‘Kidnap’ a joey to save a species BBC
‘Diabetic effect’ in dolphins offers new hope for type 2 diabetes cure Times Online
US scientists warn of fraud of stem cell ‘banks’ PhysOrg
Wealth Disparities in U.S. Approaching 1920’s Levels Seeking Alpha
Shannyn Moore: More Palin Hypocrisy: Tripp Has Government Provided Health Insurance Huffington Post
A Small Price for a Large Benefit Robert Frank, New York Times
Drawing the right lessons from an obscure tale of obscure interest rate swaps Claus Vistesen
It Is Not a Jobless Recovery, It is a Growthless Recovery Dean Baker
“The US is not a viable concern anymore” – Duncan FT Alphaville (hat tip reader Scott)
How Long, To The Point Of No Return? David Merkel
The Fed’s discount rate hike Jim Hamilton, Econbrowser
RBS and Lloyds bosses urged to decline bonuses Independent
AFI’s 100 Years, 100 Movie Quotes (Musical Montage) YouTube. As reader Scott said, ” In the meantime, this is not quite an antidote, but it’s close, and a damn good time-waster.”
Antidote du jour (hat tip Snuzzy.com). A video about a blind deer adopted by an Ohio family:
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The interesting thing about what Duncan is saying is that he at least proposes something that the US could actively DO about getting out of the hole we’re in. We won’t do it, of course – we’re not even spending money on useful (and horrifically badly needed) infrastructure this time, like we did in the 30s.
It will take huge investments to get us on the road to a productive economy again. I just think that the wad has already been blown on nonproductive rent seeking and consumption.
► “The US is not a viable concern anymore” – Duncan FT Alphaville (hat tip reader Scott)
Obama, on the campaign trail, offered the same bold vision that Richard Duncan does:
And so, like any troubled company, the US too must restructure itself if it is to remain operational, says Duncan. How it goes about it, though, will be crucial to its success. The best policy according to the author would be heavy government investment in so-called ‘future’ industries — everything from solar, biotech, nano-technology and so on. Trouble is, a move like that would take more government spending not less.
Duncan estimates some $3,000bn or so on top of the $10,000bn already estimated in deficit spending over the next 10 years would be needed to put the US back on top of the global industrial game in this way.
It is this bold vision and courageous call to action that inspired voters and catapulted Obama into office. Sadly though, Obama pulled a bait and switch. Once safely ensconced in the office of the president, instead of bold action what he has delivered was a cowardly muddling through—a continuation of the failed policies emanating from the Libertarian-Austrian-Neoliberal constellation that landed us in our current predicament.
Even scarier is that he appears poised to pull an Ernesto Zedillo on us. Ernesto Zedillo is the ex-president of Mexico who, when Libertarian-Austrian-Neoliberal policies brought the economy crashing down in 1994, instead of repudiating those policies and leading the country in a new direction, on the contrary he merely shifted those same failed policies into high gear. As the Mexican experience has clearly shown, this is the road to perdition.
Mr. Duncan makes a very persuasive case about what needs to be done–the problems in my mind are this. He assumes that the government can “spend the money wisely” when in fact no one really knows (or ever knows) how to invest in new technologies wisely. We have the illusion that new discoveries and technologies have flowed effortlessly forward, when in reality there is a great deal of money lost and wasted on dead ends and unprofitable choices, if not outright scientific fraud–even when the investment is made with private capital. (No, I’m not just talking about the biotech “industry.”–look at the history of railroads or the development of automobiles) Now, you could make the argument on energy, for example, that the best approach would be to throw a bunch of sh*t against the wall and see what sticks, but that process will certainly involve wasted money.
The second point is whether or not we have the national will to change. Very few societies do undergo fundamental change without military defeat or severe economic upheaval, because without those goads it is much easier to say that things are OK and don’t really need to be changed. The elites are, of course, the last ones to be hurt by economic depression and so will not feel pain until the process is well-advanced.
It would have been obvious to any informed observer in 1880’s China or 1770’s France that their societies were doomed without fundamental changes, but events limped along for some time after because the elites didn’t feel the necessity to change the way they operated.
All of the admittedly small number of addicts I have known would admit they had a problem in their lucid moments. They just didn’t want to change until they “hit bottom.” I hope that people like Mr. Duncan are listened to, but I fear they will not be.
► “Drawing the right lessons from an obscure tale of obscure interest rate swaps” Claus Vistesen
You gotta give these guys like Vistesen their due. When it comes to running interference for the banksters, they’re certainly not bashful about trotting out a horse that should have been put out of its misery a long, long time ago.
Speaking of the shenanigans played on investors by the Greece-Goldman duo, along with other similar sovereign-private combo-teams, he opines:
Now, at this point all this is obviously water under the bridge and what is really left now is to slowly but surely try to figure out the extent of the liabilities Eurozone governments have swept under the carpet.
[…]
At the end of the day the issue of interest rate swaps and other derivatives used by public entities to hide and mask debt is likely going to pass over quickly exactly because it is, as the current choir sings, not news.
When I read this, visions of Barak Obama—not Barak Obama the candidate, but Barak Obama the president—flashed though my mind.
If only it were so simple. If only we could just start the clock running today and the slate washed clean of all past wrongs, all past memories. But this naïve belief is in total defiance of human nature, and of all the lessons of history. No one has probably put it more concisely and more eloquently than Will and Ariel Durant:
[W]ealth is an order and procedure of production and exchange rather than an accumulation of (mostly perishable) goods, and is a trust (the “credit system”) in men and institutions rather than in the intrinsic value of paper money or checks…
–Will and Ariel Durant, The Lessons of History
What is totally lost on guys like Vistesen is that in the real world it is not possible to ignore human psychology. Those things which destroy trust are every bit as important, perhaps even more important, than those things which destroy physical/material property.
A year after the election, the hopes of progressives lie in ruins. The core problem is that they did not understand the severity of the recession before them. Consequently unemployment is much higher than expected and no protestations that it would be higher without the Obama stimulus can alleviate the toxicity of this. Progressives must argue forcefully for a new stimulus bill tailored to reduce unemployment substantially. The bill must be as large as can be achieved without substantial acceleration of wage inflation. Given the slack in the labor market, at 17% unemployment (probably significantly higher if we count undocumented workers), a stimulus billion of several trillion dollars (five, six, seven, eight) is certainly imaginable. Part of reason for the desultory response to the new jobs bill is that it seems pathetically inadequate to the magnitude of the problem. If progressives cannot climb out of their depression and use the success ( http://baselinescenario.com/2010/02/18/did-the-stimulus-help/ ) of the first stimulus as a basis for proposing and fighting for a significantly larger stimulus, then they will reap their reward in the next election.
Re: Drawing The Right Lessons From An Obscure Tale Of Obscure Interest Rate Swaps
“The idea of a common monetary union was always flawed in a number of ways, but there is also a way forward. Yet, it requires I believe a much more transparent fiscal supranational body to complement the single monetary policy wielded in Frankfurt…”
Having a supranational currency requires a supranational fiscal body. There’s logic to that argument. But the logic doesn’t stop there. It means there must also be a supranational regulator, to enforce things. Doesn’t that mean the regulator must have supranational leverage by having the ability to hold those it regulates legally, civilly and criminally responsible when deemed necessary?
Sorry, I don’t see that happening because of the lack of willingness by the people of separate sovereign nations willing to subjugate themselves that deeply to an international entity. One of the main reasons that the US dollar has survived for such a long time as an effective currency is because the 50 separate states HAVE AGREED to be subjugated to a common set of values and principles contained in various documents (Declaration of Independence, Constitution, Gettysburg Address, etc). Seems to me regulation and enforcement mechanisms can evolve much more easily, efficiently and effectively because of that. The peoples of the various European are nowhere close to having done that.
I therefore think the author’s assertion exposes a serious flaw to the long term viability of “tightly coupled” international systems such as the European Monetary Union.
I think that Obama may not be the bearer of even remotely revolutionary change as opposed to the disjointed incrementalism of compromise politics of the Cold War Era. As our system was constructed as a National Security State in response to The Soviet and Chinese threats, with commensurate international policies, the fall of that political bloc necessitates a restructuring of our side of the equation. Especially finance, as their Berlin Wall fell, so too has our Wall St collapsed. Money seems to function in the 21st century as a cybernetic phenomena, not a mechanistic variable based on the Newtonian model of physics, but more to the point, we now have more of a quantum economic paradigm. The internet has reduced the banking systems to a series of disjointed computer programs. We do no longer need the Paul Volkers and Allen Greenspans as much as we need the PayPals and Googles to conduct our banking. Bill Gates was shut up on this point right before the dotcom burst. It is still the 2nd industrial revolution, it is still being built out but the social changes and the politics have not been completed. The raging battle of who gets what among the oligarchs and what side Obama eventually comes down on, may not be extreme as is needed or what we want. But how long before the next crisis, and the choices are: do or die. If Obama is in office, he may make the revolutionary changes necessary. The concept of tyranny in America is more amusing when the middle class marches around in rallies and at town halls, strapped with side arms, hinting at dangerous times and desperate responses. This in the face of 2 million citizens already in jail, more than any other nation in the world. There is much the middle class does not understand about tyranny, especially, that this country has not been exposed to it in the way they like to imagine. Really, Hitler, Stalin, Mao. I have not seen the death certificate that said, “Taxed to death”. Nor have I seen the austerity of being denied 60 inch or even 32 inch flat panel TV’s, smart phones, 3 or 4 get away vacations, much less widespread denial of health care to the point of death, massive arrests and detention centers after political rallies, like in Iran currently. I don’t think the military industrial complex, the financial oligarchs and other elites that constitute the de facto power structure in America can oppose a real take over via the Federal Government being controlled by the Democrats during round 2 of this economic collapse and anther 30 million more unemployed, foreclosed, 401k decimated middle class with no more patience. Or heat, or food, because the Republicans don’t like deficits or handouts. In other words, if we do come face to face with a 2nd total collapse like the one we just faced as soon as the next 24 to 48 months, like the 2nd Oil Shock interval from the late 1970’s, and it is clear that we could have avoided but Obama chickened out because of interlocking interests with the Wall St bankers, then he can take the most likely course of action to deal with insolvent banks and a system that no longer can exist without complete oversight from the government. If what I am reading here is remotely on target and the educated and experienced lot of you financiers has a valid epistemology, the power of your explanation of these events will become apparent. If the wrong choices are deliberately made, owing to political alliances before the good of the social order, your predictions are dire. Bad enough for someone in the WH and in control of Congress to do systemic reform that will not easily be countered by PR or talk show shouters or anyone else who does not want to get ripped to pieces by the tens of millions who had something and lost it all.