From Patrick J. Buchanan: Comes now news from across the pond that executives at one of the world’s most respected banks, Barclays, rigged Libor. Even the venerable Bank of England is apparently being investigated.
For sports fans, this is like fixing the Super Bowl or doping a horse in the Derby. But it is rather more serious. For the London Interbank Offered Rate is the benchmark interest rate for trillions in loans around the world.
Manipulate Libor a small fraction of a point, and lenders reap millions more in interest income on hundreds of billions in loans.
How many more such blows to their credibility can the financial elites sustain before people turn on the capitalist system itself?
Recall. Three years into the Great Depression, the Republican Party — America’s Party since Abraham Lincoln’s time — was crushed by FDR. Socialist Norman Thomas won 900,000 votes in 1932. Communist William Z. Foster won more than 100,000.
Charging “money-changers in the temple of our civilization” with moral culpability, FDR became the century’s most successful politician.
Demagogic, perhaps, but in 1936 FDR would carry every state but Maine and Vermont.
In recent decades, a series of shocks has fertilized the ground for a populist assault on global capitalism. In Europe, radical parties of the right and left are rising — to overthrow the establishment center.
Manifest incompetence is but one cause of the sinking confidence in our financial elite. In the Latin American debt crisis of the 1980s, our idiot-bankers had to be bailed out with Brady bonds. In 1995, one year after NAFTA passed, Mexico threatened to default. Goldman Sachs was bailed out of its huge Mexican exposure by a loyal alumnus, Treasury’s Robert Rubin, who dipped into the U.S. Exchange Stabilization Fund.