I hate shooting the messenger even when he lets us know that he is a tad invested in the information he is conveying, but sometimes it is warranted. Floyd Norris now tells us that maybe it wasn’t such a good idea to have been so generous to the banks during the crisis. He cites the usual reasons: the recovery is shallow, the officialdom missed the opportunity created by the crisis to restructure the financial system, sparing bondholders created moral hazard, and we are now stuck with banks in the driver’s seat. His lament, as the headline accurately summarizes, is “Crisis Is Over, But Where’s The Fix?”
The problem is that his account is larded with a rationalization of the decisions made at the time to treat major financial firms with soft gloves:
At the time, rescuing seemed more important than reforming. The world economy was breaking down because of a lack of financing. Trade flows collapsed, and companies and individuals stopped spending. It seemed clear that halting the slide was critical…
A surprising citadel of that second-guessing is at the International Monetary Fund, where researchers this week concluded that the rescues “only treated the symptoms of the global financial meltdown.”
“Second guessing” is simply misleading. It gives the inaccurate impression that decisions made at the time are now being questioned with the benefit of hindsight. But in fact, those decisions were criticized loudly at the time by a vocal minority, including yours truly.
Even during the last window of opportunity to bring the banking industry to heel, in early 2009, when the financiers were still chastened, quite a few people, including Paul Krugman, were calling for nationalization of the sickest banks, which would have been Citigroup and Bank of America. A next best step, as many including Nouriel Roubini, advocated, was wiping out the stock and bondholders. They were the providers of risk capital; no one held a gun to their heads to buy those investments. Yes, this measure have hit smaller banks that had been encouraged by regulators to buy bank preferred stock, but that seemed a too convenient excuse for not taking on the managements of the biggest of the TARP banks).
There were all sorts of alternative approaches discussed as the crisis ground on. September and October 2008 were so gut-wrenching that it’s often forgotten that there were four acute phases, starting in August 2007. The Bagehot rule was invoked repeatedly as a guiding principle (lend freely, at penalty rates, against good collateral) and ignored. The Fed went from being behind the curve to over-reactive, as “75 was the new 25”, meaning the Fed was making sharp policy rate cute when markets got wobbly. A small minority became concerned when the Fed dropped the Fed funds rate below 2%, since it risked entering liquidity trap land with successive reductions (and indeed that is where we seem to be). Well before September 2008, there was ample discussion in econ policy circles of the Swedish response to its early 1990s banking crisis, which included throwing management of troubled institutions out, putting in new teams with clear objectives for their institutions but latitude in how to reach those goals, and setting up a vehicle to manage and work out troubled assets. The IMF even got serious about the question, but because its report on 124 banking crises was issued at the end of September 2008, things were moving too fast for it to get any consideration. Its main finding:
Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance….
Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery. Of course, the caveat to these findings is that a counterfactual to the crisis resolution cannot be observed and therefore it is difficult to speculate how a crisis would unfold in absence of such policies. Better institutions are, however, uniformly positively associated with faster recovery.
So no one can credibly pretend that plenty of authorities were opposed to bailouts (as opposed to resolutions and restructurings). Yet the revisionist history is that there was unanimity on what to do, and any alternative was not feasible. We live, after all, in the best of all possible worlds, even if it does not look so hot at this particular juncture.
But the sellout and its consequences were obvious to anyone who had been paying attention. Simon Johnson’s article, “The Quiet Coup“, hit the newsstands a mere two months after the Obama administration officially threw its lot in with the bankers with the announcement of the stress test charade in March 2009.
Where were members of the economics elite in calling for a proper post mortem? Why wasn’t evey major bank who took bailout money or accessed emergency facilities made, as UBS was, to conduct an investigation and report to regulators and shareholders? Why wasn’t there a push for international cooperation and data sharing on post crisis forensics? Keeping the bankers under the microscope could have at least contained their hubris; continued focus on managerial failures and looting would have given air cover that would have resulted in less limp-wristed reforms.
As we summed up a year ago:
The case for bold action was sound. The history of financial crises showed that the least costly approach is to resolve mortally wounded organizations, install new management, set strict guidelines, and separate out the bad loans and investments in order to restructure and sell them…
This juncture [the early days of the Obama administration] was a crucial window of opportunity. The financial services industry had become systematically predatory. Its victims now extended well beyond precarious, clueless, and sometimes undisciplined consumers who took on too much debt via credit cards with gotcha features that successfully enticed into a treadmill of chronic debt, or now infamous subprime and option-ARM mortgages.
Over twenty years of malfeasance, from the savings and loan crisis (where fraud was a leading cause of bank failures) to a catastrophic set of blow-ups in over the counter derivatives in 1994, which produced total losses of $1.5 trillion, the biggest wipeout since the 1929 crash, through a 1990s subprime meltdown, dot com chicanery, Enron and other accounting scandals, and now the global financial crisis, the industry each time had been able to beat neuter meaningful reform. But this time, the scale of the damage was so great that it extended beyond investors to hapless bystanders, ordinary citizens who were also paying via their taxes and job losses. And unlike the past, where news of financial blow-ups was largely confined to the business section, the public could not miss the scale of the damage and how it came about, and was outraged.
The widespread, vocal opposition to the TARP was evidence that a once complacent populace had been roused. Reform, if proposed with energy and confidence, wasn’t a risk; not only was it badly needed, it was just what voters wanted.
But incoming president Obama failed to act. Whether he failed to see the opportunity, didn’t understand it, or was simply not interested is moot. Rather than bring vested banking interests to heel, the Obama administration instead chose to reconstitute, as much as possible, the very same industry whose reckless pursuit of profit had thrown the world economy off the cliff. There would be no Nixon goes to China moment from the architects of the policies that created the crisis, namely Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and Director of the National Economic Council Larry Summers.
Defenders of the administration no doubt will content that the public was not ready for measures like the putting large banks like Citigroup into receivership. Even if that were true (and the current widespread outrage against banks says otherwise), that view assumes that the executive branch is a mere spectator, when it has the most powerful bully pulpit in the nation. Other leaders have taken unpopular moves and still maintained public support.
Obama’s repudiation of his campaign promise of change, by turning his back on meaningful reform of the financial services industry, in turn locked his Administration into a course of action. The new administration would have no choice other that working fist in glove with the banksters, supporting and amplifying their own, well established, propaganda efforts.
Thus Obama’s incentives are to come up with “solutions” that paper over problems, avoid meaningful conflict with the industry, minimize complaints, and restore the old practice of using leverage and investment gains to cover up stagnation in worker incomes. Potemkin reforms dovetail with the financial service industry’s goal of forestalling any measures that would interfere with its looting. So the only problem with this picture was how to fool the now-impoverished public into thinking a program of Mussolini-style corporatism represented progress.
Apologists for the Bush and Obama administrations’ conduct during the crisis, whether they recognize it or not, have been and continue to be part of this propaganda program.
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For links:
“Hacker-Versus-Hacker Feud is Nightmare for Cyber-Security Firm” (Bloomberg). Interesting that the US Chamber of Commerce is involved…
Paul Romer and others said at the time that we could create and capitalize new lending institutions to sustain the larger U.S. and global economy to get through the crisis — and do so more cheaply than deploying TARP, the ensuing QE, and the rest of the sham and the looting of the larger economy that have merely shored up the existing wealth structure.
The price of doing what we’re doing has been, above all, the growing loss of credibility of the U.S. both in the eyes of the rest of the world and, increasingly, its own people. It’s not likely to happen this year or the next, but we’re going to miss the dollar’s reserve currency status when it goes.
‘We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.’ —Louis D. Brandeis, LL.B. 1877,
All of this – from the fraudulent inducement of mortgages starting in the latter 90s to the intentional crashing of the real economy and the Bailout to austerity in Washington, Wisconsin, New York, and everywhere else – comprises one pattern of organized crime and class war.
(It goes back to the 70s, but for this comment I started with the final stage.)
Even if one wanted to believe one’s own favorite party were naive and innocent prior to 2008, the record since then is incontrovertible: Both parties and the MSM have seized upon the banks’ intentional crashing of the economy to aggressively push the most aggressive Shock Treatment (to use Chicago’s own term going back to the 50s for exactly this criminal strategy).
There can be no doubt at all what’s happening. The “elites” are waging vicious war on the people, and will never, ever stop until either we all are homeless, penniless slaves, or they are destroyed.
attempter,
Someone here on NC recommended that I read Carroll Quigley’s The Evolution of Civilizations and I’m just now getting around to reading it. I enjoy reading these various theories of history because they provide larger frameworks in which to look at things and hopefully provide some insights. I suppose that at the time Quigley published his book (1961) the scope was quite sweeping. He says that up until that time almost all historical studies dealt only with the Classical and Western civilizations and the timeframe from about 1100 B.C. to today. Today some historians take a much longer view and want to look at what happened in the millions of years before the advent of agriculture (about 10,000 years ago) in order to explore the conditions under which man’s hardwiring evolved.
The timeframe Quigley treats begins in 6000 B.C. with the advent of the first civilization—-the Mesopotamian whose center was in modern-day Iraq—-and ends with today. In all Quigley identifies 16 different civilizations past and present which he studied.
Quigley sets out seven stages in the rise and fall of civilizations:
1. Mixture
2. Gestation
3. Expansion
4. Age of Conflict
5. Universal Empire
6. Decay
7. Invasion
Quigley defines a civilization as “a producing society with an instrument of expansion.” The last stage of expansion in Western society, which includes the United States, Quigley says ended in 1929 when its instrument of expansion, industrial capitalism, became institutionalized into monopoly capitalism. We therefore currently find ourselves in stage 4, 5 or 6.
Here’s how Quigley defines “instrument of expansion”:
By the term “instrument of expansion” we mean that the society must be organized in such fashion that three things are true: (1) the society must be organized in such a way that it has an incentive to invent new ways of doing things; (2) it must be organized in such a way that somewhere in the society there is accumulation of surplus—-that is, some persons in society control more wealth than they wish to consume immediately; and (3) it must be organized in such a way that the surplus which is being accumulated is being used to pay for or to utilize the new inventions.
An instrument of expansion, according to Quigley, “in the course of time becomes an institution and the rate of expansion slows down.” The necessary element of expansion that usually breaks down, he says, is the third—-application of surplus to new ways of doing things:
This decrease in the rate of investment occurs for many reasons, of which the chief is that the social group controlling the surplus ceases to apply it to new ways of doing things because they have a vested interest in the old ways of doing things. They have no desire to change a society in which they are the supreme group. Moreover, by a natural and unconscious self-indulgence, they begin to apply the surplus they control to nonproductive but ego-satisfying purposes such as ostentatious display, competition for social honors or prestige, construction of elaborate residences, monuments, or other structures, and other expenditures which may distribute the surpluses to consumption but do not provide more effective methods of production.
I found Quigley’s description of elite behavior—-as the society moves from the Expansion stage to the Age of Conflict, Universal Empire and Decay—to hit the nail squarely on the head. Does this not accurately describe what we see happening in the United States and Great Britain today?:
The vested interests encourage the growth of imperialist wars and irrationality because both serve to divert the discontent of the masses away from their vested interests (the uninvested surplus). Accordingly, some of the defenders of vested interests divert a certain part of their surplus to create instruments of class oppression, instruments of imperialist wars, and instruments of irrationality. Once these instruments are created and begin to become institutions of class oppression, of imperialist wars, and of irrationality, the chances of the institution of expansion being reformed into an instrument of expansion become almost nil. These three new vested interests in combination with the older vested institution of expansion are in a position to prevent all reform…. [T]he institution of class oppression controls much of the political power of the society; the institution of imperialist wars controls much of the military power of the society; and the institution of irrationality controls much of the intellectual life of the society. These three (which may be combined into only two or one) become dominant, and the group that formerly controlled the institution of expansion falls back into a secondary role, its surpluses largely absorbed by its own creations.
Quigley says the vested interest groups do not have to, or cannot always, behave in such a reactionary way. They can allow, or can be forced to accept, reform or circumvention, in which case a new instrument of expansion will emerge that is dominant until the next Age of Conflict. However, if reform or circumvention don’t occur, then the monsters that the vested interests create—- instruments of class oppression, instruments of imperialist wars, and instruments of irrationality—-devour the entire civilization, including the vested interests themselves.
I make it that we are simultaneously in stages 6 and 7. Our decay is self evident in our preoccupation with such self serving banalities as facebook. The invasion is the curious level of illegal immigration we have. I wonder, given our proclivity to debase the currency, trash due process with unlawful foreclosures and most particularly our unwillingness to prosecute what strikes me as being flagrant financial fraud; just what makes it better here rather than there? Perhaps because of the latter, it is easier to steal here rather than there.
It then occurs to me that we have been invaded by other cultures that really do not apprehend the necessity of education, accurate information and engagement of the polity if our contract for a Federal Republic is to perform as intended.
Walk into a room of 100 people, I assert that 10 will be bright. some 30 or 40 will be adequate and the balance will be dim bulbs happily and urgently thumbing away at their Blackberry’s. Those dumb thumbers are the ones who typically aver, ‘whocouldanode’.
Now Dear Down South, ya’all got a citation for that?
Yep.
The stupidity of the average man will permit the oligarch, whether economic or political, to hide his real purposes from the scrutiny of his fellows and to withdraw his activities from active control.
–Reinhold Niebuhr, Moral Man & Immoral Society
I’ve got one for you:
“The opposite of knowledge is not ignorance, but deceit and fraud.” – Jean Baudrillard
“… dim bulbs happily and urgently thumbing away at their Blackberry’s. Those dumb thumbers are the ones who typically aver, ‘whocouldanode’.”
Or maybe they’re reading your comment on Naked Capitalism instead of ‘power networking’ with the other people in the room.
By “invasion” is meant, invasion.
The story of how white men came to southern California is instructive. Out in Ventura, white men came in the mid 1870’s (if memory serves), shooting up everything in sight & stealing the homes & land, driving the original post-Mexico Mexicans into poor barrios, where you will find them today. It’s not a pretty story, which is why it’s rarely told. That’s not the migrant story. They haven’t shot up anything.
There needs to be an annex to the theory, as in, what happens to civilizations so geographically comported as to be un-invade-able. Do they merely stagnate into a dark age, or do they rip themselves apart with social unrest first?
I think it’s even worse than that. That ~50% of the public are practically completely uninformed about politics, and just don’t care about it, apparently have no clue that it impacts their lives, is pretty bad.
That 90% of the remaining 50% are dumb and stupid, is even worse.
But the remaining people, the smart people. Are they part of the problem or the solution? Note intellectuals fulfill the role that the clergy used to fill in feudal times (i.e. providing legitimacy for the system, for the folks in power. Rationalizing their actions and policies).
Why is it that practically the first thing Communists do after a successful revolution is shoot all the Intelligentsia?
Are folks like Dick Cheney, Barack Obama, Larry Summers, smart or dumb? Are they part of the problem, or the solution?
Prior to the financial crash, something like 35% of Harvard grads would go straight into Wall Street. So are Harvard/Princeton/Yale part of the problem, or the solution?
You’re talking “Sumeria”..read about the Sumerian tablets..
Interesting, DS. Everyone who thinks about this seems to zero in on some version of the same basic idea, that the parasites congeal at the same time the life cycle of the system itself reaches the point of diminishing returns.
So even as the pie starts shrinking, the bloated parasite must engulf ever more of the shrinking resource and production base to maintain its own complexity. And this in turn accelerates the rate of decay of the productive base, since less and less investment goes into its maintenance.
Today we have this with Peak Oil and the calcification of all economic sectors into oligopoly. Neoliberalism as an ideology and strategy was intended to enable the criminal elites to preserve power and wealth through these, eventuating in the restoration of feudalism in the form of totalitarian debt indenture.
That’s where every trend line is now headed.
Attempter; if you see this rebut further down.
The point you overlook is that as the ‘Global Pie’ is shrinking so is the visible aspect of the “Singularity”
As the disparity increases so does the physical number of people at the top. The diminishing returns are not felt because it is going into fewer hands.
I look forward confidently to the day when all who work for a living will be one with no thought to their separateness as Negroes, Jews, Italians or any other distinctions. This will be the day when we bring into full realization the American dream — a dream yet unfulfilled. A dream of equality of opportunity, of privilege and property widely distributed; a dream of a land where men will not take necessities from the many to give luxuries to the few; a dream of a land where men will not argue that the color of a man’s skin determines the content of his character; a dream of a nation where all our gifts and resources are held not for ourselves alone, but as instruments of service for the rest of humanity; the dream of a country where every man will respect the dignity and worth of the human personality: Martin Luther King, Jr.:
“For one bright moment back there in the late 1960s we actually believed that we could change our country. We had identified the enemy. We saw it up close and we had its measure – and we were very hopeful that we would prevail.” William Pepper – Orders to Kill
MLK again:
A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.
Psychology Today: Where does all this lead us? What road are we going down, in your mind?
Oliver Stone: I think when you kill presidents–when you kill Martin Luther King and Bobby Kennedy and you get away with it; when you have J. Edgar Hoover in office for 50 years and he’s a raging madman who prosecutes anyone who he sees as subversive to his way of American life; when you have Lyndon Johnson as president; when you have wars in Vietnam that are genocides; when you create a Cold War mentality that breeds defense-minded expenditures of the sums that we had–then there is a corruption that follows.
The fabric of society is warped. It has been increasingly warped since World War II and we’ve locked into it and now we’re paying for it. We’re paying for it morally and spiritually and economically. Cause and effect. It had to happen. We did not throw the money into the cities, into architectural or spiritual wealth…
Along the same premise, I thought THE WATCHMENS RATTLE by Rebecca D Costa was an interesting read. The basic theory was that Empires fail when problems that are passed to the next generations, eventually become critical and too complex to solve with our slow evolving brains. In desperation we abandon science and resort to religion or human sacrifice.
I’ll wager you don’t often agree with the IMF or vice versa, but there’s this from Yves’ link to Simon Johnson’s 2009 article, “The Quiet Coup”:
“The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.”
So like a broken clock, correct twice a day, a former IMF chief economist agrees with you. Sadly, only a ‘former’, anonymous coward dares to squeak truth to power.
Regarding the Shock Doctrine, the true depression has arrived, and Obama’s collusion with ALL of the same villains who engineered it has all but guaranteed it will be the Greatest Depression ever. By his deafening silence, I see his fingerprints all over the treachery in Wisconsin, which is now sure to spread to Illinois and beyond.
YS: “There would be no Nixon goes to China moment from the architects of the policies that created the crisis…”
Yeah, I have to admit, that’s what I was kind of hoping for … expecting, to be honest. I really thought Obama knew what was going on; and was brilliantly selecting his inner circle based on un-merit, so to speak.
I remember writing a reply to a nasty anti-Obama comment posted on the Yglesias blog, in Feb or March of 09, regarding the new President’s ongoing buddy-buddy relationship with Jamie Dimon, where I wrote something like; “Haven’t you ever heard of keeping your golfing partners close, in a Sun Tzu way?”
It shocks me to know what a naive moron I am, at my core.
So who was naive?
The dumb Americans who elected Obama, who lied through his teeth? Or the dumb Wisconsinites who elected Scott Walker, who lied through his teeth?
Obama isn’t incompetent. He was/is bait & switch. Just like Walker.
I don’t like to inject my own profession into the proceedings, but the astrological signs of a compulsive liar are among the easiest to spot in a chart. If you’re interested, Mercury, and/or sometimes the Moon, in hard aspect to Neptune. The power-mad have that, as well as a prominent Pluto. Getting downsized a few years ago didn’t change it a bit.
To Dave,
As someone who knows a little of which you write, perhaps you would care to comment on the significance for the solution (if any solution is possible) of the current seemingly intractable problems facing the U.S.A., of the Geminian roots of the Republic?
You are not alone. Moral people tend to want to believe the best of others to the extent here they go into denial in support of their hopes.
“There can be no doubt at all what’s happening. The “elites” are waging vicious war on the people, and will never, ever stop until either we all are homeless, penniless slaves, or …..”
When we get to that stage, who is going to be providing their profits? Will the bigger sharks eat the ones smaller than themselves .. until in the end there is one enormous shark chewing on its own tail?
This seems to be the crisis of capitalism as predicted by Marx…. but I didn’t appreciate that the population would be lulled into a false security by not being able to believe that the elites could be so personally self destructive and hedonistic.
‘When we get to that stage, who is going to be providing their profits?’
China, India, the developing world — like that. The U.S. is seen as a mature market, played out a great extent, with individuals and communities heavily burdened by existing debt. Marx told you not to expect that the rich would generally be loyal to any particular national society.
The most impressive part of Marx, in fact, may be his predictions and analysis of globalization — which he approved of, not incidentally, since he saw the global spread of capitalism as a necessary step toward world socialism.
In the “elites” stunted brains the world is “King of the Hill” in their lifetime played by musical chair rules and all else is irrelevant.
The thing about today’s “elites” is that they are invested in their “intelligence” to a degree unprecedented in human history. The spirit of the elite civilization is captured in Halberstam’s ironic phrase “the best and the brighest”. And who didn’t recognize the Obama election as the self- celebration of the transcendent, supra-partisan elite, epitomized by David Brooks? The case can be made that despite all their education, somehow or another, these people have become pre-Socratic in their mentality.
Since inequalities of privilege are greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal values spring from, and that general interests are served by, the special privileges which they hold.
The most common form of hypocrisy among the privileged classes is to assume that their privileges are the just payments with which society rewards specially useful or meritorious functions… The presence of able men among the privileged is allowed to obscure the number of instances in which hereditary privilege is associated with knavery and incompetence. On the other hand it has always been the habit of privileged groups to deny the oppressed classes every opportunity for the cultivation of innate capacities and then to accuse them of lacking what they have been denied the right to acquire.
[….]
Dominant groups indulge in other hypocrisies beside the claim of their special intellectual fitness for the powers which they exercise and the privileges which they enjoy. Frequently they justify their advantages by the claim of moral rather than intellectual superiority… That you have property is proof of industry and foresight on your part or your father’s; that you have nothing is a judgment on your laziness and vices or on your improvidence. The world is a moral world; which it would not be if virtue and vice received the same rewards.
The idea that the profits of capital are really the rewards of a just society for the foresight and thrift of those who sacrificed the immediate pleasures of spending in order that society might have productive capital, had a certain validity in the early days of capitalism, when productive enterprise was frequently initiated through capital saved out of modest incomes. The idea, as a moral justification of present inequalities of privilege, has become more and more dishonest, since the increased centralization of privilege and power makes it possible for those who make the largest investments in industry to do so without any diminution of even the most luxurious living standards. Since we are living in a world in which there is too much capital for production and too little for consumption, the argument that economic inequality is necessary for the accumulation of capital resources has lost even its economic validity. Yet it is still used by privileged classes to establish a specious connection between virtue or social function and privilege.
–Reinhold Niebuhr, Moral Man & Immoral Society
The most common form of hypocrisy among the privileged classes is to assume that their privileges are the just payments with which society rewards specially useful or meritorious functions… The presence of able men among the privileged is allowed to obscure the number of instances in which hereditary privilege is associated with knavery and incompetence. On the other hand it has always been the habit of privileged groups to deny the oppressed classes every opportunity for the cultivation of innate capacities and then to accuse them of lacking what they have been denied the right to acquire.
This has been going around in my mind for the last few days. It comes down to the core of market-driven ideology — that the decisions of the “market” are virtuous. That is, if you can put a price on something and someone buys a good or service at that price, then the transaction is morally correct and virtuous.
So when someone talks about how great the market is, it isn’t about efficiency — it’s a cover for self-serving aristocrats who want to believe that their rent-seeking is morally defensible.
The quote you highlighted is a good one. A few years ago, I started to read Niebuhr, but never went through with the project, and for a stupid reason: Because someone who had actually read Madelaine Albright’s “The Mighty and the Almighty: Reflections on America, God, and World Affairs” told me that Albright had quoted Niebuhr a number of times in her book.
The title of the Albright book alone was enough to leave me slightly nauseous, as I imagined several hundred pages of hackneyed, mindless clichés, and couldn’t wait to get away from the person telling me about it. And so, in my mind I made this connection between Madelaine Albright and Reinhold Neibuhr, and avoided reading him.
Now, thanks to quotes from DownSouth, such as the one you highlighted above, I realize I was being completely unfair to Niebuhr, and so I’m planning to have another look at his work.
He could be a lunatic and a liar for all I know, I’ve never read him.
The best liars tell the truth nine times out of ten. You should be unceasingly critical. Yeah, sometimes you get lulled or duped, but that’s no reason to give up trying to understand the world’s problems.
Every mistake is a lesson. If you aren’t making mistakes, you aren’t trying.
I think a lot of people are going through anguish because they are learning that both political parties — both the Mommy and the Daddy party — have zero interest in representing you. They will use you and manipulate you for their own selfish ends. But they think that the only value left in America is produced on Wall Street. So the usual defense of running to the other party has become a dead-end. Both parties represent the vested interests. You have nothing to offer them except your sweat and toil, and they can buy that easily.
So our fragile world-view is shattered, and we don’t know whom to trust.
So should you trust Reinhold Niebuhr? To whatever extent you can verify what he says. He sounds interesting to me. I would read him too if I weren’t having trouble keeping up with current events. It seems like every day something incredible happens.
Yeah, just trying to keep up with current events is a full-time job. How to deal with what is happening? All these things we once believed in that are turning out to be illusions. There’s the official narrative and then there’s the reality. It’s almost as though there were two parallel planes…..
As I mentioned once in an earlier post, at times I wonder if ignorance really is bliss. If maybe it’s better not to know what is happening. But like the ancient story goes, once you’ve taken that fateful bite of apple from “the tree of knowledge” (if that’s what this is), then it seems there’s no turning back.
And besides we have to know how the “story” turns out. Will the man with the candy lead the children into the sea? (to extend your Mommy/Daddy metaphor above) Or will something turn up that leads to different outcome? Something unexpected. Stay tuned…..
I see it a bit differently. The have’s have to defend what they have and do so by by seeking more. The have-nots seek more and any means is appropriate.
I recall when I was a phone clerk on the Board of Trade, Seasoned Traders who lived in Lake Forest wore clothes that were nearly thread bare, shoes that were very supple and even a few Chuck Taylor Allstars. The lunched modestly and did not trade with Harry The Tie Guy, the guy who sold ties just out side the trading floor.
Newer traders who were now making a bit of money, actually a great deal more than they had made earlier on in their careers, wore the latest Brooks Brothers hopsack and tailor made shirts and $40 ties. The also suffered from stiff, but very shinny shoes. The flashy guys tended to be deft with the rules and dangerous when caught short.
The guy I worked for lived in Lake Forest and held the view that you really don’t want to flaunt you wealth because if you do, very soon there will be a mugger in your face. As to the have-nots, he would regularly aver, there but for the grace of God go I.
One fine Chicago Indian Summer day I had a late lunch at the Burghoff with my boss, his wife and the erudite Rinehold Neibuhr. Mrs Boss was the Chairwoman of the Lake Forest Womens Club and Mr Neibuhr was to speak there the coming Saturday afternoon. Mrs Boss wanted Mr Boss to be in attendance, he demurred, his wheat book needed some work that would keep him in the city for the day, I was invited to the lunch as a bonifidies of the need for the Saturday examination of Mr Boss’s wheat trades.
The Boss and I each had a beer and brat. Neibuhr had a pretty heavy schnitzle and Mrs Boss had a salad with pickeled herring. Neibuhr fretted over getting to Lake Forest, he was staying at the Drake on Lake Shore Drive and getting to the train etc was a problem. Mr Boss said not worry, he would be driving in early Saturday and his car and driver would pickup Mr. Neibuhr and carry him to Lake Forest and return him to the Drake.
And so it was that I observed a very wealthy man and a very large scholar. Thereafter I read some of Neibuhr’s stuff and found it apologetic as to the necessity of religion and moderately naive as to the inherent tendency of people to cheat, especially when selling something. The encounter, the reading and observations I made while as a phone clerk led me to the following credo: caveat emptor, honor the contract, avoid taxation but don’t evade it, and never lie, dissemble maybe, but never lie.
Now as to whocouldanode, only a dupe or shill can offer up that excuse for what has transpired.
Siggy said: “Thereafter I read some of Neibuhr’s stuff and found it apologetic as to the necessity of religion and moderately naive as to the inherent tendency of people to cheat, especially when selling something.”
I agree about Niebuhr being “apologetic as to the necessity of religion.” But of course I would, because I’m agnostic. But I disagree about him being “moderately naive as to the inherent tendency of people to cheat.”
When it comes to the nature of man, Niebuhr tried to hew a middle-of-the-road course. This rather ambiguous stance made him more pessimistic than the liberals, but more optimistic than New Atheists like Ayn Rand and Richard Dawkins, or Neoclassical economists like Frank Knight, Frederick Hayek, Milton Friedman, Gary Becker and Richard Posner. Niebuhr had a name for the “moral cynics who know no law beyond their will and interest.” He called them “children of darkness” or “evil.”
James Melvin Washington in A Testament of Hope wrote this of Niebuhr:
Throughout the course of their history, black congregations suffered greatly under the persecution of white terrorists who murdered their members, leaders, and neighbors. These racists destroyed black properties while espousing platitudes about justice and freedom for all. In fact, while this tragic drama was in process, most white moderates—-with the exception of those such as Reinhold Niebuhr, who early encouraged blacks to embrace nonviolent resistance—-had the audacity to insist that black Christians should be paragons of the faith. The later “black power” disdain for hypocritical white liberalism was not without some ethical justification. However, such accusers had trouble explaining the altruism and martyrdom of white liberals such as Jonathan Daniels, James Reeb, and Viola Liuzzo.
Here’s Martin Luther King, Jr. on Niebuhr in his essay “Pilgrimage to Nonviolence”:
My reading of the works of Reinhold Niebuhr made me aware of the complexity of human motives and the reality of sin on every level of man’s existence. Moreover, I came to recognize the complexity of man’s social involvement and the glaring reality of collective evil. I came to feel that liberalism had been all too sentimental concerning human nature and that it leaned toward a false idealism.
I also came to see that liberalism’s superficial optimism concerning human nature caused it to overlook the fact that reason is darkened by sin. The more I thought about human nature the more I saw how our tragic inclination for sin causes us to use our minds to rationalize our actions. Liberalism failed to see that reason by itself is little more than an instrument to justify man’s defensive ways of thinking. Reason, devoid of purifying power of faith, can never free itself from distortions and rationalizations.
And here’s Arthur Schlesinger, Jr. on Niebuhr in the New York Times:
In these and other works, Niebuhr emphasized the mixed and ambivalent character of human nature – creative impulses matched by destructive impulses, regard for others overruled by excessive self-regard, the will to power, the individual under constant temptation to play God to history. This is what was known in the ancient vocabulary of Christianity as the doctrine of original sin. Niebuhr summed up his political argument in a single powerful sentence: “Man’s capacity for justice makes democracy possible; but man’s inclination to injustice makes democracy necessary.” (Niebuhr, in the fashion of the day, used “man” not to exculpate women but as shorthand for “human being.”)
The notion of sinful man was uncomfortable for my generation. We had been brought up to believe in human innocence and even in human perfectibility. This was less a liberal delusion than an expression of an all-American DNA. Andrew Carnegie had articulated the national faith when, after acclaiming the rise of man from lower to higher forms, he declared: “Nor is there any conceivable end to his march to perfection.” In 1939, Charles E. Merriam of the University of Chicago, the dean of American political scientists, wrote in “The New Democracy and the New Despotism”: “There is a constant trend in human affairs toward the perfectibility of mankind. This was plainly stated at the time of the French Revolution and has been reasserted ever since that time, and with increasing plausibility.” Human ignorance and unjust institutions remained the only obstacles to a more perfect world. If proper education of individuals and proper reform of institutions did their job, such obstacles would be removed. For the heart of man was O.K. The idea of original sin was a historical, indeed a hysterical, curiosity that should have evaporated with Jonathan Edwards’s Calvinism.
your blog has been instrumental in educating me about the financial crimes and policy blunders. It is incredible, but actually obvious, that most of the financiers are not believers in profit and loss, but believers in profit and bailouts. What is amazing is that both political parties believe that the most important thing to do during the financial crisis was to assure that the people who made the decisions that got us into the financial crisis continue to make decisions.
Agree.
I would add that this disaster also seems to have spawned a growing ‘cottage industry’ to provide excellent financial-political reporting that appears to continue building up steam.
I’m convinced there is a growing market for truth, honesty, clear explanations, and good data. It’s no accident that NC has continued to grow so rapidly; it’s a sign of the times.
I think the point made in this post that the financial news has spilled right off the business section, and into the rest of the news, is an extremely important observation. I think this IS the news. The rest is mostly distraction.
Yves,
You ask: Where were members of the elite? Where were the investigations? Why wasn’t there a push for…?
Two days ago you provided a link to Mike Konczal’s post where he asked, and provided some answers, to a very similar question focusing on why non-financial major corporations weren’t calling for “financial regulatory overhaul of any kind.”
(Your link: rortybomb.wordpress.com/2011/03/07/towards-a-theory-of-corporate-and-financial-sector-solidarity/)
One answer he provides is: they were in bed with the bankers. Or as he said, they are engaged in “corporate capital structure arbitrage.”
He then poses questions he can’t answer about “cultural capture” of corporate elites by financial elites. This suggests he thinks the capital-structure-arbitrage factor may be important, but not sufficiently important to be a compelling reason for complicity by the corporate elite with the financial elite.
Can you provide some insight about how important the corporate elite’s use of derivatives and swaps to shift risk off of their books, how important this “wealth of transfers” to unsecured parties, has become? Are major corporations sufficiently large insider beneficiaries from an unreformed derivatives and swaps market that they don’t want that insider benefit taken away?
Jay: It may help you to realize that the monster labled as the ‘Elites’, is not so readily quantifiable. And it’s individual members are not homogenous. The identification of members could be based upon influence, but how do you measure that. Certainly wealth and prestige are only parts of the definition.
As to understanding the corporate elites, you need to realize that few CEO’s are proprietary owners of their corporations. In fact many have little stake in the companies they represent.
I never expected much of Obama, though he’s succeeded in falling below even my fairly low expectations. By Summer 2007 I suspected that this particular empty shirt might well become The Man (unless, in the wake of Bush 2, McCain & the Repubs miraculously won) and that an Obama administration would be a financial industry-friendly administration, as the Bush 2 crowd had been energy industry-friendly. (Part of how I make my living requires me to go around at hi-tech and economic gatherings, interacting occasionally with the theoretically Great and Good; I was struck by how many of these were promoting Obama, so I looked at where his money was coming from.)
Nevertheless, these are interesting times. Maybe unprecedented. Like their opposite number over in, say, Fox comment threads, many of the strident posters dispensing ideology boilerplate hereabouts see the U.S. overclass as a monolithic entity, much as the posters at the Fox site see the left as one single enemy. To such posters here, what’s happening is all part of the same old saga of class war and fine details — indeed, maybe, much of the unique historical reality of 2011 – elude them. Well, certainly, it’s class war. But there are vast differences — politically, financially, and in capabilities — among different factions of the U.S. overclass, especially if you take a historical view.
What’s impressive, I have to say — and maybe even unprecedented, since I haven’t yet found any close historical comparison – is how in 2006 a quite small group within the U.S. overclass at Goldman-Sachs stood back, gamed out ahead of time the economic collapse and crisis, and constructed a plan. They started shorting the market, promoting a favorable (for their plan) stooge to send to the White House, and installed specific individuals, like Paulson and Geithner, in the specific positions necessary to steer things their way. Sure, GS needed luck along the way and required bailing out alongside the other TBTFs when the crash came. Nevertheless, folks, they worked through the possibilities, devised a vastly ambitious plan to preempt any replay of the New Deal or a FDR-style candidate in 2008, and then executed this giant piece of social engineering.
Mark; GS annd the others were merely the vehicles to deliver the bomb. In a slightly different world they could as well have been unmanned vehicles. The suicide pilots have been well paid. Poor dumb Bernie thought he could fly solo.
Goldman did much more than this-they first drove market speculation, selling futures back and forth with other “investment banks” to raise prices, then, just when all were going “that” way, they drove it the other way.
Further, Paulson himself went to SEC circa 2005 to deregulate “leverage”..caused Lehman demise.
Anyone see this Bloomberg story “Couple Bilked BofA-Led Lender Group of $130 Million, U.S. Says”
Here’s a snippet: March 11 (Bloomberg) — A California couple was charged by the U.S. with defrauding an eight-bank lending group led by Bank of America Corp. of about $130 million by exaggerating the financial status of their decorating business.
Thomas Chia Fu, 61, and his wife, Cheri L. Shyu, 48, were arrested at their Newport Coast home by federal authorities, according to an e-mailed statement yesterday by U.S. Attorney Andre Birotte Jr. in Los Angeles. They were indicted on nine counts of bank fraud and face as long as 30 years in prison if convicted, prosecutors said in the statement.
The couple imported home-decorating items from China and obtained a $130 million revolving line of credit from the banks, according to the indictment. They borrowed against the credit line by exaggerating the in-transit inventory and accounts receivable for their company, Anaheim, California-based Galleria USA Inc., according to the filing.
“Had Bank of America and other banks known the true facts, they would not have continued the revolving line of credit and loaned additional funds,” according to the filing.
I’m not defending the fraud by any means, but funny how the couple was arrested adn may face 30 years in prison while all the CEOs of the banks and others perpetuating their massive financial frauds (Repo 105, etc.) are having a nice ultra-rich life.
Such is our world. . .*sigh*
Rahm Emmanuel was very clear that he would not let this crisis go to waste.
He and many others were successful in their desire.
They were able to take the cobbled together measures from the end of the Bush Adminsitration and get privatization of profits and socialization of losses codified into law. The ad hoc actions by Bernanke and Paulson in a crisis are now “business as usual” institutionalized subsidies to the banks.
Bush and Obama have presided over the death of capitalism in America. Capital is now allocated on the basis of political clout.
The truly annoying thing about Norris’ piece is his refusal to pursue the facts he reports with any analytical rigor. He reports commentary on how abysmally wrong bankers were on fundamentals — like asset prices — and how undeserved their bonuses are, then goes off into the impossibility of successfully regulating the sector:
“Even if regulators somehow did design a perfect regulatory system, it would not last, simply because clever bankers would eventually find ways around it, just as people find ways to evade taxes, forcing tax law writers to constantly make changes.”
Has it occurred to Floyd that if those “clever bankers,” who are so clever they royally screwed up everything, just can’t be bridled then perhaps they are too dangerous for society to tolerate. Too big to fail is too dangerous to exist.
Norris quotes Paul Romer , who has also thinks regulation is an exercise in futility :
““Every decade or so,” said Paul Romer, a senior fellow at the Institute for Economic Policy Research at Stanford and now a visiting professor at New York University, “any finite system of financial regulation will lead to systemic financial crisis.”
If that’s the case , we must have had one helluva lucky streak in the four decades-plus following the Depression :
http://static.seekingalpha.com/uploads/2009/3/22/saupload_slide16.jpg
http://www.ritholtz.com/blog/wp-content/uploads/2010/06/6-11-10-Bank-Failures-4.gif
That’s one of the many lies they tell themselves that suppress their awareness of the violence of their looting.
Here’s what Paul Craig Roberts has to say about The Greatest Rip-off: Stealing from Social Security to pay for Wars and Bailout. (Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury.)
“Social Security is an unfunded liability, because all the money working people put into it was stolen by Republicans and Democrats in order to pay for wars and bailouts for mega-rich bankers like Goldman Sachs.
What I am about to tell you might come as a shock, but it is the absolute truth, which you can verify for yourself by going online to the government’s annual OASDI and HI reports. According to the official 2010 Social Security reports, between 1984 and 2009 the American people contributed $2 trillion, that is $2,000 billion, more to Social Security and Medicare in payroll taxes than was paid out in benefits.
What happened to the surplus $2,000 billion, or $2,000,000,000,000.
The government spent it…..
The robbed Social Security Trust Fund can only be made good by the US Treasury issuing another $2.8 trillion in US government debt to pay off its IOUs to the fund.
When a government is faced with a $14 trillion public debt growing by trillion dollar deficits as far as the eye can see, how does it add another $2.8 trillion to the mix?
Only with great difficulty.
Therefore, to avoid repaying the $2.8 trillion that the government has stolen for its wars and bailouts for mega-rich bankers, the right-wing has selected entitlements as the sacrificial lamb….”
http://www.counterpunch.com/
Norris wrote this snippet because he readily concede defeat before even trying.
“Trying what?” you ask.
Trying to make the case that our, hmmm, shall we say “regulatory paradigm”, is, by design, the best system clever, rich and resourceful organizations/people can ask for.
The way around these runarounds (pun absolutely unintended…of course!) is quite simple.
Example: Instead of promulgating 1,000 pages of fine print regulations what credit card companies can or cannot do (in effect guaranteeing full employment for lawyers and lobbyists) it would be infinitely easier to write say, 5-6 rules stating what is allowed under law, with the understanding that what is not expressly written as permitted is prohibited until tested and approved. You know, a variation of the FDA model for drugs and devices: “It is illegal until we say it is not!”
It would KILL innovation!!! would blare the sycophants of the financial industry.
Answer: “So? Pray tell what has been so far out for the common good about financial innovation in the last 30 years?” Apart from the ATM, as Paul Volcker pointed out, precious little, no?
So, that is the problem with people like Floyd Norris: a notable difficulty to think different.
Even the ATM is over-rated.
It promotes poor planning and lack of discipline, especially when you’re out drinking at 3 am, you’re out of cash, and you should go home.
Well Francois: I’m not much on abdication of morality or abject surrender to the dark side. But, there is a point to saying “regulation is futile”.
Laws and regulations are crafted by people. These people may be less than perfect; they may be incompetent or the may be compromised. There are endless examples of nice sounding legislation, which in their legal application, never come close to what was expected??
Also remember the old saw, ‘Contracts are written to be broken’, the same can be said of laws. Proper crafting creates selective barriers rather good moral structure.
And the story the media has “missed”, is understanding the very largest global picture of how at least 2/5s of the world’s revenue, disappears into offshore (yes, even Delaware) corporate accounting, where profits are magically shipped round through a secretive and untouchable maze of entities, (parking profits along the way), until it appears at the other end, all clean, folded and properly full of “loss and investment”.
As each country beckons the money to their dominions, it loses accountability to any government, and to any government’s ability to properly tax the corporation for the fertile ground it was given to grow in by the people who built it and work for it. The wealthy though, certainly do enjoy the harvest – and that includes the media owners.
The politicos and lobbyists are fueled with this tax free money, the regulation is stripped away and the games of derivatives and gambling takes hold.. The losses are beyond imagination. Then, to make up the losses, the tax paying populace gets the honor of making the banks whole on their game.
It is all well and good that Americans cry and investigate the “causes”, such as lobbying, the banks and a million reasons on our shores. Beautifully organized in the corporate offshore world, where 83 out of 100 of the top US Corps are incorporated offshore, and 100 of the top 100 of the European Corps, are offshore, it works well to keep countries, and the population, confused. Confused where the money comes from to corrupt governments, where despots “steal”from the populace and democracy never really does take hold, and beyond the reach of any country’s ability to contain or investigate it.
You add “fleeing” clauses to the legalese, where even an inquiry causes an account to “escape” to another tax free international haven, the fugitive account can spend it’s life morphing shape, color, name and domicile, so it can never be caught. With no guns, weapons, allegiance or obligation. We wonder why Mubareks and Quadaffi’s “billions can never be found. Nor can our Corporation’s taxable income, or any offshore incorporated wealthy person’s either. It’s an incredibly elegant design – and the best legal minds from round the world have created it.
Read TREASURE ISLANDS by Nicholas Shaxon. The pieces of this puzzle of why this problem is very much a metastasizing cancer; a mysterious and shape shifting destroyer. Not just of one body, but of countries and of the world.
Remember the Citizens United ruling by the US Supreme Court? Where Corporations are allowed to give unlimited money to political organizations, and can do what human people can’t?
Read the Jonathan Turley editorial in the LA Times from March 9th, 2011 (he is a professor of law at George Washington University) about Justice Thomas, “accidentally” omitting the hundreds of thousands in non-investment income that came to his wife from her work with conservative organizations. In his speech to the Federalist Society, he suggested that critics were endangering freedom by undermining his authority, and by extension, the authority of the court. He and his wife are focuses on “defending liberty”.
It would be particularly appropos to Justice Thomas that I am using the famous quote by Deep Throat in the Watergate affair; FOLLOW THE MONEY.
From yesterday..”Reset, not Recall”.
When is it appropriate to start calling in airstrikes replete with a deck of the most wanted bankerster cards? – you know, spread the propoganda. Then we go after the complicit corporate media – after all, ‘When In Rome’
I look at this two ways. The Times has made something of a specialty of belatedly printing as cutting edge insight what has been discussed elsewhere for an age and still getting it mostly wrong. I see Norris’ article has another example of this.
I have to say my tolerance for such antics has grown thin. The housing bubble burst 3 1/2 years ago, the meltdown happened 2 1/2 years ago. Norris is a financial reporter with great sources and resources. He has no excuse for continuing to be so willfully ignorant about those events.
This brings me to my other point. As I often say, kleptocracy is a system. One of its components is a complicit media whose job it is to distract and propagandize the rubes, i.e. us. One of the mistakes we make is in thinking that Norris has any interest in getting it right. The “no one could have known” narrative is transparently false. But what makes narratives powerful is their repetition, not their truth. If you look at it this way, Norris’ incomprehensible ignorance becomes quite comprehensible.
some of these personalities are “perfectly possessed” by demonic forces that defy easy description, even therianthropic imagery distorts rather than illuminates.
I think Cormac McCarthy in THE ROAD does a good job of presenting a series of metaphors that evoke the reality of this possession.
too true-we knew, at least 7 years prior:
http://www.sourcewatch.org/index.php?title=Project_for_the_New_American_Century
the same old same players and agendas, pillaging South and Central America, Middle-East, going back to Nixon and Birchers…
what a surprise to see them, having largely multi-nationaled, pillage here..
What a powerfully true set of paragraphs, Yves.
What gets me is how similar the Obama Administration has been to the Clinton administration. You can predict their reactions and policy before it even happens; it mirrors Clinton’s so much. Now obviously, they share the same people. But the reactions have been this attitude “this is 1994 again, we won’t do the same things we did again”. Yet they have done it exactly the same way.
You ask, basically: “why? why? why weren’t better steps taken at the time the crisis originally presented itself.”
Your title tells it all : Whocouldanode?
Paulson was fully aware that this would be happening [financial meltdown] and what were the causes, by going along with the deception that no one could have expected this, Paulson gave himself permission to take actions that would protect the banks from their own devious mistakes. Because ‘how could he a node that they caused all this through semi-criminality?’ Only someone on the inside – like Paulson himself couldanode.
They didn’t do a forensic analysis apparently because they didn’t want to get their friends in trouble. The new administration, sadly, fits the complaints that were warned – naive. The current leader believed what he was being told by those who created, promoted and allowed this mess. And as a result – it has become HIS problem. Sadly we were all sold a bill of goods. Thank God for bloggers or we would never-ever be getting to the bottom of it.
Thank God for Yves Smith.
I should clarify.
Whenever I say this-or-that person ________________… blah, blah, blah. I mean to also add IMO. I only know my own perspective, which was looking from a completely different angle from most people. So I cannot assume that because it seemed apparent to me, means it was actually fact. After all, lying eyes, etc. … blah, blah, blah.
I should add again as a reminder of the complex nature of the situation, that at the time the crisis occurred I was ambivalent because, although I knew it wasn’t going to fix a thing, it was the only possible way to bring the disaster out of the back rooms and into the public forum.
Until something, anything was signed, the public had no voice in the debate. Our voice is with congress. As it now it coming out, our unelected leaders knew in 2005 that this was coming and chose to keep it out of the public view for fear there was already no workable solution and better just let the chips fall where may.[See: http://www.bloomberg.com/news/2011-01-14/fed-saw-housing-bubble-in-2005-failed-to-alter-policy-of-rate-increases.html%5D
That is where conflict of interest and ideology comes in. Only those beholden to the semi-criminals [I use that term tactfully] who had caused the flaws in the system, who had been acting to benefit from said flaws, would have decided that there were no workable solutions.
There were lots of workable solutions – only one palatable to themselves. TBTF. They were hoping that whatever solution would come could support the TBTFs until such time that they had worked their toxic trashets off the balance sheets – with know one knowing that they had caused this themselves… no harm no foul. After all: Whocouldanode?
Well now, it seems like lots of them know’d. What does that even mean for the gestalt? Are people starting to get the bigger picture?
Whist watching tsumani news and flipping, I saw a wonderful ad for JP Morgan Chase. It features a large book, with pop up housing, businesses, main streets, and sings the praises of JP Morgan Chase’s steadfastness in helping the economy recover.
Turn the page – close the book. Seems everybody is just anxious to have us turn the page.
I carefully observe and listen now as our leaders speak (always have). I just heard Obama discussing people having the OPPORTUNITY to get an education, and the OPPORTUNITY to have a job, etc. About our children’s HOPES and future. All ephemeral. Launguage illusion.
Also, he spoke of investigating the oil markets and exploitation. Hmmm. Well, I just saw Mark Fisher at 12:27 EST, famed oil trader, speak on CNBC, announcing for the audience, THE MARKET TRADING HAS NO RELATIONSHIP to SUPPLY AND DEMAND. He discusses as much the same for the 80s, 90s, and all you had to do was buy puts, and you made a fortune. If you look him up on google, you’ll see he predicts cataclysm in the markets.
For Godssake. when the exploitation is openly discussed on TV, why can’t anyone make a case and halt the entirely lawless market?
The Banksters are worse than you imagine.
Let’s see what the Left says about them.
http://www.marxists.org/archive/lenin/works/1916/imp-hsc/
Short version: Finance Capitalists are the reason behind Imperialism, Globalization, and War.
Let’s see what the Right (Libertarians) say about them.
http://blog.mises.org/3089/wall-street-banks-and-american-foreign-policy/
Short version: Finance Capitalists are the reason behind Imperialism, Big Government, Deficits, and War.
Non-ideological guy who actually fought in our wars.
http://en.wikipedia.org/wiki/War_Is_a_Racket
Non-ideological dude on the economic end of things.
http://www.economichitman.com/
And don’t forget who war threatens. It’s not just brown people. It’s us.
http://www.fff.org/freedom/0893e.asp
That’s got it Cranky.
In life’s poker game we leverage a little asset we call our lives (past, present, and future), to buy chips from the house. Never stopping to question who pays the dealer or writes the rules.
Perhaps we need to consider Kenny Rogers..”…Know when to alk away, and know when to run.”
Mr. Rogers may seem an odd choice of authority, but it has merit to me. We need to stop playing against the house!
I think Greed is the most powerful of all the emotions, it effortlessly trumps all others. we are shocked by the lack of morals of an elite that would hurt so many people. In doing so we have forgotten the piles of Ivory tusks,the denuded carcasses of baby seals, the generations of peoples reduced to lives of misery as slaves,blood diamonds,sexual slavery. Morality is a luxury discussed by philosophers.
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