Keiser’s image of speculators as suicide bombers has been used by a number of people. But parts of his argument sounds strange to me. The well-connected banks are “blowing up” other banks through speculation, so as to drive the dollar higher?

Undoubtedly the dollar is being manipulated and the banks will make money off of it, but blaming speculation alone is too easy a game and it will lead to the wrong remedies.

While speculation undoubtedly exacerbated the crisis and pushed the market over, speculators can only undermine fundamental weakness.

The housing bubble collapsed because the mania exhausted itself and the underlying loans were bad. Speculators didn’t make the bad loans. Mortgage lenders and banks did that.

Speculators didn’t certify the derivatives based on them were great. The ratings agencies did that.

Speculators didn’t hold a gun to home owners and tell them to buy. Greenspan encouraged them – though even he didn’t hold any guns to their head.

Speculators didn’t look the other way when numbers of professionals complained to the regulators. The SEC did that.

Speculators didn’t publish fulsome flattery of Greenspan and Summers and Rubin and Paulson. Magazines – including Vanity Fair and Time and the New York Times and the Wall Street Journal did that.

Speculators didn’t bestow degrees and honors on these charlatans. The universities and prize committees did that.

Speculators didn’t attack anyone who criticized them or called them into question. Partisans did that.

Speculators didn’t rewrite history and ignore the scores of right-libertarians at Mises, Lew Rockwell and other libertarian sites who foresaw this and warned repeatedly to rein in monetary debasement.  Left-liberal academics and journalists did that.

Speculators didn’t rah-rah for war and the expansion of the corporate state and police laws so dissidence became difficult. Right-conservatives and neocons did that.

Speculators didn’t attack anyone who argued for generosity, or self-restraint, or humility, temperance, or any moral virtue. Libertines and anti-religious bigots did that.

Speculators didn’t bribe Congressmen to pass bad legislation. Lobbyists did that.

Speculators didn’t swallow propaganda whole sale and follow the line of least resistance. Lazy consumers and the public did that……

Ergo – Goldman Sachs is a fairly accurate reflection of the kind of society we’ve become. Laws aren’t going to change that. Political and public culture has to change.