I would disagree. We are currently in a financial crisis because an unbridled, short-term incentive laden banking industry leveraged itself into oblivion.

And I would argue that this financial practice only came into existence because of government interference in the private lending market. It was looooong leadup where government and lobbyists joined together for their own agenda items to change the rules. This crisis was NOT simply a crisis of capitalism gone amok. That is a neolib conceit, and it is inaccurate because it ignores 66% of the problem. The crisis was a THREE PARTY problem. 1. GOVERNMENT was the one that set the table. 2. Financial houses were the ones that sold the food. 3. Citizens were the ones that came and gorged themselves stupidly on unnecessary, unaffordable debt.

Also, can we call it a "public option" please? Our good friends in the public relations office spent a while coming up with that one. Listen, the bottom line is we already pay for everyone's health insurance.

There have been numerous studies that show conclusively that the real problem is not the lack of socialized medicine. The problem was the creation of an government mandated 'insurance' system that screwed up the private market. THere are two kinds of insurance really. One kind of insurance is 'universal' and it supposedly covers all expenses. THe other kind of insurance is 'catastrophic' which is supposed to only kick in when something serious happens.

The problem here is that people want to treat health insurance like "universal" insurance, when they really should be treating it like "catastrophic". Americans need to get it through their thick skulls that health insurance is not and NEVER WAS designed to cover drugs, doctor visits, band-aids, flu check ups, and stubbed toes. Health insurance as a concept can ONLY WORK if it covers only large scale, catastrophic disease or injury. Everything else should be paid for out of your own pocket by direct interaction and discussion with doctors & providers. That would bring costs down to affordable levels so fast it would make your head spin.

Think about it. If you treated your car insurance like you treat your health insurance then it would cripple the industry. People would be taking their car in to change their oil, rotate their tires, replacing headlights, fixing scratches and so forth. Suddenly the demand for those services would skyrocket because they were 'covered' and people would be doing them a lot more often because they were 'free'. Suddenly, oil changes would cost $100. Tire rotations would cost $500. All because they were 'insured' and the laws of supply & demand got screwed up by an artificial system that was inserted into the private market.

But auto insurance stays relatively cheap and affordable because you can only use it when something 'big' happens. And you can go get your oil changed for only $20 because you are negotiating directly with the provider for a cheap commodity service. That's how our health care should be. CHEAP basic services we negotiate directly in the free market, with insurance for the unexpected major problems.

Yes. Define excessive.

Excessive = anything beyond what was prescribed in the original US constitution and bill of rights. I.E. pretty much 99.99999% of what the federal government is currently doing except national defense.

>> ^gtjwkq:
Wow Nithern, your reply is a mess. I guess I should have explained to you that I'm not an anarchist, since that's what you understood by "free society", my fault for using such a loose term.
I meant a society free from government intervention in the economy, free market, preferably with a small government. Being mostly a libertarian, I don't like to be confused with an anarchist, the same way a social liberal might feel offended when called a socialist.
Well, one could argue that government of any sort is government intervention in the economy. That's why anarchists and libertarians so often get confused. Think about it. There's a market for murder. There's a market for "protection". There's a market for "waste disposal". So really, the question always boils down to 'what specific government interventions into the marketplace are you for?'

The problems with that line of reasoning are all those pesky externalities. Exploiting the commons for personal gain is the oldest trick in the book. It's also, unfortunately, the reason we need to regulate the marketplace. In our most recent episode, we removed long standing regulation on securities trading. They existed because in the 20's people had already figured out how to privatize gains and socialize losses. Without a government to overcome the transaction costs of collective bargaining, it would never be possible for people to prevent this sort of exploitation. To me, while anarchy seems like the end result of libertarian ideals... really it's rule by corporate oligarchy, with rampant exploitation of the commons. At least anarchy often does away with currency, and with it the power structure.


Ah I feel better already. Bureaucracies sure seem very efficient when you explain it like that.

How about like this: Medicare operates with 3% overhead, non-profit insurance 16% overhead, and private (for-profit) insurance 26% overhead. Source: Journal of American Medicine 2007

We're currently in a financial crisis because our government is broke, the world has been lending us money, but that will end when other countries realize we're never going to pay them back. Our government is currently spending money it doesn't even have.

I would disagree. We are currently in a financial crisis because an unbridled, short-term incentive laden banking industry leveraged itself into oblivion. Afterwards, they put a gun to our head and handed us the tab. In other words, print the dough, or the pitchforks and torches tear the whole joint down. The only reason their hustle didn't work indefinitely is because too many of US were spending money we didn't have. Changing that is going to take a cultural shift that is already beginning.

As for China, whom I presume you're referring to. I don't think they want to start selling their position. Ever hear of buy low, sell high? No, I think China is more likely to just borrow against it, and start picking up their part of the consumption. They're already pulling the world out of this recession.


Socialized healthcare as an option , doesn't make the idea any better, because it's still wasting money and it's unfair competition that will further distort the healthcare insurance market. Any reform in healthcare should involve reducing government intervention not increasing it.
I disagree. Also, can we call it a "public option" please? Our good friends in the public relations office spent a while coming up with that one. Listen, the bottom line is we already pay for everyone's health insurance. It's just that it's cheaper to pay for antibiotics than it is to pay for abscess removals on ER beds.


If people are having trouble understanding the rationale behind the Tea Party movement against socialized healthcare, it's mostly about excessive government spending and taxation. Was that too hard?

Yes. Define excessive.


I don't think social liberals will ever take the issue of spending seriously, even after the value of the dollar is destroyed and our economy collapses.

Spending is serious business, it's inflation you all gotta relax about. Is it worth having the "why inflation is good for the economy" argument with you? Or would you rather go back to your non-mathematical Austrian school BS, and we can just agree to disagree?

I think you need to educate yourself out of lies about the insurance business, on the government's major role in causing the housing bubble and subprime mortgage crisis, and on the utter uselessness and injustice of anti-trust laws.

I agree, it's difficult to write laws without unintended consequences. That is, you can always game the rules. One should not conclude from this, however, that you shouldn't try and write rules. Instead, you should just write them faster than the douche bags can game them. You always need more rules. Every time there is an advance in technology, you need more rules. Why? Technology makes it easier to game the rules, and exploit the commons, just like it makes it easier to do everything else.

Wow Nithern, your reply is a mess. I guess I should have explained to you that I'm not an anarchist, since that's what you understood by "free society", my fault for using such a loose term.

I meant a society free from government intervention in the economy, free market, preferably with a small government. Being mostly a libertarian, I don't like to be confused with an anarchist, the same way a social liberal might feel offended when called a socialist.

>> ^Nithern:
Sounds like a generalization, and not fact. There is structure within the goverment (local, state, and federal) to over see, and keep an accurate report of funds being spent (...)

Ah I feel better already. Bureaucracies sure seem very efficient when you explain it like that.

The concept of Health Care for all Americans is a good one. We can easily pay for it. If we can pay for Iraq ($3 trillion and climbing now...), we can pay for Health Care for 330 million people. Now, if an individual has better, or they like their health coverage, that's fine. This concept only gives people an option.

We're currently in a financial crisis because our government is broke, the world has been lending us money, but that will end when other countries realize we're never going to pay them back. Our government is currently spending money it doesn't even have.

Socialized healthcare as an *option*, doesn't make the idea any better, because it's still wasting money and it's unfair competition that will further distort the healthcare insurance market. Any reform in healthcare should involve reducing government intervention not increasing it.

>> ^NordlichReiter:
And that is why they are marginalized. Rational thought, and rational means they do not have.

If people are having trouble understanding the rationale behind the Tea Party movement against socialized healthcare, it's mostly about excessive government spending and taxation. Was that too hard?

I don't think social liberals will ever take the issue of spending seriously, even after the value of the dollar is destroyed and our economy collapses.

But for-profit health care companies are just that....the least effort for the most buck. They are not there, for the betterment of mankind, only their kind. I think we saw what happens when we go easy on financial rules during the Bush Administration and Wall Street companies. Do we really need this sort of crap with Health Care?

I think you need to educate yourself out of lies about the insurance business, on the government's major role in causing the housing bubble and subprime mortgage crisis, and on the utter uselessness and injustice of anti-trust laws.

>> ^TangledThorns:
Either way, the government option is dead thanks to the Tea Parties.

That would be a major achievement.

Good documentary.

I think the link with the IMF they make is a bit tentative though. When capital markets are deregulated, local investors have the option, not the obligation to borrow from international financial institutions. The cost borrowing may well be lower, but borrowing from overseas obviously exposes them to the risk of their currency devaluating and the cost of the debt they have to repay rising as the buying power of their currency falls. The IMF may have encouraged borrowing from abroad, but it is hardly like they could have forced, or put pressure on the actual investors in the same way as they put pressure on government policy. Then again I'd imagine it would have been no constellation during the Asian financial crisis if you had been one of the few to raise funds locally. When the stock market plummeted, you would have been screwed either way.

There's no doubt though that the IMF encouraged harsh Machiavellian and unproven policies and given the very large stake that the US holds in it, there's an obvious potential for self serving intentions.

>> ^gtjwkq:
>> ^enoch
how is reducing government size going to affect the "culprit" of america's current financial crisis?since when did goldman-sachs and the federal reserve become government agencies?

You're kidding, right?


um...no.
it is a private institution, while the federal reserve act of 1913 may have given the fed it's birth and a charter,it is a still private.a charter is how every bank in the country need to operate,does that mean that every bank is government owned?they were basically hired to do a job,and the abuse has been going on for almost a century.
http://www.land.netonecom.net/tlp/ref/federal_reserve.shtml
"Permit me to issue and control the money of the nation and I care not who makes its laws. — Mayer Amsched Rothchild, a prominent European banker in the eighteenth century"
whose family coincidently is part owner of the federal reserve.
"If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied. — Thomas Jefferson

through the past century,every recession,inflated bubble and depression there has been ONE financial institution GOLDMAN SACHS.with incredibly strong ties to the federal reserve and the world bank and the cute and cuddly international monetary fund.i am not going to write a report just to make a point.
you think its fannie and freddie?
ok..i say fannie and freddie were planned....by?
well...i already stated as such who i think holds the blame for that.
great article:
http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine#
and i would recommend one book that is vital,especially now.the man has called it since 2004 while everybody treated him as a pariah.interesting how this man is now thinking of running for senator.see what happens when you call it right?
peter schiff and his amazing book "crash proof"
great short vid here:
http://www.youtube.com/watch?v=6NvjrfC6i0I

but hey,you go ahead and keep thinking it was the government and freddie and fannie.
but i was not kidding.

>> ^enoch
how is reducing government size going to affect the "culprit" of america's current financial crisis?since when did goldman-sachs and the federal reserve become government agencies?


You're kidding, right? The Federal Reserve is as much a creature of government as any other agency or department that was brought into existence through legislation, granting it exclusive power over our nation's currency. The only remotely "private" aspect of the Fed is its secrecy and lack of oversight (something not even private companies fully enjoy anymore).

The subprime mess was only possible because of Fannie Mae and Freddy Mac.

In an economy, it's the private sector that is productive, and the public sector mostly lives off of that production. In a recession, we need more savings and productivity to grow ourselves out of it, but that won't happen if govt keeps expanding and spending/borrowing even more money than it already does, because that adds even more of a burden to the productivity that we need to dig ourselves out of this hole in the first place.

>> ^Mashiki:
Generally when dealing the a persons health you don't want "price competition" you want to aim for best service at reasonable price for the public dollar.

Price competition is *exactly* what allows any kind of push for quality of service at lowering prices, you can't have one without the other. What is a "reasonable" price anyway? Can you appreciate the irony of a bureaucrat deciding whether a price is reasonable dealing exclusively with other people's money? There is no question that the market process is a far superior judge of what prices should be than even the smartest and most well informed group of bureaucrats could ever be.

If there is one overriding issue with the current round of debates in the US over "healthcare", is that they want to have it at the federal level for one and all. Sorry, bad idea. Hell it's a terrible idea.

That's a good point: If 100% socialized healthcare were ever implemented in the US, it would be better (less worse) if it existed at the state level as opposed to federal. That would institute a faint glimmer of competition between the separate systems, and people would be able to "vote with their feet", which is terribly ineffective, but better than being completely helpless.

If you want to solve the problem of healthcare and nail the culprit of our economy's recession, you do that by reducing the size of govt, not by making it even bigger.


how is reducing government size going to affect the "culprit" of america's current financial crisis?since when did goldman-sachs and the federal reserve become government agencies?

Tags for this video have been changed from 'byron dorgan, financial, crysis, prediction, 700 billion, bailout' to 'byron dorgan, financial, crisis, prediction, 700 billion, bailout' - edited by shuac

The reasons the increased money supply has not translated into inflationary pressure at least so far is twofold:

1 - Commodity prices particularly for raw food inputs as well as energy prices all fell dramatically and reserved a rising trend when the financial crisis hit as demand dropped off. Energy prices fell predictably as firms wound down their inventories while significantly scaling back production whereas food prices as a result of consumers everywhere, particularly in lesser developed countries substituting for inferior, cheaper and less input intensive foods. If you're looking at an annualised measure of inflation this would still be factoring into the current figure.

2 - More importantly though, underutilisation of resources whether that be firms operating at under full capacity, or not utilising all available labour capacity in light of the financial crisis means that increases in the money supply don't ripple through the economy as quickly. Once the economy begins to pick up though, that will be a different story.

So, no matter how long it takes, Obama is going to take credit for the recovery? But, many experts believe that the economy would EVENTUALLY recover without all the bailouts so, is it all just a waste?

And what about this new health care plan? How is that going to help the economy? How is incurring more government debt and increasing government run programs going to help young graduates and small businesses? How is cap and trade going to increase jobs?

What is the Government thinking??? I wish Ron Paul were here!!!


All of a sudden, Congress is paying close attention to Ron Paul.

The feisty congressman from Texas, whose insurgent "Ron Paul Revolution" presidential campaign rankled Republican leaders last year, now has the GOP House leadership on his side -- backing a measure that generated paltry support when he first introduced it 26 years ago.

"In the past, I never got much support, but I think it's the financial crisis obviously that's drawing so much attention to it, and people want to know more about the Federal Reserve."

http://www.usnews.com/blogs/letters-to-the-editor/2009/06/25/ron-paul-and-auditing-the-federal-reserve.html

Whew! That should help. But, we're going to need a lot more than just one guy with common sense in Washington.


Mitt Romney: ""I think [we] have to stand up and make it very, very clear that we run the risk as a nation of having the entire world lose confidence in the currency of the United States and that would lead to something worse than a recession -- that would lead to an extraordinary slowdown globally that would hurt us more than any other."

"When the stimulus bill is wrong, when it wastes money and threatens the viability of our currency long-term, you have to stand up and say 'no.' When a health care plan says we're going to have the government take over health care which is roughly a fifth of our economy, [we] are going to have to say 'no' to that."

"The president's plan makes an enormous error by saying we're going to put government into the insurance business. We got everyone in Massachusetts insured and we did it without putting government into the insurance business. We said instead we're going to help people get private free enterprise kind of insurance they can buy from a number of different companies."

He said the system led to plunging premiums while offering a healthy choice of options for consumers.

"It's working well. We got 440,000 more people insured than when the plan was put in place, it costs less than 2 percent of the state budget -- it's a plan that's working, it's a good model," he said.

Romney also took issue with the climate change bill that passed the House of Representatives last week, saying it was corrupted by special interests.

"It's a lobbyists' delight and as a result it's a lousy piece of legislation. It should not have been passed, it's going to cost the American consumers a lot of money, it's going to cost us a lot of jobs. Yeah we'll create jobs making windmills and solar panels and that's wonderful, but were going to lose a lot of other jobs ... that are creating products that use energy," he said.


Of all the years of wasteful government spending, why now!!!???

I'm in the process of switching health insurance and I just got a quote yesterday. It'll cost me $130 a month to have a HDHP with a $2500.00 Anual deductable and I pay 0% for preventative care. In conjunction with a Health Savings Plan, that's a heck of deal!!! There's nothing wrong with Health insurance! That's less than the combined cost of my cable internet and my mobile phone bill. I don't know the statistics, but I'm willing to bet that most people in this country without health insurance, CHOOSE NOT TO HAVE ANY because they'd rather drive their nice car or have an iPhone or HD TV or whatever.

WHAT IS WRONG WITH THIS COUNTRY? WHY IS IT THAT WE EXPECT EVERYTHING FOR FREE AND ARE WILLING TO LET POLITICIANS DRIVE THE US OF A INTO THE GROUND TO GET IT!?

I can't believe that Obama hasn't saved the world yet!

I mean, it's been over three months now, and we still have global warming, soldiers are still in Iraq, DOMA hasn't been repealed, he hasn't fixed the financial crisis, Guantanamo is still open, teachers still underpaid, we're not back to 0% unemployment, he hasn't fixed health care, AND WHERES MY GODDAMN MAGICAL PONY???!!!

I mean, what the fuck has he been doing this whole time? Playing basketball with his socialist buddies?


WORST. PREZNIT. EVER.

The 100-Day Assault on America

by Larry Elder

Has it really been 100 days?

Aided by an eagerly compliant Democratic-controlled Congress, a sycophantic media, and a bunch of squishy Republicans, President Obama has taken the country on a radical, mind-boggling leap into collectivism.

Obama -- to use one of his favorite expressions -- doubled down, no, tripled and quadrupled down on Bush's "stimulus" and "rescue" packages, spending trillions of dollars to "bail out" financial institutions, too-big-to-fail businesses, and even deficit-running states. Obama promises to use taxpayer money to rescue "responsible homeowners" -- whatever that means -- from foreclosure, thus artificially propping up prices that shut out renters who would love to buy now-much-cheaper houses.

Obama proposes spending billions (or trillions?) more on "creating or saving" -- whatever that means -- 4 million, 3.5 million or 2.5 million jobs. Pick a number. Given the government's vast business expertise, Obama proposes spending gobs of money to "invest" in green jobs. And he's just warming up. He wants taxpayers to guarantee, presumably to all who request it, a "world-class education" -- whatever that means.

Firmly in charge of much of the domestic car industry, Obama effectively fired the CEO of General Motors. He threatens to fire still more executives in the parts of the financial services industry currently under the management, direction or control of Uncle Sam -- that eminent, well-regarded banker.

Obama blames the financial crisis on "greed" and the "lack of regulatory oversight." Funny thing about greed. Celebrated investor-turned-Obama-supporter/adviser Warren Buffett says, "Be fearful when others are greedy, and be greedy when others are fearful." Apparently, some practice good greed, while others engage in greedy greed.

As for regulation, the SEC already heavily regulates most of the troubled financial institutions. The world's largest insurer, AIG, operated under heavy regulation. The government-sponsored entities Freddie Mac and Fannie Mae -- blamed for irresponsibly buying, packaging and selling bad mortgages -- are regulated by a government agency, called the Office of Federal Housing Enterprise Oversight. Its sole responsibility is to oversee those two agencies. OFHEO, shortly before the government takeover of Freddie and Fannie, gave them two thumbs up.

Did the President, after campaigning against pork and earmarks, really sign bills that include both? Yes. Will the President's new budget really triple and quadruple the annual deficit? Yes. Will the President's budget really double the national debt within a few years and then increase still more beyond that? Yes. Do the President and members of Congress, many of whom never operated so much as a T-shirt concession booth, really believe that they can "modernize" health care, thus "saving" taxpayers buckets of money? Yes.

America traditionally represents the greatest possibility of someone's going from nothing to something. Why? In theory, if not practice, the government stays out of the way and lets individuals take risks and reap rewards or accept the consequences of failure. We call this capitalism -- or, at least, we used to.

Today's global downturn reflects too much borrowing and too much lending. But would borrowers and lenders -- at least in America -- have engaged in the same kind of behavior but for artificially low interest rates under the Federal Reserve System? Would borrowers and lenders have acted as precipitously but for the existence of Fannie and Freddie, which bought up their mortgages? Would banks have so readily lent money to those who clearly could not repay it but for the Community Reinvestment Act? That law pressured banks into relaxing their normal lending standards to help low-income borrowers.

Now let's turn to Job No. 1 -- national security. We no longer call the War on Terror the "War on Terror." We no longer call Islamofascist enemy detainees "enemy detainees." The President embarked on an I'm-not-Bush and we're-sorry-for-being-arrogant international tour. To the receptive, admiring G-20 nations, the President flogged America, calling us domineering and overbearing. What did the swooning leaders give in return? Virtually nothing. He wanted more assistance in fighting the war in Afghanistan. The NATO members offered more advisers and trainers, all, mind you, out of harm's way and only on a temporary basis.

The President offered a new relationship with Iran, provided Iranians "unclenched their fist." The President even sent a shout-out video to the Iranians on one of their holidays. What did he get in return? Iran promised to continue its march toward the development of a nuclear weapon and called Israel the "most cruel and racist regime."

Obama offered North Korea a kinder, gentler foreign policy. What did he get in return? The North Koreans, in violation of a United Nations resolution, attempted to launch a long-range missile. The President condemned the act. The United Nations Security Council convened an emergency session. What happened? Nothing. Well, not exactly nothing. North Korea kicked out the U.N.'s nuclear inspectors and announced the resumption of its nuclear weapons program. And North Korea, along with Iran, arrested and imprisoned American journalists.

On the other hand, Washingtonian magazine graced us with a spiffy, Photoshopped cover of a fit and toned swimsuit-wearing President Obama. So all is not lost.

At least he looks good.

^mkknyr: She's not in this video, but right before the election she was harping on about the impending American fascism, how she was convinced the Republicans were going to rig the election, use the American military to quell the uprising on American soil, impose martial law. She drew a direct comparison to October 1, 2008 in America to February, 1933 in Germany. Basically, she was trafficking in fear; she certainly had me afraid.
http://www.videosift.com/video/Interview-Naomi-Wolf-Give-Me-Liberty



Thanks.

Yeah, she's one of the many nutjobs who "predicted" the financial crisis. There are two problems with that: 1. At any given times there are endless numbers of people predicting financial crises, generally for different reasons aligned with whichever fringe ideology they prefer. 2. If you look at her other predictions, as a general rule, they're dead wrong, as shown in that video.

Reality is, unfortunately, much more prosaic than our wildest imaginations.

I assume that after being so wrong, she's learned 0% of her lesson, same as all the figures whose predictions about Iraq were worthless (and who are still on TV, same as her). Down the memory hole, I suppose.

I don't think "cult" is too far off, actually. Her philosophy was extremely dogmatic, and she even threatened to sue its critics. Sort of like Scientology, n'est-ce pas?

ATLAS SHRUGGED, UPDATED FOR THE CURRENT FINANCIAL CRISIS.

>> ^campionidelmondo:
>> ^Lodurr:
This is one of the best pieces I've seen on the financial crisis. It's amazing how the financial institutions lied to the public every day on the way down.

I think you're confusing financial institutions with television.

I wasn't talking about the news anchors, but the top company execs they had on their programs saying everything was fine.