Stagflation is one of those words which makes the non-economically inclined slip off into a stupor. But, as Ian laid out on Saturday, the Bush Administration’s economic policy hasn’t changed for years, and we are all living the results.
…for the last 6 odd years, nothing has changed. The basic pattern of the Bush years was set in stone after 9/11, the policies of the Presidency, the Fed and Congress haven’t changed. So the events unfolding now are just the logical consequences of decisions made years ago such as:
* to invade Iraq;
* to make tax cuts for the rich in order to bail them out from the dotcom crash;
* to drop interest rates through the floor;
* to allow a telecom oligopoly to form;
* to condone Chinese mercantilist policies which subsidized Chinese exports with a low Yuan;
* to tolerate the Yen carry trade, and
* to refuse to regulate the creation of money in the form of securitization and exotic derivatives.In 2002 and 2004 the American people voted to continue these policies, including the war in Iraq. In 2006 they voted to end at least some of these policies, but Congress and the President decided to kick the ball down the field, pass some pork bills and wait till 2009 to do anything about any of it. Their bet was they could hold the meltdown off till after the election. They were wrong….
I read this on Saturday, and went off searching for something hopeful. Some sign that there was really a silver lining. What I found was not promising:
– Krugman highlights a speech from the head of the NY Fed, wherein he talks about credit markets worsening faster than the Fed can cut rates, which spells meltdown. Ugly. And getting uglier still.
– Calculated Risk asks whether we are, indeed, in recession.
– There are reports that the Fed could step in with another emergency rate cut, due to the looming recessionary pressures. But is that only going to increase inflationary pressure? Guess we’ll see. In short, if you have plenty of money, can diversify your investments, and wait out the downturn, you should be okay, at least in the short term.
Which is to say, most people are worried sick.
What can be done? There are a couple of thoughtful articles on that subject that I wanted to bring to everyone’s attention and get your thoughts on them.
– Stanley Kutler has a piece in the Washington Independent on the contrasts between FDR’s directed relief, reform measures and public works projects for economic stimulation and correction, versus the Hoover/Bush "wait and see" approaches. Anyone noticing a trend with results from Democratic-led governments and Republican ones?
…The New Deal launched vast public works projects, expanding and improving the nation’s infrastructure. The Works Progress Administration and Public Works Administration built roads, parks and airports. It employed people on cultural and historical projects, including the collection of slave narratives, public art and various records’ collections.
President Franklin D. Roosevelt (public domain)Now-forgotten conservatives railed against the public works program as a boondoggle but it is a historical marker for an imaginative and successful governmental effort to provide for the general welfare. More than eight million people, working on more than one million projects, benefited from the programs. We can recognize the physical achievements easily enough, but the intangible of providing gainful employment and instilling self-respect for productive work is beyond measure.
Public works essentially provided recovery and relief. But the Roosevelt administration’s enduring legacy came from its reform measures, most notably the Social Security Act. The administration also laid down numerous reform programs, including legislation and regulatory commissions for banking, securities, communications and labor practices….
Imagine a government and a people who worked hand in hand to get themselves out of this mess together — recognizing that each had a job to do well, and then did it.
Given the choices made by the Bush Administration to pour money into the five-year-long failure in Iraq rather than spending it on crumbling schools, roads and bridges in the US, among many other problems, Americans have a right to ask why Republicans should be allowed to run a lemonade stand let alone the federal government — because what they are doing is the opposite of good government. (That sound you just heard? Grover Norquist’s head exploding…)
– The Grameen Bank has begun a micro-lending project in Queens, NY. When we had Muhammed Yunus on for his book salon a few weeks ago, he talked about some of the work they have been doing around the world and were starting to do in parts of the US. I love the thought of giving the people who need the help the most the power to change their own lives — not under an onerous burden of hiked interest rates and hat in hand begging for financing, but a loan given in the spirit of helping them to help themselves…with the promise of their success paying forward to the next person who needs a hand. That is a true community model that I would love to see replicated across many communities here where loans and hope have been in altogether too short supply for far too long.
Related posts:
- Earth to CBO, Senate Finance and WaPo: “It’s the Economy, Stupid”
- Ambinder: Sorry I Was So Stupid, But I Was Right to Be Stupid
- It Takes The Village To Raze the Economy: Some Notes On Krugman and the Return of Keynes
- The Democratic Leadership Thinks We’re Stupid
- The Song Remains The Same: Too Much Money At The Top of The Economy
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Redd!
Evening Christy
Krugman has been painting a mighty bleak picture, amongst many others…! 8-(
Hi Christy, pups
That’s a breath of fresh air, yet, how long before the IRS or SEC trys to intervene…?
Another choice – flee! The economy down here is quite strong and unemployment (at least outside the aboriginal community) is essentially zero in that those wanting jobs can get them. The Kangaruble is now at about US 0.93 up from 0.49 six years ago. Mostly that reflects a decline in the US $, but also reflects a strong export economy.
We’ll put a shrimp on the barbie
Umm, it’s the housing bubble stupid. And the fact that the regulatory authorities didn’t do their jobs. All the other stuff you list are decidedly second order contributors.
I read the following the other day and asked myself why I bothered to get sober, it makes ya want a stiff drink;
http://elainemeinelsupkis.type…..y_matters/
How much of a problem is it to move to OZ?
Hmmm… and you do have tropical climes up north…! ;-)
Actually, it is an excellent piece.
Not in the form of 29 percent credit cards I hope. /s
The problem with the fix is as follows. It’s like trying to make a blanket larger by cutting off one end and sewing it on the other end.
Banks and financial institutions have no credit or capital to “sell”. Lots of their “equity” had to be toss in the bin as worthless. So the fed fix is to lend them more!
It’s given a drunk more wine! This is actually producing exactly the OPPOSITE effect. But these fools really don’t get it. They think if the sell some cheap money it will…. create jobs and spending. hahahaha. They’ve been hawking that crap for decades with “tax cuts” and it doesn’t create jobs or spending. It only creates speculation and trading of “securities” like derivatives which have nothing to do with main street.
You too? I figger if we stayed saober the nlast eight years, we can saty sober for good.
Speakin’ of good…… good link.
Ahhh… the old Polish Blanket, eh?
The Grameen approach might really be worth a close look, given the rate at which credit to not-so-wealthy (and even wealthy, actually) people is starting to dry up. It will certainly be interesting to see how the Queens project works.
CNN
Kiss the suburban commuter economy good-by. A tank of gas for $80-100 will further kill housing prices.
Our economy was driven by this fake bubbles which supposedly allowed people to make money from “nothing” and pump it into the economy as spending and ultimately as job creation. To the economy drivers it doesn’t matter what the bubble is, as long as it slowly deflates instead or bursts. But they always burst and so its a boom and bust.
Our booms don’t create good jobs anymore, most spending on nonsense like vacations, luxury items and junk from china which only helps the shareholder side of these “american” corporations.
The Fed can’t do much these days I suspect. Even Wall Street is not responding to these lowering interest rates and you get little pump and dump cycles in stocks and then the slide continues.
There are two shoes left to drop that I can point to.
The first is corporate default rates ticking back up to historical norms of 3%. They’ve been around .3% per year in the recent past but portfolios now are starting to show signs of stress.
That will be the catalyst for the next shoe which is the failure of financial institutions that act as counterparties to credit default swaps. They will not have enough cash to pay the purchasers of the credit default swaps which act as insurance against bankruptcy.
Both of these markets are huge.
Dugg you, Christy
Citibank will tumble. Hey Mr Ruben… What were ya doin Mr Ruben?
I hate to bring it up, but that is what the “New World Order” is all about…Bush41 talked about it in his inauguration speech. They ultimately want a one government world, and in order to achieve that, they have to breakdown the fabric of society…worldwide, and reestablish it in the way that it benefits those who survive economically. It is not a conspiracy “theory”….the whole thing is a conspiracy. All of it. It is planned. Those who become destitute are forced to work for the rich in order to survive.
They won’t achieve it, although they are really trying.
Yeah — Ian hit the housing bubble, too — but that’s already a tidal wave, the rest of it was the next up line in my mind…
Do you think so? My best friend was an AVP there, and is now retired, she thinks that it is impossible for it to go under…I’m not so sure…
Banks begged to be able to play in all sorts of cool financial instruments. And now they are taking huge hits on them and some will fall.
All of these problems are simply the result of people being berated with all of this bad news. Just ask Mary Matalin.
More good news for Republicans, though!
I read rumors that Citi is in deep doo doo. The SWF are not going to play for them.
lol…yeah…umm…people just get upset when you present them with the facts…what a piece of work.
“Berated with bad numbers”
Hi Christy,
Yes, the list above sucks Big Time, but the two things I point to as ticking time bombs (not the nuclear terrorist kind) were the endless credit card schemes and people thinking the stock market was as safe as bank CDs.
Oh did I mention easy credit? kablooey.
Dubai might not want to bail them out.
Right, thanks. Yeah, great characterization, “berated.”
I’ll listen to Warren Buffet’s opinion on what kind of economy we are in before I listen to any politician named matalin or bush or…
OT:
It was an extraordinary event at the standing-room-only Town Hall Meeting: “Is Impeachment Necessary to Protect the Constitution?” at Judson Memorial Church on Sunday. If you weren’t able to be there, you missed amazing talks by Bruce Fein, Elizabeth Holtzman, and Scott Horton which stressed that not only is impeachment NECESSARY to protect the Constitution, but NOW is the time to do it. Special guest John Nirenberg of “March in My Name” was there to remind us of what one person can do, and we heard messages recorded especially for the event by Congressman Robert Wexler and retired CIA analyst and courageous activist Ray McGovern. These messages will be available for you on AskNadler2Impeach.org tomorrow.
The person who most needed to be there was Congressman Jerrold Nadler. His arguments to date for not moving on impeachment hearings were disproved by these Constitutional experts. Most people in the audience were either disappointed, angered or outraged that Congressman Nadler chose at the last minute, not to appear. If you feel that the Congressman has made a mistake by not showing up, please let him know by calling or, if you’re in CD 8, by emailing your message.
I think Tweety wants to get laid. /s
These fools do get it. They transfered the country’s wealth to private coffers in the name of government contract firms, oil companies, banking/financing industry. We’ve been fleeced by them for decades. These fools will continue to milk us to their last day in office, and then some.
Hoover/Bush wait and see approach is more like passing the buck and making others look bad. It’s like watching a prson drowning and going under for the third time and you just don’t want to be bothered saving them so you do nothing and let them drown or maybe someone else will come along and take action, like Roosevelt, the socialist.
Actually, the Fed-worship with which we have been afflicted the last couple of decades now is a product of just this opposition, as monetary policy tends to be passive with respect to the workings of particular markets —just pour in a Fed open market operation or rate cut, and wait and see— as opposed to fiscal policies that direct relief to the needy people and functions.
(Now, tax cuts, those are perfectly fine fiscal policies to our overlords, of course.)
Exactly, initially started under Clinton’s watch… Per wiki;
Yeah, I saw that Nadler dissed the meeting. And he’s a BlueAmerica congressman too.
And we have Alfred E. Neuman as President: What, me worry?
That is interesting too…that is exactly what my friend from Citibank told me. She idolizes him. I dunno. On 9/11…guess where W ended up? Nebraska, where Buffet was having some big shindig. Where was Bush41? In NY meeting with Bin Laden’s family. Where was Cheney? In the bunker with Mineta. Where was Norad? Nowhere to be found….
created the BankAmericard in 1958, a product which eventually evolved into the Visa system (”Chargex” also became Visa). MasterCard came to being in 1966 when a group of credit-issuing banks established MasterCharge. The fractured nature of the US banking system meant that credit cards became an effective way for those who were travelling around the country to move their credit to places where they could not directly use their banking facilities. In 1966 Barclaycard in the UK launched the first credit card outside of the US.
Oh, one more thing….where did all that gold bullion go that was in the basement of the WTC….when they found it, they stopped looking for victims.
Where was I? On my way to work. When I got there we saw the building fall.
Awful, awful, awful…
SandrO
You should make sure that Howie Klein knows that Nadler was a no show.
The 911 thingy still does not add up does it? And not enough pols are interested in getting to the bottom of that one either.
KO Time…!
Will do when he shows up here.
…and get into the insurance business.
The Bush Brush Ranch is vast and, frankly, covered with brush.
All current policies lead there. No one wants to look at it. What a shame.
IIRC, the new law allowed banks to have 10% of their regulated funds in the investment side of the operation. About four month ago, there was a late Friday, one line anouncement that the govt was allowing BOA and Citi to move 30% of their regulated funds over to the big shit pile.
Keith’s on fire–contre Hillary…
This is where all the money that YOU don’t see in your life is:
In the United States, in order for an investment fund to be exempt from direct regulation, it must be open to accredited investors only and only a limited number of investors can belong to it. While there is no legal definition of “hedge fund” under U.S. securities laws and regulations, typically they include any investment fund that, because of an exemption from the types of regulation that otherwise apply to mutual funds, brokerage firms or investment advisers can invest in more complex and more risky investments than a public fund might. Hedge funds managed from other countries have similar relationships with their national regulators. As a hedge fund’s investment activities are therefore limited only by the contracts governing the particular fund, it can make greater use of complex investment strategies such as short selling, entering into futures, swaps and other derivative contracts and leverage.
As their name implies, hedge funds often seek to offset potential losses in the principal markets they invest in by hedging their investments using a variety of methods, most notably short selling. However, the term “hedge fund” has come in modern parlance to be applied to many funds that do not actually hedge their investments, and in particular to funds using short selling and other “hedging” methods to increase risk, and therefore return, rather than reduce it.
Hedge funds have acquired a reputation for secrecy. Being outside the regulatory regime that applies to retail funds greatly reduces the information a hedge fund is legally required to make public. Additionally, divulging trading methods and positions would compromise the business interests of many types of hedge fund, tending to limit the information they want to release. [3]
The assets under management of a hedge fund can run into many billions of dollars, and this will usually be multiplied by leverage. Their sway over markets, whether they succeed or fail, is therefore potentially substantial and there is a continuing debate over whether they should be more thoroughly regulated.
For those of you who have accounts with big banks, like Citi, Bank of America, Wachovia, etc. — may I suggest that you switch to a federally insured local credit union?
The government website for credit union oversight is http://www.ncua.gov. From there you can poke around till you find the place where you type in the name of your local credit union. You can then read their balance sheets in detail. We did that yesterday to see how healthy our credit union is –
the answer? Very very healthy, “well capitalized.” They haven’t invested a single dime in those risky CDO’s (collateralized debt obligations) or SIV’s (structured investment vehicles). The website also informs us that not a single credit union has ever defaulted on paying its customers their deposits.
Second comment — why is it that Mr. K8 and I, who are remarkably dumb bunnies about the finance world, could see this crash coming way back in 2004? Ever since then, I’ve been predicting that FDR and his programs would become a HUGE topic of conversation during the inevitable mess. Sad to say, FDR is a REQUIRED model of behavior for our times (sad, because we’re in such a disastrous mess).
I’ve been reading up, whenever I have the rare time to do so, on the Roosevelt administration and its reforms, as well as the cultural memes drenching the popular media of the day. A mandatory guide to what we need in the coming days, although of course with a twist.
Because as Mark Twain (IIRC, it was indeed his remark) said, “history doesn’t repeat — but it rhymes.”
We are facing another 9/11, and it is the economy, and the policies taking us there are made by the same people.
Amongst other things too, all the barriers were knocked down, and, then Shrub rendered the SEC/IRS Fed oversight negligible…
Yeah, but the guy understands how to manage money…and Bush, not so much. I don’t say I worship the guy, just that he knows a thing or two when it comes to the economy and he has no reason to spout political BS like matalin.
re Hillary’s chutspah..running # 2 behind Obama, offering the latter VP spot. I agree: chutspah, a word I learned as a teenager growing up among Jews in NYC…
Citi too? As I recall, the BofA permit was to allow their purchase of Countrywide to proceed, which if it were completed at that time would have busted the limit. (Now, with CFC worth about $.75, I don’t know …)
Maybe it looked better to name another bank at the same time.
yep—Hillary’s getting skewered, with Chuck Todd now…my pal on Facebook….
I’m very impressed with Obama’s instinct on dealing with his detractors. It shows that he would deal with foes, real or imagined, with the same steady mind. Steady Eddy. I really like that. He doesn’t shoot from the hip, he uses his mind, the most powerful tool. Very impressive and unrattled.
When I heard this, I just couldn’t understand the logic at all. I mean, wth is going on with HRC’s camp? It’s like a band of loose cannons.
But cutting taxes for Bush, his family, and their cronies solves all economic problems. The MBA Preznit said so.
Harvard should try to recover some credibility and recall that degree they “gave” to Bush.
I think whoever’s been advising Hillary should have his/her head examined. One faux pas after another…WTF?
Chutzpah, Bio…! ;-)
I’m sorry, I’m dense…who knows how to handle money?
Hillary went negative and she is not helping herself. It is alienating more voters than it is attracting.
707…MBA…Bwahahahahaaa…Good one!
But it is helping McCain.
Our economy is one without a decent foundation any longer. We don’t make much more than weapons and jetliners and a few SUVs.
Nah. He’s just coasting right now…just wait.
It’sHe’s an illusion.Hey, talk like that just emboldens our enemies (waving to the NSA.) ;)
Three words: Economy….French Revolution. Period/full stop.
Linda Douglass was on Tweety, and she didn’t agree with you: she said going negative has worked for Hillary. That’s how she won Ohio and Texas.
They are working people too, they have families…what kind of crazy world do they want their children to live in…
“Let them eat cake…!” ;-)
Except she did not really win TX.
Hi MrsK8,
Nice bumping into you in these parts again.
I think the FDIC insures bank accounts up to $100K due to bank failure.
SIPC does it for investment accounts and the credit unions have a similar program.
We also make satellites! Now there’s a growth industry – spy and communication satellites.
We do talk on cell phones a lot, but do we say anything?
She didn’t do well in TX.
btw, I just loved this photo — the vivid blue of the sky and the stark white of the tree, along with the placement of the tree just off center. Lovely composition, I thought — and I hope you guys enjoy it as well.
Oh no! KO poking holes in Hillary’s worldly experience stories.
Is “Clinton” an alternate spelling for “Bush” in some foreign language?
I’m sick of this foreign policy credentials crap…did bush have any credentials other than the beer chugging cowboy persona? Obama is certainly more qualified by far than anything that went before him.
Cristy, that photo is a stunner!
Ohio….bwahahahahaha…Ever since Blackwell, I can’t take it seriously. I wish I could, but…really…
Obama won the most delegates in Texas.
She won the popular vote, which should count in the “Democratic” party, no?
yep–someone on MSNBC this morning, perhaps Joe S, said that Hillary’s chutzpah (h/t C Tuttle) was akin to asking Obama being asked to go sit at the back of the bus…ouch!!!
Me too!! Absolutely gorgeous.
Yes, I really like it. I wondered why you put it atop an article about stagflation….but I knew you had your reasons: just cuz. pretty.
As I said, she won the popular vote, which should count in the “Democratic” party, no?
Forever forward, Bush is the floor for Presidential qualifications.
I believe HRC won the primary vote in Texas which accounted for 2/3 of the delegate distribution. The results of the second step caucus is still not reported which accounts for the final third of the delegates.
Bush has proved that you can be president with an IQ under 100, with no success in bidness, no world travel… but you do need to have pull.
He leads in the national popular vote. No poo here, because I will vote for HRC if she is the nominee. I am impressed with Obama’s ability to not get “hooked” into the crappola. I wish Hillary had other advisors…I don’t think they serve her well.
At least you can pretend to do the job, wear costumes, strut around, and take lots of vacation days.
Of course, and I’m not trying to take that away from her at all.
I think the price of fuel has brought the economy down worse than the mortgage crisis. The price at the pump affects everybody, not just those that own(ed) homes. Bush allowing energy companies to dictate policy and manipulate supply to maximize record profits shows how little he cares whether there is a third Bush administration. Just as long as everything is left a mess for a democratic president.
It’s the value of the dollar, destroyed by Bush, more than anything.
Cheenee is headed to Saudi Arabia, probably to try to get them to increase oil production prior to the elections…
Isn’t that…ummm…not supposed to happen…?
Ding. That is my point. If the dollar is worthless…well…what happens next…the Amero?
Hillary moves have been quite divisive (and polarizing) for the Dem party…I must say…
…and now the girl in that 3 AM phone call ad, who is now 18 years old, not only supports Obama but is also his precinct capt. and she’s pissed at how she was used by Hillary’s camp…
OMG, this shows how desperate the Obama people are getting– the little girl in the ad actually supports Obama. So what? She was a tot back then, she was just an actress! Talk about desperate!!!!
BTW, could this have been the impetus for Spitzer’s demise…
pesos, plenty of pesos.
I wish someone would consolidate the actions of Bushco…. all in one place –I’m not talking about Hugh’s list, which is great, I’m talking about the actions that all lead up to the dismantling of society as we “knew” it.
When you look at it that way, it is pretty clear that it has been a systematic agenda that they have been following.
Next, holders of dollars/T-Bills etc. dump them back onto the market for a more stable/appreciating asset like euros or yuan or [pick a currency].
This much “supply” in the market will further exacerbate the falling prices/rates.
Stores in NY are accepting the Euro.
My current capacity for ‘risk’ in my investment portfolio is exactly, Zero. That’s a big fat ‘no confidence’ vote in what’s going on. I’m happy that, unlike millions of people I am not counting on the stock market to deliver fifteen to twenty per-cent per year returns for the next five to ten years to make up for all the money they didn’t put away for retirement when they were younger. I’ll survive with my modest house and old vehicle while folks have their McMansions forclosed on.
Conservatism and Communism. Both look good on paper, but human greed means both don’t work in real life.
Isn’t that…ummm…not supposed to happen…?
That’s our Dick!!
That is right.
I don’t know, LS, Hugh’s list is pretty comprehensive, have ya ever read it all? Dedicate a day or so…! ;-)
Make no mistake – the most winnable war that countries in Asia are in a position to wage against the US is an economic war.
You think all people are greedy?
Too dayem bad our “Dick” didn’t hook up with the Emperor’s Club….or did he?
hey christy, sent you an email called flowers…it has the link below in it.
am posting this here and there, good thing when you need a break……
OT
a fellow master gardener just sent this to me, it is incredibly COOL
figured maybe people could use a flower break.–
here’s the instructions he wrote with the email-only takes a second to do it. when you click really quickly, is a little one, changes every time.
Click on the below link. You will get a black
page. Click your mouse anywhere (& everywhere) on the page & see what
happens! Better yet, click & drag your mouse over the black page… The more
you click, or hold the mouse, the more flowers will
grow!
Enjoy!!
http://www.procreo.jp/labo/flower_garden.swf
Cartoonist Jeff Danziger got there ahead of you: http://www.gocomics.com/jeffda…..;campid=0&
Pretty well sums up the whole Bush debacle.
Thanks for that. It’s beautiful and my granddaughter will love it.
I think we have to face the fact that the USA may be won the cold war but we are not a huge third world country with a army we can ill afford… and oodles of debt and mostly junk to sell. Junk that no one wants it seems.
Very true!
Give a group of people a free buffet and open bar and see what happens.
I have. I’m not saying anything against that at all, what I’m saying is that there is a series of actions that they have taken that link together logically that show that they have a definite agenda. The complete erosion of the fabric of our economy as a direct result of their actions and policies. Something like that. I hope that makes sense. It would not be nearly as long as Hugh’s list. Ian’s post was amazing, for example.
christy-you mentioned the micro-lending in new york……..a commenter here from australia,, can’t remember which one, suggested the other day that people use their ’stimulus’ checks toward a micro-lending project or two……..but they didn’t know of one by name…….was a good idea i thought.
Too dayem bad our “Dick” didn’t hook up with the Emperor’s Club….or did he?
well if he did, I hope they charged per sneer, as opposed to per hour…otherwise, they’d make no money at all. /s
There are any number of them around the world — Kiva is a good one that several people I know do regularly. Grameen Bank is the one that Yunus helped found. If you google “microlending” you’ll see any number of them, and I think you can self-direct loans with several of the groups. I don’t know of the names of any specifically here in the US, though…but maybe someone else does and can comment on that?
twain at 120
thanks twain, i wish everyone would try it, (link at 118) it just takes a second…….i felt like a little kid again who just discovered an etch-a-sketch! but in color!!!!!!!!
The worry will go on for awhile. Need to hope that everthing will work out all right -well it won’t work out all right, but maybe at least keep it at a standard bad but sharp and very unpleasant recession. Paul Krugman is 100% right with the the two comments below. And note that, so far, people like Krugman, and Calculated Risk and Ian Welsh have been more right than the boosters you see on TV.
I’ve said several times that economists and financial advisors really do not understand very well at all how the financial markets and the ‘real economy’ (you know, shelter, food, housing, medical care) fit together. Usually (at least since the end of WWII) things kind of work out -there is enough slack and grease and liquitidy someplace in the financial so this work out and the losses are spread around. This spring and summer we will have a real test of how much we don’t know. And a test of the administration and the free market no regulation ideologues of how mature they are and how much they are willing to admit to themselves how much they don’t know.
In theory, the financial system shoudl adjust very quickly, everyone would realize that it will all work out in the end. In real terms, it is just a process of deciding who should live in all those foreclosed houses, and how long to wait until we build some more. But the whole financial boom the last several years has been built on the belief that smart people knew how much their investments were worth, and how to evaluate the worth of a bunch of new fangled securities. Let’s hope it doesn’t work out too badly, for our sakes.
Krugman, like many of his colleagues (who are rately heard from in the media because they are considered ‘too liberal’) are standard neoclassical economists who believe in free markets. Unlike the ideologues, they also believe in trying to look at things objectively once in awhile, get some data and examine it once in awhile and see if it matches what the theory says. And also willing to change their minds when evidence indicates it might be a good idea.
——
This is all pretty crude — but it’s at least a start to thinking about the mess we’re in. Actually, I’ve been struck by how little analytical thinking I’ve seen about the current financial crisis. Economists, it’s time to come to the aid of your country!
http://krugman.blogs.nytimes.c…..s-wonkery/
We replaced the old, bank-centered system with a high-tech gizmo that was supposed to be more efficient — but it relied on fancy computer chips to function, and it turns out that there were some fatal errors in the programming.
http://krugman.blogs.nytimes.c…..o-trouble/
I bookmarked it so that I can go over and play once in a while.
Interesting that Keith lists the Spitzer story at #3, buried in the middle of the show.
Buried in recent Unemployment Report:
13% of working men ages 25 to 54 are not working.
There is no hope for productivity.
Recession or Depression, whatever you call it, it’s going to get worse.
We are and have been in recession. The captive media persist in reciting Fed-cooked numbers in ways that distort the reality of just how bad things are. People owe more on their homes than the homes are worth. Credit is tightening even for folks with good credit.
Back to skim comments before joinin’ new thread.
back from being abroad for a while. nice post. And as if national bankruptcy isn’t bad enough, I gather from trying to catch up with the news that the water supply for some fifty million Americans is now certifiably contaminated. I hope Grover drinks tap water.
christy at 127—you do know of a micro-lender in the us, you put a link at the end of the post, queens, ny……….that’s why i pointed it out! you busy mom-bloggers, you forgot it was in there!
make sure to go to that flowers link at 118 with the peanut. you guys will have a blast with it. i sent the link in an email to you called fwd:flowers.
Essentially, connect all the dots? Basically, if one merely analyzes Hugh’s list with the thought pattern that whatever enriches or enables Shrub’s ‘have more’ base, will see a discernible pattern emerge with many of the ‘Usual Suspects’ involved…! *g*
Rove would agree with that assessment…
That was a story about a microlender in Queens — but I don’t know anything about how Grameen is involved with it or how it is set up other than just that story. I don’t tend to vet out anything to you guys as a good thing to do unless I’ve had time to really research it…but I do know that Kiva has an excellent reputation, as does Grameen itself as well. I just don’t know any more details on the Queens one than what was in that one news blurb, is all.
Enron on steroids -
CDO flimflammery raised to an artform
reporting/disclosure requirement loopholes
much of what they got away with was unethical but not illegal
blinding, untrammeled greed on the part of the players
sounding familiar ??
five years ago, a Wall Street friend of mine cynically said ‘they’ve learned some lessons alright’ – they’ll make Enron look like a bake sale
too good to be EPU’d but here you go
Credit
http://uk.youtube.com/watch?v=wHyzijkTnfY
linky no workie
Beautiful, Miss Christy – but it looks soooooo cold.
nah.. in a few years, there’ll be a premium on experiencing snow. Snow will be something only the rich get to experience. Just wait :P
thanks christy-i’ll ask around. i know who to start with.
Keith just named that Congressman, Steven Arnold King, as WPITW. I wish someone could explain to me how anyone sane could elect some of these people. Again, WHO ELECTS THESE PEOPLE!
Hillary’s campaign is going to have to start vetting folks in her commercials, no? *g*
oops hit that submit button before adding the following:
Christy, I love the simplicity of that picture
Oops, sorry it took so long to reply, had to talk to Mr. K8 on the phone.
Yes, good of you to point out the different types of account insurance. There is also FSLIC for savings & loans.
Still and all, I’d rather have my money in a local credit union which showed foresight in not buying the type of loan-based paper that Atrios calls “big shitpile” and is in a very healthy state right now according to its balance sheets, than in a big bank which is rumored to be worried about bank failure — I’m sure you know that the government is trying to shore up funds for a big increase in bank failures.
[p.s. — It certainly is good to see you, too!!! Hope all is well with you.]
Thank you so much for that photo.
Ithought Yunus’ Banker to the Poor was a great book… the idea that American corporations could develop a social conscience seems naive, however.
Hillary was way ahead in both Texas and Ohio when she was “nice” Hillary. Are you saying that she would have lost in those States if she hadn’t have “played dirty”.
How Nixonian of her!
When I saw the banking situation described as a “systemic margin call”, I thought a banking crisis at this point in time may trigger a bottoms-up approach to banking. Do It Yourself microlending, Firedoglake Bank & Trust anyone? Not really kidding. With electronic fund transfers, a more peer-to-peer lending system can arise, most likely among online communities at first. Food for thought.
See, now that’s just the kind of thing Spitzer may have been paying/charging $5,500/hour to see/do/experience.
LOL! With the “What, me worry?” on the door!
Reichs~ Everybody in that ad were actresses. It was make-believe. It didn’t happen. There would ALWAYS be someone to answer the phone in the White House. It wouldn’t keep ringing.
If Hillary really wants to answer that phone, President Obama can give her the night desk in the White House Response Room.
I’d rather that someone be there to handle a crisis that is calm and moderate, rather than someone who in a crisis feels the need to “go negative”. The latter indicates panic when the campaign is spinning out of control.
The one who is desperate, and showing every symptom of it, is Clinton and her campaign. The melodramatic speeches about “Words”, the false bravado about victories (when Obama made up those delegate losses in Ohio and RI quietly in the next week, without bravado). Within the month it will soon be apparent that there just isn’t enough time to cut the delegate count below 100 or so. That’s when the Superdelegate shifts will start.
It’s all a matter if Clinton wants to “foul the nest” further for the party and to continue to hold it up to extortion…or will finally have the epiphany that she may be a perpetual blemish much like Nader has become…except 10 times worse. And she might be giving up either a Senate leadership role or even a Supreme Court Justice position down the road.
Watch the movie: The Hudsucker Proxy
starring Tim Robbins and Paul Newman.
It’s a Coen brothers production that’s
terrific.
Go Eagles!
Is it something to be impressed about? Is it an ability?
Earlier in the primary season it was Edwards who was knocking Clinton around and (I think) caused a lot of her supporters to think twice and then switch to Obama. What did Obama do to get the lead? He might have brought in illegal voters in Iowa, but aside from that he hasn’t really done anything.
I don’t see him as a fighter, but as a passive go-along-to-get-along kinda guy. Maybe he identifies with Bill Clinton in that respect. Bill seemed to deal with the Republican congress as easily as he did the Dems before.
Considering Obama’s staying-above-the-fray style I can’t see him fighting for anything if he’s elected. It might wrinkle the suit.
I think it’s better to let a corporation do what it’s supposed to do and look for ways to improve the system elsewhere.
Mostly what you’ll find is corruption in government caused by the influence of a minority of people who use great wealth to gain inordinate influence in government. That skews the workings of government, so that we no longer have Government Of the People, By the People and For the People. We need a government which doesn’t allow so much media consolidation for example. It’s money which made that happen.
Jerry Brown talked about it during his 1992 campaign and a Democrat shot him down — effectively ending his campaign.
John Edwards has talked a lot about it, though not specifically with regard to campaign financing. The media effectively silenced him.
So long as the Big Money speaks loudly with a megaphone they will be heard and will get what they want to the detriment of the nation.
We can use the Internet to change that to some extent, but not completely. We don’t have direct access to the pockets of the politicians.
Think about it, what is there in our system which isn’t in some way the fault of a corrupted government?
chicken and egg problem there, I think, wrt to big time crony capitalist corruption we see today -which is very dangerous to economy.