By William S. Lind
At a recent book party for Winslow Wheeler’s new history of the Military Reform Movement of the 1970s and 1980s, I was asked for my views on the prospects for genuine reform. I replied that “So long as the money flow continues, nothing will change.” Chuck Spinney, a reformer who spent decades as a polyp in the bowels of the Pentagon, agreed.
Events on Wall Street suggest that the day when the money flow stops may be approaching. Despite President Hoover’s assurance that “Prosperity is just around the corner,” the American economy is in free-fall. After decades of frivolity, that economy now amounts to little more than a pyramid of financial pyramids, all requiring a constant inflow of borrowed money. The inflow is endangered by the developing Panic of ‘08, where the junk mortgage crisis and the collapse of the housing market combine to dry up lending. What happens to pyramid schemes when money stops flowing in at the bottom? Maybe a recession; maybe a depression. That’s why pyramid schemes are illegal, unless the government runs them.