>> ^imstellar28:I can at least understand and sympathize with NetRunner's perspective on unemployment. That is a case of all people helping all people; even if I don't agree with forcing people to help, I can understand the reasoning. In the big scheme of things, unemployment benefits are such a small amount of money compared to our national income its really not a big deal. That cannot be said of trillion dollar socialistic bailouts to failing corporations, the governmental manipulation of markets, inflation, the creation of booms and bursts, etc.


My goodness, my efforts are paying off -- he's starting to have a grudging respect for my beliefs, even if he doesn't agree with them.

I think, imstellar, you just inadvertently stumbled into the main complaint us progressive/liberal people have about what Obama's doing with the economy now. He seems to be continuing this socialism-for-the-rich policy, which is vastly more expensive than anything we've ever dreamed of proposing in terms of unemployment, welfare, and health care, and that's saying quite a bit.

I would agree in general that we need for the losers to lose, mainly these investment banks that built these ponzi schemes. Problem is, when Paulson let Lehman fail, it triggered a run on the banks. In fact, the only thing that's stopped that from happening to all banks is the expectation that government will find a way to keep them afloat somehow.

That's why I see the question of how we deal with the banks as being one of the most important questions right now. If we let them fail, this really will be a huge depression, likely bigger than 1929, and more like the earlier "Long Depression" that followed the Panic of 1873. If we bail them out, not only is that unlikely to work, it would probably make the nation bankrupt, while heaping huge sums of cash into the pockets of the very people who built this house of cards.

I think the only reasonable option is to put them in receivership -- nationalize them. The government takes over the bank, wipes out the shareholders, brings in new management, straighten out the balance sheets, and then sell the bank back to private investors.

That way we keep the bank intact, make the losers lose, and while the risk is socialized, the taxpayers would get any upside that would be gained in the process.

All this talk about debt and deficit spending seems like hot air to me. Sure, we need to worry about it, but it's not really driving any of our issues right now. Cutting government spending right now would be a horrible idea, because it'd just add more people to the unemployment lines (even if I'd otherwise be happy to see the engines of war lose their biggest customer). Cutting taxes might help, but keep in mind Obama did that in the stimulus package (the largest middle-class tax cut in history, lefty demagogues would say), as well as spending money investing in infrastructure, to try to bring down unemployment. As Farhad said, it's probably insufficient to the size of the downturn we're in, but it should lessen the blow.

imstellar and blankfist, you both bring up inflation as a long-term risk. Here's what Brad DeLong has to say about that risk. I'm no economist, but my reading is that he's saying "good point, but here's how we would detect if inflation became an issue, and all of those metrics say we're good to go." From what I'm reading, deflation is the problem we're looking at, not inflation, and while it's true that if we make the stimulus too big it would lead to inflation, I think we're nowhere near that point right now.

Incidentally, that's the answer to imstellar's question about "why don't we do this in good times/developing countries too?"

I also love the compromise plan of saying that government should buff up our social safety net so that an economic crash doesn't put people on the streets, starve them, push them out of school (if there), or forgo medical treatments, then I'm all for letting the rest of the economy crash as hard as it cares too. I think, generally speaking, that's more in line with progressive ideology than what Obama's actually doing.

Farhad2000,

I am posting this again just for you, so I hope you read it. It was already posted above, but I do not think you took notice. You said, "...Not by the people for free market capitalism and 1% of the populace."

"Even the opponents of Socialism are dominated by socialist ideas. In seeking to combat Socialism from the standpoint of their special class interest these opponents - the parties which particularly call themselves 'bourgeois' or 'peasant' - admit indirectly the validity of all the essentials of socialist thought. For if it is only possible to argue against the socialist programme that it endangers the particular interests of one part of humanity, one has really affirmed Socialism."

You are arguing against capitalism by claiming that it only benefits 1% of the populace. The idea that science or logic only applies to certain groups of people, or somehow benefits certain groups over others, is a distinctly Marxist idea,. If you are okay with that, fine, but keep in mind the source of your ideas.

Also, keep in mind the difference between theory and practice. In theory, socialism is "for the people" but what has it ever been in practice? In the last 3 months , we have spent over a trillion dollars. How much of that money did you personally receive, and how much money did the top 1% receive? In looking at tax evasion, what percentage of middle class americans fail to pay their tax in full, when their income is directly withheld; and what percentage of the top 1% fails to pay their tax in full, when their income is largely obscured? If the government is the appropriator of money, and the top 1% has lobbyists, contacts, and political persuasion in the government, how exactly do you ever expect "the people" to win? If the top 1% are on the government payroll does that help or make it even worse?

In a capitalistic society, the top 1% have the most money but the people control the appropriations. In a socialistic society, the top 1% have the most money and control the appropriations. A perfect example is Henry Paulson: he made $54 million last year and he is controlling who gets the bailout money ($1 trillion plus). How can you argue otherwise? If you want "power for the people" aren't you on the wrong side?

Please clearly state your goals and how exactly they are achieved in your paradigm.

I can at least understand and sympathize with NetRunner's perspective on unemployment. That is a case of all people helping all people; even if I don't agree with forcing people to help, I can understand the reasoning. In the big scheme of things, unemployment benefits are such a small amount of money compared to our national income its really not a big deal. If we are talking about 2% unemployment, with people receiving 2 months of benefits at half their previous wages (large overestimation), that is less than 0.16% of our national income, or less than $25 billion. $25 billion! I mean seriously, that is like nothing when taken out of $15 trillion. That cannot be said of multi-trillion dollar socialistic bailouts to failing corporations, the governmental manipulation of markets, inflation, the creation of booms and bursts, etc.

Why should we spent upwards of 15% of our national income to indirectly address a problem which can be solved directly with less than 0.16% of our national income?

Well the work conditions might suck, but at least the food is *terrible.

BTW, guess who was the winning CEO at Goldman Sachs, reaping the benefits of this calamity until 2007?


Our very own Hank Paulson!

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Um... yeah... that's the idea, they were bailing them out with money for assets that were falling in value.... that *is* the nature of a bailout. How is this surprising? Not saying it's a Good Thing. Wait, Warren even knows this - "that could be the policy." That means Paulson *lies - why won't she just say "yes" to the question? Silly panel.

How is anyone not surprised this was essentially a subsidy??? Oh, because they didn't call it that? Fair enough. I'm still not shocked though - good call on the terrible tag because this is an idiotic piece of reporting.

Yes, Americans do have a voice... anyone notice that new guy in the White House?

OMG is the early show geared towards simplistic idiots or something?

>>I don't get the whole 1 Trillion for killing Iraqis is fine, 1 Trillion for corrupt failing banks is fine, but 1 Trillion for rebuilding the infrastructure of the US or helping the National Parks is "Socialism"

Actually, the $1T for banks was socialism. As in state-run government, etc. Our government is now the biggest shareholder of Citibank, for example.

Don't confuse Bush and Paulson with standard conservative ideology.

The neo- part of neo-con meant they were big-government conservatives. I.e., liberal on expansion of government spending, conservative on things like defense.

In a weird twist of fate, it was the Republicans that tried to increase regulation on Fannie Mae and Freddie Mac, and Democrats (including Barney Frank, who was literally in bed with their leadership while chairing the house finance committee) that blocked it.

Obama sued banks to get them to increase subprime loans.

But something tells me all this will be cleverly rebutted by liberals by having them stuff their fingers in their ears and yelling loudly...

I don't really like giving my views on these topics -- everyone is so biased by ideologies that it's almost impossible to sift through attacks and just bullshit.

Over the past six months I've spent many late nights trying to figure out what is happening to the US, and how it's going to affect my life in Australia. Our government seems to be following suit (create money, bail out failing industries, announce huge budget deficits).

Isn't it time to ask the question - is it worth 'stimulating' an economy that seems to be fundamentally flawed?

We, in western countries, have lived in probably the most leveraged state in history. Not just banks, the entire society. We used this leverage to purchase and consume goods made abroad, and to fund a service sector economy that is crashing now.

Now all this money that can't be paid back has to be written off. It can't be paid back. The leverage that existed because of this capital is gone.

Paulson and Bernanke pulled off a deft maneuver with the original TARP package.

There would have been a complete collapse of the American economy if they didn't act. The elephant in the room is simple though - what actually is the American economy?

It's a consumer and service sector based economy. Very little real goods are actually produced. The US has run a trade deficit since 1975.

There isn't a viable economy to stimulate. Even the automotive industry, considered the pinnacle of American manufacturing, burns cash at rates that render it unable to compete in a global market.

I've only read 200 pages of the act so far, and it seems like (excluding the TARP packages) it is the biggest transference of wealth from taxpayers to whomever the government decides in all time. It's a quick fix that will keep the government in power thanks in part to keeping a lot of people employed... by the government. A new social contract will emerge as written by Rahm Emanuel in his book "The Plan".

The whole saga has shown the world -- or at least myself, just what I suspected about America all along. The 'values' that they proudly proselytize to the world don't mean a god damn thing when a real test shows up.

Sadly, the next two years will probably sound the death knell for capitalism in my life time.

Cliffs:

a) America's economy is fake and nothing can 'save' it, it needs to be reinvented
b) America is bankrupt and will eventually default on it's debt to the rest of the world
c) Primarily, the manipulation of the Fractional Reserve Banking system caused the problem

Thoughts?

PS. I apologize if this is a little all over the place, I'm writing it between meetings at work.

http://www.videosift.com/video/Rob-Paulson-the-voice-of-Yakko-Nations-of-the-World

um, ^HIS name is robert paulson.

>> ^rasch187:
^ His name is Marat Safin...or Robert Paulson.


what does this clip have to do with Fight Club?

The first rule of tennis club is- don't pelt the line judge.
The second rule of tennis club is- don't pelt the line judge.
The third rule of tennis club is- if you break rules 1&2, kiss and make up.

yeah, that's some real antidisestablishmentarianism right there...

his name is robert paulson.

his name is robert paulson...

^ His name is Marat Safin...or Robert Paulson.

Epic, sir.

In reply to this comment by Farhad2000:
MCCAIN: THE FUNDAMENTALS OF THE ECONOMY ARE STRONG

BANKS: LOL OH SHIT WE FUCKED UP. WE NEED MONEY!!!

GOVERNMENT: K HOW MUCH?

BANKS: EVERYTHINGGGGG!!! LOL!

GVOERNMENT: K NEED ADMINS TO WATCH OVER IT K?

BANKS: WTF SOCIALISM? REGULATION YOU TRYING TO KILL MARKET? FU!

PAULSON: K HERE HAVE A BLANK CHECK

MCCAIN: THE FUNDAMENTALS OF THE ECONOMY ARE STRONG

BANKS: LOL OH SHIT WE FUCKED UP. WE NEED MONEY!!!

GOVERNMENT: K HOW MUCH?

BANKS: EVERYTHINGGGGG!!! LOL!

GVOERNMENT: K NEED ADMINS TO WATCH OVER IT K?

BANKS: WTF SOCIALISM? REGULATION YOU TRYING TO KILL MARKET? FU!

PAULSON: K HERE HAVE A BLANK CHECK

I guess it's clear that Secretary Treasurer Henry Paulson let Lehman fail, but saved Goldman, simply to eliminate the competition (Paulson was CEO at Goldman before he became Secretary of the Treasury). What isn't clear is how most of these bankers and brokers get away with robbery while the employees that put them there continue to get reamed.

Too bad there's no such thing as "class" in this country </sarcasm>