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Greenspan Backs Bank Nationalization
The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.
Alan Greenspan, former chairman of the Federal Reserve speaks at the Economic Club of New York meeting on Tuesday, Feb. 17, 2009 in New York. (AP Photo/Jin Lee) In an interview, Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers.
"It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring," he said. "I understand that once in a hundred years this is what you do."
Mr Greenspan's comments capped a frenetic day in which policymakers across the political spectrum appeared to be moving towards accepting some form of bank nationalisation.
"We should be focusing on what works," Lindsey Graham, a Republican senator from South Carolina, told the FT. "We cannot keep pouring good money after bad." He added, "If nationalisation is what works, then we should do it."
Speaking to the FT ahead of a speech to the Economic Club of New York on Tuesday, Mr Greenspan said that "in some cases, the least bad solution is for the government to take temporary control" of troubled banks either through the Federal Deposit Insurance Corporation or some other mechanism.
The former Fed chairman said temporary government ownership would "allow the government to transfer toxic assets to a bad bank without the problem of how to price them."
But he cautioned that holders of senior debt - bonds that would be paid off before other claims - might have to be protected even in the event of nationalisation.
"You would have to be very careful about imposing any loss on senior creditors of any bank taken under government control because it could impact the senior debt of all other banks," he said. "This is a credit crisis and it is essential to preserve an anchor for the financing of the system. That anchor is the senior debt."
Mr Greenspan's comments came as President Barack Obama signed into law the $787bn fiscal stimulus in Denver, Colorado. Mr Obama will announce on Wednesday a $50bn programme for home foreclosure relief in Phoenix, Arizona. Meanwhile, the White House was working last night on the latest phase of the bailout for two of the big three US carmakers.
In his speech after signing the stimulus, which he called the "most sweeping recovery package in our history", Mr Obama set out a vertiginous timetable of federal decisions in the coming weeks that included fixing the US banking system, submission next week of the 2009 budget and a bipartisan White House meeting to address longer-term fiscal discipline.
"We need to end a culture where we ignore problems until they become full-blown crises," said Mr Obama. "Today does not mark the end of our economic troubles... but it does mark the beginning of the end."
- Posted in
64 Comments so far
Show AllGreenspan backing nationalisation??!
I guess that means the crap has REALLY hit the fan!
IF Greenspan is actually backing nationalisation of the banks, that means the US is in FAR deeper economic trouble than the public has been told.
Yesterday on CNN it was revealed that 42 more US states are experiencing Claifornia-style levels of insolvency, and are expected to default on tax refunds and unemployment payments.
And the IMF has said that it has no where near the resources needed to help more than a handful of countries that are about to implode.
The 'stimulus' presented by Bush and then Obama are worse than useless, too little, too late. It's like trying to stop the bleeding of a traumatic amputation with a 'Hello Kitty' children's band-aid.
Walk in peace.
>>Greenspan backing nationalisation??!
>>I guess that means the crap has REALLY hit the fan!
Indeed it has. You know that capitalism is in serious crisis when the capitalists themselves recognize that nationalization of the banking system, one of the main planks of Marxism, is now required. But even that action will not ultimately save capitalism because the whole financial crisis is in itself the result of a more fundamental crisis of capitalism generally. In short, nothing can save capitalism, as it is an economic and social system that is unsustainable.
-----------------------------------------
What Is Marxism? - a short primer on a subject the working class needs to know.
http://www.marxist.com/Theory/what_is_marxism.html
Why is this man still being given a platform?
Either he (along with most of his confreres) was breathtakingly incompetent, or he and they were not---meaning this crisis was engineered by them to have exactly the effect it's having. Either way, his "expertise" has already proven worthless at best, if not deliberately ruinous.
His pronouncements should be received not with objectivity but with jeers, catcalls and overripe produce.
Ever hear the term 'controlled fast crash'?
Walk in peace.
"Why is this man still being given a platform?" Exactly!
The nerve of guys such as Greenspan to parade as pundits after all their failures of intellect, analysis and responsibility - stunning. They should be sued for malpractice.
Bob Marley had it right: We're gonna chase those crazy baldheads out of the town.
http://www.youtube.com/watch?v=YoIylEjM-bg
Joe
Just a word of explanation - crazy baldheads refers to skinheads in Marley's parlance. No offense to non-crazy baldheads.
Joe
"Either he (along with most of his confreres) was breathtakingly incompetent, or he and they were not---meaning this crisis was engineered by them to have exactly the effect it's having. "
It was most definitely the latter.
"The former Fed chairman said temporary government ownership would "allow the government to transfer toxic assets to a bad bank without the problem of how to price them."
Oh, no, let's not be concerned about properly pricing toxic waste when we can find another dumping ground for the taxpayers to clean up.
"You would have to be very careful about imposing any loss on senior creditors of any bank taken under government control because it could impact the senior debt of all other banks," he said. "This is a credit crisis and it is essential to preserve an anchor for the financing of the system. That anchor is the senior debt."
Of course, Mr. Greenspan, we certainly wouldn't want "senior" creditors to lose any money after their greed brought down the global financial system. No matter how deep the crisis gets, we must preserve the wealth of the super-wealthy so they can create another crisis 100 years from now.
"I worry incessantly that I might be too clear". - A. Greenspan
The people who support nationalization make me suspicious of nationalization.
Exactly. And the proposal that it be only temporary tells you precisely what they have in mind for the long-term: Re-privatization. But he can't come right out and say that for fear of being too transparently idiotic. Essentially nationalization is another humongous bailout.
Notice how, now that Greenspan's Chicago School Neoliberalism has proven a total bust, there is no discussion of fundamental economic principles. In other words, if he can't push his dogma of unregulated bubble-based financial capitalism, he's not going to say anything. This makes Greenspan not so much an economist as a propagandist.
ALSO NOTICE THAT HE DOESN'T MENTION THE FEDERAL RESERVE BANK WHICH DICTATES THE MONETARY POLICY WHICH GOT US INTO THIS MESS.
OF COURSE HE WANTS THE TAXPAYERS TO PAY FOR ALL OF THE CORRUPTION OF THE BIGGEST PONZI FRAUD IN HISTORY.
MARX WAS DEAD WHEN THE FEDEAL RESERVE WAS ESTABLISHED... I THINK HE WOULD SEE WHO THE REAL TROUBLE MAKERS ARE NOW.
I agree with the sentiment of being worried because a lot of "bad guys" are supporting nationalization... but a lot of "good guys" are supporting it as well. Paul Krugman, Joseph Stiglitz, Nouriel Roubini, Dean Baker, and Jeffrey Sachs, for example.
The question is more of how it will be handled, and if taxpayers will get a return on investments.
Actually, I totally agree with you. Since we have a credit crisis and little experience with nationalization in this country, the devil will be in the details. It is very important to listen to the folks you mention and to keep fakes like Greenspan and World Bank and privatization veterans like Summers from dominating the discussions.
The so-called experts I mentioned cannot be counted upon to devise plans that benefit the general population.
Joe
This is very simple. The Indians have only Nationalized banks. Let's outsource this project too, like everything else - how ironic.
>>>The Indians have only Nationalized banks.
Not true. India has both nationalized as well as private (including all the multinational players - like Citi, HSBC, Barclays, etc.) banks. Indian government is apparently under enormous pressure for a long time to open up its insurance sector to foreign players, and it may happen anytime (if it hasn't already) - basically multinational banks want to get their hand on any wealth created in any corner of the world.
Hmmm, you're right. I forgot about the multi-nationals. Regardless, my original thesis stands. They know how to run a nationalized financial system.
Alan MacDonald
Jim, good comment.
Another thing you don't hear much of anymore is the "Great Moderation" --- that asinine theory called the "Great Moderation", which many economists and political economist praised as the end of volatility in the markets which started during the Reagan era and continued through Greenspan's reign.
Supposedly serious papers and even whole books were written on the "Great Moderation" claiming that this was the 'End of Volatility' in markets, and the only serious discussions and debates were about whether superbly refined FED actions or the unregualted nature of the markets was the primal cause of this miracle.
Obviously, the truth was that the 'Great Moderation" was about as effective in protecting the market and the peoples economy as was the great 'Maginot Line' in protecting France from the Nazi Empire's blitzkrieg --- when both collapsed like cheap, phony and wishful suitcases.
The same collapse of phony protection from useless 'risk management strategies' like CDS, etc. has now exposed all people in the world to the blitzkrieg of the 21st century's RECF (Ruling-Elite Corporate Financial) Empire --- which, not surprisingly, is very similar to the Fascist/Corporatist Nazi Empire except that it has expanded the thin veil of 'Vichy' government from a petty, one-party, imperial-pawn government in France to a much better disguised and super-power armed, two-party 'Vichy' PR charade of democracy in its nominal headquarters country --- the US.
And Jim, you may be doubly right, that if Hitler had had Greenspan as both his finance minister and his propaganda minister (instead of Goebbels), his Third Reich might still be the ruling fascist global empire he dreamed of ---- instead of being supplanted by this Global Financial Empire that has taken over our country.
I'm suspicious of U.S. nationalization because it's being sold as "temporary". What's the deal? Will the taxpayers, under the guise of a "bad bank", get stuck with most of the toxic waste (bank losses) and then return the banks back to private shareholders for pennies on the dollar when they can once again make money?
It sounds like another scam to me!
You can be certain that is what Greenspan and Lindsey Graham mean when they speak of nationalization. They never cease in trying to turn their lemon policies into lemonade for themselves and their friends on Wall Street.
Despite clear roadsigns your neighbor runs his car off the road and into a tree. It crashes and burns. Your neighbor then forces you to buy the hulking wreck at an exorbitant price. You labor long and hard to fix the bodywork, repair the engine and give it a new paint job. Then when it's finally running great, your neighbor takes it back from you. Welcome to the Alan Greenspan temporary nationalization plan.
>>> Gail wrote: It sounds like another scam to me
Absoultely. "Temporary" is a dead give away. Apparently these guys believe (or know?) that any idea can be sold to this country, if appropriately packaged and promoted - whether it's invading a country on made up stories, bailing out the crooks or a "temporary" nationalization of banks. Wait and watch for this idea to be promoted as "potentially profitable" to the taxpayers when they re-sell these banks at a later date. They will not talk about what kind of returns (ROI) can be expected, only "potential profits". If they turn out to be profitable, then there is no real reason to re-sell the banks (of course, you will hear that the government cannot run any business - it can only bankroll crooks when they fail). Instead of "temporary", why not issue shares to all taxpayers who are interested? Or, if indeed it needs to be sold at a later time, when the banks do become profitable, the government can retain a "majority share", but still let the banks be run by professionals who will be accountable to the government and the taxpayers. I'm just thinking aloud...
Greenspan says, "The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit."
Okay. And, the US government may have to internationalize energy companies, cattle ranches and big box retail outlets on a temporary basis to fix the ecosystem and restore a trickle of sanity.
Isn't he the same guy who once said "If I say something and you understand, I misspoke !!"
does his opinion matter ??
or it matters more as he is one of creator of this mess ?
I think lots of our "leaders" including Obama, think it is logical that it will take those who got us into this mess to get us out of it.
If this is logic, I can't think of a case in history where this theory has been proven the rule or even an exception to it.
Hi All:
Did the senior debt get treated as greenspin suggests, for the 13 banks that have failed this year? How about previous senior bondholder debt?
It sounds as if the spin is starting to save the first in line debt when everyone else takes the bath.
Wolf I.E.
Yes, nationalize those banks too big to fail. Look what the Greeks are doing to large banks....
http://www.telegraph.co.uk/news/worldnews/europe/greece/4687971/Bomb-defused-outside-Citibank-HQ-in-Athens.html
I wonder how much of this activity is going on right here and not being reported in the MSM.
Alan MacDonald
Alan, get a clue. Are you as shocked by this reality of American democratic genius, as you were by the 'flaw' of gaming negative extenality 'debt bombs'?
Of course the banks (including the Federal Reserve) should be "Democratized" (sometimes erroneously called 'nationalized').
Just as the Royal banks and the corporations (like the royally chartered East India Corporation) of the British EMPIRE were rightly replaced by the indivisible democracy of the American Republic after the initial American Revolution, today's royalist/corporatist/private/elitist banks will have to come into the fold of the full political economic and social democracy of our sovereign, self-governing, and indivisible democratic Republic as we complete the American Revolution against unbridled EMPIRE and for effectively representative democracy.
Alan, at least you spell your name right --- now get your head right, good man!
If you really want to get your head right, then tonight in bed just read David Korten's new book, "Agenda for a New Economy: --- Why Wall Street can't be fixed and How to Replace it".
Hell, you may get so excited that it will put a smile on Andrea's face.
I'll watch MSNBC to see if she's smiling tomorrow morning, you old hound, you.
Sincerely,
Alan MacDonald
"... the indivisible democracy of the American Republic ..."
The USA has never been a democracy, and in many ways is an anti-democracy.
Alan MacDonald
A 'Republic' is based on representative democracy --- unless I'm missing something that you can explain Karlof.
Perhaps, you think that a Republic is a representative monarchy, or a representative empire?
But don't feel bad, Karlof, apparently most Republicans do.
Democracy means rule by the people, which implies that the people elect their government--self-government it's sometimes called. That also means that all citizens are allowed to vote for their representatives. That implies universal suffrage--which has yet to happen in the USA. Therefore, the USA is not a democracy, and never was. I could use several other lines of argument to prove the same point--especially the conditions underwhich the USA's current constitution was arrived at and manipulated into being.
Alan MacDonald
Karlof, sorry for the confusion.
I just read your 3:56 post, and we're on the same team.
Yes, the US is not actually a functioning democracy OR Republic.
I'll readily admit, and have been very vocal in saying, that it's a guilefully disguised 'Vichy', two-party, ruling-elite, corporate financial Empire only hiding behind the facade of faux democracy.
My point was only to promote that America is supposed to be what the best elements of the pre Revolutionary citizens (and some of the best founders) wanted and tried to become in their rebellion against the British (political and economic) Empire --- a form of voluntary self-government, at least partially representative of the people's interests.
They came close initially, and had the right idea about carefully restraining corporate power, because of their recent economic oppression by the crown and their royally chartered corporate thugs.
The model seemed a good start on an achievable goal, a work in progress (if you will) -- it just turned out to regress instead of progress.
So now we beat on, boats against the current ... but now it looks like the dark fields of the Republic are more likely to sink than roll on into the night.
Well. Good night, and good luck --- to us all.
I had this to say at the New Deal item's comments:
"Yet another example of the failure of the federal government because its blueprint does not account for political parties and how they operate, although the Framers can be excused for not doing anything about them as they didn't exist yet. The next constitution must expand democracy--indeed, in reality initiate it for the very first time in the USA--by decreasing the representation ratio (the initial ratio was set at 1:30,000 but is now about 1:712,650), affirming universal suffrage (no exclusions other than lack of citizenship), proportional representation that eliminates the duopoly, a tri- or quadricameral legislature with differing mandates, a fourth branch of government--the Regulatory Branch--whose officers are directly elected nationally, a national referendum mechanism, exposure of all elected officials to recall votes at either the district or national level depending on the official involved, 100% public financing of all elections, and an end to term limits.
"Now imagine getting all that adopted in one amendment. No way, most will say. And since there are more problems with constitution 1.0, we must have more than just the above additions, which is why I'm arguing for constitution 2.0."
This should provide you with a good idea of my position. There's much more that's been written and posted here and there; no central essay yet exists. If you've read Bailyn's "Pamphlets" compilation, you'll also know that much of the political theory and potential institutional blueprints were widely published well before 1776. Much the same is needed now so a new blueprint can be honed to present to the public when it soon becomes quite clear that the federal government is incapable of adapting to the demanding changes needed to survive the future. How soon this epiphani dawns on the majority of the body politic is uncertain, but it will certainly be sparked by the continuing downward spiral of the economy.
In 2012, insead of a presidential election, we have a referendum on a new constitution that will form new governing institutions of a far more democratic nature with much greater control vested in We The People.
>>>karlof1 wrote:...which is why I'm arguing for constitution 2.0
Wow, that's an ambitious, but absolutely logical proposition! If you think about it, after all, there are countries that do take a look a serious look at their constitution if a major part of their population feels that it's not serving the interests of equality and fairness. And of course, such re-looks have never been easy - those who have it good would never let anything to change. But it also means that the people would have to be aware of their rights as well as other people's rights. Many Americans - even when they are poor - seem to believe in some kind of exceptionalism - whether it's in their dealing with other countries or even within their own society - e.g., where are the Native Americans in public life today?. It means that they are not exactly aware of their real situation and position in the scheme of things. So it's easy to distract and mislead using inane topics and ideology. So, while we see the so-called third world countries boldly taking a re-look at their constitution, the "developed" countries are nowhere near such an idea - because the elites have made sure that people's minds are sufficiently numbed.
When I hear the names Alan Greenspan & Lindsay Graham, I reach for my pistol.
Yeah, Greenback, he come a long way from his Ayn Rand worshippin' days. Somethin' musta hit that old dude upside his head. Wonder what that might be. Is it what them call reality, maybe? Would seem he got a little reality check.
Methinks he was livin' inside that economy bubble thing. It's got a way, that economy, really can twist your head around.
Well, Greenspan and BushCo are the primary villains of this economic meltdown. After the tech boom bust, the best course of action was to create an economy based on renewable energy and infrastructure, which would have given us (likely) two decades of growth.
Instead, in their infinitive wisdom (or lack thereof) they created a model based on real estate - a big no no. Such models do not increase our technological innovations and knowledge. Real estate is "a prize to be won via hard work," and ought to never be the basis of any economy.
I called this stupid idea when they first rolled it out around 2002. Sometimes, I really hate being right.
Futher, isn't it ironic that the current brand of capitalism can only succeed when it stands on the bed-rock of socialism? This is probably what shocks Mr. Greespan most.
>>>ThoughtShaman wrote: Real estate is "a prize to be won via hard work," and ought to never be the basis of any economy
Very true - a healthy savings rate at the national level needs to precede this - which means there needs to be a sound 'real economy' first.
[... >>>ThoughtShaman wrote: Real estate is "a prize to be won via hard work," and ought to never be the basis of any economy
Very true - a healthy savings rate at the national level needs to precede this - which means there needs to be a sound 'real economy' first.
...]
We agree on the 'real-wealth' based economy (I assume that is what you mean by 'real economy').
I am not clear as much on the need for a higher savings rate. I'd rather have a strong social network that takes care of the basic needs of all members of society instead. On the other hand, a higher savings rate is something we can achieve without a change in structures.
ThoughtShaman, Japan used to be cited as an example for high savings rate, until the early 1990's - but this is what I understood it to mean in practice: a higher savings rate simply means that everyone gets decent wages and small businesses makes decent profits, and young people can save up enough for down payment for a home, with a mortgage that is reasonable. Having a real economy would also NOT require that so many people have to rely on debt, and the economy itself having to rely on people borrowing so much, and the country itself living on borrowed money. This is not only the sustainable way, but it also means that people make a decent enough living to be able to save. Of course, if you go deeper, it would probably imply that so much income and wealth disparity is simply not acceptable if the economy were to be sustainable. It would also very likely mean that the way money is created has to change, and the tax structure needs to change.
It's kind of sad that Japan adopted (or forced to adopt?) some of the western-style systems, and today, the poor in Japan are in really bad shape. Lifetime employment, loyalty between the employer and the employees, etc., seem to be things of the past there.
Alan MacDonald
ThoughtShaman, you were in good company to call this idea a fraud in '02.
No less an expert than George Akerlof, US Nobel laureate in economics said at the time, of the Bush administration, "This is not normal government policy, but rather a form of looting."
Good call, ThoughtShaman.
Good call, George.
"...You would have to be very careful about imposing any loss on senior creditors of any bank taken under government control because it could impact the senior debt of all other banks,..."
Who are these "senior" creditors - big banks, foreign countries, - really who?
ThoughtShaman February 18th, 2009 2:08 pm asks "Who are these "senior" creditors - big banks, foreign countries, - really who?"
Bondholders are senior to stockholders because a bond is a loan, while a share of stock represents fractional ownership. Secured creditors (lenders) get paid back first in the event of a bankruptcy; shareholders get what's left.
Who holds bonds and stocks? Big banks and foreign countries, yes, but also union pension plans, IRAs, and non-profit trust funds who aggregate the meager savings of millions of us. Sad to say, but there won't be any poetic justice watching just the big dogs eat themselves.
The scenario would be hilarious were it not so tragic. All the more reason to regulate the stock market under gambling rules. It is a big Ponzi scheme anyway.
Greenspan backs nationalizing banks? Then that is every reason we need to run far, far away. Greenspan is a POS amateur. He encouraged Congress in 2002 to spend big in derivatives, and then had the temerity to state that he did not see the financial crash coming.
If there is anyone who needs to take advantage of the Witness Protection Program and get a new name, it's this dick.
Never criticize a man until you've walked a mile in their moccasins - Native American proverb.
Greenspan retired as Fed chairman just in the nick of time --for him.
But his personal timing was likely no coincidence.
In recent months on the interview circuit, he's been compelled to admit that he "...had some awareness..." of the packaging and re-sale of massive amounts of bad debt.
And if he knew that, he also knew that both the camouflaged bad debt and its allegedly 'insured security' (the so-called CDS instruments) constituted double ticking bombs at the heart of the financial system -- the explosion of which would only require something as easily possible as a drop in the value of an already-overbuilt housing market.
But now, in the wreckage of the explosion, instead of acknowledging that his moral antipathy to sound financial regulation by government is and always has been an idiocy that flies in the face of human nature and US economic history, Greenspan will only say that the perpetrators of the present meltdown 'may have to be allowed' to dump their criminally concocted debt on the backs of average taxpayers.
Accordingly, Greenspan still claims that the greatest danger to the economic system lies not in preventing institutionalized bandits from stealing private capital, but in 'over-regulating the creative genius of America's financial sector.'
If ever a nutshell summary of the criminal outrage of US corporate capitalism was needed, you have it here -- straight from the mouth of its Randian high priest.
"..greatest danger to the economic system lies ... in 'over-regulating the creative genius of America's financial sector.'"
And therein lies Greenspan's ineptitude. That America's greatness lies in it's financial system. Not in manufacturing. Not in heavy lifting. Not in inventiveness. Not in it's educated citizens.
Greenspan, abetted by greedy conservatives, has created the world's greatest paper tiger, and handed the keys to the world to China.
Never criticize a man until you've walked a mile in their moccasins - Native American proverb.
"And therein lies Greenspan's ineptitude. That America's greatness lies in it's financial system. Not in manufacturing. Not in heavy lifting. Not in inventiveness. Not in it's educated citizens."
Greenspan really had no say in the matter. The capitalist system has been in a long period now of overproduction AND what Marx pointed out, "the falling rate of profit" in the industrial sector. The capitalist class was essentially forced to stop capitalizing (fixed capital) their industries and place their capital in the financial markets which would bring them a profit. Since there is a total disconnect between finance capital and industrial capital, the vehicles for profit making in the financial sector ended up being a paper tiger, as we all see today.
In short, the problem is not Greenspan nor the capitalist class's never ending search for increasing profits, but rather is fundamental to the operation of the capitalist system itself. Of course, we'll never be told this and all sorts of smoke and mirrors will be thrown out by the capitalists to explain the economic crisis that confronts us. "If only the financial sector had been more regulated" is the explanation today. But that is really all bogus, since capital to survive MUST continue to grow. If it cannot through industrial production it will be forced to look elsewhere and that elsewhere is the financial sector. Now that the capitalist class has most of their eggs in one basket - finance - they are calling on the working class to bail them out with future debt.
-----------------------------------------
What Is Marxism? - a short primer on a subject the working class needs to know.
http://www.marxist.com/Theory/what_is_marxism.html
A good and thoughtful comment. Thanks.
An innocent question (because I do not know): When (here in the US) do you think that change from "industrial production" to "financial marketing" occurred?
1950s? I don't think so. This was the "golden age" of middle class and MIC prosperity.
1960s? Nope. Vietnam, the Cold War and the space race saw to it that America was in a manic rage of industrial production.
1970s? Here we did see a downturn in industry. Steel plants failed, mining was knackered, and the floodgates to China were opened.
1980s? Here, Reagan ushered in tidal wave of investment for the MIC, but basic industry, the stuff that provides both jobs and useful everyday products for local consumption, withered.
1990s? Even the MIC started started looking for loose pennies under the mattress.
2000s? George W. Bush. 'Nuff said.
So maybe the change has been a continuum since the 1970s?
Never criticize a man until you've walked a mile in their moccasins - Native American proverb.
"end capitalism, Galenwainwright, Jim Glover" - you are so right....
This is the greatest fraud / deception / brain washing experiment in history:
Not only the numbers are staggering (total world derivatives are now over $1000 trillion or 19 times the total world GDP of $54 billion...)
but the fact that the insane crooks who engineered this "crisis" (formerly sold to the public as "financial innovation")are not even indicted for their crimes, no - on the contrary, they get even more (artificial) debt-money, because they need to be "rescued"...
In short: there is not enough money in the whole world to cover this black-hole of speculative debt..... So it must be written off, the banks are insolvent and when people like Nouriel Rubini and Greenspan advocate for "nationalization" you know for sure that the (Wall Street) Titanic is sinking fast and the state (the American people ) must rescue the first class passengers while the majority of the "lower classes" have been systematically deprived of life-boats (social justice)and the rest (middle-class) must pay for it all....
This is not "nationalization" at all, it is socialization of debt (losses) and privatisation of profit (as long as the "excess leverage & pyramid scheme" was working and money could be extracted out of the real economy)
"One would think that politicians would be willing to do the math and realize that debts that can’t be paid, won’t be. But the debts are being kept on the books, continuing to extract interest to pay the creditors that have made the bad loans. The resulting debt deflation threatens to keep the economy in depression until a radical shift in policy occurs – a shift to save the “real” economy, not just the financial sector and the wealthiest 10 per cent of American families.."
There is no sign that Mr. Obama’s economic advisors, Treasury officials and heads of the relevant Congressional committees recognize the need for a write-down. After all, they have been placed in their positions precisely because they do NOT understand that debt leveraging is a form of economic overhead, not real “wealth creation.”
Read more here:
http://www.counterpunch.org/hudson02172009.html
http://www.culturequake.org/Culturequake/Home/Entries/2009/2/15_Derivatives_Powder_Keg%3A_The_Big_Threat_to_the_World_Economy.html
http://culturechange.org/cms/index.php?option=com_content&task=view&id=327&Itemid=1
http://www.shadowstats.com/alternate_data
http://henryckliu.com/page178.html
Alan MacDonald
tocqueville, thanks much for the links ---particularly shadowstats.
Ain't Michael Hudson (and Mike Whitney) of Countpunch great?
Yes, as you say, "This is the greatest fraud / deception / brain washing experiment in history" --- the ruling-elite 'corporate financial Empire' has really 'skull poked' us.
Regarding your reference to "the (Wall Street) Titanic is sinking fast", I was showing 'Titanic' this fall to a HS class re. history & class structure, and the scene in which the ship's designer shows the engineering drawings and explains to the Captain that it's inevitable that she will sink, really hit me --- but I didn't want to bring the analogy up with the kids.
If this were just some elite 'rose thorn' in his Maxi broaching in seas, he could hit the EPIRB and maybe get picked up or not --- but this is going to be a lot of bodies in the water and no Coast Guard.