Let the Banks Fail: Why a Few of the Financial Giants Should Crash

The Swedish Plan, The Scandinavian Plan, Just say it. The banks need to be taken over, audited and let the chips fall where they may.

What could have been an outstanding article turns into a convoluted cacophony of incoherence ...

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Let them eat cake!

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The Swedish Plan can't work. We're not Swedish. We're a nation that is still in the grip of the very people who created the toxic and unpredicable environment we exist in today.

In order to solve our problems, we really need to start to remove the impediments to a well-regulated financial sector. That means that Paulson, Geithner, Bernanke, Chris Cox, Greenspan, Rubin, Summers and the Chicago Boys have to go. We need to clone Sheila Behr, the only sensible regulator I can find at the Federal level today. Alas, contrary to good sense there is an assault on her by Geithner heading up the laissez-faire posse. Which makes Geithner appear to be a dreadfully suspect candidate for SecTreas in the Obama cabinet.

Beyond getting rid of the quasi-criminal class who pretend to regulate the financial markets, it seems that it is imperative to start to rein in derivatives gambling. This foolish business is creating vastly too much risk and unpredicability in the markets. Kudos to Mr. Holland for pointing out the scale of this situation, if not exactly clearly stating the madness of the situation we find ourselves in.

Overall, a good article, but one I think could have been improved by adding less verbiage and a more direct imperative: "It really is time that society imposes some adult supervision on the adolescent gamblers on Wall Street."

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A lot of banks have already failed. Your post, however, suggests that anytime a bank struggles, it's an economic necessity to purge the market of excess capacity that resulted from artificial growth during the housing bubble. I agree that some need to disappear, but I have made the same arguments about companies that serviced the housing bubble -- like Republic Windows and Doors. Progressives, however, bashed Bank of America instead of the company - which basically is a union dumper that moved to Iowa for cheaper labor, rent, etc.
Where the Left Went Wrong in Chicago Labor Action

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thank goodnesss someone is pointing out the stupidity of derivatives!! i was working in the financial sector in the mid 80s when derivatives were being developed. i couldn't see who would be fool enough to buy them. i was told by a top exec that i needn't worry, the brokers just needed something else to sell. they lived on their commission and were running out of 'product' to sell!!

peace

annm

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As you alluded to our 'Retirement' accounts could very well be empty too..They just haven't dared announce it. So they've maintained the stranglehold on them- either while they try to replenish the amounts they lost/STOLEN or just waiting until the economy picks up before they 'Break the news'.
So for those of US still standing on the precipice of economic nothingness which way do we go.
Just go with it and file bankruptcy now to get a head of the curve (tidalwave).
Wait and File after Obama takes office and changes the laws.Which will also be a tsunami whether it lowers the bankruptcy bar or opens these accounts for OUR OWN use (run on the bank may cause lender another domino effect).
I've thought about trying to get a bank loan from my community bank using these accounts as collateral. Such as the JG Wentworths, But would that essentially turn out to have been opening yet another vein from these Vampires to feed on? Are they hoping those funds become available so as to block foreclosures or confiscate as repayments or use to gamble some more or in an attempt to repay their foreign lenders?
I would love to pay off the credit cards and be done with them (THREE have jacked up the rates for NO Reason..One Being Citibank!!!Assholes).
If we are allowed to withdrawl from them ( a portion w/o penality) Or Borrow against them.. would that negate renegotiating the balance or terms? No way to haggle for lower interest rates or a lower 'pay off' total, because now they know you have enough to pay the entire amount with these retirment funds?
So I wonder, if the accounts are truely safe, would it be more beneficial to the person or Just the Banks if these were made available.
These Accounts may be the only way some of US will be able to pay the future taxes on the Trillions which will be due, so protecting them is worthwhile for our future.
I am Pissed Nothing has been done to Fix the Home & Credit card Swindles, Extortion, Embezzlement. What is the TRUE % of charges vs the principle. we all know they've been beyond 25% for many. And yet these Banks borrow money at 4 or less..Now dropping to 0% FOR THEM, while they jack our charges further (Citi just threatened a 30% One month missed payment charge!).What is the Difference between a mafia Loan shark and a credit card or mortgage lender under deregulation? Nothing. Actually Physical threat, but those may heal and you may still have your home.If you freeze to death because you are now homeless, whats the difference then? Absolutely Nothing!I'm betting their are laws on the books to fight Orgnaized crime which are applicable to these 'lenders' practices.RICO?
If though in reality these accounts have been pilfered, Then not only is bankruptcy the only avenue,but Retirement is a Quaint archiac fantasy.
If We could use these accounts I probably would, figuring my generation (45) will have to have work in some capacity for the rest of our lives..Whether we've lost the accounts, had them serious depleted or even if they have remained sound (future taxes), We're Screwed- No Boca Raton or Flagstaff for Us. Or even those 'retirement'adventures or business.
My Retirement Dream will be written on my headstone.."Finally Bought the Farm"

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I would disagree that the auto companies be allowed to fail as there is too much at stake for those who are dependent upon them. It's projected about 20% of the country would be effected if the Big 3 were to collapse. Unemployment would be astronomical right across the board and more people would be losing what they have worked hard for. Loans with stipulations are the answer to save them.

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Not just the auto industry, any industry. We should have said no to the financial institutions as well.

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Melpol-Where in the hell did you get thoses figures?? I'll tell you where, the same place Paulson etal get theirs. You are full of it. Carlos

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The banks got all this money to loosen up the credit to avoid the loss of businesses and jobs. Well, being true to the way banks work, they are setting on the money instead of making loans so people can buy cars and goods to keep our country in business and running. Therein lies the problem of more jobs lost. They should be forced to loan out the money, or pay it back now (no more parties) and the remainder of that money set aside for them should go to help the businesses that the banks would not loan to so we can keep more AMERICAN jobs. You still have the Southern Republicans supporting their FOREIGN Auto industries (yes, we the taxpayers paid for the building of those Foreign Auto Industries in the first place) and the Rs in the Senate now have the gall to refuse to help our AMERICAN AUTO INDUSTRY, and that should make every American taxpayer as mad as hell!

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First the financial institutions, then the auto manufacturers. Who's next. What's being done for the little guy? Nothing. It's not the unions, it's the greedy, money hungry executives with their inflated salaries and bonuses as well as their gross mis-management that caused this.

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If you want to be free from deception and oppression, then strive to understand the truth, grow wise, and help others throw off the conceptual shackles called money, religion, and politics.

If you can't think outside of this triangular trap, then get used to slavery and oppression. Those who profit from the oppression of others will be oppressed. What you do to others, will be done to you. What the USA and the rest of the world is experiencing is the result of bad karma and imposed ignorance about the true nature of our reality.

Money is slavery by proxy and the USA has been instrumental in helping shadowy European overlords (the Vatican and its secret-society cohorts enslave humanity through the delusions of money, religion, and politics. That is the true purpose and end-result of the so-called American dream.

Shortly though, the source of these deceptions will be widely understood and the Vatican will finally face the Terrible Judge...

Here is Wisdom, aka the keys to your chains...

Peace...

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...in fact they are totally desiccated!

You can stuff the bank vaults with all the money the Fed can print, but unless people actually have the wherewithall to pay their loans they will simply not take out any new loans. And with people worried about whether they will have a job in six months, do you think they will take out a six year car loan?

The car companies and the UAW --who make real products and employ millions-- have to make concessions for a mere fraction of what has been thrown at Wall Street with NO concessions. In fact, we don't even know what the TARP funds have been used for.

We have had the TARP pulled over our eyes. We are giving them the same lack of oversight that got us into this mess in the first place. We are not going to cure the junkie by giving him another fix! Withdrawal is going to be hard.

The victim is going to cry out in pain that he is dying if we change the rules of the game on him. But we cannot allow him to shoot up or smoke any more derivatives, CDS, or CDO's.

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It is surprising that someone hasn't dredged up Marx on a lot of the issues of the present crisis. He is surprisingly on target despite being dead for 150 years:

Karl Marx, Capital, Part VIII, Chapter 31, page 13

Quote:
At their birth the great banks, decorated with national titles, were only associations of private speculators, who placed themselves by the side of governments, and, thanks to the privileges they received, were in a position to advance money to the state. Hence the accumulation of the national debt has no more infallible measure than the successive rise in the stock of these banks, whose full development dates from the founding of the Bank of England in 1694. The Bank of England began with lending its money to the Government at 8%; at the same time it was empowered by Parliament to coin money out of the same capital, by lending it again to the public in the form of bank-notes. It was allowed to use these notes for discounting bills, making advances on commodities, and for buying the precious metals. It was not long ere this credit-money, made by the bank itself, became the coin in which the Bank of England made its loans to the state, and paid, on account of the state, the interest on the public debt. It was not enough that the bank gave with one hand and took back more with the other; it remained, even whilst receiving, the eternal creditor of the nation down to the last shilling advanced. Gradually it became inevitably the receptacle of the metallic hoard of the country, and the centre of gravity of all commercial credit. What effect was produced on their contemporaries by the sudden uprising of this brood of bankocrats, financiers, rentiers, brokers, stock-jobbers, &c., is proved by the writings of that time, e.g., by Bolingbroke's. *60



Karl Marx, Capital, Part VIII, Chapter 31, page 14

Quote:
With the national debt arose an international credit system, which often conceals one of the sources of primitive accumulation in this or that people. Thus the villanies of the Venetian thieving system formed one of the secret bases of the capital-wealth of Holland to whom Venice in her decadence lent large sums of money. So also was it with Holland and England. By the beginning of the 18th century the Dutch manufactures were far outstripped. Holland had ceased to be the nation preponderant in commerce and industry. One of its main lines of business, therefore, from 1701-1776, is the lending out of enormous amounts of capital, especially to its great rival England. The same thing is going on to-day between England and the United States. A great deal of capital, which appears to-day in the United States without any certificate of birth, was yesterday, in England, the capitalised blood of children.

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Karl Marx, Capital, Part VII, Chapter 25, page 85

Quote:
Before I turn to the regular agricultural labourers, I may be allowed to show, by one example, how industrial revulsions affect even the best-paid, the aristocracy, of the working-class. It will be remembered that the year 1857 brought one of the great crises with which the industrial cycle periodically ends. The next termination of the cycle was due in 1866. Already discounted in the regular factory districts by the cotton famine, which threw much capital from its wonted sphere into the great centres of the money-market, the crisis assumed, at this time, an especially financial character. Its outbreak in 1866 was signalised by the failure of a gigantic London Bank, immediately followed by the collapse of countless swindling companies. One of the great London branches of industry involved in the catastrophe was iron shipbuilding. The magnates of this trade had not only over-produced beyond all measure during the overtrading time, but they had, besides, engaged in enormous contracts on the speculation that credit would be forthcoming to an equivalent extent. Now, a terrible reaction set in, that even at this hour (the end of March, 1867) continues in this and other London industries. *71 To show the condition of the labourers, I quote the following from the circumstantial report of a correspondent of the "Morning Star," who, at the end of 1866, and beginning of 1867, visited the chief centres of distress: "In the East End districts of Poplar, Millwall, Greenwich, Deptford, Limehouse and Canning Town, at least 15,000 workmen and their families were in a state of utter destitution, and 3000 skilled mechanics were breaking stones in the workhouse yard (after distress of over half a year's duration)....I had great difficulty in reaching the workhouse door, for a hungry crowd besieged it....They were waiting for their tickets, but the time had not yet arrived for the distribution. The yard was a great square place with an open shed running all round it, and several large heaps of snow covered the paving-stones in the middle. In the middle, also, were little wicker-fenced spaces, like sheep pens, where in finer weather the men worked; but on the day of my visit the pens were so snowed up that nobody could sit in them. Men were busy, however, in the open shed breaking paving-stones into macadam. Each man had a big paving-stone for a seat, and he chipped away at the rime-covered granite with a big hammer until he had broken up, and think! five bushels of it, and then he had done his day's work, and got his day's pay—threepence and an allowance of food. In another part of the yard was a rickety little wooden house, and when we opened the door of it, we found it filled with men who were huddled together shoulder to shoulder, for the warmth of one another's bodies and breath. They were picking oakum and disputing the while as to which could work the longest on a given quantity of food—for endurance was the point of honour. Seven thousand...in this one workhouse...were recipients of relief...many hundreds of them...it appeared, were, six or eight months ago, earning the highest wages paid to artisans....Their number would be more than doubled by the count of those who, having exhausted all their savings, still refuse to apply to the parish, because they have a little left to pawn. Leaving the workhouse, I took a walk through the streets, mostly of little one-storey houses, that abound in the neighbourhood of Poplar. My guide was a member of the Committee of the Unemployed....My first call was on an ironworker who had been seven and twenty weeks out of employment. I found the man with his family sitting in a little back room. The room was not bare of furniture, and there was a fire in it. This was necessary to keep the naked feet of the young children from getting frost bitten, for it was a bitterly cold day.

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all LOSERS LOSERS LOSERS letting the Internet just like TV and radio control your main faculties ! Ok, so maybe that sounds a bit too weird of me but seriously, I saw this coming years ago so I cannot be too surprised except that it was faster than I expected. Try building some local and regional economies for a change and just let the current system collapse. You won't regret it.

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If we were only dealing with the failure of so-called sub-prime loans, this would be a mere run-of-the-mill recession. But that is an easily pierced lie. The true problem and the reason that the entire global economy is imploding, is the great greed of those who created a derivatives market that is more than 20+ times the size of the entire global GDP. Who has that much money? Where did it come from? Herein lies the key to the deception.

It's the derivatives stupid !!! Those poor people you are blaming are the of victims of deception, just like you. The entire country of Iceland went bankrupt. How many poor Americans live there?

Get a clue...

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Sure, the banks are greedy but they didn't force everyone to borrow money from them. Many people chose to buy things they could not afford by getting bank loans - that's also greed.

You can't have freedom if you won't take responsibility for your own actions.

Okay, there will have been some folk who needed to borrow money because they had genuine hardship, but buying a house, instead of renting one, when you can't afford to buy the house ... on sensible terms ... Well, who's fault is that? Is THAT the bank's fault? Should we expect the bank's to be our parents and tell us when we cannot afford to pay?

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These liars and thieves that have created these fancy derivatives should go down with the ship! After all, isn't that what the "free market" is about - sink or swim all on your own, I mean isn't that what they are doing every time they foreclose on someone!

These banks aren't loaning money because they know that they are passing a lot of bad paper, so why get stuck with other banks bad paper! A bank holiday should have been called long ago, so that INDEPENDANT auditors could have gone into those banks to seriously audit their books! This is exactly what happens when you allow the fox to guard the hen-house!

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I've written before on the situation in the silver market. Here are a few more tidbits from our friends at JP Morgan that should make your hair stand on end.

Back in July JP Morgan and another bank shorted an astronomical amount of silver, forcing the price to drop 40 percent. Why, you ask, should a bank be involved in doing this? Because, as they claimed, they were "market makers" in OTC derivative securities using massive precious metals short positions as part of their derivative.

Now we know that the derivatives market has dumped tons of financial toxic waste on Wall Street and the world. Not having learned their lesson, these creeps are still at it, using tax payer money to create this garbage.

And for kickers, the shorts are probably illegal. They couldn't possibly have the silver to back the positions making them "naked", and it's against commodities law to have this much concentration of a long or short position in such few hands. As it stands, JP Morgan and another bank are responsible for 40 percent of the silver shorts. That's concentration!!!! Again, don't expect that the regulators will do anything about it.

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Our most recent Depression in this country occurred in the 1030's. But apparently it seems that neither Wall Street, the Banks, or the Congress learned anything from the financial collapse. Wasn't the collapse caused by the creation of worthless paper assets? Is this History repeating itself? What is taking us so long to apply a workable fix to this cycle of financial greed and corruption of our economic system? Bail outs, in my opinion, are basically as futile as sticking one's thumb in a leaking dam to prevent its collapse. If we need to rebuild our financial system from top to bottom to establish an independent financial system free of corruption and/or excess profits, then let us do it, regardless of what it is called.

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Watching the economy collapse domino-like in excruciatingly slow motion is almost fun. I can only say "almost" because just "fun" would be to watch the rich elites lose their status and money in one fell swoop, but we certainly know that the masses, the hoi polloi will be the ones begging for food and the rich will manage with less houses.

Just watching the shoes drop month after month is almost better than a good football game on TV. It certainly is more entertaining than "Survivor" or "American Idol" because reality is so much more dramatic and unpredictable. But this economic meltdown was predictable and the next shoe drop is also predictable, because the set up dominoes just bang into the next one down the line.

Once some sort of trigger set the whole thing in motion, all fall down. The housing bubble (caused by many factors) was the teetering domino. It took very little imagination to see the dominoes fall. Of course the big bloated banks involved went down. Of course unemployment went up. Of course a big ticket item such as cars would stop selling. Naturally the companies and industries involved would be exposed as weak. More unemployment. More retail woes heading down the ladder of consumer goods.

No surprise the government would fall over itself trying to glue dominoes to the floor. But that glue just won't dry fast enough to hold off the clickity clack of falling dominoes.

The latest dropped shoe, which is more just a sideshow, is the Madoff Ponzi Scheme being exposed as we speak on Wall Street. Rich investor Bernard Madoff admitted to a Ponzi Scheme of his millionaire friends that is estimated by Madoff himself as being in the area of $50 billion. Some of his suckers included Mort Zuckerman owner of the New York Daily News and US News and World Report; Fred Wilpon owner of the New York Mets; former owner of the Philadelphia Eagles, Norman Braman; New Jersey Democratic Senator Frank Lautenberg; a Stephen Spielberg charity; The Elie Wiesel Foundation For Humanity; the list goes on.

But that shoe doesn't surprise me as a Ponzi Scheme within a Ponzi Scheme economy seems as natural as the eighth domino knocking over the ninth. Oh, and now they suspect that there are more Ponzi Schemes, predictable, eh?

The article explains another domino to fall, the option mortgages just beginning a wave of resets to higher interest rates. Of course we will get more foreclosures as those home owners won't be able to afford the higher payments. Another domino? Try commercial real estate, that's an iceberg tip exposed and we know that that market is mostly under water just as an iceberg.

So, we know the news ahead, more bankruptcies, more unemployment, more credit card defaults, probably more selective bailouts and of course more mounting debt across our nation.

Those slow motion dominoes have many still to fall.

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I'm going to need you Liberals when all things fall apart, You guys know how to pick mushrooms and sew. I'll stick to the hunting and shooting bad guys, you just keep track of the crops, educate the village children and keep the beef jerky moist

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Aaron Russo's documentery "America, Freedom to Fascism" (available on You Tube) is a real eye opener. The Federal Reserve is a privatly owned foreign banking cartel, which in reality is a shadow government. They control our politicians, the media, the military-industrial complex et al. Unless and until we abolish this private cartel, we will continue on this road to One World Government and the end of our Republic and our freedom.

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Many a good article or shot at this stewing mess we call a financial meltdown on Alternet and other sites. Especially liked the quotes from Marx by a commenter. Marx comes to mind often as we wonder whether the enormous excesses of the financial sector unbound from regulation, reason, or morality goes from economic supernova to, you guessed it, a black hole.

An interesting bent in many of these articles is the desire for accountability and responsibility, a core human value that corporations generally evade, whilst real suffering skirts them and lands almost entirely on the people.

A good example. Let's say you own a home, buy the one next door for an investment. You then sell for a profit, and finance the mortgage yourself. You then bet another neighbor the price of the home will continue to go up, a derivative of sorts. You hold the mortgage, which is essentially a debt with a 10-20% collateral value. Then you watch as the house prices fall below your debt value. Oops, better sell that to someone else before they get wind of the smell, so they can post it as an asset when bundled with, more of the same? This shell game of turning an asset burdened with indebtedness into a 100% asset on another entity's books upon purchase is part of the reason we can't get a good explanation of where the problems lie, and hence, responsibility. But there are good explanations out there.

What is truly scary is that the population is so short-sighted as well. Just get us through to next month and our next installment of Survivor, an opiate and distraction in HDTV.

A great unraveling is truly happening. And the excrement all flows one way, largely because the finance industry has so long ago bought and sold Congress members like Gramm and others to just turn their heads at the ongoing train wreck of deregulation and Republican-sponsored diatribes against the proper role of government in fostering a lawful-minded society.

Could anything be more treasonous than to sell your country and its people's future for personal gain and the comradery of the money-lenders?

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LET THE MARKETS CRASH! Start again from scratch.
by UneasyOne
Wed Sep 24, 2008 at 04:54:13 AM PST

I believe that the collapse of certain derivatives markets and parts of the financial markets is inevitable. It cannot be avoided - and we would beggar ourselves trying. But a general collapse is not inevitable and can be avoided.

What assurance do we have that the proposed 700 billion gift to Wall Street - and the foreign banks - is anything but a small (very small) down payment on the problem? None!

In fact, next year is when the worst part of the problem is scheduled to hit. According to Calculated Risk a huge bulge of "Negative Amortizing" mortgages is due to reset next year - starting in April.

That means that "homeowners" who have been increasing their indebtedness on homes every month by paying less than even the "teaser" interest rate will suddenly have to A) Pay a higher interest rate, B) Pay that interest in full each month, and C) Begin paying down the principal for the first time on D) A house that is worth less than the initial purchase price!

I believe that the collapse of certain derivatives markets and parts of the financial markets is inevitable. It cannot be avoided - and we would beggar ourselves trying. But a general collapse is not inevitable and can be avoided. What assurance do we have that the proposed 700 billion gift to Wall Street - and the foreign banks - is anything but a small (very small) down payment on the problem? None! In fact, next year is when the worst part of the problem is scheduled to hit. According to Calculated Risk a huge bulge of "Negative Amortizing" mortgages is due to reset next year - starting in April. That means that "homeowners" who have been increasing their indebtedness on homes every month by paying less than even the "teaser" interest rate will suddenly have to A) Pay a higher interest rate, B) Pay that interest in full each month, and C) Begin paying down the principal for the first time on D) A house that is worth less than the initial purchase price!

According to some estimates, unlike the subprime homes, only about 13% of these houses are owner-occupied!

So you own three homes - as investments - that you paid a total of $600,000 for. They are now worth between 400 and $500,000 - but you owe more than $700,000 - and the payments suddenly triple! What do you do?

You walk away, that's what. So - are we doomed?

Probably - because I have no faith that any real solution will be taken to address the problem. We are now on a path to turn the US dollar from a reserve currency into wastepaper, while allowing the rich to escape, and the collapse to happen anyway - because the true extent of the problem is still being hidden!

The various derivatives markets that are threatened are larger than the entire GNP of the planet! Even if we beggar ourselves, we simply don't have the resources to bail them out!

Why not let em fix their own damned mess?

In the mean time - if anybody in congress has two brain cells to rub together, we could put that 700 billion to good use.

Use that money to capitalize banks that are wholly owned entities of the citizens of the United States! At the 10 to 1 leverage ratio generally accepted for banks that would be 7 trillion dollars of readily available credit for citizens and businesses! Selling stock in those banks would further increase their capitalization and END the current credit crunch.

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quote from the article; "Dispersed ownership and new forms of finance -- through stocks, corporate bonds and other securities -- were seen as an antidote to the influence of the robber barons, that handful of dynastic families who controlled key sectors of the American economy."

Read the book "The Creature From Jekyll Island". It is how the Fed Reserve was started by some of those same "robber barons - JP Morgan, Rockerfeller, etc, who designed the bank to make the American taxpayer cover their losses. See how well it is STILL working almost 100 years later?

Screw the Democrooks and the Republicons, vote Green Party. They don't take corporate money.

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Americans are the biggest suckers for the "something for nothing" scam that I know of. Advertizing, religion, politics (the other side of the religion coin), "reality" shows, etc., etc; you get the idea. What exactly is the "American Dream", anyway? A nation of knuckleheads forever unsatisfied with what they have, and always wanting more? A collection of know-nothings and "don't wanna know nuttins"? A crowd of morons who can't point to the USA on a globe of the Earth? We Americans used to lead the way with great ideas for the rest of the world to emulate. Now we have a bufoon in the White House, a bellicose foreign policy that has the rest of the world scared half to death, and a crumbling, fake economy. Not exactly a giant step forward is it? What happened to our originality and good ideas? We let it all get away because we BELIEVED those who were up to no good, and who cared only for their self-enrichment at the expense of the rest of us. It's almost incredible that a majority of Americans favor giving the thieves who robbed us blind MORE MONEY to continue their criminal activities. I think unfettered, unbridled, unregulated capitalism SUCKS.It's time to move on to something better.

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If you can't make the point that foolish banks who lent money to foolish people who shouldn't have asked for said money shouldn't be made the allow the taxpaying public to be made fools, without the connotation that you're extracting righteous vengeance upon them (which are, after all, us) you shouldn't pen things that require adoption on principle.

You should stick to places where vengeful missives are more acceptable. Religion. The "culture war". etc. I mean, darn you sinners to heck!

If I had a choice, I'd rather my portion of such taxes help bail out stupid, greedy home mortgage holders, instead of stupid, greedy brokers, with no other options on the table.

What if we could, however, let all the willing dumbasses who bought into willing dumbassery just let themselves take the lumps for being dumbasses, across the board? A fool and his money were soon parted, if you listened to our elders; fools and their decisions are soon subsidized at our expenses, in this 'brave new world', it seems.

Let the banks who issued stupid loans fail, and let those greedy individuals who had their dirty hands out for loans they couldn't afford do the same. Let them rent for the next few years, as my wife and I have been dooing while saving for a 30% down payment, instead of wanting a McMansion now, with 0 intersest for the first year, and 3000% after that.

Let ALL the selfish bastards enjoy what they have sown now, and let's get dumbassery behind us. And then move forward.

I'm still waiting on the housing market to crash low enough to buy a place I want for a song. Progressives love affordable housing, no? The further the housing market falls, the better, eh ;) ?

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As many of the comments on this article by Mr. Holland state that there is a conflict of interests surrounding the financial bailout on Wall Street, the Obama Administrations' financial advisors and Treas.,FED,FDIC,Commerce, and Council of economic advisors appointments, the underlying reality of the chaos in the MBS derivatives market which has spawned this "meltdown" will largely go unchanged, and without significant reform. What does this mean for most of the working Americans' assets (most of which are tied up in real-estate ie. their homes)? Furthermore, when considering that less than 10% of the wealthiest people in this country control over 70% of the wealth, these figures do not bode well for the other 90% of the population. Since there is not any significant debate centered on derivative market reform or an outright moratorium on derivatives trading, we can expect that there will be extreme caution by banks when it comes to making loans of any type. Will the banks ever consider writing off their toxic securities? Not hardly. If the alternatives are to sink their balance sheets with the massive write-offs that such a move would necessitate, then...no they won't do that to their companies. No one is even considering real world alternatives to job outsourcing, massive lay-offs, and balance sheet terrorism dictated by quarterly reports. Bill Gates has expressed the exploration of creative capitalism for a bridge between downsizing, plant closures, corporate pension-fund raids, research and development declines, and the maintenance of the American dream/culture for the middle-class working Americans. I realize that there are many who oppose the quasi-capitalist system that is currently operating in our economic meltdown. What we have not done, however, is look at the historical implications of the decline in our manufacturing base and how the financial services sector's percentage of GDP has been unprecedented up to this point. Whenever our elected representatives in Congress decide to actually deal with the fundamental causes of the financial meltdown in our economy, they will come to the real conclusion that most of the real-estate market values must be downgraded to reflect the necessary market corrections so that our foreclosure crisis can be resolved by issuing fixed-rate mortgages and affordable mortgage payments. Unless and until corporate America decides that the human capital is more important in the short-term than marginal profits, the corporate culture as we know it will not change. We are about to find out just how important people are in America. Corporate profits have ruled our economy for too long. There has to be some other way in which the American worker can keep his job, his standard of living, and live a decent middle-class life whithout worrying about losing everything during this prolonged recession. Will the present culture of capitalism be permanently changed by this recession? Will our savings, our pensions, our homes, and our futures be wrote down or wrote off? Who decides?

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Several people claim to know what to do, to fix the problems of our Nation. GOD knows we have a lot of different threads in that category. But one must realize the entire world must form a common union. And a common currency is required for that to happen. What better ways to obtain this, than to have the current economic system fail?
We would all probably agree that history repeats itself. Now the first time Jesus came, the entire world was one union. We all spoke the same language, used the same currency, and mostly did the same things. Now it’s time for the second coming and the entire world, more or less speak the same language. The internet, which most of the people use, makes that possible. A webpage in hypertext can easily be transcribed to any language. Aside from that, the general population does already know English. I’ve heard that even to become an international pilot, one must know English. OK, one down.
Now, we have the union thing. The next two, the union and the currency, will both come at once. And soon too. Face it, nothing in politics happens by accident. If it happens, it was planned that way. Nothing my little self does will alter the plan. It has been on the table for hundreds, if not thousands of years.
I recommend that a person be ready and watch the show. Be ready for what? Well, to meet Jesus, of course. This will only happen once. And I have been privy to witness it. Hallelujah. This is SO cool! You might call me a conspiracy nut, and you would be right. This is all going to happen, and I’m going to enjoy it. I believe it better to be happy, versus fight and worry about it. You can find me, “singing in the rain.”

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Yea! What's wrong with letting the blackguards jump out their windows, like in the good old days?

http://www.youtube.com/watch?v=IFhy7S2WFPA

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people. If americans finally put their petty differences aside i.e. religion, politics, bigotry etc. And started focusing on taking care of each other things might just change.

Because when the bottom drops out all our differences and dime a dozen opinions won't matter. We will be hungry and broke.

THe powers that be that are pretending to fix this mess are merely taking care of themselves.

I had a notion a while back (a silly notion really) that everyone should get a new credit card, buy all the things they need (max it out) then don't pay them back. There now we are even.

But that is just a silly dream.

There are still many americans who think dubya is a good president. THis says much about americans.

Time to get along with your neighboor because you might be taking care of each other in the near future.

peace

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... how many innocent people will suffer the consequences when banks fail? For example, what about all the people who have served our countries well, even just as tax payers, and will find their pensions worthless because a bank has been allowed, nay encouraged, to fail?

Okay, get rid of the pigs who had their snouts in the trough, but don't let the banks fail and hurt the innocent folk, just to spite the greedy big guys on the top!

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It's a side issue in this particular article, but management of non-financial enterprises is ultimately far more important than the fate of the big banks.

I'm struck by a feature of the big automaker's plight: they are presently worth very little. The same is true of many other industries, including the big banks.

That means this is an ideal time for the workers to gain control. They could buy key companies for pennies on the dollar! Heck, let them go into bankruptcy, buy them from the courts at firesale prices. It's just what the "economic hitmen" have been doing to other countries.

It's especially important because the workers are bound to take a hit. They should get something in return, like control and ultimately the returns on their sacrifice. This is a great opportunity to remodel our whole economy.

A further point: one of the best ways to help out industrial concerns is to introduce public, single-payer health insurance. The cost of health insurance is making them non-competitive versus countries that provide it, and ultimately bankrupting them. It's actually one force driving outsourcing. The Big Three have been moving production to Canada, at the same wages, because of Canada's public health insurance.

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"AIG, recipient of tens of billions in taxpayer largesse, ponied up $750,000 for both the Democratic and Republican conventions "

It's hardly the only giant corporation to do this.

"Nominating conventions" no longer actually choose a nominee. That means the conventions are actually 4-day political ads (and boring accordingly). When corporations pay for them, it's straight-out bribery. This is the only way corporations are allowed to make campaign "donations" (aka bribes) as such. It's a multimillion dollar hole in the campaign finance laws.

This is especially obvious to Greens: we hold conventions, too; sometimes they actually choose the candidate. But we have to pay for them. The convention this year nearly bankrupted the Green Party - it's one reason Cynthia's campaign had trouble raising money. And we don't get 24/7 coverage from the networks: more bribes from big corporations, since the conventions aren't really news anymore.

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One commenter wrote the following, to which I'd like to respond generally since it's so pervasive a sentiment among both liberal and conservative bailout supporters.

"For example, what about all the people who have served our countries well, even just as tax payers, and will find their pensions worthless because a bank has been allowed, nay encouraged, to fail?"

This is an argument not at all uncommon in American history. As the slavery-question reached the boiling point in the 19th Century, a common criticism of the abolition movement was that slaves needed slavery.

You could make this argument from liberal position that, while we needed to reform slavery and ensure that slaves were treated decently, we couldn't simply get rid of it, because if anything slaves wouldn't be able to get by in the world. It was the compassionate approach to slavery. You could also take the more conservative position that simply saw slavery as how things ought to be, given the unquestionable nature of slaves and their masters. Any questioning of this was tantamount to questioning the very fabric of society.

If people stand to lose their pensions if the big financial companies collapse, if they would be come worthless lest we prop up the finance and credit-industries, then those pensions were worthless in the first place. Just the same, if slaves can only enjoy human freedom from the position of their slavery, then such freedom is itself worthless or we're not even talking about freedom. The choice between letting the the finance and credit-industry crumble, effectively tantamount destroying millions of lives, and propping up that system in order to ensure that life goes on basically unblemished is a FORCED CHOICE.

It is not at all different than the line we've heard the mugger say: your MONEY or your LIFE. Even an idiot understands: this is no choice at all. The true alternative is not a repeat of the "Third Way" either, which seeks to compromise between letting some business fail, but basically trying to hold things together-- maybe throwing in a few feel-good distributive justice measures to restore Capitalism's human face.

No, the alternative to this forced choice means thinking beyond the limited premises that make up the choice. With the slavery-question, it meant thinking beyond the then naturalistic assumption about slaves as an integral part of society, which we shouldn't fool ourselves was the most liberal of them all. In Nazi Germany, it meant refusing the temptation to view the validity of Anti-Semitism in terms of knowledge ("Well, let's be fair to the Nazis and really look at the Jews, to see if they have a point"). Today it means refusing the essential tenet of what Marx called "Conservative of Bourgeois Socialism," which "is summed up in the phrase: the bourgeois is a bourgeois — for the benefit of the working class." In other words, to sum it up in today's disgusting cliches, it means refusing that Main Street cannot live without Wall Street.

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A Japanese company (Toyota) and an
American company (Ford Motors) decided to have a canoe race on the Missouri
River Both teams practiced long and hard to reach their peak performance before
the race.

On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for
the crushing defeat. A management team made up of senior management was formed
to investigate and recommend appropriate action.

Their conclusion was the
Japanese had 8 people rowing and 1 person steering, while the American team had
7 people steering and 2 people rowing.

Feeling a deeper study was in
order; American management hired a consulting company and paid them a large
amount of money for a second opinion.

They advised, of course, that too
many people were steering the boat, while not enough people were
rowing.

Not sure of how to utilize that information, but wanting to
prevent another loss to the Japanese, the rowing team's management structure was
totally reorganized to 4 steering supervisors, 2 area steering superintendents
and 1 assistant superintendent steering manager.

They also implemented a
new performance system that would give the 2 people rowing the boat greater
incentive to work harder. It was called the 'Rowing Team Quality First Program,'
with meetings, dinners and free pens for the rowers. There was discussion of
getting new paddles, canoes and other equipment, extra vacation days for
practices and bonuses. The pension program was trimmed to 'equal the
competition' and some of the resultant savings were channeled into morale
boosting programs and teamwork posters.

The next year the Japanese won by
two miles.

Humiliated, the American management laid-off one rower, halted
development of a new canoe, sold all the paddles, and canceled all capital
investments for new equipment. The money saved was distributed to the Senior
Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish
the race (having no paddles,) so he was laid off for unacceptable performance,
all canoe equipment was sold and the next year's racing team was out-sourced
to India .

Sadly, the End.

Here's something else to
think about: Ford has spent the last thirty years moving all its factories out
of the US, claiming they can't make money paying American
wages.

TOYOTA has spent the last thirty years building more than a
dozen plants inside the US. The last quarter's
results:

TOYOTA makes
4 billion in profits while Ford racked up 9 billion in losses.

Ford folks
are still scratching their heads, and collecting bonuses... and now
wants the Government to 'bail them out'.

IF
THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

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I really enjoyed this article, and learned a few things that astonished me -- like that all the US job growth in this century has been in the health care industry. How strange is that?

But one of the things I have realized, as we have seen a whole string of excellent articles explaining what has happened to the worldwide financial industry -- it seems that the whole world's prosperity has been resting on the backs of American working people and their personal debt. Think about it -- our mortgages, our car loans, and our credit-card balances have been commoditized and derivative-ized, and have served as the building blocks for the whole huge house of cards that Holland describes here. In addition, as soon as we American consumers simply slowed down our frantic purchasing, the economies of Japan and China tanked.

Really, next time you're feeling insignificant or powerless, just think about this time period. A global economic boom like nothing the world has seen was all courtesy of you and me, the American working classes. And when we poor little donkeys got tired of turning the mills of commerce and slowed down, it all came crashing to a halt.

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I enjoyed this article and now have at least some knowledge of what derivitives are; it is still going on and until that is stopped we will just keep on going the way we are. The banks who are getting bailouts should not be allowed to BUY OUT other financial institutions with that monies or use that monies as collateral for business in another country. If the credit card companies quit raising the interest rate then those who are in the bottom end of the middle class and the poor would be able to pay down their debt faster. The Government would have been better off paying down the credit card debt of Americans who earn less than 50k yr. and banning those citizens from having a credit card for a period of time. I also wonder how many of those foreclosures are actually upper middle class, actors;artists;SPORT-STARS;musicians that have all bought STUFF worth more than they make in a year.

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Dump the Fed

O Nine may not be benign like twenty nine
Will we see some banksters in the soup line?
I hear that Campbells is doing fine.
but...
the spread sheets of empire are not Enron lite
the PNAC blimp went down with a Hindenburg rite
from hyper power to poof then super limp

Can anybody spare some time..
to reverse the daisy chains of failures?
Please don't feed the bankrupt bullies
the bankster pusher merchants of death
the fraudster theiving public purse pilligers
the Gaia trashers and toxin stashers
who would prefer the commons dead than leak a little red

Dump the private theiven Fed
'Trickle down' is so.. so dead.

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why is it always that the first solution to this is to cut CEO compensation, like the author says to eliminate stock based compensation.

here's a clue: let the board of directors and the shareholders worry about how much to pay their CEO. The point of stock compensation is that the CEO has a personal financial stake in making the proper decisions. Enough about excessive compensation. It's just a populist red herring that allows people to direct anger at rich people as opposed to try to solve problems.

If you aren't a shareholder of company A, you have no business telling them how and how much they should pay their executives. Unless you want political ideologues making phone calls to your employer telling them to cut your salary.

There's a lot of reasons why we're in this mess, but Joe Fatcat CEO cashing in his stock options is NOT one of them. If you're worried about fraud, then pursue law breakers. This just comes off as typical socialist talking points. THE RICH MAKE TOO MUCH. Great, thanks for the contribution to the discourse.

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There are still mountains of trust-fund stoners cranking out poorly-crafted political essays. Now that the Bush Administration is over, we must let the chips fall. The free market will separate essential liberal commentary (TalkingPointsMemo, ThinkProgress, Wonkette) from AlterNet's less-crucial reportage on organic juice farmers in the military and how they make open relationships work.

--Former AlterNet writer

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Sorry but this is yet another skin-deep appraisal of an utterly criminal and blackmailed economic system built to serve what Einstein called the ruling class.

To be quoting self-serve monopolist Bill Gates on his "creative capitalism" garbage is perhaps the key howler here. (yes, I'm aware of Gates foundation work that is no more sincere than the Rockefeller versions).

One more time: capitalism does not and cannot exist under de facto fascism which is the actual Organized Corporate Crime system that extorts the west.

Again, what goes unsaid by the “economics editor” at Alternet is that a fascist brand system choked by private Ponzi traps such as the "Federal Reserve" Corp (not federal, minus zero reserves) has no chance – none - for anything like real democracy let alone sustainability. This remains a fully cooked system whose “Federal Reserve” Corp founders created the Royal Institute for International Affairs (now Chatham House) and the Council on Foreign Relations within less than a year of each other. Such a system is designed for failsafe giveaway programs to the super-privileged that constantly enforce their illegal and immoral crime state.

Pointing the finger at symptoms and criminal actors that rig the system is worse than pointless without addressing the core fascist machine and thus its power base. But most elite MSM and Washington actors know this as most are literally paid to look the other way.

This is the bull elephant in the room. The linchpin issue that the Alternets of the world choose to ignore one year into the next.

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We have no manufacturing base. That was destroyed by the "free market" beginning in the '80s. The other problem is that we borrow money from China. Our government is propped up by foreigners. That didn't happen in the Depression. The last little bit of news is that no one has property. We've been driven off the land, and live in cities. What you have is the making of a catastrophe of the worst order. We'll probably go down like Russia did.
My Blog

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Part One

Friends:

Are the bailouts given to the banks and corporation an effective use of the taxpayer's money? Will this “stimulate the economy”( ?) or will this gift simply be an excuse to demolish unions (?) and to drive down the standard of living of Americans while allowing the monopoly of capital and credit markets to proceed at an accelerated pace? And in the end, squandered away?

Inflation is an economic condition where prices climb faster than the median income of the work force. “Disposable-income doesn't purchase much.”

Deflation is when prices fall due to overproduction or to mis-marketed or wrongly designed products that lead to a slow down of the economy and to a decline in the median income of the workforce. “Disposable -income dwindles.” Goods are not purchased. Due to a decline in retail profitability small businesses suddenly vanish. Industry shrinks. Banks fail. Many jobs are lost in all sectors of the economy. Personal income drops even faster than prices.

Both or either of these conditions is a symptom of economic depression.

The Great Dpression of the 1930's was inflationary.*

On the current course the America economy is headed towards a Great Deflationary Depression. **

The solution to the first economic condition (inflation) is to increase wages and consumption.

The solution to the second economic condition (deflation) is to increase consumption by generating higher wages and income.

Perspective

What needs to be done is to simply get more money into the hands of workers and consumers, and to raise the median income of individuals and households quickly. Most Economists agree that that government revenue (which means, in this case, government and national debt) should be used to accelerate consumption. This cannot be accomplished unless the median income of the American workforce is raised dramatically. (And, if economic experience is a guide, it means a practical and rapid increase of income used to stimulate consumption, because this will be a boon to industry and it will help expand production and thus help create jobs). There is nothing wrong with this in theory but practical economic measures and applied government policy must advance - rather than hinder- this objective.

I would argue that giving bail-outs to the banks to the wealthiest institutions and to the wealthiest individuals (through regressive taxation measures) amounts to a gross mis-allocation of resources and taxpayer money..

Pragmatic Proposals:

1. Pass an Emergency Appropriation of 25 Trillion Dollars and distribute this directly and equally to the American people in the form of individual bonuses. (This amounts to only 2.5% of the GNP ).
The practicality here is that (1) in order to increase production and create jobs, monies must be made available directly to citizens (to help increase and to expand disposable income) (2) by using increased consumption rather that than supplementing bank profit, or in the case right now, by a policy of giving public monies to increase CEO salaries and benefits, for “Golden parachutes,” or for the use of taxpayers money that speeds up the transfer of dollars selectively into (un-audited) off-shore accounts as under the pretext of (3) “stimulating the economy” with the existing bank bailout measures –the money would go instead directly to the consumer.


~Arrow

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Part Two

2. Reform the currency and expand credit based on the public interests:
Proposal sent to Obama: (4) Nationalize the Federal Reserve, its' banks, and also nationalize the US Treasury! No more bonds, notes, or credits use to benefit the exclusionary special-interests of the plunder-elite and no more exclusive control of public social wealth by banks as stock holding institutions and as privately owned corporations. (5) Bring back Greenbacks and transfer the power to create and to expand credit directly to the American people . . . Put the financial Pirates and bankster thieves out of business. (6) Lock down the national debt, and the accumulative personal debt of every American citizen along with it, and put all of this into a Debt Fund Trust, to be (7) paid-off with a new Green Back People's currency (underwritten by the resourcefulness, productivity, and technological proficiency of the American people) with an individual and corporate tax liability used to cover interest- obligations set at a fixed low interest rate favorable to future US taxpayers with necessary installment obligations paid on this interests and principal over a period of one-thousands years. (8) summary: No more private stock Banks or privately owned “public” institutions and no more private controls over the US Federal Reserve and Treasury and bring an end immediately to the Feds contracted monopoly on creating credit “out of thin air” that their strata uses currently to squeeze mountains, clouds and flowing rivers of wealth out of the American people‘s sweat and tears while generating economic depressions as repetitious way of life. Bring an end to this Piracy!

President Obama: please remember that recessions, depressions, and wars of aggression are not accidents of history or psychological quirks but intentional political and economic policies aimed at stimulating lending opportunities that are correspondingly used to enhance the process of monopolization of wealth and to create pain through militaristic conquest. --with war and military spending also a heavy burden placed on the American people and taxpayer.
_______________________________________
* In analyzing the cause an cures of the Great Depression of the 1930s, Harry Elmer Barnes said,
“The chief obstacle to recovery today lies in the fact that the great mass of potential purchasers does not have enough money to buy a sufficient quantity of even necessities of life, to say noting of luxury goods.” (page 6)
Barnes, Money changers vs. The New Deal : A Candid Analysis of the Inflation Controversy.(New York: Ray Long & Richard Smith Inc., 1934)

** On the current economic crises check out the important articles linked at the beginning of:

“Fake inflation numbers hid crisis”

http://articles.moneycentral.msn.com

~Arrow

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I hope I was clear in contrasting the Great Depression --as plagued by inflation-- with the opposite phenomena of a danger of a Great Deflationary Depression that threatens the American economy today.
I also hope it is obvious that my two constructive proposal (posted above) are based on an optimistic appraisal of the economic creativity and strength of the American people themselves. During the current economic depression (unwillingly entered by its' citizens) the role of Government in America should be to help the individual consumer and, at the same time, to gain public control of the creation and expansion of credit.
 
The way it works right now is that for every dollar of government debt (that jointly functions as private banking capital) that come to the banks via government debt, due to waste, or too much spending and through other forms of public indebtedness,  these forms of debt permit the Federal Reserve to extend ten-dollars of credit for every dollar of government borrowing and to extend this as loans within the economic and private banking markets. In affect, the Federal Reserve creates a credit-line for the banks “out of thin air” at a ratio of ten-to one. The faster the American people acquire debt in all its forms -as a government, households, individual or public, housing , auto, personal etc., the more people sink into debt due to conditions controlled by others, the faster the banks speed-up lending. Indebtedness is a negative process of extracting wealth by expanding credit and promoting lending based on hardship, as well as accumulating wealth and assets for the banking and for the investment strata (including for global corporations that usually get first dibs). “Our pain is their gain.” Recently, when the lending houses, insurance companies and banks were unable to gain sufficient wealth “out of thin air,” unable to acquire new assets, within the existing Fed's  monopoly arrangement, these banks resorted to the risky tactics of “bundling mortgages” and of selling “credit default”and “swatting derivative” in order to artificially running up the value of these institutions and “pad the books” so as to inflate their capital and holdings. And in the case of a few large banks and insurance companies they used these puffed-up assets to purchase smaller troubled banks and corporations mostly for usable tax write-offs on their  obligation to America.

Under the Clinton and G.W. Bush administration's there was a unified push to have government “deregulate the banks” while these administrations allowed and promoted lawlessness to blossom.

Economic recessions, depressions, and crises are intentional policies of the dominant corporate government : economic crisis is manipulated into being by the Federal Reserve through control of prime interests-rates and by selectively making management credit available on behalf of private interests of the plunder elite. Remember, while the Feds create credit “out of thin air,” they are also creating loot and booty for the banksters and corporate pirates. Public revenue is a prime target for this looting. The Feds are a private corporation that assists the private interests and basically controls the US treasury. Together they protect the inequalityand monopoly of wealth.

~Arrow
 

 

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“What goes up must come down” the current round of deflation emerged after the real-estate housing bubble burst. (Over the last three decades there has been a host of “investment bubbles” floating in the wind. Bubbles blown around and snorted-up by Wall Street stock brokers and by other greedy bourgeois crack heads. In this case, the bursting of the housing bubble caused massive deflationary pressure on the market value of goods, services, and wages; and along with it, a decline in relative ratios in the value of the dollar as a currency in relation to the currencies of other nations and to the Euro.
 

 
>My second proposal posted is based on a perceived need to increase the value of the dollar currency. Why should the Federal Reserve control the creation and control of credit and the expansion of wealth out of thin air? Why shouldn't this be a function of productive activity generated by the real economy of the American people at work? Why shouldn't the return on loans(and payments of interests) and the profit from public investment be directly returned to the American public though public ownership of the Feds by the use of a tax re-cycling currency add to public revenue and Americ's income?

[Please note: in my Greenback proposal I did not call for and end to the fiat function of money, I did not suggest that dollars be backed by some other equivalent such as gold, silver, diamonds or nukes –because the ownership and control of these equivalents are also in the hands of private monopolies and and in many cases, controlled by a global corporation. In the case of nukes the American taxes pay for overly expensive military costs, --much of it privatized –along with select benefits tgoing to the “corporate/military/ financial/ complex” and to military monopolies – these corporation make astronomical profit at the publics expense. We should not use our currency or America's public tax-system to exploit and drain the life-energy of the American work-force. My proposal on Greenbacks is posted above separately.]

>Added to these two proposal, I now add a third: this time a warning about growing economic problem and the current absurdity of the dominant process used: the privatization of too many public services and government responsibilities: for example, paying mercenaries ten-times the salary paid to US military personal in Iraq? This is government waste, if not theft of the taxpayer's money. Privatization of government permits pillage, lawlessness, and corporate corruption. Take, for example, Halliburton corporation that attained so many billions of dollars in tribute, hand outs, unearned income and gifts from the American taxpayer, based on no-bid contracts, that they decided to moved their headquarters from Huston to Dubai in order to avoid Congressional investigation as to how they spent, squandered, wasted, or stole the taxpayer's money that was enthusiastically funneled to them by the Bush/Cheney administration. [ You can check out informative on Halliburton in a report, “Goodbye Huston,” at CorpWatch --search site at http://www.corpwatch.org/ ]
 
We know that The War of Agression Against the People of Iraq has costs Americans about 12 billion dollars per month. The economist Joesph Stiglitz estimates the real social cost of of this War at 2.5 to 3 Trillion dollars between 2003 and 2006. And war spending continues beyond this date. It will bankrupt the country.
 
In sum, unlike the New Deal, my proposals are based on a principle of increasing the power of American consumer rather than government and banksters; on a historic transfer of the ability to “create credit,” and to expand wealth production, away from the bookkeeper's economy and into the real economy of the American people.
 
 
~Arrow

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>The CEOs of a new (of publicly owned) American People's Federal Reserve and a New US Treasury should have all their CEOs and administrative positions (A) either directly elected by the American people,or ( B) subject to public election to an American People's Board of Economic Directors. ( C) These positions should not be patronage appointments, not made the by either the President or Congress, nor should they be hand-picked by self-interested representatives of the banks, investment houses, the pillaging corporations, or by Wall Street gamblers.
After reorganization, the Elected Economic Directors and elected members of the Feds and Treasury should be missioned as watch-dogs of the taxpayer's money and the public interests of the people. They should transform these institutions from a drain on public wealth to an asset.
 
My proposals expand democracy and show how easy it is to stimulate the economy and avoid the next Depression: I believe my proposals arise from a personally recognition of the difference between the two eras of “Great Depressions”, and, hopefully, with your contribution, am now more mindful of the historical differences you vividly addressed. Perhaps that wasn't made clear enough in my previous posting? Thanks again for the criticism.
 
~Arrow

>finis

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I was opposed to the bail-out from the start. It's foolish to prop up bubble stock prices, or prop up institutions that turned junk mortgages into AAA-rated derivatives, or who ducked insurance regulations by calling insurance "credit swaps" and maintained inadequate reserves in case the insurance had to be paid out.

But I do think the government should have taken action. Because we have a wee problem here. The institutions we're talking about are "too big to fail."

That's no joke. There has been so much consolidation permitted since Reagan that allowing Citibank or Bank of America or AIG to fail would be as irresponsible as anything Herbert Hoover did (or rather, didn't do) after the 1929 crash.

Far as I'm concerned, a company that's "too big to fail" is "too big to allow."

My prescription for dealing with these "too big to fail" companies that are teetering on the edge of bankruptcy and demanding a hand-out is to take them over, fire their entire executive staff, clean up their books with realistic valuations, and spin off components into smaller, viable, *expendable* companies. When we let go of these smaller components, we'll make sure they have a balance sheet that is sustainable (assuming good management thereafter). But if they do fail, they go the bankruptcy route. No more handouts.

I'd also do a heck of a lot of regulating.

If I were running things (probably a good thing I'm not!), here's my prescription.

If you issue a mortgage, it's yours, bank. No reselling, no repackaging, no infinite sea of middlemen handling inscrutable and ultimately scandalous transactions. It's on your balance sheet, and it it fails, it's your mess. I honestly believe that's the only way to reintroduce discipline into lending.

No more consolidations, it goes without saying. If you want to succeed, you'll have to do it the old-fashioned way. Beat the competition with service and price, and grow your business.

No more ducking insurance rules. If you're insuring an asset, and pretending it isn't insurance so you can avoid holding the legal reserve, you're violating the law. We will shut you down and press criminal charges.

No more mixing banks, insurers, and brokerage houses. Keep 'em separate.

No more shuffling vast sums of money to politicians. That's got to stop. Public policy should be in the public's interest, not Wall Street's.

Coming to the taxpayer for relief should be a last resort for a company trying to stay afloat - and it should be a painful experience, to be avoided if at all possible. I just hate that we've given 2 trillion dollars away with no strings attached, and no end in sight, without accomplishing a damn thing to prevent this kind of mess from happening again. I mean it. I'm filled with hate, and that's not my usual state of emotion by any means. We've been ripped off by disaster capitalism again, and I don't like it one bit. So yeah, if I were in charge, you bet I'd regulate the hell out of these turkeys.

I hope Obama develops a spine and takes 'em on, but I'm not hopeful.

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was warn that this whole system was going to end in tears years ago. For god's sake if you're going to lie about the libertarian right at least make it something that's not insulting to the intelligence. Don't take my word for it, look up the archives of lewrockwell.com, or google: "Ron Paul" bailout.

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Excessive endangering growth; accepting the cost. If a woman has breast cancer, she doesn't need a bigger bra. If it caught in time, a lumpectomy will work. If it grows too big, if she waits too long, she'll need a mastectomy. America has waited too long.

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Interest rates were lowered today to their lowest levels in the hope that this might renew our economy. Isn't this a repeat of history in terms of the Great Depression? Didn't Hoover try this & then, also, flood the banks with capital to no avail? I'm no expert about the Great Depression but you have to ask yourself why are all the same things in place and repeating itself just like in the 1930s? Surely, not everyone in our great country is just totally self-destructive, greedy, and willing to live in a society that is broken. It's time to get the word out - I'm emailing this latest article by Josh Holland to everyone I know. It's easy to get frustrated with your friend or relative who doesn't quite get it - inform them instead. And let's remember, almost everyone hated the banks in the 1930s.

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Zeitgeist: Addendum 1/13: The first two minutes of this video encourages visual and mental focus. It then goes on to cover how the Federal Reserve uses "fractional banking" to rip-off the lion's share of wealth in America. The original is an absolute classic video documentary. The subject here has been narrowed-down but it is well-presented in an accurate and appealing manner. This is as good as the presentation of the"dismal science" gets. ~Arrow

linke text

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The current financial crisis was not generated by the Fed's monetary policies but by the normal cyclical dynamics of late capitalism. Hyman Minsky, a keynsian financial economist, determined that mature stage US capitalism, beginning with the Great Depression in the 1930s, was the victim of the inherent, endogenously generated instability of late capitalism. Most cyclical upswings result at the start in some level of economic concentration from the shakeout of the previous downturn. This concentrated income gets quickly invested in the financial and working economy. As growth continues past the first year or so of the upturn, risk aversion tendencies subside and investment pours into various financial instruments, such as stocks and bonds, and real estate. This "herd behavior" continues on the weight of its own momentum until a bubble developes in one or more areas of the economy. At a certain point the bubble begins to deflate setting off a possible panic and a sudden bursting of the bubble resulting in the losses of trillions of invested dollars. The consequent credit crunch can lead to a massive debt deflation and deep depression. At this point the federal government must be the "market maker" to restore liquidity or the "lender of last resort."

This is what is needed at the present moment. Scorn at the banks is a non-starter. We need to restore liquidity to the markets because this is about the economy as a whole not Wall Street. Naturally, strict oversight, regulations and government supervision must immediately follow as a pre-condition for any bailouts.

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Raising credit card rates and fees at will, without any regards to families income is just wrong. This is now where banks are just, Loan Sharking to save their disgusting and diasterous policies. Throw out all your credit cards folks. Get over them. The banks are dragging millions of Americans down the tube with their policies of simply, corruption of the system. Do you see anyone putting a cap on fees/rates to hhelp the common man, NOPE. Because of this, the credit ratings are a joke. they are no longer valid means to judge a persons creditablity. If you have been punked with rates hikes/fees. Call them and tell them NO PAY, until they bring the rates/fees into a reasonable form, 19%/$10 fees. Contact your representative and tell them to support Americans, not loan sharks.

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Excuse me, but the teaching of Milton Friedmann, and his band of economic gang bangers, marched thorgh South America and other countries over the last 30 years, and well. Millions were murdered, economies turnup upside down. Before you defend the Chicago Boys, you need to do your homework. The best read on this economics diasaters is,"The Shock Doctrine", by Naomi Klein. Read it and weep sucker.

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Your post states the real condition of our economy. Times have changed in America over the last fifty years, and the growing amount of consumer credit debt is one the things that has changed. Payday loans are one form, but what about credit cards, and bigger and bigger mortgages for higher interest rates? It used to be that the only major debt a person had was their home, and maybe a car. The credit industry has grown by leaps and bounds over the last twenty years, and it is only recently that consumers in the wake of the recent recession have challenge it. Now is a good time to begin debt consolidation, as many companies are hurting for funds, and it would be good to take advantage of it. Home equity loans are a way to go, and payday loans to get early credit payments every now and again aren't a bad idea either, but you should consult a financial professional if you are going to begin trying to take down your debt. You can read more in the article posted on the payday loans blog at personalmoneystore.com.

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It would seem just to let a few of the enormous firms fail, to teach them a lesson. However, the risk that would run (i.e. a Depression) due to modern economics being so heavily dependent on speculation doesn't seem like the responsible thing to do at this time. That said, a return to long term sustainability and stability, i.e. jobs that can't be outsourced and aren't seasonal or temporary are the ones we should be creating.

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