**Clap Harder!!**

Bill Black insists that telling people the truth will empower them.
While I agree in principle, I remain unconvinced that panic will not take hold.

Oh, and Dugg here…

If things “improve” under the current system, the Obama Team will have only put off the reckoning until another day. These monster zombie banks cannot last. Will there be any will to neutralize them and carve them up into smaller regional entities when the crisis appears to have passed?

I think not.

That is a frackin’ GREAT graphic. hilarious concept

Krugman sez in his column today that if the financial fundamentals are not changed, we just have another meltdown in the future.

Tell me the truth.

It really won’t empower me. Just disturb me.

So tell me a lie.

And give me a credit card.

Oh, I’ve been educated. At one of your best universities.

Doesn’t matter. I’ve bought into the message.

So, deceive me. Doesn’t matter.

Ha, ha. Until the economic structure collapses.

I think if done correctly in conjunction with steps to ameliorate concerns, e.g., provide funds to pension funds, etc, instead of the mega banks so that those vehicles don’t collapse, we could avoid a panic. Perhaps a lot more complex than giving money to the banks but could be more effective. I have to wonder if such a strategy might actually cost less than what they’re doing now.

I’m not saying panic is necessarily a bad thing, in this sense: if the true nature of this/these problems were known, the gummint would have little choice but to act responsibly.
Yes, a healthy dose of wishful thinking.

Thus, a little public optimism may not necessarily be a mirror to reflect reality, as the old saying about art goes, but rather a tool for helping to shape it

2004 ron suskind:

The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” I nodded and murmured something about enlightenment principles and empiricism. He cut me off. “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality — judiciously, as you will — we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”

some days i just want to crawl back under the covers and ask to be woken up when our long national nightmare is over.

The U.S. had empire ambitions right from the getgo. Louisiana Purchase. Monroe Doctrine.

But like the dog who caught the bus it was chasing, we don’t seem to know what to do with it.

Depends on who’s doing the panicking. If the speculators panic I can live with that. Show the working and middle class that their money is safe and they’re cool.

The argument may come down to who’s money is it, exactly. I haven’t seen anything to indicate that anyone besides ‘citizens’ believe that one red cent is at the discretion of the public.

panic = a world wide run on banking institutions. iow, a disaster of a magnitude that makes iraq look small.

imo, a bad thing.

i expected the empire bit. but i had hopes for a dose of reality. apparently unrealistic hopes as it turns out.

Obama! Listen man, I really loved the platform you ran on, but what happened to it? Glimmers of hope?!?! Please don’t start sounding like some did many years ago, when your insiders are really telling you to keep spoon feeding the masses that we’re just about ready to turn to corner when in fact there really isn’t truth to it. I know your aware of what Twain said about history. You might want to read some of these uplifting comments from another time in our history.

RELIEF FUND URGED MEMBER BANKS
Out of the experiences of the depression, resulting in the necessity for organization of the $500,000,000 corporation to relieve banks temporarily in distress, may come a remodeled Federal Reserve System that will be so constituted as to meet the requirements of present-day commerce and industry.
-October 9, 1931

BANKERS OF NATION BACK HOOVER PLAN; October 8, 1931 (Paulson Plan 2008)

HOOVER’S BANK PLAN GETS WIDE SUPPORT; November 15, 1931 (Media Manufacturing Consent)

$2,000,000,000 POOL FOR BANK AID URGED; October 26, 1931 (Bail Out Bill)

URGES BUILDERS’ AID IN HOME FINANCING; Bank Official Says Industry Could Help More With Second Mortgages.
-August 30, 1931

REAL ESTATE MEN ON THE HOOVER PLAN; Some Skepticism Is Voiced, but the General Belief Is That Good Will Result.
-October 11, 1931

HOOVER PLAN HAILED IN HOLIDAY SERMONS; (Praise the lord)
-November 29, 1929
“The depression has ended.” (Finally see the “D” word, but only to refer to it in the past tense…very common)
Dr. Julius Klein, Assistant Secretary of Commerce.
- June 9, 1931 (Stock market did bottom one year and 50% later)

5-YEAR MORATORIUM PROPOSED BY KEYNES; Hoover Plan Is a “Stop-Gap” Device
-July 1, 1931

WORLD COOPERATION: A NEW STEP AHEAD; The Hoover Plan Has Focused Attention on the Problem of Economic Unity THE NEW WORLD COOPERATION
-July 12, 1931

ot – free book offer from Grant F. Smith at oxdown.

“America’s Defense Line: The Justice Department’s Battle to Register the Israel Lobby as Agents of a Foreign Government”.

back on topic…. from simon johnson (yes, hell has frozen over when i’m caught repeatedly quoting an unrepentant ex-imf guy): Does The US Still Face An Emerging Market-Type Crisis?

if you’ve taken nationalization off the table and you have very little cash remaining for anything bailout/rescue-related, you are vulnerable to runs.

I would never argue that a full-scale run would accomplish anything but turning the US and other economies into warehouses for many billions of starving peasants.
But take what we have now: what is the truth? That we are wholly controlled by ‘banksters’ and doomed, whether now or later…? Is that the truth?

If I read you correctly in posts and comments, if and when the ‘truth’ is revealed, that is both the right thing to do and a cause for panic. My question is, “Who is panicking?” Would not TeamObama, if they were suddenly going to start playing it straight, prepare the financial institutions for this?

As much respect as I have for you and those who have pried open these issues here and other places, how exactly should the truth be told? How would you recommend that the scale of this be presented to a public in such a way that prevents a panic? We can opine about what was possible a year ago, but since we are now here…

Thanks. He did a good interview with Scott Horton (the other one) on antiwar.com.

Nice research!

Citizen SouthernDragon:

I think you’re right on about what could and probably should be done, but I also think that the Obamaniks are playin a couple of the variables in the political economy calculus at the same time…for instance, I think that they want a public healthcare infrastructure and and auto restructuring and Social Security “reform” before shrinkin’ the financial services sector. And as for SS “reform”, I think it’s gunna be part of the new “public” health program with removal of the cap and extendin the FICA tax…this will of course give the government the revenues it needs to withstand a new round of extortion from the Wall Street swindlers.

By the by, where’s the Ravenman been?

ah, i’m not arguing against team obama telling the truth, in fact i want them to.

i don’t think the truth needs to be cause for a panic – iff team obama is prepared to deal with the situation instead of trying to prop up a house of cards. so i want them to clearly and truthfully tell us what is doing down at the same time they tell us truthfully (none of this geithner doublespeak) what they are doing about it.

and of course there may be things i’m not taking into account (iow, all i’m doing here is guessing). but it sure looks to me like team obama is not telling the truth either because:

1) they don’t think we would support their priorities/goals if we knew what they really were. so they lie to get our support.

2) they are not competent to deal with the crisis and they are trying to pretend otherwise.

or maybe both.

wow.

It can be done without causing a panic. Declare a bank holiday not to last more than three days. Chnage the charters of all banks to US Treasury banks. Recall all Federal Reserve notes and issue a new US Treasury gold and silver backed dollar which will return confidence to the dollar. Remember when a dollar was as good as gold? Get off this fiat monopoly money as Kennedy had tried with the silver certificate and take control of the money supply away from the private banking cartel known as the Federal Reserve. Gold and silver would blast through the ceiling, but would then return to equilibrium along with a stronger economy built on sound money principals.

Thanks Swopa…:)

Citizen newtonusr:

Very well stated…count me in yer corner…I been havin’ a lotta trouble with the Obama bashers lately and though I don’t mind the concept of “keeping his feet to the fire” I’m gettin a little tired of the Naderite-like rhetoric.

Citizen goldstandard:

and do all this AFTER gettin healthcare, the auto industry and Social Security done.

And I am not arguing that TeamObama should lie.
Let’s just take one example: Every significant bank in the country is insolvent, and those that are not insolvent are generally small banks, and account-holders in those banks are paying FDIC fees to prop up insolvent banks.

I am looking for a path to tell the truth, and present it in such a way that doesn’t send every Wells Fargo and BofA customer streaming for their nearest credit union.

Citizen selise:

“1. They don’t think we would support their priorities/goals if we knew what they were so they lie…
2. They are incompetent to deal with the crisis…”

You don’t believe one word of that or if ya do you’ve overdosed on the Nader KoolAide.

It can be done just as the creation of the Fed can be undone. The other issues can all be addressed within the first four years, but in order to move forward you have to have to build a solid financial foundation not one where you continue to build debt upon debt. Whether you call what’s happening today cash for trash or something else, all Obama is allowing Geithner to accomplish is rearranging the deck chairs on the Titanic.

Since I am not capable (both intellectually and philosophically) of really understanding the breadth and scope of the problem(s), I don’t know that selise is wrong. It may well be that this is the biggest shit-sandwich of all, and like other disasters visited upon this generation, we are not capable of dealing with it without massive and catastrophic upheaval.
There may well not be an answer.

Citizen newtonusr:

You don’t believe that for a moment either…and if it were true I believe that Obama would use his 60%+ approval to tell the truth as long as folks still blame the mess on the monied class.

i don’t think individuals in this country transferring their fdic insured deposits to another institution would be a big problem (am i wrong about that?). was thinking more along the lines of the money market run last september. it was institutional investors attempting to pull non-insured deposits. iirc several hundred billion dollars got pulled within a few hours.

btw, if the banks are insolvent then telling the truth would probably mean putting the big banks into receivership (could obama convince the public to bail them out voluntarily?), and i do think there are big risks involved in that process – especially because of 1) international holdings and 2) bond market (and what these could mean for the dollar). it would, imo, take a hell of a lot of coordination to minimize the fallout.

i just think there are also risks to continuing to lie to the american people in an attempt to prop up an what looks to be an unsustainable status quo.

Just wondered why you would think that the human response to what happened in 1933 would be any different today? People didn’t go running for the exits. They waited out the three days and the banks reopened. If the government well publicized the fact that banks would close for three days giving everyone the time to prepare and you then knew that the banks would reopen with a stable new currency, why would you anticipate any type of panic? If anything I would think that a stable new financial unit would create the opposite effect and in turn allow the administration to move forward on other issues.

My point is that if Obama were to try and leverage the banksters, could/would they go along? I’m not saying that it can’t be solved – I’m suggesting that a solution is so counter to the interests of those holding something like 65 trillion dollars that it is inconceivable to me how it can actually be accomplished.

If it were me, I would order the Justice Department to seize the assets of every one of them, appoint Roubini and Liz Warren God, and tell them to make the best out of it.

But WTF do I know?

Still slogging thru the book about the BCCI fraud. It seems that the regulators all wigged out and gave them close to a free pass on a negotiated settlement. Apparently it was Morgenthau, Manhattan DA, who stuck it to ‘em and made the regulators do what they should have done all along. Without such an individual on the scene now, we have no hope of dealing with the bank crisis honestly.

norske, i do think that. and it has nothing to do with nader. it’s because i’ve spent hours listening to geithner testify before congress. it’s because i know about larry summers’ history (his economic policies have helped kill millions and that’s not hyperbole). it’s because i’ve been reading stiglitz and other economists.

i maybe be completely wrong (here’s hoping). but it has nothing to do with nader.

But WTF do I know?

same for all of us. we’re left to guess because, imo, we’re not being told the whole or straight story.

I wonder how folks here can be so certain that everything is going to hell in a handbasket. Is it possible that things have improved and will continue to do so?
In a jagged world straight-line projections and certitude may not be where wisdom lies.

And without responding directly to your comment, I am waiting patiently for someone I trust to attain a position of real authority on Obama’s financial team.
just sayin.

Losing 600,000+ jobs per month gives you a clue.

Selise…..Just a suggestion. Google Dr. Antal Fekete. He’s the chair for economics at the University of Newfoundland. He has done some brilliant work on Obama’s financial plan and why it is doomed to fail. He also explains far better than me how a return to honest money can be accomplished. Here’s a start….

Dr. Antal E. Fekete Index
Dr. Antal E. Fekete Page 1. Why Obama’s Stimulus Package Is Doomed to Failure – 30 March 2009. There Is More Where This Gift Has Come From – 21 March 2009 …

http://www.professorfekete.com/default.asp

if the banks are insolvent then telling the truth would probably mean putting the big banks into receivership…. it would, imo, take a hell of a lot of coordination to minimize the fallout.

i just think there are also risks to continuing to lie to the american people in an attempt to prop up an what looks to be an unsustainable status quo.

I think this is the tightrope Obama is trying to walk — namely, tiptoeing toward a genuine solution over several months.

Or at least that’s what I hope. And if it’s true, I hope that such a “soft landing” is in fact possible.

Well, gaining 20+% in the Dow is another clue.
I don’t dispute you could be right, I question
your certitude.

I don’t think they’re walking any tightrope. Their statements suggest that they think the assets are worth a lot more than the current stalled market indicates, and that if they can only get the market in gear, everything will work out just fine.

In 1974 Professor Fekete delivered a talk on gold in Paul Volker’s seminar at Princeton University. Later, Professor Fekete was Visiting Fellow at the American Institute for Economic Research and Senior Editor for The American Economic Foundation. In 1996 his essay, Whither Gold?, was awarded first prize in the international currency essay contest sponsored by Bank Lips, the Swiss bank.

For many years an expert on central bank bullion sales and hedging, and their effects on the gold price and the gold mining industry itself, he now devotes his time to writing and lecturing on fiscal and monetary reform with special regard to the role of gold and silver in the monetary system.

At this moment, when the world’s monetary system appears increasingly shaky, Prof Fekete details why the current paradigm is flawed and how the problems must be dealt with. This is almost taboo in the main stream financial media. Prof Fekete explains it as a gold crisis, not a dollar crisis. Those who doubt it would do well to recall that every fiat* money system ever tried – and history is littered with examples – failed.

* Money that is not backed by, or convertible to, any specific commodity and whose only value is that determined by government.

Stock market has predicted 9 of the last 5 recessions is the standard joke.

I spent over 25 years as a professional forecaster of the U.S. economy. I did it by looking at fundamentals. The U.S. economy is consumer driven. With no gain in real wages for workers still employed, and large declines in employment, how do you turn the consumer around? In prior post-WWII cases, consumers who still had jobs borrowed more money when stimulative monetary or fiscal policy made them more optimistic. But it seems the taste for borrowing might be a tad less this time around.

Off to make dinner.

thanks. i’m looking for more contemporary heterodox economists to read – especially empiricists who pay attention to what minsky wrote (if you happen to know of any).

in return here’s a linky for you: steve keen

imo, not a tightrope. a multi trillion dollar rip off.

hope like hell i’m wrong.

I know you are an experienced economist and undoubtedly know much more than I do. But, even well educated and experienced people are sometimes wrong. I simply wish that from time to time you might acknowledge that possibility.

he argument would be that you don’t want to unplug the machines at the patient’s weakest point

this is such unadulterated horseshit. all the tiptoeing around the financial crisis and the fact that many big institutions are insolvent are scare tactics to prevent anyone from asking too many questions and broadcasting how the banksters are using our taxes to maintain their multimillion dollar failure compensation. Obama’s Treasury and financial advisers are a bunch of skanks in keeping with the best of anything the bush/cheney regime ripped us off for to prop up the plutocracy.

Sorry for the late reply. Was out for a while.

I agree with you.

Haven’t heard from da Raven in quite a while.

Looks like some elements in Irak are showing al-Maliki that he ain’t in charge of shit.

Oh, they already “act responsibly”, but the question is whether they can actually ‘be responsible’. I don’t know of anybody, including Dean Baker, who know the situation better than Summers (wish some of his clarity would rub off on Geithner) and it seems Obama is smart enough to know if he’s being lied to.

Wishful Thinking is good. I wish for a World Without Tears.

Logistics alone can be too much.

But, one thing I know from experience is that in crises there is often no way to know what’s the right thing to do. Sometimes you have to feel whether a considered option is too risky or if it’s simply necessary regardless of whatever risk is associated with it. At times like that you feel like you’re taking a step into thin air with the total confidence of faith that everything will be alright.

Ever seen the Indian Jones movie where Jones has to cross a chasm and he just stupidly takes a big step and he’s shocked to realize his foot has landed on something, something he can’t quite see.

Yeah, like that.

To maintain your inner balance it can sometimes help to intellectually put yourself in panic mode or whatever and then realize that panicking doesn’t really solve anything. It isn’t the same as panicking, but it can help one to get past the shock of that step and back on track to doing something. Sometimes doing anything is useful.