Arianna recently appeared on BBC's Newsnight to discuss the economic crisis, the lack of reform, and the effects of the bailout on American society and politics.
Other Newsnight guests included economist Liaquat Ahmed, author Andrew Ross Sorkin, and historian Simon Schama. BBC's Kristy Wark hosted.
To explain the public's anger at bailed out banks, Arianna pointed to the lack of lending from institutions that were rescued with taxpayer money. "The bailout originally was defended by Henry Paulson on the grounds that it would allow the banks to lend, to jumpstart the real economy and the huge problem now is this disconnect between Wall Street and the real economy and there is nothing being done right now to change that, and that and that's where the anger is being unleashed... It's really about the bailout and the unfairness and the loss of faith. It's not really capitalism."
Click here to watch the clip.
Robert Reich: Breaking Up the Big Banks, and Why Congress Won't Do It
Two ideas are floating around Washington regarding how to handle 'too big to fail' banks, but only one is supported by the Treasury and the White House. Unfortunately, it's the wrong one.
Too big to fail is nonsense. It is not their size. It is the interconnectedness. Slicing the big institutions into a million pieces would do nothing; the level of interconnectedness would remain exactly the same. If a systemic crisis threatens the system, the only rational choice, the smartest thing to do, the cheapest thing to do, is to bail out the system.
The actual cost of this bailout is going to be quite reasonable. The cost of what the outraged want, would have been the complete devastation of our economic system. The people who wanted that then, the Neocons in congress and the progressives who hate Wall Street, were morons then and are morons now.
If we have 99 out of 100 businesses run by executives who steal from the coffers and spend most of their time golfing when they should be working and they fail, how does the 1 business generate sufficient tax dollars to hold up the rest of the doomed businesses without nearly a nearly 100% tax rate?
Where does the money come from? If it's printed money used to bail out, it's a credit card account opened with China.
I don't see what telecommunications development has to do with bailouts. Both me and Charles Manson have access to a telephone, but that doesn't mean our success, failure, or ideologies are in any way related.
The reality of interconnectedness cannot be changed, and to think a 1930s regulation could deal with it is naive.
While counterintuitive to victims of the credit crisis, I personally think systemic risk would be best regulated and detected with far fewer banks of far greater size. Put all your eggs in a fewer baskets and watch them very carefully, instead of thousands and thousands of baskets that effectively are not being watched by anybody.
Monitor every da## thing.Head in with subpeonas,catalog everything so you have a comprehensive place to start.Make the rules tough,and no more of this too big to fail crud.
I know, that's a little over the top,but the financial industry really makes my blood boil.
"wall street is at war with america"
http://www.scribd.com/doc/21140663/wallst
"corporate lobbyists are at war with america"
http://www.scribd.com/doc/21261649/Corporate-Lobbyists-Are-At-War-With-America
PEOPLE OVER PROFIT!
STOP GREED!
-we need publicly financed election campaigns. get money out of politics, it corrupts democracy. it turns one man= one vote into one dollar = one unit of influence.
It is like the crew of the titanic, stealing all the life boats, and letting every one else
drown. The emergency is just as great for the real economy as it was for wall street.
Wall street has been saved and they simply don't care any more about the rest.
Its business as usual, I am getting ten calls a day from JP Morgan, every day,
8:01AM to 8:59PM, they want their money NOW! and I have nothing to tell them.
Cause I am going down! But that's OK I am just some old white guy, that lost
his investments when Wall street tanked. Just one guy, when a son, trying to
scrounge up money to go to graduate school, and a wife that works 60 hours a week
teaching and plus. But we are still going down, House of 23 years and all.
I am the middle of middle class, and because I am old and can not get a job
for me it is the "Grapes of Wrath" How many of me are out there out there
I wonder! For me the system has broken and the guys that bitch about getting
ten or twenty million less a year, should perhaps ask themselves, "How much do
I really need to live a good life?"
by Gary P. Pisano and Willy C. Shih
They assert that:
Decades of outsourcing manufacturing has left U.S. industry without the means to invent the next generation of high-tech products that are key to rebuilding its economy.
• Thanks to destructive outsourcing and faltering investment in research, the U.S. has lost or is on the verge of losing its ability to develop and manufacture a slew of high-tech products.
• To address this crisis, government and business must work together to rebuild the country’s industrial commons —the collective R&D, engineering, and manufacturing capabilities that sustain innovation. Both must step up their funding of research and encourage collaborative R&D initiatives to tackle society’s big problems. And companies must overhaul the management practices and governance structures that have caused them to make destructive outsourcing decisions.
• Only by rejuvenating its high-tech sector can the U.S. hope to return to the path of sustained growth needed to pay down its huge deficits and raise its citizens’ standard of living.