"I Told You So's" Everywhere
If you turned on Charlie Rose last night, you noticed a slice of the establishment discussing the limits of private markets. It is hard to believe your eyes and ears. Since the credit crisis, the establishment is registering their fears of free markets across the American landscape. But where were these people for the last thirty years? And, of course, where was the media?
It was almost impossible to make this case only six months ago on major TV, and almost as rare in the major print media. If you did, they thought you were a quack, and ostracized you. Or rolled you out when they were feeling guilty. Sometimes the print media consigned an occasional space for this forlorn, pitiable and unmanly view of the world, but not very many.
Such acquiescence to the mythological conventional wisdom that government was bad helped prolong the "dark ages" of the last generation, and lead to a moral and economic impoverishment of America -- flat wages, harsh inequalities, and the failures to improve education, pre-K, infrastructure, R&D, the healthcare system, manufacturing, and so on. According to those principles, tax increases always and everywhere undermined prosperity and economic growth; tax cuts were always and everywhere the answer. Big government was at best a necessary evil, diverting proactive money from business to unproductive social programs; therefore, minimize those social programs. Regulations merely made business inefficient with no benefits. Those who aspired to careers in government were by and large parasites.
In fact, there is no serious statistical evidence that either high taxes or big government undermine economic growth over time. To the contrary, big government countries and small government countries have both grown rapidly -- and at times both grown slowly.
The reason, as I outline in a new book, The Case for Big Government, just published by Princeton University Press, is that many government programs are critically necessary to maintain prosperity and stimulate economic growth. And moderately higher taxes don't subvert incentives.
Moreover, I discuss how America never truly had a laissez-faire government -- even from the beginning.
But finally, societies change, and government is the critical agent of that change. When we needed canals, railroads, and highways, government by and large built or financed them. When we needed primary schools, high schools and colleges, government financed them. When we needed sanitation systems and sewage systems, government supplied them. When we needed high tech research, government supported it. Government produced the key vaccines of an early age. When America changed, government built the institutions necessary to make the nation and its economy work.
I can only hope the dark cloud of misinterpretation and ideology has now passed. I suppose I should be happy there are so many "I told you so's" out there. But the hard sled of righting the course is still before us. And when public attitudes change, will these people stand forthrightly for a clear-eyed and pragmatic view of how to run this nation, even to their own minor detriment?
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Obama plans Cabinet Position in Technology! FIRST Project help restore Middle Class and stop Crisis!
TECHNOLOGY CAN SPUR ECONOMY, REMOVE CORRUPTION, AND AVOID MORE BAILOUTS! FIVE
KEY FACTS:
1. American Taxpayers Own Fannie, Freddie, and a group of Banks!
2. Mortgage Companies and Banks were at The CENTER of the Housing and Financial CRISIS!
3. Crisis Continues Because Homeowners can not Afford TRICKY Loans and are Walking Away!
4. The Current FED RATE is 1.5%!
5. Technology and the Internet are Sophisticated Tools for Automating Loans!
Use Internet, Automation, and New Taxpayer Owned Banks to provide direct low cost loans. Eliminating Corrupt Middle Men (i.e., Mortgage Companies and Banks)?
FIXED rate new loans could be very low 2.5% to 3% to provide the New Taxpayer Owned Banks with a 1% to 1.5% margin!
Why such low rates? Because Middle men Removed and Direct from FED!
If they can FUND Corrupt Banks they can Fund People!
Automation to verify employment, verify home title, check credit, and do 98% of the loan Preparation. Eliminates all mortgage fees, all bank fees, all title fees, most verification fees, and most documentation work done via internet and technology.
Today's technology can LOWER COSTS, Saving AMERICANS and the Economy more than any added Bailouts
The Savings: Pay debts, buy American Green Cars, buy Real Estate, and American goods plus help other countries in crisis by buying their goods!
Great Points! We must Regulate to regain the Confidence of the World in "Fair American Markets!"
I think what follows Helped Wake Everyone UP:
THE BIGGEST CORPORATE WELFARE PROGRAM IN HISTORY!
Welfare for the RICHEST People in the WORLD and they will USE IT TO KILL OFF COMPETITION!
The NEW GOAL of the VERY RICH is to REMOVE COMPETITION and what BETTER WAY THEN USING Government FUNDS to do IT!
We Must Stop Bank Mergers until they can be reviewed by CONGRESS and the NEW ADMINISTRATION!
___________________________________________________________________________
Are Paulson and Bernake going to gradually BAILOUT all $42 to $60 TRILLION in these Derivatives?
Wall Street is a ZERO SUM GAME - when Someone Wins others Lose!
So why not go after the Off-Shore Accounts Hiding all the Money these GUYS TOOK?
The Money is somewhere and that is WHY Europe wants Off-Shore Accounts included in Regulations!
Will this Bailout be ADDED to their Off-Shore accounts?
All these issues and more must be resolved and Confidence Restored!
SO MANY EXPERTS EVERYWHERE.
And nowhere is there an ounce of Intelligence, or Wisdom or Creativity shedding any light on a positive path to lead the world out of this mess.
Well, you could always fall back on Henry Ford's philosophy - pay your workers well ... and watch your profits grow.
In 1914, Ford stunned the industrial world by raising pay to the unheard of sum of $5.00 a day and instituting a 5 day, 40 hour work week. Later, he said of the plan “we really started our business, for on that day we first created a lot of customers.”
"I have learned through the years a good deal about wages. I believe in the first place that, all other considerations aside, our own sales depend in a measure upon the wages we pay. If we can distribute high wages, then that money is going to be spent and it will serve to make storekeepers and distributors and manufacturers and workers in other lines more prosperous and their prosperity will be reflected in our sales."
BusinessDay
There is a $US60 trillion market for credit enhancement, entirely unregulated and which nobody seems to know much about, whose retail equivalent is borrowing with no more than a personal guarantee, and without having to stump up one red cent in collateral.
The more bizarre examples of risk involve the likes of tin-pot hedge funds insuring giants like rescued insurer American International Group (AIG) for a fee. This is cowboy stuff which would not have been tolerated by the auctioneer in a Wild West horseflesh sale 200 years ago, let alone by the local sheriff.
It is important to note that the Lehman CDS settlements are more of a loss transfer than a loss. In other words, there will be winners and losers. You can buy CDS credit protection and you can sell credit protection.
It all goes to the banks' proclivity to horde cash and their reluctance to deal with each other. The collapse of other institutions such as Washington Mutual and the banks in Iceland are likely to spawn a wave of credit derivative claims too.
It is not just banks who play in the CDS "cloud", it is insurance companies and shadowy, unregulated hedge funds domiciled in tax havens.
Times are tough, but some look for levity, as one joke doing the rounds goes:
"This is way worse than a divorce ...I've lost half my net worth and I still have my wife."
When everybody is making money out of a scam, from the bankers selling derivatives, and the construction workers selling their work, to the chinese selling their kitchen appliances, then the consensus of the international profitereers is keeping silent.
The whole world benefited from the booming of the American economy based on the increase in home prices and on the Americans' debts.
Now the whole world is suffering from the sudden collapse of the American economy.
Hence the whole world told you so ;-)
While writing the blog I am listen to over sight hearing on regulations I think there should be oversight buy large and small banks and congress. The Banker want to blame congress and want no regulation which has not worked. The Republican approach of laissez-faire has not worked . The larger banks say that they can not operate in the world market with regulation. My question if unchecked these people are gong to ruin the world economy and have already. We can not let the fox's guard the hen house.
If the crisis had these good consequences, lets have more of it. If calamity is felt by all, especially if it feels undeserved, the responsibilty for being in misery is no longer delegated back to the individual.
To shift the blame was easier during the dotcom bubble: Whoever was stupid enough to buy shares of a IT garage firm supposed to have a value of billions frankly deserved to loose their money.
That's how people do when the ish hits the fan. Nobody wanted to be the first to say something, now everybody wants to distance themselves.
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