Danny Schechter - ColdType

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advertising money sloshing around supporting them. (The
New York Times put the figure at more than $3 billion from
2002 to 2007.)
“There is a credit divide in America that fuels our economic
divide,” I argued in my film, warning of a potential economic
implosion because so many Americans are trapped by a debt
squeeze. I was not alone in projecting a crisis, although my
focus was more on the failure of many media outlets to track
the problem and ask deeper questions.
“Ours has become a nation in which the carrot of instant
affluence is quickly menaced by the harsh stick of bill collectors,
lawsuits, and foreclosures,” I contended. “And yet, this
bubble can burst and has: the slickest of our bankers and the
savviest of our marketers have NOT been able to undo the law
of gravity, that what goes up must come down.”
One didn’t have to be an expert to see the warning signs
which have since led to a massive market meltdown, a collapse
of the subprime mortgage market, bankruptcies by leading
financial lenders, billions of dollars in losses by top banks
and financial lenders, and predictions of more pain to come for
millions of Americans facing foreclosures.
Many in positions of power downplayed the seriousness of
the threat, preferring modest, unrealistic and inaccurate estimates,
perhaps so as not to further panic the markets.
Federal Reserve Chairman Bernanke was among those
who was way off in his prognostications. In July 2007, as Bear
Stearns Hedge Funds were imploding thanks to the mismanagement
by execs who would later be arrested for fraud, he
told Congress that he only expected subprime losses in the $50
to $100 billion range.
Economist Yves Smith responded, “I recall gasping out loud
when I read that, because no one in the private sector had had
loss estimates like that for a while. The lowest estimates I was
seeing around then was $150 billion.” Bernanke was telling