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HUFFPOST SUPER USER
OleProfessor
03:56 PM on 09/16/2011
What we needed to do was to Nationalize the major corrupted banks and reform them top to bottom as many said initially not reward them for their fraudulent bad practices...immunize them from what they'd done...then re-privatize them...
Genders
Love, Tolerance, Enlightenment
08:49 PM on 09/16/2011
Just what Sweden did before the crash, and so they avoided it and are doing well.
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10:01 PM on 09/16/2011
There's a precedent: the U.S. nationaliz­ed the railroads during WW I

http://www.archives.gov/research/guide-fed-records/groups/014.html
Records of the United States Railroad Administra­tion [USRA]

A smaller nationaliz­ation establishe­d ConRail:

http://www.archives.gov/research/guide-fed-records/groups/464.html
Records of the U.S. Railway Associatio­n [USRA]
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HUFFPOST SUPER USER
rda1911a1
God Bless John Browning
03:28 PM on 09/16/2011
hope and change yes we can!
HUFFPOST SUPER USER
Carl Caroli
I just don't understand people
03:18 PM on 09/16/2011
"...and our politicians have seemingly learned nothing "
No, they've learned that if they want to keep getting big campaign contributions and stay in office they need to do what wall street and the banks say. They've learned that it's easier to screw the American people than it is to screw wall street and the oligarchs.
03:13 PM on 09/16/2011
Oh the financial industry has learned a lot. Make really bad decisions in the short term that provide for huge bonuses and use securitization and other gimmicks to past the undue risk off to some poor chump. Threaten to take down the system so that your buddies at the Fed come bearing gifts. Take the gifts compliments of the US Taxpayer and tell the government and US taxpayers to go ***@@@ themselves if you think that they expect you to change your business practices. Hire really good lobbyists and lawyers to protect you. At worse if you get fired have that generous severance package to make sure you never, ever will need to work another day in your life.

Repeat the process all over again.
HUFFPOST SUPER USER
Robert SF
03:05 PM on 09/16/2011
I share the writer's outrage at the fact that nothing's been done to punish those who broke the economy, but I disagree that the answer is to free up business lending. That's just more supply-side nonsense, and quite ironic in the face of "we haven't learned a friggin' thing." Supply-side is economic Creationism. It doesn't work.

The problem is demand. There is not enough demand to drive the economy, an economy that increasingly needs less and less labor. And the less labor the economy needs, the less money goes into the pockets of workers, who -- and here's the key -- are also consumers. So the less money consumers have, the less they buy, and the less the economy needs to produce. But whatever the economy needs to produce in terms of goods and services, their production always, always, always needs less and less labor, and so there is a downward spiral caused by technological unemployment.

Can we increase demand? Not really, plus it's a fool's errand because the demand needed to restore lost employment increases exponentially. For example, if you cut your labor by 50%, you need a demand increase of 100% (a doubling) to restore that 50% back to work. Instead, we need to understand that we're essentially at the end of infinite exponential growth capitalism. We need to start considering steady-state capitalism.
ThoughtShaman
Compassion is the highest virtue
05:28 PM on 09/16/2011
One more person who understands that lack of demand is the problem. F&F.
ByAndForThePeople
and corporations aren't people!
05:52 PM on 09/16/2011
I agree with most of what you said Robert, maybe all of it. But I want to expand on one thought in your comment -- that the production of goods and service always needs less and less labor. Of course, you're referring to productivity increases, which are aided largely by machinery (including, of course, computers). A large part of the problem with the way the US economy has developed over the last three decades is that increases in productivity put the resulting increases in profits exclusively in the pockets of senior management, the corporations, and somewhat to the stockholders. Very, very little went into the pockets of the workers whose work became more productive. Just changing that fact would have made an enormous difference in what the economy has become.
HUFFPOST SUPER USER
Robert SF
07:30 PM on 09/16/2011
Yes, you are right. Increases in productivity have not been accompanied by increases in wages. Richard Wolff of MIT explains that in his talk "When capitalism hits the fan" (on YouTube). A big part of it is that productivity no longer reflects a worker's skill and effort because the increased productivity is largely thanks to machines, and the people who own the machines see no reason why the worker should get paid for the machine's work.

Trying to change that, of course, will bring about cries of "socialism" and "redistributing the wealth," but as is, the system isn't sustainable.
jhNY
Mercy.
02:43 PM on 09/16/2011
Not sure what the author recommends. Does he want the suffering banks to be relieved of their toxic assets? How? Is he thinking that these toxic assets are preventing banks from lending to Main Street? Does he have some proof that this is the case?

Are American banks out of capital now? Hadn't heard they are. Had heard the banks were investing in commodities and currency speculation, and in unregulated swaps with money they got at rates as low as 0%. How do you get the financial sector out of the casino, and back doing traditional banking business? And how do you justify their existence in society until they do?

Have a feeling that as the debt crises in Europe continue to unfold, we'll learn how attached to the European problems our own financial system actually is, and it won't be pretty.
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HUFFPOST SUPER USER
rda1911a1
God Bless John Browning
03:29 PM on 09/16/2011
They did not get the money at zero percent they paid the standard federal reserve rate of .00012% to large banks
jhNY
Mercy.
03:43 PM on 09/16/2011
Right you are. I was rounding off to save space.
02:19 AM on 09/17/2011
And then turned around and bought Treasury bonds that paid a higher interest rate, thereby getting free money courtesy of the US taxpayer?
HUFFPOST SUPER USER
hg wells
04:23 PM on 09/16/2011
The American consumer has floated the economies in Europe as well as America for the last 30 years. Europe will fall before America because Europe has already maxed out its tax rate. Americans, on the other hand have never had a lower tax rate and our country has plenty of room to move up...once we get the political will. We have a political union, and at a certain point our gov't can singlehandedly raise the tax rate on 350 million people...try to get Europeans to agree on anything.
Genders
Love, Tolerance, Enlightenment
08:51 PM on 09/16/2011
We only need to raise taxes on the rich, end the wars, and national the federal reserve.