true of the natural world-we exploit the natural world until exhaustion or collapse.â€
The author then goes into what collapse looks like. Increasing debt throughout the economy is driving the crash. This is not about our national debt as is usually painted as critical to our survival. It is about overwhelming debt created mostly through financial markets far far bigger and more dangerous.
â€œAt 1.2 quadrillion dollars the derivative market alone is roughly 21 times the size of the global GDP combined. To say that all the money in the world can't stop the derivatives market from imploding wouldn't be an exaggeration. In fact, it'd be a gross understatement.â€ As a math teacher I have to try to explain that number: in normal grade school form it would be 00,000,000,000,000 or 12hundred trillion
In addition to this little problem, each of the major banks shares in this huge debt. They have managed to have their individual share much more than they can possibly cover. Goldman Sachs 114 billion in total assets, 41 TRILLION in debt.
Bank of America 1.4 trillion in total assets, 41 TRILLION in debt. JP Morgan Chase total assets just over 1.8 trillion, 69 TRILLION in debt. And this is just looking at the derivative market.
There is much more here including what must be done AFTER the crash to try to prevent the cyclical nature of these problems. But I must include another attempt to give some understanding to the wealth distribution in the USA. The average American family makes $57.000 a year. That would amount to a stack of one hundred dollar bills about 2 inches tall. The one-percenters in our country make about $300,000, a stack of one hundred dollar bills about a foot high per year. But the average of the billionaires on the Forbes top 400 list is 4.2 billion. Convert that to a stack of 100 hundred dollar bills and it would rise over 2 miles into the sky making a hazard for many aircraft. Well over 10,000 feet high! I'll leave it to the reader to think about that.