International Regulation For The Global Economy
By Steve Hynd Saturday Oct 18, 2008 8:15amGordon Brown answers questions on the future of the economy, bankers bonuses and global co-operation
The UK prime minister, Gordon Brown, has rediscovered his "small-s" socialist roots during the current financial crisis he helped create by forgetting them and thus allowing US-style unregulated risk-taking in UK financial markets. It hasn't hurt Brown in the polls either - where once he had trailed so badly that everyone had written him off, now he's ahead of his Conservative Party rival by 11 points.
His credibility on the international stage is high too. He was the most successful treasurer of a Western nation since WW2, with 13 straight years in the black, and is the architect of the current international plan to restore liquidity to the world economy by having governments take equity stakes in banks and other institutions. It's a process known as "nationalisation" but somehow the U.S. media doesn't want to use that word or remind voters that the conservative Bush administration has been forced to socialist policy by its own maladministration.
Now, Brown has an op-ed in the Washington Post setting out the next stage of fiscal recovery - international laws to regulate the financial sector. He's even using the words "new Bretton Woods".
We must deal with more than the symptoms of the current crisis. We have to tackle the root causes. So the next stage is to rebuild our fractured international financial system.
This week, European leaders came together to propose the guiding principles that we believe should underpin this new Bretton Woods: transparency, sound banking, responsibility, integrity and global governance. We agreed that urgent decisions implementing these principles should be made to root out the irresponsible and often undisclosed lending at the heart of our problems. To do this, we need cross-border supervision of financial institutions; shared global standards for accounting and regulation; a more responsible approach to executive remuneration that rewards hard work, effort and enterprise but not irresponsible risk-taking; and the renewal of our international institutions to make them effective early-warning systems for the world economy.
Such an international regulatory framework, if enshrined in a treaty, will have the force of international law - and that's clearly what Brown and the other European leaders intend. It will then be largely immune to Republican deregulatory zeal even in the U.S., because laws adopetd by treaty have the force of federal laws but international treaties cannot be changed just by enacting domestic legislation to do away with them. Free market conservatives (and neocons, who hate any restriction on American hegemony and freedom to act as it sees fit) are going to hate Brown's plan, but what choice do they have? The medicine will taste bitter but a little bit (not too much) socialism will be good for what ails the world economy.
But what I would find really interesting would be if someone asked John McCain, "maverick reformer", if he thinks the fiscal socialism that the Bush administration has already enacted and the socialism to come are good ideas. And if not, what would be his alternative?
Nobel winner Paul Krugman is all for some fiscal socialism and nanny-stating on the domestic scene too.
there’s a lot the federal government can do for the economy. It can provide extended benefits to the unemployed, which will both help distressed families cope and put money in the hands of people likely to spend it. It can provide emergency aid to state and local governments, so that they aren’t forced into steep spending cuts that both degrade public services and destroy jobs. It can buy up mortgages (but not at face value, as John McCain has proposed) and restructure the terms to help families stay in their homes.
And this is also a good time to engage in some serious infrastructure spending, which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn’t needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling.
Will the next administration do what’s needed to deal with the economic slump? Not if Mr. McCain pulls off an upset. What we need right now is more government spending — but when Mr. McCain was asked in one of the debates how he would deal with the economic crisis, he answered: “Well, the first thing we have to do is get spending under control.”
...The responsible thing, right now, is to give the economy the help it needs. Now is not the time to worry about the deficit.
That's something Dems have already argued (as have I), but having the Nobel winner back you up is nice.
Crossposted from Newshoggers
Login or Register to post comments.
Noble speech Mr. Brown. Good luck tackling that root cause. Greed.
The root causes are systemic, and cannot be repaired without completely dismantling the existing systems; probably not without dismantling the whole "capitalist" ponzi scheme...
Nader and his typically well thought out and elucidated points, if rather poorly photographed presentation:
http://www.youtube.com/watch?v=S7aC7CyOP0Q
Not with bought and sold "Hope and Change" fraud in the WH.
BTW, Alice abides.
A New Bretton Woods Agreement is just what is needed, I have watched with great delight to see this proposal come out.
People must understand that every FIAT currency in history has failed, ALL OF THEM! None have succeeded. Gold and silver has always won, it is the only only standard the world returns to when these other paper systems fail.
Every dollar printed is born out of debt.
Every dollar printed is lent to people of the US with interest, when you hear the FED dropped or raised the interest rate they are referring to the interest rate the dollar is being lent to banks at. We frequently hear inflation isn't rising, this is lie. The government uses stealth inflation (a.k.a printing dollars) and it highlights the difference between price and value. The Dow has only gone up in terms of dollars but contrasted against other asset classes it has dropped against commodities, agricultural products, oil, industrials, gold, etc.
The reality is the Dow has been crashing since early 1999, at that time you could sell one share of the Dow and buy 800 barrels of oil, the Dow has fallen almost 90% measured against oil since then, before the recent free fall you could sell one share and buy roughly 100 barrels of oil.
Since we are on a fiat currency there is no baseline to measure the value of the dollar as there was under the Breton Woods agreement. The only true way to know the worth of the dollar is to compare asset classes against others to know the true value of an item. The CPI is a lie with it's now shifting hedonic adjustments is nothing but a deceitful dog and pony show. John Williams exposed these shadow government statistics (www.shadowstats.com). More concerning is the fact the FED stopped publishing M3 data in 2006, they don’t want anyone to know how dollar printing they are doing.
What were they trying to hide, a huge crash?
We have been lied to; inflation has risen in the form of stealth inflation.
Don't you get tired of hearing about the nearly $5 hundred billion deficit when the national debt has doubled in the last 8 years? I know I do.
Financial Crisis: Gordon Brown calls for 'new Bretton Woods'
www.telegraph.co.uk/finance/financetopics/fin...
I'm glad Gordon Brown found his political balls. He has come out so strong and competent as he knows finances and how to use his strengths. Same as Prime Minister Rudd of the Australian Labor Party who was criticised as a bureaucrat, but he has handled the financial crisis brilliantly. A former Labor govt back in the 1990s put in some unpopular bank regulations and now our four main banks are among the 12 strongest financial institutions in the world.
All they want is the skrittle-skrats!
http://www.filthyrichmond.blogspot.com
Oh, and Rudd made a speech last week condemning extreme capitalism. It didn't go down well with the multi millionaire silvertail leader of the conservative opposition.
More government PLEASE GIVE US MORE GOVERNMENT.
Pathetic.
otherwise, somebody'd hafta hunt you like a rabid dog...
In the case of the US, it should be "Give us competent government"
I certainly dont trust someone who helped create the current financial crisis... with the solution.
and you should'nt either Cernig!
We have enough trouble electing representatives to regulate our financial markets here at home in the USA...
how will we insure that some sort of "international entity" will regulate it?
While it's good that other countries are leading the call to regulation, I hope this can be postponed until 2009 and a new US Administration. Even then, would the new Administration have the fortitude or honesty to sign a meaningful and enforceable treaty? I for one, doubt it.
An Obama administration certainly would. If McFeeble wins say hello to the second great depression.
That... is the worst kind of wishful thinking possible. Who the POTUS will be is beside their point. Wall Street has both McCain And Obama in their back pocket.
You think David Brooks and Krauthammer and Bill Kristol are saying nice things about Obama because he's the second coming of FDR?
Think again.
to the functioning of the economy (which is a whole lot), the world economy is going to be in the toilet until the banks have clean balance sheets capable of being valued objectively.
The solution to trickery is transparency.
But I still don't see how a system of (not especially 'democratically') regulated capitalism is much different from a sim8ilar system called "communism," since the names don't amtter but the concentration of power does...
i saw the subject of the post and groaned. but then i read on and as i read my heart grew lighter. the grownups just may have a chance to set up a playpen in which the ADHD set can't hurt themselves and others.
I think We as a People are once more being manipulated by fear. I can't help thinking this is all planned. A nice tidy controlled crash of our economy to scare us into accepting a North American Union.
Good-bye Dollar, hello Amero.
heres a news flash for you all IT'S ALWAYS BEEN SOCIALISM for the rich, the core problem the US has is the fiat currency and inflation by the federal reserve, it's like a farmer pouring water into his milk, eventually it's going to be completely diluted and worthless.
It's called fascism. Look it up.
Yeh, it is now, but what we have had for the last few decades has been a form of socialism, it's never been laissez faire free market capitalism, anyone who says it has needs to do a bit of research.
Blaming free market capitalism for this crisis is ignoring man many other things, people are politisizing it so they can blame the "conservatives" for it, ... i wish people would stop referring to Bush as a conservative, he's patently NEVER been a conservative.
We haven't been labouring under a govt here with "a form of socialism" for the rich. It's fascistic the fucking second the govt gives our money to a corporation. Full stop. And that's what's been going on for the last few decades of which you speak -- FASCISM.
Like I said before, look it up.
You are so full of bullshit your eyelids are brown!
You are the one who needs to go do the research and let me help you along a bit…
This is an interview with Dr. Roubini, Macroeconomics Professor at NYU’s Stern school of business who began throwing up signal flairs back in 2006 that the lack of any regulations in the international financial markets would lead to a collapse of the entire global financial system… which has now happened.
Professor Roubini’s website is the worlds leading website for economists and specialists in international business.
Lets begin with an interview he did with Bloomberg.com about where we are now, root causes, and what needs to be done shall we?
http://www.bloomberg.com/avp/avp.htm?clipSRC=...
What you “Free Market conservatives” fail to fess up to is that it was a complete lack of any regulations on hedge funds and in the international financial markets that allowed the market to become so overleveraged in the securitized debt obligations that it brought down the entire worlds banking system.
Thanks Phil Gramm and the GOP dominated congress!
PBS NewsHour 20070830 Subprime Primer 1of2
http://www.youtube.com/watch?v=k6jWvOHYeJc
Lately, your ilk have been chanting the Fannie Mae and Freddie Mac mantra as the cause of the whole crisis… that too is bullshit!
The fact is that there are only about $200 Billion dollars in bad mortgages! So how do $200 billion dollars in bad mortgages turn into a multi-trillion dollar financial meltdown?
Easy… no regulation of those financial markets as Roubini pointed out. The put those mortgages in bundles and sold them on the international market. These bundles were then rebundled and sold again and rebundled and sold again and each time they were rebundled… they were marked up until the real value of the mortgages in those SIV’s and CDO’s no longer bore any relationship to their selling price… and no regulators were around to stop them!
PBS Newshour explains the 2008 credit bubble
http://www.youtube.com/watch?v=bHXcnWrw7r4
And by the way… Fannie Mae and Freddie Mac… they didn’t make subprime loans!
http://www.newsweek.com/id/146257
I have never seen mentioned, but do realtors play a part in this?
They set the asking price for a home a little higher than the last similar property sold in the same neighborhood. Assume 10 properties sold, which would raise the price of all properties in the neighborhood. Is that reasonable, or does that contribute to overvalued homes?
Anyone have any ideas on this?
Brown sounds almost reasonable but nothing "Old Europe" does will amount to squat unless the US goes along or we fall into obscurity. So... if McCain wins and returns to his natural purpose of deregulation, does that mean another four years of "Bite Me! foreign policy?
It's a rhetorical question... :(
In the video clip Brown states that there will be no bonuses for the banks the UK has nationalized (HBOS, etc).
However, here in the US the big banks that have been "bailed out" are giving out massive bonuses.
From: Guardian UK: Wall Street banks in $70bn staff payout
That was quite a mouthful in the first two paragraphs. You say that,
"...He was the most successful treasurer of a Western nation since WW2, with 13 straight years in the black..."
While at the same time
"...allowing US-style unregulated risk-taking in UK financial markets.."
Let's see if his little "small-s" socialist self can match that record. I have yet to see a "small-s" Nation experience the incredible lifestyle the "small-c" US style economy has experienced and I doubt there will ever be one.
When you take away the risk, you invariably take away the prospect for great reward as well.
the incredible lifestyle the "small-c" US style economy has experienced
A third of the population with no or too little health coverage, illiteracy rates that beggar the imagination, food poverty rates unmatched in the Western world and a higher rate of teen pregnancies?
Or did you mean gas guzzling, carbon-emitting SUVs, McMansions built on a credit bubble, urban sprawl leading to hollow cities, gun crime rates, consumerism driven by deficit spending and a military budget bigger than the rest of the world's combined?
Simple truth: the US pre-eminent post-war economic position was based upon it being untouched by WW2 and resource rich, while the rest of the industrial world had been hammered and had to play catch-up. It had nothing to do with style of government.
Regards, C
Would that be us social democrats in Scandinavia, usually topping the list of best nations to live in year after year?
so be it.
Except that they've been risking MY money and THEY are reaping all the rewards!!
credit card debt is > $7,000 per card, and I assume with all of these recent job losses there will be just as many MORE bankruptcies
Cernig points out that Gordon Brown helped create the
current financial crisis...
...and then goes on to say "His credibility on the international stage is high too."
I say Cernig just lost some credibility.
Miss Kitty is right! ...fascism is socialism for Banks and corporations.
If you know that Brown managed those 13 years in the black by closing corporate tax loopholes it makes a difference to how you view his record. If you realise that he was forced into deregulation - and thus helped create the current crisis - by Tony Blair when he was only Chanchellor to Blair's PM, it makes a difference.
But Brown's credibility on the international stage is driven by: his lead on world poverty issues, his lead on climate change and his lead on solving the crisis he helped create by advocating nationalisation and regulation.
Milqutoast, you appear to be building your credibility on your ability to take two datum points and make a highly illogical leap from one to the other in construction of a strawman.
Regards, C
Chart showing democratic president means big market gains -
http://www.buysellshort.com/dow.htm
That depends on what your investment portfolio looks like!
did you invest in? HALLIBURTON, RAYTHEON, GENERAL DYNAMICS, LOCKHEED MARTIN, EXXON MOBIL or any other weapons or oil manufacturers?
...or did you invest in a domestic clean coal plant or a wind farm or a methanol or alcohol producing plant?
...(actually) ...I'm pretty sure if you look at congress' "portfolios" you would see that democraps are just as heavily invested in the "defense industry" as are repukelicant's
Hate to sound conspiratorial but this sounds more and more like this was planned. Gordon is one the people that talks about a "NWO".
NWO is a right wing tin foil hat theory designed to demonize anyone who goes against their third rate ideas about capitalism, and abandoning their paranoia would make their lazy butts have to look outside their diminishing box in America.
...funny how this small group of tin foil hatted conspiracy nuts have been accurately predicting all of this for at least the past decade....can’t wait to see whose face will be on the Amero.
Don't you mean Canamero, or Mexamero? You're not the leaders anymore. Just something to think about.
Still no accountability and the same people who caused the mess to happen are still in office.
Fiscal insanity.
from "global Communism?"
really...
You can't have regulations without regulators. And even with a small international group, who would head it?
I don't see America going along with that from either party. Otherwise we might have a UN army by now.
)O(
That the current market-crises disproves the 80's era mantra, "bigger is better," if when you get so big you can pull the country down with ya.
However, that might be America's saving grace. A lot of us have been predicting America will become a "third-world" power, yet a lot of the international financial crisis is due to America's faltering booshco economy. The rest of the world can't afford to have us fall.
)O(
The rest of us have to act as logs and float devices for the rich so they don't get their little feet wet in this dirty failure of theirs.
Anybody Know what happened to the REFRESH Button?
And does everyone post hang in the constantly open comment box?OK, I take bake the thing I just x'd out. that one got fixed. But how about the Refresh button?
Sounds like "New" Labour has realised "old" Labour wasn't too bad.
Similar to how the "New" Democrat label (invented by the DLC and Bill Clinton) is going to the wayside.
For the World to solve it's market-place problems, one of their pre-conditions is the immediate arrests and war-crime trials of booshco.
)O(
Didn't Bush come out of his White House Cave yesterday and say 'don't wory things will get better, eventually.' Then he retreated back into his cave.
Made me want to break Godwin's Law YET AGAIN (comparing to footage of Hitler coming out of his bunker for the last time).
I noticed that "Stars and Stripes" were played afterward. According to Uncle John's Bathroom Reader, circus bands only play "Stars and Stripes" when something has gone ghastly wrong. Thanks Dumbya: nice circus you've been running for the past 8 years. NOT!!!!
Felt I had to comment on some innacuracies and mistakes:
Unfortunately Brown helped cause the financial mess we are in right now, through his economic decisions of the past 11 years - anyone who thinks Alistair Darling has much influence as chancellor is incorrect - there is evidence that Brown has continued to try to keep as much influence over the treasury since he became PM as before.
Since becoming PM, Brown quickly acquired a reputation for stealing the policies of the opposition (shades of John Mccain anyone)and for backing away from an election as soon as it emerged he would lose, along with what has been described as an impulsive personality coupled to an unwillingness to accept when he is wrong. Brown willingly gave the banking industry an increasingly free hand, acquiring wealthy backers like Sir Ronald Cohen, as well as overseeing the final destruction of the UK manufacturing sector and the construction of an economy based on cheap immigrant labour, together with happily bailing out a bank with close ties to the Labour Party's heartland
He has failed utterly as any kind of successful chancellor - in 1997 he was handed an economy in good shape and has proceeded to wreck it - the gold reserves sell off, destroying his own golden rule etc etc, private finance initiatives - the list of charges is long and varied, but all of which can be traced back to Brown and have left this country in incredibly poor shape economically, with corporations holding vast stakes in what should be purely publicly owned entities, not least our education system.
Anyone who thinks Brown is any kind of idealist is, sadly, wrong.
Brown is even more of a political opportunist than Blair as anyone who has experienced the last 12 months of UK politics will attest.
His handling of the Northern Rock crisis was shameful, and his current reaction has come about not through any kind of desire to build a better country, but through a desperate urge not to be destroyed by the UK voters - he changes his policies to suit what he feels the readers of the Rupert Murdoch owned 'SUN'newspaper will enjoy.
Peter Mandelson and Alistair Campbell have returned to roles in government - the twin prices of darkness from the same pool that spawned Rove et al.
All of the above is based on a wide variety of articles which can be read on the websites of BBC News, the Guardian/Observer, the Times, the Evening Standard and a few others. Sorry I didn't have time to link to the specific articles, but they are generally pretty easy to find.
At least the American people will get to vote for a new President within a few weeks - we could have to endure Brown for up to another 18 months.
P.S. For the sake of the world please choose Obama!
I basically agree with these statement - Brown is just sweeping up his own doo-dah as the bar has been set so low he strides around the Globe like a superman.
He basically (including on the war) aided and abetted Bush as Blair's right-hand man.
There has been one man that seem to have predicted a lot of what's happening - from the Liberal Democrats - Vince Cable.
US citizens might be astonished that a party that goes under that title commanded 22% of the vote in Britain in 2005.
Read more a www.libdems.org.uk
I see. Let me put my tin foil hat on here...
We are SUPPOSED to be VERY AFRAID of Wall Street getting wholloped for being brazen thieves and by that fear be willing to hand over our sovereignty to a world court?
WHAT?
I say let the market crash. I WANT SOVEREIGNTY NOT SLAVERY.
That's pretty funny.
That's my question. We are moving right along on the conveyor belt to the One World or New World Order, or whatever name you like.
We already have international financial cabals who run the monetary systems of the world - IMF, World Bank, BIS, Federal Reserve and all the other central banks - and look what a great job they've done:
keeping the people of the world in debt, robbing third world countries of their resources and financial futures, etc. These are the folks who've brought us the current crisis.
So, now they want to "In Fact" consolidate all the financial systems, and the next step is surely the end of national soverignty and the
writing of some sort of New World Constitution - and all your favorite neo-con fascists will be in charge.
This financial debacle is just a new 9/11 - or a New Pearl Harbor as the PNAC'ers called it in their plans - as non verified Anonymous says, we're supposed to be Very Afraid and just move along, nothing to see here.... we are so-o-o-o-o screwed!
You know what I want to see? International taxes. That way there is no place for the rich to hide.
But the logistics of that would probably be a nightmare. Still can dream.
In laymen's terms, I knew every time I turned on the computer and saw, borrow $600,000 for only $389 a month, bad credit, no problem, I knew the system had run amok. Don't need to be a rocket scientist: these guy are not being governed at all. They were like junkies at the craps table, rolling the dice (with our savings and/or assets.)
You only think the savings and assets are yours. They are yours until some Big Shot with money, a lawyer and/or a lobbyist decides they want 'em. Witness the poor schmucks evicted under eminent domain to make way for a new casino or what-have-you. Bush's legacy to all Americans (except his tax-cut beneficiaries) is a monthly payment big enough to pay for a new car. As many others have pointed out, it's not socialism, what they've done, it's National Socialism.
What's this
By The Canadian Press
VANCOUVER - Former U.S. president Bill Clinton is praising Canada's banking system.
Clinton, who was in Vancouver yesterday to speak to a business group, says Canadians are very lucky to have a government and system that encourages one of the best banking communities in the world.
The two-term Democratic president says if Canada keeps it up, it will avoid the banking mess being experienced in the United States.
----->> Yet, in the wing-nuttia world, our system is to be feared. Imagine "socialized medicine". We all pay for it, and we all get it. What's so wrong with that?
A totally free market place would only work if you first execute, or at least lock up for years the corrupt and the greedy.
Then there should be a requirement, a law, that makes it unlawful for company executives to be recompensed more than 50 times what the predominant class of employee of that company receives. The number 50 (I just threw it out there) could be different for different kinds of businesses, but if executives raise their own salary, they would automatically raise everyone else's.
A rising tide raises all ships.
From being a rather stooping, crouching figure in the past, Brown, after some body-language management classes, has assumed the swagger of Mussolini.
It will help him just as much as it helped Il Duce - strictly short-term.
Wherever did real leaders go to in the 21st Century?
We need a Tobin tax - tax financial flows at a minuscule marginal rate to prevent large swings of capital flight and to recoup losses to domestic economies from the insane tax breaks that fuelled some of this mess in the first place
We need a Tobin tax - tax financial flows at a minuscule marginal rate to prevent large swings of capital flight and to recoup losses to domestic economies from the insane tax breaks that fuelled some of this mess in the first place
1.For financial data, publishing should be rule and secrecy exception. Publication not just in internet, but in "machine readable" broadcasting form "automatic tv-channel", from where investors, companies, governments, research institutions and curious people can pipe the data to their softwares. If international regulatory system ends up with some gaps/leaks somewhere in the world, intel agencies may be used to patch some of those, as German government has done with tax dodging.
Use of automation by open-source-software for analysis of financial data should be expanded, not just because of the usual reason that it saves work, but also because software has no conflict of intrest and people know that it has no conflict of intrest.
2.If analogies are needed for the structure and complexity of financial system, certain kinds of computer games may be the closest thing, at least better than physical systems. Design of regulation can benefit from same kind of skill that is needed for computer game rule design.
3.Currencies have been tied to gold and silver prices, but open mind is needed. Maybe, just maybe, iron, copper, wheat, helium... alone or as part of a set in some average, could be option(s)...
Login or Register to post comments.