A lot of people seem to be worrying about American bank oligarchs and how to break their political power. Bill Moyers has obviously been thinking about these issues for a long time, and he invited me to come by yesterday to talk more about how we got into this situation and how we might – if we are very lucky – get out with our economy more or less intact.
The interview is scheduled to run Friday evening (tonight) at the beginning of his PBS show; the segment should also be on his website after 10pm – and a preview/summary is already posted on Bill’s site. Comments welcome, as always.
Hopefully, there will be more such discussions, so tell me what ideas need additional explanation or substantiation to convince people on the depth of our predicament and to further the debate regarding a real exit strategy.
The Baseline Scenario 
Hi Simon,
I just jumped onto Baseline Scenario since seeing you speak earlier this week at MIT (a presentation that was, in my opinion, fantastic, though it did lead me to one question – did you REALLY agree so much with Martin Feldstein?)
As you look for feedback in arming yourself to present your perspective in media outlets, I wonder if you find it worthwhile to tell a more historical political economic narrative here.
For example, in your talk earlier this week, you made a (well-chosen and funny yet) self-effacing joke about how all this talk about banking elites sounds vaguely conspiracist. But if you give a wider frame to where the power of this sector stems from – e.g., how much GDP growth in the US has come to stem from financial services and real estate, and then connecting that at least conceptually in terms of its associated growth and governmental paradigms to the failure of real wages to rise here – then I think it sounds less conspiracist and more like an overall political economic paradigm that has run its course. It may facilitate greater identification from the average viewer or reader who may not have dug into these issues to connect the trends in their own working lives to this broader power structure that now threatens to block reform.
I think the history also helps to make the conceptual connection you’re expressing between the US and what you’ve seen in the developing world. That is to say, by illustrating the growing role of finance and real estate in the economy since around the 70s, one can have a better sense of why what is the largest and to some most sophisticated economy in the world can nevertheless diplay severe blockages and bottlenecks that would normally be associated with ‘underdeveloped’ societies and their institutions.
I’d be interested to know if others think this contributes constructively to the story Simon has here, as well as whether it’s a feasible suggestion for discussion in a mass media format.
It is time for banks to behave like banks
By Philip Stephens
Published: February 9 2009 20:58 | Last updated: February 9 2009 20:58
No, Britain’s bankers should not pay themselves extravagant bonuses. Not this year, not next, nor the years (plural) after that. That some of these erstwhile titans believe otherwise is depressing evidence of how remote they have become from the world that lies beyond the deflated bubble of the country’s financial services industry.
http://www.ft.com/cms/s/0/d23e031c-f6ea-11dd-8a1f-0000779fd2ac.html
A similar discussion is underway in UK but has mainly been in the compensation area. However, in the last few days with the resignation of Sir James Crosby (vice chairman of the FSA and ex CEO of HBOS) and the bank chiefs being up before the Treasury Select Committee the incestuous relationship between the bankers and the politicians is starting to surface.
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/02/why_crosby_resigned.html
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/02/daniels_sacrifices_bonus.html
http://ftalphaville.ft.com/blog/2009/02/13/52446/hbust/
“so tell me what ideas need additional explanation or substantiation to convince people on the depth of our predicament and to further the debate regarding a real exit strategy”
Hi Simon, I think you are doing an immensely valuable job in raising awareness about the depth of the predicament but I think you can do still more to further the debate regarding a real exit strategy.
“Blamestorming”, for example, will generate comments from others who want to vent their anger and frustration, but I am not sure where it takes us.
As we move from Contentment to Denial to Confusion and hopefully someday towards Renewal, the question for each of us as individuals is “what can we do about the economic crisis?” I feel one answer is to seek to ask better questions. Not brainstorming who is to blame, but brainstorming what question we should be asking.
Asking better questions is hugely important. The US might not be in quite as much of a mess in Iraq if, post 9/11, it had really wanted to understand “what can we learn from this?” rather than just “how can we get even?” I am getting an uneasy sense that it is more the latter question (i.e. how can we get even with these powerful bankers) you are pursuing here.
The question for each of us, once again, is not what can politicians and economists do to fix the global economy but what can I do. If, for example, as I have argued here before, our current problems stem first from collective mindlessness of the risks of the subprime derivatives game and second from reluctance to own up once problems emerge, then we can each contribute in our own discussions and comments by helping to make it safer to talk.
I am not sure that the question “how can we be sure the Obama administration takes a strong-enough line with the banking oligarchy?” lowers the stakes for the banking fraternity or makes it easier for them to open up about the problems that they ought better than anyone to understand and know how to fix.
In short, we need more than debate about a real exit strategy, we need a problem-solving dialogue that encourages the frank expression of dissimilar views. That is what I would like to see developing here.
I heard Mr. Johnson speak with Bill a few minutes ago on PBS. I fear the worst. Mr. Johnson said he was keeping his optimism for the moment, that the new administration would not give in to the banks and bankers. There seems such a slight likelihood of stopping the Geithner bailout.
Here in Canada, where I live, the situation will likely be worse. The government in its new budget, and before, is giving hundreds of billions to the banks, and promising more. The official opposition party is not opposing this step, as eager to please Bay Street as the government.
Our finance minister has already said that some of this money will be given to U.S. institutions. He has also warned that Canada’s recovery will largely depend on the degree of recovery achieved by the U.S.
If Mr. Johnson’s predictions prove correct, that means a Lost Decade for Americans and at least double that for Canadians, who already are losing their jobs at an ever increasing rate.
I find the situation agonizing.
How can the link between powerfull financial interests and politics be broken? Are term limits the answer?
I am not going to act as if I know the details behind much of the economics, but then again, I do not believe most of the economists are actually accurate in their assessment of the current situation. I have to strongly agree with Simon Johnson in that we must break apart these institutions. To be “real” with this, most Americans either: do not care, are too preoccupied with two jobs, or, they can’t follow nor predict the future (which I believe is going to be much worse than most of my fellow 9-5’s). How do we spread this information. Community action it seems is the only action that is never heard, their are no politicians at our Dunn Bros. meetings. How do we spread the word when the word is Bipartisanship? What should the transparency look and feel like from the administration. I watch important figures like Simon Johnson on great channels like PBS and I wish they could be the representatives, representing myself and all the others. How do we bypass bipartisanship and seek out those who are looking for more than reelection?
Dear Simon:
Tonight you spoke as if a major driver of the problem is that Treasury is running the show and Treasury has no experience with these kinds of events. But both Geithner and Summers led international efforts (for better or for worse) to deal with all the major international financial crises in the late 90s? They are running the show now, and they certainly can’t be said to be ignorant about analogous developing-country experiences, can they?
Looking forward to your response.
Best,
Aaron
A quick follow up from the last comment: I do not mean to accuse all members of House and Senate of complicating matters. I believe we must break up the media along with the banking management. I am simply seeking out those who can speak without looking side to side, reading preplanned lines, and explain to the American public the situation without one utterance of the word or conveyance of bipartisanship. This is the word of 2009, the lost year.
Excellent interview with Bill Moyers, the President hopefully will get to see it too.
The solution to the financial crisis is to end the LEADERSHIP crisis. REAL leaders would never let happen to the people what the gutless, incompetent, lying, self-promoting, and greedy little weenies we now have in leadership positions (not only in the finance industry) are causing to happen to people. They prove every day they are not leaders. Get rid of the people in the financial industry who are in the leadership positions making/approving the final decisions that are, and have been, causing the problems, whether as arrogant Chairs, CEOs, or just flat-out puppets for those who pull their strings, and replace them with people who give a damn, know what to do, are sincere about doing what is right for all people, and have the guts to do it, in other words, REAL leaders, and you will see the needed change begin immediately. This is not a complicated situation, on the contrary, it is disgustingly simple and obvious. There are plenty of intelligent people who can replace those who should be removed. You, Simon, seem to be one of them, and there are many others. REAL leaders always put the people first; that is why they are called “Leaders”.
Thinking ahead, is it possible to conduct a talent search of young people who could take over the leadership of our nationalized banks, who would be loyal to the American People, the owners of these nationalized banks? It’s clear the old guard cannot be trusted; it is clear they haven’t a clue how un-American they have become. It’s that or the possibility of violence against bankers when the American people finally wake up to how they have been played.
By insisting upon a large percentage of female banking leaders in the future, we may naturally have a more conservative (i.e., conserving of the nation’s wealth) and a less criminal leadership. For example, women have been placed in charge of village accounts in the developing world because women better protect the village treasury.
Finally, is there a possibility that Pres. Obama (or his election finances) is on the payroll of the banks? Your point that the limits imposed by him on bank salaries is worthless when bank stock bonuses are unlimited was well-taken, and it is not generally appreciated by the American public. Our leader wears no clothes. They seem to be held by bankers. He speaks impotent words.
Thank you for your candor and appearance on Moyers’ show. May you be safe in your efforts.
Our financial problem is like a receipe with various ingredients. One part is the money to politicians like NY Senator Schumer, aka the Wall Street senator; one part ideology of Republicans like former Senator Phil Graham and Fed chairman Alan Greenspan who believe no regulation is the best regulation; another portion is corporate structures that thrawt shareholder activity and accountability; and the last portion is human greed as displayed by the pay packages that bank executives believe they have a right to.
Citizens can speak up and vote against the first two ingredients. Shareholders can fight against the latter two. But at this moment, that is closing the barn door after the horse has left.
To restablize our economy I believe we must spend as much money as possible on projects that will both repair and prepair our country for next 25-50 years. And we must take Citibank, BofA, AIG, and other oversized financial creatures and break them into parts with new shareholders and new management.
We must pass new regualtions on hedge funds, credit rating agencies, mortgage companies and all businesses interacting with the financial health of our economy and country so every transaction is understood and public.
It will not be easy because there is a huge amount of money in the hands of people who will spread some of it around to politicans, think tanks, foundations, and talking heads to confuse and muddy the convesation.
Queen Amang the Heathner:
Simon read tsarion,
I was very impressed by Simon Johnson’s comments about the fact that insolvent banks need to NOT get bail out money WITHOUT an accounting of their losses, and a plan to move them to solvency. How is it that we are being “sold” on the idea that good money has to be spent to go after “bad” so that it is put down the proverbial rathole. I worked for the Senate Banking committee staff, as an intern, in 1980, and, later, in 1991-92, sat through the hearings of Sen. McCain, and Sen. Riegle and the other Keating Five members, regarding how they ran intererence to stop the savings & loans from being regulated to prevent losses. So here is my question: are the Timothy Geitner’s of the world afraid that, when we value the Credit Default Swap assets on the portfolio, we find them to be essentially worthless, and end up with a massive bank insolvency problem, and that in lieu of this type of stress testing and transparency, he wants to keep the discretion to dole out the money to these banks, without having a firm set of criteria for getting them from insolvency to solvency, and without an endgame? I wonder. I think that nationalizing those banks that are insolvent is the “only choice” and, by “nationalization,” I mean to insure that they do not get bail out money WITHOUT a guarantee that the U.S. Government has an equity stake in them, and a control position. I loved Bernie Sanders’ comments about Goldman, Sachs. Timothy Geithner’s answer verged on the convoluted and incoherent. I am told, in listening to prominent economists, on both the left and right, that having the accounting, and stress test, and accountability, and having it sooner, rather than later, and having the pre-Dec. 16, 2000 regulations back in effect in regard to credit swap guarantees and various other types of banking regulations back in effect, sooner rather than later, will save us orders of magnitude in terms of the cost of the bailout. So what are we waiting for. Let’s get it done quick and get it done right, the first time, so we do not have to bail out the banks over and over again.
Patrick Levine Rose (East Lansing, MI)
Simon, that was an excellent interview. We are indeed at a pivotal moment, and my gut also tells me the team will fumble the ball.
I suspect that the cancer at the core of American democracy that you describe could have been in place for longer than most realize, because most did not look behind the charade of fake prosperity – the credit-fueled illusion that the political and financial establishment was at such pains to maintain.
The serial bubbles of the last several years were no coincidence, nor was the replacement of the master bubble blower (Greenspan) once it was clear to the puppetmasters that he could no longer deliver the next, bigger bubble that they had ordered.
In my experience, nothing about large sums of money being transacted is ever a coincidence.
Simon Johnson’s comments on Moyers reinforce Lewis Lapham’s similar observations in the current issue of Harper’s Magazine concerning the inordinate and self-serving role of privileged elites. This oligarchic group’s Washington/Wall Street relationship serves to protect powerful financial economic interests in the United States in apparent exchange of hefty campaign contributions to key members of Congress. Economists Michael Hudson,Joseph Stiglitz, and Paul Krugman, also generally share, in varying degree, much the same conclusion. The present economic crisis obviously cries out for less moderate and more radically-oriented action than conventional wisdom is prepared to accept at this point in time.
Lindsay: “Our finance minister has already said that some of this money will be given to U.S. institutions.” What? I also live in Canada and I find that astonishing. Where did you read that?
Your interview on Moyer’s show confirmed my worst suspicions.
Krugman has been saying similar things about Geithner’s “Lemon Socialism” on his NY Times Blog “The Conscience of a Conservative”. I made my own entry in which I told him that he needs to hold a press conference on the steps of Capitol in Washington. The “moderator” of his blog censored my entire entry. You can draw your own conclusions from that.
Would you be exposing yourself to unacceptable risks if you were to “go public big-time” and be involved in this kind of public protest, given that your credentials (in this situation) are so credible?
The technical problem to think about is how to get the banks into receivership, get them re-scaled to a safer size, and get to work on re-working mortgages that are going into default, all at the same time. Mortgage default is the root of the economic crisis, so we are overdue on addressing this. Mortgage relief would do more to restore confidence than the new stimulus package can. Receivership, re-sizing, and mortgage relief need to be simultaneous pieces of the banking reform puzzle.
If the reality of our financial institution’s state of health is hidden in special purpose vehicles, isn’t it about time that this method of concealment is disallowed by GAP rules? Realizing the events that were taking place from low interest rates, to the so called “no verification” of income loans that were written, to the rating, package and sale of mortgage back securities, one could anticipate that our country was headed for disaster. Now that we are in this disaster, wouldn’t it be prudent for our government to look back to the events of September 2007, take a snap shot, of the real and true balance sheet of each of the entities that were selected to be given the initial TARP money, and if any of these entities were indeed not solvent, allow this to be made public, and admit the truth, and let our country get on with the business of selling off the pieces of these entities to the highest bidders? The way that the current policy is heading, we are leading towards a monopolistic financial system, because, the very firms who were not involved in making this disaster are being penalized, and the firms that appear to be the biggest players in making this disaster, are orchestrating their own salvation.
It is important to keep in mind that the leaders of the investment banks that brought us our current economic crisis probably have a great percentage of their wealth in their own companies stock.
If anyone were able to go back and take a snapshot of the health of each of the banks that were given the initial 350billion dollars of TARP money, and if it were found that instead of being healthy, that one or several of these institutions were actually insolvent, this would possibly give pause to the machine that is proceeding to make the most powerful banks more powerful.
Get your Credit Default Swaptions here-5 cents on the dollar! The derivative market may have started as a real and maybe useful financial gambit but it morphed into something like a bucket shop with traders placing bets on credit incidents and pocketing their commissions and bonus payments while the company went bankrupt. What is so mysterious about this? People have been known to take advantage in the past. Jerry
Simon,
I was speaking with a friend over a year ago and it was then I made the comment predicting our futures in the food lines of the depression era. I did not think it would come this quick.
Along with many who have spoken I too have survived the 80’s, watched while CEO’s walked away from broken companies only to go on a steal pensions from another company. Our lawmakers sat on the steel industry pension problem doing nothing for 10 years until the airlines came along. This list of industry is long and not solely banking related. The banks garner the largest attention because we all (must) use them directly.
While I too have hope to get through this I find it slipping away daily. Not because I do not believe Obama. I do believe he wants to fix this this problem but the problem is well established and that establishment is a group of individuals who have not been mentioned. Our legal society.
How is it that this group of individuals, those who hold law degrees, are policed only by their peers? I am not only referring to the typical local attorney, I refer to all LAWmakers, because that is exactly what they all do.
Each branch of our government, judicial, legislative, and executive was set up to provide checks and balances against each other yet each of those offices abide by a set a rules written by and for themselves.
Making matters worse is the way our laws are written by our lawmakers. It is no wonder the peanut and ponzi men go free in spite of all the evidence brought forward by well intentioned people. I am sure the FDA and SEC would have done more but if the law is ambiguous and left open for interpretation it is done so with intent when written. As a side note – the word evidence is meaningless. Black’s 8th edition has well over 4 pages to define this word. (I should peak at the word intent but my guess is another 4 pages.) How many regular (non legally trained) citizens know this? Very few, and the ones who have learned have learned far more than they want. The system is riddled with abuse from the individual state district court room to the executive offices and there is no real rule of law without money to argue distorted issues.
My intent in not single out and blame one group or section of our society or economy. There is far too much wrong across the board to blame on solely on ideology. (Although it would be nice to not hear.) Actually I believe most of the talk is really hypocritical anyway and you really have to pay attention to get the information you need. Often you never get the complete story. That talk starts before the media gets their hands and by default the spin begins.
I do not believe this is forum for me to detail my personal experience that leads me to my opinion here, but suffice to say I am amazed at the ease in which this segment of our society has been able to keep themselves insulated from any form worthwhile regulation. Nor do I need to repeat what others have already mentioned concerning self interest, except to say self interest can be self interest on behalf of the public. However it is also true the pensions and salary’s in most of these positions are certainly a very nice incentive want to stay and serve on behalf of us.
I would be curious to know the percentage of law degrees to the positions in all these offices who hold so much power with the potential to abuse.
I enjoyed the show and appreciate your dedication and access to your website. We have to keep at this and keep talking and thinking of how to do things differently. I have chosen to accept whatever happens with this current crises with some grace. Not because I like it. It stinks but the stink old and strong. I do not believe the depth of this crisis will be known in my lifetime and I am only 48.
As someone previously stated, heads continue to turn and blame the other side. Personally I hold all lawmakers, government lawyers, corporate raiders and corporate lawyers responsible for this mess. It is the institution we have voted in on both sides of the fence.
Thank you and keep speaking up with clarity.
I, too, wondered if Obama was watching. He’s not keeping himself in an ivory tower mode so it is possible that he was. I hope so.
When I saw Obama’s team of financial gurus, I was so disappointed. I really thought he was different.
Teddy Roosevelt is the Roosevelt he should be emulating when it comes to Wall Street and the banks.
Oh,the way easy money was thrown at the problem by Paulson should be investigated and prosecutions should follow. I fill out more paperwork when I buy a car than those guys had to do.
I want to thank you Dr. Johnson for helping to promote greater understanding of a key political obstacle to resolving the US banking crisis. The stress tests will probably show most of the big banks will need more capital to get through a long-lasting, severe recession. Given compensation caps and other strings attached, however, I imagine senior management at the big banks will do everything to resist this reality. From a personal standpoint, they know they would probably do better financially by hunkering down and nursing themselves back into better health slowly. That would allow them to hang around and return to paying themselves lavish amounts when the economy recovered. In his analysis, Dr. Johnson has suggested that one way to challenge this “oligarchy” is by pitting them against allies like private-equity firms. Private-equity firms with capital and a track record in financial company rehabilitations could purchase banks that are taken into receivership by the FDIC. If I understand correctly, ?other govt authorities? would ensure that banks that are “too big to fail” be split up under ?new? anti-trust legislation. This proposal protects taxpayer interests and ensures banks are sufficiently capitalized to provide credit to creditworthy borrowers, helping to put the US economy back on its feet. An important point, however, that Dr. Johnson has not articulated precisely is that private-equity firms would be huge beneficiaries of this scheme. In addition to his role at MIT, Dr. Simon is a senior fellow at the Peterson Institute for International Economics, which is bankrolled by Peter G. Peterson, the chairman of private-equity powerhouse Blackstone Group. To my mind, this is a relationship that Dr. Simon should disclose on this website and when appearing on PBS/NPR/TPM or before offering testimony before congress. I’m not an expert on financial system meltdowns, nor have I worked at the IMF, so I defer to Dr. Johnson’s judgment on banking system matters, but I think conflicts of interest can encourage even experts to tilt their advice in ways that favor their benefactors. That said, I am not impugning Dr. Johnson for his proposals and the work he is doing to educate policymakers, congress, and the general public about some of the behind-the-scene maneuvering that could thwart Geithner’s attempts to restore the banking system to health quickly enough to ensure the stimulus package does what it is intended to do and returns the US economy to growth much faster than would otherwise be the case.
Hello Simon, excellent interview on Bill Moyer’s tonight. I would like to hear your thoughts on the following. It seems to me that the U.S. Congress, over the last 20 years, has much to answer for this financial mess we find ourselves in. It seems to me that much of this can be explained in the context of deregulation by the U.S. Congress. Both Democrats and Republicans pursued deregation as far back as the Carter administration. We had some deregulations such as airlines and telephone companies that seem to have worked. Others such as energy (i.e. Enron) and this financial mess have been disasters. It seems that we had many regulations from the 1930s that were in place until the 1990s. You mentioned that Congress specifically prevented any oversight or regulation of Credit Default Swaps in December 2000. Can you explain what Congress was thinking when it repealed in 1999 the Glass-Steagall Act of 1933 and any other banking deregulation actions by Congress in the last 20 or 30 years? Although failure of subprime mortgages and falling home prices is where this “started”, would commercial banks have remained solvent if the regulations of the 1930s had been left in place? Is it possible that repeal of the Glass-Steagall Act of 1933 actually helped “fund” the subprime mortgages? Thanks for your thoughts on these questions.
Simon I agree with your views, however, taking over the banks would wipe out shareholder value and take down pension funds and municipalities across the globe.
The Oligarch Master Plan had made sure their destruction will take us all down.
The repeal of Glass-Stegall was the beginning of the end–the old safe bank that so many families bought shares in to provide income for their family was turned into a different creature–a casino whose management had no regard for the consequence of their risk taking to put it politely.
Surely private-equity firms would benefit, but at least the architects of the whole disaster wouldn’t be left to benefit, and further strengthen what eventually may be a monopoly.
Although, absolutely, disclosure of conflicts of interest is important, when looking at a picture regardless of who paints it, the picture that Dr. Johnson paints is one that looks just verses the current direction of TARP…proping up “possibly” several insolvent institutions and we won’t know the truth until the stress tests are done, if they are ever done.
We,the peons, are surely screwed.
This financial meltdown is a result of misallocation of capital over a long period of time made possible only by the exploits of the Federal Reserve Bank. Without addressing the core issue of the role of the Federal Reserve Bank in the current crisis no number of bailouts will be adequate to save the US economy, now or in the future. The Federal Reserve Bank ought to be abolished, the gold standard enacted, and members of Congress ought to pass a test on monetary history or be deemed imeligible to hold office.
HEAR-HEAR!!!
Dear Simon, Thank you for a very frank and helpful conversation full of information for all of us across the U.S. I hope and pray that President Obama was watching the Bill Moyer’s interview with you tonight Simon and will honestly look into all that you spoke about regarding the banks and U.S. economy!!
This economic down-turn began for me in 2004 when my State of Oregon position was eliminated due to budget cuts. Oregon, just as California has been heading toward crisis much before the rest of the nation began yelling about it happening in their area of the country.
What will tax cuts in the Stimulus Plan do to help those of us unemployed far beyond limits of our unemployment compensation have been depleted? I really wonder whether we are counted when the government unemployment statistics are accumulated and percentages are posted in the news. How would anyone know about us? And I keep wondering just what is the real income of the often mentioned “middle class”. Does anyone really know? I don’t hear any figures mentioned in the media. I guess I really do not understand the “game”, but I am determined to learn.
I am grateful for your clear economic explanations and the bravery of Bill Moyers to invite guests such as you on his PBS program. Americans need to be educated about this situation and the possible pending crisis. We need to be prepared in order to take care of our families and our future!! I think we are strong enough to do most anything if we know what we may be facing so we can make plans.
Thank you!!!
Iceland Style ? This is not my commentary, but it if weren’t true would be entertaining, http://www.youtube.com/watch?v=42IUg2NXwoU
How can we get your voice heard so that we have a chance of getting this economy back on track? Could you hand deliver this conversation to the White House? How can we put pressure on the new president to do the right thing when he has surrounded himself with former bankers who with the cooperation with members of Congress, created this mess?
Sincerely
elizabeth shipley
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)
I could only wish our president would read more Thomas Jefferson in addition to his adulation for Abraham Lincoln. That said, shifting paradigms in this century is the necessity and that is never easy for the masses, be they bankers or just regular unemployed folk. Thank you for your voice!
The bottom line is that we all are to blame for the current malaise we find ourselves in.
During the boom cycles we all shop it up, party it up , greed it up; and then when the inevitable bust cycle returns everyone gets “mad as hell and I’m not going to take it anymore”.
In a perfect world, we would correct our problems during the ‘good’ years, and we would then be better prepared to weather the downturns. But by being selfish, and lacking the necessary foresight, we forever doom ourselves to repeating the same mistakes of yesteryear.
History books hold the blueprints for better futures. Kondratieff theory and Martin Armstrong’s study of economic cycles accurately foretold this ‘winter of our discontent’. Inevitably Spring will return after the purge of Winter, the question remains as to what crops we will sow in the upcoming Year.
Dan
Simon – on one hand you and others indicate that we need the bailout to increase lending within the financial system and to re-lubrictae the credit markets, however it would also appear that the mental models of the banking culture have not changed substantially. The issue here is one of morals. How can the leaders of the banks be talking about ‘awards’ / bonuses when the system has been broken by the existing management. This is morally reprehensible. However – what is the solution? Who will replace the managers of the banks when they are removed? Surely it cannot be government employees? And it surely cannot be the subordinates of those who will be replaced.
So how about this as a solution – lets replace the management with exceptionally bright, eager, enthusiastic and untainted talent – which by chance happen to be hundreds if not thousands of MBA graduates who will be leaving school this year without the prospects of employment. What do you think? Do you think their Professors could also provide oversight and advice?
Are there reliable banks that do not give huge bonuses? If so, please publish that list and I will move my account. If we vote with our feet, maybe the banks will get the message.
Volcker seems to be on the right track about getting the genie back into the bottle, by re-imposing Glass Steagall, the Depression-era legislation that separated commercial banking from investment banking. This may be the best way to start re-sizing banks.
Simon
Economist, I am not; I appreciate, however, your vivid comments on this international wealth collapse. It fascinates me that a person of your accumen seem, not to be acknowledged by the reighning powers; Nor, is seems, is your knowledge tapped into for future global solution seeking strategies, a vital – missing – aspect of this new global transformation. We need something Icelandic: People will CREATE a new system. Period. Admirable.
The G7’s and the G-nths are not cutting the grade for this. Solutions will have to be found further down on the ground – globally – where real money is made by real people – where honest business is conducted by people with integrity. The G’s, with their international leadership void and their lack of vision for his type of global solution seeking strategy – are too close to the money and too close to power – and its perceived loss to create something new; We will defer to protect – at any cost… Screw the rest. This massive problem of personal arrogance, the vast and unchecked assumption of personal power, its lack of integrity, responsibility and of mass manipulation – socio-economic engineering (possibly a legacy of Greenspan) forms part of what has dumped international economic delivery systems into a deep and encompassing economic quagmire, spanning centuries – making its unmistakable debut on the world stage at 9/11.
On the other hand, it is uplifting to hear voices of strength and integrity, like your own; We are going to need it more and more as time goes on and the calculations gets done – in $$ quadrillions.
Considering all things, the current problem with the financial system is a lack of rules for the game as currently constituted. Further, since the repeal of Glass-Stegall, there has been ever increasing abuse of the sheds of rules that currently govern the game. Sophie Major and Alex, above, have got it right. But we can’t go backward. The Fed is a useful entity and has been a prosperity supportive construct for most of its existence. Going back on the gold standard is not reasonable although, a test of our politicians’ understanding of financial economics and its history as a qualification and requirement for holding office would be a plus, I must admit.
We live in a political economy. The concept is indivisible. Get used to it. What we must do is ensure that the political side is oriented toward egalitarian access and unbiased evaluation, not ole boy networks and partial reviews (wink, wink). Acting responsibly and transparently, our politicians will enact good laws—good rules for the game. Our market system, when operating under enforceable rules that are well and truly enforced will deliver prosperity to the most of us.
The choosing of men already associated with the problem to work on the problem is inevitable. We wouldn’t want unassociated-s, no matter how expert in another discipline, to take the time to attempt learning and understanding such a knotty problem of such a sophisticated system and then attempt to turn the correct knobs to set things right. That would be akin to allowing an acclaimed nuclear physicist perform an operation on the patient of a neurosurgeon just because you don’t trust medical doctors who are members of the AMA. (The converse of that analogy could be disastrous for us all!)
We need strong new rules, strong enforcement and transparent standards of ethics. We need governments providing support to needy individuals in our society and providing capital to support or initiate projects that private enterprise just can’t be organized sufficiently to support for profit.
You really nailed it regarding “American bank oligarchs”. Congress won’t admit it because they’ll be biting the hand that feeds them.
Main Street America cannot “afford” to back down on pressuring both their political and financial institutions. Failing to do so, will burden you and children for decades to come.
Mr. Johnson. Thank you very much for laying out your perspectives relative to the banking oligarchs. I am certain that you scared an awful lot of folks, which may not be a bad thing in the end.
What I see missing in this debate are insurances to the general public that, should these “evil bankers” (my choice of words, not yours) do anything in the future to hurt us (by “us” I mean the economy) that they will do some serious jail time. I know, this notion sounds both simplistic and barbaric, but I believe it gives some people a greater sense of security when purchasing home, for example. Unless I am mistaken, thus far the only dis-incentive for bankers to not screw us, is making certain they can’t make more $500,000 per year–and that only applies to the TARP-takers.
What’s wrong with standardizing what bankers/mortgage brokers, can charge by way of interest–and other fees- given one’s ability to pay? That is to say, why shouldn’t everyone who has a, say, 720 credit score, no debt and makes $100,000 per year be given the exact same terms on a loan.
And if I am not given my “fair” rate, then those perps can be prosecuted. Personally, it would give me greater confidence to purchase, and confidence seems to be what many economist agree is lacking in this economy…..
I think it unfortunate that Mr. Moyers did not pose any hardball questions to Simon about the role that the IMF and World Bank play in the current concentration of wealth and power.
If an Oligarchy is the antithesis of a Democracy, assuming that Democracy is preferential to an Oligarchy, then why create a charter that not only supports the status quo but acts as an enabler?
Neither Geithner nor any such predecessor will oppose the Oligarchies. And Simon, I think we both understand the larger agenda. Do we not?
Simon:
From a macroeconomic perspective, why are few people discussing the current liquidity trap which is being exacerbated by consolidation in the financial sector?
The drastic reduction in turnover of the dollar and other major currencies cannot be offset by merely increasing the money supply. With US treasury securities already trading at historically low interest rates, adding to the supply of money will do little more than pad cash reserves at financial institutions. Injecting capital directly into the financial sector will have the same effect, and forcing the banks to lend or re-finance capital ignores the underlying problems.
World and national banks face little or no regional pressure, thus are less likely to lend in tough economic times. Propping up said banks with taxpayer money makes no sense, and, in my opinion, will deepen and lengthen the recession. A forced reorganization and decentralization of the big financial institutions is required for this country’s and the world’s long-term economic health.
Simon,
One thing I’d like to hear you expand on is your references to how the U.S. has found itself in a situation similar to that of other emerging markets’ crises.
It’s sobering to hear that the U.S. could fall victim to a type of crisis normally associated with emerging markets, but it’s also encouraging to hear that you, among others, have seen similar patterns elsewhere.
Dear Simon Johnson:
My husband and I saw you on Bill Moyer’s last night and were we impressed! We followed every sylllable, and have been relaying your brilliant insights re: the banking oligarchy to others who were not so fortunate as to catch your interview.
Thanks for the very helpful information on the economic challenge the U.S. is facing right now. (And the world, too.)
Best wishes,
Sharon Slaton Howell
Farragut, TN
Hi Simon. I enjoyed the interview very much.
I think the language “scaled-up FDIC intervention” is politically sellable. Can you tell us more about your ideas on how you’d prevent (via incentive systems or the like) the private equity guys from becoming the next oligarchs? And repeating the same thing? Anti-trust regulation is good but what else did you have in mind?
A very good job. However, doesn’t the FDIC usually have takers for most of the assets when they swoop in? I just don’t see the FDIC being able to handle this in their normal manner. Also, I’m just not sure that it won’t end up being called nationalization by the bankers and shareholders anyway. In other words, a fancy FDIC = Nationalization,and will be subject to similar objections.
Amazing that a mild-mannered Baptist writer and MIT prof could get me so upset. No one else has provided the details of the financial law-breaking behind history’s greatest cash heist. The voices,speech and body-language of Tim Geitner, congressional investigators, Obama and staff were timid and fearful. I do hope that prosecution of Paulson and a beginning of FDIC law enforcement begins immediately. Where can I sign up to demonstrate? Those of us who work hard for modest wages and have unemployed friends cannot accept this pathetic cowardice from the same government that imprisons millions of people who have harmed no one.
If transparency is so important, the government should reallow M3 to be published!
Here is an interesting concept that defines the events that occurred, from the insistence that there was nothing the government could do to help Lehman’s collapse even there is evidence that Lehman asked the government for a for a 6 billion dollar bridge loan and was denied and two days later they gave AIG 85B–our country is being run by a GROUPTHINKTHINKTANK MACHINE!!!
Simon, of course you may have heard by now that the Stimulus bill placed some restrictions on the compensation of the Oligarchy; about time someone did so. I do believe these clever folks will find ways around the prohibition; however, if they are supervised carefully by the Treasury, we may see some well deserved departures of some of the most heinous of the lot. Thanks for the Moyer interview; I strongly agree that a major house cleaning is in order and the junior people can be permitted to run the stores provided we directly supervise them and reinstitute Glass-Steagall or similar. We do need to be careful that we dont kill the financial system while we browbeat them into submission.
Dear Mark B…How? How do you dismantle the Masters House… (Oligarches)? With the MASTERS TOOLS!!! Barack Obama isOUR TOOL. He can’t change the system alone, but with the grassroot powers of the people… wouldn’t you think it would be possible? EMAIL YOUR REPRESENTATIVES over and over. Tell them what you expected of their representation and how they can remain in power. Vote them out if they support the Oligarchy. And speak LOUDLY as you go to the powers that be. And be patient. I took a long time to build this house of cards…(the Reagan Administration)… and it will take good citizenry to claim it back. The key word is ACTION…take action.
Dear Simon,
I watched you today on BIll Moyers (linked thru from Calculated Risk, which I follow closely).
Having been an investor for many years, and having followed closely this debacle via a number of commentators from the beginning, I believe your role is critical.
No one else has the ability to convey to the common person how the levers of power are working, and why it is essential for the government of the people to prevail over the power of the banks.
Your description of the issues on Bill Moyers was excellent, though much too short.
To the readers of this blog, and to visitors–the victory of Barack Obama was the victory of the people. All of the tools that his campaign used to win this election remain in our hands. We must use them again.
Please excuse my strong language, but this situation is dire, and the world situation is precarious. People are dying over this, and there will be more, much more, to come.
The American taxpaying public must not be relegated to spectator status in this crisis. As a people it is our responsibility to demonstrate to our elected representatives and the banks that in America power resides in the people.
It is time to tear down those temples.
Rose 215: The statement was made by Mr. Flaherty before the budget was brought down. This and several other statements by him were tracked by Professor Michel Chussodovsky in an article on http://www.globalresearch.ca the day before the budget, The URL is http://www.globalresearch.ca/index.php?context=va&aid=12007. It is also on globalresearch under “Canada”> Headline is Canada’s 75 Billion Dollar Bank Bailout:
The $64 Billion Federal Budget Deficit is intended to Finance Canada’s Chartered Banks. The professor is a longtime economics professor at U of Ottawa. II did a full targeted media campaign to get it read by reporters with no follow that I was able to discern. I also sent it to Ignatieff and NDP, but an article on rabble.ca by Duncan Cameron opined the Liberals were all to keen to keep Bay Street sweet, and did nothing to block the bailouts. Mr. Flaherty said the present sums to the banks may need fattening down the road.
Democracy Watch figures put the figure considerably higher in their post-budget assessment. I can send you that as well, if you like.
I hope your excellent discussion with Bill Moyers gets widespread attention. I would like to point out the economist Willem Buiter, whose views are quite complementary to yours. He is a heavyweight. For example, he was called in as an advisor to Iceland after their economy collapses some months ago.
Buiter has a very interesting proposal that deals with two very important issues: getting good banks going that will lend, restarting the economies of the world, and isolating the damage from the toxic assets that are going to bury many banks so that the good banks can function. His ideas are consistent with the Soros proposal. His last column and another recent one describing his thoughts can be found at:
http://blogs.ft.com/maverecon/
watched bill moyers’ journal last nite and listened intently to you — am reading the information you have written — thank you — have seen complacency in friends since the election of obama — at the age of 60, i am thinking of revolution — what will it take to wake people up?
aj salonius-sherrod
ACTION!!! ACTION!!! ACTION!!! ACTION!!! ACTION!!! ACTION!!! THIS IS THE KEY TO SOLVING THE FINANCIAL CRISIS WE ALL ARE RIGHTFULLY CONCERNED ABOUT, AND EVERYONE WHO HAS RESPONDED HERE TO SIMON JOHNSON’S INTERVIEW WITH BILL MOYERS, CAN GET INVOLVED IN MAKING THAT CHANGE HAPPEN.
Let me give some information. Take the time to read each other’s comments! All of you (us!) are “speaking” with great hearts (which motivated me) and each person who took the time to respond to Simon has something to offer that is needed, whether you realize it, or not. MOST importantly, I get the feeling that you all are SINCERE in wanting the change to happen. That SINCERITY is POWERFUL, and believe me when I tell you that that sincerity TERRIFIES those who are NOT sincere in wanting to make the financial change happen, that needs to be done, and CAN be done! HOWEVER, my experience has been that often those who do so much damage to others often change when given the REAL opportunity to do so. Please keep this in mind. Remember that we are talking about “change”. This was proven to me in Russia while dealing with the various military people, government, mafia groups, gangs, educators, medical people, “biznez” people, and, are you ready for this (!), Russian politicians (TRUE!!!), and many others, including those who were homeless, people with disabilities, people formerly in prison, alcoholics, and so on! Once they believed we sincerely cared about Russia and its people, and listened to them and showed them respect, the people of Russia opened their hearts and minds, and their “doors”, to us, and we succeeded in helping Russia, TOGETHER! When the Russian people gave me their word, they kept it, regardless of their background, or reputation. This may not seem kosher to speak so highly of so many types of people we are conditioned to not like, but they worked hard, sacrificed, took many risks, and earned and deserve respect. I will also add that it was a pleasure to work with the Russian people, and we all came away with a much better understanding and appreciation of each other, and of each other’s country. This, by the way, is how we solve the problems of “violence”, whether you call it terrorism, war, genocide, crime, race, ethnicity, religion, gender, economic, and so on. Solve “violence”, and you open the world to economic development, job creation, positive globalizaton that will benefit ALL people, etc. Combine sincerity with common sense, knowledge, experience, guts, relentless persistence, ferocious determination, and the enjoyment of WORKING WITH WONDERFUL PEOPLE LIKE YOURSELVES WHO CARE, doing something so meaningful for so many people in the world, our lives, and the lives of those who follow us, will be rewarded in ways that could not be put into words. We already have the program (proven to work) that is ready to go as you are reading this, that is the “key” to laying the human foundation that is necessay to open the doors for the leadership, teamwork, talents, skills, knowledge, and expertise, I am sure exists, both with all of you who have responded, and with friends and colleagues you know who have the same interest we all do in changing the world. I suggest we enlist Simon in this endeavor, since he brought us together and brings relevant expertise to what is needed to be done, figure a way to contact each other, and get started IMMEDIATELY. I promise the committment of my organization, and myself, to get involved. We can be of help in using our unique “gifts” in dealing with and resolving violence, and all of you put in YOUR best efforts to do whatever it is that you do, to make change begin. Everything is needed, everyone is needed, and many will join us as we succeed. This is real, not fantasy, but we have to take action, and the sooner, the better. I know from reading the comments that many of you are ready for action now – Lindsay, Ruth, Wicky, Sandy, Dan, HSG/MIT, Pat, Elizabeth, Mike, Mark, and others, so, let’s do it! Every great accomplishment was achieved when the talking stopped, and the action started! Any suggestions on how best to contact each other, to get started, is appreciated! I would think sharing contact addresses through Simon would be a good start, with his approval, if he is willing to help and get involved?? Any ideas are welcome. But, let’s not get bogged down in emails!!! I hope you all had a wonderful Valentines Day!!!
Two solutions to curb the power of Oligarchs:
Executions.
Massive taxation on obscene wealth.
We won’t do the former.
Eisenhower supported the latter.
We need to bring back the Eisenhower era tax rates.
Greed will never curb itself.
Hi Tony and all other readers,
I completely agree with you, though am not in the US at this time. I also consent to my email address being shared with Tony, as a starting point (fascinated to hear your experiences of Russia).
One key element is undoubtedly underway–that is to get Simon’s interview posted and highlighted on as many of the key websites as possible—-the addicts’ playgrounds such as Huffingtonpost, Andrew Sullivan, fivethirtyeight.com, Daily Kos, MoveOn.org, etc. Huffington has the widest readership, and Sullivan is very influential. This is where many of the grassroots organizers and network bots still hang out. Everyone should go there and post the link on all their message boards.
Simon undoubtedly is tapped into many of these people–they may already have thoughts about mobilizing the Obama network they are integrally connected to.
I for one would love to see a hundred thousand people or more on Wall Street demanding profound change in this process. The elected representatives on both sides seem to have settled back into business as usual–they don’t recognize that this Obama revolution was about more than one election.
THEY SHOULD ALL BE MORE AFRAID OF THEIR CONSTITUENTS THAN THEY ARE OF THE BANKERS!! So far they are not. ONLY A DEMONSTRATION OF VOTER POWER WILL DO THIS.
So far the people have not owned the debate because unlike Sarah Palin’s interviews, the economic issues are technical and difficult material, and we will never understand the detail of it.
This is why someone like Simon is so critically important–because he is talking about power dynamics and not minutiae. This is the real arena of confrontation, and it is where the voter belongs.
You don’t need to be an economist or a finance wizard to understand this simple principle that Simon has articulated so well: the very last people on earth who should be entrusted to guide the American and world economy out of this mess are the people who caused it.
Period. The end.
Point me in the direction of the march. Got my boots on.
The inmates running the institutions are out of control — no longer accountable to the those who established banks, trusts and brokerages.
Consider, for example, the role that the Morgans, Mellons and Rockefellers played in the real economy.
The Morgan’s were able to establish U.S. Steel and General Electric because the House of Morgan controlled the Guaranty Trust Company of New York, Bankers Trust and the First National Bank of New York and eventually Drexel, Morgan & Co. and others.
There has been accountability because the Morgan family would never let bank managers mess with the future of U.S. Steel and G.E.
Rockefeller fortunes derive from Standard Oil and the bankers and rating agencies understood their responsibility in managing risk, not bubbles.
Now, greenbacks fetch steel and oil from the Communists and Cartels, so why fuss anymore?
Since the great Sandy Weill defied Glass-Steagall to cobble together a perpetual paper machine, unaccountable financial managers and big bonus sales people have felt free to play with FIRE. They knowingly conjure up leverage and fees in risky schemes that favor themselves and their toxic circular paper mills but threaten the very lives of real businesses and of America’s communities.
In the final analysis, it all comes down to the people – people who can be trusted if they can be held accountable both by their own moral compass and by untouchable auditors.
Those highly credentialed opportunists who are in charge of our insolvent “institutions” have been corrupted and corrupt others. They are not the victims. They outsmarted themselves but their lobbyists keep mum. You must speak up.
Their rotten “institutions” need to be institutionalized and wound down — not propped up. Their leaders need to be barred from any position in finance above that of the F&I guy at a used car lot.
i saw you yesterday with bill moyers.
it seems to me that thats nothing new. about a year ago i found louis brandeis, thesupreme court judge which is known for his famous quate “the sunlight is the best disinfector”, which fits to this crisis also, internet site which has his books. one of them is “other pepole money”, which is the story of the “money trust”, based on pujo committee from 1913. he spoke of financial oligarchy, interlocking directorates etc. it means we dont learn from history.
maybe because we are under a massive propoganda operation, to care more about reality shows, then learning from the past, or being involved citizen in the present.
you were right its not new, 3rd world countries and emerging markets had it before, as you may be aware of since you were at the IMF.
stanley fischer created the moral hazards when he rescued the G7 banks in the prior crisis at 3rd world countries.
when you bail out a crime suspect, he belives he has imunity.
i think they should be treated like the 3 strikes method for criminals- go to prison for the rest of thier life.
laws are strict when its a black american, and merciful with “white” collar criminals.
after doing it to other countries, they did it in usa. it means they have no moral limits for a long time.
i knew of this crisis in great detail in 2004. its called equity stripping, i knew of cds, tranches etc.
“I for one would love to see a hundred thousand people or more on Wall Street demanding profound change in this process.”
Sounds like a great idea, although 100,000 is too few.
Isn’t most of this bubble-trouble due to a passion for rapid financial growth? To get rich quick? At the core, don’t we need to re-regulate to prevent bubbles and get used to very modest sustainable or zero growth with more attention paid to more equitable global distribution?
John,
I highly recommend watching the webcast of Prof. Johnson’s MIT class on the crisis:
https://baselinescenario.com/2008/12/03/recorded-webcast-of-yesterdays-mit-class/
It’s from December 2nd and starts with a recap of current events, but the latter part of the class is dedicated to coming up with answers to questions such as yours.
Obviously, I don’t speak for Mr. Johnson, but my understanding of his position (at that time) was that the cycle of bubbles and busts could (should?) not be explicitly prevented. Instead, the solution is for governments to run counter cyclical policy in times of boom to insure against the inevitable bust.
HI SANDY (et al)! Your energy comes surging through! Whatever you do, you will (are!) make a difference! Keep your boots on, or close by!!!*grin* Action IS the key, my friend. A lot of “intelligent” people exist, but only a minute few are willing to put action where their mouths are, and even fewer are willing to do it directly, face-to-face, unless surrounded by “protection”, and in public view, in case something goes wrong. Those who are not willing to go alone to talk to REAL leaders, will never earn the respect of the leaders of the extremely violent and fearless, and it is important to earn their respect. They have the real power. “The man whose judgment is entirely mature will tend not to gamble with either his money or his life: he will be a pillar of society, but entirely useless if society, to its surprise, requires the services of people who take risks.” – INSIDE THE SAS: Tony Geraghty. Stay strong, Sandy (and all of you who care). The financial crisis can be resolved, and can be started immediately to be resolved, when the right people are involved, such as others like yourself (yourselves). It must happen, and it will happen. It is happening now. As you said, “the situation is dire”, but that is what is required before enough people get off their rear-ends to make the change that has always been possible. Be prepared to find people you never heard of, that you would never have thought to understand, or give a damn, to be the people who actually take the action necessary to make change happen that benefits all people, rich and poor, and be prepared to be disappointed by people you were/are sure would care, are in positions (and/or have the wealth) to do it, have even said very eloquently they did care, turn out to be nothing more than self-promoters, with fancy titles and credentials, and are very insecure (regardless of their carefully structured image, “posturing” and awards) – there is a MAJOR difference between professional-confidence, and self-confidence. There are very good people in every group in society, and when they start working together, they (we!) will help society change, as we proved in Russia. We had Veterans, clerics/priests, criminals/mafias, politicians (no jokes please!), entertainers, people in law enforcement/FSB, reporters/journalists, scientists, homeless people, alcoholics, drug addicts, drug dealers, people with disabilities, oligarchs, educators, medical doctors, students, government workers, and many others, all helping, working together, often side-by-side, in a common endeavor to help their country, and it was exciting beyond words to describe the feelings and the energy of working with this unbelievable “team” of people that grew larger every day. “Impossible”, I was told in the beginning, but, to quote an old Chinese proverb, “Those who say it cannot be done should not interrupt the people doing it.” … If I get your contact info from Simon, I will contact you immediately, I promise. If you do not hear from me, I did not receive your info, but don’t give up your fight! The SAS have a wonderful motto that says it all: “Who Dares, Wins”!!! Go get ’em, Sandy (and those of you who care), sometimes it just takes people who are willing to set the example for others to follow! Keep your hearts, minds, and arms open, to everyone who wants to help. Even people who don’t want this change to happen, can change, and be of great help, if we don’t give up on them. Many good people from many countries will see we are serious, and will want to get involved! This happened to us in Russia with people from many countries. We will win this battle to solve the financial crisis, and other crises as they occur! It’s a great fight and anyone involved will become a better, wiser, and stronger person!
I think restoring the 90% income tax to the top brackets would make a world of difference, just as it has in the past.
Thank you.Finally econ. that dummies can understand.
Hello Mr. Freeland…love your name!!! Don’t you think it would be more expedient…instead of showing up on wall street, to use the internet, flood the halls of Congress with mail with demands that may read…” Repeal the GLASS-STEAGALL ACT.” Which separates conventional banking from the Investment Funds and holds the gamblers to account for the gambles. Yes Tony… love your name too…that’s my little brothers name… ACTION!!! IS the only way a citizenry can affect its Democracy with effect. This is our job as patriots… would’nt you say?
A couple of observations. First,as a retired radiologist,who was the “guy” for 30 plus years in a busy hospital I realize that all of us can be replaced. There were well trained and ambitious young guys who were able to replace me the next day i retired. I am sure the banking industry is the same. I know of very few professional people who will only perform if they get a bonus. Yes,reasonable pay, but no bonus.
A retired banker friend noted that the loyalty to protect the bank and the client changed in his London bank when bonuses were introduced. The culture became one of acquiring any deals that would allowed bonus and guidelines were ignored.
I was involved in a MRI center,where doctors could invest. The number of exams they ordered went through the roof when they were to get a slice of the pie.
It seems to me that we need some effective regulation of fniance and banking. This is not easy to do with political leaders who are only interested in their own political future. Term limits seem to enpower buracrats however I think this might be better than the current situation IF the buracrats are overseen by a group of political leaders who are not entirely self interested.
Time is of the essence–events are moving faster than we know.
This is about who controls America’s destiny–our elected representatives or the unelected, incompetent, and self-serving banking industry?
Watch this interview again closely–Simon identifies that a major obstacle to the administration (ie, the government of the people etc) controlling the destiny of the financial crisis is that it is POLITICALLY extremely difficult.
I say this again–the government needs to be MORE AFRAID of CONSTITUENTS than BANKS.
This should not be that difficult to do, and we don’t need to do it ourselves–but we can spark it here.
The vast Obama network of organizers is still very much in place, each with their own network of email addresses and connections.
Please everyone, post the link to Simon’s interview in the comments sections of http://www.huffingtonpost.com/,
http://dailykos.com/,http://politicalticker.blogs.cnn.com/,http://andrewsullivan.theatlantic.com/ (you have to email Andrew),
http://thecaucus.blogs.nytimes.com/,http://www.fivethirtyeight.com/.
It has already started–Firedoglake–http://firedoglake.com/, which is influential in the D-community, has linked the interview, and it is starting to pick up interest.
Tony Johnson, Mr. Johnson and others:
I agree that action is required, as soon as possible. I also think it should likely be strategic. Do Mr. Simon Johnson or Mr. Tony Johnson have any ideas about this? In my humble view, what is needed is an overall objective, target audiences in terms of the objective, a one-line strategy in terms of the target audiences, key messages for each, and action plans, following careful consideration of background, current environment, strategic considerations, threats and opportunities, roles, responsibilities, followed by a number of related action plans. Actions should be tracked, to be able to evaluate, and any necessary changes made.
When and where do we begin? President Obama will visit Canada within four days. Any messages that can be conveyed to him a propos of this visit? Who are the major influencers — Obama group, other groups, individuals, organizations, etc. As you know, I am not an American, but I am a longtime devotee of Bill and his guests, and was rivetted to the set during his interview with Mr. Simon Johnson. If everyone could think of people who would at least read letters, we could form letter-writing teams, develop model letters, etc.
I hate to sound like a bit of a whacko, but I think Tony is right: it’s probably time to board our bus and hurtle down the road.
Is there a way that we can connect via this blog? For example, leave comments to the replies? I loved the interview with Dr. Johnson, but want to be able to connect with and reply to some of the entries made here.
Thanks!
Sorry folks i just can’t resist, here is a quote:
“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
Thomas Jefferson
I am most concerned that the stimulus package is drawing all attention at this time. In my opinion, the stimulus package is almost a non-issue compared to the magnitude of what may have already happened and what may happen even on a larger scale in terms of our banking system. And again, the stimulus is what people seem to be focused on, because i am sure, few people can fathom the reality of our banking and finance system.
There are too many things that happened in the fall that are without proper investigation. The Congressional Oversight Panel led by Elizabeth Warren seems to be trying to wrap their arms around issues, but when they testified a week or so ago on Treasuries aquisition and the fact that Treasury paid >130% on the assets acquired from the banks, no one except the Chairlady seemed troubled by this missing 76Billion dollars! To make matters worse, i got the impression that the panel was being pushed to look forward, instead of answering the questions about the events of the fall. Especially, why Lehman was denied a 6billion bridge loan, but AIG is given an 85Billion line of credit two days later, and soon thereafter, the US gov is the 80% owner of all of AIG, last count costing 185Billion and countin, and so far, no real disclosure of how that money was used—were there any conflicts of interest in all of these transactions or lack of transaction as far as Lehman is concerned?
This is a huge sum of money lost in space. We are up to over a trillion on all of the purchases, “bridge loans and backstops” and apparently, just warming up.
ps: Yes, it is vitally important to email your congressman or woman and senator, but the public doesn’t see those emails.
The American public is so ready for a call to action–we cannot miss this moment. Tempus fugit.
The people need to SEE images of thousands upon thousands of ordinary Americans in the street demanding the change they voted for. If they SEE this, they will join this fight.
Pick the best date, and pick the best location–whether Wall Street or the Mall in Washington, and use those keyboards God gave you to spread the word everywhere, and I promise you, the crowd that will show up will astonish everyone. Have faith.
Yes We Can.
Simon,
Enjoyed your commentary on Moyers emensely and felt that its most important quality was in setting apart and defining the “oligopoly” for those unfamiliar with it. There is an unfortunate tendency among those most apt to watch Moyers to attribute support for the depredations of American business to the Republican Party exclusively when, in fact, it is the leadership of the entire financial, industrial, educational and political leadership that is at fault.
While I found in your remarks a certain calming reserve, a reluctance to come down hard with a verdict on such as Geithner, for example, one wonders how helpful such caution really is in light of present realities. Others who share your views – and there are many that share them among libertarians, paleo-conservatives, progressives, and socialists – are much less inclined to be as tentative. There are some genuinely disturbing facts with which we’re now confronted, among them that our democracy is an illusion, a captive to lobbying interests with a death grip on the outcome of both foreign and domestic questions. It would seem to me that such a state would justify a good bit more emotion than I watched you evince. When should we expect the analysis to become less dispassionate?
Simon,
You are on the right track, but the nature of financial scandals affecting the banking system runs deeper than your comments to Bill Moyers indicate you are aware. Capitalization of many publicly traded companies has been attacked by illegal trading practices which have been green-lighted by the SEC and the CFTC, which are captured by money influences as you see Congress is. See, e.g., Harry Markopolos’ testimony to the House subcommittee on capital markets on Feb. 4, in which he says the SEC has given license to all big players on Wall Street to do whatever they wish to other investors without fear of the law. Video of hearing: http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr020409.shtml Ending that unlawfulness and remedying the crimes would solve the banking crisis, and the economic collapse, without need for trillions in stimulus or nationalization of banks. You are welcome to email me if you wish to discuss and share analysis.
Wicky: Thanks. I think taking to the streets is more dramatic than letter writing. But the letters, emails and phone calls are absolutely necessary to get the politicians to pay attention. Blogging is a relatively innocuous form of civil protest. It doesn’t inconvenience anyone, dowsn’t get on the news and can be completely avoided. A street march is a whole other matter, as anyone from the civil rights protest era will tell you. It is much riskier. Part of me thinks you’re right. Stay cool. Make a good argument. Write a respectful letter. And that’s what I’ll do. But I think about the trillions squandered. The lost opportunities. I’m angry about it.
Simon, I, also, consent to sharing MY email address with “Sandy” – 14 Feb 09. I also recommend that you set up a process, if you haven’t already, that will allow those of us who are taking action to solve problems you discussed in your interview with Moyers, to contact each other. It could be as simple as forwarding our email addresses to those who we give you approval to do so, as “Sandy” and I have done. Pressure is beginning to build that I am confident, sooner or later, is going to impact on those who have screwed up, and are still screwing up, our financial system, to correct it.
Simon,
I enjoyed what you said on Bill Moyer’s Journal. It seems to me that one way to weaken the political power of the Oligarchs is to change some basic rules about corporations in this country. This idea is an extension of ideas presented in Robert Reich’s book: Super Capitalism. By tradition, (though it’s not required by the Constitution) Corporations are treated as individuals. They have been given first amendment rights, they pay taxes, etc. Conservative politicians enjoy pointing out that US corporations are subject to some of the highest corporate income tax rates in the world.
I propose a good cop bad cop approach. First the bad cop. Let’s abolish the fiction that corporations are people. Let’s forbid them from contributing any money to any political campaign or any party.
As some compensation, let’s also abolish the corporate income tax. Despite the high tax rate, most corporations take advantage of so many loopholes that they actually pay very little tax anyway. The profits will pass to shareholders and they will pay the taxes. If we need to, we can increase the progressivity of the tax system to make up the difference.
This idea is neither conservative nor liberal, but it could lead to a change in the way we make rules and regulations. After all, poor regulations are the reason for this crisis in the first place.
Simon, this crisis runs long and deep. It originates from a basic flaw in human nature, Greed. Greed can only be exorcised by working our way through it forcibly. The banks are at the heart of this mess but are not alone in resolving it. They created the complicated derivatives in order for wealthy hedge funds to have a platform to gamble. The stimulus package being put out there, along with the bailout package for the banks will only slow down the pain of this economic crisis but will not stop it until corporate America recognizes their participation in this crime.
This country needs jobs or the death spiral of economic collapse continues. The stimulus package will create some levels of employment while avoiding additional losses. But today, top CEO’s continue to use the tool of the layoff to eliminate expenses when a correction in top executive salaries would do the same. Today, CEO’s make 433 times the average wage earner as compared to only 40 times in the 1970’s. Are these CEO’s that much smarter than their peers of the 70’s? No way. They think they are and demand compensation like they are but few recognize their personal greed has aided mightily in this mess. These top earners do not inject the same level of capital into our economy that what that of 10, 20, 100 middle class earners their wage displaced would inject.
The US government needs to manage how the banks use the money provided and these banks likewise need to have some level of control on how those corporations that receive credit based on the bailout use the capital. If the US government can control executive pay of bankers receiving a bailout, bankers can control lending that includes an assessment of executive compensation. Liability and risk of credit provided comes with the stabilization of labor not destruction of labor. No company that produces a product can be assured they can generate revenue from that product if executives simply turn to the easy task of laying off the workforce when revenues fall. A bank risks defaults on credit extended if the tide on unemployment is not turned.
This country needs to have a population of people with the ability to inject capital into the system through discretionary spending – layoffs do not aid in that process.
One of the battles I have faced on prior blogs is the issue of compensation against fraud. In this the 21st Century, our nations leading banking institutions have been stripped of tens of billions in fines associated with fraud. In each case the fraud was not isolated to a few select individuals working at the firms but was widespread. In response to such widespread abuse, those that committed these acts and those that led these companies during these acts, never paid the price for the fraud itself. Bonuses and executive compensation continued to grow as the public and public issuers lay victim to their abuses.
Where is the accountability if those that are committing the violations are not penalized personally for their acts? These fines are netted against a much larger revenue stream and thus, insignificant when evaluating future bonuses. Is this not part of the issue of Wall Street? Lloyd Blankfein made a fortune operating the business recklessly and yet today he has his job and his salary. Clearly those prior year compensation packages were not deserved when we look back on the risks he took to acquire it. I think that is the case for many on Wall Street.
Response to Dave:
Phil Purcell was ousted by the “group of 8” in 2004. (This is documented in the book (BLUE BLOOD & MUTINY) and replaced by John Mack.
In 2003 with a 12/31/03 closing share price of 57.87 Phil Purcell’s compensation was $14M. The board increased his salary to $22M in 2004 and the 12/31/04 closing price was 55.52.
Recall the weekend following the passage of the TARP, when 8 (9w/Merrill but they were pushed on Bank of America) were called in to a secret no transcript meeting and told to take a total of $350B for the good of America? Shortly after that meeting, Morgan Stanley made a press release that John Mack would not take a bonus in 2008, and that he hadn’t taken one in 2007.
What the press release failed to mention is that John Mack made $47M in 2007, without his bonus, with a share price of $53.11.
Since excessive compensation was a big reason why the “group of 8” wanted Phil Purcell out,and John Mack in, one can only surmise that with a share price about the same (in the 50’S) for both Purcell and Mack, yet Mack’s compensation more than doubled Purcell’s compensation in 2004, and 3.35 times Purcells 2003 compensation, getting paid on a leveraged bloated balance sheet full of the risk that has caused our country to mortgage our offspring’s future.
People have to be wondering, if securites were packaged, and sold on the basis of a rating that was understood to be inaccurate, wouldn’t that be fraud? And, shouldn’t it be up to shareholders to hold accountable the leaders of organizations that took risk by ramping up the leverage, and brought companies to bankruptcy by involking Sarbanes-Oxley rather than have the future of our country mortgaged for the sake of propping up companies that engaged in all of this? There are companies that did not take this kind of risk, and instead of being rewarded at this time, they are being squeezed out by the oligarchy. I am very suspicious of the whole Merrill Bank of America merger–our treasury secretary, according to the way that it is reported, took the Merrill deal to Bank of America and they were not interested at first, but when they were told (end of the world and all that) that if Merrill went down, surely Bank of America and our whole financial system may cease to exist, then they decided to move forward. In addition, they paid $29/share which, if the company was going bankrupt, how in the world could that price be fair? Not to mention all of the shady news that we have seen in the past few months. WHy couldn’t Merrill fail, and let Bank of America or any other bidder, buy it for the price of a company that was going bankrupt? These questions and others will stick in the psyche of America even if not articulated. I believe that even as urgent as it is to keep on with the business of moving forward with the interests of our country, there is really no moving forward unless there is clarity made by investigation , of all of the events, starting with the purchase of Freddie and Fannie, the decision to not allow Lehman a bridge loan which resulted in their failure (even 15 days earlier, on August 29, 2008 their share price closed at 16.09), the subsequent purchase (so called 80%) of AIG, and the passing of $350Billion dollars to 8 banks that we were told, were the ones that had to be protected because if any failed, the world as we know it would end.
Simon, if I understand all this correctly, it seems obvious that there is one place to start:
Get all the bankers and lobbyists out of the Obama administration NOW. The fox is in the henhouse.
This is a simple message to post on every blog and newspaper website you visit, along with contacting your representatives and the Obama adminstration.
Could someone tell me why, given Carol’s detailed post, and what we have all seen before TARP was even mentioned, let alone since, why the banks and other financial institutions were apparently given carte blanche, while the automaker folks were given a loan, with strict conditions and a reporting back date? If a friend borrowed $20,000 from you, or even $2,000, would you not have them sign a promise to pay by a given date, and have it witnessed? At the very least? Certainly in Canada, there have been no stipulations, conditions, payback promises, reporting requirements, etc. The opposition swears it will hold the government to account on Canadian version of the stimulus bill. without providing a single detail. Above and below the border, what makes the banking and investment firms so trustworthy, so competent, so deserving as to escape all accountability? From all the chatter, you would think that nobody would ever, even in the worst of all possible worlds, imagine that someone would actually take candy from a baby.
Thanks to those like Mr. Johnson, we are able to enjoy hindsight. Thanks to this discussion, ways to profit from it have been identified.
Dear Simon,
I watched your interview with Bill Moyers on Friday. On Saturday I sent a request through the whitehouse.gov Liason site to deliver the information on your interview and website to the President. I believe it is one of the most important ideas to emerge on the recovery. Reminder; Frontline is airing a special on Tuesday @9pm also!
Thank you for introducing the word “Oligarch” into the discussion. We Americans pride ourselves on having a government based on freedom and democracy, but deep down we know that corporations and the very rich have more influence than the average person. Until Sept. 15th we were able to somehow bury this conflict between our ideals and our reality. If there is one thing to be gained from this economic crisis, it will be to make us face the truth and take steps to bring the political/financial reality into sync with our principles. Although each American must take responsibility for his/her own budget, we can’t allow the Oligarchs to shift the blame for their actions onto the average person. We can’t allow them to go on doing business as usual. Most people, including me, are very confused about what happened and what we can do about it. We need more programs like “Bill Moyer’s Journal” and “Frontline” that can reach a larger number of people–those who don’t watch PBS on a regular basis. This is not a time for rugged individualism. We cannot look to Obama to save us from the Oligarchs. We must collectively expose them and oppose them.
http://www.twincities.com/allheadlines/ci_11722986?nclick_check=1
Sorry, here is the quote to look for, R. Davis, CEO of US Bancorp said in a speech:
“…”We were told to take it so that we could help Darwin synthesize the weaker banks and acquire those and put them under different leadership,” he said. “We are not even allowed to mention that. … We were supposed to say the TARP money was used for lending.”
Thanks, Simon; breaking the hegemony of the oligarchy that has parasitized the US citizenry and economy for the LAST 30 YEARS is essential. The difficulty is that most of us are unsure what we can actually do about this. Flooding our representatives with emails, phone calls and letters does not appear to have yielded the expected results, and as the upward redistribution of wealth continues undeflected, the productive class (ie., the actual workers) grows increasingly desperate and outraged. It seems that now that the big “secret,” is out, and all of us are wide awake now, we still feel helpless to prevent the free transfer of our tax dollars (in perpetuity) to the very TARP recipients (Citibank, Wells Fargo, Bank of America!) that even now have litigation pending against them for FRAUD, FALSE ADVERTISING and assorted other charges relating to banking practices designed SPECIFICALLY for the purpose of maximizing overdraft fees chargeable to their customers. I think we need to find a vehicle for change very soon, because after another few million layoffs, and more people starving in our streets, it will be too late to forestall a revolution.
Response to Sandy; MARCH 12-MARCH 17,2009 I WILL BE IN WASHINGTON, DC attending any and all hearings on the hill and visiting any and all congressional offices I can. I scheduled this trip in January this year and would love to be joined by any and all like minded american patriots. I am traveling from northern california by air. Happy to share my info with any progressive who is interested.
ALL READERS/COMMENT-MAKERS!!! All of your comments prove there is more than enough intelligence and common sense available to solve the financial crisis, as well as other serious problems. Maybe all of you should run for political office, and appoint people YOU know who are capable of doing what needs being done! GIVE IT SERIOUS THOUGHT! We need sincere people, not perfect people. We hear the gossip and the rumours, but we support those who prove they care, know what to do, and have guts.
We have to clean out our political, financial, corporate, and “other”, “houses”, and replace those who have caused the problems with new faces. Don’t let them get away with blaming the “institutions”, and so on. It is the PEOPLE/PERSON in the institutions that make the decisions, not the “White House”, “Congress”, Banks”, “Corporations”, and so on.
One of you (in the 80s “comments” I believe) mentioned how easily he was replaced by a competent young person when he retired! We have a lot of very competent people who could easily step in and take over, and do a fine job, where we are having problems. When I hear the so-called “experts” and “leaders” talking about the importance of each others’ “experience” in Washington, and elsewhere, I tell them they neglect to mention that the RESULTS of their “years of experience” has been failure! The condition our world is in could not be better proof of their incompetence, greed, self-promotion, and cowardice. I say the same things to them when I’m presented with a list of their credentials, titles, positions, etc., ad nauseam. When that fails to be impressive is when they start getting nervous. My suggestions are for everyone to keep the pressure on by actions (make “cold-calls” to their offices; make appointments to meet with them; “cc” any correspondence you send to them, to the media; protest marches, etc.), letter writing, emails, phone calls, and so on. As “SANDY” mentioned in a previous comment, they get scared when they actually SEE large numbers of people (CONSTITUENTS) taking action and doing something. Let them know you want to see more than token results, or “examples” that are often their ONLY example. Go, unannounced, to see their operations and programs you voted for, or donated to. The nonprofits and NGOs are more often than not, just as bad. They thrive on NOT being checked, and the money they waste and mismanage is astronomical. They rely on PR, fancy names on their BODs and funders, etc., to give the appearance of competence, success, and so on, to keep getting money. Why are the problems they have been “solving” for so long, with so much money given, with so many people involved, and massive amounts of money spent on advertising, getting worse. It is so easy to tear their excuses apart as to be laughable, then they stomp away like the gutless, self-promoting little weenies they are. It’s worse for them if you have a program like we do that has proven it can do what they have never been able to do, that they often claim is impossible to accomplish, and with a cost-effectiveness that is spectacular. I’ ve had them jog to get away from me!
WICKY! Action!!! Yes, I agree with you, positive patriotism that encompasses all countries who also want peace and prosperity for their people and country is a good way to go. The world is capable of being a wonderful “family”.
LINDSAY KELLOCK – 15 Feb/3:42pm! I like “Whacko!”!!! And, YES, “board the bus”, and lets ALL “hurtle down the road”! You’ve got guts!!! Go for it! Only when they feel threatened will those presently in positions of power and authority get off their butts and do what is right! They will want to discourage you, so don’t let them do it!!! As is often said, “You go girl!”
MDGelly – 3:44pm! I did get a response to your same question. BaselineScenario is looking for a way to make the connections possible, and are asking for any suggestions anyone might have, to keep us all in touch with each other (email addresses), and involved. Technology is not my forte, but some of you probably have good ideas as to what might work. If so, contact them.
EVERYBODY!!! One of our fellow/”fellette” (!) commentators, “SANDY”, makes a good comment about what we can do to help bring about change, in the third paragraph of her 4:06pm posting.
EVERYBODY!!! Another posting I recommend is “JOHN FREELAND’s” first sentence in his 9:07pm post.
EVERYBODY!!! “CAROL’s” post – 16 Feb/4:15pm – read all, it is short, excellent, and to the point.
PAT SMITT!!! – 7:57PM – Let’s hope the White House listens to you.
DAPHNE M.!!! – 18 FEB/10:17am – You’re not confused, Daphne, you’re just sincere, and finding out (accepting?!) those in positions of major consequence, who should be sincere, are not. Don’t accept that. Your comments are the comments of an intelligent person. Fight back. We have weak, insecure people in leadership positions, and we must get others who are strong, sincere, and competent to replace them, and/or scare them so badly that they start doing what they should be doing. Stay strong, and positive. Read all these posts/comments from the top! They will make you feel better that you are not alone, that many people care, and are very smart. It’s just too bad WE are not making the decisions! KEEP CARING AND STAY ACTIVE. That scares the cowards who hope we will go away if they ignore us long enough. The old sayings still hold true, today – QUESTION AUTHORITY, FOLLOW THE MONEY!!! Any REAL leader welcomes that kind of a person/people!!!
My thanks to all who have made comments. You are a very impressive group of people, and proof our country DOES have the people we need to solve the problems we have. BE SINCERE!!!BE AGGRESSIVE!!!BE POSITIVE!!!BE PASSIONATE!!!BE RELENTLESS!!! YOU WILL GET RESULTS!!!
THOSE WHO DARE WIN!!! SEMPER FI!!!
Tony is right – we have to keep positive. I found that especially difficult after viewing PBS Frontline “Meltdown” program earlier this week. Unless my interpretation is entirely mistaken, it seemed to diefy the architects of our present plight. Did anyone else view and can they tell me if their impression is similar to mine? I found the presentation in opposition to Mr. Johnson’s messages.
Lindsay; I found the Frontline “Meltdown” to be a slightly more in depth look at the breakdown showing more clearly how the major players were forced to face their crumbling failures. I did not see dieties through my lens – but neither did I see solutions. on another note – Interesting global news shows Swiss banks assisting U.S. investigate possible tax fraud in “swiss bank accounts”.
can’t say I agree with Simon about entrusting the FDIC to manage or “intevene” ailing banks, look at the complete disaster with Washington Mutual, do you think the FDIC acted fairly pawning off a $300B deposit base to JP Morgan for 1.9B? The fact of the matter is no regulatory body of this government can be trusted to do what’s legal and fair.
LINDSAY (and all readers), Your interpretation of Frontline’s dog-and-pony show, “Meltdown”, is accurate. Interviews are not for the truth, they are for “eyeballs” (advertising money), and self- promotion (usually on BOTH sides – network/interviewee). There is a saying about these types of “briefings” in the Special Operations community, called “The Mushroom Effect” that describes interviews well: “Kept in the dark, and fed bullshit.” No real leader would ever let happen to his/her people, what the cowardly and incompetent little “Wizards of Oz” we have in leadership positions, with their blinding greed, are doing to the people of our country. The basics to a good society are: The goernment’s job is to take care of the people, and the job of business is to make money. When making money prevents any of the people from having their real “needs” met, the government should step in and correct the problem. Making money through business is a privilege, that should be allowed to go pretty much unfettered (just an opinion), permitting those who choose business as their way of life, to fulfill their (and their employees) “wants”, not just their “needs”, UNTIL (actually, before) it has negative consequences on the people’s “needs”. This has been way out of control for many decades (centuries?!). Mike Walsh [Lt. Cmndr. USN SEALs (retired)] couldn’t have said it any better, when he said “Real leaders scare people”. We have all these (and more coming) crises, because we have a Leadership Crisis in our country. Action needs to happen that will correct the financial/economic-crisis. Endlessly talking about the problems we have (is there ANYONE who doesn’t know we have serious problems!) accomplishes nothing, except give those who are the cause of the problems more time to stall, wait for anything good that happens (clearly not of their doing), and find many devious ways to take credit for it, etc., ad nauseam. We don’t need to hear what is obvious, common-sense, and already known, as if what “they” are saying is a profound revelation. Where are the Community Organizers (and the “concerned experts” always getting interviewed – “buy my book”) that get funded to help their communities, who should be organizing their neighborhoods, to have serious protests at the elected officials and corporate CEOs offices/buildings, when the people are getting ripped off – with the “experts” walking and marching side-by-side with them??? The PEOPLE have the power to do anything. You can’t find a politician after elections, but you can’t get rid of them DURING elections. They NEED the people to vote for them, regardless of the amount of money they have raised. Get active. Organize. If your “organizers” aren’t doing their job, replace them. Don’t get “bought off”. Get started and you will pick up a natural momentum that will spread. Get sincere people involved, you don’t need “perfect” people. Keep your minds open to everyone. You will be amazed at the talent and fearlessness that is out there in your communties. Add ACTION to your talking and typing.
Tony – thank you very much for your clarification on the PBS Frontline broadcast. I agree with you that grass roots organizing is the effective longterm strategy to achieve public accountability. I wonder if this alone will be sufficient to forestall further bank bailouts, or to account for money already given to the banks and other financial institutions. I could wish there were answers to such questions as “Where’s the money?” “What did it accompliah (in detail)” “Who are the creditors?” etc.
One effort towards accountability is being made in Canada is by an org called Democracy Watch, (www.dwatch.ca) which has asked Members of Parliament to sign and observe an accountability document. However, MPs are not rushing like lemmings to sign. Presumably, if they were to sign, they would not lob gobs of cash to bailout a few institutions, but create and enrich programs that would create, for the Canadian public, real jobs that can support families, and a safety net for those who cannot find or who cannot work (upper age seniors, for example).
Your president was visiting yesterday, received a fervent welcome here and created an excellent impression and an auspicious debut.
Pat Smitt: Thank you for sharing your view of the PBS Frontline program Meltdown. I supposed the best advice for viewers is ‘Stay Tuned’. In reference to the U.S. settlement with Swiss banking regulators, I found it interesting that in Switzerland, although tax fraud is viewed as criminal, tax evasion is not.
I agree the foxes running this show are in the henhouse eating the chickens. how long do these foxes expect the FDIC to remain solvent when there are no more chickens to eat?