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Nationalized Banks Are 'Only Answer,' Economist Stiglitz Says
In an interview with Deutsche Welle, Nobel-winning economist Joseph Stiglitz talks about nationalizing banks, the outlook for developing countries, and the need for an international financial regulator.
Joseph Stiglitz was awarded the Nobel Prize in economics in 2001. Under US President Bill Clinton he served as chairman of the Council of Economic Advisers from 1995- 1997. He was chief economist of the World Bank from 1997-2000 and was a lead author of the 1995 Report of the Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize. He is currently a professor at Columbia University in New York.
DW-WORLD: Many experts fear that while things are bad now, we haven't seen the worst of the crisis yet. Do you share the belief that we are facing a long decline that could rival the great depression?
Joseph Stiglitz: We live in a very different world than during the Great Depression. Then, we had a manufacturing economy. Now we have a service-sector economy. Many people in the in the United States are already working part time because they can't get full-time jobs. People are talking more about the 'comprehensive' measures of unemployment, and these show unemployment at very high levels, around 15 percent. So it clearly is a serious downturn.
Another big difference between now and the Great Depression is then we didn't have a safety net. Now we have unemployment insurance.
Economists Nouriel Roubini and Nassim Taleb, who predicted the global economic downturn, have called for a nationalization of banks in order to stop the financial meltdown. Do you agree?
The fact of the matter is, the banks are in very bad shape. The U.S. government has poured in hundreds of billions of dollars to very little effect. It is very clear that the banks have failed. American citizens have become majority owners in a very large number of the major banks. But they have no control. Any system where there is a separation of ownership and control is a recipe for disaster.
Nationalization is the only answer. These banks are effectively bankrupt.
The Institute of International Finance estimates that the private flow of capital to developing countries will shrink by about two-thirds. Are we facing a situation where we could see a total collapse of many developing countries?
I think many governments of emerging nations actually have a much better central banking system than the United States. They realized the risks of excessive leverage, excessive dependance on real estate lending and so they took much more prudent actions. Many developing countries also built up large reserves and are in a better position to meet this crisis than they were a decade ago.
But some will face very difficult times, potentially defaults. Some of these countries are suffering from having paid too much attention to what has gone on in the United States.
Should steps be taken to help these developing countries?
Very definitely. I think it is absolutely imperative not just for the interest of these countries, not just from a humanitarian perspective, but from the perspective of global stability. It is not possible to have a strong global economy when there are large pockets of economic turmoil.
The World Bank has called for advanced industrial countries as they are bailing out their own industries and provide subsidies, to set aside some amounts for the developing countries, who can't compete on this uneven playing field.
US President Obama blasted banks for paying out billions in bonuses to executives while still on brink of collapse. Do you agree with him that their behavior is "shameful" and "irresponsible"?
Yes, it is shameful and irresponsible. But it is not a surprise ... for years the executives of American firms have defended their outrageous compensation, saying it's important as an incentive scheme. How in the world can you give bonuses of billions of dollars when your firm has had record losses of billions of dollars? Unless you're rewarding people for failure you shouldn't be getting bonuses, you should be getting penalties.
In her speech at the World Economic Forum, German Chancellor Merkel warned the U.S. of protectionism and criticized subsidies for American auto companies. Is she correct? Do you see a danger that the U.S. will resort to protectionist measures?
Yes, very clearly. We have always been aware that protectionism takes two forms: Tariffs and subsidies. Subsidies distort the playing field just like tariffs do. Subsidies are even more unfair and even more distorting, because while developed countries can give subsidies, poor countries can't afford to do so. Rich countries are distorting the level playing field by giving huge subsidies, not necessarily in the intention of protection, but with the consequence of protection.
Merkel recently called for an international financial oversight body, and concensus on the issue is growing. How realistic do you think it is that governments and companies would give up sovereignty to an international entity?
Merkel's idea is a very important one, which I have long supported. You need to have coordination of global economic policy that goes beyond the IMF, which has failed, and the World Bank. You cannot say that we have open borders without global regulation. It is inconceiveable as we go forward that we would allow financial products that are risky, manufactured in countries with inadequate regulation, to come without regulation into the United States and vice versa. International companies that are committed to gobalization should be at the forefront of calling for international regulation.
Michael Knigge interviewed Joseph Stiglitz
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Show AllGlobalization is inevitable; the only questions are those fundamental to any useful political debate, as enumerated by William Greider:
---Who benefits, and who pays?
---Who must be listened to, and who can be safely ignored?
A single central bank, which operates on a non-profit basis to facilitate commerce rather than speculation, and a single universal currency based on something immutable, like an hour of human labor, seem to be the minimum necessities for escaping the artificial boom-and-bust cycle we're now stuck with.
Think big and talk loud, people. We're the only ones who will save us.
---Who benefits, and who pays?
The central bankers who already take their marching orders from the central banks central bank (BIS) in Basel, Switzerland and who precipitaed the current crisis with the Basel accords so they could get an official global central bank that controls the worlds money. Imagine having to go to this world bank for a loan to finance our deficits, they would tell you what the IMF tells the 3rd world countries, you must give up your resources, your social benefits (social security, medicare) and live within your means to get the loan. You might as well wave the UN flag in DC if such a stupid idea came to pass.
The problem is money creation is in the hands of those private international bankers who are loyal to global government and not the US, the government needs to take over money creation, and leave local banking in private hands since local banks are not the problem, it's the system which gives the Fed a monopoly over banking and money creation thats the problem.
---Who must be listened to, and who can be safely ignored?
Anyone having anything to do with the Fed and Central Banking should be ignored. Who is Obama listening to, Volcker and his Treasury Secreatary who was a key player in the Feds decisions in recent years. Ellen Brown has a decent book called Web of Debt, anyone who has not read it is basically uninformed or misinformed because the media and our education system is controlled by those with an interest in private central banking and globalization w/o the democracy and freedoms where we are ruled by Philosopher Kings, the elect, ruling elite, powers that be, or whatever you want to call them.
The grandfather of private central banking once said "Give me control of a nations currency, and I care not who makes their laws".
Too bad the interviewer didn't bother to ask what is meant by "nationalizing the banks." The truth is, we don't even need banks. Banks are the core institution of capitalist exploitation and systematic dispossession of the wealth and productivity of the masses. The classic Marxist criticism named the private ownership of the means of production as the central flaw in capitalism, but in reality it is the private bankers' ownership of the means to profit WITHOUT production that makes the entire system unethical and self-destructive. Private ownership of central banks is the problem. Why?
The essence of the banking elites' power, derived from their ownership "rights", is their protected monopoly as the sole legal arbiters of debt and credit. That is, they are pretend creditors that insinuate themselves into the transaction between the true creditor and the debtor, forcing the use of THEIR paper to write promises to pay and extracting interest from the debtor on the pretense that they are taking a risk. But there is no risk since the "money" loaned is actually created with but an accounting entry. All you have in a so-called central banking system is a privileged handful of people who produce nothing pretending to be creditors, creating interest-bearing fiat currency with every loan. Of course, our money is notes (promises to pay); and the real issuer of the promise is the debtor. In a central banking system then, "bankers" pretend to be creditors, issuing the promises of the debtor to the real creditor (who accepts the promise for whatever property they give up); thus for absorbing the mere costs of publishing the debtor's promise, the "banker" deprives the actual creditor of "interest," all the while asserting that earned wealth is at risk, when in fact the "money" they create in the form of the loan costs virtually nothing.
With this power to issue currency and create debt they have instituted a privatized currency subject to interest - the true engine of the concentration of wealth. Since a currency subject to interest creates inherent, irreversible and ultimately terminal debt, this can be seen as the essence of our monetary system's trend toward self-destruction. Again, the core problem is that we have a privatized monetary system subject to interest.
That a currency subject to interest terminates itself in insoluble debt has been proven mathematically by Mike Montagne, who's solution, Mathematically Perfected Economy™ (MPE)* therefore prohibits interest. The essence of his solution is at once an economic principle and an ethical one. The principle is that of non-intervention; a principle which is found at the heart of Democratic Theory. It is the economic corollary to the conception of civil liberties which seeks to guarantee for each individual all those freedoms which are consistent with the same guarantee for every other individual. In its economic manifestation the principle of non-intervention can be stated as follows: It is every prospective debtor's right to issue their promise to pay, free of extrinsic manipulation, adulteration, or exploitation of that promise, or the natural opportunity to make good on it. If we want economic democracy, this principle absolutely demands constitution-level recognition.
What central bankers have going is not an economy but a deliberate system of dispossession of wealth and productivity by means of their privatized, interest-bearing currency. From this perspective it should be abundantly clear that bankers as usurers and faux creditors have no place in a democratic society. They are neither desirable nor necessary. They should be no more welcome than slave owners, political dictators or murderers. They have no right to insinuate themselves into economic relations as the only legal arbiters of debt and credit. But having done so, they have impaired every other freedom inherent to the Democratic Ideal and continue to prevent a truly free market economy from taking shape.
*www.perfecteconomy.com
Isn't the simple way to say this is that usury is a sin? I may be an atheist but IMO that is one idea the medieval Catholics and Muslims got right.
That is a simple way to say it. But religious dogma doesn't explain anything. That's why the economic and political analyses are important. If you want sustainable economics, there are monetary conditions that must be satisfied. If you want economic democracy, there are principles of fairness that must be institutionalized.
Of course religious dogma doesn't explain everything remember I said I'm an atheist above. My point is though that simple bite sized explanations win, and I for one would like to see justice and equality win. A Huey Long type populism might go a long way in uniting the disgruntled masses against the corrupt centralist center:
http://www.americanrhetoric.com/speeches/hueyplongshare.htm
Mathematical complexity BTW does NOT always guarantee good results I am sure the top level banksters who were bundling bad mortgagees and then "insuring" them with ISVs and other "commercial" paper had all sort of multi variant calculus and advanced statistics in their computer models to back them up and it didn't amount to a hill of beans because their assumptions were wrong. IMO it's time to explore the fundamental assumptions behind western economics like infinite growth, fractional reserve banking, and what is interest BEFORE engaging in long mathematical proofs that I find often hide more than they reveal.
I suspect some combination of the Ron Paulesque critique of the Federal Reserve combined with co-ops, credit unions, and "open source" ideas of production produce the best most just, most sustainible society in the long run that combines just enough competition to keep people on their toes with enough compassion to keep people and planet from falling between the cracks.
But as curmudgeon says: "I could be wrong."
Not all central banks are privately held. The Bank of Canada belongs to the people or at least the Crown, in the same way that public land is Crown land.
on Private Bankers -- this is an excellent comment. indeed they are like PARASITES on society. they have NO use whatsoever and simply insinuated themselves as "necessary".
they are actually the UNPRODUCTIVE members or class who jump on a body and parasitically consume it.
Very well written and all so true. The private central banks create nothing but debt and manipulate the economy by inflating or deflating the "value" of money. The people are nothing but debt slaves to the banking cartels. The only solution is to eliminate the private central banking scam. Instead of taking money from the people in the form of income tax, governments can issue the currency, and spending it on the operations of governance, such as building and maintaining infrastructure, and social services like universal health care and education, puts it into circulation. This is not a new idea, America was founded on this principal, operating for decades with a debt and interest free economy.
Well of course he is correct, and as has been said about everything else which is complicated the devil is in the details.
Clearly the question is, in who's interest is this to be done? The people of this planet or the corporations? If the latter then we are back at square one, ownership without control.
Sophie Scholl-The Final Days
Yes, nationalized banks are the only answer.
If the US were a democracy, that is.
The problem is that nobody seems to have figured out what the question is, and the US is NOT a democracy--it is a plutocracy, which means that the owners of government already own the banks.
There is very little time left, guys.
This is a world revolution like nothing seen before and questions are being asked by everyone now who never thought anything was wrong with the system before.
Debt has caught up with credit and past it by... with the USA and our bragging about the dollar being the world currency, we now see that it means we are the worlds largest debtor with nothing left but trying to pretend we are going to save the planet.
The revolution is on and it is unstoppable... Truth has come home to roost. I dig it therefore I am.
I don't see any revolution except the Bolivarian Revolution--and that is not in the US, but in Venezuela.
There is no revolution in the US. A revolution involves a passion and love of change, as well as a commitment 24/7 to make that happen.
I see a lot of folks in denial, a few posting grumpily or whining on CD, and nobody at all actually standing up to the system.
A revolution is when the people are in the street--hundreds of thousands of them--and they go to the seat of government, as they did in Buenos Aires in 2001--and in La Paz in 2003--and they throw the bums out. Those very bums that are living in luxury in Miami and that the US refuses to extradite.
A revolution happens when your government shits all over you and makes its deals for its cronies' interests when you told it not to do that--and you refuse to take it anymore, and you run the bastards out on a rail.
Right now you are just lying back and taking it--the same old screwing.
When the Rolling Stones play for Hillary Clinton's mother--don't kid yourself: it is just over.
I don't think there's a realistic alternative to nationalizing the central banking system. It's our money, and we're rescuing the big banks to save the economy. I just don't see how democracy can exist in a plutocratic monetary system.
I also posted this comment elsewhere - and seemed appropriate here as well. Apologies in advance.
"We can whine and say 'I told you so', all we want.
We need to follow the example of other societies and protest the 'status quo' solutions which literally enrich the rich. The citizens paid for, sometimes with blood, the environment for corporations and banking to flourish.
We should not stand idly by and let the rich keep enriching themselves at our expense - with our $, sweat, and blood."
But I could be wrong !
Your right.
So tariffs are a bad thing, then? Funny, I'd like to hear you tell that to every other country on the face of the planet. We have nearly eliminated them in our country, and our jobs and manufacturing have disappeared as a result.
China has a 24% tariff on our goods coming into their country, while we have a 2% one on their goods. It's not protectionism, it's just common sense. If you are allowing other countries to benefit while killing off yor own workers, you will lose every time. And we are losing, have lost, and will continue to lose as long as we don't square things up.
Subsidies are a problem? Do you mean like how every other industrialized country in the world has single payer health care, and we make either business or the workers themselves pay for it? Do you mean like how other countries pay for research and development and we don't, giving THEM a huge advantage over our own companies? Or do you mean some other, more direct subsidies that other countries do that we don't, thus giving THEM an advantage that our companies don't have?
The insistence on sticking to a clearly failed ideology is just amazing. And these are supposed to be the brightest and best of our business community? No wonder we have no jobs left. This was a failure the last time it was tried, it was a failure the time before that, and in fact, it's been a failure every time it's been done. The very few at the top make out like the bandits they are, while everyone else slides down the razor blade right to the poor house. Screw this damned ideology based stupidity. It's time that we get back to what we KNOW works. Jobs for peole that they can live on, a manufacturing base in THIS country, and to hell with these ideology based rewards for those who destroyed the previous 40 years of a decent economy.
'Do you mean like how other countries pay for research and development and we don't, giving THEM a huge advantage over our own companies?' You're way off on this one. Taxpayer funded research is used by american businesses all the time. It's a HUGE benefit for many American companies. Subsidies and tariffs are one hell of a mixed bag mess. Personally, I'd like to thank American taxpayers for the farm subsidies you've given me over the years. Of course some foreign farmers who couldn't compete with our subsidies lost out big time. It was unfair, but if I didn't take the money, then I couldn't compete with my neighbors and I would have lost out big time.
Ask GM how much research they have gotten, especialy recently, from the gov't. If they had, maybe GM wouldn't be doing worse in it's own country than Toyota is here. Or maybe they would be building some decent hybrid type cars instead of the Hummer. And look at how much Japan, for instance, puts into research for the auto makers, and then tell me that we come close to matching that. We USED to do such things, but now we are bought and sold by those who live by their own ideology, regardless of it's damage to the country.
As to the foreign farmers who "lost out big time", why should they get better rates than our farmers do for shipping things into his country? They ship things here cheaply and with next to no fee for selling here, and we pay a quarter of every dollar to do the same to their countries.
Tariffs were in place in this country from it's inception, and every other country in the world has them as well. And at far higher rates than ours are at. Unfair tariffs are one thing, but reasonable attempts to keep our jobs in our own country at entirely another. It is also a matter of national survival.
Then there is the giving companies tax breaks for dismantling factories and shipping them to foreign countries. This has been a systematic attack on the American worker, and it's succeeded quite well. Only thing is that it is a completely suicidal effort, as we are seeing now. And the banks were at the top of the list of the suicidal. They were and are eaten up by a short sighted greed for immediate profits fueled by insane bonuses regardless of the damage done. Instead, a sensible approach that leads to long term profitability has been dismantled, and the golden goose is dead.
I'm all for the nationalization of all banks. That is how things were until 1913, and that is what Jefferson was adamant about, as well as Jackson, who broke the first private bank back in the early 1800s. We can't keep living by this profit for the few, expense for the many type of system. It's a sham, based on nothing but a proven failed idsology.
First off, you make a lot of good points, but quite a few inaccuracies cloud your judgement. I have no idea on all the specifics involving auto companies in the US and Japan, but if you choose to study the facts, you'll find plenty of corporate help from Uncle Sam, and I mean huge. When you speak of the shipping cost disparities involving American farmers and foreigners, keep in mind that the increased costs of shipping some American grain is due to subsidies for AMERICAN shipping companies. Speaking of tariffs, many third world nations have been forced to eliminate tariffs in order to receive IMF and World Bank funds. This tends to work out well for international corporations and not so good for a lot of the locals. It's mainly worldwide class war.
I will be the first to say that I don't have all the answers, but I do know for a fact that other countries spend far more of their own money on research that gets turned over to their "private" industries. The Japanese, for instance, have far exceded our technology in things like auto engines, and largely because they spent the money at a government level.
I'm not saying that there isn't any research from our gov't, but it's not nearly as much towards private industry as it used to be, nor as much as other countries do.
I wasn't talking about shipping costs, I was talking about the tariffs that we USED to charge for other countries to do business here. Yes, many third world countries have had to drop them all together, but that is due to our medling in their internal affairs via things like the IMF, one of the worst things to have happened to humans in the history of mankind. It is leading to the worsening of conditions all over the globe for the enrichment of those who already have too much.
Which brings us to the point on which we most defintely agree "It's mainly worldwide class war". No question about it. And it's that kind of thing that causes revolutions and warfare all over the globe, which the ultra rich will also make money off of, provided they survive...
I'd say wage differentials, historically low transportation costs, and the ability to exit union influence are the biggest reasons for the relocation of manufacturing.
Before the current wave of globalization, it happened in the U.S. from North to South. Tariffs were not the reason.
I support local production and downscaling for ecological reasons. Tariffs/subsidies could play a role, but it would not be nearly enough.
The first step should be to nationalize the Fed which is the monetary system... to own our own money.
Then the Nationalizing of anything else if necessary for the people is possible like nationalizing our government now in the hands of big business trying to save their system of preaching Debt is the answer to Debt... and it is amazing that this International ponzi scheme has taken this long to be really exposed.
These are the same economists that were telling us something different just a short time ago. So I'd ask what do they know?
There is no "global" economy. No global economic system nor will there be. Nationalism is in full bloom.
'Nationalism is in full bloom," and that's nearly always a bad thing.
As the corporate globalist ponzi scheme crashes and burns it would be nice to go straight from globalism to more local community oriented finance and production. Revoking corporate person hood, and bringing back state charters for corporations would be a big step in the right direction IMO. In the long run what we need is not nationalized banks, but local credit unions.
'Revoking corporate person hood'-yes, wouldn't that be a wonderful thing. It could happen, probably not soon though.
I read Stiglitz' articles regularly.
He said the US could not afford to spend several trillions invading Irak.
He said the US could not afford to run its economy into the ground.
And, unfortunately, there IS a global economy--and the US is reponsible for dragging many other countries down with it--even though they were countries who resisted the globalization and free trade agreements.
I say that is not fair.
Only We the People can save ourselves:
www.ni4d.us/
It might have been a good idea to say how the National Initiative for Democracy applies to this article, for those not familiar with the idea. The connection is that policy, economic and otherwise, is a matter of legislation. And as Mike Gravel puts it, the real power of government lies in creating and amending laws. The people do not have this power, nor do we have the power to function as a check or balance against the other branches of government, all of which at this point are thoroughly controlled by the Money Power.
Aside from being a revolutionary political idea, the Initiative is beautiful in its cultural consequences. By virtue of institutionalizing the Deliberative Procedures, the Initiative would have the effect of perpetually raising the level of debate and citizen participation. This is the opposite of the dumbing-down, sound-bites and sensationalism of "news" and political campaigns that we've suffered to date.
Thanks.
Well, you folks can do what you want. God willing, this time next year I fully intend to have a place out in the country with a large stock of food, a nearby water source, and lots of high caliber ordinance.
We are SCREWED, pure and simple.
>>Well, you folks can do what you want. God willing, this time next year I fully intend to have a place out in the country with a large stock of food, a nearby water source, and lots of high caliber ordinance.
Right "Faithful" Catholic.....you are so, darn right.
As a righteous follower, I too know that the 11th commandment orders us to stockpile food and deny it to the poor. And steal as much water as possible.
And the 12th commandment, "Thou shalt stockpile as much high caliber ordinance as thee can get thee hands on"....well, thank you Jeezus, them thar's some mighty swift swords yer talkin' about.
"God willing" you and your "faithful" Catholic shitheads will soon find that high caliber ordinance is no protection from your own low-minded religious-fueled ignorance and stupidity.
i definitely think yours is the only course.
How did we get to the point where people who work for a living are taxed to death, and speculators, gamblers, and crooks pay NO TAXES on any of their gains, while their losses are reimbursed out of the national debt and charged to those working people who actually produce something of value?
Wouldn't taxing all transactions cut down on the kind of speculative instruments that caused all this toxic debt in the first place? I've been whining about it for many years - and nobody seems to 'get it' - are people really that stupid? And don't we 'ordinary' people have to pay taxes on any gambling that WE do? So why not the crooks and criminals in the 'investment' and 'banking' business?
When I was young, I bought all my properties on 'contract for deed' - from the REAL OWNERS, and paid THEM - not a bank - for holding paper. Who drove C/Ds out of real estate? (And the contract buyers who made a good living by cashing out contracts that some people didn't want to hold - I did that too.)
Something pretty criminal had to happen for inflation to run away at 15% a year and interest to go from 3% (what I paid on my first car) to the crazy highs we see today. Even credit-card interest wasn't much higher - 8% tops, I believe. The crooks who came in with Reagan (and the dirty Democrats who stuck us with the illegal immoral Vietnam invasion/occupation) changed the way we live - for the worse. Time to clean house and get rid of all the fascists and closet-fascists (like Obama et al) before we are all prisoners and slaves.
Guggzie
What you are referring to is the only honest and equitable system of taxation that has been proposed. It has been pushed for many years in Australia but no Government will allow it to be debated in open forum because it takes away the control Government have over people.
Advantages of using The Debit Tax
These are just some of the advantages of using just one Debit Tax of only 0.33%:
Income Tax and all other Federal Taxes become invalid.
No tax on profits, savings, investments,assets or pay cheques.
No taxes on income, payroll, provisional,property, inheritance, or goods and services.
No income tax means an instant tangible wage rise for everyone.
Goods and services will be cheaper without sales tax and import tax.
No sales or hidden taxes means more in the pocket for those in the Welfare System.
The method of collecting revenue will be effected by Electronic Transfer Systems (EFT) - the ultimate in efficiency.
No more time, money and paper wasted on daunting tax laws and complex tax returns.
Tax collectors will be appointed to more productive and useful positions.
Accountants employed by businesses, large and small, would be able to use their training and experience in the manner in which it was meant to be used, ie. making business more productive and cost efficient.
Small businesses will not be hindered by our present time consuming system, and will consequently be encouraged to grow and employ more people.
Big Multi-National Companies will be required to pay their fair share.
No tax cheating or tax avoidance necessary or possible.
It would create a real user pays system.
Continuous flow of revenue to the National Treasury.
Our large and expanding national debt will be settled very quickly.
It would allow people to save money for retirement, with no penalties.
Our National Fund Reserves would be rebuilt by the increase in savings deposits, deposits encouraged by the Debit Tax System . At present our reserves are at their lowest since the Great Depression
Here is a link that quite readily explains what has been happening:
http://www.teamliberty.net/id260.html
Any ideas on what to do about it?
after that revealing insight, i am at a loss. about all i can say is that we should just "drop out." i don't think we can fight the "system" so described.
We don't need more fascist and big corporatist power which is what nationalization would be. Corporate and fascist power loves consolidation. It increases their power. The fed government especially after the Bush administration has shown how dangerous it can become and that it is very corporatist, maybe that will change, HOPE and CHANGE!, but maybe not it is too early to allow such a huge increase in consolidation of corporate power. Nationalization is asking for two huge corporatist powers, one being the government to consolidate their power and become even more powerful and therefore potentially more fascist.
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." - Benito Mussolini.
Merge BOA and the Federal Government and you will have more fascism.
Also his statement in the article about the banks is completely false. I posted a much longer comment on another article so I won't here but the bank in question is BOA probably and it is not bankrupt. That is completely false. The bailout money now was part of an agreement with the government for them to acquire the ML. They didn't need money until this deal with the government. The bankrupt banks have already failed. There will be more but the real significant failures have happened and the companies are gone. It is over. I don't know what banks he's talking about and if it is BOA he needs to get his facts straight.
Guggzie,
Like all economist, Professor Stiglitz seems to be totally brainwashed by the false aganda of the finance industry amd the unrealistic dogma of "full employment" which is contrary to the history of the pasy 200 years.
As far as history goes, the last 200 years have seen an expotential progress along the path of producing more with a continuous reduction in human effort.
In other words, progress has been aimed at putting people out of work and providing them with more leisure time to enjoy the fruits of our inherited advancement.
Unfortunately, Governments, and societies, around the world have been totally unable to grasp this simple fact.
Everyone, except for one man I know of, have been enslaved by the doctrine of "full employment" because it is the mantra of the financial industry that the only way a person can justify their existence is to work for their living.
C. H. Douglas saw the irony of this ridiculous system way back in 1918 and wrote a series of articles and books defining the real functioning of a financial system aimed at providing Economic Democracy for everyone.
The adoption of the Douglas proposal would see the complete downfall of the current system and, obviously, every effort has been successfully applied to drown out this one voice of pure reason.
I am assuming you are not aware of the Douglas philosophy on money, finance, production and the pursuit of indicidual freedom.
He adamantly refused to see his philosophy adapted to a political theme even though this happened with some spurious attempts as a Social Credit movement.
If you follow up this email, I urge you to look beyond the politics of Social Credit and go to the heart of Douglas's ideas and concepts.
As Ayn Rand once wrote, "It is philosophy that's gotten us into this mess and it is only philosophy that will get us out of it."
To date, Douglas's philosophy is the only one I have ever encountered that rationally analyises the flaws in the current financial system and offers a realistic approach to remedy the situation.
Tom Edgar
The American Central Bank is not owned by the country but by a private consortium. ergo. The Government doesn't even control its own money.
Adolf Hitler said. "The country that doesn't control its own finances doesn't control its own country."
Where will Australia, America, Britain etc borrow money from? The only ones with that kind of money seems to be the places who actually keep control of their own cash. Oh well!! get them printing presses rolling, it's only paper after all.
Let's all join Mugabe and the Zimbabweans.
It's good to see that so many people are starting to understand what is really happening with the world financial system, that the banks have been controlling everything for their own gain. Nationalizing banks is not going to help anything, as long as the same people control the governments that control the banks. We are getting closer and closer to a true understanding of the problem. What we need is real Democracy to start happening, so We the People control the government in reality rather than in civics books theory only, and thus the issuance of money is made with the wellbeing of us all in mind, and not controlled and manipulated for one purpose only - to continue the transferance of vast amounts of wealth from the producers of real wealth (We the People) to the parasitic class. Coming soon, one hopes.
Green Island - first we take back our brains, then we take our country
We Need Public Ownership Of Banking & Finance
"Why?"
"Privatized public services is an oxymoron."
"Based on?'
"Greed."
Not to long ago (I am 58 and I saw it) even in France, a capitalistic system, their was still a National bank: it was called BNP (Banque nationale de Paris).
It seemed to work well and compete w private banks.
BUT, My main point is that as pointed out recently by P Krugman I think in avery recent article, BofA and Citigroup combined are worth only 52Billions.
Assuming that's true, nationalizing them is abargain: WE - the people - would perhaps make money on the deal. The CAO recently concluded we overpaid $68B just for the AIG deal.
LETS DO IT: "AL LAW" is wrong they are bankrupt (both of them) so we may just get the buildings + land unless they ow on that too but at least we can ask that these entities loan at 1-3% and stop leveraging above say 1/3 ratio intead of 1/30 or more -- which means I think they loaned $30 for each $ deposited; that would be being bankrupt alright! --
Stiglitz is FINALLY waking up but IS OBAMA??
the ANSWER IS NO!
re MiMiCcS February 7th, 2009 2:13 am
I said a single central bank. I did NOT say a single PRIVATE central bank. We might agree on more than you know.
"People are talking more about the 'comprehensive' measures of unemployment, and these show unemployment at very high levels, around 15 percent. So it clearly is a serious downturn."
'Comprehensive' = un-manipulated; actual statistics; reality vs cover-up, etc...
You can find them at: www.shadowstats.com
We are already in a mild depression and accellerating into a major one!
Nationalizing Banks might not be the only answer.
Here's another opinion that sounds like a rational alternative.
http://www.financialsense.com/editorials/salinasprice/2009/0206.html
Wasn't the Revolutionary War a form of "Protectionism" ?? If a US citizen makes $50,000.00 a year as a "research and development specialist" at a local manufacturing plant to support his family, is there any responsibility of his government representatives to protect his job?? Do we elect government officials to protect the "worlds economy" or our own? Are we so arrogant to think that we can solve the "worlds" social and economic injustices? Once we flourished, our work ethic, natural resource and our manufacturing capabilities were the perfect formula for success. We had the ability to reach out to third world countries, heal the sick and feed the hungry, we led the world in hand-outs, we prospered.
What has brought us to the brink of disaster in such a short time? In desperation we now reach out to "SOCIALISM"......however, history has taught us it doesn't work!
If the banks are nationalized, the government will become the owner of the banks’ good and bad assets and it will have to assume the banks’ contractual obligations towards their creditors, investors, and account holders. In particular, any contractual guarantees given by the banks to the owners of now-worthless risky “innovative” financial vaporware will become de facto contractual obligations of the government towards these owners.
If we ignore small-fry investors, pension funds etc., these owners are greedy trillionaires who bought the financial vapor ware with full knowledge of its risks. If the “financial system” goes bankrupt the trillionaires of the country (and of the world) will lose humongous amounts of money and hence will lose much, if not most, of their economic and political power (but they won’t be reduced to misery, far from it; yes, smaller investors who chose "risk" will also go down in flames and they will deserve it, even if not as badly).
That’s why the trillionaires have mobilized bribed economists, journalists, and politicians and ordered them to call wolf about the horrors of letting the “financial system” fail. “Saving the financial system” is indeed the obfuscating phrase invented by these bribed economists, journalists, and politicians to try saving this neo-feudal class of trillionaires that is “essential“ to what “America stands for” and to “how things should be after we help them out”, as the “radical” Paul Krugman has put it in print repeatedly.
As you may remember, in the middle ages whenever the feudal class created a mess they “rescued themselves” for the “sake of the country” by taxing the hell out of the serfs and the bourgeois, but now with “the triumph of liberty” all of that has changed… yeah right!
Nationalizing the banks will open the gates to all kinds of pompous declarations by congress demoblicans about the government’s solemnial duty to honor the contractual commitments that came with the “act of nationalization” bla bla bla, so they can save their trillionaire friends amidst an apotheosis of self-righteous complacency and flag waving.
Let’s not give them that chance to demonstrate so much friendship. There is no need to save the trillionaires, regardless of how much money they have given to economists, journalists, and politicians and of whether the flow of bribes may stop if the trillionaires fail for good. The banks should be allowed to go through an orderly bankruptcy that preserve their real-economy presence and protect the savings of their non-reckless customers up to say 200k per account and up to say 1 million total net worth per person (IRS-declared), where a sliding scale could be used that reflect how "aggressive" the interest-gathering strategy chosen by each account holder was and the extent to which the account holder chose risky “lucrative’ financial-speculation products over investments in actual production. The necessary paper trail is available…
One should fire everybody in the *failed* banks' upper management (because they failed, duh!) except for whistle blowers and those essential to day-to-day operations, for those managing customer accounts, and for those having expertise in evaluating loans applications by companies that produce actual goods, be they trinkets, essential insurance products, etc.
Social criteria like protecting pensions could also be used by simply dividing the amount invested by each pension by the number of people the pension represents in order to determine what the pension can get in terms of protection and for which individual accounts (since pension-holders who chose especially reckless financial-speculation products should be protected less).
So it’s not time to nationalize the losses of this self-anointed neo-feudal class of trillionaires masters of the universe. Rather, it’s time to shut down their failed banks, to let the greediest investors bite the dust, to claw back any bailout money given so far to them and the banks, and to use this money to jump start the flow of credit into the economy after “nationalizing” (hiring back!) the banks’ existing experts in locating, evaluating, financing, and following-through worthy entrepreneurial ventures in real production and giving them a new institutional backing and responsibilities.
This crisis must teach harsh lessons to the most reckless of investors and bankers, and spare those investors and bankers who tried the hardest to stay away from the greedy madness of the last 30 years, even if only for moral reasons.
oldcreditiste> the Bank of Canada creates less than 5% of the Canadian Money supply [M3]