[p2p-research] absense of structural reactions to meltdown, Fwd: ZNet Daily Commentary: What Are They Waiting for? By Danny Schechter

Wed Mar 10 16:18:44 CET 2010

Thanks ryan,

I feel most convinced by the approaches proposed by Ellen Brown,
http://webofdebt.wordpress.com/, she favours sovereign debt exclusively
focused on non-inflationary productive investements, and she has many
examples of where this has worked in the past, and recently as well,

Michel

On Wed, Mar 10, 2010 at 10:05 PM, Ryan Lanham <rlanham1963 at gmail.com> wrote:

> Hi MIchel,
>
> This is a complex topic.  First, I would say, I am no classic
> conservative.  My fiscal conservatism relates to my knowledge of how
> economies evolve and how governments work.
>
> I believe in social welfare programmes and especially safety nets.  I
> believe in social security programs.  I think all governments should strive
> to provide them.
>
> I am, as you know, a Keynesian.  I believe government spending should be
> counter-cyclical to the business cycle to mollify adverse shocks from
> the business cycle.  I also believe, following Robert Solow, that economic
> cycles can be influenced by timed investment--and should be so influenced.
>
> That said, Keynesianism speaks little to sovereign credit.  Governments now
> are at the end of their legitimate ropes.  If they exceed that credit too
> much, there are currency implications that Keynes did not have to cope
> with.  Further, there is general loss of confidence in the state's ability
> to provide meaningful funds for its legitimate purposes.  There is always
> rhetoric that current money is imaginary, etc., which is to my mind highly
> destructive.  Money is the basis of our social reality.  Understanding it is
> the chief social science and will be for centuries more.  Nations that
> manage money poorly impoverish and endanger their citizens--the worst
> outcome of government.
>
> The one thing that almost surely did not cause the current crisis is
> government policy.  What may not have lessened is government intervention
> done well.
>
> We are now in a stark period.  Truly, even the doomsayers have no real idea
> how stark it is because most doomsayers live in the happy world others have
> constructed for them with policing, stable markets, good regulations and
> minimal corruptions.
>
> There is no solution to our crisis on the horizon and there are new
> constraints we've never faced before (climate change and the end of labor).
> It feels like an end game.  One assumes there is a "beyond" as we all do,
> but I'll be damned if I can see it.  It certainly looks like an unhappy
> existance for most going forward unless the rules change somehow through
> technology.
>
> Whatever life choices a person makes, whatever political and economic views
> they hold, only a sociopath hopes for less propserous and less happy times.
> There are many sociopaths, sadly.  Properity has always been about choices.
> It still is.  It is the choice to avoid certain pains, and to relish certain
> luxuries--travel, learning, mobility, security, etc.
>
> Of course no one wants the planet to become uninahabitable or devoid of
> beauty, but it is an easy choice for most of us regarding enhanced human
> circumstances and a natural world. I'll take the enhanced human
> circumstances every time and I consider myself to be a deep oriented
> environmentalist.
>
> That is preface to saying states have three main purposes:
>
> To enable safety and propertity (Life)
>
> To enable the protection of freedoms (Liberty)
>
> To allow people to seek their best lives (Pursuit of Happiness)
> Here is what states cannot do in my opinion:
>
> 1. Guarantee happiness
> 2. Guarantee a standard of living
> 3. Change belief systems fundamentally
>
> Right now states are at the brink of their credit.  If they lose that
> credit, they will impoverish their peoples.  So they fail at all three of
> their purposes.  Most that will so fail will do it trying to achieve one of
> the three things that states cannot achieve (especially in the medium to
> long term).
>
> As such, I think states must act now like people who have spent too much.
> They must conserve, save, and attempt to recoup wealth.  As a Keynesian, I
> believe they must also attempt countercyclical investment to mollify
> shocks.  This is extremely hard.  States don't do well with moderate
> changes.  They either stay the same or change radically.  Both of those
> paths are really bad right now.
>
> I'm not optimistic.  Some will do it...New Zealand is looking like it is
> responding in most of the right ways.  Sweden is doing OK.  Canada is
> starting to do the right things.  The trick will be balanced, stable social
> expansion--a managed capitalism.  That's really hard and requires superb
> technocrats and an honest and nationalistic business community.  Few places
> have both of those.  To get them, there has to be a new contract
> between business leaders and government to be mutually supportive, to be
> socially engaged, to avoid creating external costs and other problematic
> externalities, and to not hold each other hostage in some sort of game.
> Most won't achieve that.  It is very hard.  States don't like business and
> vice versa.  That rhetoric is really destructive.  What we need now is the
> cooperative environments of China, Sweden, Denmark, New Zealand...and the
> old California or Massachusetts...or the even older UK.  It is hard to
> maintain.  Greed kills it on the one side, and free riding on the other.
>
>
>
>
>
> On Wed, Mar 10, 2010 at 8:35 AM, Michel Bauwens <michelsub2004 at gmail.com>wrote:
>
>> hi ryan,
>>
>> you write: The states doing the right things will look like the following:
>> Tight austerity plans.  Smaller government.  Less social welfare.  More
>> infrastructure spending with enough social spending to keep people alive and
>> basically out of despair.  Big emphases on enhanced productivity and reduced
>> costs without outsourcing.
>>
>> any evidence that policies that slash demand and social welfare actually
>> work? The evidence would rather point to the contrary ... countries that
>> have followed these IMF imposed policies have done very poorly, and
>> countries that went for social innovation and productivity did better ...;
>> I'm surprise that you still favour supply push policies that led to the
>> meltdown in the first place ..
>>
>> Michel
>>
>>
>>
>>
>> On Wed, Mar 10, 2010 at 8:24 PM, Ryan Lanham <rlanham1963 at gmail.com>wrote:
>>
>>> Not that I am any expert, but I would say we are already in the 2nd dip
>>> based on my local data.  Absent intensive Keynesian stimulus by the US,
>>> Europe and China, I don't see how we avoid significant contraction globally
>>> by late summer...probably 2-5% globally.  The closer it is to 5%...the
>>> greater the risk of major political instability in marginal states (e.g.
>>> Greece, Iran, Venezueala, Philippines, etc.)  I think it will be much closer
>>> to 2%--much depending on China and India consumption patterns.  That will
>>> still be stunningly painful.
>>>
>>> Shipping rates are down.  Currency flows are down.  Housing is slipping
>>> again.
>>>
>>> There is also some evidence consumption in China is slowing...savings
>>> rates are up.  If that happens, if China starts to become
>>> "Japan-like," there isn't enough government spending feasible that could
>>> return the world to a place that avoids significant contraction.  If global
>>> contraction reaches a multi-year double digit level, we will see major world
>>> system changes.
>>>
>>> People will be looking for short/easy fixes of which there are none.
>>> Consequently, they will make major errors...rapid nationalizations, huge
>>> social wealth transfers, etc.  That will accelerate the problem in those
>>> states and will disrupt productivity even more.  The outcome will be that
>>> the wealthy relocate and the poor become much poorer in the medium term
>>> after a short bump.
>>>
>>> The states doing the right things will look like the following: Tight
>>> austerity plans.  Smaller government.  Less social welfare.  More
>>> infrastructure spending with enough social spending to keep people alive and
>>> basically out of despair.  Big emphases on enhanced productivity and reduced
>>> costs without outsourcing.
>>>
>>> Education will get cut.  It is a too long term solution and radical
>>> change is even more on the horizon than ever before.  Healthcare will get
>>> cut.  In short, people will be allowed to die.  Green industries will get
>>> investment, but it won't be enough to radically drive jobs.  The rich will
>>> hunker down and stop spending.  When global tourism radically slows again,
>>> you'll know we are in the peak of the problem.
>>>
>>> I personally doubt that can be avoided now.
>>>
>>> Ryan
>>>
>>>   On Wed, Mar 10, 2010 at 4:34 AM, Michel Bauwens <
>>> michelsub2004 at gmail.com> wrote:
>>>
>>>>    What Are They Waiting for?
>>>>
>>>> March 10, 2010 By *Danny Schechter*
>>>>
>>>> Danny Schechter's ZSpace Page<http://www.zcommunications.org/zspace/dannyschechter>/
>>>> ZSpace <http://www.zcommunications.org/zspace/>
>>>>
>>>> What will it take?  What are they waiting for? What part of the reality
>>>> of a systemic crisis that will get worse don't they get?
>>>>
>>>> How is it possible that after near three years of economic turmoil, with
>>>> possibly hundreds of TRILLIONs down the rabbit hole-not that anyone is
>>>> counting or apparently can count-that the geniuses who run our economy still
>>>> don't "get" that the sh*t has already hit the fan? How many more jobs and
>>>> homes have to be lost?
>>>>
>>>> Michael Moore is not the only one predicting a second crash. Paul
>>>> Krugman is all out words excoriating the Administration for its tepidness.
>>>> Nouriel Roubini, who forecast the first meltdown, now says we are in serious
>>>> danger of a "double-dip," a lethal combo of rising inflation and deeper
>>>> recession.
>>>>
>>>> Woe to us if we can't see the handwriting on so many walls.
>>>>
>>>> The people in the know know that nothing has been fixed, know that all
>>>> the stimuli have barely stimulated, that the new jobs bill will never
>>>> generate the number of jobs that are needed, and that the banks have
>>>> obscenely been raking in oodles of money thanks to all the financing
>>>> taxpayers pumped into their coffers.
>>>>
>>>> Even as the Obamaites finally get around to proposing a measure to break
>>>> up the big banks and erode the notion of financial institutions being too
>>>> big to fail, we have the New York Times telling us that Congress does not
>>>> have the "appetite"-that's the word they use-to tackle even modest financial
>>>> reforms.
>>>>
>>>> The "appetite" is missing. In the real world of appetites, food
>>>> companies are recalling unsafe products every day because the food we eat is
>>>> subjected to federal inspections. Not so for financial products.
>>>>
>>>> The reason? Politics of course, but also the jillions that the financial
>>>> services industry  has "invested" in bill killing, compromise-making, and
>>>> just plain corrupting the legislative process.
>>>>
>>>> This past week, the Roosevelt Institute sponsored a conference over at
>>>> the Time Warner Center called Make Markets Be Markets
>>>> (Makemarketsbemarkets.org) , published a book of essays and heard from a
>>>> who's who in the world of influential economists and analysts who gave high
>>>> powered presentations, one after another, each more lucid than the next.
>>>> There was enough brainpower in the room to save the economy but, alas,
>>>> no one seems to be listening. Some business media was there collecting sound
>>>> bites but the urgency of the warnings did not transcend  the limits of the
>>>> bubble of financial journalism.
>>>>
>>>> For a long time, I wined about being ignored in not getting heard on the
>>>> economic collapse, which of course, I am, but here were people with Nobel
>>>> Prizes and PhDs and track records of making millions also being dissed and
>>>> pissed.
>>>> Setting the stage was Joe Stiglitz who won a Nobel Prize for his work,
>>>> and who left the World Bank with disgust over what they do. Stiglitz should
>>>> be in Obama's cabinet. Instead he is one of its critics.
>>>>
>>>> The presentations started off with Simon Johnson, the former chief
>>>> economist the IMF taking about the DOOM CYCLE-how we are just going around
>>>> in cycles without really addressing the system nature of the crisis. He
>>>> writes in the NY Times and on BaselineScenario.com which you should read
>>>> every day. He calls the cycle "unsustainable and crazy" and says that "the
>>>> destructive power of the down-cycle will overwhelm the restorative ability
>>>> of government like  it did in 1929-31."
>>>>
>>>> Translation: Here we go again.
>>>>
>>>> And then there was the super-articulate Raj Date who says we have to get
>>>> rid of Frannie Mae and Freddy Mac before they get rid of our housing market.
>>>> His analysis was detailed and textured. His conclusion simple: "they must be
>>>> eliminated." What is the Obama Administration doing about this? Nada.
>>>>
>>>> It got better when the only woman on the panel, Harvard's Elizabeth
>>>> Warren mesmerized the room. She has become a TV fixture because of how
>>>> charming, honest and forthright she has been in defending consumers from the
>>>> rip offs that we are all menaced by. She is the chairperson of the House
>>>> oversight committee on TARP and a leading advocate of an independent
>>>> consumer protection agency. She is now watching as Senator Dodd and some of
>>>> his GOP cronies try to bury it in the Federal Reserve Bank, a move that many
>>>> of the conference criticized in light of the Fed's history of doing so
>>>> little to protect the rights of consumers.
>>>>
>>>> After all the speakers presented their arguments, there were comments by
>>>> George Soros, who also criticized the economics profession for missing the
>>>> crisis, and businessman Jim Chanos who finally brought the discussion around
>>>> to the presence of massive fraud and criminality in our financial markets. I
>>>> spoke to that issue which I have just written a book on and made a film
>>>> about when I got a chance to ask a question.
>>>>
>>>> All too quietly, Wall Street firms are being sued for their many
>>>> transgressions. A study by Gary Null found that over $430 billion has been
>>>> paid to victimized parties by Wall Street firms in over 1500 cases.
>>>>
>>>> Some examples:
>>>>
>>>> *  Bank of America has spent $14.9 billion to settle 15 cases alleging
>>>> various charges such as securities violations and mismanagement;
>>>>
>>>> * Citigroup has spent over $13.9 billion to settle 12 cases alleging
>>>> various charges including abusive lending practices and involvement in
>>>> fraudulent activities;
>>>>
>>>> * Merrill Lynch has spent $12.2 billion to settle cases involving
>>>> various allegations including negligence and mismanagement of funds;
>>>>
>>>> * Morgan Stanley has spent over $5 billion to settle 11 cases involving
>>>> various allegations including failure to disclose material information to
>>>> customers;
>>>>
>>>> * Wachovia has spent over $9.5 billion to resolve allegations including
>>>> misleading investors and conflicts of interest;
>>>>
>>>> UBS has spent $19.5 billion to settle 6 cases with various charges
>>>> including misleading investors.
>>>>
>>>> So much information is now out there but to what effect? What more do we
>>>> need to know?
>>>>
>>>> There is a time for research and a time for advocacy, a time to try to
>>>> lobby in the suites and a time for marching in the streets. Students on US
>>>> campuses and workers in Greece have been battling the effects of the crisis.
>>>>  It is now time to go after the causes.
>>>> The public is open to acting. The most recent Zogby poll reports:
>>>>
>>>> # 32% of U.S. adults say they have "considered moving some or all of
>>>> (their) banking from a large national bank to a community bank or credit
>>>> union because (they) are unhappy with the policies or behavior of large
>>>> national banks."
>>>>
>>>> # 14% have moved some of their banking in the past year from a large
>>>> national bank to a community bank or credit union.
>>>>
>>>> # 9% of all U.S. adults have moved some of their business from large
>>>> national banks as a protest.
>>>>
>>>> People are pissed, far angrier than the media lets on. The lines are
>>>> being drawn. That hard rain is going to fall.
>>>>
>>>>
>>>> News Dissector Danny Schechter is a blogger, author and filmmaker. His
>>>> latest work is Plunder The Crime of Our Time on the financial crisis as a
>>>> crime story (Punderthecrimeofourtime.com) Comments to
>>>> dissector at mediachannel.org
>>>> ------------------------------
>>>>
>>>> *From:* Z Net - The Spirit Of Resistance Lives<http://www.zcommunications.org/>
>>>> *URL:*
>>>> http://www.zcommunications.org/what-are-they-waiting-for-by-danny-schechter
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>>>> Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Think
>>>> thank: http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>>>
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>>>
>>> --
>>> Ryan Lanham
>>> rlanham1963 at gmail.com
>>> Facebook: Ryan_Lanham
>>> P.O. Box 633
>>> Grand Cayman, KY1-1303
>>> Cayman Islands
>>> (345) 916-1712
>>>
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>>
>>
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>> thank: http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>
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>
>
> --
> Ryan Lanham
> rlanham1963 at gmail.com
> Facebook: Ryan_Lanham
> P.O. Box 633
> Grand Cayman, KY1-1303
> Cayman Islands
> (345) 916-1712
>
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