Monday, February 7, 2011

Bullies go beyond the school playground

Nocera on the Crisis and All the Devils Are Here

In this EconTalk podcast they talk about the devils involved in the economics crisis. They discuss how Fannie and Freddie were 'bullies, they used the mantra of home ownership to get anything they wanted and steam roll who ever got in their way'. They then go on to talk about some smart devils in Wall St who used synthetic CDO's which Joe Nocera believes made what was a disaster into a crisis. This made me think back to the school playground where kids went through phases of trading and playing for collectors cards or marbles. The older kids would take advantage of the younger ones and sell their card as 'the best' or the perfect compliment to the younger trader's other cards. Through many and many of these unfair trades there would eventually be an abundance of unhappy ripped off little kids and therefore the principal would step in and ban the cards or marbles from school grounds.

This was a funny little similarity that came to mind. Bullies obviously do not limit their nasty trading to the school playground.


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