By Simon Johnson, co-author of 13 Bankers (out in paperback on Monday)
Bill Daley, President Obama’s newly appointed chief of staff, is an experienced business executive. By all accounts, he is decisive, well-organized, and a skilled negotiator. His appointment, combined with other elements of the White House reshuffle, provides insight into how the president understands our economy – and what is likely to happen over the next couple of years. This is a serious problem.
This is not a critique from the left or from the right. The Bill Daley Problem is completely bipartisan – it shows us the White House fails to understand that, at the heart of our economy, we have a huge time bomb.
Until this week, Bill Daley was on the top operating committee at JP Morgan Chase. His bank – along with the other largest U.S. banks – have far too little equity and far too much debt relative to that thin level of equity; this makes them highly dangerous from a social point of view. These banks have captured the hearts and minds of top regulators and most of the political class (across the spectrum), most recently with completely specious arguments about why banks cannot be compelled to operate more safely. Top bankers, like Mr. Daley’s former colleagues, are intent of becoming more global – despite the fact that (or perhaps because) we cannot handle the failure of massive global banks.
The system that led to the crisis of 2008, and the recession that has so severely damaged so many Americans, encouraged excessive risk-taking by major private sector financial institutions and, yes, Fannie Mae, Freddie Mac, and other Government Sponsored Enterprises (although these were most definitely not the major drivers of the crisis – see 13 Bankers).
Today’s most dangerous government sponsored enterprises are the largest six bank holding companies: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley. They are undoubtedly too big to fail – if they were on the brink of failure, they would be rescued by the government, in the sense that their creditors would be protected 100 percent. The market knows this and, as a result, these large institutions can borrow more cheaply than their smaller competitors. This lets them stay big and – amazingly – get bigger.
In the latest available data (Q3 of 2010), the big 6 had assets worth 64 percent of GDP. This is up from before the crisis – assets in the big six at the end of 2006 were only about 55 percent of GDP. And this is up massively from 1995, when these same banks (some of which had different names back then) were only 17 percent of GDP.
No one can show significant social benefits from the increase in bank size, leverage, and overall riskiness over the past 15 years. The social costs of these banks – and their complete capture of the regulatory apparatus – are apparent in the worst recession and slowest recovery since the 1930s.
Paul Volcker gets it; no wonder he has resigned. Mervyn King, governor of the Bank of England, gets it. Tom Hoenig, president of the Kansas City Fed, gets it. Elizabeth Warren, the tireless champion of consumer rights, gets it. Gene Fama, father of the efficient financial markets view, gets it better than anyone.
I discussed the issue in public for two hours at the American Financial Association (AFA) meetings in Denver on Friday with two presidents of the AFA (Raghu Rajan and John Cochrane) and a Nobel Prize winner (Myron Scholes). This is not a left-wing or marginal group – there must have been at least 500 people in the audience (video will be available). The top minds in academic finance understand the problem vividly and are articulate about it – there is no rebuttal to the points being made by Anat Admati and her distinguished colleagues.
This is not a left-right issue – again, look at the list of people who co-signed Professor Admati’s recent letter to the Financial Times. This is a question of technical competence. Do the people running the country – including both the executive branch and the legislature – understand economics and finance or not?
If the country’s most distinguished nuclear scientists told you, clearly and very publicly, that they now realize a leading reactor design is very dangerous, would you and your politicians stop to listen? Yet our political leadership brush aside concerns about the way big banks operate. Why?
Top bankers, including Bill Daley, have pulled off a complete snow job – including since the crisis broke in fall 2008. They have put forward their special interests while claiming to represent the general interest. Business and other groups, of course, do this all the time. But the difference here is the scale of the too big to subsidy – measured in terms of its likely future impact on our citizenship and our fiscal solvency, this will be devastating.
Most smart people in the nonfinancial world understand that the big banks have become profoundly damaging to the rest of the private sector. The idea that the president needed to bring a top banker into his inner circle in order to build bridges with business is beyond ludicrous.
Bill Daley now controls how information is presented to and decisions are made by the president. Daley’s former boss, Jamie Dimon, is the most dangerous banker in America – presumably he now gets even greater access to the Oval Office. Daley is on the record as opposing strong consumer protection for financial products; Elizabeth Warren faces an even steeper uphill battle. Important regulatory appointments, such as the succession to Sheila Bair at the FDIC, are less likely to go to sensible people. And in all our interactions with other countries, for example around the G20 but also on a bilateral basis, we will pursue the resolutely pro-big finance views of the second Clinton administration.
Top executives at big U.S. banks want to be left alone during relatively good times – allowed to take whatever excessive risks they want, to juice their return on equity through massive leverage, to thus boost their pay and enhance their status around the world. But at a moment of severe financial crisis, they also want someone in the White House who will whisper at just the right moment: “Mr. President, if you let this bank fail, it will trigger a worldwide financial panic and another Great Depression. This will be worse than what happened after Lehman Brothers failed.”
Let’s be honest. With the appointment of Bill Daley, the big banks have won completely this round of boom-bust-bailout. The risk inherent to our financial system is now higher than it was in the early/mid-2000s. We are set up for another illusory financial expansion and another debilitating crisis.
Bill Daley will get it done.
196 thoughts on “The Bill Daley Problem”
Does he wear tassled loafers as in the joke:
Why do bankers wear tassled loafers?
Because they can’t tie their own shoelaces.
Thats funny, but eventually one relizes that their no force known to the masses able to confront the problem before you. He was created to help her but instead decided to “take” over and do as he sees fit.
It will take time to gather the tools required to remove the problem and until then he has the rule of the roost. Disagree and your fired, I call this his way or the highway and he has been at it for a long time, gathering more fiat wealth and power. The only resistance comes in the form of higher commodity prices and affects people negatively, just not him. So I say let him burn himself out until the day he finds himself no longer needed and quits.
Yes Simon, we know. But what can be done about it? If Obama said ‘ok I am breaking up these banks’ imagine the walls that would go up. First his close advisors would say no. Then his close friends in congress would say maybe. But then they would get shoveled truck loads of money. And opposite party persons would get shoveled twice that much money to resist. So someone like Scott brown could (with no political capital) say no in the senate and hold up any reform. The MSM would go ballistic about obama acting out of fear of the left and others who oppose successful people. And on and on. The system is rigged against change, especially when the change is a complete 180 from current course.
If the country’s most distinguished nuclear scientists told you…
What are the country’s most distinguished climate scientists telling us, and what is the response of the political system? There is a long history of this sort of behavior in pollution control, too.
Thanks Simon, Once again you and your colleagues at naked capitalism, calculated risk, etal. point out the falseness of the left vs. right paradigm as it pertains to the oligarchical control of the country by these financial elites.
But what to do about it?? Gentle readers, everyday, resolve to rhetorically ask a friend/ relative (1) why the innermost circles of the executive office needs to be infiltrated by former bank executives (like Mr.Daley), (2) why our dear Treasury Secretary felt compelled to visit Goldman Sachs HQ innumerable times prior to passage of the recently passed, so-called, financial reform legislation,and foremost (3) why it is necessary to recapitalize imprudent financial institutions, at no cost to the bondholders/ stockholders, when grandma gets paid 0.03% APR on her deposits.
The answers of these questions have nothing to do with whether or not you are a republican or a democrat!
Simon, great piece, just wanted to point out a couple of typos: 1) That was the American *Economic* Association meeting, not the American Financial Association; 2) In the graph starting with “Top bankers,” you wrote “But the difference here is the scale of the too big to subsidy…” Don’t you mean “too big to fail”?
When you have someone in the Federal Reserve expressing more openly how disgusted they are with the TBTF banking system (Hoenig), that really is saying something. There needs to be a truer Third Party (a modern version of TR’s Bull Moose) answering to the Tea Party, corporatization of Obama, and the Right-leaning Democrats. They said while Pres Obama was vacationing in Hawaii during the holiday season, one of his political aids was reading a book on how Bill Clinton triangulated to survive the Republicans’ Contract on America. Even though President Obama was quoted to say that he would rather a good one-term president than a mediocre two-termer, the President’s inner circle have advised the president to go for a second term at all cost; their advise is to focus on the tactics and strategy and forgo the substance and campaign promises of 2008; [There are tea party supporters that already don’t like Sen Scott Brown and want him out in 2012 if he doesn’t take a harder line on the debt/deficit battles in Washington.]
The answer is to make an active effort to stop being the economic slave. Rip up all the *new* credit card apps from Chase and Discover offering you 0% for the next 3 months ultimately netting 13-20% over the long term to the issuers. Live within your means and search far and wide for bargain deals including very low cost mutual funds/ETFs, insurance, and especially mortgages. Recent generations have lost all sight of ‘value’ in their consumption assisted by the finance companies who try to create a feeling of inadequacy if you don’t have the latest and greatest XYZ. I’ve known a lot of miserable wealthy people but the more miserable are the aspirational types when the slavemaster (aka the banks) decide to cut off the credit drug. Live more smartly folks and the banksters will quake in their boots.
Exactly. And there are common elements here: the vested interests and business model of a large and powerful industry are affected–they rev up their PR and lobbying machines to inundate the discourse with disinformation. There is no limit to the disinformation: blatant lies and fabrications are definitely included in the tactics. They dominate the discourse because they have effectively unlimited resources at their disposal to spread their lies. They supplement this with direct purchase of our venal lawmakers and, voila, they always win.
Brick walls have no ears!
As pointed out by Mr. Johnson and various comments here… and realized by growing numbers (I hope!) is that:
We’ve not really been facing a simple Left/Right or Democrat/Republican issue.
And the constant cramming of the debate into this mold is distraction from the real problem… and serves to perpetuate it.
ALL decisions made by a tribe, a nation or even a social club… involve a balancing of the interests of the individual vs. the group… and the weighing of the need for change vs the value of tradition. (these are the general ‘memes’ associated with each side)
A pragmatist will understand that neither side of that scale should always outweigh the other.
The growing alienation and division in this country are NOT because of a failure to follow one or the other of these polarities as political ‘religions’…
What BOTH Ron Paul and Ralph Nader fans (and increasing numbers in between) are beginning to realize is that there’s an Establishment GROUPTHINK embraced by BOTH parties that will doggedly refuse to look at what many of us are seeing as a fundamentally flawed path being taken in the areas of global finance and governance…
And that we have fundamental problems in the perversion of decision in BOTH BIG GOVERNMENT AND BIG BUSINESS! And both institutions are degrading the role of BOTH the individual AND the communities within which they operate.
These are (in related but not identical forms) that have afflicted civilizations repeatedly and led to collapse.
Tainter is correct in suggesting that it relates to complexity and the diminishing returns on investment in it…
What Tainter misses is (I believe) the ROOT of the problem of WHY this largely un-definable complexity leads to collapse in human societies.
The complexity that does civilizations in (generally, but not always… you can’t necessarily avoid environmental factors) isn’t the complexity of its physical technologies or logistics…
But rather the failure of its SOCIAL TECHNOLOGIES (law, finance, government, etc.) to keep up with the ramifications of power imbalances that inevitably arise over time.
THERE IS A FUNDAMENTAL SCALING ISSUE IN HUMAN SOCIETIES ASSOCIATED WITH NATURAL HUMAN COMMUNITY SIZE (Dunbar’s Number), THE ALTRUISM PROBLEM (there’s an unavoidable discontinuity between biological and intellectual altruism) AND COGNITIVE LIMITS (the “attention economy”).*
In short… our personal networks are smaller than the social organism of which we are a part. This is both unavoidable and problematic.
Social Networks & The Social Organism: Healing the Breach
* I believe this is why no conspiracies are required… but that’s a longer argument related to the role of drives and the social environment in cognition. (A very much simplified example might be to consider how a decision-maker considering a trade agreement might treat labor-rights depending on whether or not his own children would be working under them. Over time and in aggregate these biases merit more attention than they receive. “Objectivity” is often a self-serving illusion.
Decision Technologies: Currencies and the Social Contract
Support a Capable and Informed Electorate!
Capability ENABLES Responsibility
I really want to be optimistic about the Obama administration, but it is getting hard. Can anyone find the silver lining in this appointment?
The public-private fractional reserve system is intrinsically unjust, incompatible with democracy. Simon proposes to institute a size cap on it. It would still be unjust, and incompatible with democracy, though.
It seems Obama is stuck too, even if he detests the system, there is not much he can do. The revolt has to come from the street Common people have to understand the problem first..
For the umpteen time this country doesn’t need a “Federal Reserve Banking System”! It does need a central bank that facilitates managerial skills and advise for our U.S.Treasury to take on the sole responsibilty of implementing a balanced budget. It certainly wouldn’t hurt matters to bring back the “Gold Standard” either?
Chicago is the most corrupt city/state in the union? They’ve got Rod, Jesse Jr., the big O’s sweetheart
for US Senate next term
– whatmore can you ask for? The Daily Family dynasty has totalitarianism
control of Illinois via Chicagoland’s and a bonus of homicides in their pathetic school system, and on their drug laden streets. Meanwhile the notorious three-fingered “Rahm” creates his fortress too
futher rig the malfunctioning electoral process of this decadent fault-line in “Central America”?
Lest I forget – wasn’t Rod B’ the governor that went after JP Morgan Chase, and Bank of America for the people loosing their jobs, and homes? Like a shakedown gone terribly bad? Man did Rod pay deeply for that shortly afterwards…but hey, he’s still a free man.
And its only a matter of time (its still early in the year) before the pistols bust out and show just how corrupt Chicago can be.
Yeah, but when Simon Johnson says at a conference that the “Yuan will be the world’s reserve currency within two decades” he just makes himself look like a clown. Even most of the Chinese elite don’t want that. One gets the feeling that Simon Johnson just talks his book like everyone else.
In two decades the full extent of the East Asian demographic and aging crisis will be obvious. One that can’t be dealt with by immigration because it’s simply not part of the political or cultural tradition.
It seems clear that Obama does not subscribe to financial reform and Progressive values (Bill Daley, Gene Sperling, no leadership on the 911 bill, DADT, Food Safety bills in the lame duck). Obama is only interested in reelection (and the future well-paid Wall St enabled retirement). That means he has to kiss up even more to Wall St and Big Corp so he will “earn” the necessary campaign contributions. This
time tho, the slogan has been tweaked, “Lies we could believe in”
There is the smallest chance that the silver lining is that the Executive Branch will completely change,or has changed,its course and will take on the financial oligarchy, employing Mr. Daley who intimately understands the beast which is gutting the nation. Even if this were the case, it would likely mean that we would get a more explicitly authoritarian regime which would be welcomed by many. We have allowed ourselves to drift into a very unstable stable of affairs.
Excellent job Simon and a bonus with this site are the readers comments, some of which are superb. There are precious few economists who get the danger of our corporate financial state’s capture of all branches of government. They are the ruling class and until they are overthrown, change will not happen. Only a collapse of the system will offer a change but collapse is a disordered phenomenon posing real social risk in such a polarized nation. Think the French Revolution.
The TBTF Banks are GSEs.
They can’t exist without government support.
Maybe we should start with that simple fact. If that is recognized, then it follows that:
a) Government/GSE executive compensation limits should apply, and
b) GSE lobbying/influence limits should also apply.
Framing the issue as “excessive financial risk,” is a gift to the bankers. The problem undue political influence. Back-door bailouts are subsidizing the political influence of bankers.
@hugh owens: I agree with just about everything in your comment. It has occurred to me that perhaps one reason Baseline Scenario elicits such interesting comments is that they are not “moderated” — in other words, as long as the language is civil, they are not censored.
I took a look at your blog, but did not reply there because a.) the comments are moderated before going live, and b.) one apparently has to go through a gmail acccount.
However, I wonder if you are familiar with Helen Brown’s work on public banking, or with the Center for the Advancement of a Steady State Economy (CASSE):
So it is understandable that johnson is eagerly profiting from the cottage industry that has mushroomed from the financial crisis by taking advantage of the undereducated.
What is not understandable is johnson’s inability to discern right from wrong and fact from fiction. Or perhaps it is – after all, the last time a bunch of academics tried to start a financial business they created LTCM.
For example, johnson always refers to another undereducated academic – Admati. Adamati, refers to equity capital ratios of banks as high as 30% which may sound intelligent since it is coming from an academic. The problem lies in the fact that the 30% number comes from another academic who have studied REITS!!! REITS typically maintian a 30% equity ratio. Adamati fails to realise that Bank=Apple, REIT= Orange.
In his paper, Admati quotes, ” REITS do not enjoy tax benefits from Leverage..” easily overlooking the point that REITS exist due to favorable tax structure for their equity.
Furthermore, johnsons comments like..”they also want someone in the White House who will whisper at just the right moment: Mr. President,..” put him on par with a 12 year old than a supposedly intelligent human being.
Come on johnson, you are an MIT prof. you should try to should at least half as intelligent as your freshmen.
Re: @ purple___Ref: “Figuring out the Fed”
Note: dated material (4/30/09) but still going like the “Energizer Bunny”?
Excerpt: “Once upon a time the Fed’s sole purpose was to set and maintain the Federal Funds Rate, which determines the rate at which banks lend to one another”
“The Fed is hardly lending through it’s original discount window anymore and hasn’t touched the Federal Funds Rate since December of last (12//2008)year.”
“The Fed has created a new lending window called the “Term Auction Facility (TAF)”, born out of the “Term Asset-Backed Lending Facility (TALF)” through which banks that are in trouble, or not, can borrow money at discounted rates as long as they can fully collateralize the loans.”
“In all the Fed has created eleven (11) programs aimed at growing its balance sheet (which could exceed $5 Trillion this year). Its intentions appear good. Keep credit flowing and, return the nation to prosperity. *Some fear the Fed’s new tactics are coming perilously to close to “Nationalizing the Nations Banking System*.”
“The “Freedom of Information Act (FOIA)” requested by Bloomberg News back in 2008 has been denied because of certain language/wording in the Dodd-Frank bill.”
**(Remember this heroic name – Vt.(I) US Senator Bernie Sanders)**, and (US Rep.(Tx) Ron Paul)
Lastly, I’d like to mention “Special Purpose Vehicles (SPV)” funding through the “Commercial Paper Funding Facility (CPFF)” , and how it backdoors regulatory oversite regarding Goldman Sachs (GS’s), and Facebook (FB) that been in the news lately. It’s a total sham , and crime that GS’s has the wherewithall, and audacity to even tinker with the remote posibility of doing a deal with Public Money?
Thank you Simon for articulating what few others are. It was particularly gratifying to see your statement regarding Daley’s appointment as being “beyond ludicrous”. What’s maddening is so few others recognize this. As a measure of how completely the banks have won, the media is reporting that Obama is in disfavor with the banks and the business community in general, and so has appointed Daley to mend the gulf. Absurdly, Obama is painted as being a foe of these interests, when he actually has been bought off by them and has done most of their bidding–beyond ludicrous indeed.
Obama’s shocking actions of the last 2 years have laid bare the bogus right/left argument as a red herring. At the bedrock of it all, the money and power people own everyone (to the despair of us who held out hope that someone, probably a Democrat, would do the right thing).
Until we have publicly funded elections, what more can we expect? We can only hope people like Simon continue to speak the truth and continue to explain what is happening and how to follow the money trail. I’m convinced there is a huge part of the public who knows the country is getting screwed and is desperately seeking a national voice to right these terribly wrongs (a desire, in a bizarre double-irony, that spawned the big money-backed, hair-brained Tea Party).
Simon, I believe you are right. Our increasingly giant financial institutions are highly likely to create another meltdown? And who’s going to pay to clean up that mess?
One area where I disagree with you. I don’t think Obama and his crowd lack an understanding of the dangers baked in to our currently unstable financial system.
I think they understand them very well.
My sense, Obama, the Democratic leadership and the GOP leadership understand the potential for another financial train wreck. Just like they understand the longer term implications of spiraling government and public debt, our chronic trade deficit and our economy’s inability to create the sort of jobs that will restore our middle class and turn around our chronic trade imbalance.
These guys understand all this. What we don’t understand or chose to deny is that they understand full well. The reality is, they just don’t care.
Seems to me the politicos are perfectly happy letting the cowboy capitalists and the globalization at any cost crowd have their way. The politicos know they are letting these parasite strip mine what’s left of our economy and raid the public coffers for all they can. These guys, including Obama, would rosin Nero’s bow at Rome goes up in flames as long as they keep their perks.
IMO, its time to face up to reality and stop hoping the politicos will someday “understand”. It should be obvious they don’t care what happens as long as they can spin their way out of it. Americans need to recognize we need to cooperate in an anti-partisan effort to get money out of politics, primary the worst of the lot, vote out heinous incumbents of both parties and push for Constitutional amendments to reform both our political and economic systems.
I believe its time to restore democracy to our political and economic system. Get money out of politics, get rid of corporate personhood, stop the offshoring of our jobs and invest public money to re-capitalize our manufacturing base, protected by tariffs from the predatory corporations sucking up our livelihoods by offering cheap socks and tvs at WalMart.
I would like to express a dissident view, but I have seen how dissidents are treated in China. I believe that the U.S. security forces (homeland security) will ruin my life if I do not support the President’s decisions. It only takes one report of ‘suspicious’ activity to get on the no-fly list. As in China and other police states, ‘suspicious’ is a very broad term. It may already be too late for everyone here.
The honorable Paul Krugman has claimed lately that he does not censor either, except advertizing and really foul language (a welcome change!)
It’s true lack of censorship is crucial. I was banned from Daily Kos, European Tribune, and Philosophy Forums, without ANY explanation (except the later claimed, beyond ludicrous, that they owned all and any of MY ideas that I published on MY own site, and thus that I stole them, because I published them there).
So, curiously, a lot of the main stream sites are much more fair and open than some of the supposedly edgy sites. economy, at the bottom rests on the free market, not just of all and any product, but that of ideas.
BTW, maybe Obama has the secret plan to make the banks fail again… Hope we can’t believe in, springs eternal…
I suspect that this is true, that is why the battle should be joined to support WikiLeaks.
Steve, you might want to communicate with Brenda, who posts on Baseline Scenario, by emailing her at firstname.lastname@example.org.
Brenda, if you read this, I can fully get behind Steve’s points, especially his prescription as given in the last two paragraphs.
You are so right, Patrice.
Simon, “In the latest available data (Q3 of 2010), the big 6 had assets worth 64 percent of GDP. This is up from before the crisis – assets in the big six at the end of 2006 were only about 55 percent of GDP. And this is up massively from 1995, when these same banks (some of which had different names back then) were only 17 percent of GDP.”
Wow – abbracadabbra!
Can we PUHLEEZE start calling it what it IS?
Nothing “complicated” about it.
It’s so bassackward thanks to the deconstructionistic use of language that it’s hard to have a conversation about things that need to be clearly understood…
FIAT $$$ got corrupted. Or am I being too logical?
Here’s how I thought we all operated in the USA – we built/created “it”, then assigned a value to what was REALLY there in currency (“money”).
“It” was everything from diapers to satellites…and all of that “it”-creating was actually agreed to as a worthwhile “it” on which to expend PRECIOUS natural resources because ultimately it was LIFE-sustaining and, yes, even life-enhancing – NO NEED FOR SLAVE LABOR.
Seriously , WTF is what we have going now?
Indeed, what is the “social good” when you withdraw currency PRODUCED BY PRODUCERS
away from the PRODUCERS?
That’s the alpha and omega of the situation.
The Wrecking Crew needs to get pinned down – yes, they are “powerful” War Lords and Drug Lords – all the more reason to have a truly JUST WAR.
Can’t dish out wanton injustice from government institutions for decades without paying for it with complete social anarchy.
Absolutely no other “ideology” is in the monkey brains of war lords and drug lords….just Nihilism.
It seems that Simon agrees that TBTF Banks are the new GSEs. From the HuffPost:
“I’m concerned about the excessive power of the largest global banks,” he said. “Who are the government-sponsored enterprises now? It’s the six biggest bank holding companies.”
…the whole thing just smacks of fraud & corruption to the DETRIMENT of the AMERICAN CITIZEN. Pull your money out of banks & take the cash & go buy gold & silver. The Federal Reserve Bank will be gone someday soon & they DID IT TO THEMSELVES !
It is true, and neofeudalism is the backdrop. Americans are facing a dark and evil future, unfolding NOW, while they struggle to survive and abandon hopes of ever retiring.
Obama means well, but he is emulating the wrong role model. He has embraced Lincoln’s attempt at keeping the system intact (for Lincoln the task was preserving the Union), and so he attempts to steer down the middle of the road in a country he thinks will reward him for this. He will be villified on the right for being a totalitarian nanny-state-luvin’ socialist, and on the left for steering the middle right course because the country, en masse, still believes that small-govt-is-beautiful deregulation kool-aid touted by Reagan and his ilk.
A better role model would be FDR. For a surprisingly relevent speech touching on the major themes we again face today, see his 10/31/1936 speech made famous with the ‘I welcome their hatred’ line.
In this speech, FDR rails against business interests that threaten to close factories unless their candidate wins. It sounded the same as how the big banks threatened to take down the whole economy unless they were bailed out.
There are other passages that resonate with modernity in an eerily striking manner.
January 7, 2011
New Obama Chief of Staff a Message to Wall Street
Glen Ford: President Obama is more concerned with pleasing Wall St than appeasing public opinion
THE PLOT THICKENS….
No way to get money out of politics. The notion that rich people will not also be powerful people is unusually naive.
You are right about the incumbent party. The labels Democrat and Republican are utterly meaningless. But money is not meaningless. Following the money leads invariably to what’s really going on.
Just as Prof. Simon Johnson says, the banks are at the hear of the problem, just as they have been throughout time out of mind.
You can’t borrow what hasn’t yet been produced and saved. But you can steal from everyone who thinks you can, if you can create new credit money at will.
The big six bank holding companies are like drunken sailors, but where are they getting the alcohol? That’s right, the Fed.
Does BHO understand any of this? Who knows; but it doesn’t really matter whether he’s a dupe or or villain, does it?
I’m still interested in finding out what was the lobbying going on to get Daly the position.An what was Obama saying about his Wall Street connection.
Thank you again, Simon, for pulling me back to reality. Alas, I was not paying attention.
Yes!! You have hit Nail On Head!
However, many of the points raised as to the scaling limits (like Dunbar’s Number) seem to have been disrupted by technology, like (shudder) Facebook, et al.
Point being, there may be a lag between the awareness of a problem, but the solution will eventually happen as the awareness scales.
If anyone doubted it before, this shows conclusively that the apparatus of the state has been captured by the plutocratic oligarchy.
Sometimes I wonder if our youth are hunkered down in perpetual wars overseas for this reason. They are the initiators of change in society.
What does Simon really do all day? His entrepeneur program runs what, a couple of weeks per year? And where is he from originally? Specifically? Did he exist before he started college? Who are his parents? This blog isn’t nearly as influential as it was when it first burst out with a lot of contrived PR. Why keep it going? Just to make the Huffpo/other articles seem more credible? Lots of questions.
We are dealing with far more than regulatory capture here. The banks are big because the government is big financially. Federal debt, RMBS are all the detritus created by government and create much of the risk Johnson has described very well. The state and the banks are intertwined and have been since the inception of the republic. The White House is an appendage here, so focusing on this JPM bankster is really excessive IMHO. The Fed is the only game in town in an age of fiscal austerity. Ben Benanke’s assistant has more power than Mr. Daley.
Repeat after me. The bankers always win.
Requiring all FCC licensees to donate time to vetted candidates would help remove some of the money from politics. This would only take political will.
Why are you reading and posting angry comments attacking the blogger on a personal level? It’s one thing to disagree with his views and those of the commenters, but your comment is the most personal and mean-spirited to have been spewed in a long time. Save the vitriol for another forum, Sherlock.
Maybe in an efficient market, but the efficient market is dead as a doornail.
Economic history tells us nothing if not that there will be another banking crisis. My only question is which one of the TBTF will be the first one to fail.
From what I understand, they have plenty of back ups. So the real question is, will the last one fail? If so then she simply picks up the pieces to the puzzle and starts over again. Moneylecounted.
Thank you. I am not familiar with Helen’s work but I will be before the sun goes down.
Repeat after me – “fatalist have always been materialistic servants until death do their offspring defect with rebellious distain”
EXactly. Ad hominem “who’s yo mama” comments are unfair and unnecessary and add nothing to the dialog. I do have one comment about the assets of the big 6 TBTF representing 64% of GDP. That would be about 9 Trillion. Are so called assets like MBS included in that asset base, Simon? In which case while still huge would not be quite SO huge.
“there always seems to be a rotten apple in the barrel…as hard as we always look to cull the soiled fruit – your outing has never been so easy for the laborers of justice that now my [our] precious time looking will scan your remnants as waste?”
Nothing angry here at all. These questions have been asked periodically ever since the blog was started, and have never been addressed.
Instead of jerking your knees about pell-mell, think.
Try using your own head a little. These are just really nice guys, posting away for us day after day? Do you have any idea who they work for?
And if you begin to start asking questions yourself, instead of just defending your own pride, ask what his duties were back at Brunswick/UBS during the privatisations in Russia.
“Oh won’t you come home Bill Daily…or won’t you just go away – but alas, Bill Daily’s never left home for lifes nothing but a cabaret`on this merry-go-round we call Obama’s Revenge?”
This nothing more than a manifestation of capitalistic democracy at work–plain and simple.
There’s power, and then there’s power. Would Benanke’s[sic] assistant sanction violence?
Yea, @ BaselineScenario.com and I like it. Ya know there are a million other blogs out there,…?
You have an emotional attachment to this place. It makes you feel special hobnobbing. That’s all fine. Just use your “critical thinking skills” a little more. Go just one step deeper, huh?
This is a great point. Remember when we all thought Obama would fight the rich? Man. this is really disappointing.
I found this comic by Brian McFadden cathartic:
Note the lower left of the first big panel.
desi girl – Loyd B Worshiper
January 9, 2011 at 5:17 pm
THIS IS PURE NON-SENSE AND RECKLESS. iT REEKS OF INSECURITY AND DEVISIVE RHETORICAL PLOY. Are you, by any chance, in marketing or political public relations?
TRIP: It’s never too late!
SHEILA & HUGH OWENS:
iT APPEARS UBC IS PLAYING A DEVIL’S ADVOCATE ROLE THAT IS SIMPLY A WASTE OF SPACE AND DIALOGUE ON THIS BLOG. He should know that the content of SJ’s & JK’s working articles spins an authentic dialogue on these comment streams. I have seen good blogs get sideswiped by people who set up false arguments, but Uncle Billy has his own agenda and he has used Baseline as material at his site:
I would suggest that we not get bogged down responding to these rhetorical antics…the more successful this site becomes, the more it will be vulnerable. Ignoring them is probably the best. But I do 100% support and agree with your reactions.
Response however, should be to the issues of comprehensive support, critical dissent, and corrective / connected thought.
Respond but limit reactions: …so we do not get sidetracked and lost in spurious rhetoric meant only to arouse the emotional appeals of resent
Being more productive/dollar separates the men from the boys. Or in the end, he who has more toys wins the game (her), don’t need no money, don’t need no ticket, to ride this train.
Some people have just way too much time on their hands.
…(sorry)…Respond but limit reactions: …so we do not get sidetracked and lost in spurious rhetoric meant only to arouse the emotional appeals of resentments and reactionary fervor that distracts from constructive and reconstructive communications…
…which is what I believe S.J. & J.K. are actually aiming to achieve. This blog has demonstrated itself over again to stand for a truly open and democratic process that is being cut off and controlled by a consolidated process of media and sociopolitical interlock (networks) of interests that are the inner sanctum of TBTF socioeconomy of class scale. It is not up to Simon and James to be saviors to us all…
…it’s up to us to meet them at the junction they are giving us and the potential to participate in our own survival…and maybe social economic salvation.
Give it some thought…These are the ONLY guys who really invited us IN to the current events process of realism and discernment.
In effect…WELCOME TO THE UNIVERSITY WITHOUT BORDERS!
Bruce, you’re an intelligent guy, but you’re also hamstrung by your own pride, I think.
Why do you think Soros promotes an “open” society? The best and most successful propaganda uses truth to further its aims.
In the movie Gomorrah there is a scene that captures this problem well. The mobsters are talking to the corrupt mining company owner about their plan to dump toxic waste. The owner reminds them that there must be “total transparency.”
Don’t kid yourself about the importance of the comments here. There is plenty of quality thought, information, and good argument, but that is not the point of the blog. You think Pete Peterson is interested in what you have to say?
That is a fair comment and it is much more interesting when you name names. Peter P. Peterson is no friend to our considerations having milked the system for all it is worth; worked hostile takeovers and military insider knowledge from his DC world to build Blackstone (and its affiliated Blackwell) into well oiled mechanisms of power (now operating out of Dubai…). Had enough financial and political clout to take over The Peter G. Peterson International Economic forum that “instructed” Congress with neo-liberalism for a decade…and now has established the Peter G. Peterson billion dollar (tax Free) Foundation to promote a “groudswell” austerity ideology among the undereducated and never informed public sector as an indirect lobby to disenfranchise American workers from their rightfully earned benefits…all in the name of American budgetary efficiency…serving only the ultimate gains of the wealth clubs that are buying out American Assets and infrastructure wholesale / firesales…even as they spread the fear and misinformation of causal reality; linking the excess of private equity greed and collusion to the foundations of this crony and corrupt system.
But Uncle Billy…why didn’t YOU say that!
And Uncle Billy…
“I don’t see Simon Johnson “censoring” me on these points…! Actions speak more than associative words.
Speak forward and substantively, because Simon Johnson and James Kwak have more than served us across the board throughout this American and global crisis. You can’t slam them and not expect to be put in your place unless you have some evidential and material discovery to produce! (That’s my final answer…do I win a Million Dollars?)
Wow. If the shoe fits! I recommend anyone who has the slightest doubt about the police state argument, visit this link. Thanks Barbara.
They don’t censor because all press is good press. I’ve been haunting 20 blogs since 2005 and none of the blathering does any good whatsoever. They provide the illusion of opennness, and that’s it. They don’t need to censor because it doesn’t matter. They both know where I stand, and could care less. If I managed to damage their credibility in any significant way, it would be a major problem, but that is clearly difficult — they have a major machine behind them, and what do we have but bloviation on a very narrow slice of the internet. They are two pipes in the Mighty Wurlitzer, and we’re mice squeaking at each other deep inside the machine. Has Simon ever engaged on the blog? I can’t remember a single instance. If he did it would be giving us a toehold. He and his superiors are not interested in a dialogue; they are simply here to manage the message and provide the illusion that they are providing an open forum. You know your Peterson. He’s just one. There are many, and there is a pecking order.
Also, I’m genuinely curious why they still operate the blog. I’ve seen multiple instances where academics and bloggers have been rewarded with well-paying jobs or tenure at universities. In one case, tenure at two top universities! One of the early real estate bloggers now works for one of the largest I-Banks in Europe. Mason, of the Mason-Rosner paper that pricked the bubble back in 2/2007? Tenured position. Willem Buiter? Citi. Brad Setser from “Follow the Money?” What’s he up to lately? Last we saw he had made the transition from Roubini’s world to the CFR website. Roubini himself? Did his job for the most part and just bought himself a $5M party palace in Manhattan. People are rewarded well for this blogging business. We need to keep on top of it, I think.
You don’t win a million, but you may have just spent a million. Tax free of course.
Steve and Barbara: Web sites that don’t provide contact data set off little alarm bells for me. Some of the ideas on the hermes-press site reminded me of those of Lyndon LaRouche. Having searched and found further info about “Norman D. Livergood,” the person behind hermes-press, I personally don’t think I will rely on information he provides.
Nevertheless, I remain concerned about police state tactics in our republic and will be on the lookout for reliable sources on the topic.
That sounds like another one of those, “It’s all in Obama’s plan – he’s got `em where he wants `em,” apologies more than the Occam’s Razor of he’s just sold out (or was never “sold in” in the first place).
Anyway, I didn’t take you as actually believing what you were saying (ie: you were being hyperbolic), but I hope you are right. I don’t think you are right, but I hope you are!
Simon, you say, regarding the banks (not really banks, but, certainly in name): “These banks have captured the hearts and minds of top regulators and most of the political class (across the spectrum),…” From reading this article, it’s only too obvious that you get it, but, at the same time, don’t.
First I have to say that these “bankers,” in the words of Clark Gable “quite frankly…don’t give a damn” about being socially useful entities, regardless of their spurious arguments, which even they don’t believe. They don’t care about you, or me, or any of their fellow Americans, period!! The only thing they care about is money, to the exclusion of everything else, period!! They only maintain a position in the discourse to provide thin cover to their handmaidens in Washington, who also don’t care a whit about their fellow Americans, the very ones who elected them to serve us.
Sadly, looking back through history (check with Niall Ferguson), this is human foibles, pure and simple, repeated in various ways throughout human history, from ancient Egypt and Rome, through 12th and 18th century France, early 20th century America, and many other times, whether bankers did it, or others. The correlation in the modern world between power and money is perfect, and is not subject to rational discussion as a curative.
I love this blog. It is sane and sensible. It is informative. I read and participate because I believe in rational discussion about economic issues. Having said that, real change will not occur in today’s world which arises from rational discussion of economic issues. The banksters are globalist. The appointment of the new staff to Obama’s White House, including Bill Daley, is simply a symptom of what we are going to see from our leadership, as such, for the foreseeable future, that is, at least, until the world economy collapses. Hard to say whether this collapse will precede massive chaos, or whether it will be coincidental therewith. As Caesar once famously said, “the die is cast.” It is. Dialectically our course is set, and won’t be reversed in time to avoid massive global tragedy. It makes me sad, but I just don’t see any way out.
Annie, I don’t know you, but you seem to be appropriately bitter about what has happened to our dream. Read my posting toward the end (just up now). Please understand that this is the way it is going to be. I love those who think it can be changed. We need lots of rose colored glasses these days, just so we can see anything, since so much is pure blackness. There are lots of famous authors and philosophers who would love this. Eliot and Hardy come to mind, along with Marks. Please try to enjoy the small things, the good big ones are over.
Thank you, Steve. I agree, it is patently obvious that they understand. The question is not whether they care about the consequences, but whether they believe that they will suffer. My view is that they have so bought into the top that they (and those who sold them) don’t believe that they are vulnerable. News flash: When the next crash comes, no one will escape. If one of the six fails (seemingly inevitable), the tsunami will drown everybody because there will be truly global chaos. Can you imagine what will happen the day the Treasury bonds get down graded? OMG, it will be financial hell. And no one will be able to control that.
Political will, eh? Something of which there is none, and we all know why.
I know you addressed your comments to Simon, but I thought your entry was very thought provoking and (I think) common ground for many of us. I mostly agree with your sentiment and have to confess that when left to myself in my rocker…I feel the same way.
However, there are certain determinants in play here and I believe this is pushing us to a turning point or a breaking point. I am tempted to indicate that while we kick the can down the road, the bankers are kicking the bubble up the highway. A set of ultimatums are pending this doom and bust scenario. We are either transitioning into the despot regime that we so recklessly supported in the world (for our own interests…) and becoming homogenized into a global colony, or we need to look seriously at the facts and begin to intervene. I don’t think the die is cast for our future, but I do think it is already on the table for our present. The symptoms of our leadership is the symptoms of our society in consolidated form that has turned into a contradiction with the very society that spawned them.
To turn William Black on his head, it is not a “systems capacity” failure. There is, I believe, a working system but it has been usurped and captured by a class orieted politic that has actually divided the elite class itself into survivalist modes. The real core of the problem is corruption. It is much like a prison system of gangs and the top dogs are ruthless at dominating the rules and even the prison logic. But the system still prevails. I hesitate to say with unqualified stealth, but all wealth and success out there is also in the same boat… and sooner or later they will be faced with the spiraling determinants of the actual system. Consider this scenario presented in regard to the Penal System becoming something of a reactionary force and how it interacts with the system at large: I will label this
“The Neoliberal agenda and the turning point of critical mass economy…” Take a look:
The Penal State in an Age of Crisis
Hannah Holleman, Robert W. Mc C h e s n e y,
J ohn B e l l a m y F o s t e r , a n d R . J a m i l Jonna
Excerpts from the Penal State:
Neoliberalism…, a political regime where the interests of capital
are elevated and the interests of the working class are demonized and
demolished. It was the main political-economic response of the system
to the slowdown of economic growth in the early 1970s, which has
persisted and indeed worsened since. It was also meant to counter the
1960s and early 1970s era of social protest.
… neoliberalism is devoted to turning any public sector undertaking
that can be profitable over to capitalists. Here we see the seamy underside of
the system: beneath all the highfalutin lectures on hard work, efficiency, free
markets, competition, and accountable government, is the deeper reality of
routinized corruption, of public monies diverted into rich people’s pockets.
We may be approaching a moment where it will be possible to open
up a debate on the obscenity and absurdity of the present order and
its punitive social control mechanisms. The current economic crisis is
putting states and municipalities in a very difficult position. They have
sharply declining revenues but the social needs of their struggling
populations are escalating. If today’s state and local governments follow
business-as-usual, and use their shrinking revenues to cut back on
necessary social programs to bankroll their bloated prison systems,
support for public safety spending amongst the overall population may
falter. More and more people may conclude that the United States cannot
afford its prison-industrial complex any more than its militaryindustrial
complex, given pressing social needs. (
[END OF EXCERPTS]
NOTE THAT THE EXCERPTS ARE SELECTED FROM THE TOTAL TEXT AND YOU MIGHT SEE THE ARTICLE VIA THE LINK TO EVALUATE THE ENTIRE CONTEXTUAL ARGUMENT PRESENTED BY THESE AUTHORS)
I don’t know you, Hugh, but, you really get it. Sad top think that our greatest hope is in collapse. The French Revolution was really messy. Hard to imagine what it will be in today’s America. Think 30,000,000 unemployed and angry Americans. Understand that this number is not going to change for a long time. Understand that those folks can’t eat cake. They can’t buy it, and, since their homes are either gone or going, they can no longer bake it.
Well you and me both know, that the underground economy is a tough nut to crack.
Your links to those people who get it were pretty disappointing. The first few were to comments people made over a year ago.
Then I got to the comments of Gene Fama. He is so infected with the Chicago School illness it is almost too painful to watch. His agreement that TBTF should be off the table is hardly something to brag about. His unrealistic view of the world is not something I would want to associate myself with.
He does not believe free markets ought to be regulated. He does believe the capital requirements for these big banks ought to be raised substantially to perhaps as much as 40%. I wonder who he thinks has the power to make such a requirement? Whoever it may be, I guess it does not meet his definition of a regulator who imposes regulations.
Just balance the scales, one side is regulator, the other is regulations. A little jugglin and zero out the scales and the world is your oyster.
“your brush is to broad and your canvas to small to capture the rising sun washed out by your chiaroscuro tones
broaden your canvas and narrow your brush
whitewash that palimpsest fait`accompli masked past
alter your darkness with virtuous pastels of love
purge your darkside
whilst your canvas will fade as in a setting sun never to show twilight as your sorried life has become”
God bless you, “Julian Assange”!
Ben, check out Spaceweather.com to see the real climate story of 2011.
Just one major error: it is BlackRock not Blackwell that I meant to mention…and you might want to do some homework on precisely how much BlackRock has to do with our monetary system and the Fed. Reserve (I believe…)
BlackRock was founded as BlackStone Financial Management within the private equity firm Blackstone Group in 1988. Larry Fink, BlackRock’s founder and CEO, had joined Blackstone in 1988 as a partner, along with Ralph Schlosstein, former White House aide in the Carter administration, Robert Kapito, and Sue Wagner. Before joining Blackstone, Fink was a managing director at First Boston, where he pioneered the mortgage-backed securities market in the United States. In 1992 Fink, Schlosstein and the others separated from the Blackstone Group, under the name BlackRock and aggressively re-invented it as an independent asset-management company. In 1995, PNC Financial Services Group purchased BlackRock and in 1999, assets under management had grown to $165 billion and the firm decided to go public. (more at the link provided)
Great non partisan post Simon. It is clear that in order to keep the Crony Capitalist system of interchange of jobs between big business and government for both Dem. and Rep. captured parties alive the parasitic vessels must be maintained and kept on life support from, as Hayek called us, Serfs! Moral Hazard, we don’t need no stinking moral hazard.
Wow, Obama will not be elected to a second term based on this. Next big show is to see if Obama can keep with wheels on this charade until the election – odds are low.
The Republican dogfight for nomination will be loud and ugly, but it will most probably pick the next President. Watch for the Republican top brass to use this last weekend’s shootings to take Ms. Palin out of the picture.
It is no problem. The people don’t have a clue what’s going on anyway. They are too busy just trying to keep a roof over their head. Can people commenting on this blog relate? The majority of Americans are working two jobs and overtime just trying to pay their rent/mortgage and keep food on the table. How else do you explain the insanity behind the patriot act and bailouts?
If the elite were in any remote danger of losing power in the United States, blogs and the internet would be no more. Dissidents would be rounded up, like in other police states. There is no way any of us will see democracy in our time. But the masses definitely will see depression, famine and riots.
“So we limp on, with very large numbers of people in the West trapped on the wrong side of globalization, and nobody doing much about it. Would Franklin Roosevelt have tolerated such a lamentable state of affairs, or would he have ripped up and reshaped the global system until it answered the needs of his citizens?”
There is no way any of us will see democracy in our time. But the masses definitely will see depression, famine and riots.
WE have seen democracy in action, of all types for well over 200 years. But your right, only a chosen few have seen the real thing.
Nice to see you back again, wabbitman. The name of the game is organised crime. Whether we are talking about drug cartels in Mexico, or the banking cartels. Organised crime owns governments and the legal right to murder (police powers/war powers). We are getting the stick, and no carrot.
Life is a double edge sword.
I like that Roman vegetable – broccoli rabe – always classified as “bitter” in taste – but so chock full of vitamins and other good nutrients :-)
You are correct, we are complete and utter strangers and hopefully will remain so,
apart from the public discourse on this blog about the proper maintenance of resources for life on Spaceship Earth and what contributions FIAT $$$ have or have not made for civilization and progress at various points in history.
My dear Mr. Waterbury, there is absolutely no historical evidence – whether philosophical, theoretical, or ethical – that you can present as proof that POWER
LIVES anywhere other than in what
is true, beautiful and good
both within us and outside us.
Quite simply – they don’t care about what “we” care about and vice versa, we certainly don’t care about what they care about – basically getting away with a nanosecond transfer of 10,000 of civilization into a few psychotic “hands”.
It actually is impossible to do that and expect to get away with it – and seems to me like no one is even questioning that anymore (can we get away with it?) – just more worried about the consequences, no?
Not that you are a little orphan Annie, but you might be on the wrong side of nature when it comes to what is best for “Spaceship Earth”. I’ll take odds on favorite that you don’t even have a licence to pilot the ship.- If you know what I mean.
I though that this horse had died a while ago, so why keep flogging it? It will not run and in the comments here you find plenty of common sense reasons why. The thing you forget is that bank shareholders have property rights which include regulatory privileges and the only time they could have been dispossessed (other than by an unconstitutional change in applicable law) cheaply, would have been at the end of the GWB administration. By the time Obama got into office the whole thing had already become, politically and economically, unaffordable. Just keep your powder dry for the next time (maybe in 6 years, or a little earlier?
Meanwhile, the US economy, if you forget the housing/housing dependent part which hardly contributes to productivity (may in fact detract) anyway and badly needed an external shock is doing OK. Keep in mind that our benchmark should not be the pre GFC years (2003-2007) when GDP numbers were inflated by this useless production of unwanted homes), but, say 2004. It would be good if economists paid a little more attention to levels adjusted for this phenomenon. And with the meagre investment in manufacturing and infrastructure during the same period (and especially compared to competitors like China, Japan and the core-EU), there is simply not the capacity to grow gdp/capita by more than 1% per annum. And that is about what the US is getting; a little less (per capita/person employed) than Greater Germany and the Kobe-Tkoyo corridor). The price to pay for a political system run solely for the benefit of politicians.
Whoops. Sorry. It’s Ellen H. Brown. She wrote The Web of Debt.
The criminals own the government and are engaged in criminal enterprise.
You’ve hit the nail on the head. If you can’t beat ’em, join ’em if you can. Obama is a revelation of inspiration. The only problem facing crime and criminals is public relations.
I’m definitely hitting targets – mind terror is definitely one of those things on the table :-)
Are you suggesting you are smarter than the POWER that built Spaceship Earth WAAAAY before your carcass came into being, and that’s why you have a “license” to drive it?
Simon wrote above, “In the latest available data (Q3 of 2010), the big 6 had assets worth 64 percent of GDP. This is up from before the crisis – assets in the big six at the end of 2006 were only about 55 percent of GDP. And this is up massively from 1995, when these same banks (some of which had different names back then) were only 17 percent of GDP.”
Which makes your analysis a whole lot of hoooeey…
Oh, and perpetual war against mind ghosts of “isms”
ADDS to “productivity”?
So far, the criminals have done an excellent job appearing respectable. There’s something about looking congressional, presidential, and judicial that appears to really work.
Hardly, I am simply pointing out that there are laws of nature that elude your mind. And once concience of these laws, you might have a different point of view. Unless of course your mind is already made up and refuses to allow other thought to enter, I sense that in your posts. I know far more about the universe and how planets are arranged than you, this I am certain. But you can impress me with your knowledge of the universe any time you wish.
@Michael I have made similar points before on this blog only to fall on deaf ears. Despite the well-developed ideas presented here by obviously thoughtful, intelligent individuals, I see that little is accomplished other than talking. Exception is Carla, who repeatedly spurs people to consider joining a grassroots movement. Excellent, Carla.
Yes, sharing of ideas is critical however the next step ought to be action. Where is the action? Ok, Prof. Johnson spoke openly to the AEA. Excellent. Now, move on to the next step.
Don’t all of you honestly feel we are cycling through the middle of Atlas Shrugged over and over and over?
The average American doesn’t “get it” because the information is so incredibly controlled into miniscule nebulous soundbites. You folks get it so PLEASE go out and talk with your neighbors, your church members, your community group participants and so on. Be a guest columnist in your local paper once a month offering your views- in layman’s terms.
Information is power. Information lights fires in people’s hearts and minds. Don’t merely share your ideas with like thinkers on your level. This is simply too easy. Bloggers here have fabulous points and proposed solutions. Please go out and share them with your community, not just your friends at the country club.
Pragmatic, analytical assessment of policies and process is critical. But only the first step. Means very little without action. I encourage you, I implore you to leave your intellectual comfort zone and share your exceptional ideas with the average “joe & jane on the street”.
RE PRAGMATIC CHANGE:
The Commons-dedicated Account Network* is a specifically designed, pragmatic, self-supporting, easily implementable and highly beneficial to both donors and recipients.
Its benefits extend well beyond its needed potentials in networked citizen lobbying. They include increasing capability for citizen self-organization for Commons-oriented political, economic or social interests.
It facilitates the SECURE, one-button, un-burdened micro-transaction essential for scaling citizen association.
The mere existence of this neutral networks acts as a counter-balance to concentrations of wealth which distort candidate selection and opinion.
Patent approval obtained and formal issuance expected within weeks. Self-funded demo of core function and FAQ at http://www.Chagora.com
You are certainly correct at how few actually attend to pragmatic approaches to solution.
Reward for financial innovation has been centered on control fraud mechanisms. Clearly I’ve been incorrect in looking for pragmatic systems promoting a more general benefit.
*The Commons-dedicated Account System:
A self-supporting , Commons-owned neutral network of accounts for both political and charitable monetary contribution… which for reasons of scale must allow a secure,viable and costless micro-transaction. Such a network ideally should maintain its own cloud and bank. Accounts may be created and/or maintained with zero balances and/or only momentary balances during a pass-through transfer (monetization model requires no burden on the actual transaction.)
P.S. This network becomes a very stable network… unlike others which seem to be of great recent interest.
A very abbreviated logic chain:
1. There’s potential in the political microtransaction for networked citizen lobbying if it can be harnessed.
2. Problem is the cost and hassle of the microtransaction.
3. This problem is solved by system similar to x-box points (which is how they handle microtransaction issue for certain system content).
4. Additional problem is catalyzing the network
5. Addition of charitable potentials solves this for a variety of reasons related to system monetization and a more general user-utility
6. Patent has been approved for this mechanism.
7. There are theoretical reasons for need for such a system but points 1-6 above are about a PRAGMATIC implementation.
8. Should any of the points above be in doubt (which is reasonable) ask a question.
Political Fundraising: Act Blue, Facebook and the Missing Network Imperative
Capability ENABLES Responsibility
Fixing the Political Relationship
Empowering the Commons: The Dedicated Account (Part I)
P.P.S. This is not a secret project. However, it does seem to take a relentless nature… and a willingness to do without. Thanks for your careful attention.
If only the great movements of the 60s had produced structural changes. What does it really take for that to happen peacefully?
Cedar: Thanks for the atta-girl. I appreciate it.
A little background: I was recruited along with a few others by an “economic justice organizer” several years ago after a showing of the film “The Corporation.” We started meeting and discussing the issues presented in the film; what would real democracy look like; and what is preventing us from creating a real, representative democracy?
After about a year of this, we came down to what we thought was the bedrock issue of real Campaign Finance Reform, which we then started researching. We developed presentations to try to educate the public. There was very little interest, but we have been persistent, written many letters to the editor, “bird-dogged” candidates to raise the issue, etc. It has been a SLOG, let me tell you. Even harder than single-payer healthcare, which I worked on as a volunteer for 10 years before Obama and the Democrats sold us out.
Our work on Campaign Finance Reform, coupled with the financial crisis, led us to investigate fractional reserve banking and the entire monetary system.
We continue to work on campaign finance but have also become activists for drastic reform of the Federal Reserve, the elimination of fractional reserve banking, and the creation of public banks to fund the infrastructure (physical and social) projects our country so desperately needs. North Dakota has had a state bank since 1918 and it has been a really positive economic mechanism for that state.
My interest in these topics led me to Baseline Scenario about a year ago, and I am very grateful for the education I am receiving here.
@Claude, re: peaceful change. We can only control whether our actions are peaceful; we are not necessarily in control of the reaction by the powerful monied interests. If those interests cannot be convinced that a more economically equal society is in their best long-term interests, their reaction will not be benevolent. Unfortunately, they seem to be firmly in the grip of short-term thinking.
BTW, that economic justice organizer I mentioned above? He is a Quaker.
Here’s some factual material for you Carla, and keep in mind that the Sauedi’s just signed a 10 Billion dollar (starter) contract with Lockheed with the Obama blessings of saving the economy…the contract was for jet planes…
Tomgram: William Hartung, Lockheed Martin’s Shadow Government
Posted by William Hartung at 10:02am, January 11, 2011.
Is Lockheed Martin Shadowing You?
How a Giant Weapons Maker Became the New Big Brother
By William D. Hartung
William D. Hartung is the director of the Arms and Security Initiative at the New America Foundation and the author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex (Nation Books, January 2011). To listen to Timothy MacBain’s latest TomCast audio interview in which Hartung discusses the unsettling reach of Lockheed Martin, click here or, to download it to your iPod,
Copyright 2011 William D. Hartung
“True, Lockheed Martin doesn’t actually run the U.S. government, but sometimes it seems as if it might as well. After all, it received $36 billion in government contracts in 2008 alone, more than any company in history. It now does work for more than two dozen government agencies from the Department of Defense and the Department of Energy to the Department of Agriculture and the Environmental Protection Agency. It’s involved in surveillance and information processing for the CIA, the FBI, the Internal Revenue Service (IRS), the National Security Agency (NSA), the Pentagon, the Census Bureau, and the Postal Service.”
http://www.tomdispatch.com/post/175339/tomgram%3A_william_hartung%2C_lockheed_martin%27s_shadow_government/ (full article)
Talk about too big to fail and Government backed Corporations…
Shouldn’t National Defense be a Public Utility Service Industry as a sideline of the entire military system? I, for one, do not think that privitizing warfare for profit…and that massive dependency path projection…can lead anywhere but to eventual military-politico factionalism in a civil society.
They “understand” it completely. They’re fraudsters and thieves who have arranged to share the take, and they hope to get away clean to their mountaintop gated communities before the reckoning. It’s that simple.
Yes the AEA had their meetings in Denver, but I believe that Dr. Johnson was actually speaking about the AFA meeting. Specifically this http://onlinevideoservice.com/clients/afa/2011AnnualMeeting.html
Desi Girl, help me understand. Why is it you find it appropriate and necessary to belittle those you don’t agree with? I find it incredible how many folks indulge in calling really intelligent people stupid.
What’s your self-justification for gratuitous insults?
David, I would encourage you to rise above the defeatism. There are ways to get money out of politics.
Several states have done this with their elections.
Suggest you check out the “Move To Amend” website.
Also think about this. What if 5 million members of MoveOn agreed to vote against any politician who doesn’t agree to getting money out of politics?
What if the gazillion progressive/liberal non profits would actually join together to devote 20 percent of their funding to supporting getting money out of politics and voted as a bloc?
I’m telling my non-profits no more money from me until they work together to get the money out of politics and to support a constitutional amendment to remove corporate rights in the area of public advocacy, including campaign contributions.
And I’ve told my Federal representatives the same thing, as well as the Democratic Party’s fund raisers.
I’d like to see enough progressives get together on eliminating money from politics and dismantling the whole notion of corporate personhood that it becomes
a third rail. The Natl Rifle Asso has made guns a third rail. They only have about 4 million members.
Why can’t progressives demand the nonprofits they contribute to rally around cleaning up the Beltway
and taking back corporate personhood?
Because we’re too defeatist to try.
And stop calling those of us who want to clean up our politics naive. Who are you to name call?
Trip, the same thought has crossed my mind. The politicos are on top of those of us who send them too many emails or make too many phone calls.
My congressman had one of his aides call me to find out why I was so concerned about financial reform. And why I emailed so much.
CURIOUS—has anyone contacted you because you email too much?
Jeff, consider this. Obama embraces a totally corrupted system. IMO, his sleaziness was promising real change and hope and then abandoning his campaign
theme to play the Beltway game.
Suggest you watch the documentary from Frontline called “Obama’s Deal”. Its about the Obama team’s
tactics to get health care reform.
I would rather have no health care reform. Instead I wish Obama would have called on his supporters to call their Senators and Congressfolks to demand a public option. He could have created a tidal wave of popular support for this right after the 2008 election. And he could have taken down the Too Big To Fail financial outfits as well, not wrecking them, but firing their top dogs and restructuring them so they provide necessary financial services rather than promulgate a casino of junk derivatives.
Boy, Uncle Billy, you must have a very grand sense of yourself. Enlighten me. What do you know that makes you so superior?
As if those who you don’t agree with don’t think? Ummh.
I don’t think so.
humans are very simple beings, I think we have a tendency to complicate everything.
Essentially this crisis is a problem of having a minority of greedy individuals who have access to financial and political institutions that allow them to circumvent our supposed democracy in order to get what they want.
this is nothing new, this was happening over 100 years. The difference now is that media is completely irresponsible and does not adequately inform or encourage any form of discourse amongst ordinary people.
That is all well and fine, but who is to say that, that financial services cancer, is now not currently being treated?
definitely not left/right.
Look at the think tank Daley was part of: The Third Way. First of all, is it some kind of joke that Mussolini called Fascism “The Third Way”? And then look at this “centrist” think tank’s board – 2/3 of them are bankers. Some center.
No conspiracy THEORIES are required. What has happened is an actual conspiracy. The bankers figured out how to make obscene profits via control fraud and campaign contributions, and they all are to blame. A Gresham’s Law situation forced the “good” bankers and most honest politicians out over time, so the remainder are ALL part of the problem.
silver lining? Buy silver?
Seriously, perhaps this will seal Obama as a one-termer, and the Tea Party person TBA who takes over will make things so much worse that real change will be inevitable. We get guaranteed change, for better or worse, in about 2014.
Oh, sweetheart. Home early from school because of snow?
You’re, of course correct both in terms of the bogus nature of ‘The Third Way’… who’s basic message is essentially: “Let’s all be more courteous about giving ourselves over to large corporate dominance of politics and government and not ask any embarrassing questions along the way!”
… as well as about the role of Gresham’s Law and the corrupt self-interest of TBTF bankers…. though I don’t believe it required secret meetings or codes of silence… unfortunately (that’d be hard to pull off).
Re the role of money in politics… I wish it wasn’t there also.
However the solution involves trying to understand the role of scale… and attending to solutions that address the problems it creates.
On the potentials of the networked political microtransaction:
“A full 90 members of Congress who voted to bailout Wall Street in 2008 failed to support financial reform reining in the banks that drove our economy off a cliff. But when you examine campaign contribution data, it’s really no surprise that these particular lawmakers voted to mortgage our economic future to Big Finance: This election cycle, they’ve raked in over $48.8 million from the financial establishment.” (“Crony Capitalism: Wall Street’s Favorite Politicians”, Zach Carter, ourfuture.org)
I don’t like the way money is controlling politics either. Sometimes you have to fight fire with fire…
$48.8 million? It’s disgusting how these special interests can network their money!
$48.8 million is less than 35 cents per registered voter…
It’s just a matter of implementing the technologies to harvest other sides of the debate..
Most people NEVER give to a cause or campaign. It’s a hassle and unless you’re giving substantial bucks you feel pretty impotent anyway.
It doesn’t need to be that way. Its just a matter of catalyzing the network.
BTW, the existence of the network itself leads to a great reduction in the cost of campaigns… as well as being the ONLY neutral mechanism for the public funding of elections… (small amounts DIRECTLY to voters with contribution capability to any legally qualified candidate).
I’m just waiting for a chance to be heard.
Heh. Come over here and sit my me, Margie….
The solution to the problem of big businesses getting bigger- reducing competition, promoting crony capitalism, and endangering the Republic- is to create a FINANCIAL (not regulatory, via antitrust) advantage for smaller businesses.
The best way to do this would be to revise the corporation tax system. Right now, it’s a byzantine, complex hodgepodge of rules and regulations that keeps corporate accountants and tax men busy to no good purpose. Determining ‘profit’, and taxing it, wastes billions of dollars annually. Meanwhile, bigger businesses enjoy a host of advantages over their smaller peers, ranging from political influence to more access to capital, to being “too big to fail”.
I’d propose a much simpler, transparent and more socially productive system: tax on the basis of gross (not NET) income, on a sliding scale. Thus something the size of Exxon-Mobil (one sixth the size of the federal government!) or Citibank, or Walmart, would pay 30% of their gross receipts in corporate tax, while a Mom and Pop like Manny’s dry cleaners would pay 1%. If Exxon split up into 12 equal sized companies-still giants, mind you,- their tax bill would go down to 25%. If they split into 120 equal sized companies, it might go down to 20%. And so on. There’d be an automatic brake on businesses getting too big to fail, and more businesses means more competition and innovation.
I’ll do you one better. It was suggested that in order to become a congress person you had to be able to do your own taxes, no help from anyone, and if you needed help learning how to do your taxes, then it would be provided for you. This would force change in the tax system because instead of reling on another individual to do your congressional taxes, you would have to negoiate with your peers as to how to make the system fair for all. This sounds to logical to be implemented but it is actual change fo the better.
Making this man his right hand man when he doesn’t even really know him, is nuts. This link says it best:
A quickly constructed correlation. I am retired from a medical specialty. I sincerely wanted my patients to follow a prescribed treatment regime,to do so, I learned early on, they had to believe in it, had to understand it and be personally “invested” in the treatment process to attain any degree of patient compliance.
Treatments were extensive and required substantive changes in daily behavior that effected not only patients but ancillary individuals such as family, friends and some times colleagues.
My point is that accurate information is ever so important, conveyed in a manner that is easily understood and incorporated with clearly defined steps to reach clearly defined goals and outcome potential that is simply detailed. Otherwise, the majority of my patients may have said, Dr C sure sounds smart but I dont’ have a clue what is being said so the heck with it, I’ll just do what I have always done.
My interpretation of the general populace grasp of the economic cliff on which we stand is pretty flimsy. Is it because we are daft? No, my experiences do not support this posit. My opinion is the information is camoflauged, controlled, and contained. Expectations are LOW for comprehension, so don’t even bother. Poppycock.
I don’t subscribe to the idea that the American public is too stupid to evoke meaninful change. Offer information in an understandable, correlative format with steps and outcomes, and you might be surprised by “joe six-pack’s” intelligence and capability.
Can change be effected in a peaceful manner? History does not support this notion but the future is not yet written.
I agree our political system is captured; we do not hold the “cookies”. Its a very tenuous situation on a global scale. I recently re-read 1776 and continue to be amazed at the tenacity of the “poor, disadvantaged farmer” in the field of battle. Read about the Battle of the Bulge and Bastogne- its unbelievable what the ‘average’ individual can accomplish. Then tell me structural change is not possible. What will it take to get to this point? As with my former patients, I prefer less suffering and more information to motivate people towards positive change.
Carla’s gatherings are fabulous. Can we each try to duplicate some of her efforts in our own communities?
Share the information and act. Who is interested? Count me in.
I don’t have the answers. The bright individuals who post here have some tremendous insights and suggestions which is why I continue to read this blog. I learn. It won’t work if we keep these ideas amongst ourselves, batted about like a tennis ball.
Besides the uncatchy phrase, the article is more about briefing the president upon his inaugration as to what the army wants him to do (vs all others, they come later). All the campiagn slogans and promises to get the military out of govt are dust in the wind. And it has been this way for ages and grows on its own agenda. No clear answers as to the solution to this napping of the American public, its if ya can’t beat um, join um. And if ya can’t join um, start jugglin.
oh yeah, well I’ll pony up my crystal ball against your astrology maps any time any day to predict what metaphysical math move will cause the most damage to make the most for ME ME ME
More misery for others = more money for ME ME ME
insert roll eyes smiley face here
Repeat after me people, “They are NUTZ”.
Gee, what was the “economy” doing in 80 B.C. when shamans were in charge?
From January 9, 2011 Astronomy Picture of the Day on the internet, the Antikythera Mechanism:
“What is it? It was found at the bottom of the sea aboard an ancient Greek ship. Its seeming complexity has prompted decades of study, although some of its functions remained unknown. Recent X-rays of the device have now confirmed the nature of the Antikythera mechanism, and discovered several surprising functions. The Antikythera mechanism has been discovered to be a mechanical computer of an accuracy thought impossible in 80 BC, when the ship that carried it sunk. Such sophisticated technology was not thought to be developed by humanity for another 1,000 years. Its wheels and gears create a portable orrery of the sky that predicted star and planet locations as well as lunar and solar eclipses. The Antikythera mechanism, shown above, is 33 centimeters high and similar in size to a large book.”
ALL OF US
And worse, we are NOT ALLOWED to help ourselves – “…no money for you….”
I don’t know what that has to do with the price of tea in China. But as for Mechanical Engineers, I am all for them, cause they live to be ages a normal human being can not even fathom. And with that age comes aquired wealth. So if it means more money for ME ME ME, then I am all for it. As for misery, I will leave that up to the others.
This is the American spirit I was brought up to admire and respect!
May I suggest, Sir, John Rawls (1999; 4th printing paper,2002; Harvard Press): THE LAW OF THE PEOPLES: with “The idea of Public Reason revisited”
…within which you will find:
“There are three essential elements of deliberative democracy. One is an idea of public reason, although not all such ideas are the same. A second is a framework of constitutional democratic institutions that specifies the setting for deliberative legislative bodies. The third is the knowledge and desire on the part of citizens generally to follow a public reason and to realize its ideal in their political conduct. Immediate implications of these essentials are the public financing of elections, and the providing for public occasions of orderly and serious discussion of fundamental issues of public policy (Rawls 2002:139).”
Keep in mind that political theory is taught as a profession in colleges these days…just like economics…and they follow theory…right or wrong; or as they say…not so much what’s right so much as what is left!
Coalition and Alliance theories evolved from cohort groupings in sociopolitical perspectives; and these areas of practical application have subsumed and consumed the search for an ideal strata of political culture. But not for all. Just as you have voiced we do have leaders spread thinly through the matrix and they need our support. We need to network. We need to form coalitions and alliances. We need to throw off the misinformation of mass conformity and do the research…do the assessment…do the contemplations and the benchmarks of best practice and communicate these amongst ourselves until it is a standard of understanding. We need to link and interlock with our best and most authentic leaders and make sure they are not out in Arizona alone!
This process has superseded simple group factional divisions ruling on issues. It has become an issue of POWER itself. Under such demise of individual perspectives, the conglomerate of “citizenship” has become a mere backdrop to history as an overgeneralized, disintegrated, detached, depersonalized, servile. We interpret reform as conform to the acceptable public arena and it is certainly not “informed” by anything outside the “captured market media”. We need to take that back.
We need to establish an empowered citizenship and the only way we can do that is through a new consensus. Overall, consensus, coalition and alliances form the body politic. “Dictating to the majority” has become the tricks of the trade through commissions and stall tactics that form the realism of central power flow. The reason it works and that people think it can’t be interrupted is all about SECRECY and Stealth (much enhanced by the power contributed by wealth). A great deal of money has been spent to create a false consciousness in this country and our market orientation makes us vulnerable. The “simplification of language” factor does not work for this cure. We need to connect, unify and coordinate a practicing democratic participation that places people and law back in control. But if we wait too long…Trust me…they will change the law itself.
“Dictating to the Majority” coordinates third party marginal power placement and other vehicles of power under the sister versions of contemporary alliances from game theory more or less converging under “coalition theory”
There you go again. All of Unforgivable Sin can include a large number of folks who don’t know as much as they lay claim to. But you keep trying your best and who knows, maybe there is no limit to what you can accomplish.
“To an extent rarely seen in recessions since the Great Depression, wages for a swath of the labor force this time have taken a sharp and swift fall.”
Obama has no shame. No doubt the White House looks with scorn on so-called fringe bloggers and commenters. But the facts speak for themselves. Obama represents a massive betrayal of the people’s trust.
In the words of another widely respected blogger:
“You put all this together and it’s clear that this administration, beyond even the normal standard of corrupt government, is nothing but the hired thug arm of the bank rackets. This is the one and only priority. Bush was always rightly pegged as a childish warmonger who wanted to let big corporations loot the country. Obama was rightly questioned for running a vacuous campaign based on nothing but charisma and vaporous rhetoric. What would be the basis of an Obama presidency, and how would it represent Change from Bush?
Now we see that Obama represents not change from but the refinement of Bush corporatism. The core of his policy is delivering the country to the Wall Street racketeers as a mine and a playground. The pretext is the crisis, the vehicle is the bailout. Every other policy flows from this.” Excerpt from ‘Bailout War’:
Thanks Trixi. I’ve been kinda busy lately.
You’re right about the carrots.
Gotta run …
Why is it wrong for Simon Johnson to make an honest buck by writing and selling a book critical of those who are making their money dishonestly?
No, that the big 6 have grown has nothing to do with my analysis: my sole point was that if the US gvt had wanted to do something about the type of banks it has, it should have done so when the GFC was at its peak, ie during the last months of Paulson’s reign as Treasury Secretary. The one thing they should not have done is grant BHC charters to Goldman and MS and they should have broken up all banks with business models that would require ongoing TBTF status. Those business models involve high market shares in most critical regions of the US, resulting in those banks continually holding hostage the SME populations of all the large metropolitan areas, and extracting quasi oligopoly rents from them. The returns from that strategy then feed a far more risky set of financial markets activities. Although most “proprietary trading” (intelligent gambilng) will now move to friendly, but not controlled hedge funds (meaning that from now on the Goldman traders will formally have their own firms, but will probably remain funded and serviced by their former colleagues. To what extent that makes Goldman less risky remains to be seen. But it will move slightly from being a casino player (although often in the role of “the house”) to one that operates one for a fee.
But the key issue is, like you could read in todays British papers: if a gvt wants to be hostile to the financial services industry (or rather, the managers and organizers of it, who extract the easiest rents), it will simply move to a more hospitable jurisdiction, and you, gvt, will be left with the dross…
What good would that do? This stuff is pretty complicated and Simon’s ideas and those of his colleagues are interesting, but not necessarily leading to superior outcomes. May I remind the congregation that at least half of these people would not have expected that Long Term Capital would have such a short life. But your average bank trader would have spotted the vulnerabilities and just waited to profit from the great market disturbance LTC’s demise and clean-up would create. Markets are for grown-ups not academics, even if they have earned Nobels..
Also, if it is even impossible to convince the US public that normal healthcare arrangements (like everywhere else in the developed world) are cheaper and lead to better social outcomes (greater longevity, less health induced economic, economists of all people should not engage in a wasteful activity like educating the public about better financial sector arrangements. Something like that can only be done by someone like Murdoch (Fox News), a gifted video game designer, or a reality show producer or a genuine business celebrity.
Maybe you could get Steve Jobs interested?
When bashing fiat money, just remember who controls the precious metals market. A gold or silver standard won’t improve anything.
Pffft, and that’s game. Any hope that Obama might have reconsidered his position of pandering to the financial sector’s every whim is gone. Get ready for a wild ride as the banks proceed to ritually gut the remainder of the middle class.
You ask the right questions. And I guess many people (a) do not believe the US public is stupid (b) the current economic situation is dangerous (c) the political control mechanism seems to be captured. Strangely enough, that is far from new. We have an economic crisis partially (but not completely) due to bad policymaking in areas such as monetary policy and bad regulatory change. But these two should be seen against the challenges facing the policymakers: monetary policy in the US must balance inflation and growth/activity, rather than just target inflation. When then a monetary policymaker is confronted with an inherently malignant (in economic terms, definitely not in ethical terms) structure that controls fiscal policy (a vote buying machine aimed at the middle class) there is little she can do, except rationalize the few decision choices still at her diposal. In that situation, the Fed erred on the side of raw activity at the expense of efficient allocation (at least that is how you can see it). The bad regulatory policy (and this subject still lives on on this blog!) was probably chosen as a result of lobbying and with objectionable results, but consider the alternatives: would it have been possible to prevent the concentration in the US financial services industry and the blurring of lines between regulated sectors by using different regulation? I am personally in favor of a rather simple regulatory model, but absolutely sure no one would want the shock that its introduction would deliver to the economy, even if the reward would be a low maintenance, low fiscal impact solution. And in the present environment, that shock would be compounding the mess we already have. Things like that work when a country is liberated from a dictatorship (like the East Europeans) or after a verty long period of deep misery, where no one belive things can get worse. The US is far removed from such a situation, despite all the stories.
The greatest statesman of our time, Li Guangyao from Singapore once replied to an inaudible question from the audience during an election rally: “What do you want? Democracy or good government?” This question has kept many little minds with time on their hands busy since before Socrates and Aristophanes but to no avail. What the US needs is good government, with as much democracy as it can afford, given international competition. Deliberative democracy and other structuralist ideas should not leave the classroom…
As I recall Steve had some of the exact same complaints. Why don’t consult him, he is rather experienced in the field.
The only seroiusly intellegent gambling I know of is with a pair of dice.
Or simply put, the little engine that would not wear out, has teeth.
I think that as regressive taxation increases, the barter economy will grow in size and scope. This is a natural consequence that can be combated by the government only through more zealous enforcement measures.
Of course, the correct path for the government would be to shift the taxation rubric to penalize less those at the bottom of the income ladder with the greatest incentive to engage in tax-free economic activity.
Instead, however, we may get a private enforcement agency to audit all suspect consumers. Just imagine how fun it would be to have a Blackwater-like security company come storming through your door (or wall or ceiling, just like in the movie “Brazil”) and then, under gunpoint, suggest that you retrieve your financials.
It will probably start with an offshoot of the RICO laws.
That has the oder of an Al Capone 5 finger discount.
We’re having a blizzard here, so to procrastinate further, I turned on Bloomberg TV. There, the CEO of PIMCO is speaking of yet more bonds to somehow eventually restructure the debt of some Euro states, similar to what happened in Mexico and Latin America years back. Sounds like a plan, hey!
More debt, that is, for working people, less for families, a reduced social safety net, years of pain and suffering….lost generation(s).
Losses for: All except for the large institutions, and investors. Doesn’t seem like there is too much justice in such an equation, to me.
This system is terminally broken, and no amount of tweaking, finessing, deception, or bold pronouncements is going to be able to put Humpy Dumpty back into his integrated shell, and back up on his high wall. He’s all a gooey mess, and smells bad by now.
As for Daley, I am POSITIVE none of the posters on this site, most all of whom are impressively informed, constructive, and decent people, are a bit surprised by this selection.
As for POTUS, he’s been hooked, and grilled by the banksters for goodness knows how long, so how can anyone expect different now?
On top of everything, there are all the birds falling out of the sky, and fish washing up……how to make a $$$ buck out of this endeavor?
“. . . others who oppose successful people . . .”
This never fails to get a big laugh out of me. The reality is, “others” do NOT oppose “successful” people.
However, many, many “others” do oppose those “successful” people who gain their “success” by lying, cheating, and stealing from “others”.
Like the banksters, for example. Are they successful? Why yes, yes, they are. Do we oppose them because they are successful? No. We oppose them because they lie, cheat, and steal their way to success, while asking us to behave in a “lawful” manner. Then they buy the laws. And there you have the real story behind those “others” who oppose “success”.
The only good government is one that is in my hands as much as yours. Until you are prepared to define your terms you should restrict yourself to what you yourself are willing to accept. As far as the classroom is concerned, I left that many years ago; deliberative or participatory discretions don’t matter qualitatively speaking. This is not academic but activistic and real for some decades now…accept for those who might search for government in their supermarkets and department stores.
TRNN is opening up a channel of interactive commentary & communication.
If you want a dose of some truth, listen to this editorial commentary:
January 12, 2011
The Tucson Shootings, Civility And The New Class War Zone
Instead of using ‘civility’ to cover up reality, how about a people’s civility intended to reveal it.
Even billionares eventually have to pay dues, if they want to sing the blues.
Thank you for your most thoughtful reply. Many of us, including me, have been losing sleep for a long time struggling with a long neglected duty. There is something everyone can do to agitate, no matter how seemingly insignificant. The worst thing is to do absolutely nothing.
I’ve been advised to dump euros, especially now that China is shoring up the battered currency to a limited extent. I noticed the euro is up. Anyway, I don’t need an ‘expert’ to tell me what the future holds.
“if the US gvt had wanted to do something about the type of banks it has, it should have done so when the GFC was at its peak, ie during the last months of Paulson’s reign as Treasury Secretary”
I am quite certain that Simon would agree, as would nearly everyone who comments here. But you seem to be implying that having failed to do so, that it is inappropriate to try to correct the situation now. Do I misunderstand you?
You assert that some of the TBTF banks truly would leave the US if we made the appropriate reforms. Personally I doubt they would pass up this huge market, but let’s even say they would. Suppose this actually happened: wouldn’t we just be better off without them? Surely in their absence, others will rush in to fill the void they leave behind.
Suppose this actually happened: wouldn’t we just be better off without them? Surely in their absence, others will rush in to fill the void they leave behind.
What if though, the hen house was without only one rooster. You would have quite a dream to weave with questionable tools. I like the idea besides the logistics.
“My point is that accurate information is ever so important, conveyed in a manner that is easily understood and incorporated with clearly defined steps to reach clearly defined goals and outcome potential that is simply detailed.”
How true. But in your practice, you did not have to attempt to prevail against a barrage of disinformation being continually and ubiquitously blasted at your patients.
Admati is pretty smart, and a girl too
though mistakes get made…
Actually in this case I believe you need to count both apples and oranges. Which would leave you with a scarce number of individuals professionally qualified to have a recipe for that salad.
Okay so we don’t care and they don’t care – so since nobody cares, then what the heck.
I’m going to take the opportunity to use this current blog back and forth blather to make a serious case against the Patriot Act.
Outside of one person with bona fides as a global economist, who hasn’t been around for a while on this blog, btw, probably because he is off educating others to issues and solutions in the circles he travels in with other economists,
I have not reached out to anyone else. You are all strangers to me. FACT.
Which means that the presumptive familiarity that Herbert Wetherby has decided he has the “right” to indulge in in conversation with me is permission he gave himself based on – well, what? Is he in possession of “secret” files being collected in some Homeland Insecurity department about me without any JUST cause? And is he doing this slapping to create a dossier of language deconstruction and interpretation to rationalize the continued infringement of my rights to a peaceful existence? Is he STALKING me on the internet legally? Is he protected by law as a Predator with the sole purpose to his activity being to disparage my contribution as a citizen in a democracy AND get in to my finances and deconstruct those to transfer them to himself while the circus of slapping me around distracts everyone?
So far, he (and some others who post here regularly) sent up flags on every one of the following points “regulators and auditors” of ALL life-sustaining industries used to watch out for as evidence of FRAUD:
1. complicated business arrangements that seem to serve little practical purpose
2. changes in auditors, or frequent management disagreement with auditors
3. financial figures that routinely match targets, particularly if the targets are overly aggressive
4. unusual balance sheet changes
5. unusual accounting policies
6. reversing or changing contingent liability and other reserves to smooth out earnings
7. frequent changes of estimates for no good reason
8. frequent “management overrides”
9. entries that hide a change in earnings or a failure to meet expectations
10. entries that change a loss into income, or vice versa
11. changes that affect compensation or compliance with regulatory requirements
Outside of calling the planet we are on “Spaceship Earth” (a totally neutral and affectionate knick-name from the moon-walking days) on a consistent basis, I don’t believe there was any conversation about planetary astronomy or ASTROLOGY from my part, Herbert. Sure, I like to visit websites where data from our satellite probes out in the solar system is being shared with the “public” – data from Jupiter, Mars, the Sun and even Pluto, who doesn’t like that NASA info about “out there”?
The connection the atmospheric composition of Uranus has to a man-made economic Depression in the USA eludes me, so I’ll concede to not being spacey enough to “get it”. And I don’t care that I don’t see those connections.
So moving on….here is an interesting article about lightening. Lightening has always captured the collective imagination of humanity in one way or another because it is an intellectual challenge to “get it” and a direct challenge to our physical safety. The genius hairy butt primate who got zapped while hiding in a tree during a thunderstorm was the one who speculated that a cave might be a better place in which to weather a storm. And so it goes across the centuries all the way up to today with the recent discovery that storms are producing “anti-matter”! Wow! Article in NASA Science News dated January 11, 2011.
Should anybody be intimidated out of joining that conversation regarding what we don’t yet know about lightening by Homeland Insecurity internet stalkers who use every word you write to extrapolate it with full malicious intent into a character deconstruction because the “law” is on their side and they have info on YOU, but you are not allowed to challenge what they did with that info even after there is NO PUBLIC EVIDENCE that they did not use that information to make sure that you don’t have a job, savings, property or your hard-earned good name?
Imagine how criminal they are behind the scenes with your information if they are bold enough to be so nasty in public? And who are these people? The “elite”? Or just the nastiest gossipers in the ‘hood that everyone always avoided and disliked – bad “characters”? People like Herbert who presume to be so familiar with strangers as a “judge” when there is no wrong doing other than a difference of opinion do not deserve to have any of yours or mine financial or medical information for “marketing” purposes and call that schtick “security intelligence”.
To repeat, I do not KNOW who this blogger – “Herbert Wetherby” is…but looks like I’ve got yet another predatory stalker on me – well, dude, get to the back of that LONG line…
Constitutional Convention and burn the Patriot Act.
And I believe we have all we need to officially declare a JUST WAR (wiki it) against the Wrecking Crew….it’s a longer “list” than the one in the Declaration of Independence, that’s for sure, and more than one wanton aggressive predatory “shot” has been fired from their side. Enough. I BELIEVE we all still have the right to defend our own lives – lives INCLUDE health and the fruits of honest labor that contribute something to civilization.
And there you go, Mr./Ms.FBI – the monkey brains just needed one archetype to bring down MILLIONS, financially, from behind the laptop screen. It certainly was a “cheap war” for them.
Quite the stock rally today based on “bank” earnings – seems like the cancer had a big day of metastasizing…
Now I’m off to another blog to “share” what could possibly be killing all those bees being rented out…I might even use the example of renting out Herbert with his laptop, but first blindfolding him, sticking him in a dirty truck trailor with no ventilation, driving him non-stop for thousands of miles and then throwing him out in the middle of a whole new wilderness of flowers, and release him to find the right “honey” smell frequency to get back on the internet through the wireless card…no cell phone to call IT for help, either.
there you go, Lauren :-)
thanks for sharing!
Okay, Cedar. You have noticed Carla’s effort. Now won’t you join her, me and Brenda. Brenda began this. Carla and I are all she has so far. Since you appreciate what Carla is doing you add just a tad more support by emailing Brenda at email@example.com? Come join our discussion. We need you. Brenda, who began this, I fear is about to get discouraged by the lack of response.
Bruce. Come join our discussion at firstname.lastname@example.org. Please! We need you to connect with us! We’ve blathered all for a couple of years on these here blogs. It’s time to organize to some affect. We have found enough areas of agreement here that we can all get going in the same direction and not waste what we’ve learned. But we need you to go with us. Email Brenda and lets start a plan of action. Come on, Bruce! Email Brenda. email@example.com
The rest of you who share many of the same ideas here in the comments section of Baseline: Come join us. We’re starting a party, for whatever that means. We haven’t gotten anywhere in particular, yet, but we need the energy and enthusiasm that many of you show in these discussions. We all agree that power has been gathered into the hands of a few, mainly to their own benefit. Well, guess what? They have their you-know-what together. It’s time for us to do the same, now that at least our ideas have met each other. Come on! Email firstname.lastname@example.org. We are going to DO something as well as talk about it. Put your action where your mouth (so to speak) is.
Annie dear. I hereby invite you to email Brenda at email@example.com, and join our tiny little smoldering ember of a party. We desperately need your passion. Go Annie! Go Annie!
The connection the atmospheric composition of Uranus has to a man-made economic Depression in the USA eludes me, so I’ll concede to not being spacey enough to “get it”. And I don’t care that I don’t see those connections.
That’s very good, and could also be a reason for the unsystainable rise in health care costs this country is currently faceing. I’m glad you skipped over it to move on to another subject, because most people just turn around and walk out the door when I begin talking about the issue.
Whoops, Sorry. I didn’t read your posting first. It may have been an inauspicious moment. I posted in a hurry because a show that my wife and I were about to watch was starting. You’re still invited, as is anyone else who would care to join us. Please join, y’all. We want to start being of affect.
Don’t be defeatist, Mr. Waterbury. Join us at firstname.lastname@example.org. Come on now. We’re expecting to hear from you. We may well not get anywhere, but we do intend to be able to say we tried. We need people of your evident intellect to help us find our direction. Please email Brenda at the above email address and help us get started.
They just work harder at it, or pay people to, to a positive (for them) effect. Now, y’all, put up or shut up. email@example.com
Join us, Tom. firstname.lastname@example.org
There is a old saying “It is like giving a garland to a monkey” (the monkey will tear it to pieces).. Americans have to recognize that this is what they have done by electing Obama (and prior to him Bush) as their President.
Sad state of affairs for a Great Country!!
No, I am not suggesting that to try to fix this is inappropriate. But that it is futile. It is too expensive and there is no way the sitting politicians will be able to act collectively towards a situation more in the public interest. Besides, as I mentioned, there is an international dimension to consider. Finally, the experts do not have the answers either. Simon and his friends are, in a way, bluffing.
CBS, sorry to have overlooked your third para. And that is an important issue. It is not very easy to leave the US, but if say, Goldman would find it unattractive to comply with hypothetical new rules they could give up their banking charter, or move their legal headoffice to a more favourable jurisdiction. The old Lehman (now part of Barclays (headquartered in the UK) can do everything Goldman can and would not necessarily be affected by a change in capita adequacy rules (for instance) applying solely to US banks. I guess most people who comment here have no idea of the difficulties facing anyone who would like to reform the US banking system, apart from a republican house (never anatgonistic towards the financial services industry). The US should have reined in its financial services industry when the Europeans wanted that too. Meanwhile the new UK government will welcome with open arms any US bank or fund manager threatened by onerous rules thought up by little US voters…
Love to be a part of those trying to improve the situation! So happy to hear more and participate in any way I can.
And certainly would welcome the chance to advance a broader mindset than presented by the two dominant parties now controlling the parameters of discussion.
I should note though, that while I have plenty of opinions on issues… my focus is on improving processes… (“meta-political” rather than Left/Right stuff). I believe that without serious improvements and re-vitalization of those processes no real progress is possible. The Left/Right debate ends up being used as an intentionally distracting tool by those interested in advancing more narrow agendas.
It’s possible a movement focussed on PROCESS… and specific proposals for improving that process… rather than the Dem/Rep false choices could garner very broad support now!
Re-Igniting the Enlightenment: On Building Landscapes for Decision
Make no mistake… you’re trying to do something extremely difficult. I KNOW! I’ve been trying to spread the “Commons-dedicated Account” concept for 4 years and am bankrupt and lost my home because of it.
I am making some progress lately. (fortunately USPTO understood practicality and problem being addressed as well as complete lack of any competitor and viability of mechanism)… And the story of what it’s taken to get me this far may in itself be of some help.
What apparently is problem for investors is my intention for it to be ‘Commons-owned’… I understand the problem. However I believe solution is possible for that. (I am not looking for it to be govt owned and financed. I believe a better configuration is as a for-profit enterprise owned by its donor/users.
Actually I believe the mechanism and ownership structure leads the enterprise to dominance of the Charity/Campaign Services Sector… There are synergistic benefits that arise by placing that enterprise in the Commons. At least that’s my ‘theory’… I’m open to alternative ideas. Especially because things are getting very difficult and lonely out here trying to do this solo.
Ever try to start an institution? It’s tough… but once in a while… it can be done!
P.S. Any interested are welcome to join me on LinkedIn as well.
but i thought maobamao was a socialist commie marxist.
I agree with the rejection of economic slavery, but why not take it further. How about a total bank boycott, pay cash for everything, and a three day general strike and gasoline boycott (If you’re not going to work, you don’t need to buy gas) with no specific demands. The only message would be, to our statist and corporatist overlords “learn how to act right, or you’re fired!”
I’m sure (if they don’t resort to martial law) that the big boys will come up with all kinds of creative ways to change their image, really fast. In the end, they need us more than we need them. Oh, but wait, this plan would require taking risks, enduring an unknown degree of discomfort, and (gasp!) people working together without a boss or a politician telling them what to do, like some kind of un-American anarchist-communist dope smoking socialist sex fiends, because only people like that are happy when no one is telling them what to do!
What you describe here is not merely the result of the vagaries of a mixed economy. It’s that way, because it’s supposed to be. “Industrial Psychology” has come a long way since the days Fredrick Winslow Taylor. The reduction of “human capital” to interchangeable, disposable, and entirely docile components of centrally controlled machinery is nearing completion. Slavery reinstated by the sincere sentiments of the enslaved is best. Pretty soon, even the spectacle of the ongoing “two party” football game will be unnecessary. The people have chosen comfort and security over personal autonomy, and if history is any indicator, they will in the end lose all of these things.
Angry hungry people can start revolutions, or welcome fascism with open arms. The mouthpieces are wasting no time in providing scapegoats, there is a new hate flavor of the day each time you turn on your favorite media device. Obama is a hypocritical sellout, and a politician to the core, but no more so than any of his colleagues in DC. He sure brought the haters out though. People who have been serfs for their entire lives start buying all the guns they can get their hands on. Why? Finally, the witch hunters cross burners and queer-bashers have no one left to look down on.Yes we have class war now; the ruling class is fighting it, and winning.
SIMON JOHNSON: Bill Daley’s Appointment Proves “The Bankers Have Won”
Yes Hugh, Historically I think that unfortunatly the main successes in overthrowing a ruling class has been in eliminating them. Cesar Augustus and Mark Anthony did this in Rome when they executed about 1,000 ‘insiders’ and then Rome had its golden age.
First Julius Cesar had tried to reform without eliminating the ruling class, he was going to print new money and just give it to the poor for example and bring in all sorts of reforms to help the poor. The ruling class contrived together to get rid of him and stabbed him.
Again in the French revolution the poor people just eliminated the ruling class and went on to form a succesfull republic, which many others have been based on.
I am not suggesting that this be done in the US, merely pointing out that the power and infulence of the Oil and Financial companies in the States is such that they can have a large influence on whoever is in government and even have whoever opposes them removed by trickery and perhaps illegally.
I do not recommend violence but feel that as Simon suggests the power of these vested interests needs to be regulated and broken up. For example imagine if they were not allowed to make any campaign contributions.
The appointment of Bill Daley is not a positive step for the people.
It is a positive step for finance and the demoncratic political party.
The democrats were punished at the november elections because Finance decided to support the republicans. The republicans also were more pro-finance.
Lesson Learnt by the democrats – be nicer to Finance.
They have been told this by the US voters.
So why did the US voter vote for a more pro-finance party in Novemeber?
Could it be that unlike the bloggers here the average US voter is not informed or perhaps do not fully understand the issues Mr. Johnson raises?
Could this be becuase Finance has more money to spend misinforming the people, while Mr. Johnson does not have billions of dollars for informative advertising campaigns?
Which is better for the democrats?
1. to stay in power and be severly comprimised on your morals and policies by bending to will of the large multinationals who can decide to use their funding with you and have you re-elected.
2.Leave power, keep your morals and policies by not bending to the will of the large multinationals who can decide to use their funding against you and have you outed at the next election.
I think they have justified staying in power by saying “Even if I am comprimised I will still be better for the people than the republicans”
The real champions are the people who do not compromise in doing the right thing despite losing their status in society, power or money because of this.
This is not an easy thing and personally I can not claim to have done this myself in the past, however I am gradullay trying to do better.
If more people acted like this in their own lives more change for good would happen.
Redleg, I don’t know if you were responding to me, but I did not mean to bash fiat money. I completely agree that a gold or silver standard won’t improve anything. — Carla
Just cautioning, not provoking.
Since the same banks that control fiat currency also control the gold and silver markets, fiat and gold backed (for example) currencies are just different points on the same continuum.
I work in the mining industry – bankers run the show there too, not geologists or engineers.
IMO the only solution that I can see to the money supply problem, meaning a currency w/ zero inflation that is backed by something that would benefit the bulk of the general population, is to have it backed by population. Constant money supply per capita.
That said, I’m not sold on backing currency w/ anything except trust. After all, tally sticks worked for something like 700 years.
Cindi…I have been in total agreement with your commeents ever since the appointments of Messrs. Summers and Geitner.
Bamboozled. Thats the base word. Right now, if there were an election between Obama and Bush II, I would vote for Bush II.
My frustration has taken me to switch parties. I can actually make more of a difference as a Republican. SAD.
Some perspective is needed. We tend to attribute god-like powers to the President and his aides. They’re people just like the rest of us, albeit typically better informed about a wide range of issues.
But when it comes to technical aspects of science policy, the intricacies of immigration law, climate change scenarios, water policy, sulfur emissions from coal plants and the impact on acid rain and, …, and yes, financial regulations, they rely on appointees and advisors. That, of course, is the sticking point.
The growing power of money, thanks to the decision that it is equivalent in every way to free speech, has led to the total takeover of those positions by the very groups who are supposed to be regulated. And nowhere is this truer than in the world of finance. That is, after all, where the money is best spent.
All the blather about money playing no role in the decision making process about who those appointees will be is, of course, ridiculous. Again, politicians are no different than the rest of us, susceptible to all sorts of enticements. To claim otherwise starts to give you an idea of the disconnect between the Washington-New York axis and the rest of us.
Wall Street has successfully sold a number of ideas, some of which are simply outright lies. They did not know what they were doing when the brought the economy down. It wasn’t any sort of blip, but simply a function of the hair-trigger marketplace they built. They don’t have a clue about the danger involved in building the sort of feedback mechanisms they have into an automated trading system.
They lied about why they did it. They actually wanted to bring down lots of the instruments they were selling, that’s how they made the most money. They had no idea what the larger implications of it were. Some of them need to go to jail. There will be no buyin for any of this by voters until that happens. Both parties are going to get hammered, over and over again.
Most folks don’t have a clue what happened to this day. Hell the President’s staff barely gets it. There has been a tacit effort to bury the details from the getgo. That needs to change and quickly or, as Simon points out, we’ll be revisiting Panic Street shortly.
“Obama’s Revenge” (2/15/09) Ref:
“The continuum moves foward with the Bush’s agenda and Clintonian Era’s manifesto of New-World-Order”, Hasrh….?
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