The quick way to talk about how any economy is doing is in terms of “growth”. This is just what it sounds – a measure of how much the total value of production in a country has increased in the last month, quarter, or year.
Thinking in terms of total production – more precisely, this is usually Gross Domestic Product, GDP – never tells you everything that you want to know, but it usually gives you a sense of the near term dynamics: are business prospects expanding or contracting; is unemployment going to rise further; and will people’s wages outpace or fall behind inflation?
Seen in these terms, the balance of opinion on the near term outlook for the U.S. today has definitely shifted towards being more positive. A number of prominent analysts have revised upwards their growth expectation for the second half of this year considerably – for example, the ever influential Goldman Sachs was recently expecting 1 percent growth (annualized), now they guess it will be closer to 3 percent.
“Potential” growth in the U.S. is generally considered to be between 2 and 3 percent per annum – this is how fast the economy can usually grow without causing inflation to increase. So the Goldman swing in opinion is equivalent to switching from saying the second half of this year will be “miserable” to saying there will be a fairly strong recovery.
But at this stage in our economic boom-bust cycle, is it still helpful to think in terms of one aggregate measure of output? Or are we seeing the emergence of a two-track economy: one bouncing back in a relatively healthy fashion, and the other really struggling?
Think about this in terms of individuals and the households in which they live. Some people have lost their jobs and are finding reemployment very difficult; many will exhaust their unemployment benefits soon. Others find that what they owe on their mortgages far exceeds the value of their home. And many find they have been cheated by financial products, particularly home loans and credit cards — which is why we need effective consumer protection for finance, and in a hurry.
The traditional U.S. recession remedy is: move to another, more prosperous part of the country. But nowhere is exactly booming at present. And how do you move if you can’t sell your house?
The overall numbers on outcomes by groups can get complicated (here’s a partial guide), but the simple version is: the top 10% of people are going to do fine, the middle of the income distribution have been hard hit by overborrowing, and poorer people will continue to struggle with unstable jobs and low wages.
Can the richest people spend enough to power a recovery in overall GDP? Perhaps, but is that really the kind of economy you want to live in?
The United States has, over the past two decades, started to take on characteristics more traditionally associated with Latin America: extreme income inequality, rising poverty levels, and worsening health conditions for many. The elite live well and seem not to mind repeated cycles of economic-financial crisis. In fact, if you want to be cynical, you might start to think that the most powerful of the well-to-do actually don’t lose much from a banking sector run amok – providing the government can afford to provide repeated bailouts (paid for presumably through various impositions on people outside the uppermost elite strata).
Ultimately, of course, you get lower growth. But by the time that is clear in the numbers, it may be too late to do much about it.
By Simon Johnson
This post originally appeared on the NYT’s Economix blog, and it is used here with permission. If you wish to reproduce the entire post, please contact the New York Times. The usual fair use rules apply to short quotations.
The Baseline Scenario 
Can any of this trend be attributed to the immunity that large commercial entities enjoy through being legal persons?
Can the richest people spend enough to power a recovery in overall GDP? Perhaps, but is that really the kind of economy you want to live in?
Yeah – the TBTF protection racket economy. Living as meek little slaves under the thumb of technocratic gangsters.
The United States has, over the past two decades, started to take on characteristics more traditionally associated with Latin America: extreme income inequality, rising poverty levels, and worsening health conditions for many. The elite live well and seem not to mind repeated cycles of economic-financial crisis. In fact, if you want to be cynical, you might start to think that the most powerful of the well-to-do actually don’t lose much from a banking sector run amok – providing the government can afford to provide repeated bailouts (paid for presumably through various impositions on people outside the uppermost elite strata).
We’ve had this two-track economy for decades now, as wages have declined, wealth and power have concentrated, the real economy has been offshored and technologized out of existence, any real middle class has been eradicated and replaced by a zombie middle class propped up by exponential debt, and now that debt cannot and will not be bubbled up again.
Therefore we’ll now see the post-civilization variety of Dark Age feudalism in all its hideousness, as the ever more miniscule elite deploys ever greater violence and repression to maintain its fortress privilege, while the rest of us (and not just in the 3rd world, where the vast majority of Americans have been happy to exploit and ravage, but now at home as well) starve and freeze in the dark, as indentured serfs.
That’s the real plan and prospect. Yet Nero, er, Obama and the Dems, seem happy to fiddle their own delusions, which really boil down to the same old voodoo economics, no matter how many times trickle-down has been proven to be a lie.
But by the time that is clear in the numbers, it may be too late to do much about it.
It is clear in the numbers; it has been for 30+ years.
America damn well better “do something about it”, or what I described above is its fate.
Reagan put on the two-tracked economy.
Not sure how we can see robust growth if recovery lacks jobs.
An unregulated financial sector is, as we’ve seen, exceptionally dangerous to the economy. With no movement on that front to enforce regulations that diminish the terrible risk, we”ll likely see even great failure in the future, what with post-crash consolidation creating much larger TBTF firms.
When the US´ Secretary of the Treasury says that this country´s most imoportant strategic relationship involves a one party totalitarian state (with all related shortcomings) and no one seems to mind, something is gravely wrong.
; is unemployment going to rise further; and will people’s wages outpace or fall behind inflation?
GDP growth no longer reflects this, since there is no longer a relationship between labor and revenue.
What you call a two-track economy is more usually called a class system. Croak!
Reagan did not put us on a two track economy, the Socialists did.
The socialists now heavily regulate at least in the blue cities and states, housing, energy, insurance, education and healthcare. As a result, the cost increases in those five areas have grown much faster than income or CPI over the last twenty years. These cost items are the big ticket items in most family budgets, and are the reason the middle class is being squeezed and bankrupt. The higher income families can absorb these somewhat “fixed cost” hits and are now relatively much better off. This heavy consumer cost economic structure is typical of the socialist third world, and increasingly America’s socialist blue cities where there is a huge disparity of wealth.
Even more than being merely two track is the demoralization of America. It can no longer hold to the previous myth that the people who get ahead deserve it in some way. Rather, it has become clear that the way to get ahead is to become more crooked and corrupt than the next guy.
If we continue to count financial products and services as fully weighted GDP, half a dozen guys with really good computers at the big banks can replace everybody else and still keep GDP growing.
Obsolescence of everyone but the banking oligarchs is a natural result when our economists believe that the existing market is the only possible arbiter of the utility obtained by moving money around, and that the only way for an economist to measure progress is to watch whether the amount of money moving around is getting bigger or smaller.
I agree that the problem of income and wealth inequality has been worsening since 1979, but if I may agree with Simon, the degree of that inequality has only recently come to a point of threatening political instability. Democracy can’t survive in such a divided society.
I lived in Miami for over a decade and believe that city demonstrates the pattern of wealth and income inequality that increasingly characerizes the whole nation. I was skeptical when Obama campaigned on the idea of change because we need radical change, beyond what he seems willing to propose or fight for.
Socialists? Which Socialists?
Are you talking about a different country?
Add transportation costs to the list too.
…because obviously the present crisis was caused by too much transportation regulation in blue cities like New York.
People in America throw around the term “socialist” and “communist” a lot. Let me help you out, one: these are different, and there are several types of socialism. Their is democratic socialism which is exemplified by many of the parties in Europe. There is full blown socialsm ala Russia after the revolution. And to put your political spectrum into context, your democratic “socialist” party is farther to the right then our Conservative Party. Our Conservative Party would be labelled Socialist by US metrics. The democrats have been very pro-business, (welfare reform, tax cuts, secret deals with pharma, giving away pollution credits). The one context where I might agree the US is socialist is that both the Republicans and Dems are happy to practice Corporate Socialism, in that, whenever a business goes bust, be it an overleverage bank, a pharma or insurance company, a crappy auto manufacturer, farmers who try to grow crops in deserts, the government is happy to step in. Socialism usually bails out people, not businesses. So I do believe it would be appropriate to say that the US pratices corporate Socialism.
Nice one. I believe you have seen where we are going. Now, what do we do about it?
Tyson, it seems that the Wikipedia article on socialism gets it wrong. The word “bail out” doesn’t even appear in the article! You should go there and edit the article and enlighten the rest of the world.
http://en.wikipedia.org/wiki/Socialism
Paul: “Reagan did not put us on a two track economy, the Socialists did.”
Oh, did the Socialists come to power in the 1980s? I missed that.
Let’s see, the U. S. Socialist Party platform for 1900, I have heard, was eventually enacted into law. OC, that happened with the New Deal. Did the New Deal put us on a two track economy? It did not. For that we had to wait for Reaganomics. Then we got policies that allowed and encouraged the siphoning of wealth upwards, and that has created the two track economy.
Greater income inequality at the population level also carries significant implications for medical spending and health outcomes (morbidity and mortality).
“Can the richest people spend enough to power a recovery in overall GDP? Perhaps, but is that really the kind of economy you want to live in?”
Don’t worry. The jobless recovery will end when enough people get used to the idea of being live-in servants to the upper class, and ordinary workers accept living in slums.
Since the 19th century socialism has opposed “tracked” economies and political systems–what are otherwise known as class or aristocratic systems. Look at Reagan’s backers, look at his policies–not poor, not even middle-class. You’re talking nonsense, Paul.
“Years ago I recognized my kinship with all living beings, and I made up my mind that I was not one bit better than the meanest on earth. I said then, and I say now, that while there is a lower class, I am in it; while there is a criminal element, I am of it; while there is a soul in prison, I am not free…”
–Eugene V. Debs, American socialist
Croak!
Obama equals Nero?
is there another one than the Roman one?
if not, please elaborate what about Nero you find reincarnated in Obama
if it was the Socialists why then did Reagan not weaken US-Socialists the way Bismarck weakened “his” Socialists?
(i.e. by introducing social security)
Kissinger elaborates
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/18/AR2009081802850_pf.html
one question:
when exactly did this change happen and in which currency are they trading, clearing or whatever
“China has begun to trade with India, Russia and Brazil in their own currencies.”
“The United States has, over the past two decades, started to take on characteristics more traditionally associated with Latin America: extreme income inequality, rising poverty levels, and worsening health conditions for many. The elite live well and seem not to mind repeated cycles of economic-financial crisis. In fact, if you want to be cynical, you might start to think that the most powerful of the well-to-do actually don’t lose much from a banking sector run amok – providing the government can afford to provide repeated bailouts (paid for presumably through various impositions on people outside the uppermost elite strata).”
No need for cynicism to recognize facts as they so clearly present themselves to us. But when do these facts spark anything more than a detached, academic interest in you, Simon. The analysis is yours, its excellent but as you present it, it seems abstracted from its likely impact on those it enlightens. Are we to locate you, perhaps, among those that “live well and seem not to mind repeated cycles of economic-financial crisis”. Egad, man, where the outrage, the empathy?
And as to “which is why we need effective consumer protection for finance, and in a hurry”, is it not absolutely clear to you that given the stranglehold the arms, financial, drug and Middle East foreign policy lobbies have on the paid-for scum said to “represent us” in the White House and Congress that there will be no such effective consumer protection short of effective mass demonstrations and strikes? That people here engage in endless intellectualizing about the operation of the present structures as though they were amenable any longer to some sort of amelioration is, at best, paralysingly naive, or, at worst, enabling and collaborationist. When the Rubicon eventually is crossed, perhaps the people will see to it that collaboration is rewarded with a haircut similar to those sported by Vichy sympathizers in post WWII France. Might it be?
If the majority of economists couldn’t even predict, or at least warn us, of a crash of this magnitude, why do we need them? To bull$hit us? We already have enough a$$holes in Congress, the administration & in big finance bull$hitting us.
That’s why we can have a “jobless recovery.”
The “recovery” is only measured by stock indexes, which the financial powers-that-be can manipulate to their own benefit (they profit no matter if the indexes go up or down – neat trick!)
Thus upper tier wealth and abstract measures of “growth” will conveniently increase while more people become worse off in a “real” sense. But, that has been happening for the last 30 years anyway.
If the majority of economists couldn’t even predict, or at least warn us, of a crash of this magnitude, why do we need them? To bull$hit us? We already have enough a$$holes in Congress, the administration & in big finance bull$hitting us.
None of this BS is protecting us from the rapacious financiers.
I forgot to add this to better explain the point:
http://www.nakedcapitalism.com/2009/08/why-austrian-keynesian-monetarist-and.html
I agree that it’s probably an insult to Nero, who was probably smeared by the historians who got to monpolize his story. (Nero was on the whole a populist who was hated by the rich; historians like Tacitus who comprise our sources on Nero were pro-Senate partisans. We can imagine how a true populist today would end up if his reputation was consigned to the hands of corporatist partisans.)
I was just referring to the (probably untrue) anecdote of Nero fiddling while Rome burned. It’s a famous metaphor for frivolously doing nothing while everything you’re responsible for is being destroyed.
Now does it sound more like Obama and the Democrats, when we compare what they’re doing to what they claimed they wanted to do, and could do at will?
True. What is with this American obsession with not calling a class a class? It’s one of the truly endemic American forms of idiocy.
BTW, if you ever want to read about the opposite of Bush’s “response” to Katrina, read about Nero’s actions following the Great Fire.
Within a few days he had a tent city set up on the exercise grounds to shelter the tens of thousands left homeless, and in a truly prodigious feat of organizing, had enough food regularly delivered from all over the countryside to keep them fed.
Putting modern America, either party, to absolute shame, “cost” was not a concern in any of this, nor in the case of the public works undertaken to rebuild the city.
(The story that he intentionally set the fire in order to clear slums to build these works, including improved public housing, was spread by – you guessed it, rich interests who felt aced out of their opportunities for disaster capitalism, or just to build new palaces for themselves.)
well, I got my take on Nero from Suetonius, from Robert Graves of I, Claudius fame and Mary Beard – here is a guy on Nero who up to now has proved pretty reliable – haven’t listened to his take on Nero yet but maybe you can glean some real history knowledge from him http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?i=58142000&id=261654474
even though Nero is supposed to have been an improvement over Caligula I wish you good luck with having a life under him
according to Mary Beard we do not even know what Romans laughed about but you feel it OK to “know” that Obama and Nero have something in common – but go on – I keep trusting those who know at least the language
http://classics.berkeley.edu/people/sather.php
http://www.nybooks.com/articles/21616
In the real economy we have an entire generation (those over 65) now living off capital. How much spending can we expect from it? The baby boom generation was fully invested in the stock market. It is down at least forty percent and perhaps more since a good percentage were shaken out and lacked the recklessness to plunge back in last April. Now age fifty and older, its members aren’t returning to the job market except to welcome shoppers to Wal Mart and bag groceries at Publix. The entire real estate industry is now comatose. This includes a good many individuals formerly included in your top ten percent. Nine months of layoffs averaging 500,000 per month surely included quite a few managerial employees who can forget about ever being rehired.
Apart from those clunkers peddled at taxpayer expense, what business is turning up? I cannot help believing this recovery now being trumpeted by mainstream economists is another cheerleading lie, orchestrated by Monopoly Capital. The idea is to stampede small fry back into the stock market so that there will be someone to buy when the hedge fund speculators realize it is time to sell. As for MC, it is moving on to cap n trade, which ought to furnish the next bubble.
Actually, a lot of economist were warning that the housing bubble was going to burst and shit would hit the fan, but no one wanted to listen: Nouriel Roubini and Robert Schiller made the point explicitly, and Paul Krugman made it indirectly. But no one wants to be the unfun person who deflates the bubble, so they kept listening to Larry Kudlow and Jim Cramer instead. Schiller also predicted the dotcom implosion, but no one listened to him the either. Who missed this whole thing, lets see, oh yeah: Tim Geithner, you ran the NYC fed at the time, Ben Bernacke, then a academic, Alan Greenspan. Pete Peterson also made the case that the economy was going to implode, but no one listened. While the economic proffesion surely has leasons to learn from this crisis, so do people, sometimes we have to hear the things we don’t want to.
It is high time to use more sophisticated measures than GDP.
In particular GDP does not consider efficiency (traffic jams augment it). I proposed to use AWE (Absolute Worth Energy).
Meanwhile it may be good to consider the median income. It has been going down for a very long time in the USA, on a real basis (including the inflation in the cost of everything, not just the CPI). Looked at it that way, on a 20 year period, the present times compare unfavorably with any period centered around the 1930s.
In this light, the great depression is now.
Globalization without global law will lead to convergence of the income distribution, on a worldwide basis, thus the USA’s wealth pyramid will look more like India, in the long run, than that of the 1950s America.
King Louis XV of France used to say: “Apres moi, le deluge!” After me, the flood… He did not care. Plutocrats tend to reason that way, because all the money to them now is the balm they use for their absence of worthy passions. The vision thing is no tool they enjoy, as it would reveal them to be empty inside.
“No drama Obama” converges towards the exact same psychological profile… Meanwhile the society and economy is losing its essential substance, California, for example throwing, literrally the baby out, rather than the putrid bath…
Patrice Ayme
http://patriceayme.wordpress.com/
Yakkis, maybe you shouldnt get your information from wikipedia. I can never tell if you are joking.
All that reading, and you’re still not familiar with the fiddling anecdote and how it’s used….
???????
The Bailout Maps
The bailout is big. But, where exactly is it going?*
http://correspondents.theatlantic.com/richard_florida/2009/08/stimulus_geography.php
Put me in the pessimist camp. I don’t see the US pulling out of this one, at least in the state we have become accustomed to.
Most Americans have no appreciation of what Socialism actually means or is in practice, nor what Capitalism actually means or is in practice. Nor do Americans appreciate how Socialist, and centrally and artificially planned and interfered in the US economy has become. Nor do they appreciate how very un-Capitalistic large portions of the US economy have become.
And, there is profound irony in the current US situation. the 90% of Americans below the top 10% figure used by Simon are expected to perform based entirely on Capitalist principles. Get a job, do the job, keep your job, save your money, sign a financing agreement, read the fine print, can’t deal with massive interest rate or fee changes in the fine print, get sick, lose your insurance, lose your house, or your business, go bankrupt and lose everything. Too bad, so sad. Want a friend…? Buy a dog. Brutal, bare knuckles, unadulterated Capitalism risks and rewards.
The top 10% and other select subgroups have used political influence to structure their performance based on Socialist principles, within the “Capitalist” system. In the last 12 months, the financial industry, the insurance industry, and the auto industry have been able to convincingly feign Capitalist natures which allows them to Capitalize the rewards, while massively socializing their risks and costs. Another more long term systemic example is agriculture. There isn’t a single farm that I am aware of that is able to make money growing corn or beans or wheat or any other commodity based on input and market prices. All farms at best break even on their commodity production, and make their money exclusively based on a myriad of entrenched government set asides, subsidies, payments, etc.
Unbeknownst to most Americans, the real “two tier” battle is about how effectively a person, or business, or industry can position itself for Socialist treatment with Capitalist rewards within the US system. And, the top 10% have been much more effective at this so far. Agriculture and government are other entrenched systemic examples.
Thus, in my view, the true irony is: to succeed in the US, one must adopt a convincing mantle or capitalism (nationalism (GM, Citi, B of A), and patiotism (Goldman Sachs) doesn’t hurt either) and leverage influence to afford the opportunity and privilege to operate as a Socialist.
Want to succeed in today’s US? Operate as a Socialist and become too big too fail and of sytemic importance, work for the goverment, work for hugely government subsidized industries like agriculture, or work in education or healthcare.
The last place you want to be is in a Capitalist non-too big too fail business in the private sector that continues to get squeezed to pay for others Socialist benefits….
Since 1960, Govt Transfers as a percentage of personal income have risen from 6% to 18%. In that same period, Inequality has risen. I’m having a hell of a time getting anyone to explain this to me. However, there is an explanation that makes sense to me, since I favor a Guaranteed Income. Here it is:
http://www.davidhilfiker.com/docs/Justice/American%20Inequality.htm
“And that leads to the second major straightforward cause of inequality in the country: the relatively low levels of government wealth transfer from the rich to the poor. By “wealth transfer” I mean both the effects of government taxation and the effects of government programs. There are obvious transfers of wealth like food stamps or welfare payments, but there are other more important sources of this wealth transfer. For instance, universal health care benefits everyone about equally, so, in essence, government-funded health care transfers wealth from the rich to the poor. Public education, social security, Medicaid, and Medicare are other examples.
Examining the statistics, one finds that it is this differential in wealth transfer that actually accounts for most of the difference in inequality between the United States and European countries. If you use the same international method to calculate poverty rates for the United States, Canada and Western Europe and if you calculate those rates before any government transfer of wealth, it turns out that the US poverty rate is among the lowest. But if you calculate that poverty rate after government transfers, the US poverty rate is by far the highest at 18% (the United Kingdom is 13% but all other European countries are 8% or under). So, the primary reason that other developed societies are more equal than American society is that, in essence, they take money from the rich and give it to the poor.”
Hilfiker isn’t likely to find me a political brother. But I agree with his entire post, except for his tax proposals, which I don’t think will be effective.
If we’re correct, we’ve got a big problem with govt transfers. Namely, they’re not nearly efficient enough in reducing inequality. Since I agree with Lane Kenworthy that govt transfers are the best way to increase equality, this is not a good result.
I favor a Guaranteed Income/Negative Income Tax. As Milton Friedman said, it has the benefit of giving money to the least well off in our society. But then, maybe that’s why it doesn’t get much traction. Until this question is addressed, we can’t know that we’re efficiently dealing with inequality, under any economic conditions.
There is a difference between class distinctions and what Simon calls a two track economy. Even with distinct classes, there is a shared economic reality. In most societies, the upper and lower classes have not become so distinct that the economic reality of one is divorced from that of the other. Increasingly in the U.S., the two distinct economic realities barely connect. The guy on Wall Street earning $500,000 cannot imagine what it means to live on $20,000, and vice versa. We see this with the recovery of the investment banks and the re-institution of bonuses while the rest of the economy is still shedding jobs and facing foreclosures. Further, because the first has assets, his life still functions during a downturn. In fact, he may be able to buy additional assets at reduced prices when the lower class guy defaults. This accelerates the shift in wealth. Consider the former head of Countrywide who is buying up distressed properties.
Class distinctions are inevitable, but the economic fissure in this society is dangerous.
Exactly my thoughts Daryl. I think you should write a “Dummies” book along those lines. “Dummies guide to getting rich in the U.S.” Here are some chapter title suggestions I thought of:
1.) government contract work: getting no-bid contracts
2.) sociopath or great philanthropist?
3.) corrupting politicians and civil servants: a primer
4.) the small-business trap and the free market myth
5.) printing your own money: how to do it legally with credit creation and derivatives
6.) the hidden fee racket: make it work for you
7.) taking advantage of people without them knowing it
8.) advertising, propaganda, spin and all that
9.) running a financial instruments casino
We’ve been living with two economic tracks at least throughout the Bush years to now. People have lived beyond their means for a long time, borrowing to keep up basic living. The Bush years saw a jobless recovery. Now we have a jobloss recovery. It’s the people in the financial sector who can manipulate the money through split second trading programs that give them an edge who are making the money. Other wealthy people without that edge have lost money like everybody else. They just had more of a cushion to be able to afford to lose.
It does seem that way these days…
Thanks Tyson, I had forgetten what a cesspool wikipedia is. I much prefer your description or the description in “the trustworthy encyclopedia.”
http://www.conservapedia.com/Socialism
Let’s co-author it.
Here are some other chapters:
1. Everything you’ve ever wanted to know about latin and legal terms, and how to string them together in small print to describe fees in a legally enforceable manner, and hide them at the same time.
2. How to profit as a value reducing, but large fee generating intermediary.
3. New Math Primer: How revolutionary math innovations and techniques now allow 1 to equal 30.
4. Public relations lessons from Love Canal, Chernobyl, and Bophal.
5. Advanced real time culpability and responsibility doging for megalomaniacs. Includes 25 realistic role play scenarios for breakout sessions at executive retreats.
6. The ABC’s of making your business or industry systemically important.
7. How to become too big too fail as quickly as possible, or at least act if it is, and why this is critical.
8. How to fly on your jet and not draw attention-Regional airports ranked by discretion.
9. If in doubt, deny, forget, don’t recall, and never admit anything, and why this is critical.
10. Why coming ill prepared to meetings without the facts, and with no documentation is paramount. Includes handy pocket phrase guide of proven question deflection responses like “I’ll have to check with our CFO and get back to you”, and “we’re compiling that information right now”
11. Mercenaries: Why you need them, where to find them, and proper care and feeding.
Everything you’ve ever
When the metric is comfort and happiness rather than “GDP” and/or “growth”, then we’ll know we’re back on track as a society.
Until then it doesn’t matter what the “official” line is – we’re in shit shape.
Don’t forget:
12. Everything “private” is “private”, even if given to you by the public. Accountability is for the “little” people.
The nation is being openly pillaged and looted. This much is not a secret. Children not yet born are being made debtors so that men like Hank Paulson, Ben Bernanke, and Tim Geithner can pretend they have not brought an utter catastrophe upon us.
Make no mistake – the debt being compiled right now in the name of the people of the United States is odious debt.
Intergenerational debt violates fundamental decency. It is time to institute the practice of jubilee so that debt cannot again be used as a means to this end.
“The United States has, over the past two decades, started to take on characteristics more traditionally associated with Latin America: extreme income inequality, rising poverty levels, and worsening health conditions for many. The elite live well and seem not to mind repeated cycles of economic-financial crisis.” Actually your analogy is improper. We are seeing a reversion to the U.S. economy at it existed at the end of the 19th century–The Rovian dream. Unfortunately what is preventing the complete reversion to 1890 is big government and public sector unions: If the GOP could only repeal the new deal, their happiness would be complete.
It is an interesting point that until 1929, speculative bubbles ending in panics occured on a regular basis every 20 years or so beginning about 1820. The new deal regulations and government agencies ended this cyclic nature of speculative bubbles ending in panics until the S&L debacle of the 1980s. The age of Greenspan has generated three speculative bubbles in last 20 years ending in ending in the current panic. So if free-market economics is so wonderful, why is the economy in such a mess–and government interference is not an acceptable answer since government interferance has been going on since Roosevelt and the economy has only become unstable since Reagan.
There’s only a free market here if you’re buying politicians.
A central bank setting interest rates by fiat is by definition not a free market.
tyson: “So I do believe it would be appropriate to say that the US pratices corporate Socialism.”
Welfare Capitalism is the term I learned.
donthelibertariandemocrat: “Since 1960, Govt Transfers as a percentage of personal income have risen from 6% to 18%. In that same period, Inequality has risen. I’m having a hell of a time getting anyone to explain this to me.”
Whose income are we talking about? Let’s say that it is the average income of the recipients of explicit Govt Transfers. Well, if we normalize incomes so that that income has stayed the same, then the Gov’t Transfers increase it by 12%. Meanwhile, the incomes of the upper class have have increased by something like 300,000%. I have not checked the numbers, but that’s the general picture, even if it is off by a order of magnitude or two.
How big is the output gap now? Add the actual drop in GDP over the last 6 quarters to the normal 2.5% increase in potential (for close to another 4% over 6 quarters) and it must be approaching 7-8% by now, no? Why is anyone getting excited about 2-3% growth in the near future? That puts us on a tangent to old trendline, but starting 7-8% below the old trendline. The back of the typical V recoveries post WWII makes up lost ground in about 2 quarters. Anyone want to bet me that won’t happen this time? We need 10% growth over the next year just to get back to treadline (the existing gap, plus the relentless 2.5% increase every year). 2.5% growth from here means we stablize at 9.5% unemployment, with future job growth just absorbing work force growth.
And how about the relevance gap in the comments section? im 50 posts in, and probably 90% are completely off point.
The predatorclass is drunk and delirious with greed. They champion this evil, because they can, because they have bought, purchased, captured and effectively own the government through the power of their illgottengains. The dire problem is that economies and especially an economy as large and diverse as the American economy can NEVER be supported by 10% of population. All the wanton wealth the predatorclass has won and gleaned over the last few decades has come at the expense of America’s poor and middleclass. There are no crumbs off therichmanstable. The American predatorclass is heartless, brutal, lawless, merciless, and delirious with gread and their own false misconceptions of their exceptionalism. An intersting paper by then (1985) Cardinal Ratzinger, http://www.acton.org/publications/occasionalpapers/publicat_occasionalpapers_ratzinger.php currently the Pope
“Market Economy and Ethics” touches upon these critical issues. If the predatorclass is ruthless and heartless and turns it’s back and spits upon those less fortunate, – the markets will inevitably fail and implode; overwhelmed by the arch crimes of avarice greed, wanton criminality and the moral failure to provide for, and care the least bit about their fellow human beings.
This is the reality of Amerika today. The predatorclass, 10% of the population is ruthless, heartless, insatiable, criminal, and brutal and owns and controls the government. In effect our republican and what little remains of our democracy and our once more perfect union is now a Kleptocracy wherein the predatorclass, the superrich maraud, pillage, rape, rob and brutalize the rest of the population for the own singular and exclusive illgottengain. The American people either stand up, be heard, strikeout, and curb the predatorclass abuses and wanton greed and profiteering, or we go like sheep to the slaughter, or moths to the flame.
The top 10% are enemies of the American people and present dire theats to what little remains of our daring experiment in democracy. All the solutions to all our economic woes and instabilities are solved by curbing and clawing back from the wanton greed, monsterous wealth, and rank abuses of the American predatorclass. Sharpen your pitchforks and get locked, cocked, and ready to rock. The American people either sheepishly relinquish our future and the tattered remains of America to the predator class, or we force those fiends and shaitans to give back to the society they have ruthlessly pillaged, robbed, abused, and raped. The solution to America’s recovery is clawing back from the predatorclass. The predatorclass does not care about the rest of America or humanity for that matter, – so neither should we care about them. The time is long past, to even the playing field and demand and force accountability, the rule of law, fairness, and some small semblence of morality from the predatorclass.
As a followup, know that I spurn the Catholic church and all organized religion. The worlds religions and drenched in oceans of innocent blood and so evil. ““Men will never be free until the last king is strangled with the entrails of the last priest” Denis Diderot.
I just wanted to point out that there is a greater good in entertaining the questions of morality and particularly with regard to economic policy, and that our current predatorclass horrorshow is an example of wanton immorality and rank abuse – not too mention systemic criminality. Level the playing field, clawback from the predatorclass, and there could be hope for recovery.
Continue the status quo, and we’re doomed to either violent revolution, upheaval, and a brutal economic collapse. The predatorclass CANNOT be allowed to brutalize the rest of the population. No economy will ever prosper under this kind of fiendish onesided criminal immoral enterprize. The predatorclass must be put back in the keep!!!
I am encouraged by all these people who tell me about the recovery underway.
Now what exactly is the economic model which we will proclaim as ‘recovered’?
Is this 95% of workforce in employment, housed and spending with credit available?
Would someone please describe in detail what our recovered country will look and be like to live in?
Some financial gurus say the old model cannot be recovered because consumer credit levels were unsustainable. Given that the Fed has given the TBTF crowd real dollars to legitimise what was until then just book money, we now seem to have speculating financial folk profiting rather than wearing their losses! I don’t buy this was the only way to fix the mess. Where are the option evaluations, even post mortem?
Another puzzle in the broken business model is our Federal deficit and our continuing trade imbalance.
BO will spend $1,800 billion this year. Even if our annual savings reach 10% ($500 billion?) and our foreign creditors invest all their surplus ($400 billion?) that still leaves $900 billion to find! Just how much tax revenue is to be levied and used as a balancing item and to pay the interest on this flood of debt? Given that the numbers are approximate, just how does all this balance out? If we print more dollars and the Fed buys bills to cover same, how does all this cutesy accounting fly?
Would someone please inform me how exactly we are going to miss the inflation trap , get full employment, return to 2006 consumer spending levels, rehouse our people and fix our national debt?
I just want to hear from the Pres. and his team where on earth we are going and what it will be like when we get there and why this trick cycling is the best approach. I want my grandkids to have a life!!
HELP!
must include
13. a How-To for public cries (interviews, speeches) for solidarity, for unity under fire
“we are in this altogether”
“we must all look forward now”
“united we shall overcome”
etc.etc.
14. a How-To of putting the blame for having been fired ever so subtly at the feet of those fired thus reassuring the ones still “alive” that it can never happen to them. Never directly blaming them of course but pontificating on projects gone wrong or similar undeniable facts
As Deutsche Bank took away 12 bn of your money while refusing German government bail-out it may interest you that the Chef-Volkswirt=chief economist of the Deutsche Bank said in a distinctly shaking voice on October 13, 2008 “hier müssen alle helfen, das Feuer zu löschen”= here all must help extinguishing the fire. On April 23, 2009 he was back in his usual self-assured mode, being proud of having been up to it all along “ein bißchen stolz bin ich schon, daß”=I am kind of a bit proud of
Does “Incremental Pre-Fascist reestablishmentarianism” work too?
Don’t tell anyone, but what’s left of the “real” economy is crumbling before our eyes. The plan is unfolding right on schedule. “They” gave us enough rope, we hung ourselves, our necks were broken but we didn’t die, and here we are twitching away.
That select crew, the prophets who hit it just right — maybe we should look more into them and their relationships to find the roots of our problems. Alternatively we could continue to walk around in a daze wondering, by golly, how were those guys so smart.
We’ve been robbed, and they’re laughin’… jus’ laughin’ (that was intended to sound more sardonic than unbalanced)
Oh almost forgot. Ehem, yes well 20% decrease in the velocity of the 3rd derivative has led analysts to conjecture a healthy fall crop of blue mushrooms in Sri Lanka. All other economic indicators will henceforth be directed by the National Association of Realtors.
“by then (1985) Cardinal Ratzinger … currently the Pope
“Market Economy and Ethics” touches upon these critical issues.”
to recommend a paper from that source on that subject is a bit rich, really!!! – Rome and later the Vatican have never been shy about sucking up to the predator class or predatoring themselves
if you follow the advice in there you may be sure the money will not end up in the little man’s pocket – it may be hard to figure out but after all they almost had two millenia to hone their skills and skills tend to get passed on from generation to generation
as to hopes for Pitchforks – read Orwell on it, I think it is in “Down and out in Paris” – without a (gentleman) leader nothing will come of it (yes I know Hitler was not a gentleman but the ladies of the Munich salons took care of that, teaching him how to pose as one if required – just read last night that Lord Halifax returned to Britain from a hunting get-together at Göring’s quite impressed with Hitler’s charms) – oh and by the way we had some promising pitchforks once (Bauernaufstand) – Luther himself was quick to help quell it …
and Arnold Toynbee convinced me that there is no salvation/uplift/civilizing without using religion/dogma
even though strictly agnostic myself I must admit that you can’t get anything going with at least a slogan/mantra to start with
maybe recovery just means the brink has a bit receded and war was avoided
– I keep getting flashs of fantasies like some government decides to wreck the internet, i.e. of a no prisoners’ taken cyber war
– aside from the stopping of the financial markets wouldn’t all those ships transporting food over the oceans start going astray or something like that? water supply, electricity no matter what would be affected
– we have embarked on making ourselves dependent on an extremely complicated and extremely lovable technology
– if a sword broke you could try to fight on with a lance – do we have equivalent back-up today?
don’t say the cyber gangsters would be hurt by it themselves – governments once they get going have never minded any hurt whatsoever as long as it was only to their people it was always declared “necessary”
IPR seems to be a bit over-crowded http://en.wikipedia.org/wiki/IPR
IPFR invites nice analogies
http://www.networkworld.com/newsletters/frame/0313fr2.html
IPFRE seems to be mostly free
secure your IP-domain now!!! if you want make money from the coinage yourself
The Spectator has a piece today titled
“Cash For Clunkers: At Last, A Stimulus That Works”
does this one run out of money because the cash gets into the “wrong” tracks pockets?
I do not really believe in any long term effect of such a program besides it probably helps at least a number of people remaining employed while waiting for the storm to blow over
The German C4C was so successful it had to be prolonged (twice?) – I suspect one of its major effects was to empty the savings accounts of folks (while leaving fortunes unmolested) – also it is said to have made a lot of people from the more shady businesses happy, saving the clunkers from oblivion, shipping them to Africa
http://www.spectator.co.uk/the-magazine/business/5259023/cash-for-clunkers-at-last-a-stimulus-that-works.thtml
The “shared economic reality” under American corporatism is that the wealth of the upper class is mined from the lower (and there is no longer a “middle” class, only its short-time-left zombie vestige).
This process has only accelerated since the onset of the crisis. The bailouts and the current attempt to use the sense of crisis to further entrench the private health insurance parasite are two examples of this disaster capitalism.
So unfortunately they are not “divorced from one another”. The feudalists are not just an obnoxious hood ornament. They are parasites uselessly sucking huge amounts from the gas tank, even as they create zero value. It’s a zero sum game.
What indeed? There was recently some discussion about this at Economist’s View, and below is my suggestion.
(From the thread under the post “The Trickle-Up Economy”, Aug. 18)
http://economistsview.typepad.com/economistsview/2009/08/trickle-up.html?cid=6a00d83451b33869e20120a4f180b9970b#comment-6a00d83451b33869e20120a4f180b9970b
In the thread under the post “Machine-Sourcing” [also Economist’s View](Aug.8), I suggested that taxes are one way but not the only way to address the inequality issue. Another way is Govt. enterprise – “insourcing”, if you prefer. I said: “There is already the Post Office, Govt. education, NASA, fire and police services, parks etc. Why not have more? I have advocated a Govt. bank here and on other blogs in the past, and Govt. health insurance is very much on the US agenda at the present time. There are lots of other possibilities”.
In that thread I also remarked on the willingness of another commenter to praise the impact of the US military’s training and employment activities. I queried why this seems OK if it’s military, but not if it’s civilian: “The situation reminds me a bit of NASA. When JFK decided to put a man on the moon, he used this dazzling goal to demilitarise the US space program. No more separate Air Force and Army rocket programs, instead a civilian rocket program. Very clever. It could be done again with a civilian training/job creation program. Call it NELA (National Employment and Learning Administration)”.
That would be insourcing.
There is also the impact of regulation. There have been quite a few posts and comments in the blogosphere about how some transactions linked to the financial crisis should never have been permitted – like “NINJA” loans and “naked” CDOs. That’s a regulatory issue; there are lots of others.
So basically though I don’t disagree that taxes are important, rectifying the galloping inequality seen in the US and also in other countries will probably require the use of Govt. enterprise and better regulation as well. Maybe there are other useful tools out there that I haven’t thought of.
and you think debunking the fiddling anecdote proves that all the rest about life in Imperial Rome is untrue and that you have deep deep insights into a Roman emperor’s mind and intentions – insights in fact so deep that you know who impersonates him today –
insights people who devoted their lives to study them could nowhere find confirmed nor debunked
if you are not even sure what made people laugh how can you presume to know about the rest
maybe you should enlarge your reading just a wee bit and there’s a lot worth listening to out there too
No, not Mediaeval or Dark Age, I think you only need go back to the end of the eighteenth century, the age of Jane Austen. And of course of the French and American Revolutions, of Tom Paine and of the Six Acts.
but why am I for a number of years always urging myself to finally read up on the 30 years war because that keeps ringing bells – of course that was neither medieval nor dark age but it was way before Jane Austen and ended in the peace of Westphalia
the subject was taught in school with the help of Grimmelshausen whose way of describing it made me reluctant to ever go back to the period – but Schiller’s Wallenstein seemed to be the drama of choice for the last remembrance year we had for him – so maybe that’s the place to go for a warm-up
Recovery for whom is indeed the correct question.
It seems to me that the top 10%-20% would be concerned with income inequality only if it reaches a level that threatens political instability or the rule of law, particularly property rights, enough to involve them personally (there are, of course, exceptions to this generalization). According to anecdotes in the Brazilian documentary about political corruption and increasing crime, “Manda Bala”, if you buy a high-end car and live in Sao Paulo or Rio de Janeiro, you should expect to pay another $30,000 to have it bullet proofed. Yet, Brazil is regarded by many as a prime example of a successful NIC. By this informal measure (the bullet proofing requirement incidence), the US has a very long way to go before its population cares about or even feels income inequality.
The dominant myth of the American social fabric has been, I believe, the myth of the successful entrepreneur. Much as Heracles, given his immortal lineage (the modern equivalent is “talent”) overcame his mortality to achieve immortality and ascend to the summit of Olympus to live with the other Gods in ancient Greek mythology, Steve Jobs, Bill Gates, Warren Buffett, George Soros, et al. have ascended to the summit of the economic Olympus (truly independent wealth and great influence if not explicit power) in the 20th century. Central to our idea of ourselves as a country is the faith that, given enough talent (the American equivalent of noble/immortal lineage), a few breaks, some courage and a lot of hard work, ANY American could be the next Bill Gates. As long as enough of the population believe this particular myth and believe that “the government” wants take it away from us and make us share the extraordinary fruits of our (12) extraordinary labors with everyone else, changing popular sentiment about income inequality is unlikely.
Although we argue about the particulars of action, we know what we need to do to distribute income, wealth and quality of life more equitably among Americans. Not enough of us want to do it.
Min,
My point is that I’d like to see the numbers.
Take care,
Don
now would you care to fantasize who of your Olympians is going to be the one to turn himself into a bull and abduct Europa?
– you did it twice before and to me the growing nonsense and/or opaqueness around me seems more and more so ominous thatmy only hope is that America doesn’t switch all of her interests to Asia.
Two stories on Bloomberg on the new CEO for AIG are very revealing about the attitude of our new ruling class and sense of responsibility (or lack thereof) for the greater society and that either consciouslly or unconsciously they have accepted the ethos of John Galt’s speech and seek to restructure the U.S., if not the world’s economoy on a model similar to the Old South or Latin America. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aBMbXtpD2QG8. Also, Charles Gasparino’s article in “The Daily Beast” on Robert Rubin and his belief that world is treating him unfairly is very good for CITI’s collapse into public wardship (though still paying those handsome bonuses1).
could it be that all this has long left the aera of buying politicians and entered the aera of black-mail? at least at the highest levels?
I guess to blackmail an American government you would have to make credible that foreign relations/wars will become disastrous/erupting all over the place, if they the banks are not left alone/being helped to save the situation
only they can be our saviours …
Forget about insourcing, how about outsourcing? Indians, chinese and assorted other third world peoples could do a lot better job than our government bureaucrats and congressmen for 10 cents an hour and without health or pension benefits. We could also make the next Bill Gates by granting a single American a monopoly on overseeing these guys.
“My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!
Ever heard of Ozymandias?
Do you find it odd that the U.S. economy is supposedly hemorrhaging, and all of our resources are being given away to people least deserving to prevent us from addressing the problem?
Would someone please inform me how exactly we are going to miss the inflation trap , get full employment, return to 2006 consumer spending levels, rehouse our people and fix our national debt?
I think the plan is to make the rest of world pay for it.
According to this story the founder of McAfee anti-virus software is now worth $4 million down from $100 million. (Lost 96% of his wealth.) Then there are those who trusted Bernie Madoff. So in the interest of self-preservation, perhaps, there will be push back from the wealthy and, formerly wealthy, for reform in American-style Capitalism.
The once much-vaunted SEC has lost all credibility. Bernie Madoff’s Ponze scheme went undetected and would have continued but for the 2008 Wall Street meltdown.
So what kind of reform, if any, is underway at SEC?
What role does does public service have in American values?
What role is there for public service in American values?
Hee hee, someone seems to have a bug in his bonnet about Nero!
I didn’t write to “debunk” the fiddling anecdote, I used it as a throwaway line to characterize this administration. Sheesh.
Just to annoy you some more, wasn’t it Seutonius who wrote that the poor strewed flowers on Nero’s tomb every day for months?
I don’t mind if anyone uses as long as they link back to the “It’s A Wonderful Life” videos on Youtube.
a bureaucrat can never better the rules he/she has to abide by – if the rules are idiotic the bureaucrat HAS to act like an idiot
other than that most of the Asian patent attorneys and their clerks I had to deal with were so very very first class that I think your proposal should be seriously considered
but once they knew the system wouldn’t they start demanding pay raises? and thereby destroy the income structure in their countries which we find so very beneficial?
and where could the next batch of low income earners be found?
Heureka – after a couple of decades of that system the American bureaucrats would be so impoverished that they’d be willing to work for a piece of bread a day
as I’m always into finding out what “they” are up to I like this best,
“if anyone would know how great I am”
– that’s the problem “they” haven’t solved yet – they’re rich in money and low in esteem – getting statues in remembrance of their achievement in the middle of big cities to outlast all the ages – now that would be really something – yachts and handbags, bah, helipads every prol has one
“King of Kings am I, Osymandias. If anyone would know how great I am and where I lie, let him surpass one of my works.”
yes I confess I googled and wikipediaed
I try hard to preserve my sense that it is indeed odd that all the money seems to flow just up and up and up until it finds wide pockets at the top
I don’t know much about economy but I have a keen sense of what preserves or damages jobs
and so while the German C4C-concept didn’t convince me*) I am really glad that it probably kept any number of people employed
I’d guess for example it hit the used car sales thus making the selling of regular new cars harder because the dealer’s stock of used cars is already higher than it should be
in case you are for once not being “dark”
how do you pull that off without inflation?
one has to sort the Madoff clients into groups – those whose returns were much higher over the years than their initial capital those who hadn’t yet cashed in on returns and those in the middle
only after that one can decide which ones are deserving of pity
Don
Sorry, I am in a hurry. Just a quick note for now.
The growing socio-economic stratification of the U. S. is not new. I first read about it in the 1980s, and it has only mushroomed since then!
However, I did see last night that the 18% figure is probably misleading. It is from this summer, when average incomes are down because of unemployment and recession, and gov’t transfers are high, for the same reason. You can’t really compare that number with one from a normal year.
Ciao,
Min
“What role is there for public service in American values?”
Public Service has no value. Reagan 1:1
We have the problem of greed. Greed is one of the seven deadlies for good reason. We are all suseptible to it. There is a three pronged greed temptation in current American society – you might succeed through merit, through luck (lottery), or through corruption. One of these three elements is enough to tempt just about anybody.
Now when anyone who’s not at the very top talks about greed, the usual comments about jealosy and whining are made. There is a place for competition in every society. Human society works best when there’s a healthy balance between competition and co-operation.
A completely competitive society would be an utter hell on earth. Even animals pick and choose when they’ll compete and when they don’t.
I have no problem with the rich so long as there are many notches from the top to the bottom. We’re heading towards a society where the only choice is untold wealth by hook or by crook or to be dashed on the rocks. My fear is that the only thing strong enough to defeat the greed culture is something on the order of radical Islam.
Ten percent of the American population is 27 million. Aren’t you casting a pretty wide net?
The American program is more interesting. If you bought a gas guzzler in the past few years, you can trade it in with a large subsidy for another gas guzzler with slightly better gas mileage.
If you were at all sensible and bought either a fuel efficient car to begin with or kept your car for more than a couple of years, you are not eligible for the program.
do you have a link to an understandable description of it?
the way you describe it it sounds like it was just meant to clear the yards of the not-up-to-date models
Ours was quite simple – if you had owned a car more than 9 years old for more than a year you were eligible for € 2.500. Also your new car had to comply to Euro 4 i.e. current standard exhaustion norm
You got the money against showing the certificate that your old one had been demolished
– how to produce these certificates seems to have given innovative business ideas to fraudsters though – provide the certificate and take the often still perfectly alright car to Africa or elsewhere
but even without fraudsters involved I could see possibilities of “agreeing” with the dealer on something on a more private basis
car dealers and? their suppliers have been enhancing the lure of the Abwrackprämie by giving promises in their ads of heretofore unread of reductions, how and if they will be able to get back to old prices remains to be seen
but when all is said and done the producers of small fuel efficient cars had a time in March when they had problems meeting the demand which hopefully means workers could work full time and were not laid off
Tippy Golden: “What role does does public service have in American values?”
My impression is that there is something of a Blue-Red state divide. In the Blue states organized public service is valued. People go into the Peace Corps, do community organizing, etc. In the Red states private charity is valued. I think that the American public is fairly altruistic, despite placing high value on individualism. :) But there are differences about how to help people.
http://en.wikipedia.org/wiki/Car_Allowance_Rebate_System#Eligibility_criteria
(guarantees an improvement of 4 mpg for eligible cars)
Well, I don’t know the sources you mention, but maybe the 30 Years War rings a bell because of the Reformation and the State system which is often traced by historians to the Treaty of Westphalia – and called the Westphalian system because of that.
no it rings a bell because it is used even today as a shorthand for a complete breakdown into chaos
– as a complete change of everything
– Wikipedia calls it the decentralization of the Holy Roman Empire – on the map it looks more like it resulted in the destruction of it
Min,
Here are the charts:
http://dmarron.com/2009/08/13/latest-data-on-transfers-and-income/
From 59 to 74, it rose from 6 to 12. In the last year or so, we’re talking 16% to 18%. The question is, if it’s rising, why is Inequality rising as well. I think that you’re right that Inequality has grown more since 80. Here are a bunch of charts on that:
http://www.demos.org/inequality/numbers.cfm
Take care,
Don
Jay Z
A thinking post.
I would suggest that ‘radical Islam’ must imperatively follow the Koran explicitly.
Now surah 9 also known as ‘The Sword’ is the abrogating portion of the Koran which spells out relationships between peoples. You will not be surprised to note that surah 9 commands no friendship with non-Muslims, war and subjection and generally anything but defeat of a greed culture.
I will leave you to read the rest. However Islam often claimed to represent peace literally translates as subjection (enslavement) and a common Arabic name ‘Abdullah’ is ‘slave of Allah’.
May I suggest a better solution would be ‘radical’ ie Gospel Christian faith.
Now how can we achieve this in our nation? Separation of church and state must have originally sought to preclude control of us all by an organisation run by men and in the 1700’s termed ‘church’. However what we have ended up with is a demand that only atheism and state are allowed.
What an absurd handicapping and burdensome mess!
from all I’ve read I am sure that “radical Islam” is one of these waves religions come up with over the centuries to create as much misery as possible and leave in their wake something different
– during the 1100 years that Byzantium lasted Islam has been coming up with all kinds of models to stimulate it’s believers and measured on decent behaviour on the whole they probably come off pretty balanced against the Orthodox and Roman Christians
I understood Arnold Toynbee’ study of history so, that he said it needed a new religion to get the world back on track. As he is also reported to have said once in Cairo some pretty insensitive stuff about a certain people being unwilling to recognize Jesus I guess he meant Christianity. http://en.wikipedia.org/wiki/Arnold_J._Toynbee
for the time being it seems like Islam was faster in heeding Toynbee’s advice ;)
So given the koran directives do you prefer to live as an Islamic subject? We have Islamic followers obedient to the Surah 9 commands in US/911, Pakistan, India, Indonesia, Phillipines, China, Afghanistan, Iran, Kuwait, Malaysia, Russia, Egypt, Palestine/Israel, Lebanon, England to name a few. Historically in the Balkans, Sicily, Italy, Egypt, Syria, North African Christian countries and Spain to name just a few more. Don’t forget the current ethnic cleansing in African Islamic nations.
Time to switch from generalities and be explicit about your Islamic druthers together with the Koran’s war commands? Just how do you plan to reconcile this activity record with a preferred lifestyle for us here?
May I suggest you review the resulting abrogated portions of the Koran and quote the surahs under which you suggest we should live. But don’t miss surah 9.
Then compare the Koran lifestyle prescription with the Christian Gospel. I’m sure a free vote in Muslime countries would get a large vote for a Biblical life. However Islam bosses will not let a free vote and the Koran calls for murdering anyone who leaves the Islamic scene!
Count me for the non-Islamic camp please.
I was referring to the ups and downs of 1300 to 1400 years of history and Toynbee’s guess at the role of religion in that time and long before that – by the way
My ideal is to live in a democratic state with a strict division of church and state which allows me to go on living as a confirmed agnostic who acknowledges that she has been raised in and shaped by the Christian world view, something that in Europe at least still needs quite a bit of adjusting of its relations to its ancestor religion. Anything fundamentalistic will hopefully never be tempting to me.
– I will never forget what the American Captain told me when he took me out to dinner on Good Friday in Wiesbaden and I realized horrified that people had been working on Good Friday. Good Friday being the highest protestant holiday in Germany, even today you will find no dances going on on that day and he told me VERY proudly that Americans would never tolerate a church holiday adhering to a strict division between church and state – that was in about 1967 and boy did I admire your country for that
though even though Islam may be on the march again right now I would love to dare the Christian Churches to come up with a better defence-attack-combination than the introduction of theocratic elements would be
reads like a clerk’s dream of securing jobs
– to be assigned the job to get all this mpg-info assembled must have seemed like manna from heaven and probably will continue to be because I guess these mpg-figures will be hard to unify all over the markets
– at least in this instance the EU-system seems to have created something sensible – at least by comparison – also it is more balanced in the distribution of jobs between blue and white collars.
– we have to have our exhaust fumes chequed regularly to get a sticker to be able to go on driving legally and that check is done by technicians and initiated and taken care of by the mechanics when the car is inspected
– thanks for another “weapon” against the crowd forever disciplining us with the “in America everything is better” battle cry which I think is likely to be more damaging to the image of the US than criticism is. It creates these resentments one has when was is called stupid by the “world-wise” ones
I asked: “What role does does public service have in American values?”
Min answered: “My impression is that there is something of a Blue-Red state divide. In the Blue states organized public service is valued. People go into the Peace Corps, do community organizing, etc. In the Red states private charity is valued. I think that the American public is fairly altruistic, despite placing high value on individualism. :) But there are differences about how to help people.”
My Response:
Min, thanks for your reply. It goes without saying, we need to be responsible for ourselves and our dependents. Beyond this, I think there is wide latitude in understanding what it means to engage in public service. Speaking here as a Canadian:
If we understand “public service” as creating a “public good” there are many occupations that qualify. For example: teachers, social workers, doctors, nurses, city engineers and planners, law enforcement, fire men and (yes, those sometimes much maligned) politicians … and much more.
Public service can be understood as those who work for government departments. This includes the building and maintenance of public infrastructure. Our roads, bridges, dikes, waterworks, sewage systems for storm and waste water.
I am fascinated by the idea of social contracts that bind a country and a society together. These social contracts are in fact the laws enacted by government or common law. So there is a social, legal and physical infrastructure that we can easily take for granted because it is so well integrated into everyday life.
I would argue that public service means more than working for the Peace Corp or charity. (Though not to diminish altruistic activities.)
I raised this question because (based on my reading of this blog) the financial crisis on Wall Street can be blamed, at least in part, on a dismantling of the American civil service that began with Ronald Reagan.
Notabanker,
My understanding is the American Constitution separates Church and State because of the long history of religious violence in Europe that your American forefathers sought to transcend. For example, the wars between Catholics and Protestants, and between different denominations within each faith. These were theocratic governments.
Iran has a theocratic government. And it has been argued that the sectarian violence in Iraq, between Sunni and Shia Muslims, can be compared to the religious wars between Catholics and Protestants in Medieval Europe.
For example, if Church and State were not separated in the United States, which denomination would qualify as the State religion? Catholics, Protestants, Episcopalians, Baptists, Mormons, Evangelicals, to name a few. Which one would win the claim to being the True Religion? And how would competing claims be disputed?
not to contradict you just to add a European facet as I’ve come to see it
when “1968” happened – remember the photos of the German foreign minister throwing stones then – all heretofore unquestioned rules of behaviour got under scrutiny
– a lot of it was put to good and beneficial effect but like any fashion it became ever more shrill and totalitarian (just as an example that may resonate across the Atlantic “all men are rapists”) and a lot of the shrill stuff got widely accepted, like when you want to seem laid back in private life you must not be overly meticulous in keeping to the time of your appointment and you are old-fashioned and stuck up, if you dare to expect that you are owed an apology or explanation. this example may seem insignificant but I think it illustrates a very deep shift in our dealings with eachother. So this ever widening extension of “anything goes” into everyday behaviour certainly nourished the climate in which bankers’ self-entitlement could grow out of all proportion
and even more frightening for me was to read Paul Berman on Kouchner the current French foreign minister who not only founded Doctors without Borders but cherished very broad ideas (acting on it in the drama of Biafra long ago) on softening up the right of a state to non-violable borders (likely to having been undisputed since the Westphalian peace i.e. 400 years)
– now of course Kouchner “campaigns” for it in the interest of the mistreated inside countries with a excesses of violence. Even though it alarmed me because one day a less benevolent empire*) than the US will decide that a country needs to be saved from itself and there will be found other causes to necessitate the saving than the murdering of citizens by their own government et al
*) and yes that’s what they are on balance if you measure them against all the other empires before them but that never will keep me from watching them closely with a grain of mistrust like I do with anybody who has power of me
thank you Tippy
I just would like to be more specific with the use of “theocratic” – the German states who got the right to demand their citizens to confess to the sovereign’s religion after the Reformation and I think after the 30 years’ war were not theocratic in any way comparable to Iran today – that’s why I chose to call it clumsily “theocratic elements” which we most certainly still have today in Germany
– I recently heard 1,5 hours about Calvin in Geneva and that sounded for the short time it lasted like what I would call theocratic – but I’m probably wrong there also
… to demand their citizens to confess to the sovereign’s religion:
and switch it if the sovereign decided to convert
Thank you for your comments.
Please note I am not opposed to separation of church and state at all! Jesus Christ declared as much ‘My kingdom is not of this world’. Churches were not supposed to run governments. Our government has always had Christians in office which is different to a church being in control.
I am quite prepared to have agnostics all over the place! I hope your search for truth is successful.
The issue I took up was the perceived suggestion that Islam was a worthwhile ‘management style’ for life? That is refuted by the contents of the Koran. Do you agree?
Notabanker,
JayZ wrote: “My fear is that the only thing strong enough to defeat the greed culture is something on the order of radical Islam.” I think he was being ironic. Although I cannot speak for JayZ, I don’t think he was seriously recommending “radical Islam” as “‘management style’ for life.”
I don’t know enough about Islam to comment on it. Although, I found this this historical perspective fascinating.
“I hope your search for truth is successful.”
thanks for your good wish but I do not search for truth in that field, that is why I call myself agnostic, humbly acknowledging that there are things unknowable to humans, by the way I a confirmed agnostic objects to atheists
as to the Koran
I had all through my 11 school years 2 hours a week of religion as part of the normal curriculum – the teachers being either protestant or catholic and I loved those hours, I went through the extensive preparation obligatory for confirmation and I hated every minute of it, I have been always very keenly interested in the role the churches play in my country but I would never ever presume to proclaim I know anything of interest about the Bible even though I have of course read it
– thus how could I even attempt to acquire any kind of knowledge about the Koran, especially since I get quite often told that it is a highly complicated and in parts very contradictory book and on top of that I have never lived in a Muslim country and am therefore totally ignorant of the dos and don’ts of their everyday life.
in general I strongly object to religions throwing quotes from eachothers holy books at eachother. Recently I listened to a series of lecutres by Paula Fredriksen http://en.wikipedia.org/wiki/Paula_Fredriksen – the amount of what I do not know about the evolving of Christian teachings/learnings is staggering
I hear that a Grand-Ayatollah who other than Khamenei has gone through all the usual stages of his education takes an incredibly long time to acquire the title. I have as yet no wish to get familiar with his thinking. I want it to stop that there are public executions. That women stop to get treated as if they were weapons of mass destruction for men and so on and so on – I just want them to behave in the here and now by rules of decency which within the realms of their religion have had times when they were complied with
Tippy
glad there is another one out there who enjoyed her first encounter with that unique radio program
I have subscribed to it via iTunes have listened by now to each and every episode even the ones on physics and mathematics and enjoyed every moment of it
The problems in our economy are due to a lack of innovation and the 1/3 of the economy that is completely dependent upon the government trough. The fastest and cheapest way to get our economy growing is to push innovation. To understand why innovation is key to the economy see http://hallingblog.com/2009/07/08/is-innovation-the-key-to-growing-the-u-s-economy/. If you want to see specific, low cost proposals to spur innovation see http://hallingblog.com/2009/05/26/innovation-regulatory-road-kill/
as it happens, I just listened to this program http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?i=58425886&id=256580326
the first part tells how rules of ruling which evolved in Bermuda became almost British policy in the US when you were still the 13 colonies – luckily the British decided otherwise
– the second part is about Medieval mores
Sean McGlynn discusses Medieval atrocities and reveals how they compare to modern-day brutality.
notabanker
here are two accounts of Churchill from the end of the 19th!!! century when he participated twice in fighting muslims fired up by Mahdis (some kind of messianic belief that exists in some or all islamic “churches” – i.e. I read that the Shiite idea of a Mahdi and the Sunni idea of a Mahdi are quite different.
The campaign was at the border between Afghanistan and Pakistan exactly there were American troops have to do it now (and where a little bit further off the former Lawrence of Arabia (Waziristan) spent part of his life as a simple soldier).
The war was about Somalia (Khartoum) i.e. the city where Osama bin Laden lived before he took off for Afghanistan.
The Mahdis who started both these things were both Sunni, oh, and the troops who fought with the help of British soldiers the “River War” were Egyptians i.e. presumably muslims also and Churchill seems to have liked a lot of them but was full of admiration for the Somalis if I remember correctly
no, I am in no way judging whether the British were right to get into those fights
– for that I would have to know lots and lots more history than I do, I only want to provide reports from modern times when an empire decided it had to stop something initiated by fanatics
http://www.gutenberg.org/etext/9404
http://www.gutenberg.org/etext/4943
What has been missing since the rise of Ronald Reagan is any sense of noblesse oblige.
I vote for “die Sorgfalt eines ordentlichen Kaufmanns” equals very roughly the carefulness of an established merchant/financier – I am sure there must be something like that in your law
Silke
Mahdi is about equal to a person who will arrive at the end time and make the whole world Muslim so get ready. In the interim it has been sometimes used to refer to a significant leader. Khartoum in the 19th century is an example. Sunni and Shia are really not so far apart in their Mahdi beliefs
Khartoum is actually in Sudan not Somalia. Ethiopia and Uganda are between Sudan and Somalia whose capital is Mogadishu.
My impression from reading of British involvement in Sudan and what was then India is that they were there for money, more money and maybe pride! Similar record to other European countries seeking to plunder African and Asian countries. Sudanese troops were popular with Churchill (then a newspaper correspondent and minor British officer) as fighters accepting of discipline. If you are interested in Sudanese ancient history the Egyptian Pharoahs also admired Sudanese soldiery.
I would like to suggest reading the Gospels again and mulling particularly what Jesus said. Only about 170 pages at most. If you are going to reject Jesus at least know who you are rejecting.
The Koran is indeed confusing as the contents are arranged with shortest surahs(books) at the front and longest at the the back. With Islamic claim that difference on a subject, between surahs, is a function of abrogation whereby Allah changed his mind We need to know which Surahs are laest. Suffice to say the Surah 9 is an abrogating surah and thus represent the latest from Allah. This is actually titled ‘The Sword’ If you were to read The Sword you would probably be done in 2-3 hours easily
I suggest this wwithout intending criticism but to highlight that we can know a lot about what we believe and disbelieve by investing a relatively small amount of time. An agnostic as defined by Professor Huxley is one who has not yet determined the truth of a matter. Now Huxley was a professor and was speaking in terms of enquirers who were still short of sufficient data to decide. I don’t believe he included in the term those who had not pursued enquiry.
I can sympathise and indeed empathise with those of us who were processed by ‘churchianity’ but Jesus is not such churches.
Please accept I mean no disrespect of your position.
thank you for the correcting my miswriting Sudan (but there were also Somali fighters) and thank you especially for explaining to me the content of two books I have actually read – especially useful is to read about the Mahdi in theory as compared to real Mahdis in action.
and if you’d take the trouble to read Churchill’s My early years you could learn that at that time a newspaper correspondent could have a kind of hard to judge by today’s standard combatant status at the same time – in Malakand Churchill didn’t stand by when his comrades (he had a comission himself albeit to another regiment) were in trouble and in Sudan he took part in the last Reiterattacke (attack on horse back) to date.
“Please accept I mean no disrespect of your position.”
then stop proselytizing
“My impression from reading of British involvement in Sudan and what was then India is that they were there for money, more money and maybe pride!”
before I’d come to that judgment I would check out a lot of things, for example how much the American Civil War and the embargo had damaged their cotton/textile industry which they needed to feed their people
I consider it a truth universally acknoledged that a state has the duty to secure the live of its people (oh and since we have arrived at the professor-level now – I liked the way Quentin Skinner explained it
– I have a vague memory that cotton grows in Egypt – maybe securing cotton was as much in their interest as it is nowadays in the interest of the “West” to secure the supply of oil because otherwise things would crumble so badly that they in their turn probably couldn’t feed their people anymore.
finger-pointing is the easy route understanding how something came to happen is hard why else would historians continue to write books about the same events always having found some new and very interesting angle that adds another part to the picture
German journalists forever LOL about these doom sayers – they picked always the ones who had put a date on it and pounced once that date had passed
it is really bewildering that whenever an enthusiasm/mania breaks out that there seems to be nothing one can do to deflate it. Stop feeding it money would help but which money from where – Greenspan says now whatever he could have done it wouldn’t have changed anything
Silke
Maybe all this is getting way off the thread re the two stage economy?
I note you have examined the Bible and the Koran, are well informed re the contents of each and have concluded there is insufficient data to enable any change in your agnostic position. So be it.
Are “Blue Regions” responsible for US Socialism? I’m a resident of Brevard County, Florida represented by the Reddist Representative in the US House of Reps (Bill Posey- who introduced H.R. 1503, i.e., the Original Birther).
Brevard is extremely RED but depedent upon Social Security, Medicare, NASA and protection of unnecessary military bases in that order. The Anti-socialist, Reganite, Birther Bill P. fights as hard for this federal money as any Rep. FL District #15 has ever had. So my question is, is he a socialist?? Also, Bill and I apparently agree that Brevard should continue to receive income from the federal gov’t but we serioulsy disagree about how to distribute the federal dollars, how do we decide who is the socialist?
JRW
how about this http://en.wikipedia.org/wiki/Bhagavad_Gita
I read it is revered by Hindus and I read that in Hindu-communities lots of things are brewing
and the stance one takes towards faith can harm or help an economy so it’s not as off-topic as it seems at first glance, after all the ones who created the mess were strict adherers to dogma.
…and people still believe him.
I never did
– over here he was eulogized again and again “oh he is so much better than our bankers because he speaks in these well-calibrated vague hints
for me that sounded like the Delphian oracle – one can interpret it any way one wants
– I am way too stupid to go for that kind of stuff – it makes me sick, reminds me of the writings of the romantics which were rammed down my ears in school
OBAMA TSUNAMI
I ACCEPT PRAISETIQUES NOT CRITIQUES
ANY RESPOSE IS APPRECIATED IF ONE USES FACTS-NUMBERS.
BLARNEY BLABBER GENERALIZATIONS NOT READ.
“CONSERVATIVE” IDEOLOGY GAVE US THE CURRENT “GREAT” RECESSION SAME AS IT DID IN “GREAT” DEPRESSION
LET WALL STREET GAMBLERS PLAY WITH LOADED DICE AND MARKED CARDS
FREE THE FREAK MARKET
LET RICH GET UTRA RICH IT WILL TRICKLE DOWN TO MIDDLE CLASS
FROM 1946 TO REAGAN WAS ––T HE GREAT MIDDLE CLASS YEARS—
EACH PERCENTILE INCREASED, ALMOST EVENLY, IN WEALTH AND INCOME.
ECONOMISTS CALLED IT A PICKET FENCE DISTRIBUTION.
REAGAN POLICIES BEGAN UPWARD SHIFT (ONLY DIFFERENCE BETWEEN SHIFT AN SH-T IS ONE LETTER)
IT BECAME A STEP LADDER DISTRIBUTION. EACH STEP GAINED A LITTLE AND TOP STEP(10%) WENT INTO OUTER SPACE.
HIS HUGE TAX “CUTS” FOR WEALTHY (60% CUT).
HIS HUGE TAX “INCREASES” ON THE MIDDLE CLASS (PAYROLL TAX INCREASE WAS LARGEST IN HISTORY –TAX ON 50% OF SOCIAL SECURITY INCOME–5 CENTS ON GAS)
HIS ENORMOUS INCREASE IN MILITARY SPENDING ENRICHED THE RICH STOCKHOLDERS OF DEFENSE BUSINESSES.
REAGAN INCREASED SPENDING BY 80% AND DEBT BY 170%.
Do not try usual conservative spin—“it was congress”.
Reagan 8 budgets spent more than prior 50 years.
He submitted 8 for over 7000b. 1930-1980 spent 6066b—congress returned 8 budgets to Reagan with fewer dollars in total than he had submitted to it.
Go ahead try usual conservative spin—“real” inflation adjusted dollars—no work senor—
From 1948 to 1989 Reagan spent 2.7 dollars in 8 for each “real” dollar spent in other 32 years. Comprehendez amigo? Factoids hurt? Si!
Try usual Heritage spin—Reagan tax cuts paid their way—huh! From 1983 to 1989 federal revenues increased from 599b to 990b. 391b increase. Correct. But-Reagan tax cuts were income tax cuts therefore it seems logical you measure income tax revenue increase.
319b increase. 201b was increase in payroll tax revenue from Reagan huge increase in it.
50b in excise tax increase partial from gas tax. 251b of 391b. Durn! That leaves 140b increase in income tax revenues. My math professor Dr. Hook taught me 140 in is smaller than 750 out. Factoids are miserable things.
GEORGE W. BUSH DID MORE DAMAGE THAN REAGAN.
INCREASED FEDERAL SPENDING BY 110%–DEBT BY 100%
CUT TAXES FOR TOP 2.7% OR 4 TIMES AS MUCH AS BOTTOM 80%
HIS 1700 BILLION IN TAX CUTS WERE IN THE 5000B HE BORROWED.
BUSH LED US INTO TWO AWFUL SLAUGHTERAMAS. HUNDREDS OF THOUSANDS OF INNOCENT PEOPLE WERE KILLED. TENS OF THOUSANDS OF LITTLE KIDS WILL BE MAIMED FOR THE REMAINDER OF THEIR LIVES. TENS OF THOUSANDS OF WIDOWS HAVE NO WORKER TO SUPPORT THEM.
EVER KNOW AN AMERICAN SO-CALLED CHRISTIAN TO WEEP OVER THOSE HORRORS?
MILLIONS OF TEARS SHED OVER HOLOCAUST. NOT THIS ONE.
HE CREATED NET NEW JOBS AT 3000 PER MONTH. HORRIBLE COMPARED TO 218,000 AND 237,000 THE CARTER-CLINTON RECORDS.
THE WORLD WARNED NOT TO INVADE IRAQ.
BUSH FATHER SAID DO NOT DO IT
LEADERSHIP OF EACH MAJOR RELIGION (EXCEPT SOUTHERN BAPTIST) IN AMERICA SAID DO NOT DO IT.
POLLS IN MAJOR NATIONS SAID DO NOT DO IT.
EXCEPTIONS WERE THREE–ISRAEL AS EXPECTED-POLAND-AUSTRALIA
CHENEY TOLD RUMSFELD THE DAY AFTER 2001 INAUGURATION “PREPARE TO INVADE IRAQ”. EQUIPMENT WAS MOVED INTO KUWAIT FAR BEFORE BUSH “CHEERFUL” ANNOUNCMENT WE WERE INVADING IRAQ TO FULFILL HIS STATEMENT TO HIS BIOGRAPHER– “I WILL NEED A WAR TO BE A SUCCESSFUL PRESIDENT”.
WALL STREET WAS ALLOWED UNRESTRICTED WIDE-OPEN GAMBLING. IT WAS UNPRODUCTIVE. NO JOBS WERE CREATED. IT WAS SIMPLY THE RICH GAMBLING TO GET RICHER. BETTING MONEY AGAINST MONEY. ROULETTE WHEEL TYPE GAMBLING.
I BET ON RED YOU BET ON BLACK.
THE HOUSING INDUSTRY SUSTAINED GDP GROWTH BUT WASTED CAPITAL-LABOR-MATERIALS TO CONSTRUCT HOMES TOO LARGE-TOO EXPENSIVE FOR THE MIDDLE CLASS INCOME. FEDERAL RESERVE (GREENSPAN) INCREASED THE TOTAL MONEY SUPPLY IN 5 YEARS BY TWICE AS MUCH AS INCREASE OVER PRIOR TEN YEARS.
GREENSPAN GAVE CLINTON A 6.5% INTEREST RATE AND BUSH A 1%.
THIS ENCOURAGED BANKS TO BORROW MAX FROM FEDERAL RESERVE.
PLENTY MONEY PLUS LOW INTEREST=DISASTER
LOCAL BANKS WERE ALLOWED TO TRADE AND INVEST IN WALL STREET.
COURTESY OF PHIL GRAMN, REPUBLICANS IN CONGRESS, PLUS PRESIDENT CLINTON WHO APPROVED ELIMINATION OF SMOOT-HAWLEY RESTRICTIONS ON LOCAL BANKS.
IT KEPT BANKS FROM GAMBLERS ON WALL STREET AS IN 1920S.
WE DID NOT LEARN FROM CHANGING SAVINGS AND LOANS FROM LOCAL OWNERSHIP TO WALL STREET GAMBLERS OWNERSHIP AND MICHAEL MILKEN LED RAIDS ON CORPORATIONS.
A FEEDING FRENZY TOOK PLACE ON HOME MORTGAGES, WHICH WERE SOLD VIA SECURITIES AS HIGH GRADE INVESTMENTS TO UNSUSPECTING BUYERS LIKE FOREIGN NATIONS, STATES, CITIES AND INDIVIDUALS. HOME OWNERS WERE ENCOURGED TO REFINANCE AND TAKE CASH TO BUILD SWIMMING POOLS, VACATIONS ETC. PRIME EXAMPLE IS WHERE $500,000 MORTGAGE WAS REFINACED AT $700,000. MORTGAGE FIRM TOOK BIG CHUNK OF THE $200,000.
CRAAAASH. HOME OWNER NOW HAS $700,00 MORTAGE ON $400,000 VALUE HOME.
FORECLOSURE HERE I COME. SPECULATORS GOT INTO THE FRENZY. BOUGHT HOMES FOR NO DOWN PAYMENT AND SMALL MONTHLY PAYMENTS BASED ON SELLING IN TWO YEARS AT HUGE PROFIT. ZAP. FORECLOSURE. IN JANUARY 2008 THE TOTAL FORCLOSURES TO DATE WERE 23% ON SPECULATION PURCHASED HOMES.
LARGE DEVELOPMENT FIRMS GOT LOW LOW INTEREST MONEY TO BUILD MANSIONS NOT AFFORDABLE HOMES FOR THE MIDDLE CLASS. THEY GOT RICH. IN CALIFORNIA A DEVELOPER BUILT A DEVELOPMENT OF $700,00 HOMES AND IN ANOTHER AREA BUILD EXACT SAME BLUEPRINT FOR $500,000. IF HE MADE $100,00 ON A $400,000 HOME HOW MUCH ON A $700,00 HOME. HE IS BEING SUED BY BUYERS OF $700,000 HOMES.
THE HOUSING FRENZY WAS BASED ON ONE ASSUMPTION. A LOGICAL ONE BASED ON HISTORY. HOUSING HAS ALWAYS APPRECIATED IN VALUE. ALWAYS IN HISTORY.
HISTORY IS FALLIBLE.
ONE HEDGE FUND (GAMBLING) MANAGER MADE 2000 MILLION IN ONE YEAR.
TWO MADE 1000 MILLION IN ONE YEAR.
TAXED AT 15% RATE.
THIS GAMBLING GREED FRENZY COST THE MIDDLE CLASS IN THE REDUCED VALUE OF THEIR HOME AFTER THE BIG CRASH. THE VALUE DECLINE OF MY HOME WAS 15%.
FROM 1981 TO 2008 IT WAS A DISASTER FOR WORKING PEOPLE AND BONANZA FOR GAMBLING PEOPLE.
WHY DID NOT CEO’S INCREASE INCOME OF THEIR WORKERS?
IN ONE YEAR THE CEO’S MADE 550 TIMES THE PAY OF THE AVERAGE WAGE IN THEIR BUSINESSES. REMEMBER THE GOOD OLD MIDDLE CLASS DAYS WHEN IT WAS 40 TIMES.
IT IS NON—DEBATABLE. 1981 TO 2008 WAS ENRICH RICH DITCH THE REST.
SINCE 1980 HERE IS A BRIEF
20 YEARS=3 SO CALLED CONSERVATIVE PRESIDENTS
18 YEARS=SO CALLED CONSERVATIVE SENATE
12 YEARS=SO CALLED HOUSE
6 YEARS=TOTAL GOVERNMENT CONTROL BY SO CALLED CONSERVATIVES
2 TERRIBLE ILLEGAL WARS
TRANSFER OF JOBS TO CHINA AS WE COVERED OUR OVER-SPENDING BY THEIR LOANS
LOSS OF OUR JOB PRODUCING MANUFACTURING BASE–
HERE ARE THE RESULTS
600B SPENDING TO 4000B
1000B OF DEBT TO 11,000 +
23M NET NEW JOBS
12 YEARS OF CARTER + CLINTON GOT 33M
8 YEARS OF THE MOST SCURRILOUS ADMINISTRATION IN HISTORY PER HAYNES JOHNSON IN –PRESIDENT REAGAN=SLEEPWALKING THROUGH HISTORY
138 CHARGED WITH CRIMES WAS MORE THAN GRAND TOTAL SINCE 1900
MOST OF THEM WERE CHARGED IN CRIMES INVOLVING MONEY.
THE NUMBERS ARE AVAILABLE. THE HISTORY IS VERY CLEAR.
THE GREAT MIDDLE CLASS GOT THE GREAT BIG SHAFTING.
THE STRUGGLING RICH BECAME THE ULTRA-RICH
SMASHED WALL STREET
SMASHED ECONOMY
SMASHED HOUSING
SMASHED CHILDRENS FUTURE WITH DEBT
SMASHED WORKERS INCOME
SMASHED AMERICAS REPUTATION WORLDWIDE
STARTED THE DECLINE OF THE AMERICAN EMPIRE LIKE ROME-SPAIN-HOLLAND-BRITAIN
DEMOCRATS HISTORY OF BUILDING GOOD THINGS FOR ALL AMERICANS
CONSERVATIVE HISTORY OF FIGHTING THOSE GOOD THINGS
WHY DO YOU SEND CONSERVATIVES BACK TO WASHINGTON?
I AM OLD AND UGLY AND I APPROVED THIS MESSAGE OF DELIVERANCE
FROM CONSERVATIVE FALSEHOODS
I ASK ONLY IF I AM WRONG GIVE ME FACTS AND I WILL CORRECT.
I ERR BUT I DO NOT WRITE WITH INTENT TO DECEIVE
8-26-09 USA TODAY—CBO AND CEA PROJECT DEFICITS OF 9 TRILLION OVER NEXT TEN YEARS. REPUBLICANS, PER USUAL, JUMP ON OBAMA CASE.
REP. BOEHNER “TODAY’S REPORTS CONFIRM WHAT THE WHITE HOUSE HAS BEEN TRYING TO HIDE.
THE DEMOCRATS OUT-OF–CONTROL SPENDING BINGE IS BURYING OUR CHILDREN AND GRANDCHILDREN UNDER A MOUNTAIN OF UNSUSTAINABLE DEBT”.
This is so stupid it is a good laugh. He took us on a Spend-Borrow binge from 1000B of debt to 11,000B. He took us on a spend binge from 600B to 4000B.
These guys have one simple trait—deceive—distract from truth—attack attack
Yes! No question. It is going to take much Spend-Tax-Borrow for years to correct the mess created in prior twenty years of conservative control.
How easy the people forget the Balanced Budgets=Surpluses under Clinton and 8 good years.
WOW—8 YEARS=5000B + INCREASE IN DEBT UNDER BOEHNER-BUSH
1830B IN CLINTON LAST YEAR OF SPENDING TO 4000B UNDER BUSH LAST YEAR OF SPENDING
SPENDERS + DEBTORS + LIARS = CONSERVATIVES
ONE MAJOR TRUTH—IF A CONSERVATIVE LEADER SAYS IT –IT IS PART TRUE.
NEVER TRUST A CONSERVATIVE IN WASHINGTON. NEVER. NEVER. NEVER
cswinney2@triad.rr.com
political historian since 1991
lifeaholics of America
author-Lifeaholic-Workaholic to Lifeaholic Success
unpublished
ALL AMERICAN PARTY—how the democrats built a Great Middle Class only to watch conservatives attempt to destroy it and begin the dissolution of the Great American Empire on the same trend line as Rome-Spain-Holland-Britain.
Just think—I voted for Nixon-Carter-Reagan twice-Bush I-then Clinton and Obama
I always voted the man not the party. I am reegistered I.
Clarence, the Great Depression was caused by market interference from the government. The Great Depression was initiated by the restrictive monetary policies of the Federal Reserve and the high tariffs of Smoot-Hawley. Both Hoover’s and FDR’s response was more government intervention. FDR’s policies were essential Hoover’s on steroids. For more information see the book FDR’s Folly. You are right that the pattern is repeating. The housing crises was due to government interference in the housing market, including Fannie Mae, Freddie Mac and the bond rating agencies, which are a SEC created cartel. These policies pushed for easy credit standards and then lied about the risks. Bush’s solution to this government created mess was more government intrusion into the market. Obama’s policies have essentially been the same as Bush’s on steroids. For more information see the book Meltdown by Thomas Woods.
same in Canada
That is what I think too.
The same in Venezuela, though there the mantle is not “too big to fail” but “cooperatives”. Between 2003 and 2008, 261.513 cooperatives were formed in Venezuela by those following the money… most found the seed money and thereafter immediately stopped any further cooperation.
You forgot:
Convincing financial regulators that just because you are less risky, and though you because of that are already charged lower interest rates, you need further subsidies; like requiring lower capital requirements for a bank when lending to clients that like you were able to hustle up an AAA.
“Intergenerational debt violates fundamental decency.”
Not necessarily but to better be able to see that it doesn’t, it might be time to empower democracy with one-child-one-vote, to free them from the current baby-boomer dictatorship.
The clearest evidence of ongoing global warming is the parallel of the banana republic’s moving northward
Tony Foresta “The predatorclass CANNOT be allowed to brutalize the rest of the population”
Defining a predatorclass seems to imply they are aware of being predators and that is not so… come on most even think of themselves a veggies
Tony Foresta “The predatorclass must be put back in the keep!!!
If so be extremely careful with the utensils used because the cleaning out is a rock solid opportunity for a new generation of turbo-predators to take over.
“Cash for clunkers” is a misnomer.
A more accurate description of the program is “Another slightly newer and slight less clunker of your old clunker”.
With the world running up against dangers of climate change and lack of energy a program of “Public transport coupons for clunkers” would make more sense and then employing thousands of new buss chauffeurs and taxi drivers.
The prime purpose of a Constitution is to defend the citizens from the governments that hold so much power and so in an ever more inter-related global world there is a now a need for a Global Constitution to defend the citizens against the global powers of state associations… and to give us some guidance on when it is appropriate to infringe local sovereign rights. At the end of the day let us not forget that we are all indigenous to planet earth!
Silke: “highlight that we can know a lot about what we believe and disbelieve by investing a relatively small amount of time.”
Absolutely and given the topic of this blog many would do reading the Bible or Koran of the financial regulations since is suspect that most of you, including the owners of this blog have not read in its entirety.
One of the problems with our financial clergy is that is profoundly misinformed about their own religion and sort of makeup sermons as they go along… like wheeling and dealing rural preachers. It is so much more fun and productive shouting out with fervor against the local oligarchs.
You can find the latest Basel Epistles here http://www.bis.org/publ/bcbsca.htm
Absolutely, but pushing innovations is to assume risk, which is not so easily done when financial regulators, on top of what the market charges, place their own layer of taxes on risk.
And in this we are really talking about the original sin of the Basel Committee
This is indeed a side note but seeing your interest in the German church could you explain how it comes that the land which gave us Martin Luther is now in the forefront selling carbon emissions indulgencies?
“CONSERVATIVE” IDEOLOGY GAVE US THE CURRENT “GREAT” RECESSION SAME AS IT DID IN “GREAT” DEPRESSION”
I do not agree. This recession originated in the minds of some extremely arrogant financial regulators who naively thought they could control for risks in the banks; and that with their innovative regulations managed to fertilize the markets to better grow all type of creative and innovative shenanigans
Republicans, Democrats, conservative and progressives stood all mostly on the sidelines in this, not even understanding what was going on. It was mostly the doings of regulatory technocrats.
maybe the protestants have realized since that they erred ;-)
I am not especially interested in church matters per se, I am interested in how competition plays out at the top, how they grab and re-grab power and in that the churches have been major players from their first days on
why does your description remind me of the time when we were constantly forced to adapt to the latest consultant taught gimmicks?
– at the time I thought I finally understood what Mao’s permanent revolution was about.
Besides that slogan I know nothing of Mao but some of the students hired as extras whom I had to supervise in the first half of the 70s tried to press the Little Red Book on me
– maybe BaselII can be found in there? they all seemed rather confused – couldn’t multiply without a machine, didn’t know the sequence of letters in the alphabet etc. but knew all about how society was to be reformed. They should have had about the right age to get a hand in at BaselII.
No, I am a protestant and I now I protest the green indulgencies sold by the neo-Lutherans so as to allow some the right to contaminate! If carbon emissions are a sin then they are a sin and you should not be able to buy yourself out of it; and, if they are not a sin, then selling carbon permits is just another Ponzi scheme.
Revisionist transferance is classic reactionary prologue to more of the same. The gross misappropriation of associated Neo-consequence here is pure Friedman and has created nothing but disrupted chaos since its politically based inception restructured ideology in the cloak of methodological science. Talking points, writ large. Nosce Teipsum.
Dale B. Haling says “The housing crises was due to government interference in the housing market, including Fannie Mae, Freddie Mac and the bond rating agencies, which are a SEC created cartel. These policies pushed for easy credit standards and then lied about the risks”
Fannie Mae, Freddie Mac before they burnt their fingers on the subprime had been around for decades with nothing truly bad happening and I think conservatives could benefit from excluding these from their list of favorite culprits as that would allow them a clearer view of what happened.
Yes the SEC-Basel credit rating agency cartel created is to blame but even worse than the credit rating agencies missing out on the ratings was how the regulators meddled in the risk allocation mechanism of the market by their capital requirements for banks based on risk.
Again, financial regulators who want to punish risk-taking and push risk-adverseness wants the world to lie down and die!
The American Economy is, indeed, in a schism. The one dimensional perspective of a single machine-like system, however, has to be questioned. Can the American Economy truly be seen as a monolithic or at least a unilineal system in the first place. Therein is the heart of the problem. The unquestioned premise behind a “2 track” system is that it was ever a one track system at all. A good portion of the idea of “recovery” is distorted primarily because it is an attempt to heal or retore a unified field (financial) system which never actually existed except in the minds of the political finance sector itself. Having noted this, however, it is also very true that this “recovery” (restructuring or if you will…American Perestroika) has orchestrated around the designs of a double standard. The schism, as truthfully demonstrated in the Florida economy as a great example, is one of inclusive/exclusive consolidation elitism over a differentialy dislocated excluded subsistence economy that services the concentric center. Interlocking markets overlap and create specialized class economies that are separate from yet serviced by the central core econoic sector.
This neo-monetary autocracy (Neo-sovereignty) and its oligarchic syndication is a pervasive and insidious parasite on its host so to speak. It is facilitated and enabled by a disconnect between monetary supremacy on the one hand, and legislation that permitted them to gain control and capture of the more assets oriented American Banking system that had been giving us the actual wealth and health over the decades (do a controlled study…you will see the direct correlations that are causal and not associative). It is not surprising to find that our middle class banking professionals are overwhelmed from there position. They are definitely not in lock step with finance. But they are completely subordinate and are essentially only given terms of capitulation that serve (scale) to recapitulate and reinforce the dependency arrangement with high finance gone “global” (in scope). A capital flow monopoly has taken the “contours of this differentiation” not towards a “restoration” (as needed” but towards a “reformative recovery” which is essentially a loose canon in local, regional national and global transgression. The so-called “inside track” of private wealth clubs are having a field day and a feeding frenzy feasting on American assets. Recent comparasons to the Japanese crisis fails to recognize that there was not only capital flight from the Japanese economy but wholesale shortselling of the Yen that underminded every spike towards recovery. America, meanwhile, is being invaded with money to buy assets. Unfortunately, it is not a substratum that will serve the core “tier” of our economy but is seeking to own it outright. Bush told you all in his sinister way when he touted his “OWNERSHIP SOCIETY” vision. And the long term spectre is one of e-money, national tracking systems, and a demographic economy of domesticated renters and their landlords. Market attachments will shape and shift demographics as easily as chattel commodities.
The short term growth, as “Simon Says” will be ecliptical and crisis co-orientated. Inflation and fear mongering rhetoric will drive “the contemptuous market” towards irrational behavior which (like the banking substrate) will not just ask but demand the terms of capitulation. The American Business community never looks beyond its nose and will rattle and rant to defend the system to the point of reactionary factionalism. Welcome to the neocon-artist world of corporatist feudalism. And what of the Globe? Well like America itself it is being shaped into one big Bananna Republic based on a crony model of third world priviledge over misery. Thank you Simon; I am not sure you agree…but you did lay out all the pieces.
“Again, financial regulators who want to punish risk-taking and push risk-adverseness wants the world to lie down and die!”
… but it was promoting risk-adverseness by providing an ample supply of sloppyly evaluated AAA-products?
aren’t sloppyly evaluated products close to fakes? (as they in the end turned out to be)
I’ve understood by now that Basel II made it extremely desirable to have such AAA-products on offer, serious or fake
– but for me the question remains how intentional was the creation of the fakes? just stupidity and slippery slope or evil genius or something in between?
With capital requirements for banks which established lower requirements if risks perceived by credit rating agencies were low and vice versa, the regulators de-facto subsidized low risk and taxed higher risks.
The sloppy evaluated AAAs? Call it a response to the market demand for AAAs created by the
Regulators.
Or as was explained by the Joker in the movie “The Dark Knight”, 2008.
“You know (the regulators), they’re schemers. Schemers trying to control their worlds. I’m not a schemer. I try to show the schemers how pathetic their attempts to control things really are. So, when I say that … was nothing personal, you know that I’m telling the truth. It’s the schemers that put you where you are. I just did what I do best. I took your little plan and I turned it on itself. Look what I did to this city with a few…” collateralized debt obligations.
In fact, it is a negative sum game.
Why? Because on top of every wrong policy about financialization of the economy, we have neglected the most important asset the US ever had; scientific research.
Look around you; every “Next Big Thing” that was “Made in the USA”, especially in the second half of the 20th century was the result of the two-way collaboration between basic and applied research labs. Think Bell Labs, RCA, Xerox PARC, the research departments of IBM IBM, DARPA, NASA, and so on and so forth.
Where are these centers of long term growth today? Don’t look for them.
http://www.businessweek.com/print/magazine/content/09_36/b4145036681619.htm
Right on, Dr. Frankie!
“If the stock market’s recent gains hold up, CEOs may be the only people who’ve come through the downturen in good shape”– quote from a “Business Week” article dated August 26, 2009:
CEO Pay: Is It Still Out of Sync?
http://www.businessweek.com/magazine/content/09_36/b4145000403938.htm