By James Kwak
Robert Reich discusses a theme that I think I’ve discussed before (and first heard expressed by Ezra Klein):
“The most important thing to know about the 1,500 page financial reform bill passed by the Senate last week — now on he way to being reconciled with the House bill — is that it’s regulatory. It does nothing to change the structure of Wall Street.”
Reich’s post weirdly cuts off in the middle on his site, but Mark Thoma has a longer excerpt. In that excerpt, Reich concludes this way:
“The only way to have a lasting effect on industries as large and intransigent as banking and health care is to alter their structure. That was the approach taken to finance by Franklin D. Roosevelt in the 1930s, and by Lyndon Johnson to health care (Medicare) in the 1960s.
“So why has Obama consistently chosen regulation over restructuring? Because restructuring Wall Street or health care would surely elicit firestorms from these industries. Both are politically powerful, and Obama did not want to take them on directly.”
I would add that Obama is also a political pragmatist with a strong belief that getting something done is better than nothing. I think that on health care he and the administration probably did the best they could. Remember, they barely got a majority in the House, then barely got sixty votes in the Senate, then barely got a majority in the House again (to pass the revised bill), and public opinion was very divided.
But on financial reform I think they could have gotten more done. First of all, public opinion wanted more; and second, the administration lobbied against some of the most far-reaching changes, such as Kaufman-Brown and Blanche Lincoln’s derivatives spinout provision, and Merkley-Levin never got a vote. The whole theater of the administration trying to put the bill into stone before it got much stronger should have been embarrassing to them, but they decided they could take the hit.
I think the explanation for this is some combination of (a) the economic policy guys really think that the financial system we have today is basically fine and just needs a little better oversight and (b) Obama just doesn’t care that much and wants to save his political capital (and his support from the financial sector) for other issues, like (hopefully) jobs and climate change.
Here’s Thoma’s conclusion:
“Structural change is harder than imposing new regulations. The fact that legislators are shying away from the harder to impose types of change out of fear of losing reelection support from the financial industry points to the political power the industry still has, and to the need for structural change to reduce this political (and economic) power. If we cannot muster the political will to make such changes in light of the most devastating financial collapse since the Great Depression, that does not bode well for the future.”
60 thoughts on “Regulation vs. Structural Change”
“the most devastating financial collapse since the Great Depression”
I believe President Obama could have gotten much more in both health care and financial reform. Did your mother never tell you ‘you won’t know unless you try’.
That last point is devastating. As a former reporter who covered the S&L crisis, I find the lack of will in Washington heartbreaking.
I have heard some, however, view the bill as a step in the right direction. Does the bill inspire some hope in your mind?
Yet there are number of brain dead, elitist academicians and “consumer advocates” out there giving high fives over the passage of this drek at the moment, among them ruling class butt-girl, Elizabeth Warren. Robert Reich has, at least, the beginnings of a peoples’ way of looking at things. “Finacial reform” as regulation left to the very regulators that botched the last opportunity? You got it!
Why am I not surprised that the candidate who took a bazillion dollars from every stash of private money he could find is now unwilling to substantially alter the ways that money is managed or accumulated?
“So why has Obama consistently chosen regulation over restructuring? Because restructuring Wall Street or health care would surely elicit firestorms from these industries. Both are politically powerful, and Obama did not want to take them on directly.”
Reich wishes this was the real reason.
But he knows better. So he’s just “restructuring” excuses, as opposed to stating the facts.
It’s not exactly “luck of will”. It’s mostly fear. And not only about losing support of financial industry in the coming elections.
The key question is if we kill banksters (who partially parasite on the status of dollar as the reserve currency) what will replace them in national economics. Just imagine that tomorrow all five major banks are nationalized and brass is jailed in renovated Alcatraz or better Guantanamo to help them to write memoirs. What’s next?
One thing was to do it 30th, when manufacturing was growing and another thing to do it now when finance has became one of the largest employers in the country and contributes substantial share of GDP (OK GDP is fake metric, but still they are “exporting industry that bring money home form oversees).
When people say financial oligarchy owns Washington, they forget that along with oligarchs there are way too many people who are involved in this industry and who are hostages of the excesses committed.
Also while leaching of the US population, business and municipalities is just part of the picture. This industry has international reach and is leaching money and partially repatriates them from oversees. When you read stories how this and that TBTF bank managed to fleeces other bank (German banks proved to particularly naive) or remote Norwegian or Italian village those stories represent flow of money in opposite direction then payments on the our external debt.
James writes “Obama is also a political pragmatist with a strong belief that getting something done is better than nothing.”
The evidence suggests Obama is a political opportunist whose only agenda was getting himself elected and whose only strong belief is in the power of propaganda.
Noticible cavalry bias my friend ;-).
With the financial reform everything is possible but nothing is easy. OK, let’s close Goldman and send God’s banker Blankfein to the place were he deserve to be. Will is solve the problems country is facing now? Or at least would it be a useful first step from economic standpoint for the majority of Americans ? Will it help to neutralize Republican Taliban which holds the country with deadly embrace preventing any meaningful reforms?
Unless we answer those question status quo is not a bad idea.
I think in this war it might be better to attack Republican Taliban first. But Obama is too cowardish to venture any frontal attack. And Democratic party is by-and-large just another wing of the same party (and there is strong fifth column in the Democratic party aka blue dogs).
It chess terms it looks like zugzwang: no matter what you do your position deteriorates.
You need far more acute stage of the crisis for that.
Whould you prefer Palin ?
I’m a little surprised to hear you say that Obama does not care much about getting a strong financial reform bill in order to save political capital, and not lose political support of the banks.
My impression is that he just does not have the stomach for a fight.
There are obvious examples where we have had the right President at the right time in our history: Washington, Lincoln, FDR, and Kennedy. There are also examples of where we had the wrong president at a critical time: Andrew Johnson, GW Bush. I think that this phase of our history will likely prove that Obama will fall into the latter category.
I was excited for us to act to some degree on Volcker’s reccomendations. Then this has me confused.
These conclusions, and the relocation of giant banks to become risks for other economies, makes me question the long term value of the largest. Perhaps there is some benefit?
That’s a false choice, friend kievite. To see Obama as the prevaricating paramecium that he is validly taken in its own right. The interjection of Palin into the question is an utter irrelevance.
Down the Yellow Brick Road
05-25-10 09:08 AM – Huff Post
“Buried in a research report released yesterday on the growth potential of equities in the U.S. financial services industry, Goldman Sachs offered a glimpse into what the final version of the Wall Street reform bill might look like.
In particular, the report predicts that the Senate bill’s most controversial element won’t make it through the conference committee negotiation process.”
Nationalization was the only way that we were ever going to get meaningful structural reform. But the FIRE industry plays on people’s ignorance and fear. Obama was taken in . . .um. . . convinced to not nationalize the banks because it was the “safest course.”
A more knowledgeable and confident leader might have seen what was at stake not allowed himself to be “guided” to a resolution that would work solely for the banks. But not only was Obama NOT that leader (at the time, anyway) but there were other items on his agenda that were closer to his heart, especially healthcare. Remember, he campaigned for 2 years and the financial crisis was less than 2 months old when he was elected.
Obama’s ignorance and the industry momentum almost guaranteed that nationalization would NOT happen. The FIRE Industry was strong and powerful at least up to September 2008. And FIRE was, I believe, Obama’s biggest financial contributor. In Nov 2008 when Obama had to pick the people that would help sort out the financial mess and he had plenty of guidance from his still-respectable friends in the industry. No surprise then that he chose Geithner and Summers. After all it was Geithner’s NYFed that made AIG pay 100% on the dollar that fall(!).
I wonder what Obama thinks of all this now. Until September 2008, any politician would have loved to have FIRE support but the Industry and keen observers of the Industry surely knew by then that public anger would grow as the Industry excesses were revealed. Does he wish that he had chosen a different team? One that would have been more forceful with the banks?
Ironically, the Obama administration’s support of the banks has not been visibly returned (Kabuki?). The banks never played along with Obama on helping the real economy or accepting reform (paying themselves huge bonuses was a political stick in the eye) and are now giving more money to Republicans!
Yet, Obama and the Democrates now “own” the financial mess including the unpopular bailout and the proposed (weak) reform – and even the historical antecedents like the government push to make homes more affordable. (Perhaps the Industry is smart to flee a sinking ship?)
A ship that they helped to gut!
Sound familiar? Pump and Dump! Subprime . . Greece . . . Abacus . . . Obama . . .
“Toddlers who lie ‘will do better'”
this from the BBC website http://news.bbc.co.uk/2/hi/education/10119297.stm
this is why regulatory capture happens?
That’s the name of the game: Regulatory capture
It is amazing reading in the MTM press about the
successful FIN / REG.I personally hope it blows
up again in their face, I fail to understand
how you can close down on such a bill, given the
costs American taxpayers had to pay for the
‘gaming’of the system, all this while you have SIGTARP,
FCIC, SEC and DOJ busy investigating the ‘doings’ of that ‘industry’,’socially useless’to recall the words
of Adair Turner and, purely, socially dangerous, in its current stage
Liz Warren should be happy and I wouldn’t begrudge that. The senate version of the CFPA passed intact, apart from Carper’s amendment to restrict state AG’s from prosecuting anything other than federal laws when it comes to banks. She probably wasn’t thrilled by the CFPA’s subservience to the financial stability oversight council (FSOC), but that battle was lost long ago.
Oh, and before anyone complains: by “nationalization” I mean receivership/”pre-privatization.”
At the time, many people differed about what how any receivership should work. In part this was just FUD. In my view Receivership/”pre-privatization” should have included:
– 500 (give or take) top executives and directors canned, and if we couldn’t clawback compensation, then they would be banned for x years
– consolidating core banking (why do we need 20 different payment systems and a bank on every corner?)
– separating core banking from risk-taking activities
– strong governance and regulatory reforms
In short the banks would work for main street, not the other way around and core banking would be “boring” again.
The right to conduct business and earn profit is supposed to derive from a Government’s authority based on it’s monopoly of force, endorsed by the citizenry – At least that used to be the theory. It would appear that in 21st Century America it is the Government’s right to conduct the business of the Nation that derives from the Financial’s sector’s monopoly on money (credit)creation, undendorsed by the citizenry. This is a form of fascism.
do they really have that many employees? and they don’t really have much of add on employment (like say GM who really has few employees in the US, but without them the dealers employees, and suppliers, and their suppliers employees would also be gone)
Unless one has been propagandized , the natural course is to subvert the state or others to overcome resistance to what one desires. Thomas Hobbes was quite eloquent on this subject. Fear of consequences meted out by the state tones down this fear. Fear makes one obey the state. For the more fearless, a ruthless reaction is required. Every state that survives preserves the idea of it’s being the Leviathan. This leads to those that seek to control the state to profit from being within the Leviathan . As natural as breathing.
Obviously, we see the lie apparatus of children kicking in here. If the kid was caught in a lie to the wrong person there was a time when the kid was socialized by instilling fear. This can be seen in nature. I have had a long relationship with a clan of Ravens. I can get within several feet of them almost any time when they show up. Our Pine Squirrel’s feign attacks on the Ravens to horde my fresh peanuts in the shell offerings. The Pine Squirrel is being untruthful to the Ravens. Humans are no different, just much more complex.And wow, do those Pine Squirrels steal from each other too. The Ravens invariably share within their clan.
Palin wasn’t running for President. John McCain was running for President.
So the question should have been “Would you prefer McCain”?
And my answer would be yes, I would prefer McCain.
The fact that a number of leading Al Queda Democrats pocketed millions yet pretended to parrot reform had nothing to do with their abysmal attempt? Obama, Dodd and Frank all put millions in their coffers from the TBTF. Mere coincidence the reform fell short of the necessary steps to protect this nation’s financial system? The status quo will serve us no good. Turning a blind eye to the sins of the Democrats in charge will prove a catastrophe.
What am I missing…?
Threw out Glass-Steigel (sp)
then threw a “war” in the Middle East (as if there wasn’t enough “war” in the Middle East already)
You guys do the math – a structural change would mean that the war lords and drug lords would end up being the ones who went BROKE from the war…
Instead – they are on their way to “owning” ALL the real estate built during the “boom”
they fee’d everybody to rapid, “consumer” poverty creating some kind of sci-fi, imaginary “economy” that is 67% of GROSS DOMESTIC PRODUCT (oh, right, “GDP” – REAL stuff – is not “real”)…
and to keep the music playing for WAR
the IRS is gonna get in on the fee game by making you pay for NOT BUYING the “product” from health insurance companies that was carefully designed to make sure you end up paying for your health care in addition to FEES…
And all this because one fruit loop in the Middle East said that another fruit loop in the Middle East does not have the “right to exist”….
Seriously – WTF is wrong with everyone when it comes to $$$…?!
My, you’re quite easily pleased, son. Would that someone could bequeath to you – and to butt-girl Warren – both this atrocious “financial reform” and this fetid cesspool of a government that you seem so willing to accept uncritically. I mean, please.
Structural change? REAL structural change? Okay, here goes:
Campaign finance reform. Divorce the politicians from their corporate sugar-daddies. That’s change I can believe in.
Dissolve the unrepresentative Senate and reconstitute it. Rep by pop. That’s change I can believe in.
Hold hearings into the effects of the laws of incorporation and limited liability. That’s change I can believe in.
Nationalization of industries, a constitutional convention, there are many ideas for the betterment of society. My point is, real structural change begins and ends with government itself.
And therein lies the rub.
The saying still holds true…
“You can judge a man by the company he keeps”.
The DNC called last night asking for yet another donation for yet another emergency. My response was that “I would rather donate to Sarah Palin first, because I know she will do what she thinks is right (which is exactly wrong).
This will exacerbate the next crisis faster that the slow, methodical, pragmatic, orchestrated bleed that we are suffering from now. It is becoming painful to watch this administration tackle ANYTHING.
Both Kauffman and Brown said that some reform was better than none—and that this was why they voted for the bill. I think this article by Reich points out this is not the case.
I second all your ideas….whole-heartedly.
This is just an evidence of another one not knowing what he is talking about. Anyone thinking that regulations which allow capital requirement for banks of 0 percent, 1.6 percent and 4 percent, and of that basically only 50 percent in real money, Tier 1, has not altered the structure of banking, should not intervene in the debate… and neither should his followers.
And in this sense what they are doing in Congress, since they have delegated so much in the Basel Committee, without telling anyone, is neither structural nor regulatory, it is just some “Give ’em the old Razzle Dazzle, Razzle dazzle ’em”
Fear not, The entire edifice will collapse under its own weight soon enough. And yes, Barack Obama has turned out to be a massive disappointment. The Emperor has no clothes!
I find what happened in the way of the two major reforms to be completely nauseating. Look, I voted for Obama. Now, it appears that whatever happens, he has decided (maybe because the view from the Oval Office is a bit too daunting) that the guts he showed in the election run are inappropriate as a moderate in the White House. In any case, I have watched, over and over, during the debates and run-up to the two bills passages, as the President decided that he did not have the necessary gonads to go up against the oligarchs. He has wasted his “bully pulpit” on empty rhetoric.
What we have now is two huge pieces of legislation that simply reshuffle the deck of cards, but don’t, in any significant way, change the game. The oligarchs have bought themselves our political elite. Compared to what they can take from all of us, the price was tiny. A few hundred million to buy billions in future profits and confiscational ability is such a small price to pay.
We are now virtually assured of the coming of future global fiscal catastrophe on a scope which will far exceed the Great Depression. In fact, if we extrapolate the endgame, we are now seeing the end of this country as a world power, and maybe the end of our precious freedom which has been ceded, for all time by a President and Congress which has conspired against the common man. Does this mean that I am Republican? Far from it. I don’t see either party’s leadership as offering a future. The coming elections may be the last time we can vote from real change, but I also realize that it may well be too late to reverse the now seemingly ordained tragic history about to be written.
Comparably very public: Rep. Frank says the measure ‘goes too far’.
So if you believe in “the now seemingly ordained tragic history about to be written”
what have you got to LOSE if you make a stand AGAINST it?
No Klingon math geeks? :-)
“Look, I voted for Obama. Now, it appears that whatever happens, he has decided (maybe because the view from the Oval Office is a bit too daunting) that the guts he showed in the election run are inappropriate as a moderate in the White House. In any case, I have watched, over and over, during the debates and run-up to the two bills passages, as the President decided that he did not have the necessary gonads to go up against the oligarchs. He has wasted his “bully pulpit” on empty rhetoric.”
He has HUGE gonads. Gonads that are large enough to tell everyone exactly what they wanted to hear when he needed their votes, all the while knowing he was going to do everything his Oligarchal money masters wanted him to do once people like you made sure he was elected.
Thanks for nothing!
Obama has a quiet determination that can be seen as weakness of position or purpose. His story and personal history show a steadfast effectiveness. First remember that Obama’s entire political career stands at 14 years; from election to the Illinois State Senate in 1996, through election to the US Senate in 2004 and election as President three years later.
This is remarkable achievement, and the more amazing given his race. Before judging Obama’s effectiveness, defining his options or writing his legacy every three month when he has been in office all of fifteen months it is useful to take a look at what Mr. Obama was doing before he ran for national office, and how he did it.
After getting his undergraduate degree at Columbia he worked as a community organizer in Chicago. From an article in The Nation; Obama’s Community Roots April 3, 2007: “Loretta Augustine-Herron, a member of the DCP (Developing Communities Project) board that hired him, remembers him as someone who always followed the high road. “You’ve got to do it right,” she recalls him insisting. “Be open with the issues. Include the community instead of going behind the community’s back–and he would include people we didn’t like sometimes. You’ve got to bring people together. If you exclude people, you’re only weakening yourself. If you meet behind doors and make decisions for them, they’ll never take ownership of the issue.”
He was President of Harvard Law Review, his style is revealing. In The Boston Globe article of January 28, 2007; At Harvard Law, a unifying voice: Bradford A. Berenson, a former Bush administration lawyer who was an editor at the review is quoted, “The politics of the Harvard Law Review were incredibly petty and incredibly vicious,” Berenson said. “The editors of the review were constantly at each other’s throats. And Barack tended to treat those disputes with a certain air of detachment and amusement. The feeling was almost, come on kids, can’t we just behave here?”
And as a law student, “what set him apart was his approach to argument, the lifeblood of the law school and the constant occupation of the young lawyers-in-training. While other students were determined to prove the merits of their beliefs through logic and determination, Obama preferred to listen, seek others’ views, and find a middle way.”
Taking a look at his record as Illinois State Senator and US Senator show Obama as prepared and involved right off, and building consensus, and teaming up with his fellows in proposing and moving legislation.
His method requires calm, clarity of purpose and patience. Here’s his modus and I would say it works. We all have to wait while he does what he does best.
So if you believe in “the now seemingly ordained tragic history about to be written”
“what have you got to LOSE if you make a stand AGAINST it?”
“On February 9, 2009, in warning of the dire consequences facing the United States economy after its housing bubble, U.S. President Barack Obama cited the “lost decade” as a prospect the American economy faced.”
“….(the) economic system had fueled a massive wave of speculation …… banks and securities companies. A combination of exceptionally high land values and exceptionally low interest rates briefly led to a position in which credit was both easily available and extremely cheap.
This led to massive borrowing, the proceeds of which were invested mostly in domestic and foreign stocks and securities.
Recognizing that this bubble was unsustainable, the Finance Ministry sharply raised interest rates in late 1989. This abruptly terminated the bubble, leading to a massive crash in the stock market.”
Fasten your seatbelts, it’s going to be a bumpy ride.
“Seriously – WTF is wrong with everyone when it comes to $$$…!”
An age old problem, there is never enough $, and determining who to steal from next.
so…he’s basically prepared to run a kindergarten class?
Roubini was taped on CSPAN this week end saying the Chinese won’t bail us out in the next great meltdown and the world will demand we make structural changes. Maybe the last hurrah for the financial oligarchy , it will get worse before any major structural adjusting.
Obama ran for president before the meltdown . He might not have thrown his hat in the ring if he knew the mess we would be in. After all he’s still a young guy.
One current opinion is that China will need to sterilize their banking system with much of their foreign reserves, once their financial bubble pops.
I agree on the regulatory vs structural bit. We need structural reform – erect firewalls between the key components of the financial system (e.g., Glass-Steagall), bring the shadow banking system out of the shadows and regulate it as banking, reduce leverage across the board, break up institutions that are TBTF.
The events in Europe over the last few weeks should have been a wake up call. We’re not “past the crisis”. Imagine if this bill passes next month, and then towards the end of the summer another big bank implodes.
This must be an April Fool joke, right? Have you ever tried to READ the Harvard Law Review? Month after month, year after year, 500 pages of aimless pretentious nonsense surrounded by impenetrable footnotes, a monument to the arrogance and futility of bought and paid for law in a plutocratic paradise. The whole idea of MAKING the Harvard Law Review is to guarantee yourself a cushy job on the INSIDE of the whole operation. Want to meet an entire army of Law Review Stooges? Walk into any Wall Street law firm. The best and the brightest. Vietnam redux. Bringing you today’s financial calamity and tomorrow’s climate disaster, and cementing the right of spouses and heirs to shop until the day the shopping stops. The whole thing is a crock, but the only way to know is to waste a few years there. I wouldn’t wish it on anybody.
I couldn’t be more disappointed in President Obama and the Democrat majority. I really believed we were getting a TR/FDR hybrid. Instead we got Bush in brown skin.
In the ’06 midterm Democrats promised to get us out of Iraq.
In the ’08 election candidate Obama promised to get us out of Iraq in 18 months.
Single payer HCR became a warmed over Bob Dole proposal from the mid-90’s.
Financial reform is looking like No Child Left Behind. Notice there are no provisions for funding enforcement of the new regs.
Gitmo remains open and we still rendition suspected terrorists.
Meanwhile muni bonds look like the next $2.8 trillion hole in the economic dike. There is no money to bail out State, County and Municipal governments. Not to worry though the Goldman Sachs administration will just print more.
beautifully put. as anon says above he has huge Gonads, a terrific ability to lie. we must ask his mother about his childhood dishonesty.
for those expecting financial apocalypse remember the Roman empire took over 400years to collapse, Britain 30years. get comfortable for a long slow agonizing poverty.
Product vs. Process
Regulatory reform is suffering from its version of the Heisenberg’s Uncertainty principle (or other such related insights). But instead of having to choose between velocity and location as the independent variable, regulators have to between “investment products (i.e. Volcker Rule’s Prop trading)” versus “investment process” that segments the underlying economic environment into predictable, probable, and uncertain regulatory regimes.
Policymakers should stress comprehensive governance, not ad hoc rule writing. Rule-writing is the proscriptive description of an undesirable situation. It does not necessarily produce a net benefit and should not to be confused as the same as governance. Rule-writing is ad hoc policymaking that Band-Aids over the current problem. It expects buy-in from society by describing the undesirable situation and prefacing it by saying “don’t do this.”
I agree with former SEC Secretary Jonathan G. Katz commented, that when “the SEC adopts a rule, it believes it has solved whatever problem it is addressing. … The solution is to rethink the rulemaking process. Instead of assuming, as lawyers do, that rules are self-effectuating, the SEC should adopt a scientific approach.”
I believe it more preferable to epistemically fix the “market process” by segmenting the underlying economic condition in terms of predictable, probabilistic, and uncertain governance regimes than to solve the “stochastic problems” relative to financial products of scale that is to-big-to-fail and scope that is too-random-to-regulate (See: Jubin, Reading the Markets 5/10/10). I argue in favor of the former and believe it to be consistent with the essence of Senator Dodd’s proposal to provide market practitioners with better information.
Stephen A. Boyko
Author of “We’re All Screwed: How Toxic Regulation Will Crush the Free Market System (Sww: pages 50-71)”
“STRUCTURAL CHANGE SPEAK” … Modification and Shaping strategies are part of every good business plan that adapts and adopts a succession worth supporting. Regulation and Structural change speak to static Institutional ism where the ownership interests are being asked if they would like to surrender some of their privileges of control. This is equivalent to asking an aristocracy to graciously step down for the common good. One might also note that politicizing the language into an all or nothing choice between regulation and structural change is requesting a discernment and decision between the “lesser of two evils.” In logic (rational rules of order) this is termed the fallacy of dilemma. Politically it appears as if decisions are being made, but in truth this becomes a shift of power in an establishment that serves the institutional prejudices (e.g.: more of the same). We are moving down the same river and just arguing over what boat to take.
BY THE WAY…IS CENSORING PART OF A STRUCTURAL CHANGE OR REGULATION?
“His method requires calm, clarity of purpose and patience. Here’s his modus and I would say it works. We all have to wait while he does what he does best.”
What exactly are we waiting for him to do?
Everything he’s done since he took office has shown the exact opposite of “clarity of purpose”.
He offers no clarity on anything from one day to the next. Conversely he offers a constant display of a two faced personality.
The health care reform bill and now the financial reform legislation mirror that reality.
The 2 year old math geniuses took over EVERY life-sustaining industry with one purpose and one purpose ONLY – to find $$$ to feed the Middle East war machine…
That’s why we are having more and more “industrial accidents” – bacteria laden food, municipal water a cocktail of pharmaceutical molecules pee’d out by “users”, the obvious energy issues of oil and coal and gas…
the “business model” in place is EXTRACTING more and more from a FIXED profit margin – yes, boys and girls, there’s a LIMIT to PROFIT – it’s PHYSICS…not “conceptual math”…
so the only way to extract MORE is to skip all the safety-valve steps
since 25% unemployment and stagnant/dropping labor costs have been maxed out – the infrastructure of USA has been dismantled – mission accomplished.
Once the 2 year old math wizards took over as leads in writing clinical trial protocols to appease Merck lawyers
they created Inclusion/Exclusion criteria (who should be enrolled in the trial) that effectively excluded any real human being. I’m serious – they created a human being with a medical complex that is NOT REAL.
Genius solution to winning every court case against big pharma – eh? Meaningless and flawed data – every REAL human being who died from the drug did NOT fit the Inclusion/Exclusion profile and so the “corp” is NOT GUILTY…
We’re just as nuts as they are for still playing the game with them – arn’t we?
However, whoops, I just had a fleeting nanosecond of sanity – it’s NOT a “game”, is it?
Good point, Jake, about how institutionalized people can only function in the institution that gives them refuge from the rest of the world.
The real world is not an insitution.
On a “religious” site that I drop into to monitor their metaphysical beliefs – they BELIEVE that if they do not SEE you, you do not exist in the “reality” that they inhabit in time and space. I kid you not.
One can understand why such beliefs lead to the need for the creation of an institution that can permanently house such demented minds.
The universality of greed, revenge and hatred in the human species married to money as god…
yup, doesn’t end well…
Seems I have failed to convey my thesis. Still, you are all missing the forest for the trees. It not about any one assignment per se, rather his nature characterized by equanimity and preternatural maturity.
Perhaps you are right an I am too patient. On the other hand, the opposite is possible.
Does anyone believe that the government is capable of regulating the financial industry to reign in systemic risk? What would Minsky have recommended?
I feel sorry for government regulators, but I think one reason the Tea Party folk may be striking a resonant chord in the public mind is the apparent inability of government agencies, even the Fed, to look out over the horizon — and to overcome the influence of industry, through their friends in congress and through the dominance of their ideas in the business/investment media.
Structural reform would probably be the best hope for the medium term…. and we won’t get it.
Did you get any glimpse of the horror of the way the settling up was done? Basically the remaining assets still controlled by the S and L’s were just given away.
I was living in Lubbock, TX and met an assembler on an assembly line. He bought 12 brand new complete houses on his personal credit card. His brother in law was one of those “honest” CPAs that were hired to sweep the dirt under the carpet.
Why is it that CPAs have any trust at all? Aren’t they bonded for their duties? Why don’t any of them wind up in prison? Seems that all of the real big failures (Enron, the dotcom conjobs) have clean books and the CPAs walk.
Well, Warren is about the strongest advocate for the forces of good out there. Calling her names isn’t all that helpful, is it? Who else is making anything happen?
as an aside, I’m very disappointed by Sen. Bingaman’s failure to exercise any leadership.
Gack. That’s a scary thought.
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