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To Nationalize or Not To Nationalize...

In this week’s edition of the JOURNAL, Bill Moyers spoke with economist Robert Johnson about the precarious state of many banks in the U.S. and across the world. Johnson suggested that President Obama should take tough action on failing banks:

"People talk about nationalization – I just call it restructuring. Restructuring is part of capitalism. That’s how the airlines get restructured when they go through bankruptcy, or how you deal with the auto industry, how you deal with venture capital projects. Do the same thing with the banks... I think the notion of ‘nationalization’ has been a little bit of a PR spin. Restructuring is what you do in capitalist economies to maintain function and continuity. Nationalization evokes the specter of the state seizing the means of production, like Che Guevera is about to take over or something... The government just becomes the stockholder until such time that they sell the stock back to the market and get paid back a little bit for all the lost support that they’re creating for these banks."

William M. Isaac was head of the Federal Deposit Insurance Corporation during the banking crisis of the 1980s, when it nationalized Continental Illinois Bank, which was then the nation’s seventh-largest. In a column for the WALL STREET JOURNAL, Isaac argued against nationalization:

"Any bank we nationalize will be forced, both by regulators and the marketplace, to shrink dramatically... What’s more, we won’t be able to stop at nationalizing one or two banks. If we start down that path, the short sellers and other speculators that the Securities and Exchange Commission still refuses to re-regulate will target for destruction one after another of our largest banks... For nationalization to work there needs to be a reasonable exit strategy... Today, who has the wherewithal, legal authority, and desire to purchase our largest banks? No one comes to mind, particularly if we rule out foreign powers, which I suspect would not pass muster due to national security concerns about ceding that much power over our economy to foreign powers... Who will run these companies when we dismiss the existing senior managers and board members? We had significant difficulties attracting quality people to Continental even without today’s limits on compensation."

What do you think? Should the Obama administration nationalize America’s failing banks? Why or why not?


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Anna D. and other Correspondents:

People in this culture are incapable of concocting a falsehood about their role in it. They can certainly lie and pretend to be what they are not and will never be, but the scope of their knowledge and their indoctrination dictates their core being from which they perceive their version of the truth. On the Internet we assume different roles, claim status, change our ages and genders, locations and circumstances. Even when we are genuine it hardly matters.

Would it be different if we all materialized bodily to chat? Yes, but the actualities would manifest inhibitions that would make these conversations impossible. Our imaginations clothe other voices here in virtual physicalities and write extensions to idiosyncratic philosophic dialogues. Thousands of discrete ineffectual relationships with the nonexistent are generated with little purpose beyond repartee. Our improvisational work here is of a stillborn provisional sort because it has little or no impact in a real physical community.

In fact, we write here about unreal things. We are as remote from eruptions of Mount Redoubt in Alaska or millions of unemployed migrant workers wandering China as we are from authenticity with one another. Yes, remote from authenticity, estranged from the possibility of producing or reproducing genuine culture.

Chris Hedges has been writing (You are all capable of looking him up.) about our moral depravity. The voice “Chris” resonates with my core being and my experience. He talks about how vocational higher education has become to the exclusion of possible ethics. He talks about how reality shows on TV are manipulated sadism, the Greeks would describe a synthetic reality ripe for the rapaciousness of a hungry gaze. If there were an actual Chris Hedges for me I’m expect he’d be an exemplary friend, but I do not know this figment and never will.

Global commerce under capitalism was a fact there for awhile. We got real flat screen TVs and colorful dish drainers made from petroleum. Our buzzards could go overseas and employ slaves to turn out sneakers and jeans. We were deceived that “our way of life” had become global. It was a joke that we who had ceased manufacture of our own authentic culture in communities could export meaning. Our substitute was as flimsy, disposable and meaningless as the women’s clothes in Walmart. Couldn’t we take the hint that “bad faith” reciprocity was unsustainable? Real organic culture is limited in its possibilities of projection and was never global. Maybe that is for the best.

Our associations seem voluntary but maybe they are not. We praise the nuclear family as integral but flee it daily, continuing to deny the obvious truth that the people we spend time with are “family.” Spending time with specters on the Bill Moyers Journal blog is family too, especially for the lonely validation seeker. If HE (Billy Don Moyers) reads your submission excerpt on the viewer comment segment does that make your online character real? Maybe a hologram appears in some minds and you see a flash of Klark Mouvinon driving a wrecker or Ethan Allen feeding hogs in Vermont, but that would only be for the over-imaginative initiated gamer. You can never confirm that Fran G. sang hymns in Lancaster, PA or Jim Bullis engineers in California. Even when the “Other Katherine Harris” is listed as an Albuquerque attorney or you find the vineyard of retired auto manufacturing supervisor David Eddy on Google Map in Washington they are no more real to you than a game of Candyland with a five year old. Our lives are solitary because the well of our human interactivity is dry. You can tell it from the way people seek and repeat scripts, graft onto pre-fab ideas and assert the authority of professional strangers. Whether a baseball player, a judge or a talkshow host, they “play one” on TV or You Tube. We are tactile, olfactory, electromagnetic creatures (among other conditions) and our technology is a disabling filter. We fill out every sensory absence with random fantasy and projections: Think when you last heard “This American Life”: It was partly from your head and your history.

That is why I’m considering a project. I want to come visit you correspondents in your homes and expand upon your personhood. I want to see if we can resume the cooperative manufacture of culture. Anna D. facetiously invited me to “hook-up” in the 4 Corners desert some time ago. She said I could fly into Vegas and rent a car. I’ve done all that before Anna, when I photographed rock art and Pueblan ruins, but I wouldn’t mind coming out if you were sincere. I would not impose, just visit at your discretion. She or anyone else can e-mail me at Figgersinstitute@yahoo.com

With your permission I’ll bring my professional digital camera and my DAT and we’ll manufacture some homegrown media with you presenting your authentic self. Or if not we could talk over snacks and cool drinks for an hour or two. I’m a storyteller, not exactly a liar. I think many professional journalists are fraudulent: They are manipulated by powerful economic interests. I think of Dan Rather or Laura Logan in front of their green “bluescreens” with the projectiles projected. I think of Bob Woodward who was jolted morally half-awake when he was hit. Is it safe for me to come into your house? Are you one of the violent malcontents from the evening news? Is domestic violence raining down, or is it only the structural violence from the corporate core where poisonous addictive synthetic culture is mass manufactured? Common people in this “culture” are incapable of concocting a falsehood about their role in it. Do they retain the faculty of genuine cultural production and reproduction? Well I wonder, La-de-da… Lordy, Lordy, Lordy... La-de-da.

Note: I wrote this after having considered this project for some time. The urgency and worth of the idea was proven to me last night when I became upset over “Nightline”. They had a sick, pointless and manipulated debate about the existence of Satan, in a church with the pastor as participant, and commercial hound Deepak Chopra as tormentor. How sadistic and demeaning can Disney get? (Should Terry Moran wear mouse ears or horns? Maybe one ear and one horn a la Matt Groening?) At a time when people are hungry for meaningful discussion of real needs and choices they were punked with the worst sort of bulls***. (Obama’s recent town meeting joke about legalizing marijuana was pretty much the same thing.) I think it’s time we all got media capable and started shooting back.

Well, Vince, it's all on paper - the CDOs the CDSs the derivatives - all designed to be complex enough to hide that it was ALL going to belong to "them" in the end.

And now they are printing more paper and will limit the distribution of that paper to those who printed the other paper.

Rocks? Escargot? Flowers?

Take your pick. Everything is one big swap meet (wives, houses, "stuff") - so we could be swaping for quite a while.

But they'll write something on another piece of paper to get the "middle man" fee from ALL of that, too.

You don't understand the psychological profile - they want it ALL.

"You cant't solve a problem with the same mind that created it."

Albert Einstein.

The political-financial-corporate structure that we have now is not going to solve this problem.

Why? They are not the ones that have to pay for it.

"Nothing happens until something moves."

Albert Einstein

What are we prepared to do?

Vince

There is no desire to get credit flowing again because what everyone would go out and buy would be "green" products and, collectively, everyone would be willingly investing out "tax dollars" into the pot to re-invest in infrastructure. Seriously, image what 1.1 trillion would buy in infrastructure.

But, nope, let's buy the made up stuff we have here on paper woth more made up paper...see? Nuts.

But what is the psychology profile of a person who says that if he can't make 400 times more "money" than the research scientist at the bench makes, he's not going to stay at the top dog job?

I say don't let the door hit you on the way out.

Simple as a two-headed coin, Anna D.

Here we are witnessing a "Special Olympics" version of government where all the corporations get a gold medal prize no matter how retarded or crippled, and Obama gutters the balls and misses the spares as he surrogate bowls for the people. That sombisch is thowin' the fight! (If he doesn't it's a bullet to the noggin'.)

"On the other hand, if the bank was just gambling that a bond that it did not hold would go bad by buying a CDS issued against it, it is difficult to see how a failure to honor the CDS would impose a serious hardship..."

Obviously, "they" disagree.

Wall Street and "government" rigged the TAXPAYER slot machine to pay out the jackpot to themselves. It's sick.

"If a bank had bought a CDS to protect itself against losses on a mortgage backed security, and the CDS was not honored, then it would be an unexpected blow to its balance sheet. On the other hand, if the bank was just gambling that a bond that it did not hold would go bad by buying a CDS issued against it, it is difficult to see how a failure to honor the CDS would impose a serious hardship." Dean Baker 3/20 in "The AIG Saga: A Brief Primer" emphasis mine
http://www.commondreams.org/view/2009/03/20-12

Hey, language of the layman and laylady. Right on!

Grady,

LOVE YOUR QUESTIONS!!! We HAVE to do more than talk – and probably won’t. (That’s the real purpose of blogs and Internet democracy.) So, let’s talk.

The message of Soddy and other monetary reformers is far from an abstraction. All of them agree the ‘without which nothing’ of civilization’s survival is for governments to issue ALL of their people’s money, to reap the rewards claiming a huge chunk of society’s wealth in exchange for ‘money created out of thin air’ and to be held responsible for what they – governments – do with that wealth. Of course, people have to be smart enough about something almost as vital to their existence as air or water – money. And maybe that’s hoping too much.

To me what is fascinating and at the same time deeply depressing is that “Moses Gang", trying to fix the old wagon held over from slavery” were so stunningly successful in their ‘predictions’. They were not allowed to “test or employ … knowledge in action” because politicians continued to talk and apologists for the status quo continued “trying to fix the old wagon held over from slavery” until WW II saved their bacon - politicians and apologists that is, not the 100 million or so who died in the conflict predicted by Soddy and others in the late 1920s and early 30s. (Can’t wait for the sequel! Cold War? War on Terror?)

So lawyers and politicians will talk while the earth burns. There will be all kinds of reasons rooted in existing laws why we can’t do anything about it. We should all just be patient. Soddy and the monetary reformers gave us something more than just an abstraction. They gave us a concrete first step. It may not right all the wrongs in the universe but it was and still is a (the?) first step. Meanwhile those who are even aware something is wrong struggle mightily to reinvent the wisdom of the ages.

Just as you predicted Grady – more talk. I think I’ll turn on TV.

There is no truth in abstractions. That's why they call it the "Onion." Reading Soddy or Marx or Nietzsche is only the beginning of understanding. So you find something you agree with on the printed page and you feel validated. Until you test or employ your knowledge in action or prediction you have an abstraction, a personal fetish.

All you here claim to possess understanding, but how will you apply it? Will your actions end with critique of my questioning?

Under our current law nationalization and salary caps and retroactive taxation will all be overturned by our Supreme Court. It's a wonder the minimum wage hasn't been overturned as a violation of contract. To achieve a sustainable and more just and fair economy we need different laws, and probably a different economic system (without maximization, without elite contract making, with psychic and ecological externalities included in every proposition). And here are the "Moses Gang", trying to fix the old wagon held over from slavery, reading texts from the last time we dropped out of reform school. The dissidents of the past are no more the future than the culprits. (ex: What good are higher tax brackets when those subject have the ability to morph income?)

Yay! Agreement among ALL that putting a "cap" on salaries is not something that the government should be "nationalizing". Finally, when everyone is made to play by the same rules, the "minimum wage" isn't so "minimum"! Bonuses for all!

But the confusion persists, isn't a wage/salary/bonus fight with government "protectionism" in its purist form?

A gang of predators thought that they could get away with using a computarized program of "loanership" to throw people out on the streets. It's all mine, mine, mine!

Can't wait to see what the best and brightest "insurance" people are going to do with health care - like Saroman's army of Orks, they're shifting their focus on the "worker". Yikes.

Unemployment growing. Actually, it's wonderful to realize how many "whistle-blowers" have been freed to re-invent themselves - without money, of course.

Capital markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable.

By using the greater computer power of today we can have a much higher turn over of capital in the capital market. This higher turnover will make the market harder to game or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day?

So now that we have the compute power to provide for all these transactions that will smooth out the market how do we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of more than 7 days.

The likes of Yahoo, Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one's investments every 7 days (based on the specs you give the agent).

A system like this will make the financial markets work as smoothly as the local fruit market.

I just finished Soddy's "Money Versus Man". He is honing his message. The book is only 118 pages but it is sensory overload - kind of like listening to Dave Matthews & Tim Reynolds "Live at Radio City". How do you quote a whole damn book?

Thank you, David H, for the link to Mr. Soddy's book. You are a true scholar and a gentleman :-)

At page 13, after I read, in part, "It is better to listen to those who have made the desert blosom as the rose rather than to those who have made fair fields a slime of mud and blood..." I decided that I will shut up now and just read the book.

Did I hear someone say something about "babble"?

The system is set up so that reformers are forced into left brain escapades. Very tiring. Of course, it's to the critics' advantage (argumentwise) that trickle-down has such an eternal embargo on what the right side has to offer.

Except for Rush Limbaugh's creative lying, the steady stream of stuff from from Ministry of Truth is all left brained. Critics must pepper their left brained alternatives with right brained "divergent thinking" [see E. F. Schumacher on divergent thinking]. Thus, they will deliver the superior product.

Hmm...looks like it might all be here...

"The Role of Money" by Frederick Soddy
http://books.google.com/books?id=bI-BjmxzDrUC&printsec=toc&dq=soddy+bankers&output=html&source=gbs_summary_s&cad=0

I thought it was "blood from a rock"....?

So how many more unempolyed before the "treasury" has enough tax payer money to "give" to "investors" so that investors can "buy" the bloody turnips?

Seriously, would a month long "strike" help speed things up?

People are exhausted from the psycho-babblic micro-managing of who-deserves-to-own-a-home...

...but appreciate your putting them up that is.

Steven, thanks for everything you related at 2:17 PM. This post, unfortunately, will have to be brief.

I must admit, in the back of my mind there has been something that keeps saying: behind this whole thing there is some kind of "blood from a turnip" theme.

I haven't had time to go to the Rome links yet, but your puting them up. H.G. Wells' "Outline of History" gave me a glimmer years ago of what you are talking about.

"Conspiracy of silence,"...yes. I can relate.

Most of these writers properly feel that the crash was caused by a combination of all or most of these influences: deregulation to the point of anarchy; a towering secrecy that conceals the financial world from ordinary investors..." Robert Sherril in Katrina Vanden Heuvel's book "Meltdown" page 72, emphasis mine

Obama talks so much about education; that's what makes writing here seem like your in the shadows. Trouble is only recently were a whole lot of current Keynes fan profs...globalization buffs. Man, who's gonna teach anybody anything? Who will tell the people? There's so much resting on an understanding of what's what. On message bds people talk about it, but in real life people look at you like you're trying to beam'em a migraine between the eyes. Wonder what it would take to get Soddy's book in Google Books.

The best site I've come across on hedgefunds I believe was a Nova show site on LTC ("Commanding Heights" series or something like that), but I don't know if they've scaled it back over time. I imagine Hudson's got a much better breakdown in text. Just last week I threw away a cassete I'd made of a radio talk on the "Asian Crisis" (my new rule is I'm only keeping ones 90 min long).

In the last few years, conveniently, it's been little books that have had the biggest impact on me, so at least that aspect might end up one consistent reality over time.

Might as well relate now that my PC is a jittery one.

Thanks again.

David,

Your concern is rightly with helping the most immediately and severely affected victims of Wall Street and banking fraud. It is very easy for some of us to insist upon principle when we are not in the ranks of those victims. That said, I’m wondering if the time hasn’t come for doing exactly that – standing on principle. Ever since the Great Depression, this country’s political establishment has been buying time with one ‘compromise’ and public deception after another. The sellout here, as I understand it, is in exchange for (hundreds of?) trillions of dollars of government credit to bail out banks, hedge funds and the purchasers of Wall Street’s ‘financial engineering’ products those parties are willing to leave people in their homes – for 6 months.

My mentor in all this is Dr. Michael Hudson. Dr. Hudson’s take on this is that there is only one way out – the debts have to be forgiven, written down, canceled – not just transferred to the government’s books and to present and future generations of tax payers. This appears to be the view of every economist not looking for one more cheap trick to buttress the status quo for a little while longer. (It was the view of Herbert Hoover’s Treasury Secretary Andrew “Purge the rottenness!” Mellon.)

There are, no doubt, questions of equity here with respect to the 2-bit hustlers flipping real estate before the collapse vs. real victims. But all of this is really a distraction from the larger questions of equity and fairness. Before the bubble burst, the big beneficiaries of the boom were the hedge fund investors and operators. Read Hudson’s description of this. You have to have a spare million or so you can afford to lose to play. But for that million you get access to computers programmed by the world’s best mathematicians to make trades sometimes lasting only seconds. So long as the markets continued to go up you could make a LOT of money. I think the record for 2007 was something like an annual 800 plus percent return. Then there are the 30 or some Wall Street peddlers who made close to $1 billion IN ONE YEAR last year. There was an article on http://www.traderdaily.com/ about these guys (and I believe, at least one gal) but I can’t find it right now and the site seems to have gone silent.

You ask about theory. I certainly don’t know enough to even attempt to match wits with a Tim Geitner or Robert Rubin in an attempt to achieve an outcome that would be fair and in everyone’s long-term best interests by manipulating the rules of the current ‘system’. I don’t think it would be very smart for me, MoveOn or anyone else to even try (Dr. Hudson possibly excepted). The stakes are just too high:
Livy, Diodorus, Plutarch and other historians of the epoch attributed the
prospective fall of the Roman Empire to its harsh creditor-oriented debt laws. But
today, historians publish books speculating that perhaps the problem was lead piping
or lead goblets for their wine, or disease, or imperial overreaching, or superstition –
anything but the cause to which the Roman historians themselves pointed.
Michael Hudson, http://www.globalresearch.ca/index.php?context=va&aid=10458

Livy, Diodorus and Plutarch described how debt pressures were aggravated as the economy polarized and the wealthiest landed families shifting taxes onto the less prosperous classes, impoverishing Roman society. The money economy was destroyed, bringing on the Dark Ages and a reversion to local subsistence production. http://www.michael-hudson.com/articles/debt/CompoundInterest2.html

The error which interprets the whole age is the ignorance of the real nature of wealth and the ruling passion to treat it as something to lend at interest rather than to use and , consume. This is the real antagonism between the conception of universal wealth and relative wealth, between the wealth of nations and of individuals, which opposes and may prevent the peaceful triumph of the scientific civilisation. We are here up against the oldest unsolved problem in history, the Curse of riches, and the new economics make it transparently clear. But human nature being what it is, it is doubtful if it can be solved before the next and Greater War ends the scientific civilisation.

The problem that is not solved and which must\ be solved quickly, if civilisation is to be saved, is the problem of distributing the wealth that now by scientific knowledge can be so plentifully produced, not for the yet further increase ofproductive capacity in the future, but for consumption and the satisfaction of the economic needs of the individuals that make the community.

After over a century's unparalleled advance in the arts of producing wealth, living is becoming for an ever-increasing proportion more difficult and insecure, Everyone knows that there is something fundamentally wrong, and that the solution of the problem is not yet within the horizon of party politics.

The alarming increase of unemployment and the continued deep depression of our staple industries is the continuous theme of all parties, but on the money policy as the obvious, and indeed the definitely predicted cause, there is a conspiracy of silence.
“MONEY versus MAN”, FREDERICK SODDY, 1933 (**That’s nineteen thirty three!!*)

If you have time for only one book, get Soddy’s “MONEY versus MAN”. It is only 118 short pages and will tell you far more about money and economics than anything you learned in college or from the voluminous and convoluted writings of Marx. I hope this answers your question or at least gives you an idea where to start looking for the answer.

Steven Lesh, re what you wrote 3/8...on the basis of that it seems that I must add to my communiques to reps and senators that all of these infusions must be accompanied by summoning the "political courage" to ban short selling for a longer term against given entities (or simply the practice over all?). I assume that's how Naomi Klein as well thinks Wall St 'tantrums' should be dealt with. Now, please answer me this: We know the wrong things the banks have been doing with the money, but if they were to hire enough hands to negotiate down the monthy mortgage payments...would something like that move you more toward endorsing Bernake's and Ullman's approach? The way I read it, the banks are supposed to help get'm down to 38% of income and when that happens then later the gov'll step in and get'm down to 31% [but just for 6 mo is it?]. Of course, what I meant to propose on 3/6 is that the gov (working in conjunction with bank employees) would get'm way, way, way lower than that. Such a solution would seem very unfair to those who are starting to look for a modest home right now (or have done so after whatever agreed on crash date), but jobs are by now scarce and I give the banks at least three quarters of the blame for that (and on the polity's stupid endorsement of what Daly described as pyramids-without-real-assets-philosophy I guess one could reasonably place the rest). It's a good time for me to ask you about theory as an email I got from moveon.org yesterday allows me today to attempt to square it all up with what's go'in down in real life (emphasis mine, added)....

Dear MoveOn member,

Next week, the Senate will begin work on an important part of President Obama's plan to address the housing crisis, and your senator's vote will be key.

The bill makes a crucial change to bankruptcy law, empowering judges to help homeowners reduce their mortgages instead of losing their homes. Judges already have the ability to do this with vacation homes, cars, even yachts. But they can't take this commonsense step with primary homes.1

The bill passed the House last week, but faced opposition from some Democrats. The fight in the Senate is going to be even tougher. Sen. ________ needs to hear from you today so he knows constituents are counting on him to stand with homeowners, not big banks.

[snip]

President Obama offered a comprehensive plan to ease the housing crisis. His plan helps families refinance their mortgages to take advantage of low rates, and gives qualifying homeowners relief through loan modifications. In all, the plan is expected to help up to 9 million families stay in their homes.2

Most of the plan is already being implemented, but the key provision in question needs congressional approval. By allowing bankruptcy judges to modify mortgages on primary residences, this bill provides a strong incentive for banks to work with homeowners before foreclosing.3

But the mortgage industry is fighting the bill tooth and nail--they convinced 24 Democrats in the House to vote against the bill--because they don't want to take any responsibility for their role in the housing crisis.4 We can't afford to lose even a few votes in the Senate, and that means letting Sen. Warner know now that you expect him to put his constituents ahead of the banks.

While it still seems to me a super deluxe database could assess the value of the bad instruments...it also seems gov should only shell out legal tender for'em only if there are enough federal employees around in close proximity guaranteeing that the banks are loaning out said legal tender. Dunno if this makes it "nationalization" per se, but AFAICan see the "restructure" term would serve just as well.

Now, for even more real reality...

ROBERT JOHNSON: "Fill that hole with money, taxpayer's money, to recapitalize. Send them back out into the marketplace where people know they're wholly capitalized. And last thing I would do is I would separate the toxic assets from the bank that you put back in the marketplace."

Why do the banks even want the toxic assets...because the mortgage payments keep flow'n into'em? But if they don't know what parts of the MBS (or whatever) won't have a net good flow-in of payment money...what makes them not want them removed and replaced with capital?

ROBERT JOHNSON: "Well, what I think they need to do is inspect them thoroughly, examine, mark down the assets to a conservative level that protects the taxpayer. See the resulting deficit on the balance sheet, which is the hole."

What does mark down the assets mean? Re-evaluate all instruments owned by the bank? Its own bank stock? Or just mainly MBSs? Give them an accurate value, so that regulators will know when to assume tighter control before bank customers lose more money?

I wonder if anyone wonders if I found an answer to my question about short selling (no offense, Steve, there's so much to cover). I sort of got one from page 298 of MELTDOWN: HOW GREED AND CORRUPTION SHATTERED OUR FINANCIAL SYSTEM AND HOW WE CAN RECOVER by Katrina Vanden Heuvel and the editors of "The Nation," Introduction by William Greider...

12/1/08 "I fear that the real reason the Democrats are so far failing to act has less to do with presidential protocol than with fear: fear that the stock market, which has the temperament of an overindulged two-year-old, will throw one if its world-shaking tantrums. Disclosing the truth about who is receiving federal loans, we are told, could cause the cranky market to bet against those banks." Naomi Klein

And I fear I'm still gonna have to ask why they'd bet against. You see, Parker and Armstrong and Klein are try'n to get down to my level. And one day maybe they will!

Anyway, just sitting down with this book for less than an hour...Doug Henwood has shown me my idea of sending the money straight to the mortage payers [below 3/12 6:38 PM] won't work (I know, I know...it was John Stewart's idea before it was mine. Yes, Henwood was once on NOW IIRC). Its "Why the Bubble Popped" article by Robert Sherril is not technically as thorough as I had hoped [Arun Gupta's "Meltdown 101" must still be the best condensed one around]. But there are three Henwood articles, two Naomi Klein articles, a Walden Bello article, and two by Robert Pollin. And all the other writers I have as of yet not been introduced to through reading in this book...might end up of equal help! Katrina vanden Heuvel and Eric Schlosser's article points out that back in September of last year Hillary Clinton had "called for a revival of the Home Owner's Loan Corporation" (organized in the early months of the New Deal). Could it be we might be at a point where all the politicians need is some public support...that they've already turned the corner to where they can at least logically endorse the concepts?

Prof Kenneth Rogoff(Harvard) interviewed on "NOW" gives us 4 yrs before we emerge (he also mentions Japan's 10 yr recession). To me that seems conservative with respect to current raw materials/petroleum problems and climate problems. Friends, if Rogoff thinks 4 yrs will be rough and stresses more requirements and regulation for banks on that basis...then you can see why someone more "conservative" would want to discuss with others here getting a handle on these concepts.

1)more collateral
2)more constraints on hedge funds

[re more he seemed to say would be good ideas...got to get a new computer so I can watch it over in a stream]

More than I wanted to know? It's perhaps just too much for me to accomadate within my given spare time in the near frame.

As far as "consorting with undesirables" goes, I'm looking at it (hypothetically) as a minor factor which sort of slowly but surely leant a leaven to the whole zeitgeist...mindset. Set the mood. It was the attitude that got transferred perhaps...moreso than hard assets (though these got messed up too big time no doubt). No holes barred free booterdom. Or amplified a subset mindset. Take lotteries as a milder example for instance [in the Jungian sense I'm sometimes inclined to view lady luck as a true archetype, and that it's a big mistake to get so possessed you think she's the only angel in heaven]. At first all the lottery proceeds were gonna go to education (here in VA). But then...does this diversion itself (resorting to lottery tickets) help alter, in some undefinable manner, the whole picture such that: those who voted for lotteries end up not caring if the proceeds go someplace else? Or such that: anyone in the casino biz becomes fair game for slanders like Abramoff's? [Well, I'll buy one Mega Millions ticket once in a while.]

The weird thing about lady luck is that when you take your money somewhere, you want accountability and propriety. You don't even want the appearance of anything else. But it's truly only an appearance of accountability and propriety that we have settled for in this land. The appearance has easily been mastered as a matter of facade and ambiance. Behind the facade (behind the whited sepulchre) is pure anarchy...where all the faith is in this aforementioned lady! Yeah, there are male figures you could find that could represent as well.

Okay, Mr. Lesh, you win. I kept HOPING that there was more to money than the fact, that not only is it manufactured out of thin air, it's sole use is to torture the soul. Yikes!

Okay, so now that my worst fears have been confirmed, it's all a matter of adjusting my "attitude". I'll keep in mind that the whole planet is operating like an insane asylum were the inmates with CASH are in charge.

After billions of years of evolution, this is what the human species ends up as? A seething morass of crazy?

Nope. I'm not buying my own logical conclusion "theory". Something very unnatural happened to the human species.

Guess that if you can't even figure out when to add to a "complex" system, talking about the phenomena of physics called "exponentiality" is pointless. In one week, 600K new unemployed is exponential.

Trying to recoup a 40 to 1 leverage is not mathematically possible, even if you "own" everything in the world.

Who is to say where high finance ends and crime begins? My general take on the crime / money laundering link is: the banks don’t need to launder money. They can create as much of it as they want using fractional reserve banking. I’m told, however, that this is not totally the case. The godfather of banks and central banks is the Bank for International Settlements (BIS) - http://www.bis.org/. BIS has something called capital requirements and those banks DO have to observe.

The real fun is ‘creating money out of thin air’. In the old days you did it using a pencil and a bank ledger. Now you do it with a computer. This is what the monetary reform movement has been howling about for 300 years. See http://monetary.org. Stephen Zarlenga’s “THE LOST SCIENCE OF MONEY” is a fascinating book. But it may be more than you wanted to know about money.

Have I mentioned Frederick Soddy? (sic) This guy is particularly fascinating because:
1. he was tired of seeing scientific advances trampled under the boot of ‘the money power’ (bankers, industrialist, etc who would rather fight ((wars)) than part with the prosperity made possible by industrial technology to the laboring cattle who created it)
2. he was a Nobel prize winning – NOTE – chemist – NOT an economist.
3. his economics is rooted in the physical world, not tortured logic and incantations by the priests of finance, i.e. establishment economists. (He is actually quite funny in places.)
4. 80 years ago he wrote books that read like they could have been written yesterday.
The prose may be a little challenging, though probably not for Moyers viewers. If you want something a little more contemporary that is easily accessible check out Ellen Brown’s book “Web of Debt” – http://webofdebt.com.

That’s probably more than you ever wanted to know about where to draw the line between high finance and organized crime. In summary, why consort with undesirables except perhaps to get a little seed money when you can create as much of it as you want in the form of loans to your customers - whether they be sub-prime home buyers, hedge fund operators or whatever – and then sell those loans on Wall Street, turn around and make some more loans with the money you got from Wall Street (that you didn’t stash in your Cayman Islands account) and just keep doing it over and over again until you get bored or trapped by the limits of a finite world.

P.S. My understanding is that while sub-prime mortgages may have triggered the collapse they are really chump change when compared with all the hedge funds loans and garbage created by Wall Street.

At 12:55 today Grady lee Howard posted on "Finding Wholeness in Tough Times":

"While I'm about it let me share what a Wachovia broker exec.(and he should know, considering....) told me yesterday: "Bernie Madoff can't be fully unraveled because he was involved in money laundering for the Russian and Colombian mobs." It makes me wonder if Tony Soprano types run Wall Street, and now Obama's crew and the whole government."


I tend to take this seriously considering your snippet below and that it is common knowledge that 25% of our economic volume is drug/underworld related.

Note: This may be my last post for awhile in that I will be staying with friends in Allentown after Saturday the 14th. Steve B. is coming home to his trailer and wrecker job and dogs from 15 months in heavenly beautiful Kyrgyzstan, building a railroad for gold mining. I'm giving him this laptop since it has good reception with the Roadmasters WiFi. I don't know where I'll go next, but I'll be in touch. If you have any ideas for me send them to lindengallery@hotmail.com by 6pm Friday with a contact number.

Re the latter site [mentioned 8:40 PM], I hadn't even found it yet, but a search took me there. Here's part of a sentence I saw yonder...

"Since US banks and stock markets are heavily dependent on criminal money..."

My natural question is: how dependent? Would the subprime thing even have been possible without this dependence? Is it just this dependence, or was/is it rather just a collusion in general with the shadow economy that predisposed us to such scams? Or does the subprime thing dwarf the dependence which is more or less small potatoes?

There was a poster at Daily Koss trying to draw a connection between subprime meltdown and money laundering...but everyone was talkin too cryptic and I didn't have the time anyway.

This would be a good place for anarchists to advise how to exit this particular current default paradigm, which, if the above is true, is already way symbiotic with anarchy.

Strangely, none of this seems to have any bearing in media commentary. We get a review of "The International" which seems to render it some kind of aperspectival curio. And that's it. But I guess somebody was try'n to say somethin.

Steve, I just put Hudson's link in my Fav Places. Will get the Global Research one later. Thanks.

Sorry I don't have time to read everything since my last post here, but I thought I'd pass on a breakdown source on The Homeowner Affordability and Stability Program. Go to Monday's Fresh Air (npr.org)...Elizabeth Warren was guest. Unless I heard things wrong, those with homes whose values have plummeted too far will not qualify for assistance/refinancing!? Correct me if I'm wrong folks. There are other factors that must be considered, added up, etc.

Everything seems sort of backwards. The bad loans wrecked the economy, right? So, why not take all the money and put it toward every single mortgage (whose payees have had difficulty) that ended up with balloon rates following teaser rates? They sold the stuff without a care in the world about repurcussions. They were supposed to be the experts. Give the people who fell for the whole thing a break. Let all the balloon rates refinance...suspend payment until possible! Do it just to clear up the matter.

We also need a new CCC and Single-Payer Health Insurance. Without these 3 things (or some variety of the 1st included in above para) I am beginning to wonder if Robert Johnson's suggestions will be sufficient.

Not sure "nationalizing"'s the magic word. Follow what Johnson says and do the 3 above...it might be just as good. Not sure nationalizing will save any bank in UK. They're almost just as neoliberal and EU rules might obligate them to bail out eastern european banks. Which is not a bad thing; it's just that going with Johnson's plan seems in keeping with logic-of-these-3-things plus production planning for around the planet...if you could convince some folks it wasn't the antichrist's doins. Anyway the environment can't take the duplication, plus there's not enough money for anyone to take the same risks as before.

People understand so few things re the meltdown. There are no graphics depicting anything. Everynight Colmes and his techies touch it not with a ten ft pole.

good quote...

"Instead of suffering for their bad judgement, the banks will not be required to write down the values of their vastly overpriced loans, much less relinquish control over the derivative securities (CDOs, SIVs, and all the rest of it). Instead of writing down the bad debt, as has been done in most previous crises, the banks will retain the unrealistic current value of their loans, with the difference paid for by the very taxpayers who are being thrown out of their homes." Boyd R. Collins February 22nd, 2009 6:01 pm (discussion following article)
http://www.commondreams.org/view/2009/02/22

Bill, Back in the 1980's the Resolution Trust Corp took over the toxic assets of the time. They revalued everything and sold the properties to new investor's who turned the assets into ongoing profit making businesses. I witnessed this first hand.

Maybe its time to get past the fear and opposition rhetoric and move forward.

Louis Fuchs

Steven Lesh,
I was making a general statement...
The "you" I was reffering to was meant to be the universal you as in
"Everyone" needs to think about the meaning of words and what possible wrong usage might distort the intent". It would be nice if we had a technical language that eliminated multiple meanings of words.
Sometimes it is necessary to explain what particular meaning of the word is intended.
"Socialism" as in the ability to organize people into cohesive groups that work together for their common good is a great deal different than Socialism as a "social dictatorship" that is based on the society for the benefit of one person.
The word "Capitalism" as a word for efficient exchange of goods and services is a whole lot different than a "monopoly capitalism" where one person wins and they control all of the money.
The quality of people's lives depends on an efficient exchange of goods and services no matter what you call it.
Money is a means to an end; not an end means.

PA Leimbach: I feel compelled to address your "socialist" fears. Remember when wealthy frat boys Teddy and Dub formulated "No Child Left Behind." I also fear that type of centralized social control, but I call it fascism. Profiteering sham wars of occupation you might also call socialism, welfare for a wealthy investing class.

PA, someday you'll realize that usury and over sanctified attitudes toward concentrations of "private" property are what cause wealth and income disparity, and cause most poverty. THe peoples' hands are tied by these ridiculous customs.

Realize that Steven Lesh's fetish over the word capitalism can also be a blinder. I think we may need some new words of our own creation. Here is an essay by Significant Figgers on just that theme:

The Darker Truths of Substantive Intellectual Property

Financial and economic reality is dictated to the public in authoritative language. People derive their own vernacular meaning because terms are imposed upon them in a gradient from powerful to powerless. Actually, those in charge may not possess a fixed learned definition of any concept or term. These things mean what leaders deem them to mean, and that is fluid according to what they need them to mean at any moment, in any particular tactical situation. A sliding definition is an attribute and prerogative of power.

Often we observe how our schools neglect financial and economic education. Ideological conflicts arise when these subjects are attempted. Contentiousness about the truths of our economic system comes into play because we are under continual economic stress and competition among innumerable interests. Such instruction is not neglected if we realize that socialization as a powerless consumer is substituted for practical knowledge. I expect that those with fortunes and trust funds receive an entirely different indoctrination about how to apply the power of wealth and how to preserve it, in the home and in preparatory schools and elite universities. The ability to utilize such theory as a practical tool is conditional upon not only access to large sums of money value but also previous instruction and socialization. Values and morals, worldview and expectations are as divergent as the polarization of wealth and property. The rich are like a magician in a dog act with commoners comprising the sillier end of the trick.

Putting aside the question of concerted or purposeful conspiratorial manipulation by the moneyed class, most of us will agree that the general public is at a distinct disadvantage in the discussion of economic subject matter. The classed dynamic of the educational system colonizes minds and preempts any notion of intellectual equality. Further, subjugated minds are colonized by handicapping of cut rate and popular notions of the proper social order and how society should function. An individual may admire celebrity or highly priced fine art but doesn’t begin to understand the mechanisms that create these phenomena, or even why they were needed or their origins.

If the wealthiest portion of society has a monopoly on creating specific technical, aesthetic and descriptive language, or can employ intellectual specialists to complete or manage these tasks for them. Such a mode of linguistic production renders much of our population mutes or babblers.

One of my correspondents recalled the oppressed instructors of his rural grade school so many years ago. They lacked the courage even to question the answer keys in state issued instructional material when these answers were obviously wrong. A great part of their education as teachers bestowed the necessary grace to defer to authority even when the result would be miseducation. It might require a higher status individual than they to overturn an error. My correspondent related how a manufacturing superintendent’s wife, the male spouse of the female town doctor, and a privileged practice teacher from a major university were able to intervene in these minor matters upon examining their children’s test papers. The practice teacher reported the error to publishers and was then able to make an inked correction in the margin of the teacher’s text. What a teapot tempest! Maybe that explains why nominative and objective voices of common adverbs are so frequently misused in our speech today. A habitual mistake by one socio-economically gifted individual would be sufficient to prompt all subordinate grammarians into compliance.

During rampant economic injustice or unfairness, or a widespread disruption in the economy, working people and even their advocates are clearly ill-equipped to complain about or describe the conditions of their suffering. During times of conflict the overly eloquent might even be singled out for punishment or ridiculed as a malcontent, trouble maker or outside agitator. Most everyone does possess the innate capacity to defend personal interests, but have been systematically deprived of the words, or the authority of language usage, that would enable us to construct a viable discourse. Common citizens lack the authority to mint words in the same way they lack the authority to print money. When some plain spoken creative gal or fellow sums up the truth accurately, but outside the accepted vernacular, their observation will likely be taken as a joke.

In developing countries during colonial times, native languages were displaced in commerce, politics, education, even aesthetics and religion by the tongue of the occupying conqueror. (This has been a particular shortcoming or impediment in US occupation of Iraq and Afghanistan.) Indigenous people then became unable to complain or negotiate except on the oppressor’s terms. The validity of the native world view was discredited and the history and cultural evolution particular to those locales was terminated. Folk art and wisdom withered and was retrieved later in freeze dried form as a quaint and rare curiosity to be valuated in an alien market. We owe the few creative and virtuous, savantic intellectual survivors of these displaced cultures who have been able to describe the process in the victor language from the subjugated point of view. They invent a new method of mediation between the lost and the imposed culture and language. To accomplish this they maintained a high level of fluency and proficiency in both systems. Such decoding work becomes more nuanced in a strictly classed society like ours where boundaries are denied and we all ostensibly share the same spoken and written language.

For me the delineation lies in story telling. My origins are in the lower working class. I am an individual fascinated by both language and the usage of sociopolitical power. Different classes tell different stories as a means of summoning images in the mind. Different classes tell different sorts of stories, for various purposes and with divergent significance. A story presents perception and experience from a specific point of view.
It models reality using a controlled mental photography that orders individual and collective worlds. Idle curiosity about these modalities compels a need to discuss and write.

My conclusion is that shared language and culture are a locus of power. When people organize around an issue, as a community of common interests, or as laborers the process is at heart rhetorical collusion and calibration. For the disempowered this liberation struggle can be as difficult as the rehabilitation of aphasic stroke victims learning to talk and write all over again. Something remains from before, but as they accept the loss and overcome it, many will observe that they emerge as different or new persons.

The Internet enables us to share our idiosyncratic and creative use of language. People pick up conceptual clues and descriptive phrases from one another. Organic synthesis is problematic online because access to the whole person is restricted. Trust is never assured or complete as it might be in person. Many people present valid arguments and exhibit comprehensive understanding, but are unable to express ideas in a widely accessible or popular vernacular, and so are misunderstood or ignored. And again we suffer the disruptions of the ever present dominant class and their servile imitators and defenders. It is as if they invade our therapy room and disrupt our rehabilitation.

There always exist purveyors of outrageous stories and improbable world views. Some of us build our confidence and skills refuting such wrongheaded deviance. The put-downs are usually no sharper than what they might receive from honest critics at a polite gathering, and they enjoy the attention. A little more challenging are the parrots that relay flawed or dubious arguments heard from politically manipulative or putatively religious broadcasters. One has to deconstruct their mistaken underpinnings to discredit their fragmentary reasoning. The assertion of contrary facts will not usually suffice in confrontations with true believers. It’s funny sometimes when a blogger expects an audience to share their peculiar assumptions. Some people find delusion comforting: Maybe it is more pleasurable than the anxiety produced by unbridled idle curiosity.

As a Summation I would assert that face to face organizing is good. Meet with whomever you can and talk things out. Stress and anxiety will be abated because we all harbor some fear of one another now. Discourse and honest exchange of ideas might need to continue for a long time until a general consensus in defining problems can be completed and the need for action is agreed. Choosing strategies and methods is a subsequent step. Because possession of language produces and evolves culture over time and produces its own internal legitimacy talking alone can be powerful.

Again, let me reiterate that if you are not designated by the possessors of power and wealth that your (and my) discussion of fiscal and monetary, economic and financial matters is patently illegitimate and does not warrant any notice or discussion by the general populace. It is only through intellectual conspiracy with knowing peers that you commandeer ownership or minting of language. I’ll admit continuity can be a limitation, so scribes will be required. Such insurgent efforts initially accomplish nothing outside the participant’s minds in themselves, but if they exhibit internal consistency and provide an alternate cultural narrative, have the potential to become contagions in the populace and build into a political epidemic.

What we have been describing here is a condition of substantive intellectual property. Substantive indicates basic or underlying. What could be more basic or constitutive than our common culture as composed from communication by us? Don’t let the oligarchy privatize that!


Notes:
1. As I composed this essay yesterday (March 10th) I overheard a discussion (Talk of the Nation) about Barack Obama’s vernacular adjustments according to audience sub-culture in his public speaking. His body language, his vocal cadences, and his vocabulary shifts were all admired. By now most of us realize that Jeremiah Wright’s description of the President’s political profession was especially accurate. Anyone engaged in the ultimate position of “leadership” takes on the necessary traits of megalo-maniac and sociopath if only because he represents a wide divergence of power between those who really make economic decisions and members of the general populace. As campaign promises are uncovered as not compatible with marching orders “responsibility for our economy” is summarily copyrighted as another catch phrase alongside, “I feel your pain,” and “fireside chat.”
2. When your undercapitalized news outlet operates on the basis of press releases the projected winner dictates the terms of engagement before the social conflict begins, bias is mobilized, agendas are set and intimidations exercised overtly or knowingly. In these instances radio and television cease to be informative and become the direct tools of powerful interests. They are deaf to the plight and needs of the people and blithefully dictate the mandates of wealth extraction and maintenance. This has been true of NPR and PBS, even Pacifica and other independents, as well as commercial outlets. This only goes to highlight the need for organic discourse among the masses.

Maybe my last post requires a little more explanation and moderation in view of a previous post of
when others question the ‘financial capitalism’ that is on the verge of destroying everything the ‘make it better, faster, cheaper’ capitalism that is more vital than ever in an over-populated, resource-depleted world, we are called socialists.
If the last vestiges of ‘better, faster, cheaper’ capitalism are destroyed, it won’t ultimately be the work of socialist revolutionaries. It will be the result of Wall Street / banker greed. People who call critics of Wall Street’s financial capitalism socialists need to do a little more homework and maybe some thinking.

In today’s world of accelerating financial pressures - the only relief for which the American lifestyle provides is more conspicuous consumption, finding the time to read and think might be pretty hard for a lot of people. Perhaps wishing them a special circle in hell if they attempt to substitute labels and name-calling for the work required to really understand their world was a little too harsh.

David E.

All labels, including ‘socialist’, are just exactly what you describe them as being, “a ploy by the rich and powerful to prevent people from supporting their own best interests”. If believing in “Cooperation, equity and justice” and a quality society makes me a ‘Communist’, socialist or Lawrence Welk fan, I could care less.

It is also true that dictators – and a lot of other people besides – use words and symbols for purposes that are antithetical to “Cooperation, equity and justice”. If there is a hell, let’s hope they get their own special circle.

I don’t think I’m confused.

Steven Lesh,
Demonizing socialism is a ploy by the rich and powerful to prevent people from supporting their own best interests. It also undermines government programs to level the playing field.
Cooperation, equity and justice are vital elements of social organization and they are essential to a quality society.
Dictators corrupt the concept socialism to subjugate their victims.
Please do not confuse these factors.

Hi Irene, You wrote, "We wondered where all the farms and farmers went, what had become of inventors and repairmen and tinkerers, and first aid healers and canners and sewers. It seems as if only the better off can now indulge in these expensive hobbies."

I know that I'm not that old (flower child stuck in between stoned hippies and medieval Gen X - sigh) so I guess NJ wasn't that bad of a place to live...I put myself through a 4 year state college on a supermarket cashier salary and playing saxophone in a band on the weekends.

All I know is that I have been "tracked" for the past 8 years by predators. "They", thanks to Homeland Insecurity cover, got access to all the details of my life and proceeded, one by one, to erect walls and schemes and "religion" to take it all and then, sociopaths that they are, took it one step too far and figured out how to prevent any attempt at picking myself up by my bootstraps - yet again - by finding that hourly wage that makes any progress impossible - relatively speaking. Half of the wage to go to a roof over your head, the other half to health care costs - and we're done, right?

"Derivatives" funneled all money only one way - back to the banksters.

"We" are going to start using rocks as money rather than let them "win".

It'll cost you two rocks, Mr. Lesh, to look at my face and not get irradiated from the "tension" that another guest of wonderful Mr. Moyer called "the tragic gap".

Me likey reality - always did, always will :-))

"They" only know how to subtract - clueless how to add. Think about it, it's true. Take, take take...

My suggestion is to fix their math deficiency...

Now, how do we move forward?

“AMMEND the CONSTITUTION!”

Get the power you deserve and use the knowledge you have!

Thank you Steven. I appreciate the back up a clarification.

Anna, I understand where you are coming from. I will make a better effort to be clearer in my future posts.

Now, how do we move forward?

Vince

Anna, Vince, Grady, David H, All:

Please keep posting. My ‘vision’ comes almost solely from stumbling across the right books. It sounds like your vision comes from seeing. (I think I might have to check myself for radiation exposure if I ever met you face to face!)

I am concerned I might miss some of your posts in the future. If the maintainers of Bill Moyer’s blog can’t do it, does anyone know where we could maintain an index of comments?

Vince's point was lost on me because he basically made his point by blaming the victims, so to speak.

That is "their" successful mass-media noise schtick and "we" are beyond insulted at this point. Enough. I've been around since Reagan took down the solar panels when he moved into the White House.

My point is also valid. "They" do not know the "math" that keeps it flowing, do they?

Thanks to everyone for the conversation - I am learning a lot about the "details". Like any other person too involved in the hard labor of trying to do those life-maintenance tasks in such a way that actually was life maintaining, I kept thinking that I was not destined to be the one to shoot myself out of the canon saying, "Enough already!".

It is time for all of us who kept putting it off to get up and do it.

I, for one, am not falling for the sell that all of a sudden they care about my "health". It's political power play numero uno time, and, oh, it's so much sicker of a power game than even war is.

Grady,

I rule out nothing. And I also could care less about the personal qualities of anyone who might have anything intelligent to contribute to our understanding of the world. Perhaps the personal qualities you list may have lessened the contribution which Veblen was capable of making. But what he did accomplish was enough to convince me more than 30 years ago the problem isn’t understanding the world we inhabit. It is the lack of political will to act upon what we already know – and have known for at least a century.

Frederick Soddy was a recent discovery. Take a look. Perhaps you will find his work less contaminated with personal failings than Veblen’s. Soddy’s analyses of the lead-up to the Great Depression and his suggestions for a way out could have been written yesterday. They WERE written from 1926 to the mid 1930s. Like Veblen, Soddy predicted the collapse of scientific civilization if we didn’t do something about the problems he identified.

I’ll take another look at Packard and C Wright Mills and a fresh look at Jessica Mitford. Thanks for the references. Until then, it remains my belief that we didn’t need to wait for their contributions or those of scholars and original thinkers in our own times. For a hundred years we’ve had the information needed to rebuild our civilization on a more sustainable foundation.

P.S. Sooner or later somebody is going to discover Soddy’s ‘anti-Semitic’ “there are still Jews and
Jews. Let us hope so, at least.” I think the kind of Jew for which Soddy was hoping was one who, facing prosecution by the authorities of governments that have inflicted outrages upon their neighbors and the prospect of indiscriminate retribution from those upon whom violence has been inflicted, demand justice, morality and compassion. I think the kind of American for which Soddy would have hoped is the kind we thought we were until the Bush II years revealed not just that we have no monopoly on moral conduct but the gathering stench of US foreign policy starting with its first CIA-sponsored coup in Iran.

Lack of "smarts" among the greedy- does not equal -a well planned conspiracy of debt collapse engineered years in advance. So which is it? I pick the later as being more likely.

Thorstein Veblen was a mighty timid academic with a tenuous doctorate from Yale. Speaking in circumlocution he could maintain employment for a little while that his sexual aggression, alcoholism and mumbling lectures did not undermine.
He was a Norweigian farm boy first, and I believe emotional conflicts arising from his working class origins derailed his brilliance.

Steven Lesh is certainly on to something in his theorizing but should give more credit to Veblen successors like Vance Packard, Jessica Mitford and C. Wright Mills. You're not gonna learn these things in school (without subversive librarianship).

Irene: Can one really radicalize a 90 year old, and what is the point considering shelf life?

Anna,

There can be no doubt about “lack of smarts among the greedy”. However, you don’t need numbers and math to see that Vince has a point. Just go look at the gridlocked roads filled with more than a few earth destroying Hummer-like obscenities, RV homes on wheels, etc. The crime of Wall Street and the bankers goes far beyond the trillions they’ve already stolen and the trillions more Obama appears intent on helping them steal. The iron logic of compound interest demands growth in the numbers of people and their consumption. Without growth, the real economy has no way to support people who live off interest and their control of money. For them the most dangerous word in any language is ‘enough’.

The first chapter in “The Engineers and the Price System” by the American economist Thorstein Veblen is titled “On the Nature and Uses of Sabotage”. Veblen describes the sabotage of the industrial system by absentee owners who feared running that system at full capacity would reduce the income stream they received from the money they controlled. Though Veblen coined the phrase “conspicuous consumption”, he apparently didn’t seriously consider the possibility those absentee owners would sabotage the efficiency of the entire economy to maintain the flow of profits and interest on which their unearned income depended.

It would appear that the personal growth made possible through leisure and the time to study and reflect upon the world does not return a sufficient profit. The only way the advances of science can be accommodated in a world dominated by the iron law of compound interest is for people to make things for or provide services to each other. We have to make things that self-destruct quickly enough so we can make them again. Or we have to sit in our cars for countless hours, stuck in traffic so we can wear the cars out faster so we can make them again so businesses can make enough profit to pay stockholders ‘dividends’ and bankers interest.

And even this isn’t enough consumption. So we have to make the weapons with which we can destroy everything previous generations built when scientific progress gets ahead of the entropy we work so hard to introduce into our economic life.

“We” tolerate this. Some of us call it ‘the American lifestyle. And when others question the ‘financial capitalism’ that is on the verge of destroying everything the ‘make it better, faster, cheaper’ capitalism that is more vital than ever in an over-populated, resource-depleted world, we are called socialists.

Vince has a point Anna.

A lot of this is starting to sound more like the Socialist Republic of the Americas than the United States of America! Wonder when American officially gave up?

I don't know who the "we" is that you keep referring to, Vince. Your red herring of "consumption" needs a simple equation to show how much "over" is being done. Without the math, it's just yadda.

The only RATIONAL excuse for what is going on would be that people are bad at numbers crunching. One math formula does not fit all. When a lightening bolt strikes in Arizona it did not need to steal electrons from Topeka's electrical grid to exist. Hence the current "economic" crisis - lack of smarts among the greedy. Don't USA ADULTS rank low in math compared to other countries?

If all this is not just a "whoops, my bad, I stink at math" situation, then we DO have a psycho-logical problem that "management" and "government" have created and perpetuated. When kids keep hearing about the "working poor" and how the pilot who landed safely in the Hudson (because he shut off the auto-pilot software) is basically one of the "working poor" in USA, what "value" system is there for them to "work" towards?

No, my friend. Won't work because this is not a discussion it's an interrogation. "We" have evidence of the crime, "we" know who is guilty, "we" get the psycho-logical profile - that the criminal feels nothing and will never admit to wanton usury, and "we" will be under moral and ethical obligation to do something about it. Our collective security as a "country" depends on bringing to justice those who commit preemptive strikes - the psychotic and the sociopath are not the "fittest".

If I have any "native" in me, it would be "native" to the land from where the Red Man migrated to the America continent all those centuries ago.

David C:
“Obviously, The FDIC needs to have more power to prevent careless lending.”
Your wish comes true!

Rapid movement in “Nationalization of the Financial System,” so far “41 banks in the last

several months have been nationalized. "You have to believe that dozens and dozens

and dozens of more banks HAVE to fail!”
While they were on rampage for the last 8 years “Four months ago, the FDIC and state
of Illinois ordered the bank to stop risky lending!”
“You haven't seen these takeovers (confiscation) happening because they're done
secretly at night...,” The “agents prepared to seize a bank outside Chicago,.. checked
into a hotel under a fictitious name,...!” Refreshing, of the old west story of “the gunslingers”,
before the community was terrorize on a pretense of “Santa Mariya”, "I always want 'em
to think that I'm one of the good guys!”
"We don't go broke. We're the government, we are backed...” by the power of “Printing press.”
An excellent report by 60 minutes veteran journalist Pelley. My thanks.
http://www.cbsnews.com/video/watch/?id=4852631n

Obama is not allowed to use the word "Nationalize" lest the CIA organize a coup, as they did with Mosadeque in 1953 Iran.

*****************************

Any "write down" should be on the stockholders, debt holders and principles, and not the taxpayers. Some of these mega-toilets deserve liquidation. (ex: GM, Citi, BofA, AIG, Wells Fartgo, and Minnie Others.

David H,
The radical ness of the truth is its simplicity. So many of us share the same mental blocks, through, which truth must struggle to penetrate.

"Herman Daly, a leading ecological economist, says that money transactions now outstrip transactions of real things by 20 to 1: the present so-called liquidity crisis is due to too many financial assets relative to real-world assets.......Jefferson: 'The issuing power should be taken from the banks.' Madison: they 'have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance'. Lincoln: 'The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. Money will cease to be master and become the servant of humanity.'"
http://www.resurgence.org/magazine/article2747-Pseudo-Money.html

It is good to know that others agree with my theory that it is the demand side of economics that needs fixing not the supply side. Fixing the demand side of economics will automatically correct the supply side of economics.
David E.

Vince, Anna, David H, All:
Thanks for being there! Please continue to post and share your information and insights in the weeks ahead! Ultimately, we have to do more than just talk, of course. But a mindless, misdirected expenditure of energy might be worse than doing nothing at all - like Bernanke's bailouts.

Anna D,

I appreciate your comments. But you seem to be focused on this "Cherry Picking Data" mantra.

Let me elaborate on a couple of points that I made.

First, let me say this. Come to Detroit. That is where I was born and raised. Outside of Downtown it is a spreading wasteland. Spent factories, surrounded by spent neighborhoods filled with spent autoworkers who did not make plans to leave before it was too late. They were consumed in the overproduction of automobiles that were engineered to fail soon after they started rolling off the dealership lots. Now we have junkyards full of cars nationwide full of spent natural resources.

Media Overconsumption: The average American will spend 13 YEARS watching television. Television programming in it self is a term that seems benevolent. But think about it, it is programming, but it just happens to be programming us. It teaches people how to act, what to buy, what to expect from their representatives, etc,. Look around you. Look how much time people spend staring into their $300 phones and Blackberries.

Look at the people around you listening to mindless dribble on their iPods that passes for music nowadays. Ask to talk to some of these people. They can't put two coherent sentences together without using the word LIKE at least a dozen times. They sound similar to Valley Girls of the 1980's. They haven't a clue as to what is going on around them. Myspace is their life.

Perpetual Consumption: We have been building cheap houses since after WWII. Houses in this area built before then are still standing while houses built as late as the 1990's are crumbling to the ground. Plenty of natural resources wasted on dead or decaying suburbs. How much overtime did people work to make those house payments?

I take it from your contributions to this blog that you might be a Native American. If so, I would think that it would be self-evident to you on how Americans are experts on over-consuming natural resources. We have spent years cheating the Native American population out of their fair share of the profits reaped from extracting resources from Native Territories.

We have consumed almost all of the oil that was under the Continental U.S. We overproduce corn that is subsidized by the U.S. Government. We exploit the natural resources of every country we occupy. Iraq (oil), Afghanistan (drugs), Latin America (Oil, food, cheap labor, etc,.) Central America (oil, drugs, cheap labor, toxic pollution dumping).

Anna, we have been exploiting cheap labor since our founding as a nation. African Slaves, Child and Woman labor, Mexican & Central American labor, Chinese labor, Latin American labor.

The IMF and World bank help facilitate private company ownership of public resources, especially in the western hemisphere. The WTO has laws that trump U.S. labor laws that allow corporations to sue if they feel that American laws make them "uncompetitive".

Please, it is an insult to YOUR intelligence to think that large companies and corporations are just "middle men" that provide us with what we ask for or demand.

This engineered financial crisis is meant to blackmail the government into propping up failed institutions that are "Too big to Fail". Ralph Nader wrote about this scenario over twenty years ago. Only the names have changed to protect the "sociopaths".

I will agree with you that people should spend less time with their heads in the bible, koran, torah, etc. I am personally an Agnostic. I have no need for dogma or doctrines.

As for the army, just think BlackWater and CIA. They answer to the President, not Congress. They are beyond and above anything resembling the "law".

Again, thank you for your posts and responses. Perhaps enough people will take the time to stop and look around before they just take someone else's word that the world is coming to an end if we don't bailout Wall Street and the Banks.

Best,
Vince


David H.

BTW - Thanks for the references in your first post. I haven't read any Daly but it sounds like you've given me three to six months' more entertainment. The article was excellent - although too short!

David H
The guy who really understands what is happening right now is Dr. Michael Hudson, Rep. Dennis Kucinich’s economic policy advisor. Take a look at Hudson’s work on his web site http://michael-hudson.com and on http://www.globalresearch.ca/ (do a search). Hudson is really prolific. His web site doesn’t come close to covering all his output and he has a book coming out this summer. Take a look at Hudson’s work and, if you agree, add your name to a request to have him appear on Moyer’s show.

That said, I’ll take a shot at trying to answer your question. My problem with the “bad bank” solution is that the ‘banksters’ and Wall Street gamblers will succeed in converting their ‘toxic wastes’ –which they have acquired vast amounts of wealth by dumping onto for example pension funds – into (at least temporarily) good US government legal tender money. I’m not sure establishing the correlation you describe is possible. However, if it was, the action you suggest would be preferable to what has been proposed to date as I understand it; that is to do everything possible to insure mortgage debts remain in tact and just provide temporary assistance to struggling homeowners until the economy revives enough to allow them to service their debts without government assistance.

Under your suggestion, if the government owned the debt at least it would have the power to write it down. Just about every credible economist agrees recovery will only begin when today’s bad debts (or as some people call them “illegal bets”) are ‘forgiven’, ‘written down’, ‘purged’ or whatever you choose to call it. I do not share John Ullman’s faith in Bernake’s efforts. Possibly with the best of intentions, Bernake is concentrating above all else upon saving the banking system. That “infusion of money” Bernanke is pouring into the system is going to go somewhere. Dr. Hudson suggests it will go to a new feudal class of bankers, financiers and wealthy persons who have been benefiting from Wall Street’s financial engineering all along.

Nor do I see much validity in Ullman’s concern about profiteering short-sellers. This is just a technical detail. If the government summons the political courage to act, it simply needs to precede that action with a ban on the short-selling of bank stocks. It has already done that once in this crisis.

Vince: "Perpetual consumption has been at the core of our problem for years."

I don't get this faux argument at all for the simple reason that no one has figured out how much a human being, at a bare minimum, needs to "consume" to be healthy enough to be "value-added". There has to be some kind of "bottom" to paper money.

Vince: "People consume too much food and media.

You're right about the food. But here is the perfect example of cherry picking data to score a win - in this case making a point about how stupid people are. Overweight people are mostly malnourished when it comes to vitamins and minerals. Cheap "food", because of the way it is "manufactured", is devoid of healthy soil's micro-nutrients and digestive enzymes. A month of discussion can revolve around how "media" does everything but provide the news and information that ANY civilization needs to thrive successfully. A cable news station yesterday tipped over into the "psycho" category when it snarked that there is too much information flooding the internet about "banking". I know you have a firm belief, that you have chosen to believe, that people are stupid because of too much information, but just because you believe in something does not make it "real". Not sure how long it will take to "heal" the 30% of USA population from chronic cognitive dissonance. They've come to rely too heavily on dellusion and illusion to "win" political arguments.

Vince: "Companies consume too many people and resources."

C'mon, Vince. This is insulting to YOUR intelligence. We're talking about "companies" that exist for middle-man to get their hands on everyone else's "wealth". They got all the "paper", so now they want the FAMILY home and they recently figured out that the only way to get the home is to take away ALL THE JOBS. Criminals are SIMPLY stupid in execution of the crime. And all they need in the way of "resources" is electricity for phones and computers to do the deed. I will agree that there is a permanent "class" of USA citizens who morph from one scheme to another - from Savings and Loan to Enron to Anderson to AIG. Medically, they are diagnosed as sociopaths. The "bigger" sociopaths become, the faster they devour a civilization.

Vince: "Countries consume too many cultures and ideologies."

No wonder why history "repeats" itself. Rome FELL not because it had a culture in place that absorbed and improved on the knowledge of the vanquished, but because it did not do the math to figure out when to stop using "war" to stay "rich". Rome spent too much on empire building.

Leveraging 40 to 1 is a sick joke. No one can repay that because there is no "will", even in the mercenary army, to kill off 40 Hoffas to keep one Vince "safe".

It might seem as if the "cops" (all USA citizens who were too busy upholding the civilization that secret squads of sociopaths were selling and consuming) are too stupid to get to the "truth" during this "public" interrogation, but we're not.

This depressing drama is just another "armageddon" self-fulfilling prophecy that happens when a sociopathic dictatorship crumbles. Criminals ARE too stupid, even at the top, to rule those they decided, incorrectly, are stupider than them. People need to "study" something other than the bible now and then, imho. God may provide, but the sociopaths are in the details. Cherry-picking data is as old of a political schtick of fallen empires as is divide and conquer.

When you ask the Navajos and Hopi what happened to Canyon de Chelly's "culture", they give you their equivalent of "it was all bs". Hard to retain and repeat idealogical nonsence to innocent children during their "education", if you have a normal human make-up. The kind of nonsence that created artificial "POWER" grabs, like Canyon de Chelly, in FAMILY cultures will all be discmissed as "it was all bs" in verbal transmission of life-maintenance knowledge.

"Survival of the fittest" gets reset during every manufactured social crisis. It's going to be tough to dethrone so many sociopaths, but I think we have their MO down - preemtive strikes.

Bottom line, there is no moral or ethical "survival" imperative to allow the inmates to run the asylum.

You can't "win" by ruthlessly breaking laws (as the sarcasm goes, "you and what army?") and when caught in the ruins you created by breaking all those laws, use the excuse that better laws are needed.

“In a column for the WALL STREET JOURNAL, Isaac argued against nationalization”
In the article he states,
“First, any bank we nationalize will be forced, both by the regulators and the marketplace,
to shrink dramatically.”
This, conveniently avoids to address the reasons and purpose of the “Anti-trust laws” that were
created . The purpose of the “Anti-Trust” laws did serve to “avoid nationalization.”
“The old shareholders ultimately received nothing,.... “
It appears that he does not considers that it was “confiscation and nationalization of the
shareholders ownership” when the FDIC stepped in, and that it was not necessary to have
and enforce the “Anti-trust laws” long before the crises begin. The FDIC turned “blind eye”
to the operation and management of the Banks that lead to the crises we have now!
He does not address the “Ant-trust laws!” The excuse, “For they are to big to fail,” does
not provide solution! Simply, they have driven the country “into the sins of Adam and Eve!”

Unless I am mistaken, Steven Lesh, one of your points is the same as Herman Daly's (cited in my 3/7 post 10:36 PM)...that vast quantities of money-out-of-thin-air debases our saved money via inflation. (and Jefferson's point and Madison's, etc)

The toxic mortgage backed securities, though, do seem to pose an interesting problem. John Ullman's solution and the admin's solution (stick'em in bad banks) does seem to make some sense.

Don't the mortgage payments go right into these securities? If no one wants the right to these repositories of payments (if no one wants to buy'em)...then, hypothetically, if they were obtained before an agreed on plunge-date, couldn't their correlated monthly payments be reduced accordingly? It seems like there's something wrong with this logic, but I don't know what.

CDSwap "insurance" I cannot see the gov backing or bailing (though I wonder how much gov money has gone to salvage AIG CDSs already). Meantime, if everyone starts submitting the information on what mortgages reside in which MBSs and CDOs...couldn't one supercomputer handle the whole job? "Too complicated to sort" sounds like another diversionary tactic.

and it seems as though vets should copy and return-receipt any claims mailed. Why? Google "NPR" "shredding" "veterans" and "Zwerdling."

The radicalness of the truth is its simplicity. So many of us share the same mental blocks, though, which truth must struggle to penetrate.

"Herman Daly, a leading ecological economist, says that money transactions now outstrip transactions of real things by 20 to 1: the present so-called liquidity crisis is due to too many financial assets relative to real-world assets.......Jefferson: 'The issuing power should be taken from the banks.' Madison: they 'have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance'. Lincoln: 'The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. Money will cease to be master and become the servant of humanity.'"
http://www.resurgence.org/magazine/article2747-Pseudo-Money.html

The article "Planet Crunch" in the latest issue of "Resurgence" is also free.

Trends:
1. The FIRE economy is a golem economy because very little labor remains involved. (A crucial fact highlighted by Chris) Capitalism is only possible because of the "surplus value of labor" and all else amounts to cooking the books.(can't be sustained) Off-shoring, automation, slavery, and unearned income all undermine capitalism. The United States is dying because the manufacturing (already decimated) and construction jobs (temporary)are being lost at a higher rate than other sectors of employment (though things are bad all over),thus; no laborers to exploit, no margin.
2. Unemployment is being reported at a deflated rate. We already had a large sector of discouraged and underemployed workers before this Depression began. Add to that the self-employed (ditchdiggers and cable installers, handy persons,hair stylists contractors, consultants) who are out of work without eligibility for unemployment. While the CES (as contracted to Commerce Dept. by Labor Dept.) is used to estimate unemployment and household finances it has been heavily doctored since 1984 to reflect a false prosperity. Respondents are coached to report higher earnings and lower credit debt, and no cross checking is ever done. Renters often claim to be buying homes, the idle claim employment and cars ready to be repossessed are presented as paid off. People exhibit false pride.
Just look at raw figures: We claim a shrinking workforce of around 130 million in a population of at least 300 million where anyone working 1 hour a week is "employed." Weekly unemployment numbers and claims are higher than any since 1949 (as a percentage) and no one can explain how people are dropped from the roles when there exists only one opening per 5 unemployed persons reported. They do admit the workforce is shrinking like a game of musical chairs.The median pay gross is only around $30K even when billionaires incomes are averaged in. Talk about living beyond our means; most of us have no means.(Most of the people claiming investment losses in conversation in reality have had a negative net worth for awhile and probably had no meaningful stocks, bonds or retirement accounts, let alone real estate and insurance policies.) A great majority of us are hopeless debtors. Even if 8.1% unemployment were accurate, that's almost 12 million people. I suspect there are already more desperate people and families out there than the 25 million estimate during the Great Depression if only because of population growth.
3. Resiliency (the ability to adapt or bounce back)
I made an emergency call to a 90 year old lady Friday who had just gotten cable TV. She had jerked the coaxial feed off the back of the TV, probably out of frustration. It was cheaper to get another set at a second hand shop than to repair the severed connection. She asked me about the new Depression as we drove on that errand. I told her not to worry, that TVs were cheap because of the same digital change that caused her to order cable. Then the stories began, about the old Crosley radio and living off the land. Lilly's father was an energetic man who used a mule and plowed rented ground to feed 25 people. He had a cow and bees and fruit trees, and berry canes, and a spring house and a sawmill. After I got her back on cable we talked several hours. We wondered where all the farms and farmers went, what had become of inventors and repairmen and tinkerers, and first aid healers and canners and sewers. It seems as if only the better off can now indulge in these expensive hobbies.
"This time it will be worse said Lilly. How many parents or grandparents own a farm? How can people grow a garden in yards full of lawn chemicals? What will they find when they are hungry without neighborhood fruit and nut trees? If the power goes off they'll go crazy just like I did over not being able to work cable." I tried not to upset her but understood how right she was, I'm in my 50s and people have become so helpless even during my time. A ninety year old could surely see how we lack resilience in the basics.
4.Privatization: Fencing the Commons: Well they closed an extra day and shortened the hours at the public library. Schools in a neighboring county are asking grade schoolers to bring toilet paper. The college radio station wants a $150 day sponsorship to mention my organizational club meeting four times. Food and blankets will no longer be allowed on hikes in our woodsy county park (homeless people). There is almost nowhere where a car can be parked at night near where I live unless in one's own work place or driveway. (car dwellers) People carrying paper signs (work for food) or posting signs in their windows, vehicles or yards without permits will now be fined and/or arrested. (panic sales) Two neighbors with outdoor cats are competing with county provided traps to catch and exterminate one another's animals. Both previously had fed strays. A man down the block threatened his neighbor with a gun for Wi-fi-ing off his ISP. (I guess he doesn't know how to install electronic security.) Police now arrest people for suspicion who peer through the plate glass fronts of vacant businesses. The auto parts store has told delivery drivers they are either self-employed now or fired, and that they must use their personal vehicles or pay for gas in company vehicles. The pizza place fired a driver for eating an undeliverable pizza without waiting until he was off and paying full price for it. The town history museum (built and supported by taxes) is now open by appointment only to paid groups.

How are things where you live? Resilient? I organize them one at a time, as they become ripe.

Steven Lesh,

Thank you for the information and your feedback.

Reading some of the posts from BMJ helps me to know that there are still some clear thinking people left in this world.

Vince

Vince,

Take a look at the work of the Nobel prize-winning (in chemistry) Frederick Soddy. The answer to your question “where do we start” may be simpler than you think. There is a hold over all of us more powerful than “nonsensical media inundation” – money. And ‘money’ is mostly privately held debt, AKA credit. All the talk about sub-prime mortgages is really a red-herring designed to distract attention from a 300 year old game of swindling people out of real wealth by issuing ‘money’ created ‘out of thin air’ by entering a few figures in a bank ledger. The modern twist is selling those bank balances on Wall Street so more new loans and their origination fees can be collected by the banks. Another way of saying this is that Wall Street has gone partners in the game of creating money and, of course, debasing the value of any money you try to save – as measured in real wealth, the things you need for a good life.

As a country, we still need to decide what it is we really value. But breaking the ‘money power’ – a task that may be easier right now than at any time in the last 300 years because of the mindless stupidity and greed particularly of the last 8 years – will at least allow us to have an honest discussion.

Anna D.,

Getting people to take direct action requires that we break them free of the mass media distraction complex.

I have talked with many people about a national labor strike for years. How do you convince the people who have been living from paycheck to paycheck for as long as they can remember that the system has been rigged to keep them in that situation?

Perpetual consumption has been at the core of our problem for years. People consume too much food and media. Companies consume too many people and resources. Countries consume too many cultures and ideologies.

Just imagine if Jimmy Hoffa Sr. had not "disappeared". He was the most powerful labor leader in the country, and agruably the world. Had the Teamsters been able to just organize all of the truck drivers, Then he / Teamsters would command quite a bit more bargainning power at the "table". And, I would argue, all labor unions would have benefitted from that power.

You see, Globalization was implemented to break unions. It has been successful so far. In years to come, the UAW, IAM, USW, and other international unions will falter due to a lack of demand for manufactured goods produced at a fair wage.

So Anna D, where do we start? How do we break the chains of perpetual work, non-sensical media inundation and outright financial corruption?

Do we organize a national labor strike? Do we organize a national tax strike? Do we boycott all mass media? Do we do all of the above?

There must be something constructive we can do to bring this nonsense to a halt.

What do you think?

Good Morning! Cherry-picking data to win an argument is so much fun. Looks like the non-plan is working, just like it did in the "private" sector - "Analysts: Job Losses Could Drown Stimulus". So would enough money be "saved" to save "globalization" if all money trickling down to Labor stopped for wha'? Six months? Seems like everyone's agreeing on sometime in 2010? That's a risky time frame for keeping everyone entertained long enough with mass media circus "politics" to forget about institutionalized theft and lawlessness made "law". What say you, Vince? You think you guys can pull it off? How about we just speed up the process and call for a national strike? Labor gets NO money? Makes the math a lot easier if the flow goes only one way! How did I catch on to the game? This ditty, Vince, gave it away "Why didn't they invest in clean technologies back then?"

“Obviously, The FDIC needs to have more power to prevent careless lending.”
I regret very much to disagree with you on this point.
I firmly believe that the power should be in the hands of “ALL” the people.
People should be empower to participate in the process.
People should be empower to decide and established their destiny, Rules, Laws
economy, health, wars and to BALANCE the cost of products, services, production,
education etc.
One example of many, Fact: “The bill of $17,062.66 shows that the attorney worked

only 41.8 hours on the case at the rate of $400 per hour.” This is a gross mis proportion

to person “working 40 hours and being compensated at $7.00 an hour.”

"Never invest your money in anything that eats or needs repainting."

Karl Marx defines: “Capital is only when it is invested in the the process of production.”

Therefore funds to bail out “AIG” or the BANKS is not a “capital in the production.”

The Legislators and the justice system ignore their duties, responsibilities,

they let the “Genie out of the bottle” - the “Bell can not be unrung!”

“When a man has been made poorer by extravagant bill we do not regard his wealth

as a unity, or the tort if there is one, as directed that unity as an object. We do not go

behind the person of the sufferer, WE SAY HE HAS BEEN DEFRAUDED or SUBJECT

to DURESS,..... and STOP THERE.”

I see as the only solution to “AMMEND the CONSTITUTION!”

EMPOWER the PEOPLE to EXPRESS THEIR “WILL on ALL ISSUES!”

As I remember them, John Ullman, your suggestions sound like a recap of Robert Johnson's, and they make sense to me...except high-finance wise I am a bit too unschooled to follow your explanations re what will happen if they aren't implemented. Would official "nationalization" earn ideological contempt [Limbaughesqe style] and would this be the origin of the attempts to short bank stocks? Or what other facet would bring on the shorting?

I found this article via Serota's at Campaign for America's Future site...

"The top Republican on the Senate Finance Committee, Charles Grassley, said on Monday he could accept moving Panama to the front of the line, 'as long as we turn to our pending agreements with Colombia and South Korea right afterward.'"

What does that mean?

I'm 100% convinced Johnson is right re gov-control/regulation/re-structuring, but if we'd banked on Greider's suggestions starting in 03 I just wonder what items we'd be trading and who would have been trading most of'em to whom.

"A less brutal, more politically plausible response requires a two-stage strategy--first, a shared agenda of economic stimulus to restore global growth, but accompanied by enforceable commitments to reduce the exporting nations' lopsided reliance on the US market once stable growth is restored." William Greider 2003
http://www.thenation.com/doc/20030922/greider/single

Venus Project: Thank you for the link. It was very informative.

Klark, as always you make some very strong points.

Marc, you hit the nail right on the head. Even the "free" media are still too timid to shed complete light on our defective system.

I am reminded on what Ralph Nader said when Barack Obama was elected.

"Be prepared to be disappointed."

Why?

Obama's Pledges:

No lobbyists: Yet his team is loaded with people from the very sectors of the economy (banking and Fannie Mae / Freddie Mac) that were instrumental in causing our financial meltdown.

Leave Iraq: We will never leave Iraq until we are kicked out. This was a hard lesson the British had to be taught during the Revolutionary War.

Clean Coal: There is no such thing as clean coal. Get over it. It is the leading source of Greenhouse Gasses. It should have been phased out decades ago.

End torture: Yet we still engage in extraordinary rendition. This is only used to expedite torture in other countries.

Bankers financed the majority of his election campaign. Why should anyone be suprised that his administration is geared towards propping up the most unproductive part of our damaged economy.

Investors needed a place to invest the vast sums of money that they were making off of the backs of working people here and abroad through Globalization. They invented a Ponzi scheme to enrich themselves and eventually bankrupt our capitalist banking system.

Why didn't they invest in clean technologies back then?

Now we are told that we must prop up banks with our money (debt) so that they (banks) can loan us back that money so we can invest in our futures. Hmmm.

Let me get this straight. We will borrow money from foreign banks. Then we will issue treasury notes (money) to the banks. Then the banks will loan this money back to us? So now we will pay interest on the treasury bills to foreign banks. Then we will pay interest to the banks for loaning us "our" money.

Are you disappointed yet? Give it time. You will be.

I know that I already am.

Vince,
Concerned Citizen.

Chris, and Friend Karl M,
I would think nationalize banks would be a last resort.
The FDIC Already regulates banks. Obviously, The FDIC needs to have more power to prevent careless lending.
Breathing life into zombie banks is going to take comprehensive regulation.
I would suggest that any bail out money provided would be in the form of savings acounts and shares so that money provided by the government would be retrievable.
Providing an efficient means of financial exchange is banks only reason to exist.

"Never invest your money in anything that eats or needs repainting."
Billy Rose
Providing

Dear Mr. Moyers,

A letter to the President,

Dear Mr. President,

With all due respect, rather than foolishly bailing out anything and everything, much like at the end of the Titanic movie, I think the time has come to simply tell the band to keep playing.

=
MJA

The world is not a place where everything is fair. Yes Nationalization is the quickest way to stablize our country but isn't this a good thing. The country is in trouble with debt and it needs help.

Quasi nationalization, i.e., Fed control of bank lending, is the only way to force the markets back on track.

Banks need to be audited, with all "toxic assets" taken out and guaranteed by the Fed long term - massive new regulation, oversight and transparency through public exchanges - a permanent moratorium on sales of new derivatives, with trading only in existng paper - banning of naked credit default swaps -- these are some of the policies that can get us out of the ditch.

But, "nationalization" is a mistake. It is an utterly corrupt means to enrich only those who would short bank stocks and decimate the progress that Bernanke is trying to engineer through the infusion of money into the market.

Remember, trillions in short sales have been put in play through credit default swaps - and naked credit default swaps - gambling that the economy will fail. This will become a self-fulfilling prophecy unless it is stopped through forced long-term holding in these assets.

If banks have to ask We the people for our tax dollars for their bad investments. We the people need to nationalize -restructure get rid of the people who have run the banks brought into this mess /black hole. They have No place in the continuation of the running of the banks. Toxic assets were a vast international scam. If the banks do not need We the tax payers bail out funds it means they have not been involved. We own C.i.t We own A.i.g we soon will own Bank of America. Or just let them all fail and We the people start our own banks. Banks are for lending and money is for spending. Along with health insurance. Its Sicko

I think it would be wise to compare this current federal funding via loans of private business (banks, auto) to the past 50 year of the government funding/subsidizing of agriculture which has effected the value of the dollar (one of primary factors of inflation), what it has done to the world market (made it impossible for countries to provide food for themselves when competing with subsidized US crops - our make believe money is better than the real thing). And then there's NAFTA's effect of stripping the agricultural lifestyle from S. America, increasing our immigration and destroying their market. If this is what happens when the government mingles with private business for food, what is going to happen when they mingle with Wall street and the auto industry on the same level?

They can't have it both ways. Either the government needs to go 100% and provide Everything for the American people out of taxes (government farms, grocery stores, businesses) or get their dirty hands out of business, whether it be agri-bus or Wall Steet or GM, and focus on regulation, not direct involvement. If a business fails, it fails. If people choose to work for a company, they take on the responsibility that they are dependent upon the success of that business. If a business is so big that our government won't let it fail because of loss of jobs will be too great, then they should regulate earlier on to prevent the business from becoming so powerful that it can be let to fail like the mom & pop store down the road when there is not a market demand for their services.

"I believe that banking institutions are more dangerous to our liberties than standing armies." Thomas Jefferson and me

There are a lot of interesting posts here I haven't read all the way through yet [good one 3/2 Chris Dorf; remedial ed is sort of the only way...as I heard Michael Basen say more or less], but I had the idea tonight to check out a book I once owned on some matters...and ended up deciding to put up a link just in case the material is of interest to anyone.

"Meanwhile the Keynesian 'purists,' including Davidson and Minsky, have pinpointed similar conceptual weaknesses in the mainstream Keynesians, such as Paul Samuelson, Walter Heller, and Leon Keyserling which have caused them to misunderstand inflation and therefore downplay its effects in an effort to widen distribution via growth. Davidson, Minsky, and other 'purists' point out that Keynes developed a basically disequilibrium view of the economy and although his policy recommendations have been adopted in most industrial economies in what has been termed the Keynesian-neoclassical synthesis, that in reality no synthesis occurred on the conceptual level. Instead of a true integration Keynes' policies were simply overlaid on the basic equilibrium model of the free marketplace developed by Adam Smith, and later rendered more elegant, but alas, less accessible to scrutiny by Leon Walrus in France some hundred years later." Hazel Henderson in "Creating Alternative Futures" pages 116-117
http://books.google.com/books?id=GtlPdPl9O_4C&pg=PA117&lpg=PA412&dq=inflation+henderson++%22labor+intensive%22+automation+OR+mechanized+OR+cybernated&lr=&as_brr=0&as_pt=ALLTYPES&output=html

The above material sort of leads into Henderson citing Minsky saying we won't end up facing the alternatives of inflation vs recession but actually inflation vs debt deflation. And from there she goes into a brief mention of full employment in the context of a "low investment economy" and "labor-intensive" production (developed further on in the book). There are a few points here I need to get squared away myself.

Index has links.

“Who would be nationalized first citibank or bofa?
I do not think it matters any more who is first or who is on second!
It is Ramped corruption, confiscation of funds and eviction due to unemployment,
low wages and many with no savings at all. SIPC that suppose to protect
accounts up to $500,000, [such as is the case with LBHinc. bank and brokerage
firm or WAMU] per person has not paid anything yet to creditors.
The SIPC does not maintain very much capital let alone to compensate creditors
of $650 billion dollars. The Banks and corporation are well protected under the
“Federal Bankruptcy Act!”
In PA of the federal “$418 million money, the.... the $42 million will be earmark for
the state related universities... .” We are reminded of an opportunity that “We have
ONE CHANCE to use these funds to put Pennsylvanians to work!”
If we miss this “ONE CHANCE,” it must be a chance between life and death!

Grady LH Mar 3 11:48pm Hope you keep the knots out, but with the gutless wonders thrashing around at the top of govt., you may want to tune out the news & drop your buds at MS.

cnbc mar 3 2:37pm Right on.

D Eddy mar 1 12:47pm Wonder how many "sound banks" are in the US? Don't ask the media as it may be good news, which they have blinders on to protect them.

T Amman feb 27 7:32pm Some suggest The New Testament says it is better to do something & lose vs being luke warm as Congress...wait...guess you are right 'cause not being as bad as Congress is not necessarily as reason for trust.

Billy Bob, Florida where the DNP & Obama did not trust he could 'win' the nomination if Fla. & Mich. voted out of turn

If the truth be known black hole debt gravity is greater at B of A. They have a derivative fund at heart just like AIG. I think Obama's team will liquidate B of A to frighten Citi into an audit disclosure. That is a bad move if you think the old economy can be saved, because those two alone could push US borrowing over the threshold: No market for T-bills. That's the way talk is going at Morgan Stanley where I'm a minor player.

I live in Jersey and I hope the cascade failure doesn't completely mess up the food supply because I'm on a special diet to survive since last June. If my guts get knotted up again I'll miss the end of the big show: Global Corporate Capitalism's swan song. I'm stocking up on cans and juice.

who would be nationalized first citibank or bofa?

Putting more of the knowledge in great libraries on the internet certainly is a better idea than having Grandpa's constipation prescriptions electronically monitored by someone 2000 miles away from Grandpa and his Doctor.

USA was not in trouble when it operated as a civilization with local, state, and federal government functioning to protect the individual from force and fraud. When it presumed to act as a CORPORATE empire with a mercenary army at the disposal of international moneyed elite, look what happened. Empires are self-fulfilling "end times" prophecies. The ideology of certain factions in the USA do not have a historic connection to the building and maintaining of any civilizations that ever existed. They do, however, draw their ideas from doomed empires. When 1 in 25 people are sociopaths, guess who has presumed to OWN all the "money" in the world? So to answer the question, no, civilization is not lost.

Rush Lumbah has come out and said it " America is a Capitalistic country" Now will everybody in America stop using the word "Democracy". In other words there is no God because Money is the only God in a Capitalistic country.

Can one be on both ends of biopolar, simultaneously?

The financial medias are, and it is most sickening.

They are also the culprits!

CNBC 3/3/09

#Pros Say: Coming Next — A Strong Rebound
# Portfolio Manager: We're Entering A Depression
# Stock Picker: There's a 'Very Brisk' Rally Coming
# Health Care Stocks: Big Shift in Buy Strategy
# Jim Rogers: I'm Buying Farmland
# Charts Predict: S&P Could Lose 20%
# Investor Warning: Don't Forget Inflation Risk

Mr Johnson,

When you answered Bill's question inquiring what you would do first with the banks if you were in charge, and you replied that you would fire the executives, or at least get all of their letters of resignation, I applauded. Literally. Mind you, I was watching alone, at home. But what a relief to have someone with your expertise and ethics say that those who created the global financial crisis (because of their personal and institutional greed)should pay the price was right on the money (so to speak).

I've been thinking about accountability and the evaporation of the business judgment rule as applied to publicly traded companies in recent years. I had personal experience (as an in-house paralegal and then lawyer) with the business judgment rule in the late 1980's and early 1990's, when it was alive and well. In 1993 I accepted a trademark lawyer job with a privately held company, and the health of the business judgment rule was no longer on my radar screen.

Self-dealing and usurpation of company information and opportunities for personal gain became the norm, unfortunately for all of us. I agree with you, Mr Johnson, that vigorous regulation of banks, rating companies, and investment firms are required to address this fundamental crisis of confidence. There are smart, ethical, public-service-minded industry experts, I am sure, who can identify and quantify the toxic assets. These "good" experts are at least as smart as the self-dealing, unethical experts who created AND sold the toxic assets.

Thank you for saying we should do this sooner rather than later. You are a hero for speaking truth to power in this crisis. I wish you every success - and hope that President Obama and Secretary Geithner take the actions you recommended.

Margaret Serrano

Anna:
So do you think civilization is already lost? Do you assert that the oligarchical elite has triumphed and is floating upon a wealth and power cloud of extortion as in Jonathan Swift's "Voyage to Laputa" (Gulliver's Travels"- Part III.)? I know I hold title to no wealth in any form. Do you?
The best selfish individual strategy would be to proclaim that the Overlords have won justly, and to devote efforts to defending their "legal" entitlements. They sent you a trash bag full of "opportunity",Anna,now how will you respond?

Also, I don't think the "records" matter anymore.(Saving the libraries might be a worthy task.)
We're gonna set new records, voluntarily or involuntarily. I wonder what day the Internet will go dark.

Dear Klark Mouvinon, I stand by the theory that machinery, technology, modern communications, and money lenders are no longer manageable by any kind of government or leadership because progress has been manipulated behind the scenes since the 1970s. It's a freak, petry dish hybrid of a civilization that was created by so much "genetic" manipulation. Add to it the vicious psychological methods used to dumb down the masses and there really is no "team" of people anywhere in the world that can round up and reorganize all the opportunistic "survival of the unfitest" interests and put progress back on the right path. Let's acknowledge the "people" problem correctly - it's not just the lawyers who filled out the paperwork. I have a black garbage bag filled with junk mail trying to sell me a subprime scheme. It was predatory. When you look at the waves of people who came to USA on the heels of the EU refugees, you find a repitition of the same story. The greedy predators show up to take. Why haven't 2 billion people stretched out to inhabit their own continent's land mass? Location location location? Taming Siberia is too hard? Poppies the only cash crop allowed? Only a real lack of species intelligence could place so much money on the wrong horse. Oil and coal are not sustainable resources. "Money" as a symbol of life maintenance activities could be made of anything - even carbon emissions, huh? Until the entire library of the 30 major cities in the world have been copied onto an electronic file and available on the internet for research we can safely assume that no one has all the facts at their fingertips that were in place before the manipulation began. It's all pick and choose data to sell yet another dumb idea.

Random items:

1)Capital Eye Blog
http://www.opensecrets.org/

2)Ran across a message board last night where they've been talking about Iran/Contra from 7/06 all the way up to January of this year (talking about BCCI in 2006). Can you find it? Yeah, looked it up after seeing "The International."

When those conservatives say the U.S. is always giving away too much money to other countries...if they only knew.

I once asked on another blog, how many trees it would take to accomodate the stimulus bill.Or if the money would come from recycled paper. This generation has vastly overrated "money". Money is a trading untinsil used in exchange of something else. Why is its value bein overrated? Acient Africans used the cowery shell as money. Paper is no different then this natural shell. Now I can buy a whole string of cowery shell for one dollar. I even wear them in my hair. I think we should stop overrating money and wear it or use it for scrap paper.

Anna, and friend David E. :
Oil need never "run out" but become so expensive to drill and pump that it ceases to be practicable as a major fuel, but exists only as an exotic lubricant, dye, medication and synthetic for plastic tools and rubber.(no longer for bottled water)

I was in a vintage record store Wednesday and the owner was singing praises to the superiority of vinyl to CDs. We got to talking about whether LPs are an extravagant luxury and wondered how many are still pressed. It's kind of a "keep your powder dry" situation.

Imagine the mega-energy required to move into 3 mile deep water and drill 5 miles into the sea bed with a whip apparatus, then inject steam or CO2 to force out thick sulfurous goo, that then must be pumped or hauled to a refinery, where it is mixed with starters and other crude and cooked into all sorts of petroleum products, then distributed. Like corn ethanol, at some point the energy input exceeds the energy embodied in the completed gasoline and fuel oil. We may already be burning excess coal to drill, pump and refine crude.

Climatologists put us well past the tipping point for positive CO2 and methane feedback from thawing tundra, warming ocean gas sinks and fire storms. We're gonna flood. The only issue is how deep.
The western US will be a tinder box and then a desert with refugees fleeing within 6 years. Schwarzenegger has already declared a drought disaster in California after 3 years of lowered rainfall and snowmass (along with growing usage). The way things are going gamblers in Las Vegas will be drinking recycled urine before long, oh for some of those still-suits from "Dune." But Obama is still talking up the fiction of clean coal and preparing to sell carbon offsets. Nitwit!

Nationalization becomes a settled minor issue (Do It Now, Stupid!) when one considers that inflation is not due to paying higher wages to labor but because of the increasing friction of production in the system, due to both real and engineered scarcity. (Capitalism feeds upon manipulated scarcity.) Notice how fresh food prices are creeping up, but not as fast as independent farmer overhead. That is why our food quality and safety are down under the same lax enforcement. We do need more inspection, but also more conservation of soil and arable land. We will need every quart of topsoil we can muster to produce our own food when Monsanto and Archer Daniels Midland go under. The building of condos and shopping centers should have already been halted.

Again, I say, Bashful Barry Obama and most of his crew are attorneys, and do not understand these problems first hand. Remember what Harry Markopoulis said on 60 Minutes this past Sunday, that the SEC had no financial expertise but were expedient at filling out legal forms. Legalities won't protect you or feed you, or conserve precious resources. Enforcement is not accomplished by filling in the blanks. Wealthy manipulators complain about regulation (Madoff) even as they violate laws and imperil our existence with impunity because of class collusion. To survive we must displace them. Obama has foolishly asked us to "push" him, and we should!
By what means can people in general mobilize and accomplish this survival mission. Forget the play money: It's too damn late for that. We can recalibrate later.

Please have Robert Johnson back very soon. Mr. Johnson understands the global economy very well and sees the interconnectedness of this global economic meltdown.

Bankruptcy and nationalization would appear to bring about economic recovery sooner rather than later. However, Americans have been kept in the dark about the depths of this economic crisis and how much money needs to be spent bailing out the various banks, AIG, auto industry, etc.

We can't continue these bailouts since the national debt that continues to grow is a major concern to the American taxpayer now and in the future. Additionally, we can not continue to ask other countries to finance our national debt. What happens if these other countries financing our national debt start refusing us bailouts?

With Eastern Europe teetering on economic collapse and the rest of Europe struggling, how will the USA and the rest of the world pull out of this economic mess? How long will it take?

No discussion in Washington as to what kind of public policies and regulations will be put in place so that our economy will grow and be safeguarded in the future. And no discussion about investigations and indictments on those responsible for this economic mess.

What about all those executive pay bonuses being returned to the American taxpayers? Why aren't our elected officials demanding this, especially for further bailouts, etc.?

Recently, Nancy Pelosi and other members of Congress took private jets to Italy at taxpayers expense yet scolded bank executives for taking private jets. Hypocrisy and political business in Washington continues. Why do voters continue to vote for these idiots? It is now time for clean elections - taxpayer funded campaign/elections. Congress needs to pass legislation to make this possible once and for all. These banking lobbyists and CEO's should be publicly known and shamed in the newspapers and media.

Thank you for having Robert Johnson on your program.

Nationalization - Yes!

The very businesses that have been "too big to fail" need to be broken up so if they do fail the economy does not suffer.

The longer this goes on, the more convincing is the theory that they just aren't very good at doing math. We the People realize that they failed math - a big red "F" for flunked. They are just arguing now for an "A" which shows a lot about their moral and ethical character. Yes, we could give them an "A" for designing a numbers scheme that prevented, for 30 years, the natural evolutionary processes that built the original great civilization that they take from, but that's not the point of anything resembling an "economy" that keeps money flowing in all directions, not just into the "take" stream. The "F" stands as the final grade. Get over it already. Maybe we can get them all together in a vacation spot somewhere on a "private" island and then erect a big barbed wire fence around the place and keep them there until they learn how to ADD and subtract?

I think that Moyers should do a program about "Why are the people not told the truth about what has happened".

I have not seen one program in the United States that explains the question that Moyers asked of Mr. Robert Johnson:

BILL MOYERS: So we had a system that enabled them to take huge sums of cash out of the short run, and pass the long run losses onto the public. That's essentially what it comes down to.

ROBERT JOHNSON: That's right.

This comment explains the crime against humanity that was done - and it is not covered. Summers, Rubins, Paulson, Giether - all of them made hundreds of millions each....

As we are all so paralyzed of what has happened, and scared of what may be still coming, a bit understanding of those in charge is good. This is a valuable article on the Treasury Secretary from the Bloomberg News. Click the name link below:

This Robert Johnson appears to be a brilant man who actually makes sense. Put him on the economic team ASAP. Kudo's on a great conversation that was so blatantly nonpartisan. How refreshing.

What do you think? Should the Obama administration nationalize America’s failing banks? Why or why not?

Most definitely. What I want to know is, when and how will the taxpayers get their fair shake in all of this? If the government nationalizes or becomes the dominant owner of any major bank, as soon as that bank becomes solvent again shouldn't the taxpayer get some financial gain out of it? After all, it was our taxes which bailed out these moribund corrupt banks in the first place! Fire the top brass of any of these banks accepting taxpayer money and give taxpayers a direct stake in ownership of these banks. Let the taxpayer benefit financially from these new government acquisitions. If Obama doesn't fight on behalf of the taxpayer, no one in Congress will.

The essay CIVIL DISOBEDIENCE is often cited for declaring government is not needed. When I read the whole essay and not just the first page, it was noted that government was needed to make and execute the laws in order for a nation's citizens to know what to expect. Without the laws and the enforcement by government, man in his natural tendency would use corruption and greed to get what the individual wanted even when it would destroy the community. That day has come. Maybe we should reread our essays and literature and take the obvious lessons from them, and not what others tell us it means.

What do you think?
“The words and pictures have been the very instruments ... for collective violence
regardless of how innocently they were intended.” Yes, the facts, actions and harm have been
real! The immunity stated in the laws provides the protection and assurance for the elite
to do as they please... “like a loose cannon,” irrelevant how bad, wrong and harmful it is to others!
Should the Obama administration nationalize America’s failing banks?
Why or why not?
Nationalization is masking tape, as was the tape for emergency preparedness.
It does not mater if you call it “Capitalism restructuring” or “Socialism
nationalization” or “party restructuring, such as Mr. Gorbacev tried” or fascism They all failed.
The “masking tap” during “9-11” did not work to protect!
RE: “I would ask for letters of resignation from the top executives of all the major banks.”
and “after the blade falls, you can walk over it!”
After the World War II socialist countries in Europe, nationalize just about everything
and executed many; So to speak they “walk over the after the blade fall” to impose
themselves as “new leaders,” elites and dictators. After the nationalization they change
to free market, to day, they are in the same position as before!
To “Give people confidence that there was fair play,” the “dysfunctional
government -representative” and the JUSTICE DEPARTMENT should have enforced
the laws of the land! Instead of they turn blind eye! The Criminal code violations are
define by the elements: “KNOWLEDGE, INTENT, RECKLESNESS and NEGLIGENT!”
Had the LAWS been enforce “Those who bet wrong should not have to pay!“
To “Give people confidence that there was fair play,” should “AMEND the CONSTITUTION,”
to EMPOWER THE PEOPLE to EXPRESS “THEIR WILL on ALL ISSUES!”
The people should have a RIGHT and PREVELAGE to DIRECTLY DICTATE
and decide their destiny and not by the POWER of PRINTING PRESS PARTY of MONEY!

If the current system is so flawed, what are our other alternatives? Check out the Venus project below...

Mr Eddy, I thought we were talking about what to do about the people who are living off of EVERYONE else's means - you know, unearned wealth, which is what the banking system succeeded in becoming. Until the same people who did not follow any rules tell us what rules they choose to follow in the future, we are merely playing into their hands with the waiting it out game. They want more foreclosures to happen.

Not sure what the latest calculation is for when "oil" will run out, but eventually everyone is going to have to live within the means of their own country's ability to FEED its people since transporting "stuff" hither and yon won't be economical. As a CEO recently noted, even if "labor" got no money at all, the problems would still remain.

To Nationalize or not to nationalize that is the question...
While it may be necessary to nationalize banks to change their modus operandi; it should only be done long enough to install regulators to insure that banks have safe and sound banking practices. My bank is managed by an ex-FIDC auditor and is a very sound community bank.
In the meantime...
People need to change their modus vivendi to live within their means.

RE: Robert Johnson and wiping out shareholders of Citi -- "Those who bet wrong should pay."

Those of us who "bet wrong" would be the millions of Americans who invested in Citi in 401Ks, IRAs, mutual funds and pensions. Most of us did not think we were betting, we thought we were investing in our future and our retirement. Now it turns out we were really in some kind of giant casino?

The average shareholder was not responsible for driving Citi into the ditch, yet Mr. Johnson's solution protects the management that wrecked the place and wipes out the investment of millions of innocent shareholders. Then he wants to turn around and take billions more of tax money (including that of wiped out Citi shareholders) in the form of tax dollars and revitalize the bank – for new investors.

If you are going to wipe out the shareholders, then do the honest thing and liquidate the bank. Johnson's solution essentially takes the existing bank, built up into a huge business over a number of years with the use of shareholder investment, and steals it from existing shareholders. Current shareholders are made to pay for the toxic assets while new investors benefit from the viable assets that are left. And yet the management that invested in the toxic assets is protected.

There may have been some justification for wiping out shareholders in the past when they had some control over management, but today such control is a fiction with regard to most shareholders. Shareholder’s in such large corporations are mere investors and should be treated more equitably.

Ben Bernanke's attempt to restructure the bank by diluting current shareholders instead of wiping them out is a far more equitable solution than Johnson’s. At least the millions of Americans with an ownership interest in these banks would have some chance of recovering some of their investment in the future.

True, David Eddy. The race to the bottom wage-wise abroad is synonomous with "shock doctrine." And shock doctrine enhances the militancy of our enemies. Keep everything going as usual and the whole machine will continue delivering money/resources to whomever Washington rationalizes as rightful recipients (currently) in the feedback loop.

[OFF TOPIC: As I sit here at 6:57 AM many theories run themselves by in my head re the difficulties with my posting here. I know that others attempt to post one message two or three times as well. Do they have slow connections like me? Did they attempt to post when the server with the message boards was jammed with communiques? My paramount theory is that when you have 1)a slow connection; 2)the server's busy; 3)your browser needs updating; and 4)you have a history of cross linking other boards plus controversial links in your posts...it's then you have problems. Though, those aren't the factors it seems relevant for everyone encountering problems. Such a shame. That's what slowly happened before with the "Now" boards when Moyers was over there. Of course, there is also the spectre of piggybackers (something totally outside the province of forums under the auspices of PBS).]

Anyway, as I tried to post last night, Robert Johnson's recommendations sound sound. You could call it re-structuring or nationalizing as far as I'm concerned. I haven't had the chance to compare his proposals one for one with Galbraith's recent ones quite yet. As I remember, Galbraith stresses green technology which at least is in line with us using less non-renewables. And that's important as I found myself agreeing with the poster "kayaker" below Nick Baumann's most recent article at CommonDreams dot org (I'll omit the official link hoping to get by the snafus I encountered last night...Freddie Kilowatt also provided a minimalist but seemingly true-take over there).

Also, I'll go over Friday's Journal stuff again by reading the transcript (so I'll have been over Johnson's interpretation twice), but I am tending to accept the truly conservative recoveryspeak of kayaker. Even in the best scenario (the one William Greider laid out years ago) in terms of non-renewable resources the pie will be getting smaller even as the slices get more evenly divided. This matter points beyond financial tweaking and over to more or less planning (or accepting natural patterns of) future production/consumption distribution (across the planet).

Voodoo economics was the result of the effort to compensate for the short fall of cash flow to support a growing economy. The short fall of cash flow was caused by off shore investment, military action, greedy money managers, the rise in prices and the loss of wages.
The only way to correct this problem is to increase wages, reduce prices, eliminate greedy money managers, not fund unnecessary military action, prevent off shore funding and provide sufficient funds to support a quality nation.
Further gouging of middle class America will only exccelerate national decline.

With what's been lavished on these moribund beasts already, we should own them lock, stock and barrel. TARP funds are barely a drop in the bucket, compared to what the Fed has done. It's turned itself into the fabled "bad bank" by ridiculously taking in toxic waste at face value. We're close to $10 trillion down to date and still counting. When does the madness stop?

Quote – “They used paper money creation by banks to pry wealth away from the feudal system originally, but have abused it ever since.”

I love it when we get “historic”. If you look at the timing of the biggie revolution in the wealthiest country at the opening of the 20th century, you’ll figure out how timing is everything when it comes to “change”. When “they” caught wind that the Czar and his ministers were about to GIVE OWNERSHIP of land to the peasants, they had to act first. Enter Trotsky and the power of the press.

Quote – “The last 8 years, our society reeked of feudalism (and fascism)--where the king and his cabinet squeezed the poor population (without consequence to king and court) so that they could live high on the hog.” End quote

Bottom line is that so far we have, historically, NOT had an “elite” anywhere on the planet that amassed wealth through anything other than slave labor in one form or another. USA keeps coming up with the idea that it is possible to have a better civilization when the civilization is NOT built by slave labor. Must be something to do with our collective pursuit of science that leads us to reality such as energy can neither be created nor destroyed. But we keep messing up the “science” when some shaman claims that labor, which plays the role of fundamental energy in the physics of human civilization, can’t be allowed to “own” the just fruits of its own energy.

Quote – “The idea that the banks are too big to fail is a psychology that the banks are using to stay in the taxpayers wallet. In essence, it's a stickup without a gun.” End quote

Yeah, I’m kind of done, also, with the illusion that psychobabble is somehow “science”. Too much exposure to reality over the years, I guess.

Quote – “With that logic all pyromaniacs should be given flamethrowers and be put in charge of the fire department and we should set up all homicidal psychotics with gun stores and make them sheriff.” End quote

Psssst, that IS what has happened in many parts of this big country of ours. Have to watch out for the free will of flamethrowers and psychotics when they decide to get in on legislative action using the cover of the bible.
Quote – “If money is the deciding factor, then we should rejoice that we’ve lived long enough to see the highest quality people in our nation’s history running our government, our banks, our larger corporations, our colleges and other similar institutions….If money is the deciding factor, the real heroes in today’s world are the likes of Bernie Madoff and the directors of Enron.” End quote

They certainly got incensed when it was observed that they are now, obviously, celebrating on the taxpayer’s dime! You have to love the free press and the fair and balanced news that allows all squeaky wheels to get oiled.
Quote – “I'm even more pessimistic than Robert Johnson was last week because I am sure the bad debt of just the 5 major zombie banks is well beyond the ability of the taxpayers to bail them out.” End quote

You’re right, we can’t. They blew the whole wad on a preemptive war to secure an UNSUSTAINABLE energy source in a hate thy neighbor region. Guess they had REALLY bad intelligence guiding their big picture decisions.
Quote - “I have been waiting decades to hear honest to goodness descriptions of the reality of the 'magic money' world of finance, where the financial sector has taken hold of reality, substituted an illusion, and then proceeded to pillage the wealth of the poor working class of the world for it's stores of assets - in a vampire like fashion. (Interesting how we get 'zombie banks' from a 'vampire economy'!)….The fact that so little 'truth' gets spoken to the masses is an object lesson that the thieves are running the hen house - and the masses have no way of distinguishing reality from fiction….These times we have lived in the past 25 years have been so surreal, to those whom have been 'onto' the grand 'scheme' of the financial sector, it has seemed to be a nightmare. The plunderers have won - the masses will never get back what was stolen - or even realize it.” End quote.
Wait a minute, if we all know how made-up it all was, what did they really take that we can’t get back? Don’t watch too many scary movies anymore! We the People will write the real ending to the story, not Hollywood. Have no fear!
I would also like to hear the answers to the questions asked by Steven Lesh because I, too, am a fan of a lot of the human civilization that the ancient Greek, Roman, and Middle East has been working at for centuries. There are some great aspects to Oriental, African, and Native American ideals about civilization which can be integrated into a global civilization, but the way to get to that ideal global civilization truly is a long way off. All anyone can say for certain is that psychotic tyrants and industrial slaves won’t be involved in building the brave new world where the smartest, not the nastiest, “cream” of humanity rises to the top.

America’s genius is how well we do together as a diverse people in understanding reality. We get the whole life-maintenance plus sustainability plus profitability that equals progress equation better than anyone else on the planet. Currently, we have money lenders that do not support what we do best.

It’s also perfectly clear that we don’t do well, at all, when it comes to religion, philosophy, and politics. And neither, it seems, does any other civilization do any better. Everyone gets entirely too out there where there is no oxygen when the self-proclaimed intellectuals start rationalizing their personal, no-boundaries, selfish lifestyle and call that political mind game religion or philosophy.

I’m pretty sure religion, philosophy and politics will have a greater purpose than mental masturbation one day. But not today when we have to chop water and carry wood to undo what’s been done in the name of money.

In the meantime, let’s all be grateful that we realize that they dried up credit completely this time instead of just quietly taking down the solar panels that were on the roof of the White House when Reagan took control of the “people’s house”. There is no doubt now how far they’ll go.

The REAL issue that we have to address that is really uncomfortable to address is that the flamethrowers and homicidal psychotics aren’t giving up on legislative fun and games. They finally feel so smart when using “psychology” in DC and on the mass media channels to control justice, health care, who gets to live on the streets and, of course, the military services. It’s like the revenge of the nerds except it’s the revenge of the mediocre minds with a big dose of nasty.

I believe that President Obama does know who and what he wants to work for as Commander in Chief. The rest of us will be figuring it out soon enough. Let’s hope for the best. I voted Libertarian last cycle because the motto on their website was simple enough for a gal like me to relate to – “The only role of government is to protect the individual against force and fraud”. You’re on your own when the government is up to everything else but that. And under a government dedicated to force and fraud, and even farce, against the individual, there is nothing remotely resembling the security that a great, just and fair civilization can provide.

However, if we must be intellectually cheerful about all challenges to be allowed to sneak in a real opinion past the psycho-analysts, I can do that. Here we go,, how’s this? I guess that even anarchy has a plus side. If we all go back to swinging through the trees, we’ll be back to a totally green lifestyle.

Tired of seeing your tax dollars wasted on Wall Street bonuses, corporate jets, scams and office remodeling as well as rewarding bankrupt banks that refuse to lend to Americans?
These mega banks have used our hard earned tax dollars to reward their stockholders, continue their lavish lifestyles and buy up smaller banks.
Now, wealthy Chinese are coming to America. What for? To snap up foreclosure bargains and our “to big to fail” American Banks are giving them credit to buy American homes!!!
Meanwhile, these big zombie (insolvent) banks keep receiving more and more taxpayer bailouts while refusing to help Americans keep their homes, charging usury credit card rates, giving themselves exorbitant bonuses (now called “awards”) while escaping accountability for the disaster they caused.

What is wrong with our government? ENOUGH!
A bank to big to fail is a bank to big to exist!
It’s time to get back to basics – responsible, accountable and fair lending.

Our local banks, such as Citizens Savings, are shining stars in this continuing banking fiasco. They actually care whether or not you can pay the loan! Citizens continues to offer viable mortgages and loans – without taxpayer handouts.

It’s time to let Citicorp, BOA and the other big banks sink or swim without taxpayer bailouts and applaud the sound policies of our small banks.
The staff at Citizens should be placed in charge of examining, regulating and determining the fate of zombie banks.

Fred D’Amato
Mount Pocono, PA

Correction to my post: the Yale economist was Irving Fisher. His book "100% Money" was written to describe the 'Chicago Plan', the product of a group of the nation's leading economists formed to analyze the causes of the Great Depression and formulate policies to insure such an economic catastrophe could not happen again. See http://www.monetary.org/chicagoplan.html for an updated version.

Well the only trouble with capitalism is capitalist. They are so bloody greedy.

Never has so much been paid by so many to so few for so calamitously ruining US all.

Americans are so pathetic to let this happen over, over.

Well over a century ago, the prescient Abraham Lincoln wrote, in a letter to Col. William F. Elkins (on November 21, 1864), "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."
We see now where we have permitted these "few hands" into which so much money and power have aggregated have led us.
I will say no more on the subject, except to point out that the Declaration of Independence is not being read nearly enough these days - particularly the second paragraph!
We have rights, PEOPLE; rights we need to re-claim from these oligarchs.

I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.

The sooner you let WS, the Banks, Insurance Companies, and the Corporations fail the sooner we will get out of this mess.

All the Bailout money is going to pay off the WS and Bank side betters... it is all another scam to pay the rich who bet against the US and cover it up. And let the taxpayer hand in the wind.

It is not complicated it is thievery without consequence.

Wake up!

The banks and the market cannot recover because, simply put, you would not trust a surgeon who has horribly botched your prior surgery to perform yet another one on you. The affect the bankers have on us all is no less severe. The depth and breadth of malfeasance perpetrated by the executives and boards of directors of these financial institutions is catastrophic and the economic impact devastating. Nationalization and a wholesale sweep and removal of the incompetent and corrupt are the only way the institutions themselves might be saved. That these individuals fight to maintain their positions and the status quo makes even more blatant their avarice and hunger for the power they have abused, taking bonuses in real money for years while justifying them with company accounts padded with fraudulent and illusory profits. They would rather drag the entire nation into socialism than be swept out themselves in a manner befitting the capitalism they hypocritically profess to defend. While they remain at the helm of the ships they have run aground, no one will place any faith or trust in them, their institutions, or the market. N-O O-N-E. In the name of monstrously unjustifiable self-enrichment, they have wreaked upon this nation and the world a calamity only terrorists could dream of.

Restructuring the banks is a MUST! And the mass resignation of the top tier is essential!
Let's go one step further and ask for them to reveal their subsidiaries in the Caymns.
I resent it when I hear Wall Streeters groan about how nothing but doom and gloom is coming out of Washington and if only there was some cheerful talk the markets would respond.
Well, guess what? Reality is coming out of Washington and Wall Street dug itself into a hole. Get over yourselves and quit the arrogance.

I have been waiting decades to hear honest to goodness descriptions of the reality of the 'magic money' world of finance, where the financial sector has taken hold of reality, substituted an illusion, and then proceeded to pillage the wealth of the poor working class of the world for it's stores of assets - in a vampire like fashion. (Interesting how we get 'zombie banks' from a 'vampire economy'!)

The fact that so little 'truth' gets spoken to the masses is an object lesson that the thieves are running the hen house - and the masses have no way of distinguishing reality from fiction.

These times we have lived in the past 25 years have been so surreal, to those whom have been 'onto' the grand 'scheme' of the finacial sector, it has seemed to be a nightmare.

The plunderers have won - the masses will never get back what was stolen - or even realize it.

chris dorf

The assortment of expert opinion the public is permitted to hear discussing attempts to save the world’s financial and monetary systems may disagree on the specifics of cause and cure. But they seem to be pretty uniform in the opinion those systems should be saved, Mr. Johnson included. The sometimes explicitly stated rationale is that it is necessary to save the existing financial system in order to save the larger market-based economic system and prevent wide-spread suffering and political unrest a collapse of the real economy would produce. However, it is way past time to ask some fundamental questions about ALL of our financial, economic and political institutions.

Money is a pillar of modern industrial civilization. When a nation’s monetary system has been mismanaged or abused – and there can be no doubt this has been the case with the US in the years since the end of WWII, that civilization faces a real threat of collapse. The US Federal Reserve System, which its critics point out is neither ‘federal’ nor has reserves, was created in response to a series of (possibly artificial) increasingly violent economic depressions in the late 1800s and early 1900s. Its stated purpose was to prevent those depressions by providing banks with ‘reserves’, i.e. money, that could be dispensed to member bank depositors if those depositors started losing confidence in their ability to access their savings when needed.

Twenty-six years after the creation of the Federal Reserve, the US experienced the worst economic depression in its history – this at a time when the US monetary system was still on the ‘gold standard’, i.e. dollars were convertible into gold. Apologists for both the Federal Reserve and the gold standard would no doubt argue that ‘mistakes were made. Give us another chance and this time we’ll do better.’ However, advocates of the monetary reform movement - which has been around since the creation of modern central banking based upon PRIVATELY-CREATED money using fractional-reserve banking techniques – argue that system is fatally flawed both ethically and technically.

The ethical flaw is easy to see once you understand that most of our ‘money’ is really credit created by banks by simply entering it into their ledgers. Banks do not use depositors’ money except as the base for a pyramid of loans (money) they create using depositors’ money as the reserves for depositors who might from time to time demand currency as opposed to bank statements to prove their deposits are still accessible. The bottom line is you enter a 30 year agreement to pay a bank interest and principal for the house you buy, for example, in exchange for … the bank making a few key strokes in its computer bank ledgers.

The technical flaw has to do with a money supply based upon privately-held debt. When the ability to service that debt collapses, so does the money supply. Since the debt is leveraged, when debtors’ ability to service their debt fails, the money supply must decrease by the leveraged multiple of the amount of their debt. Legally about 12 times more debt than covering deposits can be created; in practice, using financial engineering the limit to this leveraging was effectively removed.

In all likelihood, the fundamental changes we require go beyond fixes to our financial and monetary systems. Instead of taking advantage of the insights and opportunities provided by science and technology, we continue to let our economic life be determined by the need to make little pieces of paper bear interest. In the depths of the last Great Depression the Nobel prize winning chemist Frederick Soddy and the Yale economist Frederick Soddy - and monetary system reformers for the last 300 years - provided us with insight into our problems and a vision of a fix. See Fisher’s “100% Money” and Soddy’s “The Role of Money” and “Wealth, Virtual Wealth and Debt”.

We didn’t listen then. If we don’t soon, human civilization will be out of time. There is no question Bill Moyers is the best thing on television, with his former co-host and current ‘Now’ host David Brancaccio lapping closely at his heals. But I have a bone to pick with both. As far as I am aware neither have come even close to interviewing people like Dr. Michael Hudson, Rep. Dennis Kucinich’s economic policy advisor. Just a quick glance at Dr. Hudson’s resume is enough to reveal a professional competence to provide perspectives on the current economic crisis we can not afford to ignore.

Come on guys! How about stepping up to the plate?

The assortment of expert opinion the public is permitted to hear discussing attempts to save the world’s financial and monetary systems may disagree on the specifics of cause and cure. But they seem to be pretty uniform in the opinion those systems should be saved, Mr. Johnson included. The sometimes explicitly stated rationale is that it is necessary to save the existing financial system in order to save the larger market-based economic system and prevent wide-spread suffering and political unrest a collapse of the real economy would produce. However, it is way past time to ask some fundamental questions about ALL of our financial, economic and political institutions.

Money is a pillar of modern industrial civilization. When a nation’s monetary system has been mismanaged or abused – and there can be no doubt this has been the case with the US in the years since the end of WWII, that civilization faces a real threat of collapse. The US Federal Reserve System, which its critics point out is neither ‘federal’ nor has reserves, was created in response to a series of (possibly artificial) increasingly violent economic depressions in the late 1800s and early 1900s. Its stated purpose was to prevent those depressions by providing banks with ‘reserves’, i.e. money, that could be dispensed to member bank depositors if those depositors started losing confidence in their ability to access their savings when needed.

Twenty-six years after the creation of the Federal Reserve, the US experienced the worst economic depression in its history – this at a time when the US monetary system was still on the ‘gold standard’, i.e. dollars were convertible into gold. Apologists for both the Federal Reserve and the gold standard would no doubt argue that ‘mistakes were made. Give us another chance and this time we’ll do better.’ However, advocates of the monetary reform movement - which has been around since the creation of modern central banking based upon PRIVATELY-CREATED money using fractional-reserve banking techniques – argue that system is fatally flawed both ethically and technically.

The ethical flaw is easy to see once you understand that most of our ‘money’ is really credit created by banks by simply entering it into their ledgers. Banks do not use depositors’ money except as the base for a pyramid of loans (money) they create using depositors’ money as the reserves for depositors who might from time to time demand currency as opposed to bank statements to prove their deposits are still accessible. The bottom line is you enter a 30 year agreement to pay a bank interest and principal for the house you buy, for example, in exchange for … the bank making a few key strokes in its computer bank ledgers.

The technical flaw has to do with a money supply based upon privately-held debt. When the ability to service that debt collapses, so does the money supply. Since the debt is leveraged, when debtors’ ability to service their debt fails, the money supply must decrease by the leveraged multiple of the amount of their debt. Legally about 12 times more debt than covering deposits can be created; in practice, using financial engineering the limit to this leveraging was effectively removed.

In all likelihood, the fundamental changes we require go beyond fixes to our financial and monetary systems. Instead of taking advantage of the insights and opportunities provided by science and technology, we continue to let our economic life be determined by the need to make little pieces of paper bear interest. In the depths of the last Great Depression the Nobel prize winning chemist Frederick Soddy and the Yale economist Frederick Soddy - and monetary system reformers for the last 300 years - provided us with insight into our problems and a vision of a fix. See Fisher’s “100% Money” and Soddy’s “The Role of Money” and “Wealth, Virtual Wealth and Debt”.

We didn’t listen then. If we don’t soon, human civilization will be out of time. There is no question Bill Moyers is the best thing on television, with his former co-host and current ‘Now’ host David Brancaccio lapping closely at his heals. But I have a bone to pick with both. As far as I am aware neither have come even close to interviewing people like Dr. Michael Hudson, Rep. Dennis Kucinich’s economic policy advisor. Just a quick glance at Dr. Hudson’s resume is enough to reveal a professional competence to provide perspectives on the current economic crisis we can not afford to ignore.

Come on guys! How about stepping up to the plate?

R. Johnson articulates much of what I & many other blog commenters seem to be saying..Fire the Bastards!

Good managements says that the CEOs & Boards of directors had their chance & failed NOW let's get some managers that can get the job done! (no change=no confidence)

Why has "good management" not been implamented? Because the OLD Status Quo is at the fore front for The Corp. Big Guys & Congress.
They will not abandon the great rewards to be had at Mainstreet's risk.

Mr. Johnson got half way there.

Congress has failed!

Both Houses must limit a chairman's term to 2 yrs;

Limit committee membership to 4 consective yrs;

Require 4 yrs. before a member could return to a committe;

Allow seniority to accru to no more than 2 yrs. (an experienced member may be desired in chairman's position.)

This would allow newly elected members to be heard before being beaten into Washington form.

Man may not be changeable, but the system can be refined.

Change the way Congress does (or doesn't) do the Mainstreet's business!

I say we (ordinary Americans) become angry villagers with torches and "burn-out" the people who got us into and allowed this mess. The last 8 years, our society reeked of feudalism (and fascism)--where the king and his cabinet squeezed the poor population (without consequence to king and court) so that they could live high on the hog.

My husband was told on Friday that he would recieve no pay raise this year, even though the company he works for reported record profits last year.

I don't think the Republican party helps itself with ordinary Americans when it seeks to obstruct the efforts of the Obama administration (I hear money experts say the bill does not spend enough). The Republicans' tired solution is more tax breaks for business and the wealthy--we had 8 years of that (and 12 previous with Reagan and Bush 41) and it didn't work. This is where we are today. Are they blind! Trickle-down DOES NOT WORK Republicans!

The wealthy and business must pay their FAIR SHARE. When this group is taxed, it SPENDS money to hire and to build and upkeep infrastructure in order to receive a tax break.

Businesses that seek government money MUST BE restructured and rid of the bad seeds that caused it to be in the situation in the first place. There is plenty of talent in this country to step up and run these companies with an honest and greedless hand.

McWhorter is amazing. I wish that he could have addressed the purpose of language. Yes, it's to communicate truth,and to manipulate and brainwash. How does brainwashing, etc govern our government? Who benefits?

Glad I stumbled upon this show last night, this guest, Mr. Johnson, gave the best explanation I have heard, of what has happened and what must be done. He communicated very clearly by extracting the PRIORITIES from the CHATTER without over simplifying... And to think, it came from a politician... I haven't even checked his party affiliation yet; and I don't care, he definitely gets my vote.

Robert Johnson seemed about as despondent as Marvin the Android in "Hitchhiker's Guide to the Galaxy." And then Bill Moyers asked something like, "Weren't you much more pessimistic when we spoke last week? What happened?" Johnson only sort of answered Moyers saying something about increased confidence in Obama's team.

As I've emphasized many times, confidence is not the problem. I'm even more pessimistic than Robert Johnson was last week because I am sure the bad debt of just the 5 major zombie banks is well beyond the ability of the taxpayers to bail them out. We are dealing in "bubble money" only because some insist upon preserving a "zombie economy" at a time when real reform would be justified. Robert Johnson's plan to liquidate major institutions, fire all the directors and zero-out the stock holders is more rational than the Obama-Geithner plan, but we should go farther. Let's liquidate global corporate capitalism and start again with better rules. Why should the innocent public continue a game they never made or consented to for the purpose of saving face for those who live in privilege. I don't want my taxes, or future citizen's taxes, to be absorbed into a black hole of "bubble money" fictions. If taxes were still necessary under a new government and economy I'd want them used to build up the things people own in common, or to feed and house and medicate victims of circumstance,or to prepare for upcoming change. Bill Moyers show is looking more and more like an absurdist play, where happy twits alternate with champions of depression. We see truth-tellers in the wings, but "Ed Sullivan" insists the audience is not ready for them. I confess that I'm even more down than Robert Johnson appears. Bill even read my quote about Afghanistan during the pledge break, and that reminded me to feel worse.
Let's just admit that global corporate capitalism has self-destructed and that we can't resuscitate it by Easter. Then we can get down to work.

“We had significant difficulties attracting quality people to Continental even without today’s limits on compensation.” William M. Isaac, quoted in this blog.

If . . . if . . . (high-)quality people are only attracted by money, are deemed to be quality based on the amount of money they have / control, and are evaluated in terms of how much more money they can acquire, then what’s the big fuss about our current economic situation?

If money is the deciding factor, then we should rejoice that we’ve lived long enough to see the highest quality people in our nation’s history running our government, our banks, our larger corporations, our colleges and other similar institutions.

If money is the deciding factor, the real heroes in today’s world are the likes of Bernie Madoff and the directors of Enron.

If it’s just money then eat, drink and be merry for tomorrow we die.

Better get yours (and mine) while there’s still time, because time is running out.

Life is a vapor, gone in the twinkling of an eye.

It is, after all, appointed for a man once to die and then the judgment.

Better get yours before it’s too…………………………

No one has stated the cost of nationalizing the US banks. Can the US Govt afford the costs? What would be the effect on the US and global financial markets if the trillions dollars of toxic assets held by the US banks are written down? Could Congress and the American people accept adding trillions more to the national debt?

I think we need to include answers to these questions to the discussion of whether bank nationalization.

Bill, Bill, Bill, how do u do it? You're the Jimmy Carter of b'cast journalism, God bless you, buddy! Is there even an equivalent to Moyers on Fox SNewz? Who could it be? Steve Doocy, or maybe, oh i know, that 60 Minutes giant's son, that Wallace boy, Chris, that his name, sure, maybe him? Not really. Sad, very sad. Bill, please take good care of yourself, because when you're gone, unlike most any CEO on God's green earth, who will we find to replace you?

Hmm, come to think of it, before i get to the subject matter, i have a story idea for you, Bill. How about taking a comparative look at people like yourself in today's media world. There are others, not at your level, i don't think, but some fairly thoughtful young fellers out there who seem to have a passion in their beliefs, rather than merely a penchant for the trends. Oh well, just a thought...

Robert Johnson here...wait a minute, isn't that the famed name Robert "Crossroad Blues" Johnson...? And speaking of the "crossroads", what have we here in last night's interview but a direct reference from both Bill and Bob:

"ROBERT JOHNSON: But the question is, as this man stands at the crossroads, as a very young president, will he exert the will to implement what, say, his heart tells him when he gets it?

BILL MOYERS: What do you mean, crossroads?

ROBERT JOHNSON: The crossroads right now is that we could have a society become despondent. People who think that proper reforms, and proper business restructuring, are just romantic notions."

Wow, i have to shake off the eeriness of that last observation. Well, no matter, i will say that for an economist, Mr. Johnson has more soul than any i've seen since Galbraith. And that leads me to the topic for tonight, nationalization...NATIONALIZATION!!!! WHOA, NELLY! We can't be havin' any a that, now can we? I remember not three months ago, to suggest it was what, communist, or no, it's fascist, isn't it? Yeah, Nazi means National Socialism. Heh heh, better look out America, here it comes, haha!

Well, i'm only kidding, i hope so, at least. For to be honest, i've called for nationlizing many big biz and corporate entities for the past 8 years. And what did Mr. Johnson say tonight? Well, basically, he said what i've said for several years now, "Tell these outsourcing, offshoring CEO's and billionaires to pick it up, and move it out. America will just rebuild without their help." I've said for years, "Beijing seems to be where they want to do their biz and hire their work force, so LET them move there and establish permanent residency." The USA will do just fine without them. After all, the USA was doing quite well before they came along. It's not like the things that they do are so hard, or so rare, and uncommon that many other enterprising individuals with a MBA or a finance degree from any state university couldn't handle it. In light of this, I should note what Johnson said last night:

"I would ask for letters of resignation from the top executives of all the major banks. I would not do a case by case restructuring. I would take the largest group all in and say, "I want everybody's letter for resignation."

Okay, Bob is a lot nicer about it than i'd be. And no, i'm not a nut, though i've been called one for expressing many of the ideas that seem to have become common household notions since about September, last year. It's rather interesting that people discuss the term "nationalization" without so much batting an eye today. It would have NEVER become necessary had it not been for
greed, avarice, neglect, legalized malfeasance and out and out irresponsible criminal behavior in officials elected by the actual people who today are whining and waving their fists. We must remember, there is some truth to the free market concepts, because profit-seeking, like water, seeks only one end; for water, it's its own level, and for profit-seeking, it is nothing less than MORE. After all, there isn't a single business admin grad who won't tell you that they were taught in school, that the only reason to go into business is to make more money.

Fair enough. But there were laws. Just like controlling an individual's urge to murder someone, laws need to be in place to control one's urge to make profit for themselves at any cost whatsoever. Laws, a civil society's consent to operate within boundaries that are acceptable to most and harmful to the least. When, however, for 30 years, wages have been stagnant, and corporate profits and incomes of the richest five percent of Americans have soared beyond anybody's wildest expectations, and not a single legal barrier, administrative code, federal regulation or agency stood in their way, something has gone awry. Pointing it out to those richest amongst us is blatantly poopah'ed, and when pointed out to those working class people who one day hope to be in that five percent income bracket themselves, it is denied. Voila, we have today's economic crossroads, just like Robert Johnson said.

"I went to the crossroads, fell down on my knees/I went to the crossroads, fell down on my knees/I asked the Lord above, have mercy, save poor Bob if you please/Uumb, standing at the crossroads I tried to flag a ride/Standing at the crossroads I tried to flag a ride/Ain't nobody seem to know me, everybody pass me by."

The mortgage industry has been riping off home buyers for many years. My first house cost me twelve thousand dollars and by the time it would have been payed off, I would have payed forty five thousand dollars. That is thirty five and a half times the original price.
Any more than ten percent interest should be considered usury.
At ten percent interest the house should have been payed off with thirteen thousand two hundred dollars not fourty five thousand dollars.
All we have to do to solve the mortgage problem is pass a usury law that only allows a flat ten percent interest on the amount Borrowed. The house payments would drop considerably and people could afford to keep their house. The extra buying power would jump start our economy.
What do you think?

Thanks for pointing out:
They have destroy America and they have ruined the world again and again.

Those criminals on Wall Street and their corrupted running dogs in Washington will find the judgment day coming to you all soon.

People know who you are and we will stand behind Obama and/or all leaders.

I think Robert Johnson is right on. Obama should follow his advice....

Dear Bill,

Over the past few years observing governmental activity, I developed a theory that, while not promoted nor probably accepted by Naomi Klein, dovetails with the "Shock Doctrine" theory.

I call it "Intentional Incompetence." Iraq is case study one for me (there are probably more, but I am not old enough nor smart enough to recite others.)

The best encapsulation regarding the administration's real cover in Iraq was Rumsfeld's notorious quote "stuff happens." "Stuff happens" allowed a purposefully incompetent administration to stay in Iraq long enough (not so incompetent after all...just blood thirsty)to complete the world's largest embassy and multiple galactic sized military bases that Obama can now staff with 50,000 military personnel (without too much concern even from his own constituency). Nice hand-off.

Likewise, Greenspan did not just "underwrite" the bank's failures as your guest so artfully describes, Greenspan in fact encouraged it. Just a few years ago, during one of his speeches to congress, Greenspan said the housing market would continue to rise for some time because lenders (the banks)had many creative financing structures that would enable many more to buy homes.

The Fed knew where it was taking us a long time ago, and they knew, despite Greenspan's false mea culpa that he was mistaken in thinking banks would protect their shareholders.

OK, so what is the motivation? First, the CEOs get unbelievably wealthy along with some other insiders. Second, the Fed raised the property revenue tax base for states with property taxes. Third, the Fed created a new large group of indentured slaves (or reliable debt ridden /middle class) that must work their fingers to the bone to pay for their overpriced property. They are not the ones getting bailed out nor foreclosed upon. Fourth, all U.S. middle class become indentured slaves to pay off the Feds socially engineered and promoted bank debt.

No offense, but we the consuming public, and yes, even you Bill, have been FED (pun intended) a socially engineered process. I do not believe for a second Obama understands the role he has been given. However, it is inevitable that a bright, honest and affable president will almost certainly have no choice but to play the hand that was dealt to him.

Obama bailed out banks, indebted our future (he did not want to) and is leaving 50,00 troops in Iraq. He even bought the Afganistan war.

I suppose it is not all bad, these little economic engines, tech bubbles -- mortgage bubbles, wars, recession and depression cycles. They make the 'insiders' more confident in their covert social engineering models (aka giving citizens a "purpose" as Bush once said in a State of the Union Address) while easing the insider's conscious as they simultaneously enrich themselves while extorting the rest of mankind (an unknowing mankind) to a less transparent, less democratic and less autonomous future. Is this the price of being on a planet with 7 billion people, all of us part of the same species that engaged in Nazi Germany and Rawanda?

I'm certain that my voice will not be heard nor my thoughts examined, and frankly, I am not intelligent enough to defend them, but the thin veil between us and Oz will never be pulled open if the Bill Moyers of this world are fooled by the deeds of others engaged in social engineering cloaked under (planned) shock and awe plus intentional incompetence.

You have a dignity and lack of cynicism that prevent you, at a certain point, from seeing through a certain ugly depth of power once corrupted. Despite my frustration, I admire you, Klein, Goodman and so many like you. You are tireless, kind and brilliant.

Mr. Johnson seems to be one of the few people who get it - The management of these banks failed profoundly and should willingly hand in their resignations; without any golden compensation. If you read between the lines, the power the banking system wields is precisely what mutes the concept of reorganizing the banking system from the "very" top.

Maybe sports athletes who take steroids should get paid more than other players?

Maybe Bernard Madoff should be put in charge of CitiGroup?

Get the point?

How can we keep giving money to someone who can't manage the money he already had?

With that logic all pyromaniacs should be given flamethrowers and be put in charge of the fire department and we should set up all homicidal psychotics with gun stores and make them sheriff.

When are we going to step back and value: CHARACTER?

Why don't we take the banks like:
AIG
Bear Stearns
CitiGroup
Countrywide Financial
Fannie Mae
Freddie Mac
Lehman Brothers
Merrill Lynch
Wachovia
Washington Mutual
etc.

And, take the worst portion (20%?, 30%?, 40%?) of what is left and nationalize that into 2009 Federal Assets Bank.

Then with the rest give it the bankers who have actually done a good job. Banks like:
1) United Ban of Alabama
2) First Financial (Indiana)
3) Citizens Holdings Co.
4) Arrow Financial
5) First of Long Island
6) Republic BanCorp
7) First Financial Bankshares
8) Glacier Bancorp
9) Financial Group
10) Bank of Hawaii Corp.

We give the good bankers the good deposits and good loans, and reward them for not buying into this derivative leverage game.

Then, we take a page from China, and send the executives from the first list of banks (the bad ones) to prison and take away ALL (REPEAT ALL!) of their assets (where ever they may be, overseas, Cayman's, Switzerland, etc).

The 2009 Federal Assets Bank is run by a committee of the good bankers for a period of 10 years, in 2019, and if anything is left it is sold in an IPO and the proceeds go to pay for the bailout.

What is the difference between what Bernard Madoff did and what Angelo Mozilo, Joe Cassano, Dick Fuld, Frank Raines, Marion and Herb Sandler, Stan O'Neal, Lew Ranieri, Fred Goodwin, Sandy Weill, Jimmy Cayne, Kerry Killinger, etc., did?

I think what the latter group did may have actually been worse. I would have never invested with a Bernie Madoff, but I did make WaMu my largest investment.

When I first bought WaMu in 1992, Killinger was a genius. Expanding the thrift from a northwest regional into the nations largest. But, he obviously got lazy, sloppy, and greedy (as did I for not pulling my money out).

I trusted this man to be honest and above reproach with my money. Now, it is wiped out.

So, it all goes back to CHARACTER.

Who is going to watch the watchers?

Let us say that President Obama does pass tighter regulations to watch the new CitiGroup. But then one of the top executives at CitiGroup takes the person who is in charge of watching the bank to the Turks and Caicos Islands and Abu Dhabi.

And, a year later the watchdog resigns his post, with the government, and takes the new vice-president of Caribbean Operations position at CitiGroup.

The big problem I am having is 1) I can't trust the top 30 executives of the top 30 banks (900), and 2) I can't trust the people in government either.

Everybody seems to be corruptible these days.

Where is John Adams and Harry S. Truman? Where are the guys with honor?

I am afraid that we have not sunk low enough yet to bring out the integrity and virtue that we need going forward.

I would trust Warren Buffett with the job, but he already has a better one.

Until we as a society, nation, and as individuals, start placing a much higher premium on honor and character the dog will continue to chase it's tail.

Robert Johnson made an excellent point. The best response that our government could make would be to break up the failing banks, fire those currently in charge of them and sell the good assets to smaller banks to take over. I would go a step further and suggest that Anti-Trust laws be enacted to prevent banks from growing beyond a manageable size. If competition is vital to a strong capitalist society, then attempts at financial monopoly should be prevented, and greed and profiteering be called what they are rather than be considered to be in the public interest.

Mr. Johnson's recommendation to devalue the stocks of failed banks (by which I mean any bank in need of a bailout or bankruptcy) to zero is brilliant. Stockholders would scream, but they need to be reminded that the stock market IS professional gambling -- nothing more and nothing less. They gamble, and if it's a good bet they get a profit. If they make a bad bet on a company that makes bad choices, they lose what they already paid to get the stocks. The government should not start a habit of repaying gamblers for the losses that they knew were possible when they put down their bets.

Perhaps laws against selling loans, individually or in packages, short of selling the entire bank to new owners would be a good idea as well. As I understand it, that practice is at the heart of the current economic disaster.

When corporations become big enough, rich enough, and powerful enough to BUY our ONCE free press and our state and federal politicians, and strip our government, and judicial system down to powerless bare bones, then what we have is worse than a nationalized industrial, military complex.

Nationalized means that The PEOPLE still have a say in their own destiny.

Robert Johnson makes the most sense of any I have heard on television. Thank you Bill for having this very wise man on your program, I only wish we heard more meaningful discussions like what Mr. Johnson talked about, unfortunately we never see on the cable tv stations. Robert Johnson should be in the Obama administration.
Bravo!

Bill,

Thank you for your wise choice of Robert Johnson with regards to addressing our economic meltdown. He was candid and honest. It is this type of honesty that will restore the economy, starting with trust. Johnson awoke listeners to the global shift that has taken place, namely, that economic chaos, not terrorism, is the biggest threat to our planet's security. Johnson's perspective was a watershed of light on an urgent issue, an issue that mainstream media has not covered in depth. PBS - public media, did well. Why should we not trust that we the people - the public with the essential restructures needed now in this time, with an administration that is finally representing the public, not continue in this trust? I believe we can and we will.

I am not an economist but I have been listening very closely to what is being said about resolving this huge issue and it seems to come down to a very simple formula. The FDIC has the authority and the tools to go into a bank and audit their assets. They go in and determine the good assets from the bad and to what extent each bank is solvent. If the bank is in trouble the FDIC takes it over, garruantees the deposits, seperates the good debt from the bad and gets rid of it. If the bank can be salvaged it would be reopened with the good assets and new management or sold off to another bank that is solvent and only then would these banks get capitol injections to be able to function and lend again.

This is supposed to cost much less in time and future bailout money and would restore trust in "bank to bank" lending that is used to fund businesses, etc.

If the banks are given money without doing this process then they are likely to loose the money to bad assets and continued bad practices. I understand that the bankers would loose in this scenario because their stock would devalue but isn't it their own fault.

If this were done to every bank in trouble than it seems to me that the bleeding would stop and recovery would begin. I can't tell if OBama's administration is moving in this direction or doing the same things that Paulson was doing. I hope not.

P.S. One thing that they could do for folks right now is make the banks reduce interest rates to a reasonable rate so folks that are in debt can pay it off.

Because the US government has invested so much of the taxpayer money into the banks, we have, in a sense, nationalized them, although every attempt is made to avoid using the word. Frankly, one of these big banks or all need to be broken up. The idea that the banks are too big fail is a psychology that the banks are using to stay in the taxpayers wallet. In essence, it's a stickup without gun. The only bank the can not fail is the one that threads the 50 United States together, the Treasury Department. Without government intervention, do the shareholders in these banks truly believe that they have anything left of value?

I obviously don't disagree with Johnson, except I feel a need to correct a couple apparent misunderstandings. First, free-market fundamentalism had nothing at all to do with this financial mess except that Greenspan considered himself one, I guess, but he was also a typical central-banker, but it was not the even the lack of regulation there by them that caused the problem. Rather it was the unlimited bail-outs, "socializing" of debts, and inflation inherent in creating credit inadvance of return many times the amount of deposits that did. Johnson said that, but he also said the other, and he will have to make up his mind. While I can't disagree either with closing down insolvent banks, firing the executives and zeroing out the shareholders, which I agree is certainly fair, the debts they created remain, and they, more than the banks are the problem which we haven't dealt with. Those are also a matter of restructuring, and the other day I wrote in the Charlie Rose blog that I think our crisis is now less an economic, than a legal one.

This largely reflects a change in my position that the debts should be paid, because I think increasingly that the natural mechanism is to deflate generally and that the creditors are no more deserving than the debtors. Creditors are attempting, too, to hang on to their money and, rather than write down what is owed them, force government to bail them out again, and it is not enough for Summers, Bernanke and Geithner to say we hate doing this, but we have to, to prevent a worsening situation. This is Keynes' liquidity trap, and the reason he advocated govt spending. It is merely selfishness. And I don't buy it anymore than Friedman did. Ppl fear deflation as a loss of capital, but how can it be? Capital is not diminished unless you are defining it as lost employment in the sense of a going concern. Rather the money supply is revalued changing prices. Unemployment results only where the activity was unsustainable and creating more money and credit is not going to fundamentally change that. Keynesians are mercantilists at heart. They used paper money creation by banks to pry wealth away from the feudal system originally, but have abused it ever since. Where we used to think we had to starve, beat and tax ppl to work, modern theory is that we must bribe them. (Marx's idea that ppl could learn to work on their own was viewed as heresy.) Capital can only really be lost by wars and natural catastrophes, or the loss of virtue and that is promoted by the policies Keynes advocated. There is a tendency to blame this activity on free mkt economics, but clearly the problem has been not that but the abuse of credit creation. Economists used to argue about whether this boom-and-bust or so-called business cycle was caused by over-production or underconsumption, and the answer is either both, or over-investment causing both, itself caused by too much credit. Keynesians like Krugman think (not on Rose last week, where he mostly spent the time looking quizzical as if rehearsing for Bernanke's job) that monetary expansion should be used precisely in order to create inflationary expectations and spur spending, but clearly the spending has to be of some utility and sustainability, or it will encourage the opposite. Like feeding animals you can encourage population growth that cannot in the end be sustained and the system will crumble like the Ponzi scheme it is. We are not in fact addicted to oil, but to easy credit. At some point we can expect deflation to bring prices down low enough for ppl to buy and be re-employed. This is deterred rather than aided by creating more inflation, such as lowering nominal interest rates. The damage is done not by deflation, but by the initial inflation and like an addict, it will unfortunately probably be necessary to go cold turkey unless creditors and the law can get together on means to avoid it. Creditors can only expect to further impoverish themselves if they don't cooperate. I can remember reading several stories in the Wash Post over the past decade criticizing Japan for failing to write off the bad debts from their very similar real estate bubble, arguing that the money was only owed to themselves. But it was not money that was owed; it was merely high prices. Does anyone owe high prices to themselves? If not, to whom should they owe them? If or when the price is right then someone will buy the debts. The same with the houses.

The banks may have led the charge but society as a whole was also complicit in this meltdown. As easy and convenient as it may be to blame a government or corporations for our troubles this is in many ways a collective failure.

The program Mr. Johnson outlines makes sense to me. Week after week, you offer us the wisedom of people I don't hear on other news programs. Sometimes I have read works by your guests. Mr. McWhorter is one such writer. Sometimes on your program, I hear others for the first time. Mr. Johnson is such a quest.

By the way, you and I read the same obituaries and are blessed or having done so.

Thank you again for your work--your ministry.

Robert Johnson makes more sense than anything I have heard. Throw the bumbs out at the banks and in Congress who enjoyed the fruits of the activities that created this problem. Leaving the present management in charge does not change the problem. The stockholders will be hurt, but when you invest in anything you are gambling and every gambler loses at one time or another. Wise investors do not put all their eggs in one basket.

If banks have to ask We the people for our tax dollars for their bad investments. We the people need to nationalize -restructure get rid of the people who have run the banks brought into this mess /black hole. They have No place in the continuation of the running of the banks. Toxic assets were a vast international scam. If the banks do not need We the tax payers bail out funds it means they have not been involved. We own C.i.t We own A.i.g we soon will own Bank of America. Or just let them all fail and We the people start our own banks. Banks are for lending and money is for spending. Along with health insurance. Its Sicko
and the GOP got us here. Now let the Democrats clean house for real its long over due. Call it what you want its broke so lets fix it. Americans no how to build and fix things. So lets roll up the sleaves and get to work Brawn and brains and along the way thank our african grand mothers we are all from the same place with the same blood.

If banks have to ask We the people for our tax dollars for their bad investments. We the people need to nationalize -restructure get rid of the people who have run the banks brought into this mess /black hole. They have No place in the continuation of the running of the banks. Toxic assets were a vast international scam. If the banks do not need We the tax payers bail out funds it means they have not been involved. We own C.i.t We own A.i.g we soon will own Bank of America. Or just let them all fail and We the people start our own banks. Banks are for lending and money is for spending. Along with health insurance. Its Sicko
and the GOP got us here. Now let the Democrats clean house for real its long over due. Call it what you want its broke so lets fix it. Americans no how to build and fix things. So lets roll up the sleaves and get to work Brawn and brains and along the way thank our african grand mothers we are all from the same place with the same blood.

In order to save businesses and thus jobs we ought to create state banks in each of the 50 states, capitalize them and compete around "the bankers strike". The Big Banks are toxic especially Citi and BofA. With 60 Trillion in credit default swaps, according to Paul Volker, that is a huge volume of toxicity. Beyond bailing, beyond governing. The the Big ones through in the towell and be taken over.

"Moral Hazard" only takes place in a vacuum of usury laws. Why no talk of usury?

Finally, with 60 Trillion in Credit Default swaps, which some have equated to taking 15 fire insurance policies out on your neighbors house, why not consider all these bogus instruments what they are: bogus.

Nationalization is the quickest way to restore public confidence. Investors who would be wiped out have taken most of their losses anyway and the banks have lost the ability to adequately capitalize by leveraging the meager investment they have. Beyond this is the question of whether we think banks could reform themselves so that they function effectively in their broader public role of lending to promote the economic interest of the country. Whatever my doubts are about the government, my doubts about the bankers who got us in this mess are greater. Give me one reason to trust them.

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