The root of President Obama’s failure is the lack of will to treat the largest banks in the same manner as GM. No restructuring has been done to them and none of their executives have lost jobs due to their failures because of the government bail out of them. I would like to know of any FDIC restructuring of banks, like say Indy Mac, where the executives and shareholders were left whole.

But where he will lose me is signing legislation such as the Homebuyers Tax Credit (which only benefits bankers and realtors) and signing legislation for bailouts of companies such as GMAC which do not carry systemic risk. President Obama needs to see to these type decisions more carefully.

I’m not ready to join those who see apocolypse as the only alternative, although they may be right. First, The finance industry must be brought under control by separating banking functions and imposing large taxes on large incomes. It won’t solve the problem but it will signal Main St. that the financial industry does not own Washington.

Second, the country needs massive spending on infrastructure. Such spending will increase the nation’s capital assets while lowering unemployment for a time until the economy can pick up the slack. If unemployment does not fall substantially and quickly, the country will be run by Beck, Palin and Rupe’s other dupes. Where does the money come from? States don’t have it and the private sector won’t fund it so ultimately, it is down to the federal government. It can take the form of direct spending or government guaranteed revenue bonds to be repaid by user fees on the rebuilt infrastructure. It will raise the deficit one way or the other, at least on paper until the contingent liablity of the guarantees disappears. But this nation will not grow without consumer spending, which will not increase materially until folks have jobs doing something other than flipping burgers or changing bedpans. Better to put government funds to work to benefit all of us than to give it to bankers who use it to increse power and ever larger financial inequality.

If government spending is going to bankrupt the nation at least give everyone a taste.

If Obama doesn’t do something fast to address the issues of unemployment and growing financial inequality, he will be a one-termer. But Obama isn’t the issue. If we turn the government over to the current opposition, this country may lose its last best hope for returning to a more equitable distribution of wealth, power and freedom.

We know who will be saddled with the debt if today’s Republicans are in charge. In that case, maybe the apocalypse is the better alternative.

To your point that “facts must follow belief” it is easy to interpret as “people are willfully blind to important realities”.

As with animals living in complex ways in a single tide pool, I’m not convinced it is entirely willful. And as applied to human affairs this has me worried.

One symptom of being trapped in a vast complex system is being blind to it. Do fish understand “aquatic ecology” or even “water”? It’s not obvious until they are pulled out of it. Likewise we are all trapped within a complex environment that few (any?) of us can even begin to fully understand. And, it’s badly broken. And one of the reasons we can even see it at all is because… it is badly broken.

A system too complex to hold together on its own, too complex to understand, and too complex to touch safely least of all fix. This is a very dangerous situation, IMO.

We are on the verge of becoming creatures stripped of our supporting systems. The collapse of our financial and governing institutions would have that effect. But what other way out is there? How shall we escape this machine except to step free of its wreckage?

cougar

I was thinking of the mathematical metaphor. Are not most of the important lessons of history learning from the failures? Another aspect is learning the ways that are not followed in a given society. But right now the big lesson from the past not learned is that facts precede belief. That facts cause changes based on different interpretations in any given situation. The kicker in the US though is facts now tend to be required to follow belief.

I see that you understand.

However I would rewrite your final sentence as “Political and cultural disintegration are the only way complexity gets factored out.”

I know, it’s terrifying. But that would be the lesson of history. And you humans are — if nothing else — willing captives of your own history.

cougar

Even a broken clock is correct twice a day. Someone makes a correct prediction and it means… what exactly? At any instant in the day a million people predict a million equally unlikely things, a few of which turn out to actually be correct. Big deal. Can they do it twice in a row? Can they explain their methods of choosing among all possible outcomes? Rarely.

More important, who has the correct methodologies? Who has the correct initial parameters? I don’t have the answer by the way, I’m just saying that “but he predicted it!” is meaningless.

Now, tell me who accurately *modeled* it! The answer will probably be — nobody did. That’s perhaps because economics is less science and more sooth-saying religion, and we need to realize that before we’ll be able to begin the heavy lifting required to get ourselves clear of this train wreck.

cougar

We have perhaps 10 months. And there are a lot of people in the crowd that would seriously peg it at less than that.

It is worth mentioning that as a practical matter this is a self-limiting problem in that if we don’t get a handle on it, the system currently giving us nightmares will disintegrate and leave us with an opportunity not seen since the Middle Ages — to start over from scratch.

You know what, that sounds just interesting enough that I’d be willing to let all this proceed as it seems destined and see what turns up in a year or so.

cougar

Not really. Not intelligent in the least.

“I have seen no evidence that this isn’t true.”

I doubt you would recognize evidence if offered, but he *was* elected President of the United States in a fair election. I imagine that counts for something in most circles.

The problems run deeper and wider than you appear ready to accept, and have been in the ramp-up for perhaps 30 years, or even longer. That you cannot see that is a personal limitation, but it is a common one.

Complexity sucks. But get used to seeing it because you are surrounded by it. This because you are inside a machine you do not understand and it will grind us all into sausage if it doesn’t operate correctly.

Which, at present, it is not. Not even close.

cougar