While I was in Europe, the world celebrated the anniversary of the Lehman collapse, the bank at the center of the mortgage meltdown. Like everyone, the fact that it has been ten years since the world teetered on the edge of the abyss slipped my mind. It is important to think back on the last decade, since many economists and analysts still think it was a near-death experience for the world. Danish television was playing the movie The Big Short, for example.

As to the crisis itself, a few things remain remarkably obscure. One is that the best minds on this stuff still cannot bring themselves to notice the biological element. Blacks and Hispanics were wildly over-represented in the default numbers. The only analysts and commentators, outside of those on this side of the divide, to notice this fact, do so to “debunk” it. These are the folks who run around making sure everyone in the human sciences says “race is a social construct” five times a day while facing Frankfurt.

The other mystery is that the so-called experts still have not explained how the sub-prime mortgage happened. Even a decade on, it is hard to get reliable numbers on the quantity of mortgages that constituted the bad paper. The only thing that the experts agree upon is that the lowering of lending standards created a speculative bubble. The result was a wave of over-lending and over-building, that led to the great mortgage bubble which burst a decade ago.

Currently, the druids from the grand economic council claim that eight million people lost their jobs because of the recession that followed the collapse. That seems small, given that the labor force is roughly 160 million. That means unemployment would have gone from about four percent to just under ten percent. That is the official line from the druids in the academy, but it certainly does not fit with the narrative about this being a near-death experience for the economy. Those numbers suggest a common recession.

Another part of the official narrative is that super-smart druids from the academy rushed in and saved the world from ruin. That is an interesting aspect of this story. Economists all believe that the Great Depression could have been thwarted, and as a result the events that followed could have been avoided, if central banks had expanded the money supply in response to the crash of ’29. Therefore, the reason this crash did not result in world war and the rise of you-know-who was the central banks expanded the money supply.

Another number that was presented at the end of the film was that the collapse resulted in six million foreclosures. This number is hard to judge, other than the presence of the mystical number six. There is no question that lots of people lost their homes. It’s also true that lots of connected people cashed in on this by quietly investing in house flipping operations that preyed on the vulnerable. I recall being in Las Vegas sometime after the crash and thinking that the only guy getting rich was the guy selling “For Sale” signs.

Of course, the inability to figure out the details of what was billed as the greatest economic event in world history since the crash of 1929, may have something to do with who was responsible. In a world run by bankers of a certain sort, it is probably a bad idea to point out that the bankers were responsible for destroying the economy. The economists start from the assumption that the failure was not systemic and not deliberate. They seem to view it as a weird accident like leaving the coffee pot on before leaving for work.

It’s like the bias toward normal distributions that Nicholas Taleb discusses in his book, The Black Swan. This blind spot for various aspects of the crash is not the result of some complex conspiracy. Economists are not sitting around plotting to obscure the facts from the public. They simply start from a set of assumptions that rule out things like a cultural bias that manifests as a systemic bias. They can only think systemically within the accepted parameters of the system itself. That means ignoring lots of possible answers.

Like the Great Depression, the mortgage collapse of 2008 has created a specialty of study within the field of economics. PhDs in economics will be based in this event for generations, assuming we make it that long. Each book and paper will fill in a bit of the official narrative until the only people questioning it will be cranks and oddballs. This is how religions evolve. If the disaster is not repeated in the near term, the ambitious will be happy to go along with the conventional wisdom.

Another part of the official narrative is what is assiduously excluded from the official narrative. For example, the fact that no one was held accountable for the disaster. Take, for example, Franklin Raines, the head of Fannie Mae. He walked away with millions, never having to answer for his crimes. Angelo Mozilo, the guy in charge of Countrywide Financial, was allowed to avoid acknowledgment of wrongdoing and criminal charges, by paying a relatively small fine to the SEC. He retired a gazillionaire.

Just as important, as Steve Sailer likes to point out, no one even mentions that the Bush Crime Family was largely responsible for the sub-prime loan disaster. It was the Bush administration that pushed banks to drop their lending standards as a part of the “ownership society” campaign and the desire to buy votes from migrants. In fact, the political class emerged unscathed from the disaster. If anything, the catastrophe that was the Bush administration strengthened the managerial state’s stranglehold on society.

Here is where you see the race obscurantism warp official reality. To focus on the wrongdoings of the Bush people, would require acknowledging some unpleasant realities about diversity. For example, default rates for blacks and Hispanics were three and four times the rate for whites. Similarly, the people targeting these groups with bogus loans were doing so because they knew they were not savvy enough to understand what was happening to them. That opens doors that must remain bolted closed in this age.

My own view on this, to wrap up the post, is that the financial system is built on the biases of the people who control it. A system designed by people who keep a bug-out bag next to their desk, and leave their car running in the parking lot, is never going to incorporate long term risk. Ours is a parasitic system that is designed to drain the blood from the American middle-class. The patches and remedies to keep it going are just that, quick fixes to keep the blood flowing. Eventually, the host will die, and the bankers will move on.