Jon Huntsman: Too Big To Fail Is Too Big

By Simon Johnson

The idea that big banks damage the broader economy has considerable resonance on the intellectual right.  Tom Hoenig, recently retired president of the Kansas City Fed, has been our clearest official voice on this topic.  And Gene Fama, father of the efficient markets view of finance, said on CNBC last year, that having banks that are too big to fail is “perverting activities and incentives” in financial markets – giving big financial firms, “a license to increase risk; where the taxpayers will bear the downside and firms will bear the upside.”

The mainstream political right, however, has been reluctant to take on the issue. This changed on Wednesday, with a very clear statement by Jon Huntsman in the Wall Street Journal on regulatory capture and its consequences.  Before the 2008 financial crisis: “The largest banks were pushing hard to take more risk at taxpayers’ expense.”  And now,

“More than three years after the crisis and the accompanying bailouts, the six largest American financial institutions are significantly bigger than they were before the crisis, having been encouraged to snap up Bear Stearns and other competitors at bargain prices. These banks now have assets worth over 66% of gross domestic product—at least $9.4 trillion, up from 20% of GDP in the 1990s. There is no evidence that institutions of this size add sufficient value to offset the systemic risk they pose.”

This message could work politically, for five reasons.

First, for anyone on the right of the political spectrum who thinks at all about the issues, this is a coherent and appealing position.  Fama had it exactly right when he said, in the same interview:  “[Too Big To Fail] is not capitalism. Capitalism says – you perform poorly, you fail.”

“Too big to fail” is not a market; it’s a government subsidy scheme – of the most inefficient and dangerous kind.

This is exactly Huntsman’s theme: “Hedge funds and private equity funds go out of business all the time when they make big mistakes, to the notice of few, because they are not too big to fail. There is no reason why banks cannot live with the same reality.”

Second, senior serious figures within the Republican Party have long been pointing in this direction.  In 2009, for example, Nicholas Brady said: “First we should just come out and say it: the financial system that led us to the brink of disaster is broken.”  George P. Schultz has emphasized that we should “Make Failure Tolerable”, for example, “an escalating schedule could be required of necessary capital ratios geared to size and matched with escalating limits on leverage.

Republicans like to discuss who is and is not a true Republican.  How can any “true” Republican really condone the subsidies that underpin our biggest financial firms today?

Third, mainstream financial thinking is in exactly the same place, in terms of arguing that capital requirements for big banks should be much higher.  On this issue I refer you, as always, to the work of Anat Admati and her colleagues at Stanford University.

Huntsman’s position is in alignment with the strongest possible technical thinking, but he has also found a direct and easy to communicate the right political message.  Higher capital requirements for big banks are a great idea – this should help prevent financial disaster.  But when such disaster occurs, we need financial institutions that can actually fail – with losses to creditors – without bringing down the entire system.  Anything that is Too Big to Fail is simply just too big.

Fourth, political Republicans who favor the status quo with regard to megabanks are going to have hard time justifying that position – including in a confrontational debate format.  In particular, Mitt Romney is very vulnerable on this issue – particularly as he has already lined up so much support from among biggest banks.

Presumably the prospect of Wall Street donations is enough to deter some Republicans (and many Democrats) from really confronting the issue of Too Big To Fail.  But if Romney is already far ahead is this fund raising category, there is much less to lose.  And his donations must make it harder for him to explain exactly how he would ensure that even one mega-bank could fail.

It’s not enough to just wish that big banks could fail – or to promise not to support them “next time.”  This is not a credible commitment – and the “resolution authority” created under the Dodd-Frank reform legislation is a complete paper tiger with regard to winding down the biggest banks.  If the choice is global economic calamity or unsavory bailout, which would you choose – let alone any Republican president?

Huntsman has joined the dots.  There are various ways to directly address and remove the implicit subsidies that the largest banks receive – bloated size and excessive leverage can be effectively taxed.

“Eliminating subsidies would encourage the affected institutions to downsize by selling off certain operations or face having to pay the real costs of bailouts. We need banks that are small and simple enough to fail, not financial public utilities”.

Fifth, the eurozone is on the verge of calamity in large part because they built very large banks with huge implicit subsidies – and this facilitated an irresponsible accumulation of public sector debt.

During the Dodd-Frank financial reform debate last year, we heard repeatedly from people – including senators on both sides of the aisle – who believed that reducing the size of our largest banks would somehow put the rest of our private sector at a disadvantage.

Who now would like to emulate in any way the disaster that the Europeans have brought upon themselves?  Seriously, Mr. Romney, please explain how you would prevent our largest banks from becoming ever larger and taking on more risk – and supporting the reckless build-up of debt throughout the global economy?

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

40 thoughts on “Jon Huntsman: Too Big To Fail Is Too Big

  1. A Republican showing enough intelligence to speak out against fraud and regulatory capture by Too Systemically Threatening To Fail (TSTF) banks and Muammar Gaddafi being caught, both happening in a 36 hour period!?!?!?!?!?!

    Geez, this keeps up and I’m going to start feeling hope for this country. I don’t remember drinking any Gin this morning….. ? hmmm…….

  2. Mr Romney can’t, nor can any other politician. It actually becomes their job once elected. They get debriefed and then brain washed that hidden equity should be leveraged today in the form of cash and commodities dealers, for if not, some other country will and the USA would lose its financial advantage. Back and forth the volley continues between the yen, the euro and finally the all mighty dollar. Anyone out of step gets pummeled and the subsidy scheme carrys on. Only when an opposing power has hard control of its assetts can a rebalance occur, and then the currency cliff caves completely in on itself. Oil, silver, and gold alone (and the countries that control them), could bring the hyperinflation to an abrupt end, along with the accompaning notorious currencies. This day is not all that far away, though he has so much on his plate right now, and discussing it with the arrogance and hypocrisy involved just makes his blood boil, so you won’t hear tell any talk of it. But it won’t hurt to protect yourself as best as you can, and then just watch him go down for the heart attack count.

  3. @owens – not really sure what your hypothesis is? Sounds like a bunch of conspiracy theories strung together….

  4. Too little, too late. American taxpayers are now again on the hook for trillions more. Democrat/Republican no difference. Actions are what matter most, not mere empty words. The Democrats proved that they were only interested in paying lip-service to Wall Street’s transgressions. How could it not be so? Afterall, you don’t ordinarily bite the hand that feeds you. So, let’s not focus so much on what is said, but instead what is actually done. And here we can rest assured that the banksters are in complete control of the political puppetdom. The oligarchy is starting to feel some heat now, so naturally they are making slight noises to appease the restless peasantry.

    “Bank of America is shifting derivatives in its Merrill investment banking unit to its depository arm, which has access to the Fed discount window and is protected by the FDIC.”

    “This means that the investment bank’s European derivatives exposure is now backstopped by U.S. taxpayers. Bank of America didn’t get regulatory approval to do this, they just did it at the request of frightened counterparties. Now the Fed and the FDIC are fighting as to whether this was sound. The Fed wants to “give relief” to the bank holding company, which is under heavy pressure.”

    “This is a direct transfer of risk to the taxpayer done by the bank without approval by regulators and without public input. You will also read below that JP Morgan is apparently doing the same thing with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve.”

  5. “The mainstream political right, however, has been reluctant to take on the issue.”

    It’s so much easier (and far more lucrative) to blame Barney Frank and ACORN.

  6. The reason banks are in trouble is they are engaged in activities that a traditional bank should never be involved. Then they want the taxpayers to bail them out. FDIC was only to cover depositors not management of security traders.

  7. Poor Mr. Huntsman. He’s been trying desperately to fly the “I’m competent and not completely nuts” banner and getting nowhere with it. But then, taking more rational positions on such issues means campaign cash from Wall Street and wealthy ideologues is going to go elsewhere. The conservative machinery isn’t going to give him the time of day. (For some reason I am reminded of the moment in 1980 when a row of Republican candidates turned to John Anderson and told him to his face to run as a Democrat.)

  8. “Republicans like to discuss who is and is not a true Republican. How can any “true” Republican really condone the subsidies that underpin our biggest financial firms today?”

    I am afraid that you have got that backwards. Would Lincoln, Teddy Roosevelt, Eisenhower, or even Nixon be Republicans today? The party of “government of the people, by the people, and for the people” has become the party of gov’t de Los Ricos, para Los Ricos, y por Los Ricos. Banana Republic. It’s not just a store anymore. :(

  9. @Anonymous …. Repeal Frank Dodd and Re-implementing Glass-Steagall Act would be a good start.

  10. The crusade against Too Big To Fail on the left and the right, and in Europe, and in DC, is doomed to fail by one simple fact: central banks are uwilling to compensate for the effects on the money supply of winding down these banks. The ECB is the most catastrophic example, following precisely in the footprints of the Fed in 2008. The ECB, with IMF in tow, will be dragged kicking and screaming to the aisle – but only after inflicting tremendous damage on the world economy. At no point has the ECB said “we will recapitalize banks to the tune of 500 billion euro, but only if we get stronger regulation, smaller banks, and capital asset ratios”. We don’t know if the issue is that they want to leave big banks intact, or that they are terrified of ruining their precious reputation.

    I’m still not sure Bernanke and our Fed get it –

    We also don’t even know how much of the banking disaster is due to poor monetary policy, and the perception of incoherent NGDP trajectory. How, exactly, is Greece going to pay back 140% GDP with NGDP growth of -5%?

    What are politicians on the right terrified? Because they know if they implemented the policies they publicly advocate (make bankers pay), they would not only alienate a core political constituency, they would cause a profound depression UNLESS they simultaneously implemented policies they have foresworn (aggressive monetary expansion combined with fiscal injections, a la Joe Gagnon). The constant harping on one side of the problem as occurrs in this post (of which we all are sometimes guilty) is failing us, and the public dialogue reflects that.

    From a media perspective, I suppose, it is a winning strategy. prof. Johnson owns the phrase “too big to fail” in policy circles.

  11. Yeah, *ironic*:

    The Just War theory is an authoritative Catholic Church teaching confirmed by the United States Catholic Bishops in their pastoral letter, The Challenge of Peace: God’s Promise and Our Response, issued in 1983. More recently, the Catechism of the Catholic Church, in paragraph 2309, lists four strict conditions for “legitimate defense by military force”:

    1. the damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;
    2. all other means of putting an end to it must have been shown to be impractical or ineffective;
    3. there must be serious prospects of success;
    4. the use of arms must not produce evils and disorders graver than the evil to be eliminated. The power as well as the precision of modern means of destruction weighs very heavily in evaluating this condition.

  12. My first thought when I saw his op-ed was that perhaps we had found our Constructive Populist. Very glad to see you put it in a broader framework.

  13. Simon – Good stuff, as always. Yet another example of what has become our “Fair is foul, Foul is fair” world. Right is now left and left is right. I used to think that Republicans wer pro-capitalism, but I eventually figured out that they’re not; they’re pro-business.

  14. If we accept the premise that too big to fail is too big to exist, then there are only two possible options:

    1. Let them exist temporarily, but when they get in trouble just let them fail. This approach is somewhat appealing to Tea Party types and other simpletons. Those who understand the concept of externalities and collateral damage know this is impossible. You do not address the issue of TBTF and moral hazard by allowing spectacular failure in the financial sector any more than you would with, say, nuclear power plants.

    2. Break up the TBTF banks immediately. Unfortunately for the right, this means government intervention which is in opposition to their core principles.

    There is no other alternative. Capital requirements, the Volcker Rule, etc. do not solve the TBTF problem. If you’re not willing to break up the big banks, then you are being disingenuous by making the statement that you believe too big too fail is too big too exist.

  15. Mr.Johnson, I am going to send you a packet of information that perhaps you can show your students and also publicize. I have details that no other American has on the financial crisis. I will share with you the one business that is ” too big to fail”. What I am sending will show the real problem in America is massive, intentional, unaddressed fraud. I’ve fingered some of the participants. Unfortunately, they used my name and I got lots of documentation regarding the entire crisis.

  16. Mr. Johnson:

    I treasure your work (this is not a facetious comment – I cite you as an authority on this subject often.). However, your mention of Romney’s Wall St. donations omits an important point… The 2012 campaign money Obama has already received from the Financial Services Industry eclipses Romney, Perry and all the other Republican candidates. Obama is their present “pin-up” boy.

    It is no longer a matter of who is corrupt. It is a matter of who is the most corrupt? If Financial Services campaign $ is any indicator I think we already have a winner.

    “I did not leave the Democratic Party… the Democratic party left me.” was the common refrain in the 80s. Dubya made these former Dems rethink that refrain. Today, the common refrain should be, “I quit voting because it made no difference in this era of corporate dominance.”

    What we have today is more than “regulatory capture”, it is also “legislative capture”, “judicial capture” (of which regulatory capture is a subset) and “executive capture”. I am sure if there were other branches of government up for purchase they would have already been captured, too.

    Until we have both a united mass protest by both the Left and Right, they will continue to “divide and conquer” us and have us pointing fingers at everyone else. I find Harvard Law Prof. Lessig’s assessment of the problem to be correct on this point. Neither Obama or the Republicans are going to break up the banks. They are simply obstacles to meaningful change… God I hope these comments do not land me on Obama’s “Hit List”… he seems to be pretty darn effective at killing those he does not like… kinda makes Nixon look benign in comparison.

  17. @ Logic

    There is some hope in the seeds of destruction:

    “Amidst the endless flood of propaganda (“there is no recession, Europe is about to fix all its problems in one fell swoop, a new Bull market is underway,” etc.) a trend of long-term importance is emerging: the truth is going global.”

    “By the “truth” I refer not to some eternal truth, but to an understanding that the financial model presented by the Status Quo as “reality” is in fact an illusion that serves the interests of those controlling massive concentrations of wealth and political power. Simply put, the present-day financial Status Quo is unsustainable, and it will devolve or collapse under its own weight of internal instabilities and lies.”

    “There is no way to track how many people around the world are awakening to the understanding that everything that the mainstream media presents to them as financial reality is a distortion aimed at managing their perceptions and gaining their passive acceptance of the Status Quo as “good for you” or at least “permanent.”

  18. Is this something only the right is failing to seriously address? What government leader on the left is arguing to cut TBTF down to a manageable size? Certainly not the Democrats in power today.

    I honestly cannot believe that nearly 4 yrs after TBTF banks took down the global economy, the majority of our politicians feel compelled to continue with the status quo, rather than reform these gargantuan monsters.

  19. When Cain, Romney, and Perry have finished their glorious strut and when we get to New Hampshire: will Jon Huntsman emerge as the Republican with the right set of values?

    While our politics are to the left of Lenin, we still feel that Cain, Romney, and Perry force us all to focus on the mandate we are going to award in November 2012: who is going to get our political capital?

    Our bet is that Huntsman will be recognized by New Hampshire voters as having the right stuff: it will just sort wash over the NH electorate that a Mandarin speaking Mandarin from Utah might indeed be the right choice.

    Huntsman is the only GOP Candidate with even a remote chance of capturing Democratic cross-over votes.

    Smart Republicans will understand that Huntsman is really the only GOP candidate who can bring the debate to the middle.

    As it is unquestionably true that by the time the National Conventions in Tampa and Charlotte roll around late next summer that we will be having million-marcher demonstrations in the streets all over the country.

    100,000,000+ people will be mobilized on weekends in July and August, 2012.

    Whether those riots turn into Chicago 1968 or Kent State is the decision of Police Departments who seem incapable of reining in their testosterone.

    A Huntsman nomination will help prevent riots. Why?

    Because an orderly debate between Huntsman and President Obama [or perhaps even with a Candidate H. Clinton if President Obama abdicates) would transfix Americans and keep them at home in front of their TVs.

    President Obama is not going to have a lot to talk about come next summer. Hillary Clinton, who is universally admired within the US Military’s high ranks, may emerge as the Democratic Candidate. As the economy continues to slide in 2012 – Hillary Clinton will be the only candidate with a viable political agenda.

    Huntsman will pick up on Mrs. Clinton’s cue: and become a powerful political voice for the practical elements of the US right.

    The mandate handed either Huntsman or Clinton after the September/October 2012 debates will be roughly the same: in other words, either Huntsman or Clinton will be the trustee of similar or comparable plans.

    They will have closed the gap: and there will be a valid political consensus.

    A mandate handed to either Obama or Perry will have us descending into national riots in 2013-2016.

    That leaves us with Romney as a wild-card at this point: can he redeem himself after renouncing the brilliance of his own Massachusetts health plan? I don’t think so. Mr. Romney lacks convictions. And he can’t speak Mandarin Chinese.


  21. The shift of Merrill’s derivatives to FDIC-insured BofA accounts noted by Anonymous above and reported by Bloomberg ( ) further illustrates the point Simon’s making.

    I posted something on another website to the effect that the move likely means BofA’s downgrade puts its credit rating below most of its counterparties’ (CP) credit ratings. ML’s potential insolvency — demonstrated by this Fed-approved shift — could have resulted in a run on the bank, in the event these higher-rated CPs decide to NPV their positive mark-to-markets against BofA’s ML sub, which, they are entitled to do per ISDA rules. (Come to think of it, even if your credit rating is lower than BofA’s, you likely want to NPV your positive m2m with them, just for the certainty of getting your hands on your own money. The cost of discounting to NPV at your higher interest rate = price of certainty that you’ll get your funds out of there.)

    So here’s the deal: The Fed knows ML is insolvent vis-a-vis its derivatives exposures. That’s why it supported shifting ML’s derivatives exposure over to the FDIC (via the transfer to BofA accounts). ML — along with the other erstwhile investment banks left standing (MS and GS) — would fail if their CPs elected to NPV positive m2m derivatives accounts. In the event, these financial institutions then would be left to collect on m2m amounts from CPs who owed them money. Rational CPs, however, owing these banks money on derivatives m2m amounts, would sensibly slow payment or stop it altogether, if they thought an event of bankruptcy was right around the corner. It would only take one such event to produce a cascading failure in the entire system, as was demonstrated in 2007 – 09.

    The French and German banks with the largest exposures to the Club Med basket cases are in the same position — their capital is nonexistent (2 to 3 percent of total cap), thus they could not sustain demands for NPV’ing positive m2m amounts from their derivatives CPs. This is a whole set of exposures the system was never designed to absorb, and was never adequately capitalized to support. The lack of capital at these institutions simply means the smallest negative change in the value of the small sliver of equity their institutions are built on wipes out their own capital. Paying CPs the NPV of positive m2m amounts is an entirely new class of risk the old-fashioned capital structure was not designed to handle. Such payments surely would wipe these banks out, even if there was no change in the capital they have invested in their institutions. (ISDA rules are transnational, so CPs do have the right to NPV positive m2m amounts.)

    Bottom line: There is no flex in the system right now — the US and Euro banks already are carrying their Club Med exposures at close to zero (if not zero) on the books they manage to. (The books they report to the public and investors are a different matter entirely.) The other derivatives exposures would completely overwhelm their capacity to function as ongoing concerns. Hence the unceremonious (and unadvertised) dump to the FDIC’s realm.

    One can speculate, nonetheless, that BofA now becomes a candidate for an orderly wind-down under the aegis of the FDIC. If BofA did fail and the FDIC wound it down in an orderly manner — something it claims it can do — the markets actually might rally. The claim that Dodd-Frank outlawed TBTF would be backed up with something definitive, as opposed to the vacuous protestations by T Geithner. This would do nothing to solve the Euro mess, but it would be a start: There isn’t even a hint of the possibility that orderly wind-downs are being considered for a future meeting to consider such things in Europe — they might just go into default mode (no pun intended) and nationalize failed banks rather than wind them down.


    P.S. Johnson, Fama, et al, are right: TBTF is an abomination to capitalism. It surely will destroy our economies if it is not eradicated.

  22. Let’s be clear. Huntsman, and many others in the Republican main stream – whatever is left of it – are quite aware of the current danger. Posters on this board need to appreciate what Simon’s been saying for a long time now: given the interconnectedness of all the big players, if any of them fails they all will. No government will be able to come to the rescue. Citizens will surely pay but not in the way some comments imply. It certainly won’t be out of pocket through taxes. Those pockets all the way up the line will be empty.

    Not everyone in the business community should be thought oblivious to this. As the linked story from the WSJ shows, there are lots of concerns and people across the spectrum for whom this has all become obvious. It’s pure self-interest after all. Bankrupt governments and you bankrupt any possibility of too-big-to-fail, or too-small-to-fail for that matter. And you no longer have a societal framework on which to hang consumers, if there are any.

    But the dynamics of our current political economy have created a serious conundrum for the party. It’s been handed a near un-winnable hand by its primary strategist, Karl Rove. Their current collection of presidential candidates, most of whom are scientific and economic illiterates, are up on that podium to satisfy the narrowest of bases.

    That base has been carefully distilled by the man who will, I believe, be seen by history as a walking disaster. It is one which, nonetheless, calls the shot in the primaries. This is undoubtedly why the popular media is trumpeting the fact, whispered into their ear incessantly by Republican talking-heads, that Romney’s got it in the bag. Party strategists need a fait-accomplit to push a wishy-washy health-care loving moderate past that fanatic base, someone who might actually be able to understand the problem.

    It’s also why Huntsman gets the podium at the Journal. Here’s the takeaway: there are a lot of suits who are very worried, about where we’ve been, about where we might be going, and about who might push us there.

  23. Hoenig and Huntsman….

    Notice how these guys are both on their way out. Anyone who points directly at Wall Street and the asset bubble game we have been playing is eased out quietly.

  24. @ NORM CIMON:
    You are the real thing!
    The comment you make here is crisp (if a little held back …?) but following up on some of the background material you have produced is very impressive:

    Click to access computer-power-and-human-greed.pdf

    (the comment by Norm Cimon to Salmon is a critical gem, slightly hedged to the safe side of corrupt accusations, but the implications are devastatingly depicted in the assessment. It is definitely worth a serious read along with the articles. BRAVO! )

    I have to wonder how Mr. Norm Cimon might contribute to a real evaluation of the history of ideas in this futures game called economics? I would also think that he might take William Black and Michael Hudson into the “gamestream” of realism if he so choose to point his analysis towards the perverted incentive potentials and moral hazards (computation makes a mockery of the terms…) and truthfully evaluate rational choice manipulations of asymmetrical information and the obfuscations and machinations made possible under the margins of corruptability and abuse under the potentials presented by “relational database” exploitation? The “design” of computer enhanced transactions presumes a cooperative foundation all in mutual consent towards a common outcome. But the exclusivity of competitive based zero sum formulas under maximizing pure monetary gain (over substance) nearly obliterates the growth potentials of a cooperative and mutual base in favor of “winner takes all” and “succession by any means” as the primary hidden agenda for survival…wherein, TBTF is simply a symptom of self destruction to the systemic whole. Any comment Mr. Cimon?

    Hat Tip to YOU, Mr. Cimon
    (PS: any other links to your writing?)

    By Poul M. Thomsen
    How Iceland Recovered from its Near-Death Experience
    Posted on October 26, 2011 by iMFdirect
    “To take stock of Iceland’s crisis and recovery, the IMF and the Icelandic government are co-hosting a conference on October 27 that will see prominent economists such as Nobel Prize winner Paul Krugman and international economists Willem Buiter and Simon Johnson debate civil society, academics and IMF officials on whether the lessons learned can be applied elsewhere. Do join the discussion.”

  26. Here’s another post from the same site dealing with the algorithmic trading:

    Much of my writing revolves around ecological processes including entomology, forestry and wildlife habitat, and fire science. That’s where the ideas come from. If that background has taught me anything, it’s this: thinking of any community of organisms, including humans, as monolithic is a very big mistake. For all the delusion (and pure dishonesty) in much of the financial world, there are plenty who know what the score is. They’re now as concerned as those who oppose many of the warped schemes they and their co-workers so casually implemented. Here I mean warped in the literal sense: as in bent, as in bending previously understood reality.

    That’s the other theme in my writing: do fish know they’re surrounded by water? The effect of our technologies on our social, cultural, financial, and scientific systems are never mentioned, at all. Yet those techniques are completely immersive and of a scale that’s never been seen on the planet. That puts them on the same plane as religion. Like any potent ideology, they are everywhere and, because they are, we never think or talk about the implications. Does anyone really believe that putting this much networked computing power into play is without consequence?

    Humans are inherently creative. The quants created something they don’t understand, and which no one can control – by definition (read the above post). This finally seems to have dawned on the regulators. Don’t get me wrong. There is and endless amount of corruption in what went down, thanks to collateralized debt, swaps, and the rest of the monetary candy that proved irresistible. There’s also a stunning amount of ignorance about the trading machine that’s been put in place and the dangers it poses given such a large amount of junk (take that any way you want) to work with:

  27. “From now on, depressions will be scientifically created.” — Congressman Charles A. Lindbergh Sr. , 1913

  28. @ Norm:
    As you may well know the preconceived notions of “economy” are embedded in the development of ecology in many ways, but less is true of the reverse. The fact is that production / outcome based economics denies ecological imput and ignores impact and especially import to its position in human “history.” The history of ideas are fascinating in this regard, but you seem more like a naturalist in the best of American traditions.
    Quantitative models of exploitation, meanwhile, only exponentially plunge this denial syndrome into an abyss and confound the relationships between emergent complexity and chaos (as we term unpredictable walks in the park). The intricacies of actual outcome from these “elegant” (as they were being called) models have never been comprehensively studied in terms of overall impact on human beings and other “externalizations” to the outcome. Much like the distance of canon fire, responsibility and accountability are not read in retrospect or follow-up studies…only specific mechanical self-persuasive desired output.
    The sheer mass of the transactions are so awe inspiring that they are not handled as normal transactions but are given superhuman privileges that dwarf the basic standards of fair play…and the titanic drama plays out the karma of civil society by proxy,…only to be than called TBTF in a false premise of dependency.

    The counterbalances of context can no longer be divided between internal and external considerations when the game plan involves a capital expenditure of peoples lives. And that is the sad fact of denial being buried by the current process being cooped in the name of recovery economics under business as usual. It is all about gaming the system and claiming the spoils as “earned” profit. In a sense it is much more like fighting a forest fire than modeling homeostasis.

  29. Constitutional Amendment to overturn Citizens United introduced in US Senate
    Submitted by oskebuckley on Tue, 11/01/2011 – 13:42

    U.S. Senators Tom Udall and Michael Bennet introduced a constitutional amendment to overturn the Citizens United decision. The amendment calls on Congress to correct the Citizens United v. FEC Supreme Court ruling on campaign finance allowing virtually unlimited corporate and special interest spending in elections. Joining Udall and Bennet as original cosponsors of the legislation are Sens. Tom Harkin, Dick Durbin, Chuck Schumer, Sheldon Whitehouse and Jeff Merkley.

    The constitutional amendment would authorize Congress to regulate the raising and spending of money for federal political campaigns, including independent expenditures, and allow states to regulate such spending at their level. It would also provide for implementation and enforcement of the amendment through legislation.

    For the text of the proposed amendment visit,

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