The Huntsman Alternative

By Simon Johnson

The eurozone financial situation continues to worsen.  The latest idea from the eurogroup of finance ministers is apparently to have the European Central Bank make a massive loan to the International Monetary Fund, which would then turn around and lend to countries like Italy.  This is a bizarre notion.  If the IMF takes the credit risk of a mega-loan to Italy – e.g., an amount around the $600 billion mark, greater than the fund’s current lending capacity – this would represent an unprecedented and unacceptable risk to the IMF’s shareholders, including U.S. taxpayers.  If the IMF does not take this credit risk, what’s the point?  The ECB should provide financial support directly to Italy, if that is the goal.

But that goal increasingly seems both to be the only idea of officials and the last failed notion of a fading era.  More bailouts and the reinforcement of moral hazard – protecting bankers and other creditors against the downside of their mistakes – is the last thing that the world’s financial system needs.   Yet this is also the main idea of the Obama administration.  Treasury Secretary Tim Geithner told the Fiscal Times this week that European leaders “are going to have to move more quickly to put in place a strong firewall to help protect countries that are undertaking reforms,” meaning more bailouts.  And this week we learned more about the underhand and undemocratic ways in which the Federal Reserve saved big banks last time around.  (You should read Ron Suskind’s book, Confidence Men: Wall Street, Washington, and the Education of a President, to understand Mr. Geithner’s philosophy of unconditional bailouts; remember that he was president of the New York Fed before become treasury secretary.)

Is there really no alternative to pouring good money after bad?

In a policy statement released this week, Governor Jon Huntsman articulates a coherent alternative approach to the financial sector, which begins with a diagnosis of our current problem: Too Big To Fail banks,

“To protect taxpayers from future bailouts and stabilize America’s economic foundation, Jon Huntsman will end too-big-to-fail. Today we can already begin to see the outlines of the next financial crisis and bailouts. More than three years after the crisis and the accompanying bailouts, the six largest U.S. financial institutions are significantly bigger than they were before the crisis, having been encouraged by regulators to snap up Bear Stearns and other competitors at bargain prices”

Mr. Geithner feared the collapse of big banks in 2008-09 – but his policies have made them bigger.  This makes no sense.  Every opportunity should be taken to make the megabanks smaller and there are plenty of tools available, including hard size caps and a punitive tax on excessive size and leverage (with any proceeds from this tax being used to reduce the tax burden on the nonfinancial sector, which will otherwise be crushed by the big banks’ continued dangerous behavior).

The goal is simple, as Mr. Huntsman said in his recent Wall Street Journal opinion piece: make the banks small enough and simple enough to fail, “Hedge funds and private equity funds go out of business all the time when they make big mistakes, to the notice of few, because they are not too big to fail. There is no reason why banks cannot live with the same reality.”

The path we are on leads to more state ownership of banks in Europe – not a good idea – and, in the United States, huge open-ended subsidies to private banks.  Executives in those banks get the upside and American taxpayers and workers get the downside – a huge recession, damage to millions of lives, and a huge run-up in government debt due to lost tax revenue.

Everything else Mr. Huntsman wants is also eminently sensible, including full transparency in the derivatives market.  Who will argue with that proposal as we watch the European financial sector spiral downwards – driven partly by the fear of what lurks in prominent opaque transactions and balance sheets?

Mr. Huntsman has also spotted the fatal flaw in Basel III: “The Basel III Accord primes the pump for the next financial crisis by putting its thumb on the scale of sovereign debt, making it less expensive for banks to invest in those instruments without making a realistic risk assessment.”  Again, in the light of recent developments in Europe, who can seriously dispute this?

These are not fringe or unproven ideas.  When I talk with sensible people in and around the financial sector, these are exactly their views.  These are also natural Republican ideas – what we have now is not a market, it’s a huge, unfair, and dangerous subsidy scheme.  Such points are made by top academics like Gene Fama (University of Chicago) and Alan Meltzer (Carnegie Mellon), former officials such as Nicolas Brady and George Schultz (both former treasury secretaries), as well as by top Federal Reserve officials, like Richard Fisher (president of the Dallas Fed) and Tom Hoenig (recently retired from being president of the Kansas City Fed; nominated to become the number two person at the FDIC).  (See my coverage of this strong current of Republican thinking in past Economix columns, including these two.)

Only Teddy Roosevelt could take on the industrial and railroad monopolies in 1901, only Richard Nixon could go to China in 1972, and only Jon Huntsman can face down the Too Big To Fail banks today.

An edited version of this post appeared this morning on the NYT.com’s Economix blog; it is used here with permission.  If you would like to reproduce the entire post, please contact the New York Times.

81 responses to “The Huntsman Alternative

  1. I’ll put 10 to 1 that there was a backroom conspiring agreement, during Basel III, to have the Swiss central bank pump out 3 month 8% paper to finance any ECB leverage they might need to cripple along and avoid the inevitable. This was no doubt bolstered by Timmy, as the only way to bring in the necessary funds considering all the lost holdings the USA feels responcible for returning to senders in the form of federal reserve notes. Ego and arrogance must be the feel good for continuing in this fashion, and obviously there is plenty of that to go around in Wall Street and Washington.

  2. I am not a Ron Paul supporter, but he says it much better than Huntsman.

    http://www.ronpaul2012.com/2011/11/30/in-case-you-missed-it-ron-paul-comments-on-fed-actions-in-europe/

  3. “The path we are on leads to more state ownership of banks”

    Didn’t you mean “The path we are on leads to more bank ownership of states”?

  4. Historically, yes, this is what the republicans are about. now, not so much. you have at least 3, with Huntsman being a small 4th of choices/views within the party:
    1. establishment – fed by lobbyists, will prop up banks
    2. anti federal action – either way they want no federal action, anything the fed gov’t does is bad
    3. libertarians – too small a faction to win, and those currently representing are too extreme, banks would be broken up, but wow, what our country would become.
    4. Huntsman – his time may come(highly doubtful); those who pumped up Trump, Bachmann, Perry, Cain, and now Gingrich will never back him, those backing Romney will never back him.

  5. Well, the quite obvious step is to face the consequences of the damages build into the financial system and let things unwind by itself. We don’t need bankers, regulators, adminstrators and academics to solve the current problem in that way. Ofcourse there is no use of just passing the risks around to different agencies in this world, because the risk is not going out of the system. And there is no visibility of any extra-terrestrial investments. Obviously, we need these people to find a better way to solve this problem. What are these better ways left with? Any clue?

  6. MIC CHECK
    YOU OWE U$
    YOU OWEU$YOUOWEU$YOUOWEU$YOUOWEU$

    http://www.vosizneias.com/95122/2011/11/18/london-occupy-protesters-take-over-ubs-owned-building-in-london/

    Occupy London said the building it occupied in east London will not be used for “residential” purposes but as an event and meeting space called the “Bank of Ideas.”

  7. “These are also natural Republican ideas – what we have now is not a market, it’s a huge, unfair, and dangerous subsidy scheme.”

    So would I be right in believing the other Republican/Tea Party candidates would say that banks should be allowed to become too big to fail and then allowed to fail?

  8. So would I be right in believing the other Republican/Tea Party candidates would say that banks should be allowed to become too big to fail and then allowed to fail?

    Yes, but with no fancy gov’t or fed tools to break them up ‘nicely’. straight to bankruptcy court..

  9. As many observers realise, the Fed/IMF/ECB goal is to bailout the banksters, and incidentally, Europe. The same script played out in 2008 in Amerika. The system evidently is ripe for collapse. But the banksters want to squeeze every last drop of blood from the global economy before that happens. The banksters are holding a gun to the heads of the world’s governments: Print money or the markets and credit die. Whatever reforms are in the pipeline now will be TLTL (too little too late), but is there an alternative to printing money? None that the banksters accept. And politicians are just their whores. Prepare for what is now apparently inevitable: complete global economic collapse.

  10. Comes with many fleas though.

    Huntsman clearly has his head straight about a number of economic and other issues. Past that, it gets kind of ugly if you’re a liberal.

    Still, he seems by far the least offensive of any of the Republican candidates. Will definitely have to read more about him…

  11. It is hard to imagine that any US President would take on TBTF. This is very likely more rhetoric to win supports only to stiff them when elected by failing to fulfill a campaign promise.

    The original Glass -Steagall Act should be dusted it off and re-enacted without the subsequent amendments. Simple.

  12. There’s no reason Huntsman’s line in the sand couldn’t be adopted by other candidates, after he drops out. That happens all the time. And these are Republican ideas, at least they have been in the past.

    Trouble is, those people don’t have a party any more. It was hijacked thanks to the distillations of one Karl Rove. The “coalition” he built is largely composed of fringe elements, many with extremely narrow agendas who are very poorly informed on the way the world works. That’s especially true of the world of banks, the shadow banking system, and finance in general. I don’t believe those ideas can make any headway given the navel-gazing so prevalent in the so-called debates now playing.

    What’s really disorienting is to watch this roster of candidates spin one way to attract that crowd in the primaries, then try to recover some semblance of sanity in the general election. Talk about disconnect… How about deracinated instead?

  13. The original Glass -Steagall Act should be dusted it off and re-enacted without the subsequent amendments. Simple.

    -A-MEN to the above, I meant…

  14. Huntsman also touts shrinking the military, which wins him additional sensible points.

    But, as Jon Stewart points out, Huntsman is like Romney-lite to the unsophisticated voter (despite his recent efforts to distinguish himself), and as such, wouldn’t you prefer the real thing, just as you would rather have Alec Baldwin than one of his lesser-known brothers, like Billy?

  15. http://www.msnbc.msn.com/id/37560195/#45498050

    When it became clear that people were running the USA based on interpreting what prophets wrote 2000 years ago, or wha’ever (Mormons and Smith), well, the soap box TRADITION in USA got dusted off and people got up to say,

    “That’s just nutz. I don’t want anyone in government who believes the tooth fairy should keep leaving money under the pillow of those who did not lose a tooth because that is what I read in the *holy* book written by the most UN-holy of MEN.”

    OWS is a cherished democratic soap box tradition. As is a tax revolt….

    How can you not tax DELUSIONAL derivative transactions when unemployment benefits are taxed?!

    WHY was Glass-Steagall thrown in the shredder? To Ponzi scheme the DECADE OF WAR in Messupotamia to let self-proclaimed *god’s chosen ones” create a one world government…?!

    Uh, you guys got proof of being *chosen* – something other than being *agnostic*? And something other than another fancy piece of paper with a fancy seal…?

    The VAST MAJORITY of USA people did NOT agree to the invasion of Iraq – the CABAL who took this country to pre-emptive war needs to be brought to justice. THEY need to go broke and have their *assets* seized – it’s all OUR commerce currency they seized – not any freekin’ Iraq oil!

    Which is something I do not hear from anyone in D.C. – a clear understanding of JUSTICE.

  16. Did anyone actually click through and read Huntsman’s plan?

    Nowhere does he mention actually breaking up the TBTF banks. NOWHERE.

    He talks about increased capital requirements and penalty fees to discourage large banks from getting larger, but he completely fails to address existing TBTF banks.

    You have to understand that “ending TBTF” means something entirely different to the GOP than to everyone else. To the GOP, it’s synonymous with “no more bailouts” and just means promising to actually let banks fail going forward. It’s not an action plan for breaking up banks AT ALL.

    You’ll also find “repealing Dood-Frank” and eliminating onerous regulation on the smaller banks in Huntsman’s platform. It’s the same old deregulation message, nothing new.

  17. Not so simple ella, I’m down to my last clown, after that, its Nov 2011 all over again.

  18. Alas, Prof. Johnson, your plumping for Huntsman is deja vu all over again: If you will recall, the original (before it was watered down by Geithner et al.) Volcker rule–back in Sept. of 2010, if memory serves–included gestures toward limiting the size of the megabanks; which gestures were enthusiastically retailed by you and many others. But oligopoly capitalism, being the inexorable trend of corporate capitalism, got its way (as usual), and the Volcker rule degenerated into Dodd-Frank, a shabby and corrupt simulacrum of a remedy, with more loopholes than a negative-amortization no-doc subprime mortgage from Angelo Mozillo. Moral of the story: In the unlikely event that Huntsman survives the lunacy of the Tea Partiers polluting the GOP “base” and goes on to win the presidency, his reprise of the Volcker rule will fare no better than the original. I and others predicted the fate of the original Volcker rule on this website, contrary to Prof. Johnson’s raising of false hopes; which he, as a reformist, is programmed to do. (Incidentally: Although I am not a regular visitor to this website and so may have missed the recantation that the Professor owes his students, I do not recall Prof. Johnson’s ever coming to terms with his failed hopes regarding the original Volcker rule; which is why, I suppose, it is so easy for him to rehearse the same false hopes anent Huntsman.)

  19. In the long view of history, Tim Geithner may be seen as the one who blew the last shining opportunity to fix TBTF. Yes, there was much to be feared from financial instability in 2008, but there was little or nothing to fear from throwing out those bankers who were responsible for the damage, and imposing stringent conditions in return for TARP funds. And of course, Geithner’s boss and patron BHO will be seen as complicit as well. They have kicked the can down the road & the piper’s bill is yet to come due.

  20. Well it looks as if we have 60 contenders, and they are all red. Now I talked to the boss, and she says I’m okay. But she dosent know so much about the rest of you guys.

  21. @ Annie.If my memory serves me right 70% of the American public were in favor of the Iraq invasion as were all the big media outlets including the NYT,WSJ CNN and so on.Attempts to whitewash or alter history are pathetic and serve the intelligent voter poorly.But then the intelligent electorate also voted in Tim Geithner’s boss.In the end the world is doomed anyway?

  22. Great article, as always Simon. I think this topic has fallen off the radar of too many, especially our presidential candidates. I think it remains one of the biggest threats to the economy and needs to be addressed.

  23. @Independent – I challenge your data about 70% of the American public in favor of the Iraq invasion. What % of the American public were for the invasion BEFORE the nuclear threat announcement?

    People snagged the info on their own recording devices. You won’t be able to cut and paste the 24/7 news timeline since 911 into a completely different configuration. Putin offers this advice to USA, “Save your $$$ to pay off the *debt* because your Plan A isn’t going to work.”

    NYT, WSJ, CNN and so on had to have their *news* approved before it could be broadcast or printed – what’s the delay time in seconds on *live* TV…?

    NOTHING got printed or broadcast that was not censored by – well, that’s still the question, isn’t it – who was doing all the censoring? There was a COMPLETE shut down of anything not passing the censors.

    The Patriot Act arrived for a vote so rapidly via a secret *Moses* channeling it from the mountaintop, right?

    NEVER letting you guys off the hook for how you abused religion to *sell* it. THAT *strategy* is the every definition of iniquity.

    I have NO CLUE what Huntsman thinks the role of *justice* should be in this massive HEIST of commerce currency from the citizens since the war ended up not being *cheap* and the *booty* not quite the haul that was PROPHESIZED…and the world did not end….

  24. @Simon Johnson “The Basel III Accord primes the pump for the next financial crisis by putting its thumb on the scale of sovereign debt, making it less expensive for banks to invest in those instruments without making a realistic risk assessment.”

    Even with a realistic risk-assessment it would be wrong, because it would mean that the sovereigns would be able to borrow at lower than the real undistorted market rates, and so the whole economic signaling system would be damaged.

    But how amazing is this article… as these are issues that I have been writing in The Baseline Scenario for about 3 years now… and when Simon Johnson writes “what we have now is not a market, it’s a huge, unfair, and dangerous subsidy scheme. Such points are made by top academics like Gene Fama and Alan Meltzer, former officials such as Nicolas Brady and George Schultz , as well as by top Federal Reserve officials, like Richard Fisher and Tom Hoenig” to evidence when they did that and then to explain why he has ignored it until now….

    His is Monday morning after last Monday morning after last Monday quarterbacking….

  25. The Republican party strength is in the Bible belt and deep South which doesn’t include Utah. The overt attempt by the Republican Party establishment to push Romney is dead and clearly the so called Tea Party wing or social conservatives are the grass roots of the party and now call the shots which makes one wonder what will happen to the Northern Republican do they hook up with the Democrats Blue Dogs?

  26. I don’t trust any of them, including Huntsman, to actually do anything. They won’t even try. Except maybe Paul…he’ll try but can he do anything.

  27. Huntsman’s ideas are good as far as they go. Of course, I think that a return to Glass-Steagall would be the key to gettng banking under control. Let’s return banks to their proper role, and stop the deregulated, out of control casino-like structures that were a natural outgrowth of Gramm-Leach-Bliley. I disagree that most Republicans are in agreement with Huntsman’s ideas. After all, the vast majority of the Republican elites subscribe to the Friedman-Hayak school of economic thinking, that is essentially the Greenspan, “markets don’t need regulation, because they are automatically self-regulating in ‘pure’ capitalism” approach. This is the Neo-Conservative approach, and, among Republicans is probably epitomized by Newt Gingrich’s position, as well as that of Ron Paul, who would have us move entirely to the capitalistic jungle. I have feelings which are substantially libertarian when it comes to people, but without the constraints of intelligently crafted and managed regulations, corporations become pure unfettered predators. And, I didn’t read anything in Huntsman about actually breaking up the TBTF’s, unless one could argue that that is the only way to end them, which, of course it is.

    As to the EuroZone crisis, where do I begin. Two days ago, I predicted exactly what happened, and it was an easy call. It is only too obvious that the various world central banks see their role as protecting their bailiwicks, i.e. their largest banks. Look at what the FED has been doing for our largest. As of this date, the FED has pumped nearly seven and a half trillion dollars into them, and, that is just to enable them to actually operate. Several are in trouble now, and, although they don’t have a lot of direct exposure to the European bond markets. they are heavily involved otherwise, and our economy is under massive exposure in the Credit Default Swaps market hedging against European collapse. It is only a matter of time. Merkle, Sarkozy, et al, simply can’t do what needs to be done to save things. Their upcoming conferences will likely discuss just who to keep and how to restructure the Euro market area when, not if, things go disasterously.

  28. Huntsman is just a jonny-come-lately. He might be telling the truth; he might not. Who cares? He’s a same old-same old Republican of the Reagan vintage: lower taxes and higher spending. The Utah state budget increased 40% in 5 years of jonny-nomics.

    Why consider Huntsman at all, when the real deal is on offer? His name is Ron Paul. Accept no substitutes.

    http://online.wsj.com/article/SB10001424052970204346104576637290931614006.html

  29. http://www.msnbc.msn.com/id/31510813/#45514370

    “The ONLY role of government is to protect the people against force and fraud.”

    There is no way to save or cure rabid raccoons…

    “They” also take it one step further – such as the attempted take over of Martha Steward’s home-making *empire* in tandem with the Iraq Invasion – boy, cable news footage from that period of time is so revealing….

  30. Crikey! You are making me want to vote GOP! I didn’t think anyone was talking about TBTF.

  31. Bruce E. Woych

    If Jon Huntsman can rethink some of the “neon-conservative” attachments and play them down; and then, (stranger methods than would be considered orthodox) appeal to the leadership position of the 99% (at least in the spirit of unity if not in 100% substance)…then he might be able to pull an elephant through the keyhole and get elected as the people’s choice.

    The problem is that despite the very clear support (85% as I read it…) that the 99% movement has on popular appeal, …there is no candidate that will dare go near it.

    The problem with that is simple. If the candidate can’t lead a majority populous made to order…a standing army ready to go, so to speak; then what kind of real leader can that candidate be?

    Jon Huntsman is a thinking candidate, but he is still subject to his political advisers. The historic leader is not made by political advisers…they make history by defying them.

  32. I didn’t think there was a single candidate talking about too big to fail, banks or capital requirements. This is something you might persuade your buddies at Planet Money to talk about. What is each candidate’s position on Capital Requirements? I bet most GOP folks are vociferously against it, because “the market knows best.” Too bad POTUS feels the same. I’m stunned there is one who sees it correctly.

    Is that enough to support a guy who has to be terrible on the environment (this is me talking)? I don’t know, but it is compelling. Thanks.

  33. Bruce E. Woych

    @bayardwaterbury ….. compliments:
    ——————————————————————————————————-
    consider Huntsman’s dispatch of information on his policy proposals:
    http://www.jon2012.com/index.php/issues/financial-reform
    ———————————————————————–
    Some of it seems logical but not rational: or, maybe the other way around?
    He proposes …repealing the 2010 Dodd-Frank law, which perpetuates too-big-to-fail and imposes costly and mostly useless regulations on innocent smaller banks without addressing the root causes of the crisis or anticipating future crises. But the overregulation cannot be addressed without ending the bailout subsidies, so that is where reform must begin.”
    ———————————————-
    For my money I would prefer that he state that the “over-regulation propaganda” has been engineered by people who point to how it ties up small business…
    It would be accurate to say that the big business sector that brought us to our Knees have their own protective barriers and these are the same ones that are repressing and suppressing competition from smaller banking and corporate entries to market…
    it would be nice to hear him admit that the fiasco of de-regulation politics has created a “no-law” zone when it voided an “outlaw” designation that favored the TBTF domination of market practices…bringing us unscrupulous market …junk.
    It would be preferable to hear Jon Huntsman say that he would adjust Dodd-Frank to scale and scope so that it improved its ability to target the worst practices for tougher regulation and accountability while selectively reinforcing new competitive growth and/or reinvestments into asset building infrastructure.
    And of course there is a whole lot more about protecting Frank-Dodd, but the rhetoric is meant to appeal to the mindless neo-conservative drones of misfortune…
    _________________________________
    In any case: the rest of the platform follows the same kind of cursive elaborations of a transliterated neo-conservative policy of private markets suddenly appearing as perfectly balanced self-regulators…and the question arises under:
    “Restore the Rule Of Law: President Huntsman’s administration will direct the Department of Justice to take the lead in investigating and brokering an agreement to resolve the widespread legal abuses…”
    …as to what kind of “Rule of Law” is restored…
    when all your reforms are to repeal…the LAWs?????

    Ultimately Jon Huntsman appears to be a new model of an old idea on a corrupted ideal.

    You can evaluate his platform fairly: here:
    http://www.jon2012.com/index.php/issues/financial-reform

  34. Bruce E. Woych


    Arlo Guthrie/Alice’s Restaurant

  35. Bruce E. Woych

    Huntsman rides his Motor Cycle

  36. Rather than bring the other pile of garbage up, we decided to throw/or knock ours down. That is, after the other was raised from being under future water.

  37. @Woych – thanks for the cogent musings on *tax policy* enactments since WWII…

    You wrote, “For my money I would prefer that he state that the “over-regulation propaganda” has been engineered by people who point to how it ties up small business…
    It would be accurate to say that the big business sector that brought us to our Knees have their own protective barriers and these are the same ones that are repressing and suppressing competition from smaller banking and corporate entries to market…
    it would be nice to hear him admit that the fiasco of de-regulation politics has created a “no-law” zone when it voided an “outlaw” designation that favored the TBTF domination of market practices…bringing us unscrupulous market …junk.
    It would be preferable to hear Jon Huntsman say that he would adjust Dodd-Frank to scale and scope so that it improved its ability to target the worst practices for tougher regulation and accountability while selectively reinforcing new competitive growth and/or reinvestments into asset building infrastructure.
    And of course there is a whole lot more about protecting Frank-Dodd, but the rhetoric is meant to appeal to the mindless neo-conservative drones of misfortune…”

    *Global* Gin-i-co-efficiency – so USA won the off-the-cliff dive – fastest earth record set for creating a HUGE social disparity between Global Criminal Inc and the *middle class*.

    So now what….?

    Not sure of the bets placed *conserving* the status quo in USA….? Go figure…

  38. Why not pass the N.E.E.D Act. , HR 2990 sponsered by Dennis Kucinich and John Conyers?

  39. All Mr Huntsman requires to rise to the top of the GOP ticket is a sordid past,murkey policies and a condecending nature. Time is short.

  40. john@? Why not pass the N.E.E.D Act. , HR 2990 sponsered by Dennis Kucinich and John Conyers?

    This would not solve all our problems but it would surely make the solutions to most of them easier to come by. I believe this is the most needed move to bail out this rapidly sinking ship.

  41. Finally, finally, finally – it seems Simon has seen the light : That Obama is effectively a traitor to “the small people” and just a huckster for the bankster gang.

    If Huntsman is the real deal, I can wholeheartedly support him.

    Perhaps a Huntsman/Paul ticket?

  42. When will Hank Paulson, Jon Corzine, Timmy-the-tax-cheat Geithner be put in jail for a long, long, stretch?

    When will Obama be impeached?

    None of these can come too soon.

  43. A blistering interview — everyone should listen to this (putting political leanings aside)

    “A Powerful Interview with Ann Barnhardt” — on Financial Sense Newshour

    “Was the collapse of MF Global an accident or the calculated move of a political insider? Ann passionately lays the whole scheme bare, explaining the massive implications this has for our legal and financial systems, not to mention how investors should prepare.”

    http://www.netcastdaily.com/broadcast/fsn2011-1201-1.asx

    http://www.financialsense.com/financial-sense-newshour/guest-expert/2011/12/01/ann-barnhardt/entire-futures-options-market-destroyed-by-mf-global-collapse

  44. It is interesting to see the results of the Reagan era playing out over the last 20 years. Yes, communism failed but in Ronnie’s efforts to support his base, he also, laid the ground work for the collapse of capitalism.
    Deregulation, killing the union movement, removing the teeth from government departments that were acting in the interest of the general population, and signing trade agreements which favored the American corporations, he has changed the world.

  45. Here is the economist Steve Keen on BBC Hardtalk.

  46. Steve Keen is a Professor in economics and finance at the University of Western Sydney. He classes himself as a post-Keynesian, criticizing both modern neoclassical economics and Marxian economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen’s thinking about economics include Hyman Minsky, Piero Sraffa, Joseph Alois Schumpeter, and Francois Quesnay.

    - from his Wikipedia profile

  47. Bruce E. Woych

    i GET KNOCKED DOWN…

  48. http://www.msnbc.msn.com/id/37560195/#45529035

    The Gardens of Democracy…

    It FEELS so much better to know they’re not in charge anymore – it’s either that (ignoring their theories into oblivion) or a hate-filled hatchet war – complete savagery since there are tribes on the loose financially empowered (War Lords) from the erection of Global Crime Inc. who hack away at flesh – that’s how they steal – hack because they did not know enough to steal the sharpening stone along with the hatchet….

    And we have moon-walkers…now what economic, political or religious theory has a lucid explanation for the benefits of economic eugenic engineering when it’s done without *regulation*….?

    There’s no way to push people to meet each other in the *middle*. There is no *middle*.

    Everybody has the right to make their lives less miserable though honest work.

    Funny how all the economic, political, and religious-inspired (supposedly) *isms* are seen for the delusions that they are in light of that FACT – life less miserable though honest work AS FREE WO/MEN…

    And where’s the consistency – if you BELIEVE the world is going to end while you walk it, why turn that fortune telling flight of fancy into a self-fulfilling prophecy by doing the worst things imaginable to other humans in order to be the richest psycho on earth when *the end* shows up?

    People need to see footage again from WWII – you really wanna go there because of an *ism* someone made up?

  49. Bruce E. Woych

    Bob Marley (version)-Don’t worry be happy

  50. Bruce E. Woych

    @The End Of The Euro
    with 70 comments
    By Peter Boone and Simon Johnson – this post is the first two paragraphs of a column that appears this morning on Bloomberg.com
    http://baselinescenario.com/2011/11/28/the-end-of-the-euro/
    —————————————————————————–
    from “flashback” (comment reference from The End….)
    http://www.goldmoney.com/gold-research/alasdair-macleod/currency-swaps-the-beginning-of-a-solution.html?gmrefcode=gata
    ————————————————————————————————————
    from “anonymous” (comment reference from The End….)
    http://www.counterpunch.org/2011/12/02/one-bank-to-rule-them-all/

    http://www.counterpunch.org/2011/12/02/debt-slavery-%E2%80%93-why-it-destroyed-rome-why-it-will-destroy-us-unless-it%E2%80%99s-stopped/
    ———————————————————————————————————————-
    By Simon Johnson
    The eurozone financial situation continues to worsen…………..
    —————————————————————————————————————
    if this is the Baseline review for evaluating Jon Huntsman’s international perspective than it is only an extension of the previous blog and comment stream:
    @The End Of The Euro
    with 70 comments
    By Peter Boone and Simon Johnson – this post is the first two paragraphs of a column that appears this morning on Bloomberg.com
    http://baselinescenario.com/2011/11/28/the-end-of-the-euro/

    You think Jon is paying attention?

  51. SJ writes: “Mr. Huntsman has also spotted the fatal flaw in Basel III: “The Basel III Accord primes the pump for the next financial crisis by putting its thumb on the scale of sovereign debt, making it less expensive for banks to invest in those instruments without making a realistic risk assessment.” Again, in the light of recent developments in Europe, who can seriously dispute this?”

    I’ve been away from Baseline for a time. So they are up to Basel III now eh. (The “eh” being an idiomatic expression in Canadian vernacular speech).

    Well SJ’s comment may be a hat tip to Per Kurowski who has dedicated his life in the econo-blogosphere to warning that the bankers in Basel may have already and may yet still spark a nuclear reaction in the world financial system.

  52. I’ve missed something. I am still trying to figure out what happened at MF Global. I take it this is recent. Then there is btRaven’s link to that commodities trader. Wow is she mad. At least she still has the right to free speech. Perhaps, “free speech” and “critical thinking” and the exercise of “citizenship” can ultimately save the world.

    Here is Michael Sandel :) on Al Jazeera talking about “critical thinking,” the “Arab spring;” and the desire for citizenship, dignity and justice.

  53. Bruce E. Woych

    The economic model solution = Will it work?

    The Political economic solution = Will it work for ME??

    The Political Resolution = WILL ???
    ——————————————————————-

    Where there’s a “will” there’s a way…

    but if things “…continue to get worse…” (“simon says”: Make up your democratic Will…your descendants or inheritance is being ramified and ratified as we speak).
    —————————————————————————-

    ‘Simon says’ originated from Latin, the Latin version was “Cicero dicit fac hoc”,[1] meaning “Cicero says do this” (Cicero was a powerful Roman politician).

    The tradition behind the use of ‘Simon’ as the controller of the game may trace back to the year 1264, when Simon de Montfort captured King Henry III at the English town of Lewes. For the next year, any order Henry III gave could have been countermanded by de Montfort until Henry’s son Prince Edward took Simon’s castle by force.
    (source)
    http://en.wikipedia.org/wiki/Simon_says
    ———————————————————————————————
    advice for Huntsman: Kennedy’s notable quotes from his inaugural address:
    “…the belief that the rights of man come not from the generosity of the state, but from the hand of God.”
    “Let the word go forth…..that the torch has been passed to a new generation of Americans.”
    “Let every nation know… that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, to assure the survival and the success of liberty.”
    “The world is very very different now. For man holds in his mortal hands the power to abolish all forms of human poverty and all forms of human life.”
    “Let us never negotiate out of fear. But let us never fear to negotiate.”
    ————————————————————————————————————–
    “Ask not what your country can do for you – ask what you can do for your country”
    —————————————————————————————————————-
    “For only when our arms are sufficient beyond doubt can we be certain beyond doubt that they will never be employed.”
    “All this will not be finished in the first 100 days. Nor will it be finished in the first 1,000 days, nor in the life of this Administration, nor even perhaps in our lifetime on this planet. But let us begin.”
    “…let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.”
    (source)
    http://en.wikipedia.org/wiki/Inaugural_address_of_John_F._Kennedy

  54. @tippygoldenpress “SJ’s comment may be a hat tip to Per Kurowski who has dedicated his life in the econo-blogosphere to warning that the bankers in Basel may have already and may yet still spark a nuclear reaction in the world financial system.”

    Thanks very much for that… as I end up commenting in the discussion linked to below, a bankster might have gambled a bank but the regulators, with amazing hubris, gambled our whole financial system.

    http://www.forbes.com/sites/stevedenning/2011/12/01/a-worthy-competitor-for-the-worlds-dumbest-idea-bank-capital-regulations/

  55. Hey Per, nice to reconnect.

    What happened at MF Global and with John Corzine?

    I’ve been too busy web designing to follow the financial news.

    From your perspective as a former World Bank executive director.

    (ps: briefly so we do not hijack the thread, though at some level it all is interconnected)

  56. @Annie

    Don’t be too dispondent. There is hope out there. Human beings have always somehow managed to prevail.

    Michael Sandel, IIRC, was influenced by an influential Canadian philosopher named Charles Taylor.

    OK a high-brow Harvard philosopher, but I love absolutely what he has to say.

    The global financial crisis is asking all thinking citizens (and especially Americans given that while weakened the United States retains its status as a “global hegemon”) to re-examine the meaning of citizenship.

    At least we can read and write and comment on the internet. There is so much suffering in the world. Poverty, famine, starvation, drought. At least we can still exercise our right to vote. One can always hope public service might still be viable and a mechanism for real change.

    Sigh … All I have is a glorified highschool diploma (B.A. Honours :)

  57. slight edit required:

    Michael Sandel, IIRC, is influenced by a Canadian philosopher named Charles Taylor who taught at McGill University.

    OK, Sandel is a high-brow Harvard professor, but I absolutely love what he has to say.

  58. @Per,

    OMG, they finally heard you at Forbes magazine.

    Nice :)

  59. So whos up for starting a tv station? Bruce is buyin the wine for the next meeting. Its either that, or taking a few hostage, and puttin um through the washer.

  60. Bruce ?

    lol … anyone can start a radio station or tv station now with Open Source / FLOSS :) Dedication, hard work, and free software is about all you need perhaps.

    I believe a “free press” is considered a cornerstone of democracy

  61. @Dedication, hard work, and free software is about all you need perhaps.

    Besides a set of, hand to finger keys of course.

  62. Bruce E. Woych

    http://rwer.wordpress.com/2011/12/04/300-economists-give-support-for-the-occupy-wall-street-movement/
    300 economists give support for the Occupy Wall Street movement
    December 4, 2011 Editor Leave a comment Go to comments

    On November 13th 2011, economists from the University of Massachusetts Amherst issued an open statement pledging support to the Occupy Wall Street movement. Since then about 300 economists have added their names. ….
    list is off the link:
    conspicuously missing names…

  63. Bruce E. Woych

    http://newsvoice.se/2011/12/02/us-senate-declares-the-entire-usa-to-be-a-battleground/

    “In a stunning move that has civil libertarians stuttering with disbelief, the U.S. Senate has just passed a bill that effectively ends the Bill of Rights in America.”
    “The National Defense Authorization Act is being called the most traitorous act ever witnessed in the Senate, and the language of the bill is cleverly designed to make you think it doesn’t apply to Americans, but toward the end of the bill it essentially says it can apply to Americans ”if we want it to.” …..

    ”Bill Summary & Status, 112th Congress (2011 – 2012) | S.1867 | Latest Title: National Defense Authorization Act for Fiscal Year 2012 | Sponsor: Sen Levin, Carl [MI] (introduced 11/15/2011) | Related Bills: H.R.1540 | Latest Major Action: 12/1/2011 Passed/agreed to in Senate. | Status: Passed Senate with amendments by Yea-Nay. 93 – 7. | Record Vote Number: 218. | Latest Action: 12/1/2011 National Defense Authorization Act | Amendment details

    This bill, passed late last night in a 93-7 vote, declares the entire USA to be a ”battleground” upon which U.S. military forces can operate with impunity, overriding Posse Comitatus and granting the military the unchecked power to arrest, detain, interrogate and even assassinate U.S. citizens with impunity.”

    US Senate wants the entire USA to be a ”battleground”
    2 december, 2011 By Mike Adams 400 Comments

    http://newsvoice.se/2011/12/02/us-senate-declares-the-entire-usa-to-be-a-battleground/

  64. @tippygoldenpress “What happened at MF Global and with John Corzine?”

    I really don’t know, but I assume it is just a big storm in a bathtub that floats around in global oceans with real ocean storms.

  65. A nice shout-out, Per. For those of us with a low jargon recall – what is “ex-ante”?

  66. @Oregano… “ex-ante” sort of before the fact….”ex-post” sort of after the fact

  67. Ahh, I see. Couldn’t understand why gambling terms like “ante” were coming up in your commentary on financial regulations…;-)

  68. I think scholars/professors sometimes make easy targets. In fact most of them provide much more positives than negatives in the system. They certainly educate people about what’s going on, more than the Koch Brothers and TBTF bankers would like (outside of those institutions the Koch brothers bribe and where they have power over faculty selection such as George Mason University, where Tyler Cowen does their bidding). On the other side of the spectrum I consider Simon Johnson and James Kwak to be two guys of above average character and ethics, and consider them to be the “good guys” wearing white hats in our little surreal western of 2011.

    Then there are others, who frankly, I think unless they have a serious communique with the Judeo-Christian God (who I happen to believe in) in the heavens, are doomed to hell. Observe: http://www.youtube.com/watch?v=8lHvTKzfu8Q

    Hat tip to ZeroHedge blog for above video.

  69. That zero hedge is a mad house in a mostly insane cyber world, and i’m curious Bruce what is the difference between the new law and the current Martial laws of today. Seems to me that they already had that power to some extent at least, and perhaps they felt they needed more powers considering today’s youth are acting more like animals than humans well before and after their college years.

  70. @Tippy – Wondering what’s in it for YOU – $$$$wise -( btw, I never forget you all are betting on ruin somewhere to rake in personal profit) – to interpret the following as *despondent* – what part of IT FEELS BETTER is open to interpretation? English language is very precise – Subject-verb-object

    It (subject) FEELS (verb) better (adjective :-))…

    I opined, “It FEELS so much better to know they’re not in charge anymore – it’s either that (ignoring their theories into oblivion) or a hate-filled hatchet war – complete savagery since there are tribes on the loose financially empowered (War Lords) from the erection of Global Crime Inc. who hack away at flesh – that’s how they steal – hack because they did not know enough to steal the sharpening stone along with the hatchet….”

  71. @Woych

    Yup, declaration of war from the Senate…how long do they think that they are going to walk this earth before the grim reaper comes for them – natural death , of course, old age and cells shutting down…?

    Is their *retirement* nest egg not enough…?

    Do they have any clue what they are leaving in the History books of USA cherished freedoms as their legacy…?

  72. http://www.huffingtonpost.com/2011/12/05/vietnam-weapons-of-war-casualties_n_1128791.html

    Interesting story to get the *creative* thinking juices going when it comes to making a BIG TIME buck today!

    Who *owns* the live ordinance that’s littering the planet?

    The banksters? How can they collect *rent* on it (mortgage and foreclose)? Can they issue CDSs? Can they sell it off to private inwestors so that the metal and technology can be re-cycled into a gizmo with a built in come-to-jesus-love *app*?

    Seems like *financial instrument* creation neglected to consider where *wealth* lies untapped and un-exploded…

    Which way to *short* the deal? Ooops, is this *insider* information I’m seeking…?

    WOW – the interconnectedness of the *global* economy…one big, happy, Kellogg-cereal bowl of *commerce* craziness…

  73. Dianne Foster

    Before I would wax too romantically about Huntsman and Repubs in general being better on the “TBTF” issue, I would remind everyone that 30 Dems and 3 R’s voted for the Brown/Kaufman amendment, 27 Dems and 40 R’s against. Maria Cantwell, D-Wa has fougnt as hard as anyone for Break up the Banks, restore Glass-Steigal, etc. and unlike Huntsman, she hasn’t supported anti-choice bills, a regressive flat tax, and school vouchers. I’ll take Occupy Wall Street before any R any day.

  74. Woops! Huntsman reverses himself on climate change, bows to right-wing crazies — and in an extremely sleazy way:

    http://thinkprogress.org/green/2011/12/06/383101/jon-huntsman-now-questions-climate-change-because-of-a-university-in-scotland/

  75. Bruce E. Woych

    Fair assessment:
    http://www.jon2012.com/index.php/hblog/post/transcript_of_governor_huntsmans_unveiling_of_plan_to_restore_trust_in_wash

    HBLOG
    Transcript of Governor Huntsman’s Unveiling of Plan to ‘Restore Trust’ in Washington
    POSTED BY Team Huntsman
    December 8, 2011 @ 10:37A

    (Shows adaptive interests…but cuts too much like a business CEO rather than a government Leader)

  76. On actually reading the Huntsman plan, I am impressed with the fact that he wants to limit government, yet somehow enforce a banking break-up (it take regulations to do that), while proposing a regressive flat tax, and calling our Social Security insurance plans into which we have paid all our lives “entitlements”; he of course want to cut those, ala Paul Ryan. He proposes to limit lobbyists, who cannot return to DC after public service, which Obama has already done. At least O’s Health care plan limits administrative fees to 15% profit, better than the previous 30% profit, which will cut into the financial oligarchy’s health insurance domination. Along with Huntsman’s anti-choice legislation in Utah, and privitization of schools (talk about crony capitalism), I certainly won’t be supporting him now or ever.