RGE Content: Weekly Roundup
Check out all the great contributions that were published during the past week on RGE’s Nouriel Roubini’s Global EconoMonitor, RGE Analyst’s EconoMonitor, U.S. EconoMonitor, Emerging Markets Monitor, Global Macro EconoMonitor, Finance & Markets Monitor, Asia EconoMonitor, Latin America EconoMonitor and Europe EconoMonitor.
On Nouriel Roubini’s Global EconoMonitor, Nouriel Roubini discusses the severity of the current downturn and recommends the policy actions to undertake to stem the deflationary tide. Check out: “Latest Roubini Interviews With Tech Ticker On Global Deflation Risk, Bank Losses, Rate Cuts In Europe and (GM) Bailouts”
Until July of this year Russia was growing at an annual rate close to 8%, oil prices were peaking at $140 a barrel, the country was running a large fiscal surplus and a large current account surplus, it had a war chest of $600 billion of foreign reserves, its stock market, bond markets and currency values were strong and policy makers were thinking of turning the rouble into a major reserve currency, at least for the CIS bloc. This economic and financial success was leading Russia to flex its geo-political muscle challenging the U.S. on a number of political and military issues, using its energy power as an instrument of foreign policy in its relations with the Eurozone and its former Soviet neighbors. What a difference a few months make! Read Nouriel’s “Rouble Trouble in Russia: The Inconsistent Trinity at Work and the Need for a 20-25% Currency Depreciation”
On the RGE Analyst’s EconoMonitor, Mary Stokes argues that the return to falling prices in Japan, which many believe will be temporary, could very well be longer-lasting after it slides into deflation in 2009. See: The D-Word Pops Up Again In Japan: How Temporary?
The Lehman bankruptcy in mid-September unleashed a heavy sell-off in both the high-yield and investment-grade corporate bond markets. Compared to the respective CDS indices, especially investment-grade bonds look cheap right now. Nevertheless, ongoing deleveraging pressures, a low and further deteriorating average credit quality, as well the prospect of escalating default rates in 2009 to new record highs are likely to put a lid on investors’ enthusiasm. See Elisa Parisi-Capone’s Record Corporate Bond Spreads: A Buying Opportunity?
On the Finance & Markets Monitor, Satyajit Das examines various “illusions” about the level of money available in the global financial system. In Where did all the money disappear? – Liquid Fantasies, Das addresses the issues of central bank reserve illusions, capital illusions, international trade illusions, and other topics pertinent in the current global deleveraging process.
In The Answer is the Question, the Question of the Deal Sylvain Raynes addresses some of the concerns raised by his previous posting: The State of Financial Engineering
On the Global Macro EconoMonitor, Joshua Aizenman, Menzie Chinn and Hiro Ito revisit the trilemma, which states that a country simultaneously may choose any two, but not all, of the following three goals: monetary independence, exchange rate stability and financial integration. Read: “Assessing the Emerging Global Financial Architecture: Measuring the Trilemma’s Configurations over Time”
The National Bureau of Economic Research (NBER) Business Cycle Dating Committee declared—or, perhaps more accurately, confirmed—that the U.S. economy began to contract in December of last year. David E. Altig tell you the story in pictures. Don’t miss “Do you see what they see?” and “The recession in pictorial context” On the Emerging Markets Monitor, Antonio Carlos Lemgruber discusses how the current state of the U.S. economy is bringing back old discussions about monetarism versus fiscalism as well as about monetary policy instruments: A Monetarist Analysis of the US Macroeconomic Situation. Nirvikar Singh, on India after the Mumbai Attack analyses the strategic dilemma facing the Indian government in the aftermath of the Mumbai attacks and the challenges for India’s security environment. On the U.S. EconoMonitor, economists discussed populism, the Fed balance sheet, and the auto sector. In Are We Courting a Populist Backlash? Robert Reich warns of a populist backlash at the seeming lack of government aid for the average American while executives, shareholders and well-paid professionals and blue-collar workers get bailouts. In The Fed’s balance sheet is changing: reserve balances set to grow, Rebecca Wilder examines the size and composition of the Federal Reserve balance sheet under the shift away from traditional monetary policy. In The auto downturn is very serious, James Hamilton worries that the ailing auto sector woes may herald a plunge into an even deeper economic downturn. On the Asia EconoMonitor, Brad Setser argues that even though the depreciation of the renminbi against the dollar would be consistent with how a basket peg would work, such depreciation is still not the right policy. Given its (still) strong balance of payments position, Setser believes that China should be appreciating against a basket. He also argues that the absence of real appreciation in the past undermines China’s case for allowing the renminbi to depreciate rather than by doubling down on efforts to stimulate domestic demand. Read: Should the currency of the country with a large and growing trade surplus and large and growing reserves depreciate against the dollar? by Brad Setser
He also suggests that China is starting to sound like a normal creditor country as it voices its concerns about loose US policies and hopes that the US will take the necessary measures to stabilise the economy and financial markets as well as guarantee the safety of China’s assets and investments in the US. Setser worries that as China wants a bit more say over US policy, potential sources of tension may be in the horizon.
On the Latin America EconoMonitor, Javier Guillermo Gomez Pineda explains that backward looking expectations embedded in wage contracts and price adjustments are likely to be revised downwards as inflation surprises on the downside. He continues to explain that inflation rose strongly in 2008 in Latin America but the good news is that this means some cushion against the scenario of a possible US-deflation. Read: “The Mystery of a Rising Inflation in Latin America”.
In very interesting piece, Tom Trebat supports the creation of an emergency financing facility for Latin America. The U.S. has already made a first step toward building a basis for a much broader economic partnership with Latin America by electing Barack Obama who is extremely popular in the region. Read: “Latin American Alarm: Time for Global Action, Not Benign Neglect”.
According to Nicolas Magud, Argentina apparently intends to increase its outlays while the expected revenue seems to be trending down. The indebtedness ratio has already reached levels similar to those of the latest default and the risks are in the upside. To find out more read: “ On the contractionary effects of expansionary fiscal policy, sustainability, and income distribution in Argentina (cont.)”
On the Europe EconoMonitor, Aurelio Maccario praised the ECB’s sizable rate cut in December, but still believes the bank is not yet fully awake to the severity of the recession hitting the Eurozone. He notes the refi rate may well be at 1% by mid-2009. See: ECB – A welcome 75bp cut. Communication remains an issue
In the UK steps in the right direction, Steve Keen welcomes the UK government’s recent decision to give stressed borrowers an interest repayment holiday of up to two years. To address the current crisis, he favors a “legislative approach–which should ultimately include debt moratoria” over what he sees as the standard economic approach to reducing the debt burden, which is to “print money to cause inflation.”
Also on the Finance & Markets Monitor:
- Liquidity Discount versus Time Preference by Mark Thoma
- Reckless Endangerment! by Rich Hartmann
- More Bailout Comparisons by Barry Ritholtz
- Of Financial Capital and Human Capital: Why We’re Bailing Out Wall Street While Allowing Our Schools to Get Clobbered by Robert Reich
- Financial Limbo by Macro Man
- The Bailout Paradox by Robert Reich
- Capital One buys Chevy Chase Bank: Another bailout freebie by Edward Harrison
- National Security Alert #3___The Republic Destroying Democracy, Fix… by Lloyd Gillespie
- Rubber Stamp Agencies by Mark Thoma
- NFP: Even Worse Than Reported by Barry Ritholtz
- Woodward and Hall: Options for Stimulating the Economy by Mark Thoma
- Ben’s still dancing… by Models & AgentsA Populist Backlash? by Mark Thoma
Also on the Global Macro EconoMonitor:
- The Brit Ministry of Defense looks at world’s future – it’s grim. by Fabius Maximus
- The greatness of John Maynard Keynes, our only guide in this crisis by Fabius Maximus
- Crowding-Out and Crowding-In by Mark Thoma
- Origins of the Economic Crisis – In One Chart! by Jeffrey Frankel
- What Causes Gluts and How Can They be Cured? by Mark Thoma
- Policymakers got it wrong too by Rebecca Wilder
- About the state of economic science, and advice from a famous economist by Fabius Maximus
- Detroit Bailout; Ford Opts Out? by Barry Ritholtz
- Why exactly does the Fed pay interest on reserves? by Rebecca Wilder
- A change is gonna’ come by Reggie Middleton
Also on the U.S. EconoMonitor:
- · Why I am bearish on the U.S. Dollar by Edward Harrison
- · Measuring Import Prices: Implications for GDP Growth by Menzie Chinn
- · Fed Watch: Potentially Very Bad Policy by Mark Thoma
- · Is The Deficit A Threat To A Future Recovery? by Mark Thoma
- · Today’s initial unemployment claims report not totally unexpected! by Rebecca Wilder
- · Shall We Call it a Depression Now? by Robert Reich
- · Another record-setting employment report, but what record exactly? by Rebecca Wilder
- · Will someone tell our government that you can’t legislate high asset prices? by Reggie Middleton
- · Three people look at America’s economy by Fabius Maximus
- · 2 million more jobs lost? Could be by Rebecca Wilder
- · Obama proposes a new New Deal – like Japan, will we burn money to keep warm? by Fabius Maximus
- · Comparing recessions by Edward Harrison · How to Pay for National Health Insurance by Barry Ritholtz
Also on the Asia EconoMonitor:
- · Dani Rodrik is letting the cat out of the bag by Michael Pettis
- · China’s exports contracted in November by Michael Pettis
- · Australia: 40% chance of recession? Try 95% by Edward Harrison
Also on the Latin America EconoMonitor:
- · Overview: Bolivarian Dreams by Walter Molano
Also on the Europe EconoMonitor:
- · Romania’s Economy Heads Off Quietly And With No Fanfares Into It’s Deepest Crisis in a Decade by Edward Hugh
- Bail out the Spanish University System by Jaime Pozuelo-Monfort
- The Tale of a President: Aznar’s Personality Profile by Jaime Pozuelo-Monfort
- The Tale of a President: José María Aznar López by Jaime Pozuelo-Monfort
- The Tale of a President: José Luis Rodríguez Zapatero by Jaime Pozuelo-Monfort
69 Responses to “RGE Content: Weekly Roundup”
From Bob Chapman which could be a clue to who the FedRes have favoured in the bailout:”All the taxpayer liquidity created has gone on the balance sheets of these banks. All the Treasury and the Fed has done is rescue these banks and has allowed the economy to deteriorate.”http://www.theinternationalforecaster.com/International_Forecaster_Weekly/History_Set_To_Repeat_Itself_In_The_Economic_DownturnSounds predictable and consistent to me?Ho hum
I think this is the official first post – only because the above post was made before this made its way to NR’s blog
There is plenty of good stuff in the previous thread you may want to read before jumping into this new BS thread with no real new content:-)
The previous thread has a weeks worth of great reading and posts – I am reposting this link as a sober reminder to those with bullish tendencies A Bullish Call (Barron’s Dec 2007)and this link (PDF but only opens in IE) featuring a distinguished group of analysts and their predictions for 2008.
@Haynes,Thanx for that. Every once in a while this skiddish bear needs a good smack on the nose…;^)PKB
Note OR’s comment here and at the end of the previous thread – there continues to be a good conversation going on there – It is one of the better (if not best) threads in recent weeks packed with great content so I think I for one will stay there for the remainder of the weekend.
Ok. posted below before reading your post. I will return to the previous thread. If that fails, I guess I will come back here.
It appears to me that in a repression and even a depression, those that suffer, albeit in growth (excess) the most, are eventually, the bankers and their associated cockroach industries (e.g. real estate agencies, mortgage and finance industries and the over priced slop shops, etc., etc.).I say ‘eventually’ as people adapt to their conditions fairly quickly after the initial broadsides and shock and dismay effects of change; we are adaptive creatures, pioneers and survivalists first and slobs of civilization if ever, last. After all, we have been around for 1 billion or so years dependent upon which school of history you prefer; I prefer the Indian schools.In order to learn our lessons we must be permitted to carry the cat home by the tail without too much interference; such is the travails of life and indeed the inviolate Laws of Physics.For the normal modern political, economic, bureaucratic inept of advanced arrogance and hypocritical piety, ignorance, stupidity, treachery, betrayal, cowardice and all other such attributes that are innately attached to these non-thinking sub-classes of the animal kingdom, there is also much suffering primarily in the form of inadequate funding and the need for transparent justification and accountability; such enterprises that are easily overlooked and swept aside during the joyous days of high growth and, mais oui, war.Yes, I hear those objections that you have lost your house where you have no monetary skin and that you are in debt and your kids will suffer and, I do feel for you but is it not only your responsibility arising from your picking the cat up by the tail?Well, no, it is not; this responsibility you have placed with your “leadership”, you remember, those that you elected to public office and trusted to look after the public; those described above. It is they that have preyed on you, lied to you, stolen from you, and will do anything else they desire – to you – to keep their game afloat – and scr&%w you, and, er, a priori.But no, it is not their fault – as you knew, or should have known, as to the attributes of these political and bureaucratic classes and all that is attached to them, due to the fact that such attributes have been well established for and during the past 3 millennium or if you prefer, 3000 years, or so.So, when you picked up that cat by the tail, you knew, but still you picked it up so; so, now it is time to finally learn your lesson. I know, ‘mileage will vary’.Only those that choose to ignore the facts and are still totally reliant on their chosen and elected leadership (which they should not be, if sound of mind and body) will be, eventually stronger and more armed with values in the long term future. (I speak generally and broadly)As someone once said, ‘you are entitled to your own opinions and not to your facts’. You have to use your own facilities and think for yourself – bottom-line: in adversity, we humans are very good at such things; not including the sub-classes of mention above which normally act more like hyena.Ho hum
pjb, “to ignore” .. kill this. and replace “still totally reliant on” with “independent of” ..and then “should not be” .. would be “should be”..and i think you could scare the shit out of any fleshy man with less than steel testicles.the thing is, i think, while these ego money freaks fight over air space etc., people on the ground are being enslaved and exterminated by one another at their behest and it has turned this human experience into a sort of hell realm. physical, emotional, and intellectual, spiritual (varies.).it’s moments like this that i wish Kurt Vonnegut was alive to remind people what it was like toto walk out of slaughter house 5. to clean up at gun point. the race has gone blind.
Correction Alert – trial by suggestion;):’Only those that choose the facts and are independent of their chosen and elected leadership (which they should be, if sound of mind and body) will be, eventually stronger and more armed with values in the long term future. (I speak generally and broadly)’Aye now this is a message – thank you dear Guest, however, I have reason to believe that this round is a repeat of the planet’s affairs of circa 1300 BCE (doesn’t change the message)Ho hum
pjb, i don’t know what that means but,, it doesn’t sound good and will look it up pronto.
The ‘Dark Ages’, my man
jb, wow, that’s much worse than i thought. you could have kept that to yourself.
This is a link from the previous thread on Bernanke, the history of the crisis and his role in it. Even the uber-nerds (like me:-) who have followed the crisis from the days it was brewing back in 2004 will learn a lot of new things from this great article. John Cassidy is a great writer his prose is a real pleasure to read!Reporter at LargeAnatomy of a MeltdownBen Bernanke and the financial crisis.by John CassidyDecember 1, 2008http://www.newyorker.com/reporting/2008/12/01/081201fa_fact_cassidy?currentPage=all
John Cassidy is a great writer [and equally great journalist] his prose is a real pleasure to read!
So I guess we have moved – in response to PeteCA and the black swan – I just posted this on the previous threadWhat surprises me is the India Pakistan situation and how it appears to have been contained -The Sunday TimesDecember 14, 2008 Pakistan blinks in India standoffBRITAIN and the United States are engaged in a frantic diplomatic battle to stop the row between India and Pakistan over the Mumbai terror attacks escalating into war.Relations between the old enemies, both nuclear powers, are so fragile that conflict remains a constant threat.Gordon Brown arrived in Delhi last night to try to calm Indian anger at Pakistan’s role as the launchpad for the attack. He will promise continuing support for an Indian campaign to bring the Pakistani masterminds of the raid to justice.His visit comes after Pakistan finally gave in to intense Anglo-American pressure to arrest the leaders of the Al-Qaeda-linked terrorist group Lashkar-e-Taiba (LeT)…
One possibility for a Black Swan event is a major regional war such as Pakistan vs. India, or Israel vs. Lebanon, or Israel vs. Iran. But another possibility entirely is an unexpected currency crash for the US dollar (due to rapidly accelerating flight of foreign investors from the USA). A third possibility, namely a major crash in US bonds, seems plausible based on technical analysis, but unlikely given that the Fed is buying in the bond market with large amounts of printed money. A fourth possibility might be a domino effect of debt defaults for foreign countries. Whatever ther cause, the global economy is far from being in a robust shape to handle a major problem at this stage.PeteCA
PeteCA,If oil continues to plunge, doesn’t it seem only logical that other weak oil producing economies will follow in the footsteps of Ecuador? That seems like a very distinct catalyst, and possibly dollar bullish – but I’m no expert here.PKB
Venezuela’s credit rating was downgraded a couple of days ago.
It is better to stay here:-) Those who have not read the previous thread can do that if they want and then come back. Don’t miss the link for a free copy of Jesse Livermore’s book.
So now certain governors of certain states with budget crises, I would posit, are quite literally having numerous wet dreams about the certainty of being able to slash guv’mint budgets for the next biennium.Taking bets on what will see the red pen first? I can’t decide whether it’ll be state workers’ pensions (particularly in those states, as mine, where the workers are unionized) or the social safety nets.Make no mistake, the unions are goin’ down.I talked to someone the other day who is, for lack of a better label, upper middle class. We got into a discussion of shipping jobs overseas. He has no problem buying something Made In China or Japan or Thailand because the quality is better, according to him, and the price is much lower. He has no problem with his US dollars going to pay workers much less wages overseas. I am not judging him; I put it out there for y’all to see as an example of one man’s thinking. While I wasn’t able to retort appropriately (of course I thought of something to say five minutes after the conversation ended–something like I’d rather be giving my money to an American worker), I did, I think, score a point with him. I asked him just exactly how he expected his sons, who’ll be graduating from college soon, to compete with engineers over in India who’ll work for $10,000 a year. Perhaps I made him think; perhaps not. I just wanted to share the story.
This selfish sort of mind set is prevalent through out the country and it’s because sadly the real suffering has yet to begin. That same guy you just talked to will sing a completely different tune a year from now once he realizes he’s not as insulated from his neighbor as he thinks he is.
I spent eight years in AFSCME and think it would be to everyone’s benefit if they were culled. Good riddance.
I think the unions got fat and lazy too, and suffer from the same corruption at the top as our guv’mint, unfortunately. I worked for the director of labor relations of a small union for a while. I will never again match the benefits I received there but I also did not receive a salary comparable to the marketplace. It’s too bad because as per usual the almighty dollar wins every time. I daresay back in the day the unions broke the ground for the worker bees at least having a chance to speak up for themselves. Now they pay lobbyists, too. Gawd. It’s just everywhere.As for Guest’s comment about the “selfish mind set,” I bring this point up because I think my friend was reacting as most of us do–don’t take away my little perks in life. He earns his money and will spend it as he sees fit. I understand that. It’s how most of us middle class thinks, or did, anyhow. We just never expected to have all of it taken away at once and we still believe the housing market is going to come roaring back and give us back our “wealth,” peace of mind and happiness.Oh, great. Just as I am posting this, my local news talking heads are parroting the latest talking point: GREAT TIME TO BUY A HOME. GET OUT THERE AND BUY A HOME, FOLKS. HURRY UP. RATES ARE LOW. BUY, BUY, BUY! Aaaaacckkkk!!!
It was obvious that change was coming. Skyrocketing health insurance premiums, wages that didn’t keep up with inflation, decreasing PTO, not filling vacant positions, etc. made it clear that something was really wrong. When change for the worse, even incremental change, continues for long enough even the sheep start to realize that the tide is turning. I would even count myself one of them.Now I’m one angry sheep.
Wow! The Mad-Off nuclear bomb went off in the middle of hedge fund Camelot!:-)http://www.independent.co.uk/news/business/news/superwoman-stung-by-hedge-fund-gurus-50bn-trading-scam-1064460.html He was a popular choice for the East Coast rich, for charitable foundations, and for professional investors alike. In the centre of the hedge fund world, in Greenwich, Connecticut, many “fund of funds” funnelled money to Madoff investment vehicles. As the scurrilous New York Post put it yesterday, “Suicide hotline in Greenwich could be lit up.”Big learning for everyone here. Everyone wants a free lunch, have others do their homework. I combine this with my giving money to Bill Gross* to manage this year to decide I will never again place a single dollar under active management other than myself. only straight stocks, bonds, etfs and index funds.*BG ain’t Mad-Off but he did loose a cool billion selling AIG CDSs. He didn’t break the rules in the prospectus but given all the talk at PIMCO about them being prepared for the crisis; the last thing I thought he would do was something as stupid as selling CDSs on Greenberg’s “wild cowboy” shop.
And I wouldn’t b surprised if many hot hedge fund managers invested with him to diversify their wealth in a “low risk” way:-)You see, they were fooled by the market maker side of the business so they didn’t care how he was getting the steady low risk returns. They probably thought he was just riding (i.e., front trading) the buy/sell trades orders of large investors who used his market maker services. The catch is that you can cheat this way when you are small but when you are larger than the other traders in does not work:-)
link to the (likely to be taken down very soon) Madoff.com web siteWhat has been taken down are the pages that linked to Madoff’s Annual STANY Party – 2008
Don’t worry, the disaster recovery facility guys will recover every single penny in the 50 billion. It will not be a lot different from rescuing a hard drive. They just have to reformat Bernie’s brain and the problem will be solved:-)Sophisticated Disaster Recovery Facilities, Reflects the Attention to Every DetailMadoff Securities has one of the most sophisticated disaster recovery facilities found anywhere in the securities industry. In addition to its offices in Manhattan, Madoff Securities maintains a fully equipped and staffed facility located near LaGuardia Airport. This office duplicates all of the features of the primary Madoff Securities offices. Madoff Securities’ disaster recovery facility is not just an alternative trading room, but rather a full-fledged office which is equipped to receive and transact orders and to handle the clearing and settlement process as well.Under the supervision of a facilities manager, this unique on-line facility is tested continuously to ensure that it is prepared to take over the firm’s operations if any kind of disaster were to affect the Manhattan office. Members of the firm’s staff are rotated through the facility and regularly perform their work from it. Thus, there is always staff on hand in case disaster strikes at the firm’s main office.The disaster recovery facility is on a different electric power grid than the main office, and it is served by a different telephone central office. The facility also has its own electrical generator.Since this facility was created in 1992, it has been used as an adjunct to Madoff Securities’ main office, and it has not been confronted with a major emergency. But the existence of this facility testifies to the high priority the firm places on being available to meet the needs of its clients under all conditions.Guys the time to use the facility has come!
http://en.wikipedia.org/wiki/Bernard_L._MadoffGood up-to-date work at wiki. They have the longest list of clients i have seen so far. Even a senator was nailed. But the list is not complete. I don’t see, e.g., Numura…
I don’t know about that, Octavio. My guess is that Madoff made some real bad but legal investments, perhaps in the CDS market, and then, tried to cover up the losses by fraudulent means.
One article said that investors suspected he was trading on inside information and that is WHY they invested with him – he had the balls to do it and the connections to get away with it. Those investors deserved to LOSE all their money!!!
Did anyone else catch the rerun of the exploding whale (the actual seagoing mammal) in Tiawan this evening…how symbolic and ironic!!!
Bernie looks like an ugly whale and he also exploded.
This Marenzi guy, is he totally right or is he totally a clown?http://www.reuters.com/article/email/idUSTRE4BA47420081211?pageNumber=2&virtualBrandChannel=0My tendency is to go for the second but his allegations are so shocking that it makes me doubt. Are we all so incompetent, totally unable to discern good from bad that a nutty guy can take the media’s attention so easily?
In Dimon’s interview on CNBC he commented on lending levels (links on previous thread) seem to go along with Marenzi — he also quotes in his interview (link previous thread) that is his data is from Fed website — maybe a clown – but think about the end of the world scenario by Hank and Ben – and think about how much money their bankster friends received … needs to be some investigations on his numbers – but if one guy Madoff could rip of $50 Big ones – a $350 B rip off by the treasury and fed isn’t that big a number —
o, don’t forget President g.w. bush.
Brain Trust Progress ReportThe results of the “What’s The Problem With Our Economy” debate are now available. They represent a terrific outpouring of effort and ideas from 43 different people. I consolidated the input you’ve provided over the past two weeks into one 55-page document.What follows is my effort to:* condense the material into a set of one-line problem statements* sort those problem-statements into these three themes:Economic design issues which prevent the economy from functioning effectively.Social system failures concern how the society manages the behavior of economic players in order to maximize the economy’s positive impact on all members of society (maximize the average person’s benefit)Individual deficits which are individual traits that may contribute to sub-optimal economic behaviorBelow please find three posts, one for each of theme. I’ve included the problem statements and the proponents of each problem statement, so that you can make sure I ascribed your contributions appropriately. Please let me know if any corrections need to be made.
Theme 1: Design of the Economy is FlawedThese issues prevent the economy from functioning optimally. Each problem can be rectified by change in the function of a major player or class of players.JasonB
Finance industry not performing allocation function effectively.
Facts of Life
Delegation of money issuance and money supply management to private interests is a bad idea.
West must regain producer/seller .vs. consumer/buyer status via innovation.
Massive over-supply of labor causing structural re-balancing of world economies.
Economic policy penalizes savers.
Focus on high profits causes errors and is not sustainable.
The system we’re using to allocate production isn’t working; the imbalances are too great, and the core problems of society aren’t being solved.
David Walker % Ralph
Integrity of rating agencies is severely compromised.
David Walker % Ralph
A disconnect exists between those who benefit and those that bear the risk/costs.
David Walker % Ralph
System doesn’t price-in “externalities” like environmental impact.
Our economic system is not sustainable. Permagrowth is not possible.
Government is in business of allocating resources, and it’s not good at it – e.g. bailouts.
Government’s role is to build for the future, and that’s not happening.
Global economy is not working in average person’s interests. Rewards go to top players only.
Aerial View, EconomicsMinor, YahItMatters, MotherOfGod, Hubbs, ex VRWC
Winner-take-all concentration of economic benefits – “casino effect”.
Economy built on misconception of human nature.
Profits being siphoned out to remote HQ instead of being used to advance the welfare of communities in which those profits are earned.
Banking system needs to be re-designed to reduce tendency toward concentration of wealth / debt slavery.
Cahill, Lord Sidcup, Theta, Guest9, Guest10, Blindman, Hubbs
We don’t know how to equitably and efficiently allocate over-production.
Dr. Steph, Lord Sidcup
Too much of the “work” being done is unnecessary. We’re using make-work to deal with a lack of effective policy for allocating over-production.
Producers induce excess consumption because of over-capacity
I am in the process of reading a recently published book by Canadian Prof. of Economics, Peter Victor, entitled, “Managing Without GrowthSlower by Design, Not Disaster“ that addresses some of the comments above.It might be interesting to potentially use Victor’s thesis as a basis for critical analysis/discussion as it pertains to the BT.Best wishes …
Theme 2: Social System FailuresThese are problems concerning how the society manages the behavior of economic players in order to maximize the economy’s positive impact on all members of society (maximize the average person’s benefit). This is a summary of the general types of problems within this theme:* Regulations aren’t coping effectively with dysfunctional economic behavior by individuals / corporations* Regulations aren’t maintaining level / fair access to political decision-making process* Incentives to individuals to engage in constructive economic behavior are not appropriate* Appropriate levels of knowledge or information not available to individuals* Thinkers not united and empowered in order to have maximum impact on the economyThe problem statements are:PeterJB
We need to empower the thinking 5% of the population. Concept of autopoiesis.
We’re dissipating our power fighting against the wrong thing instead of increasing our power working together for the right thing.
Characterizing outdated or dysfunctional socialization as “human nature” prevents that dysfunctional socialization from being dis-continued. Improve the socialization (training).
EconomicsMinor, Lance, Does It Matter, AverageJane
People must unite and mobilize in their own interests.
We must identify the fundamental values on which our society’s prosperity was based, and return to them.
We currently share an obsolete vision of our “national lifestyle”.
Government has always been about resource allocation; it’s just doing it badly at present.
Human nature is weak, and needs regulation
There’s not enough long range thinking going on in our society. We don’t share a long-range view of where we’re going.
Guest1, Blindman, Amacfly, RanMan, JasonB, EconomicsMinor, Aerial View, BrooklynPete, Lord Sidcup
Banks and corporations are too powerful. They are interfering with the proper operation of our government and our society in general.
Leo70, EconomicsMinor, P & L, Aerial View, Jomos
People are not educated enough about economic affairs, and therefore cannot make valid decisions about economic policy at any level personal, national, world.
Society doesn’t understand the limits of geometric progression.
Moral hypocrisy. We say one thing, do another.
Special interests play on the emotionalism of un-informed to advance agendas counter to the public interest.
Blindman, EconomicsMinor, Redleg
Consumerism misleads the under-informed into dysfunctional economic decisions.
We have ignored God.
It’s still OK to exploit thy neighbor.
Theme 3: Individual DeficitsThese problems which are individual traits that may contribute to sub-optimal economic behavior, and generally center on a lack of information, knowledge or motivation:Leo70, EconomicsMinor, P & L, Aerial View, Jomos, AfA
People aren’t educated enough about economic affairs. Knowledge, access to information, motivation differences have a major impact on income disparities.
Individual-level mis-allocation of resources. People don’t really understand / value the difference between consumption and production.
People tend to trust financial advisors whose knowledge and intentions were sometimes questionable.
Guest2, GSM, Lord Sidcup
People took on too much debt.
People tend to think and act in herds; they need to learn to think more for themselves.
BrainTrust ParticipantsWe’ve completed stage 1 of this analysis. We’ve got a fairly good universe of problems on the “whiteboard” set out above.Now it’s time to move to Stage II of the analysis, and start filtering the problems according to “some logic”.This “some logic” aspect is vital to get right. If we select the correct filtering criteria for grouping/ranking/narrowing these problems, we go a long way toward picking a fruitful course of action for the group.We could filter these problems according to criteria such as:* What it would take to change that particular problem. Is the “fix-ee” amenable to change?* How much impact would it have on the overall economy if that problem were to be fixed* How committed the group would be to fixing that problemIf we are to be effective, we must focus, and we must focus on something we can actually change, and we must have the group’s commitment to effect that change.When I think about changing the behavior of a large group, I ask myself:* Who are the people that are amenable to change? The ones suffering pain.* What behaviors are easiest to change? The ones that require the fewest number of people to say “yes” to.Before I go further down this track, I’d like to invite each of you to set out how you’d develop this analysis to the next level. What is the “controlling logic” we’d use to narrow down the problem-set to something that’s “actionable” by a new and small group?This is a very important question. What do you think about it?
A couple of ideas: one consistent theme I constantly here from people is that they are sick and tired of hearing about the “trickle down theory of wealth” and no longer have faith in it. Thus, our approach could be based on the more equitable concept of “trickle up theory” in which policies are changed to support that. If we can establish broad support for this general concept and several more specific measures, we could then approach either the Obama administration or someone like Ron Paul (as an example) and build from there. Additionally, once we have sufficient public support, we can also protest against corporations or other companies who appear to be the greatest offenders of our principles. The lastest effective example of this occurred last week when workers who were angry over job layoffs at a Republc Windows & Doors factory in Chicago camped out at the plant arguing they are owed pay and benefits and expressed outrage and blamed Bank Of America for cutting off financing to their company. The outrage prompted politicians to jump on the anti-Bank of America bandwagon calling for a halt in business with the bank-and it worked! Bottom line is if enough people protest and remove their dollars from any business, the business will either modify it’s policies or suffer the consequences (bad publicity and loss of business). This, it seems, is probably one of the greatest direct and immediate powers the American public has and forces politicians to either standup and support the effort or reap the consequences in the next election!
The “trickle up theory” implies low unemployment (<5% by a true measure), higher wages (a living wage vs a minimum wage) and a more equal playing field so that small business could effectively compete with larger businesses.
“Trickle up” theory = grass roots?
Trickle down economics is an excellent idea only one problem is the same people who support it are two faced they claim to believe in “trickle down” but the money never makes it down because of corrupt policy.If hereditary laws were passed so that huge fortunes could not be passed down through generations, if corporate and small taxes were eliminated in favor of 50% capital gains taxes, if anti-monopoly laws were rigorously enforced, if unions were encouraged to flourish then “Trickle down” economics would work great because it would create incentive for the best and brightest to excel and in the process help carry the less fortunate. However the way the far right wants it, and has implemented it, “Trickle down” economics is just a lie and a farce- cleverly disguised pure class war fare!
That brings up another point: why isn’t “capital gains” income? Any and all positive cash flow should be taxed as either one or the other, not with the system we have now. It is fundamentally unfair.(steps on soap box) I worked (and actually produced tangible stuff) for my income, and you can’t say that the BS that has been going on in the financial world should be rewarded with a lower tax rate since it was “capital gains”. Horse hockey!
Eunion, vote with your dollars. Companies that violate trust with their clients get recognized for this distinction. Information made public.
I would like to repeat what I have often said before in various posts:1. There are two states of being in the human arena which are 1. Opinions of men (read: which cannot be trusted) and 2. The inviolate Laws of Physics (read: Universe Principles in a parochial environment – that is on planet Earth)2. Man: Each man is unique and represents Universal function and as such, collectively cannot be trusted, for individual man operates in a constant risk state, neurologically, where survival is the prime objective and the second, to bring “privilege” (read: biological state)to his offspring.3. Cause and Effect: Man is somewhere between Cause and Effect; unlike Gold of the Minerals family, man has not yet reached ‘effect'(read: man has not become ‘royal’ and therefore is not yet redundant) and therefore is an emergent phenomena to be viewed – and treated as an evolving work-in-progress.4. The Spirit (read: courage, potential and elegance)of man is unequaled and the inner strengths on one man is far greater than all the past histories and all the future histories. Man is the uttered expression of all that there is and will ever be.5. Man is the alter-ego of woman, that is to say, of Universal principles of creation and nurture.6. There is nothing more powerful nor dangerous that individual man; all collective organizations should be abandoned and as in any least squares computations in volume, no large groupings should ever be permitted to dominate man’s socio-economic affairs (read: Banks and Governments).7. There is naught but infinite possibility in the affairs of men subject only to circumstances and preference.8. Man is the expression of the Universal strategy constrained only by time.9. Men who do not understand the elementals of the laws of physics and music experientially, have no qualifications for “leadership”.Ho hum
PeterJB, that was the post I was looking for. Thanks for the effort. We’ll be working those themes.Aerial View and Jomos: you have identified a lever. We will discuss the means of acquisition of power shortly. Hold that point for about a week, and re-post it, please.Now, one thing I haven’t seen anyone speak to is the mob .vs. oppressor dynamic. Both are bad, and they are the target of the U.S. Constitution, which was devised over a period of several thousand years as a means to keep both these forces in check.Many of the “social justice” problems set out above are based on a dis-balance of these forces. Right now, the “oppressors” have the upper hand. We seek to redress that.What is the principle of equilibrium that we seek that will guide us per Does It Matter’s point:
We’re dissipating our power fighting against the wrong thing instead of increasing our power working together for the right thing.
On another dimension of this issue, brought up by Lord Sidcup: we have massive over-capacity relative to the “manufactured” demand of consumer trinkets and the plethora of busy-body services of little long-term value (c/o Dr. Steph).Is demand manufactured, really? If so, why is it manufactured (takes time and money, right?) How come the world’s productive capacity isn’t geared toward solving real needs first, and fluff-needs second?Please don’t trot out the first-line symptoms of “poor people can’t pay for stuff”. We were all poor at one time. If producer-financing is OK for rich people that are actually broke, why can’t producer-financing be done on behalf of poor people that are also actually broke? What’s missing? That is a bottomless-pit of demand.If you agree that phony demand has been manufactured, who is the person(s) that make the manufacture decision, and why?A depression is a sudden reduction of demand; productive capacity doesn’t change very fast.Why aren’t we looking for more clever ways to produce demand? Why isn’t there more debate on “which demand do we want, and how do we enable that demand to happen?”This is what makes shoveling money at banks so profoundly stupid. Makes me grit my teeth every time I think of it.
Another point:Globalization, for the U.S. middle class means either:a. Protectionism, orb. Develop a sustainable competitive advantage, orc. Falling real incomes to the point of equilibrium with our trading partners (the Chinese or Russian or Indian worker)There may be some self-interest in raising the income level of our trading partners. Maybe we should encourage trade unions to happen in China and India? Or find some other way to increase their wage rate?But what about automation? Doesn’t automation make the whole argument of trying to raise wage-rates silly? If no labor’s being used, who cares what it gets paid?Does that turn the discussion toward “who owns and operates the robots?”I’ll say this via hyperbole to make the point: “what if we all got taught how to acquire, operate and service robots?” What would that world look like?Energy, materials and smart people and a lot of leisure. Is that right, or something else?Building and equipping and operating robots is happening now, it’s just in the same stage that mainframe computers were in at about 1965. Fifteen years later…PCs and Microsoft happened.These are some of the alternatives we can consider for what the next economy looks like. It is worth asking now, because now is when demand must be “manufactured”. Which demand, and how to manufacture it?
Interesting story. The learning/punch line seems to be that if don’t save the too big to fail, even if they are crooks, they will bring the system down with them. This is why, IMO, AG was totally mistaken in his disregard for regulation.http://online.barrons.com/article/SB122914127585004015.html?mod=9_0031_b_this_weeks_magazine_mainThe Long View: Essays on the history of businessA Fiasco That Fed the Great DepressionBy JOHN STEELE GORDON | MORE ARTICLES BY AUTHORGreat Depression, revisited.A MAJOR NEW YORK FINANCIAL INSTITUTION was in serious trouble. The government authorities were trying to get other, sounder institutions to rescue it and prevent a failure that might have far wider repercussions. But no one would step forward, and the institution failed.Lehman Brothers 2008? No, the Bank of United States, 1930.By May 1930, the stock market had recovered half the losses it had suffered in the fall of 1929. The New York Times didn’t even think that the stock-market crash had been that year’s biggest story. Instead, it picked Admiral Byrd’s flight over the South Pole. When a group of clergymen visited President Hoover in April to urge the establishment of public works projects, Hoover declared: “You have come 60 days too late. The depression is over.”But then the signing of the Smoot-Hawley tariff in early June sent the stock market spinning back down and the rate of bank failures ratcheting upward. There had been 659 failures in 1929. That seems huge today, but it was actually below the average of the preceding few years. Almost all of them had been small, one-branch banks in rural areas, victims of the agricultural depression that had been deepening for several years.The financial establishment had nothing but contempt for these small banks. Sen. Carter Glass of Virginia had written the law that brought the Federal Reserve into existence in 1913 and would co-author the Glass-Steagall Act of 1933 that reorganized American banking. He thought these “unitary banks” to be not much more than “pawnshops,” run by “little corner grocery-men calling themselves bankers.”Wall Street failed to help save the Bank of United States, whose depositors lined up to make withdrawals after reports of its problems began spreading.The rate of bank failures in 1930 was up, but not alarmingly so, until the last two months of the year. Then an avalanche of failures rolled through the country, bringing down 600 banks in November and December, making the year’s total 1,352. The economy’s downward spiral accelerated, and Hoover’s “depression” soon turned into the “Great Depression,” a term now forever tied to the 1930s.A MAJOR CAUSE OF THAT WILDFIRE OF BANK failures at the end of 1930 was the collapse of the Bank of United States. It was not one of those rural, stand-alone banks. It was the fourth-largest deposit bank in New York City, the nation’s financial capital. It had 60 branch offices in the city and $268 million in deposits (by way of comparison, federal revenues in 1930 were a little over $4 billion). It had 450,000 depositors — about 10% of all New Yorkers with bank accounts.But the average deposit was less than $600. The Bank of United States wasn’t one of New York’s more prestigious banks. It was known on Wall Street as the “pants-pressers’ bank,” because its clientele was mostly middle- and working-class Jews in the Garment District. Nor was it well-run.It had been founded by Bernard Marcus and Saul Singer, who had been in the garment business before becoming bankers. Its clumsy name had been chosen consciously in hopes of getting recent immigrants to think it had some official government connection. Its loan portfolio was heavily in mortgages, often second and third mortgages. Worse, its investment arm, the Bankus Corp., engaged in manipulating the bank’s stock and using those shares as collateral for loans.It was a disaster waiting to happen, and when the economy began to contract in the spring of 1929, the Bank of United States was soon in difficulty. By the second half of 1930, its stock was worth only a fraction of its 1929 price, its capital base was woefully inadequate, and its increasingly nervous depositors were withdrawing their funds. While it was a member of the Federal Reserve, the discount window was of no use because of restrictions on what the Fed could take as collateral in those days. Real estate loans did not qualify.On Monday, Nov. 24, it was announced that the Bank of United States would be merged with three smaller but sound banks, with a bridge loan of $30 million from the big New York clearinghouse banks. The head of the new bank was to be J. Herbert Case, chairman of the New York Federal Reserve.But when the clearinghouse banks took a closer look at the books, they pulled out. In a last, desperate effort, New York State Banking Superintendent Joseph Broderick called Wall Street’s leading bankers to a meeting on the evening of Wednesday, Dec. 11, 1930, and pleaded with them to make it possible to save the Bank of United States and the savings of its hundreds of thousands of depositors. He warned that the bank’s failure might well cause the failure of 10 other banks. Who knew where it would end?It was to no avail. “I asked them if their decision to drop the plan was still final,” Broderick remembered. “They told me it was. Then I warned them that they were making the most colossal mistake in the banking history of New York.”The next morning, Gov. Franklin D. Roosevelt ordered the Bank of United States closed. It was the biggest bank failure in American history up to that time, and it made headlines around the world. The stock market plunged on the news. Many in Europe, fooled by its name, assumed that it was a government institution. Withdrawals from the banking system accelerated as more and more people began to doubt their own banks’ solvency. The nation’s money supply spiraled downward as the deflation deepened.There’s plenty of blame to go around for turning an ordinary recession that began in the spring of 1929 into America’s greatest economic calamity. The Federal Reserve kept interest rates high after the crash. Herbert Hoover signed the Smoot-Hawley tariff into law in 1930. Congress sharply raised taxes in the summer of 1932 to trim the federal budget deficit. Wall Street’s biggest contribution to the debacle was refusing to save the pants-pressers’ bank.——————————————————————————–JOHN STEELE GORDON’S most recent book is An Empire of Wealth: The Epic History of American Economic Power.
Madoff was a crook and now he is in jail. He will die there. All the people and institutions he stole from will be hurting for many years to come. I don’t think they will recover much at all because he had to pay out so much in double digit earnings each year. What a pity.Check out gloomboom.com – it will make your day!
“Madoff was a crook and now he is in jail. “@ By GloomBoom.com on 2008-12-13 21:27:30It is said that he has been released on US$10m + bail… please get the facts right?ho humand Yes, it does make a difference
Thinking about the old commodity-money standard I consider that there is something wrong with fractional reserve banking and its LOW reserves requirement.But staff economists support the concept.I would like to know your opinion about this. Read the article below. Opinions?———————————————————————The Real Causes of the Housing Market Collapse, by Patrick CarmackThe National Debt now exceeds $9.2 trillion dollars. In Fiscal Year 2006 the U.S. Government spent $406 billion on interest payments.to holders of that debt. Why do we have such a gigantic debt? Because Democrat and Republican officeholders spend far more than the Government receives in revenue.In 2007 alone, the US government paid out roughly $430 billion in interest to pay for money borrowed to finance previous deficits. The interest total for just the last 20 years – back to 1988 – is well over $6.5 trillion. Interest payments in 2008 alone will again exceed $400 billion. Where on earth will all that money come from? If the government borrowed it all from the credit markets (i.e., sold US Treasury bills, bonds and notes – government IOUs) to raise the money it would dry up all available credit. Interest rates would skyrocket and the economy would collapse. So how does it do this year after year without such dire effects?Here is the trick. Take, for example, a year like this year in which the government runs a $400 billion dollar deficit. The Treasury Department has to sell $400 billion in US Treasury bills, bonds and notes (government IOUs) to buyers at a rate of interest sufficient to attract their money (and beat the interest competition of other banks’ CDs and other governments’ bills, bonds and notes). To avoid a credit squeeze, the Federal Reserve System Open Market Committee in Washington directs the NY Federal Reserve Bank to purchase roughly 10% of that total (or $40 billion in our example) in existing US bills, bonds, and notes from the current holders. To pay for them it creates the $40 billion out of nothing, merely with keystrokes on a computer. Through more keystrokes, this new $40 billion is deposited into the banks of the various bill, bond, and note sellers, thereby increasing the reserves of those banks by $40 billion.Pursuant to the Federal Reserve Act of 1913 those banks must keep only 10% of those new deposits on “reserve.” (Because these banks do not have to keep 100% on reserve, this banking system is called a “fractional reserve” system.). So of the $40 billion deposited, the banks must keep 10% on reserve ($4 billion) and may loan out $36 billion (90%), for business loans, mortgages, credit card loans, to purchase government bonds – for whatever borrowers want. Those loans (and payments) are in turn deposited in banks (very few folks put their money in mattresses). So of the $36 billion loaned out and then re-deposited, the banks receiving the new deposits can then loan out 90% or $32.4 billion, retaining 10% or $3.6 billion as reserves.Banks repeat this redeposit-reloan process, reduced 10% each time, until the 10% reserves retained have reduced the funds available for loan to zero. This cunning process allows the banks to create out of nothing nine times the original $40 billion in new deposits received from the Federal Reserve (the “Fed”), or $360 billion dollars. This total is concealed from the public by the only partial expansion of the loan total at each repetitive step.We can easily see that even by the second re-loan step mentioned above, the banks have loaned out $68.4 billion based on the original $40 billion deposited. The end result of the process is that the banks receiving the deposits and re-deposits collectively have loaned out $360 billion dollars, which they created out of nothing, and have retained $40 billion in reserve. The Fed created the first $40 billion, the banks $360 billion, equaling $400 billion dollars. Thus the credit markets are stabilized even though the US government has borrowed $400 billion.But notice, the Fed only created the initial 10% ($40 billion). Privately owned banks created 90% ($360 billion) out of nothing, and loaned it out at interest. At even 6% that is $21.6 billion dollars per year in interest. Some of this profit goes to the private stockholders of the banks. However, the banks conceal much of this vast profit from the public as undistributed or retained earnings. Five banks hold over 50% of all deposits in the United States. This means that in a year with a $400 billion deficit (such as FY 2007-2008), those five banks will receive over 50% of approximately 6% interest on the newly created $360 billion: over $10 billion per year, from now on, for creating money out of nothing. This is profoundly unjust, and dangerous to any government, especially in a country that prides itself on being a democracy.Note that the Fed, not the United States Treasury, created the initial $40 billion in our example. The 12 Federal Reserve banks are private corporations the stock of which is owned by private banks in their districts, not by the United States Government. The United States Treasury pays the Fed interest on the US bills, bonds, and notes the Fed buys with the money it creates out of nothing. The Fed routinely holds about 10% of the United States National Debt (US Treasury bills bonds, notes), which it has accumulated to provide the base for the rest, as explained above.6% interest on the nearly trillion dollars in bonds it now owns provides the Fed with roughly $50 billion in revenue. With this money the Fed (1) pays some money to its private banks stockholders, (2) uses some to create giant unaudited slush funds to manipulate currency and stock markets (ostensibly to help avoid economic crises such as the one we are currently in), and (3) then takes out whatever it wishes – without any Congressional oversight or external audit – for expenses, salaries, perks, jets, lavish parties, etc.. The rest it returns to the US Treasury. In this manner the Federal Reserve operates independently of our elected Congress and external oversight.A well-meaning, but later-disillusioned President Woodrow Wilson signed into law The Federal Reserve Act of 1913 that authorized this profoundly unjust system. This law transferred money creation from our elected government to private banks. The vast economic wealth that contorted and deliberately complex law of 1913 concentrated in the hands of the privately-owned national banks is almost incalculable. It is concentrating the wealth of the nation in fewer and fewer hands as they create over 90% of our new money, year after year, and receive the interest tribute on it from the American people to whom they have loaned it.Deficits fuel the fire of economic injustice by requiring borrowing which requires new money creation, by the private banks. Wars fuel deficits. Conflicts and fear fuel wars. The mass media fuels conflicts and fear. The bankers own and/or control the mass media. Full circle.Apart from the horrific greed of the banks and mortgage companies making the deceptive sub prime loans, the creation of new money to pay for wars and other deficit-spending results in inflation. Too much money at a time with the same amount of goods for sale drives up prices. To combat this the Fed raises interest rates. Higher interest rates hurt the housing market. Repeated and large deficits require repeated interest rate interest hikes to avoid severe inflation. Since Americans were on the edge economically already, the housing market was killed.Now that the housing market is dead, can the Fed resurrect it? Perhaps. Certainly lower interest rates and tax breaks (to a much lesser degree) will help. But so many Americans are already bankrupt, or unemployed, or broke, that they simply cannot qualify for or afford any loan, house, or even, increasingly, a rental. They are now homeless, or living in homes owned by the banks, so that most Americans are now debt slaves on the continent their great, great, great, grandfathers conquered. The bankers own it all, or very nearly so. Once the “recession” has been halted – if it can be – the Fed will have to raise interest rates, rather quickly, to avoid severe inflation caused by all the deficits. Again, full circle. Besides the concentration of wealth into fewer and fewer hands it causes, fractional reserve banking is the primary cause of the inherent instability in our economic system and of its boom-bust “cycles.”Until the American people cease being foolish consumers and realize how the banking system in the United States really works – and fight to reform it – they will remain slaves to the bankers, who will become increasingly harsh taskmasters and injustice and wars will multiply. Soon, very soon, America will consist – like the 3rd world countries – of only the very few very rich and the very many very poor.Understand now why the banks are the largest buildings in every town in the US?, why the bankers fought tooth and nail to get the Federal Reserve Act of 1913 passed, giving them the power to create the great majority of the US money supply (excepting the tiny fraction in coin issued by the U.S. mint)?, why banks like wars and deficit spending, and why we unfailing have deficits every single year, regardless of which bank puppets they get elected using the mass media they own and control?Each generation is faced with the same choice. Our forefathers made their choice – to be free. Have we made ours – to be slaves? (copyright 2008)
For a full treatment of this story – read The Creature from Jekyll Island by G. Edward Griffin. You will understand all abou the Fed and it’s evil but you may not sleep well ever again.
a, my favorite warburg was abby. he was the eldest son of i think max. he was totake over the bank but wanted to start a library, among other things, so he made a dealwith his brothers to give them the bank if they would promise to buy the books he wanted.”the warburgs 20th century oddyssey of…” ron chernowi’m not a big fan of paul warburgs work either…http://imaginarymuseum.org/MIM/index.html.The ideas of Malraux (1901-1976) for an imaginary museum – as they developed from the thirties onwards – are certainly not unique in its time, there were several people working in a similar way in the arts, or expressing the same ideas in adjacent fields of knowledge, like: Abby Warburg (1866-1929) with his associative iconographic atlases; Paul Otlet (1868-1944) with his project for a world conscience facilitated by international documentation systems and educational institutions…..
1.)The fractional reserve system2.)The outdated permagrowth assumptions to economic theory3.)The increased complexity/convoluted nature of finance, which allows non productive people (banksters) to steal from the country and from people who are too busy doing productive work to sort out all the loopholes and get rich quick schemes of the banksters.4.)”Profits” made from fractional banking system in theory should belong to the people, not private corporations or banks.5.)Population control6.)Realistic expectations concerning health care costs and personal responsibility for health/lifestyle choices.7.)Political reform whereby there are term limits. As posted a year earlier, I defined a politician:One who seeks reelection.When the elected official becomes established in a career of politics, the lobby money establishes a pipeline of influence and the politician loses sight of what’s beneficial to society in the long run.Outer Beltway; These in my opinion are some of the most critical issues.
Got it. Will feed this into the maw of the BT. It is becoming increasingly interesting as to what will actually come out. We are approaching the border between regurgitated fluff and new-thinking territory.BTW, we are going to be applying narrow-down logic shortly. Please background-process this for a day or two, and if you get some inspiration, share it.Tks.
That is an excellent list, incidentally. I forgot to say that, and it’s important to point out superior performance, seeing as how that’s what we’re after.
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Awesome news! Thanks for the info!
MITCH ALBOMHey, you senators: Thanks for nothingA few parting words for the senators who squashed the auto rescueBY MITCH ALBOM • FREE PRESS COLUMNIST • DECEMBER 13, 2008Recommend(615)Print this pageE-mail this articleShare this article:Do you want to watch us drown? Is that it? Do want to see the last gurgle of economic air spit from our lips? If so, senators, know this: We’re taking a piece of you with us. America isn’t America without an auto industry. You can argue whether $14 billion would have saved it, but your actions surely could have killed it.We have grease on our hands.You have blood.Kill the car, kill the country. History will show that when America was on its knees, you lawmakers wanted to cut off its feet. How does this happen in America?Suddenly, the worker is the problem? Suddenly, unless union members, overnight, drastically slash their wages with a hard deadline, you pull the plug on an industry?Suddenly, Detroit is the symbol of economic dysfunction? Are you kidding? Have you looked in the mirror lately, Washington?In a world where banks hemorrhaged trillions in a high-priced gamble called credit derivative swaps that you failed to regulate, how on earth do we need to be punished? In a bailout era where you shoveled billions, with no demands, to banks and financial firms — who created the problem in the first place — why do need to be schooled on how to run a business?Who is more dysfunctional in business than you? Who blows more money? Who fashions and molds its work based on favors and pork and traded compromises?At least in the auto industry, if folks don’t like what you make, they don’t have to buy it. In government, even your worst mistakes, we have to live with.And now Detroit should die with this?In bed with the foreign automakersKill the car, kill the country. Sen. Richard Shelby, Sen. Bob Corker, your names will not be forgotten. It’s amazing how you pretend to speak for America when you are only watching out for your political party, which would love to cripple unions, and your states, which house foreign auto plants.Corker, you’ve got Nissan there and Volkswagen coming. Shelby, you’ve got Hyundai, Honda, Mercedes-Benz and Toyota. Oh, don’t kid yourself. They didn’t come because you earned their business, a subject on which you enjoy lecturing the Detroit Big Three. No, they came because you threw billions in state tax breaks to lure them.And now — this is rich — you want those foreign companies, which you lured, and which get help from their governments, to dictate to American workers how much they should be paid? Tell you what. You’re so fond of the foreign model, why don’t you do what Japanese ministers do when they screw up the country’s finances?They cut their salaries.Or they resign in shame.When was the last time a U.S. senator resigned over the failure of his policies?Yet you want to fire Rick Wagoner?Who are you people?More money for the lords of Wall StreetThere ought to be a law — against the selfishness and hypocrisy our government has demonstrated. The speed with which wheelbarrows of money were dumped at the feet of Wall Street versus the slow noose hung on the auto companies is reprehensible. Some of those same banks we bailed out are now saying they won’t extend credit to auto dealers. Wasn’t that why we gave them the money? To loosen credit?Where’s your tight grip on those funds, senators? Or do you just enjoy having your hands around blue-collared throats?No matter what the president does, history will not forget this: At our nation’s most uncertain hour, you stood ready to plunge tens of thousands of families into oblivion. Push them onto public payrolls, unemployment, no health insurance. And you were willing to put our nation’s security at risk — by squashing the American manufacturing we most rely on in times of war.Kill the car, kill the country. You tried to slam a stake into the chest of this business, and you don’t even realize how close to the nation’s heart you’re coming. Shame on your pettiness. Shame on your hypocrisy. This is how we behave two weeks before Christmas? Honestly. What has become of this country?
Sorry this post was missing a paragraph the post below is the article in its entirety.
MITCH ALBOMHey, you senators: Thanks for nothingA few parting words for the senators who squashed the auto rescueBY MITCH ALBOM • FREE PRESS COLUMNIST • DECEMBER 13, 2008Recommend(630)Print this pageE-mail this articleShare this article:Do you want to watch us drown? Is that it? Do want to see the last gurgle of economic air spit from our lips? If so, senators, know this: We’re taking a piece of you with us. America isn’t America without an auto industry. You can argue whether $14 billion would have saved it, but your actions surely could have killed it.We have grease on our hands.You have blood.Kill the car, kill the country. History will show that when America was on its knees, you lawmakers wanted to cut off its feet. How does this happen in America?Suddenly, the worker is the problem? Suddenly, unless union members, overnight, drastically slash their wages with a hard deadline, you pull the plug on an industry?Suddenly, Detroit is the symbol of economic dysfunction? Are you kidding? Have you looked in the mirror lately, Washington?In a world where banks hemorrhaged trillions in a high-priced gamble called credit derivative swaps that you failed to regulate, how on earth do we need to be punished? In a bailout era where you shoveled billions, with no demands, to banks and financial firms — who created the problem in the first place — why do need to be schooled on how to run a business?Who is more dysfunctional in business than you? Who blows more money? Who fashions and molds its work based on favors and pork and traded compromises?At least in the auto industry, if folks don’t like what you make, they don’t have to buy it. In government, even your worst mistakes, we have to live with.And now Detroit should die with this?In bed with the foreign automakersKill the car, kill the country. Sen. Richard Shelby, Sen. Bob Corker, your names will not be forgotten. It’s amazing how you pretend to speak for America when you are only watching out for your political party, which would love to cripple unions, and your states, which house foreign auto plants.Corker, you’ve got Nissan there and Volkswagen coming. Shelby, you’ve got Hyundai, Honda, Mercedes-Benz and Toyota. Oh, don’t kid yourself. They didn’t come because you earned their business, a subject on which you enjoy lecturing the Detroit Big Three. No, they came because you threw billions in state tax breaks to lure them.And now — this is rich — you want those foreign companies, which you lured, and which get help from their governments, to dictate to American workers how much they should be paid? Tell you what. You’re so fond of the foreign model, why don’t you do what Japanese ministers do when they screw up the country’s finances?They cut their salaries.Or they resign in shame.When was the last time a U.S. senator resigned over the failure of his policies?Yet you want to fire Rick Wagoner?Who are you people?More money for the lords of Wall StreetThere ought to be a law — against the selfishness and hypocrisy our government has demonstrated. The speed with which wheelbarrows of money were dumped at the feet of Wall Street versus the slow noose hung on the auto companies is reprehensible. Some of those same banks we bailed out are now saying they won’t extend credit to auto dealers. Wasn’t that why we gave them the money? To loosen credit?Where’s your tight grip on those funds, senators? Or do you just enjoy having your hands around blue-collared throats?No matter what the president does, history will not forget this: At our nation’s most uncertain hour, you stood ready to plunge tens of thousands of families into oblivion. Push them onto public payrolls, unemployment, no health insurance. And you were willing to put our nation’s security at risk — by squashing the American manufacturing we most rely on in times of war.And why? So you could stand on some phony principle? Crush a union? Play to your base? How is our nation better off today now that you kept $14 billion in the treasury? Are you going to balance the budget with that?Don’t make us laugh.Kill the car, kill the country. You tried to slam a stake into the chest of this business, and you don’t even realize how close to the nation’s heart you’re coming. Shame on your pettiness. Shame on your hypocrisy. This is how we behave two weeks before Christmas? Honestly. What has become of this country?
I think it’s nuts to bail out these auto companies. GM hasn’t made a profit in over 4 years, and they are going to try and restructure during a severe recession? Give me a break. Check out GloomBoom.com – it will make your day!