Opinion Brief

Did 'financial terrorism' cause the economic crash?

A government report suggests that "outside forces" may have triggered the 2008 economic meltdown. So... it wasn't our fault after all?

It turns out that the devastating 2008 financial collapse wasn't caused by our over-leveraged borrowing and ballooning real estate prices, but rather "financial terrorism" from "outside sources," at least according to a newly uncovered 2009 report commissioned by the U.S. Defense Department. Financial analyst Kevin Freeman, the Pentagon contractor who wrote the report, claims that coordinated financial attacks on the U.S. from unknown "financial enemies" turned a normal downturn into an economic catastrophe that drained $50 trillion from the global economy. Could that really be true?

Yes, and we still face an economic 9/11: The financial attacks we've suffered are "the equivalent of box cutters on an airplane," Freeman tells The Washington Times. But the likely perpetrators, "radical jihadists and the Chinese," aren't finished yet. A massive, dollar-destroying sell-off of U.S. government bonds "is the 'end game' if the goal is to destroy America," and our nation remains woefully unprepared."Financial terrorism suspected in 2008 economic crash"

Ummm... aggressive investing isn't terrorism: The "takeaway" from Freeman's "ridiculous and wrong-headed, totally misguided, frequently factually incorrect" report is that being bearish "makes you a "full-fledged terrorist," says Kevin Depew at Minyanville. Well, betting that "completely insolvent" banks are, in fact, broke isn't a crime. And China asking us to repay the trillions we borrowed would hardly destroy America, but it "could... get this... raise the cost of borrowing money!""How being bearish will make you a terrorist"

Don't assume this happened just because it's "possible": Freeman's theory doesn't quite "hold water," says Ed Morrissey in Hot Air. I can see how economic sabotage looked like an imminent threat in June 2009, when he issued the report, but his suspects — China, Russia, Iran — either couldn't or wouldn't want to carry out the attack he envisions. That said, his "report is very useful in underscoring the potential vulnerabilities in our system," and the real dangers of "financial wars." But don't assume terrorists caused the 2008 economic meltdown."Was financial meltdown the result of economic terrorism?"

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