Ready to Revolt, Lessons Learning, Default Today, Not Ready for Prime Time, 22 November 2010 and 1963
Something's rotten in the state of Denmark.
With Wall Street bonuses about to be unleashed on its lucky occupants, the real unemployment rate hovering close to 20%, data confirming that America has become a two-tier society, the Federal government gridlocked to death, the Federal Reserve now the biggest owner of its own paper with the attendant risk to the dollar, and the assets of America's six biggest financial institutions equal to 65% of US GDP, the call to revolt may be falling on fertile ground.
Chris Hedges and others explain.
Also the fearful truth that lessons from managing the economic downturn are only being understood in the present tense, thoughts on defaulting now, why Ireland was not ready for globalisation and now is paying the price, why the US dollar is at risk of dying and a voice from history, Jackie Kennedy's bodyguard remembers that day in November.
Chris Hedges argues that Americans will need to find a different way to make change. The system has been hijacked.
Truthdig -- Power and the Tiny Acts of Rebellion There is no hope left for achieving significant reform or restoring our democracy through established mechanisms of power.
America the Titanic.
Fabius Maximus -- For Rome to Prosper It Must First Burn Most modern systems are robust, so that great disasters usually require a series of mistakes plus misfortune.
And just in case you thought we are going a little over the top, The Economist debates the hard question.
Kay King on what can be done to free up Washington.
New York Times -- Congress vs. National Security The much maligned 111th U.S. Congress will soon come to an end, leaving a legacy of gridlock and rancor despite a prolific legislative record.
Paul Krugman sees only one potential outcome.
New York Times -- There Will Be Blood Former Senator Alan Simpson is a Very Serious Person. He must be — after all, President Obama appointed him as co-chairman of a special commission on deficit reduction.
Robert Samuelson on the perils of trying to deal with America's fiscal problems, it's been a long time brewing.
Washington Post -- Our Burgeoning Budget and the Politics of Avoidance America's budget problem boils down to a simple question: How much will we let programs for the elderly displace other government functions - national defense, education, transportation and many others - and raise taxes to levels that would, almost certainly, reduce economic growth?
Canada's Excellent Future -- America's Excellent Past This may be the week that historians mark as the defining point of America's fall from grace. The combination of a viciously divided national political debate with Constitutional checks and balances that make legislative gridlock an organising principle, and the Federal Reserve's trillion dollar money print are threatening to confirm that America's future will be anything but excellent.
The bottom 80%.
Business Insider -- The One Chart that Explains Everything Roughly speaking, we can divide the U.S. economy into "Wall Street"--the financialised part of the economy which encompasses the FIRE (finance, insurance and real estate) economy and its bloated partner in predation, the Federal government--and "Main Street," the looted, overtaxed remainder of the "real economy" which isn't a Federally supported corporate cartel (i.e. the military-industrial sector, the "healthcare"/sickcare sector, Big Agribusiness, etc.).
John Cassidy explains why the top 20% keep winning. (ed's note: guess where most Federal politicians go to get career buried?).
New York Review of Books -- The Economy: Why They Failed On Wall Street, the Great Recession didn’t last very long.
Quote worth quoting.
"From an economic viewpoint, the most serious problem with the rescue programs was not that they further enriched the loathed bankers but that they exacerbated some serious incentive problems at the heart of the financial system.
By extending trillions of dollars in loans, capital injections, and debt guarantees to troubled firms, the US government and its counterparts overseas had greatly extended the public safety net for banks and other financial entities ....
[a]fter all the mergers that the government had orchestrated during the crisis, six huge firms—Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo—now dominate the financial industry, wielding enormous market power and political influence. Together, their assets come to about 63 percent of GDP, some $9.2 trillion."
And in The New Yorker Cassidy asks what social good does Wall Street do? (ed's note: it is not their job to do 'social good' it is their job to make a 20% plus return on capital, just like tobacco companies).
The New Yorker -- What Good Is Wall Street? A few months ago, I came across an announcement that Citigroup, the parent company of Citibank, was to be honored, along with its chief executive, Vikram Pandit, for “Advancing the Field of Asset Building in America.” This seemed akin to, say, saluting BP for services to the environment or praising Facebook for its commitment to privacy.
Whew. Now to Ireland, and the risks that the consequences of the medicines, zero bound interest rates, fiscal austerity, fiscal stimulus, currency depreciation, currency appreciation, and IMF bailouts are unknown.
The lessons are being learnt. They are unknown knowns. (ed's note -- Mummy why is the UK government helping the Irish government? Our bank exposure dear among other things).
Financial Times -- An Irish Crisis and a British Nightmare This is not the time to gloat.
Quote worth quoting.
"Britain is Ireland’s biggest creditor. Its banking system is heavily exposed to Ireland’s banks. So are its export industries: Ireland is a bigger market for British goods than the four Bric countries put together."
How Ireland screwed up.
Financial Times -- Dublin Is Paying the Price of Three Follies Ireland is today facing a political as well as an economic crisis, with the government under growing pressure to resign.
Quote worth quoting.
"Public overspending that led to a loss of competitiveness, a resulting housing boom, and excessive cuts in income tax all led to the current crisis."
A reminder to Canadians -- particularly Sherry Cooper -- of the importance of having your own currency to adjust.
Financial Times -- Strong Euro Will Make It Hard to Stabilise Regional Debt Not for the first time, developments in the eurozone’s peripheral economies have been causing volatility in financial markets.
This article raises the important question that advocates of globalisation must confront, was Ireland really ready?
Ed's note -- as the Asian Crisis of 1997 showed the countries with the best globalisation outcomes had the best balanced banks with clear controls on real estate lending.
See Pdf below 'Asian Earthquake 1997 October' that co-written with David Wolf now special advisor at the Bank of Canada).
Is there an argument for default?
New York Times -- In European Debt Crisis, Some Call Default Better Option Ireland has finally taken its medicine, accepting the financial rescue package European officials have been pushing for several weeks.
Some analysts at the IMF disagree.
Pdf below 'IMF Default in Today's Advanced Economies'.
22 November 2010 the day according to Tyler Durden of Zero Hedge that the Federal Reserve was the biggest holder of US government debt.
Zero Hedge -- The Beginning of the Ponzi End Well, folks, it's official - mark November 22, 2010 in your calendars - today is the day the Ponzi starts in earnest.
Why the dollar is doomed.
Pdf below 'Jens Parsson - Dying Of Money'.
Clint Hill on that day in Dallas.
New York Times -- On Mrs. Kennedy's Detail IT was with great trepidation that I approached 3307 N Street in Washington on Nov. 10, 1960.
The moment. (ed's note -- beware very graphic video)
|Asian Earthquake 1997 October.pdf||2.22 MB|
|IMF Default in Today's Advanced Economies.pdf||2.23 MB|
|Jens Parsson - Dying Of Money.pdf||894.19 KB|
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Ultimately, the most successful societies find the balance between the twin virtues of inequality of outcomes and equality of opportunity.
The new politics must marry the twin virtues of unequal outcomes and equality of opportunity.
When too few get too much everybody loses.
Feminism is about women living their lives on their own terms, marshaling the resources of the society to make that possible, and men embracing this as vital to a successful society and their own liberation.
Can it be that striving for equality of opportunity however imperfect the process not only benefits the individual but also creates benefits for the society that are unintended but wonderful?
Economics must be a 'moral enterprise' as much as politics claims to be. Economic outcomes need to be framed in terms of right and wrong not just efficiency if only because these often align in surprising ways that are good for society and the economy.
My vision of Canada is that any Canadian child from a family of limited circumstance can expect to have a chance at lifetime of unlimited opportunities.
Tax policy should be founded on the principle of generating steady tax revenues sufficient to maximise environmentally sustainable economic growth in order to fund fair government.
Public policy should be designed to decrease inequality before the law and increase equality of opportunity.
Capitalism is not the problem; the problem is what we do with capitalism.
Content is always more difficult to argue than conspiracy.
Let the state regulate and the market operate (most things).
Welfare strategies are best designed as a hand up, not as a hand out.
Political debate should not be fact free fighting.
Explanation lasts longer than eloquence.
Always favour empowerment over dependency.
The most enduring public figures are embraced for the causes they fought for and not the concept of themselves they hoped others would remember them by.
Find your voice and don't be the echo of somebody else.
It is possible to operate on two different levels: the practical, cautious and conservative; and the realm of ideas, open, free, and radical.