Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Markets have completely failed - a simple lesson

by Jerome a Paris Fri Sep 19th, 2008 at 07:08:39 AM EST

The federal government is working on a sweeping series of programs that would represent perhaps the biggest intervention in financial markets since the 1930s, embracing the need for a comprehensive approach to the financial crisis after a series of ad hoc rescues.

At the center of the potential plan is a mechanism that would take bad assets off the balance sheets of financial companies, said people familiar with the matter, a device that echoes similar moves taken in past financial crises. The size of the entity could reach hundreds of billions of dollars, one person said.

After years of deregulation, of promotion of greed and assertion of the superiority of the market, and in particular of financial makrets to decide how to run the economy, it appears - nay, make that: it is now blatantly, in your face, obvious - that none of this worked. Worse, the people that have mocked government throughout, as wasteful, inefficient and incompetent are now counting on the very same government to bail them out from the hole they have dug.

What do we need to do to ensure that we NEVER EVER LISTEN TO THESE PEOPLE AGAIN?


Display:
Punitive marginal tax rates on all income above certain threshholds.

That way, at least they won't make out like bandits in the boom part of the boom and bust.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Sep 19th, 2008 at 07:09:45 AM EST
See this discussion.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 07:15:27 AM EST
[ Parent ]
I'm with Linca on that discussion. The upper middle class isn't the problem, it's the tiny number of people at the top. If you look at where income gains have gone over the past couple decades, it's the tiny number at the top. What I'd want is a return to Clinton era tax rates for most people, plus (indexed) capital gains counting as straight income, plus ending the cap on SS, plus a new tax bracket for folks earning over $1million/year of sixty-seventy percent, federal. Europeans, who don't have local/state income taxes should have the national tax at a correspondingly higher level.
by MarekNYC on Fri Sep 19th, 2008 at 11:00:25 AM EST
[ Parent ]
Note that the median household income for a family of four in the wealthier parts of the US is on the order of $90K - $100K. Incomes are not perfectly stable - they go up and down for each household. What that means is that the majority of couples in this region will at certain points in their lives be earning six figures. A 200K level for punitive rates seems a bit low under those circumstances.
by MarekNYC on Fri Sep 19th, 2008 at 12:12:26 PM EST
[ Parent ]
... being rolled back if implemented.

I still like the idea of converting the estate tax to a cumulative gift tax, with the first $2m of gifts received free of gift tax, then next $2m at 25%, then next $2m at 50%, then 75%, then 100%.

That would break the aristocracy of self-perpetuating fortunes, as marginal income taxes even of 90% at their height in the US never could.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Sep 19th, 2008 at 01:02:41 PM EST
[ Parent ]
How about prohibiting renumeration differences of a certain magnitude throughout a company, Say 10: If the CEO gets a million, then the lowest janitor in the company must get at least 100K, and everybody else at least as much as well. No ceiling for the stars, but they have to drag everybody up with them....

--
$E(X_t|F_s) = X_s,\quad t > s$
by martingale on Fri Sep 19th, 2008 at 07:37:40 AM EST
[ Parent ]
I don't think banks have actually directly employed janitors for quite some time...

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Fri Sep 19th, 2008 at 09:01:03 AM EST
[ Parent ]
Which is actually a good thing. Quite a lot of the time, concentrating on the core competency and hiring subcontractors to do the other stuff is a good idea and increases the total wealth of a society.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 19th, 2008 at 09:06:10 AM EST
[ Parent ]
"increase the total wealth of society" being, quite particularly in the case of the cleaning staff, a codeword for more efficient exploitation of wage slaves.
Instead of being one of your co employees, the janitor becomes faceless ; going around labor laws is much easier for the subcontractor than the large bank ; a janitor asking for better wages gets a "but we will lose the customer" rather than a non credible "we can't afford it". This goes for work conditions, too.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Fri Sep 19th, 2008 at 09:11:08 AM EST
[ Parent ]
Because all the increase in wealth (and sometimes more that 100% of it) accrues to the business that outsources the non-core function.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 09:11:50 AM EST
[ Parent ]
How much of the "increase in wealth" is actually a transfer of non-monetary wealth towards monetary wealth ? In which case there is no increase in wealth.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Fri Sep 19th, 2008 at 09:13:40 AM EST
[ Parent ]
It does result in economies of scale and higher efficiency when there are a number of specialised cleaning or security or whatever companies serving customers compared to when every steel mill or fire station have their own guards or janitors.

I didn't talk about equality or labor conditions. That's something for labor unions and politicians to deal with.

But I really, really dislike the word "wage slave" except when used in jest. There are still real slaves around you know, and they don't get any wages. Even crappy jobs are real jobs, not slavery.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Sep 19th, 2008 at 09:22:15 AM EST
[ Parent ]
You know, a few of those holding these kind of jobs in France actually are slaves, and many are "illegal aliens" who as such don't have access to legal and union defense of their working conditions.

Janitors and guards don't result in "economies of scale". Those are service jobs, and take as much time to do wether the worker is employed by the the large company or a subcontractor. Hell, the large company is certainly more efficient in dealing with the administrative side of employment. The "economies of scale" come solely from the possibilities of enforcing rougher working conditions (which includes wages).

How can you separate working conditions and efficiency ? Very often, "efficiency" improvals come from transfers from the utility function of the employee and that of the employer - the later is monetarised, unlike the former, and that why it shows up as an "increase in wealth" which it is not.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Fri Sep 19th, 2008 at 09:31:54 AM EST
[ Parent ]
... employing their unskilled employees is also something that ought to be tackled, and probably won't be.

If there is regular employment at a business for a certain number of janitors, which they have outsourced, they should pay a penalty on outsourcing that work as opposed to hiring the janitors directly.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Sep 19th, 2008 at 01:05:51 PM EST
[ Parent ]
Probably not easy to do, but much more fair.

A 'centrist' is someone who's neither on the left, nor on the left.
by nicta (nico@altiva․fr) on Fri Sep 19th, 2008 at 08:26:45 AM EST
[ Parent ]
Wealth is delayed consumption resulting from income, and double taxation is a bad thing.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 19th, 2008 at 09:02:46 AM EST
[ Parent ]
Well, right now both incomes and consumption are taxed. So, what's the point ?

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Fri Sep 19th, 2008 at 09:07:55 AM EST
[ Parent ]
Gah, I knew you were going to say that. I haven't actually considered if we should change the VAT into an income tax, but... Triple taxation is bad.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 19th, 2008 at 09:09:23 AM EST
[ Parent ]
Tax unearned income: inheritance and gifts.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 09:08:29 AM EST
[ Parent ]
Wealth being "delayed consumption" is, at best, only partly valid in its application to holdings of debt. But yes, Double Taxation is a bad thing.

Since when was private property in the "Wealth" of land, non-renewables, intellectual property, and shares in joint stock corporations - which constitutes a huge part of our stock of wealth - "delayed consumption"?

Taxation of the privilege of private property in land eg a "Location Benefit Levy" or a tax on land rental values, is perhaps the simplest, and certainly least avoidable, tax there is.

Even Milton Friedman said it was the "least bad" tax, and Martin Wolf - no pinko subversive, he - was suggesting it again in the FT only a day or so ago.

Likewise Corporation Tax should be abolished (double taxation again) and replaced by a "Limited Liability Levy" on gross corporate revenues, collected at the transaction clearing level.

Such a tax on the privilege of limitation of liability would again be simple, equitable, and unavoidable.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Fri Sep 19th, 2008 at 08:41:22 PM EST
[ Parent ]
60% on anything above $200k.

And when they get outraged, we'll all just shout, "Mars, Bitches!"

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Sep 19th, 2008 at 09:00:12 AM EST
[ Parent ]
In the US the big problem would be controlling tax loopholes at the higher brackets.  That problem is essentially insoluble with the current system of campaign finance, as the average citizen only gets to vote for their representatives; representatives actually work for the large contributors.  Fix that and things might improve.

The other big obstacle is the degree to which the neo-classical mythos has been written into the brains of so many of our populations.  Given over 30 years of repetition and conditioning and the extent of biblical world views I wouldn't be surprised if >50% actually think that "The Invisible Hand" is "The Left Hand of God."  Half or more of such folks would rather believe that the present financial crisis is all an evil plot of the Democrats, even if the Democrats didn't have a black man as their presidential candidate.

Perhaps this is best attacked through humor.  In the '30s and '40s labor organizers added alternate lyrics to old religious standbys such as May the Circle be Unbroken:

May the Circle be unbroken
In the Great Bye and Bye
There is a better world awaiting
In the sky, Lord, in the sky

This was appended with:

There'll be Pie in the Sky
Bye and Bye! It's a Lie!

Followed by a "consciousness raising" discussion.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Sep 19th, 2008 at 10:38:56 AM EST
[ Parent ]
I'm a little hopeful on this point, actually, should we win the election: Yesterday Biden said that wealthy Americans paying higher taxes was their patriotic duty.

And he got away with it!  The Reps tried to make a big deal out of it, but it didn't work.

It was awesome.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Sep 19th, 2008 at 09:04:13 AM EST
[ Parent ]
I'm just wondering why no one ever tried wrapping it in the flag before.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 19th, 2008 at 09:07:06 AM EST
[ Parent ]
They have.  Kerry certainly tried it.  But I guess between the press's love for the Bidens and the ever-growing "McCain is a Liar" meme (and McCain, of course, lied about what Biden said immediately), it managed to get through.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Sep 19th, 2008 at 09:09:25 AM EST
[ Parent ]
Two things are needed to be done right away. First is to pass a 'livable minimum wage' which takes into account actual living expenses and is indexed to rise with inflation. Santa Monica, California has it and I believe its about $11.50 per hour vs. the US minimum of $5.60 ? Require all countries to adopt a similar 'livable minimum wage' along with penalties for offshoring jobs which will be effective enough to limit many jobs being exported to other countries. Require low wage countries like Mexico, China etc to have their own 'livable minimum wages'; otherwise their exports are not allowed out of their own countries.

Raise the taxes on the wealthiest 10% to start with and limit the amount of money they are allowed to have offshore. Create a wealth tax for the top 25 %.

by An American in London on Fri Sep 19th, 2008 at 02:36:19 PM EST
[ Parent ]
Well shit, if we're doing pie-in-the-sky recommendations, I want ... let's see ... super powers like the Silver Surfer, a dick the size of a horse's, Marg Helgenberger's personal email address, and a whole bunch of "never gonna see it" shit.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 02:42:33 PM EST
[ Parent ]
What do we need to do to ensure that we NEVER EVER LISTEN TO THESE PEOPLE AGAIN?
The ideology of Market Fundamentalism needs to be discredited.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 07:19:04 AM EST
It will appear in some other form.

The basic issue is caste defined as the absence of personal responsibility and freedom from consequences.

The free market pirates invented an interesting new spin on this pseudo-aristocracy, but given time they'll think of another one.

Income taxation won't solve the problem because the issue is now international, and needs to be enforced consistently across the planet. If the rich don't want to pay exotic taxes they can always redomicile. Off-shoring would have to be eliminated, as would capital movement and speculation on foreign markets.

Estate taxes would possibly be more helpful. Kids have much less freedom of movement than adults do, and taxing inheritances and closing avoidance loopholes would catch the cash at the point where it can prevent the idle rich using their inheritances for political leverage - which seems to have beenb one of the root causes of the current situation.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Sep 19th, 2008 at 07:26:12 AM EST
[ Parent ]
Yes, large exit taxes on international capital movements would have to be introduced. Stiglitz mentions them as a sound policy in the wake of the 1997 Asian currency crisis. He strongly criticises capital market liberalisation and rallies against "the ideology of Market Fundamentalism" (his wording, not mine) in the IMF and the US Tresury. (He forgot the EU Commission, but his book was written during the Prodi years so it wasn't that obvious)

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 07:44:01 AM EST
[ Parent ]
I don't know if you've seen it already but Stiglitz has stated in a rather interesting interview three days ago that:

...the fall of Wall Street is for market fundamentalism what the fall of the Berlin Wall was for communism -- it tells the world that this way of economic organization turns out not to be sustainable. In the end, everyone says, that model doesn't work. This moment is a marker that the claims of financial market liberalization were bogus.


The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Fri Sep 19th, 2008 at 08:39:50 AM EST
[ Parent ]
We sure are witnessing a historic development they'll still be talking about in 50 years time.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 19th, 2008 at 09:04:05 AM EST
[ Parent ]
Yeah, like the crash of 1929. We're still talking about it 80 years later.

But 50 years after the crash, Reagan and Thatcher got into power and unleashed Friedmanomics on the unsuspecting masses.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 09:10:48 AM EST
[ Parent ]
Tobin tax?

Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Fri Sep 19th, 2008 at 10:21:07 AM EST
[ Parent ]
The basic issue is caste defined as the absence of personal responsibility and freedom from consequences.

That has been the default case of governance since, at least, the development of settled agriculture.  But it has usually been wrapped in religious justifications. It is what Voltaire meant when he said "Religion began when the first Priest duped the first peasant."

Regardless of the ideological justification, that behavior is the one at least 80% of the people expect, based on long experience.  That expectation is written into their brains and, so long as there is a credible "external threat" and/or their situation is not totally intolerable, they actually find comfort in familiarity.  Pathetic but true.  Our social abilities are closer to those of ants than most will believe.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Sep 19th, 2008 at 10:50:40 AM EST
[ Parent ]
It's still wrapped in religious justifications. They just use 'freedom' and 'the invisible hand' as abstractions instead of some old guy with a beard and a bad temper.

ARGeezer:

Regardless of the ideological justification, that behavior is the one at least 80% of the people expect, based on long experience.

And yet - for a short while at least, we had something which looked like a participatory democracy. Up to a point.

That's still there as an ideal, and it's not going to go away.

Humans are truly wretchedly limited when it comes to political strategy, and it's easy for the amoral and immoral to prey on that.

But education can shift that. Even if royalty is replaced by trashy celebrity, and everyone gets their fifteen minutes, that's still an improvement on total war, total top-down control, and total bankruptcy.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Sep 19th, 2008 at 10:56:07 AM EST
[ Parent ]
That was a point in my earlier comment on this thread:
The other big obstacle is the degree to which the neo-classical mythos has been written into the brains of so many of our populations.  Given over 30 years of repetition and conditioning and the extent of biblical world views I wouldn't be surprised if >50% actually think that "The Invisible Hand" is "The Left Hand of God."  Half or more of such folks would rather believe that the present financial crisis is all an evil plot of the Democrats, even if the Democrats didn't have a black man as their presidential candidate.

I also believe that education can help.  That is another reason I support any and all direct aid to students in higher education.  But a purely technical education won't help.  The core humanities and social sciences requirements are vital, but not necessarily sufficient.  

Too many students are able to compartmentalize their thinking and emerge as "bi-conceptuals," who apply rational analysis to the area of their core competence, but retain more traditional world views in the rest of their lives.  I know a very able PhD in physics who teaches Sunday school, holds to the "old time religion" and votes Republican.  Naturally, he works in the "defense industry."  They can be very certain of his "values" and of the appropriateness of his security clearance level.

The remaining problem is the workplace, which, especially in small companies, is the most un-democratic place in society.  Workplace attitudes constrain the thinking of too many.  I speak from experience.  Either you shut up and go along or you take on 80% of your co-workers, including supervisors.  I had the Director of Operations of my company say to me:

"Things just work better when one person says what to do and everyone else follows his lead, don't you think?"

I disagreed and had a very hard time getting everything I designed built and installed.  He was one of four partners in a very successful contracting company and was very good at getting everyone moving in the same direction.  It was my sad duty at times to point out that, if they didn't change direction, they might all go over a cliff.  Fortunately, I had the support of two of the four.

Once we were sending out batteries for installation in an emergency power backup system.  The batteries were of the lead acid type.  I suggested that he send out some baking soda with the delivery.  He asked me why!  The knucklehead apparently  never took chemistry in high school.  I was in engineering.  People who were his hire didn't dare question him as I did.  Many just adopted the attitude that this was the way things ought to be.  Guess it made it easy for them.  Didn't work for me.    

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Sep 19th, 2008 at 01:50:35 PM EST
[ Parent ]
We are obviously going to have the same problems of confusion with 'knucklehead' as we have with 'someone' ;-)

You can't be me, I'm taken
by Sven Triloqvist on Fri Sep 19th, 2008 at 01:52:41 PM EST
[ Parent ]
I guess we all will just have to improve our abilities of garnering meaning from context.  I have deliberately used "someone" in both senses simultaneously, but not, as yet, "knucklehead."

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Sep 19th, 2008 at 01:56:24 PM EST
[ Parent ]
;-)

You can't be me, I'm taken
by Sven Triloqvist on Fri Sep 19th, 2008 at 02:00:34 PM EST
[ Parent ]
Actually I did take chemistry in high school. Not only that, but I also took chemicals. I don`t know about 'lead', but the 'acid' was cool.
'Baking soda' floated the submarines from the cereal box. It`s all good though.

The difference between theists and atheists is that the atheists don't set the theists on fire for refusing to agree with them.
by Knucklehead on Sat Sep 20th, 2008 at 12:51:35 AM EST
[ Parent ]
Knucklehead:
Actually I did take chemistry in high school. Not only that, but I also took chemicals.

lol... maybe they took you too!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sat Sep 20th, 2008 at 01:40:18 AM EST
[ Parent ]
And what a long strange trip it`s been.
It`s been melo though, & I keep a photographic journal of it all.

The difference between theists and atheists is that the atheists don't set the theists on fire for refusing to agree with them.
by Knucklehead on Sat Sep 20th, 2008 at 02:12:05 AM EST
[ Parent ]
Religion has, in the 20th century, been replaced with Ideology. Market Fundamentalism is the ideology of the last 30 years.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 08:56:12 AM EST
[ Parent ]
This entire financial fiasco was caused by fraud and corruption. So the Fed and other central banks along with our 'supposed representatives' are going to come to the fraudsters rescue without any accountability. Not one bank or financial entity has had to agree with any regulations prior to their rescue and not one person I know of has been indicted for any criminal activity. The central banks and their governments are aiding and abetting criminals which makes them, at the very least, accessories to the crimes against us and most likely co-defendents along with the very institutions they are protecting.

All done under the guise of saving the financial system which has destroyed lives or at the very least, impacted negatively upon the quality of life of 99% of the people who have to live under the system and our future generations which will have to pay for this.

What we have here is a cry for 'Revolution' ? Where is the outcry besides the words written in columns, blogs and the media propaganda which protects these criminals. Are there not any laws in the US which will invalidate what these criminals have done to bail out their fellow criminals?

Unbelievable and momentous. The irony is the only laws which they have passed to supposedly protect us from 'terrorists' are actually providing protection for themselves.

by An American in London on Fri Sep 19th, 2008 at 07:29:34 AM EST
An American in London:
Are there not any laws in the US which will invalidate what these criminals have done to bail out their fellow criminals?

No.

[ET Simple Answers for Easy Questions Technology™]

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Sep 19th, 2008 at 07:35:31 AM EST
[ Parent ]
So you can take actions which violate existing laws without passing new laws to invalidate the existing laws, prior to taking action?

I guess I will be watching 'Brazil' tonight to see what our societiy will be like in one...two...or three years.

All blogs will have to be shut down for fear of getting the truth out and possibly inciting outrage which could lead to revolution.

by An American in London on Fri Sep 19th, 2008 at 07:40:03 AM EST
[ Parent ]
An American in London:
So you can take actions which violate existing laws without passing new laws to invalidate the existing laws, prior to taking action?

That's exactly what the Republican administration has been doing, and it's also what the Fed has done recently by loosening funding restrictions. There's a law which makes this illegal, and it's been ignored.

The Rs have also ignored sub-poena requests, they've shredded essential documents and hidden evidence, they've lied under oath, and I'm sure there are even nastier things happening on Wall St which we'll never know about.

This the New Conservatism - narcissism with a campaign office, touting the slogan 'I can do whatever I like, because laws don't apply to me.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Sep 19th, 2008 at 07:46:55 AM EST
[ Parent ]
If Obama isnt elected; overt facism will become the norm in American society.

'Facism will come to America wrapped in the flag and carrying the cross'-Sinclair Lewis

by An American in London on Fri Sep 19th, 2008 at 08:05:45 AM EST
[ Parent ]
Hasn't overt fascism been the norm in America for about 30 years?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Sep 19th, 2008 at 08:57:44 AM EST
[ Parent ]
And if he is, covert fascism will remain the norm?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 19th, 2008 at 09:02:20 AM EST
[ Parent ]
Hi  Boys and and Girls!  Somebody singing MY song?  I keep saying (typing?) "You better FIND AND KILL THEM before THEY STARVE YOU OUT, and I am friggin' ignored.  Have you heard the great news this morning?  The DOW futures are giddy with anticipation that the Fed et al are going to steal from the poor to prop up the wealthy, AGAIN!

How about a diary series on the "Reverse Robinhood Effect"?  Just prior to my new series "Blood in the Streets".

Now I know why I came to this planet NOW!  The fun has just begun!

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 09:28:28 AM EST
[ Parent ]
Rats too will attack when all chances of escape are blocked. The great thing about democracy is that there are more poor than rich. The rats have numerical superiority.

You can't be me, I'm taken
by Sven Triloqvist on Fri Sep 19th, 2008 at 01:57:28 PM EST
[ Parent ]
YES YES, FUCKING YES!

IF THEY ACT, NOT IF THEY DO NOTHING !!!

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 02:04:05 PM EST
[ Parent ]
imperialism on a shoestring budget?

"Beware of the man who does not talk, and the dog that does not bark." Cheyenne
by maracatu on Fri Sep 19th, 2008 at 08:21:42 AM EST
while you're sitting on your FAT ASSES getting sloshed, why don't you discuss what the future of ET will be in the coming months?  To Think Tank or Not Think Tank? Etc.  Come back with some ideas.  Just a thought.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 09:33:36 AM EST
The Lehman bailout talks failed because potential investors demanded government guarantee for bad assets. The Bush administration was not that stupid to accept the demanded and the talks ended.

Now, that government guarantee is exactly what American investors demanded and got to bail out the Long Term Credit Bank of Japan and they reaped huge profits through no ingenuity on their part, but simply at the Japanese taxpayers expense. These people think they can still squeeze some juice (and that they are smart).

I will become a patissier, God willing.

by tuasfait on Fri Sep 19th, 2008 at 10:05:18 AM EST
the people that have mocked government throughout, as wasteful, inefficient and incompetent are now counting on the very same government to bail them out from the hole they have dug.

What do we need to do to ensure that we NEVER EVER LISTEN TO THESE PEOPLE AGAIN?

A better title for this diary, Jerome, might have been:

Homage to Milton Friedman

Dead people can still talk.

by shergald on Fri Sep 19th, 2008 at 10:08:24 AM EST
They seem to be doing the same thing in USA, that the government did in Finland in the beginning of the 1990's. Government set up a "trash bank" where they put all the worthless assets. The end bill for finnish tax payers was tens of billions (US) finnmarks. If the banking crises is of similar scope in the US, that means a bill of $1 trillion for american tax payers.
by kjr63 on Fri Sep 19th, 2008 at 10:11:46 AM EST
As long as the economic system is based upon capitalism the cycles of greed and collapse will continue. It is a feature of the system.

Small gains in wealth or market position allows for predation which then makes the winning firm bigger. The bigger firm then can buy political influence which then creates the legal framework for them to grow even larger.

This feedback system continues until it implodes, when there is much hand wringing, some modest reforms and the cycle starts again.

The only way to break this cycle is to eliminate capitalism and replace it with something new. Something which is not based upon the continual striving for growth, something which is not based upon exploiting natural resources and something which is does not reward greed.

I have no idea what this new system would be, socialism and communism have also been shown to suffer from fatal flaws of their own.

What I have found is that every time I bring this up I get blasted by libertarians who can't see beyond their cramped views of personal liberty and dislike of "government".

My most recent rant on the subject on this site:
http://www.eurotrib.com/story/2008/8/7/124216/5548

I really would like to hear some ideas on what new social structures might look like, but it seems it is easier to tear down ideas than come up with new ones...

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Fri Sep 19th, 2008 at 10:16:13 AM EST

The only way to break this cycle is to eliminate capitalism and replace it with something new.

Question: Are you replacing just the ECONOMIC SYSTEM or the GOVERNING SYSTEM?  For how many people?  With access to what resources?  What about population (birth) controls?  Will your society operate in a vacuum or should you consider competition from Communist China, who I see (in short order) taking over the entire globe and exterminating ALL non-Chinese humans, other than zoo specimens and humans for research?

Let's start that discussion, right here at ET, especially while the ADULTS are away in Paris!

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 10:52:48 AM EST
[ Parent ]
I've written a lot about governance, you can peruse my web site for the essays.

What we have now is public firms where the governance is under the control of the CEO and board of directors, not the stockholders. This is anti-democratic.

We also have highly imperfect democratic governance in the largest developed countries (especially the US and UK). In the US it is money that votes not people. This has nothing to do with how firms are financed (capitalism).

What is needed in the US is to reform the electoral process so that money is not used to buy elections. Any combination of public financing, limited allowance of corporate money, free broadcast time and a number of existing good government proposals could do the job. Unfortunately there is little sign of a desire for reform.

The permanent election industry (consultants, lobbyists, media, pollsters, etc) makes too much money from the present system to want to see it changed.

As the number of non-democratic capitalist countries continues to grow the old confusion between the two concepts is starting to vanish. We need to repair democracy, we need to replace capitalism.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Fri Sep 19th, 2008 at 11:58:20 AM EST
[ Parent ]

What is needed in the US is to reform the electoral process so that money is not used to buy elections

How do you view Obama's method/success at fundraising?

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 01:56:58 PM EST
[ Parent ]
rdf:
The permanent election industry (consultants, lobbyists, media, pollsters, etc) makes too much money from the present system to want to see it changed.

was there ever a more parasitic, useless caste in history?

amusing to think the whole phenomenon was a luxurious excess, that future societies would do well to heed as warning.

as in carved in stone in every village square...

don't blindly trust treasurers!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Sep 19th, 2008 at 04:48:41 PM EST
[ Parent ]
What we have now is public firms where the governance is under the control of the CEO and board of directors, not the stockholders. This is anti-democratic.

It may be, but if you read Galbraith's The New Industrial State is seems like a natural development.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 08:54:10 AM EST
[ Parent ]
"I really would like to hear some ideas on what new social structures might look like, but it seems it is easier to tear down ideas than come up with new ones... "

I have thought a little bit about some kind of "layer economy", where there would be, perhaps, two layers. The basic layer would be some kind of a sosialistic/private agricultural self-sustainable society, that would include food production, housing, health care etc. On top of this there would be a free and open liberal capitalistic society where people could sell their "services" what is left from the lower layer. The top layer would work with maximun flexibility and laissez-faire, because it would not take part in servicing the basic needs, which create "inflexible" economic and political structures inside the market economy.
I'm not an economist, so i can't go further, but i wonder if some economist have thought something along these lines?

by kjr63 on Fri Sep 19th, 2008 at 11:04:39 AM EST
[ Parent ]
Whatever it might be, it would be a transformation as profound as the agricultural revolution.

you are the media you consume.

by MillMan (millguy at gmail) on Fri Sep 19th, 2008 at 01:22:26 PM EST
[ Parent ]
yup, that's how it looks to me.

how we get through the bottleneck between now A and B where this might end up if things go very favourably, is the million energy-unit question....

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Sep 19th, 2008 at 04:57:14 PM EST
[ Parent ]
Reuters via NYT: Oil Up Sharply, Again Breaking $100 Barrier

Oil rose more than $5 to above $100 on Friday on expectations a comprehensive United States government plan would help battered financial markets.

Washington launched several multi-billion-dollar programs to guarantee holdings in money-market mutual funds and curb short-selling while developing a more sweeping plan to mop up toxic mortgage debt, sending global markets higher.

News of the plan helped push up United States crude to a session high of $103.64 a barrel, and by 9:45 a.m. New York time, it was trading $4.91 a barrel higher at $102.79. Prices were recovering from a seven-month low of $90.51 a barrel on Wednesday.

London Brent crude gained $4.65 to trade at $99.84.

"I think oil is up because there is more confidence in the financial markets. There is a feeling that the crisis is bottoming out and some may see it as a good time to buy," said Gerard Rigby, an independent energy consultant based in Sydney.

Hey Feds, thanks a lot.

by Magnifico on Fri Sep 19th, 2008 at 11:03:43 AM EST
At the center of the potential plan is a mechanism that would take bad assets off the balance sheets of financial companies, said people familiar with the matter, a device that echoes similar moves taken in past financial crises.

This is an exact copy of what we did in this country 15 years ago. It worked very well and the state ended up owning a lot of bank equity.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 19th, 2008 at 11:21:08 AM EST
What country are you referring to?

I would be very happy to see the US Govt. take ownership of most of these entities.  If the US Treasury could enjoy the kind of profits the IB's have seen over the past ten years we'd be in good shape.

The trouble is that the minute they begin to perform they will be "released" back into the wild.

by paving on Fri Sep 19th, 2008 at 04:09:24 PM EST
[ Parent ]
The subprime mortage crisis is almost a blue copy of what happened here in 1991-1994. Google "Securum".

The Swedish approach to the problem of tidying up after the banking crisis by transferring troubled debt to specialized asset management companies is often held up as an example for other countries to follow. The most unusual aspect of Securum was the great degree of independence given to the company, combined with the rather broad terms in which its assignment was formulated. The Swedish state, as owner, announced that the winding-up would be permitted to take considerable time and that it should proceed keeping the best interests of taxpayers in view. In all other respects, Securum's board and management were given a great deal of freedom in shaping the company's policies. Moreover, the board was dominated by experts, with representatives of the ministry and the political domain being a limited element.

Furthermore, the legal structure chosen was such that Securum's operations were not subject to the laws applying to financial institutions, particularly not the constraints imposed by the regulatory framework of banking legislation. The company was also allocated sufficiently substantial equity that the risk of the management needing to return to the owner and ask for more funds was virtually non-existent. Consequently, the material prospects of independence were good.

In a happy twist of fate, the guy who was put in charge of the swiftly created authourity "The Bank Support Committee" (generally called the "Bank ER") is now the the chairman of the Bank of Sweden, and another key person, Bo Lundgren, then minister of taxation (and later chairman of the liberal-conservative party) is now the head of the Swedish Debt Office.  

So for once we have smart expereinced people in exactly the right place to deal with this crisis.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Sat Sep 20th, 2008 at 06:19:52 AM EST
[ Parent ]
the state ended up owning a lot of bank equity.

That's the missing bit in Paulson's plan - therefore there's no guarantee it will "work very well" this time around.

For everyone else: read starvid's excellent LQD: Learning from the Swedish banking crisis (March 18th, 2008)

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 09:08:00 AM EST
[ Parent ]
What do we need to do to ensure that we NEVER EVER LISTEN TO THESE PEOPLE AGAIN?

Why would "these people" change a system which allows them to make money when they win, and gives them money when they fail?

It's become quite clear that the financial classes will not change until they themselves, the Owners seen as individual humans, can remember sitting on the sidewalk, begging for food and beer or oxycontin.

This cycle has to complete itself to bring about appropriate codes of conduct for industry.

by Ralph on Fri Sep 19th, 2008 at 12:06:23 PM EST

This cycle has to complete itself ...

And that "completion" looks like WHAT?

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 02:01:22 PM EST
[ Parent ]
The completion would mean a separation of the financial system from the rest of endeavour - like a Friday night poker game.

You can't be me, I'm taken
by Sven Triloqvist on Fri Sep 19th, 2008 at 02:03:13 PM EST
[ Parent ]
Not sure I understand BUT

what is the possibility/probability we'll see this event prior to human extinction?

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Sep 19th, 2008 at 02:06:25 PM EST
[ Parent ]
Read Chris Cook's diaries....

You can't be me, I'm taken
by Sven Triloqvist on Fri Sep 19th, 2008 at 04:42:24 PM EST
[ Parent ]
(Note: I am not an economist and have no access to special information. The following is just me thinking about what seems logical.)

If the U.S. were a smaller country, "completion of the cycle" would mean a combination of drastic currency devaluation, rise in that country's interest rates and imposition of "austerity measures" (to use the ugly World Bank phrase).

Things probably cannot actually turn out that way, because too much of the existing international trade structure depends on the value of the dollar staying within a range. Instead I expect to see some combination of the following:

The dollar tied to some sort of "basket of currency," with specific exchange rates subject to periodic renegotiation;

One or more black markets coming into existence, involving both international trade and movement of goods inside the US, especially energy-related goods such as petroleum products;

US interest rates rising significantly;

Several new and mostly secret bilateral agreements made between the US and other countries, involving both trade and military matters such as arms sales. Such agreements might impel the US to reduce its military presence in some areas, while increasing its presence in others;

A slowdown of US imports of crude oil and petroleum products. The price of other imported goods should also rise.

The other "normal" alternative would be war in some form or other. But war between the US and the rest of the world is simply not going to happen, mainly because it would cost too much.

by Ralph on Sun Sep 21st, 2008 at 08:41:10 AM EST
[ Parent ]

But war between the US and the rest of the world is simply not going to happen, mainly because it would cost too much.

I find this strangely funny.  Has Dick Cheney  read this sentence?  He may not be convinced.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Sun Sep 21st, 2008 at 08:47:34 AM EST
[ Parent ]
Reuters: S&P says pressure building on U.S. "AAA" rating (September 17, 2008)
Pressure is building on the pristine "AAA" rating of the United States after a federal bailout of American International Group Inc, the chairman of Standard & Poor's sovereign ratings committee said on Wednesday.

The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve "has weakened the fiscal profile of the United States," S&P's John Chambers told Reuters in an interview.

"Lack of a pro-active stance could have resulted in further financial stress and put pressure on the U.S. triple-A rating," Chambers said. "There's no God-given gift of a 'AAA' rating, and the U.S. has to earn it like everyone else."

No, it's not God-given, it's S&P-given. The credit agencies are punching above their weight and will have much to answer for when all is said and done.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 08:49:56 AM EST
[ Parent ]
Off topic but relevant:

Suppose the US exchanges all of the bad debt from whatever for Communist Chinese ownership of all this foreclosed real estate?  The Chinese won't need a war to defeat the US.  They'll simply export Chinese citizens to the US who will vote out the Anglos/blacks/Latinos/etc.

Cool?

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Sun Sep 21st, 2008 at 08:57:42 AM EST
[ Parent ]
That's interesting, and not even off topic. It's one way we could pay our debts to the world, and much less dangerously than by arms sales. I wonder how many Chinese could move onto all that real estate?

Note to Barack Obama: be sure to consult

   THE Twank (paszeski_aaaaaaatttttt_yahoo.com)

when it's time to Pay Off the World.

by Ralph on Sun Sep 21st, 2008 at 10:47:08 AM EST
[ Parent ]
Well, I guess i should feel flattered.  I may have to start reading some of my SPAM.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Sun Sep 21st, 2008 at 02:34:52 PM EST
[ Parent ]
On S&P country credit ratings, see FT and S&P - conventional wisdom : why we should care by Agnes a Paris on March 28th, 2006
S&P sets the sovereign rating of almost each country in the world, and a country that has no rating can hardly tap international finance markets. France, UK, the US, like most OECD countries, are AAA rated, which is the highest rating on a AAA to D scale.
If the rating of a country is downgraded by even one notch (for France it would be AAA-, this immediately triggers investor suspicion, money fleeing the country and increases cost of government debt raising.


A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 01:11:13 PM EST
[ Parent ]
Talking about Agnieszka - what's up with her. She hasn't been around for ages, unless she popped up during one of my hiatuses.
by MarekNYC on Sun Sep 21st, 2008 at 01:12:44 PM EST
[ Parent ]
Last I know (from a year ago) is that she was going to move to NYC. It had been a while since she had lurked on ET already then.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sun Sep 21st, 2008 at 01:17:33 PM EST
[ Parent ]
Just in from oral surgery ... thank god for pain killaz ...I'm just catching up ... and feeling grizzly.

Troubled Asset Relief Program?! WTF?!

The U.S. Treasury plans to use as much as $50 billion from the country's Exchange Stabilization Fund to temporarily protect investors from losses on money- market mutual funds.

"$50B" so-called Exchange Stabilization Fund is referred to an AP story as a "Depression-era fun." Now US haz research hook, doubtless a provision of the Emergency Banking Act. NB - FDR order the RFC to act as treasury agent in gold trading, devaluing USD virtually overnight.

The Treasury will insure for a year holdings of publicly offered money-market [mutual?!] funds that pay a fee to participate in the program. Retail and institutional funds are eligible, the department said today in a statement.

This is FDIC fiduciary "mission-creep" in real-time. Mutual fund investments are not insured according to USC because those funds are not saving (account holder assets). FRB acts, Congress reacts -- AUMF tactic executed in new arena. Congress, especial DP caucus, will "fall" for double-down authorization. Why? Barack Obama's Hamiltonian coat tails.

"Create Automatic Workplace Pensions
Currently, 75 million working Americans --roughly half the workforce-- lack employer-based retirement plans. Only half of female workers have access to an employer-based retirement plan, and only 39 percent participate in those plans. Even when workers are given the option of joining employer-base plans, many do not take up the option because it requires considerable work to research plans and investment portfolios, and enroll in the plan. Barack Obama's retirement security plan will automatically enroll workers in a workplace pension plan. Under his plan, employers who do not currently offer a retirement plan, will be required to enroll their employees in a direct-deposit IRA [investment retirement account] account that is compatible to existing direct-deposit payroll systems. Employees may opt-out, by signing a written waiver. Experts estimate that this program will increase the savings participation rate for low- and middle-income workers from its current 15 percent level to around 80 percent.

"Expand Retirement Savings Incentives for Working Families
Women are less likely than men to have significant income from pensions and other savings at retirement. Barack Obama will ensure savings incentives are fair to all workers by creating a generous savings match for low and middle-income Americans. Obama will expand the existing Savers Credit to matchh 50 percent of the first $1,000 [$500] for families that earn under $75,000, and he will make the tax credit refundable. To help ensure that this proposal actually strengthens retirement investments, the savings match will be automatically deposited into designated personal accounts by using the account information listed on IRS tax filings. Coupled with the automatic workplace pension plan, this proposal will stimulate tens of millions of new Americans to invest for retirement. Over 80 percent of the savings incentives will go to new savers, and 75 percent of people eligible for the incentives wo are expected to participate in the new program do not currently save."


"Blueprint for America's Working Women and Families

Obama expects to win in Nov, assuring the "democratization" of capital risked with finance managers --defined contributions rather than defined benefits, rather than real wage growth. And even if he doesn't win, McCain is committed to keeping the capital market primed with trusts' funds.

The one-percenters we call representatives are sick.


Diversity is the key to economic and political evolution.

by Cat on Fri Sep 19th, 2008 at 01:49:48 PM EST
The news is incomplete.  Treasury's Monthly Statement of Receipts and Outlays of the U.S. Government (Monthly Treasury Statement) reflects the ESF's gains or losses on transactions, net interest earnings, and valuation gains or losses. These are reflected in Table 5, in the Exchange Stabilization Fund item under Department of the Treasury.

                                                 STAR - TREASURY FINANCIAL DATABASE
                                        TABLE 5.  OUTLAYS OF THE U.S. GOVERNMENT (IN MILLIONS)

                                                        ACCOUNTING DATE:  08/08

                                                                         THIS MONTH            THIS MONTH            THIS MONTH
  CLASSIFICATION                                                        GROSS OUTLAYS      APPLICABLE RECEIPTS         OUTLAYS
+ ______________________ ________ _______ _______
    DEPARTMENTAL OFFICES:

      EXCHANGE STABILIZATION FUND                                                  ......                   101                  -101
      OTHER                                                                            92                ......                    92

Table 6 shows as an asset item the ESF's holdings of SDRs and as liabilities the SDR Certificates issued to the Federal Reserve.

      SPECIAL DRAWING RIGHTS:

        TOTAL HOLDINGS                                                              9,301                 9,772                 9,494
        SDR CERTIFICATES ISSUED TO FEDERAL RESERVE BANKS                           -2,200                -2,200                -2,200

          ;ABALANCE                                                                 7,101                 7,572                 7,294

      RESERVE POSITION ON THE U.S. QUOTA IN THE IMF:
        U.S. SUBSCRIPTION TO INTERNATIONAL MONETARY FUND:

          DIRECT QUOTA PAYMENTS                                                    46,525                46,525                46,525
          MAINTENANCE OF VALUE ADJUSTMENTS                                         11,304                13,690                11,795
        LETTER OF CREDIT ISSUED TO IMF                                            -52,101               -51,825               -51,826
        DOLLAR DEPOSITS WITH THE IMF                                                 -153                  -136                  -140

        RECEIVABLE/PAYABLE (-) FOR INTERIM MAINTENANCE

         OF VALUE ADJUSTMENTS                                                      -1,111                -3,320                -1,579

          ;ABALANCE                                                                 4,464                 4,933                 4,775

      LOANS TO INTERNATIONAL MONETARY FUND                                         ......                ......                ......
      OTHER CASH AND MONETARY ASSETS                                               25,168                26,387                26,211

        ;CTOTAL CASH AND MONETARY ASSETS                                          111,969               100,449                45,152

I must be reading the accounts incorrectly. It seems to me that Treasury has insufficient funds to borrow from the ESF. And, if the news is to believe, intends to swap $50B of "non-marketable Treasury short-term securities" with the IMF. Except, according to Treasury Bulletin (Aug 2008) the SDR balance a/o 31 March 2008 was $9,892,018. Total assets of the ESF were $51,888,567, net income balance ~$42M. (cf Treasury MPSD; FRBNY FAQ re: 2007 ESF balance.)

Anyway, Exchange Stabilization Fund use is supposedly limited to short-term, ForEx lending. The proposed financing for domestic "Troubled Asset Relief Fund" is entirely extraordinary. It implies some of the funding is for foreign domiciled financial firms or central banks.

Diversity is the key to economic and political evolution.

by Cat on Sat Sep 20th, 2008 at 06:09:37 AM EST
[ Parent ]
$41,593,294 billion "total capital" exactly, including USD equivalent of all euro, yen currency and US government securities distinct from SDR account.

Diversity is the key to economic and political evolution.
by Cat on Sat Sep 20th, 2008 at 06:28:55 AM EST
[ Parent ]
I can get you Marg Hellenberger's email address. And if I told you 4 years ago a black man named Obama was 6 weeks from being President of the US; you would have said that was pie in the sky. Yes much of what I said is wishful thinking. But nothing radical ever happens until we are faced with disaster. FDR would have never been able to get some of his reforms through if there wasnt a Depression.

My hope is Obama gets elected, the economy and financial systems gets worse and he jettisons the idiot advisors who put us here in the first place and keeps his own counsel and gets advisors who have as their first priority 'social justice'. He has had to thread the needle in order to get this far with keeping his cards close to his chest. Lets see if he turns into a great President if elected or another hack like Clinton who talked himself into his first priority, which was to be reelected.

If Obama is able to have 60 Dem Senators or somewhere close to it; he will be able to pass real campaign and lobbyist reform and may be able to pass a real living minimum wage. Combined with a universal healthcare program and 2 or 3 Supreme Court Justices will make a real difference to Americans for generations. But first he has to get elected-then the shite really has to hit the fan economically in order for him to radically change the way the US thinks. Social Justice may be a priority as everything in his background points to it. Or he is just another compromised pol like Clinton was immediately after he was elected. He was visited by Greenspan who said balancing the budget was the first priority which negated all of Clinton's campaign proposed progressive policies. Greenspan's advice was backed up by Lloyd Benson, the designated Sec of the Treasury and Robert Rubin, then Benson's asst Sec of Treasury who is advising Obama. Lets see what happens but I am optimistic that out of misery will come radical programs.

by An American in London on Fri Sep 19th, 2008 at 03:58:59 PM EST
Didn't Obama's presidential campaign essentially start at the '04 democrat convention ?

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Fri Sep 19th, 2008 at 07:43:01 PM EST
[ Parent ]
And I haven't agreed with a concluding phrase on any of your diaries more than the one you used over there today. Absolutely, that is a big part of the solution.

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Fri Sep 19th, 2008 at 05:59:14 PM EST
Don't expect someone to fix a problem when they are completely incapable of admitting they ever made a mistake.
by Andhakari on Mon Sep 22nd, 2008 at 04:52:31 AM EST


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