Face The Nation: Paul Krugman Says There's Hope For Our Economy--If We Get Real About "Bipartisanship"
By Nicole Belle Sunday Dec 28, 2008 12:15pm
I just loves me some Paul Krugman. In a just world, a man of his credentials (hello?!?! Nobel Prize in Economics?) would have far more weight than the bozos on the business channels still touting Friedman economics as the iceberg crashes into the bow and the water rises to their necks. But sadly, the media still gives equal weight to the failed policies that got us in this predicament as if the recession occurred in some vacuum, devoid of any consequences of the Republicans hard-on for "free" market de-regulation.
Guest host Chip Reid asks Krugman if the recession is actually a blessing in disguise, because it opens the door for a 21st Century New Deal. Krugman agrees, but only if we let go of the myth of "bipartisan agreement":
He’s [..] not going to get bipartisan consensus. He may be able to get some moderate Republicans votes. He may be able to get the moderate Republicans in the Senate – both of them -- to go…vote with the Democrats. The point is, you look at what John Boehner is doing in the House right now, the House Republican Leader. He’s dead set against doing anything constructive right now. He’s actually soliciting on his website, saying if there are any credentialed economists who are willing to you know, say negative things about stimulus plans, please contact me. So no, it’s not going to be bipartisan, in the sense that leaders of both parties are going to get together. Reaching out across the aisle, trying to find some sensible people on the Republican side is not the same thing.
I find it hilarious that after all of the petty partisanship of the last eight years that somehow it's incumbent upon the Democrats to be the grown-ups in Washington and reach across the aisle. Where was all the talk in the media circles of bipartisanship for the last eight years? Is it that the media knows that Republicans aren't mature enough to do so? And where, in all their history, have the Republicans shown themselves to be able to do anything for the good of the country instead of their party, as Krugman so aptly describes?
Krugman is dead on right. There will be no bipartisan consensus. The Republicans' agenda will be to obstruct and hobble as much of the Obama plans as possible to regain the majority in 2010 with the argument that the Democrats couldn't do anything. Boehner has all but admitted it. So let's let go of the notion of "bipartisanship" and get the majorities necessary to get things done.
Transcripts below the fold
REID: How do you see this recession and the response to it changing this country? I know you’ve been arguing for a more progressive government for a long time and obviously, difficult times like this, I don’t want to suggest that a recession is a good thing, but if looking back at this, five years or some number of years from now, can you envision a country that is better off because of how it responded to this recession?
KRUGMAN: Well, if you believe, as I do, that we need a stronger social safety net, that we need Universal Health Care, than the revelation of just how vulnerable we are when things go wrong, is going to help. If you believe that we’ve gone way too far in this belief that the market is always right, that regulation is always wrong, than this is one heckuva lesson in what happens when you don’t adequately regulate the financial markets. So I think we may be seeing a swing of the political pendulum as a result of this crisis that will hopefully leave us a better nation in the long run. We came out of the New Deal, we came out of the 1930s as a better country, a middle class country where we had been in the Gilded Age. We came out as a country that took better care of its citizens. That doesn’t mean that you hope for a depression, right? So we hope that this thing is relatively short, shorter than I expect it to be, and it’s not as bad as I expect it to be. But yeah, we’re learning something, and hopefully, we’ll make some use of those lessons.
REID: Barack Obama has talked a lot about the need to reach across the aisle…on everything. On all of his policies, foreign policy and this. And clearly in the Senate, you can’t get anything done with…anything with less than 60 votes. You need Republicans…
KRUGMAN: Right…
REID: …And in fact, I’ve been told, on Capitol Hill, they want a lot more than 60 votes. They want this to be genuinely bipartisan, which brings me to your book, which I was actually reading last night, and on page 272—I’m not playing ‘gotcha’, but I just wanted to see—you talk about the fact that the Republican Party is controlled by ‘movement Conservatives.’ You then say, quote ‘…the notion, beloved of political pundits, that we can make progress through bipartisan consensus is simply foolish.’ Are you suggesting that the kind of bipartisan consensus Barack Obama is looking for is foolish?
KRUGMAN: He’s…you know…that …he’s not going to get bipartisan consensus. He may be able to get some moderate Republicans votes. He may be able to get the moderate Republicans in the Senate – both of them -- to go…vote with the Democrats. The point is, you look at what John Boehner is doing in the House right now, the House Republican Leader. He’s dead set against doing anything constructive right now. He’s actually soliciting on his website, saying if there are any credentialed economists who are willing to you know, say negative things about stimulus plans, please contact me. So no, it’s not going to be bipartisan, in the sense that leaders of both parties are going to get together. Reaching out across the aisle, trying to find some sensible people on the Republican side is not the same thing.
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Obama's in for the rudest of awakenings if he thinks the GOP is going to be helpful. Krugman's right; they'll obstruct everything. So will Obama take the Clinton route and kiss their ass, and end up with a GOP Congress, or will he stand up to them? We'll see.
Exactly.
Krugman could single-handedly help the economy by investing in a razor, shaving soap, and aftershave.
See his beard?
Ain't it weird?
Don't be skeered,
It's just a beard.
(stolen from George Carlin)
Actually I'm bearded.
(I buried Paul...)
And I love the hell out of it.
At this time in our history with all the problems facing this nation, Mr. Krugman tries to give progressives a sensible voice on our economic future, and what do small minded people like yourself do, make fun of his beard. Guess your financial house in order or else you might not be so glib and wholy unintelligible on his commentary. GET A LIFE!!!
Hate to break it to you chum
But one can't be unintelligible on his commentary, if one did not make a comment about his commentary.
Where, pray tell, can I purchase a computer with that much vaunted but ever elusive Smell-O-Monitor that you have cleverly obtained?
When he told what Boehner is doing right now, I could have cried. Boehner is more interested in pissing around than he is in doing whatever might help the country right now. I hope republicans see this for what it is and kick his ass for it.
on both sides of the aisle. Reid and Pelosi are both ineffective, Lieberman is a topic unto himself, and Boehner et al, are nothing but trouble. It is time to lay down the gauntlet on both sides of the aisle.
And it's time for me to get a beer and watch the Dolphins kick the Jets' asses. (But I'm not sure any of this will happen...that is, of course, besides getting a beer...)
Now time to kick some Boehner, Lieberdouche, Pelosi, and Reid asses!
While the Republicans seem to get their way whether they are the majority or the minority, it is time to have real leadership from Democrats. Let the Republicans stand up for 36 hours and filibuster. Let them cray foul, but scorch them in the end.
I'm going to copy and paste an email I received from a Democratic Senate staffer as to why the Republicans cannot be forced to actually talk and filibuster. The rule changed years ago.
It would seem that the Republicans did not have any problems when they were the majority. It goes back to Democratic leadership. Let the Republicans speak for 3 days why they cannot support the middle class and then let them get voted out of office. If the Democrats just cave in then they will be voted out for being ineffective.
That's right.
Let them stand on the floor for days railing against the middle class. Then we take all that CSPAN footage of them obstructing and hating and assemble some nice election time commercials.
I'll say it again. The right wing will not be reasoned with. They must be crushed like roaches.
Amen!!
I gather Obama is a very good poker player. I doubt the Repugs are good at anything more difficult than Dodge-Ball.
bombardment bombardment bombardment bombardment.
If you can dodge an impeachment, you can dodge a ball.
from any side. not very satisfying, but it's what we need. this boehner guy can fuck off.
.
.
.
Not only should there not be bi-partisanship, there should be an immediate investigation into the crimes committed by the Bush administration. To not do so is to be complicit in these crimes.
This should NOT be politics as usual.
.
.
.
and morty kondracke actually already has said it in an editorial today. no war crimes investigations for the bush administration or be seen as "bush haters."
someone said earlier the republicans always seem to get there way. i agree and i find that curious.
That is a very very lame excuse.
I spent way more time than I wanted to at Boehner's site today trying to find the part that Krugman is talking about. I just couldn't find it. The only thing I found was that I felt I needed a shower after being there.
It might be removed from his website already
http://www.openleft.com/showDiary.do?diaryId=...
Thanks so much, Nicole. And good for Matt for catching it. I should have began looking as soon as I heard about it this morning. I hope he did have to take it down, the SOB.
I have seen nothing but total co-operation between dems and repubs for the last eight years! (errrr....since 9/11 anyway)
neo libs and neo cons working togther.
Conyers Pelosi and Reid, are all whores and even Obama voted for the patriot act, wiretapping immunity, and the bankster bailout!
The Dems caved in to everything the Bush admin wanted, ...and now its time for the republicans to return the favor!
it's still business as usual, and I'm sure Obama will get all the republican support he needs...
still seem to be agreeing on everything from bailing out the banks, to the war on poor brown people, to Pork barrel economic "stimulus" ( I guess they get stimulated when their rich cronies in their district get infastructure money?).....I agree with you totally. This is bipartisanship.
as I read what he has to say, I don't come away with anything more than the idea of stimulus spending...a 1930s solution to a mess of 21st century problems...?
hmmmmmm?
the mountain of credit card debt and the trillions of dollars of CDOs and especially CDSs sitting on bank balance sheets.
Keynesian spending won't touch these problems...which are at the core of today's economic mess.
let the banks go bankrupt with all of the folly sitting on their books.
Folly of their own making.
Their real books, not the phony books.
A Bankruptcy Judge would tear those contracts up.
Why not, because the Congress without public hearings decided to give them vast amounts. Bernanke, Paulson, and it is suspected here, Geithner when his time comes, seem determined to pay off at face value every last crooked derivative in existence.
There should be people going to jail. Instead we bail them out.
n/t
Banks are not allowed to go bankrupt in the United States. Accounts are generally
insured up to $100,000per individual per bank by the Federal Deposit Insurance Corporation.Banks that are in danger of failing are either taken over by the Federal Deposit Insurance Corporation, administered temporarily and eventually sold off or merged with other banks.
A List of banks seized by regulators and the assuming institutions can be obtained at Federal Deposit Insurance Corp - Failed Bank list
Note: In 2008, due to the financial crisis, and to encourage businesses and high-net-worth individuals to keep their cash in the largest banks (rather than spreading it out), Congress temporarily increased the insurance limit to $250,000
The Financial Modernization Bill of 1999 - which repealed Glass Steagall allowed Commercial Banks, Investment Banks and Insurance Companies to merge. And sell each other securities, securitized mortages etc etc.
That is why we are in this mess.
Investment Banks, Financial Services Companies, Asset management units of merged Investment/Commerical Banks can go bankrupt.
Lehmann Brothers files for bankruptcy.
Commercial banks units are placed into receivership by the OTS which seizes the assets and places them with the FDIC. Other units of the same parent corporation may be sold, perhaps continue or go into Bankruptcy.
Observe Washington Mutual. The Commercial assets, deposits were placed with the FDIC. Subsidiaries were sold to JPMorgan Chase and the holding company filed for bankruptcy.
My concern is the vast derivative market, Credit Default Swaps and Mezzanine CDOs which should be in my estimation before a Bankruptcy Judge.
The way they are doing it is a vast black hole. US banks have exposure to $180 Trillion in derivatives.
It is not the Commercial Units that have been doing all the madcap gambling. I can only surmise.
I agree with you, though the view I have is from this position. The worlds central/largest banks are pushing their monopolistic business plans, causing a consolidation of wealth and power in few well established hands.
Look at the folks that scraped up the remains of Lehmann Brothers, "Barclays PLC is ranked as the 25th largest company in the world according to Forbes Global 2000 (2008 list) and the fourth largest financial services provider in the world according to Tier 1 capital ($32.5 billion). It is the second largest bank in the United Kingdom based on asset size."
On September 25, 2008, the United States Office of Thrift Supervision (OTS) seized Washington Mutual Bank from Washington Mutual, Inc. and placed it into the receivership of the Federal Deposit Insurance Corporation (FDIC).
The OTS took the action due to to the withdrawal of $16.4 billion in deposits, during a 10-day bank run (amounting to 9% of the deposits it had held on June 30, 2008).The FDIC sold the banking subsidiaries (minus unsecured debt or equity claims) to JPMorgan Chase for $1.9 billion, which re-opened the bank the next day.
Look at all the corprate welfare crook switching over too become banks to get at the TARP funds, like Morgan Stanley, AMEX ...
Some interesting facts can be noticed here > http://video.google.com/videoplay?docid=65071... Thanks for your time :-)
The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act,
Gramm is a vice-chairman of UBS Investment Bank, a financial services company, and massive benefactor from Gramm's financial positions while he was in the Senate, based in Switzerland.
It is the world's largest manager of private wealth assets, "the world's biggest manager of other people's money" and is also the second-largest bank in Europe "Money makes the world go round" If you dare audit the Fed, you may just end up dead...
All evil, stems from greed, love and need.
"To crush your enemies, see them driven before you, and to hear the lamentation of the women."
But I expect that is too much to ask from Reid, Pelosi, Obama, et. al.
Yes, Conan would be a better leader, not Arnold, but Conan.
bipartisanshit that's what it's all about.
I don't agree with you, but if you say spending won't stem the tide, then what will? What do you propose, to let the economy collapse into depression?
The Keynesian goal in this situation is to keep the economy going and keep some level of liquidity until such time as the damaged sectors of the economy can sort themselves out.
A very large number of people are going to have to accept that their 'paper dollars' are gone. Hopefully there will be a renewed focus on the value of producing 'real' wealth through work.
-- to acknowledge the truth (e.g., that Citibank is insolvent and GM's a goner)
-- to let the dead fruit fall off the tree
-- to use any bailout money to bail out the citizenry
-- to breathe life back into congress as an independent branch of government (through public financing of congressional campaigns)
-- to use stimulus spending on the right kinds of projects (e.g., AZ, NM, and NV solar plants)
Let's not let anyone off the hook. I'm beginning to think the best service liberal bloggers could do is to get after our own reps, and I mean REALLY get after them. Not much we can do about the same-old, childish, bitter, largely ignorant righties. They're out-of-date and beyond repair.
But we do have considerable power of numbers over our own representatives. We need to scare the beegees out of them. The organizing can be done online now with the same focus we saw during the Obama campaign.
Boehner? Fuggedabahtit! He's a minor pea-shooter compared to an organized blogosphere. We'd do better to concentrate on our own shirkers. All we need to do is to agree on the issue and the representative to target. Then just do it.
Your ideas intrigue me. I could get on-board something like this.
Maybe a better role for bloggers
Sun, 12/28/2008 - 13:33 — PW
But we do have considerable power of numbers over our own representatives. We need to scare the beegees out of them. The organizing can be done online now with the same focus we saw during the Obama campaign.
_________________________________________________________________
Would this work?
http://www.youtube.com/watch?v=OCAjmuA1HDk
There's Hope For Our Economy--If We Get Real About "Bipartisanship"
So, in other words, we're screwed. We are all quite aware that Repugs don't work and play well with others. Not even when it's a cop in an airport bathroom!
If our success depends on Republicans then what hope do we have? They will do nothing to help anyone but themselves and to hell with all of us, that's been the mantra for 30 plus years now. Am I really supposed to believe they will put all that behind and look forward to a brighter tomorrow for all?
I would have to see that before I could believe it, the history of the modern Republican party has shown me that they care about no one and they have no remorse for the mess they have made.
In fact they seem proud of it.
Under the Democrats and Obama's administration I'm betting that "Bipartisanship", "reaching across the isle" are going to be what they have always been: excuses to make sure that nothing changes for the better and to ensure that the government stays firmly under control of the banks and the large corporations. Obama is going to deploy the tactic of seeking so-called "bipartisanship"in order to provide cover for ongoing complicity by the Democrats in the acts of treason that are subverting the Constitution, the Nation and the People. They are going to do anything it takes to buy time to continue the coup d'etat of a thousand incremental baby steps. When it gets to the point that they've extracted all the use they can get out of political theater, they'll just pop off a nuke somewhere, blame it on pissed-off Arabs or Persians and use that as an excuse to declare martial law.
I'll believe they're acting in good will when (if) I finally see positive changes. The road that they are currently mapping-out isn't going to bring those changes about.
Just like to add thanks to Nicole Belle for some really useful info.
What? Bipartisanship?! Well OK in principle, but never, never again with the Republicans! The Republican party now consists of distilled filth. How are you going to deal with that? The Republicans don't represent anyone anymore except themselves. They have boiled away until only the most unscrupulous of them remain. No way, there has to be new political parties formed now!
GOP bipartisanships is the GOP and Dems getting together to do whatever the GOP says.
that doesn't follow logically at all. It's one possibility out of many things that could result from them obstructing Obama and the Democrats from passing legislation to aid the U.S. economy recover. But it doesn't follow at all that if they do that they will 'automatically' benefit. In fact, I wager they will hurt themselves even more if they obstruct to the higher degree. The electorate is now more aware of their slash and burn electoral tactics during numerous election cycles. And with real people really hurting during these tough times I don't believe regular folks will forgive those who 'got in the way' of policies that could've helped them. The GOP is great at pointing fingers but this situation is far bigger a deal than they may realize. And if they want to play with obstructionist fire then they may burn themselves (3rd degree) more than they can recover. This is not a time to undermine it's a time to really put the country first. If they don't, their party deserves to descend into oblivion. The GOP is already the cause of a lot of sorrows, do they really want to be to blame for more?
David Broder wrote a column yesterday about how the Republican party, by aligning itself with the southern politicians,(who are still fighting the civil war) are about to relegate themselves to oblivion. They just don't get it.
They harp on the isssues that the America automaker should correct, but it's not common knowledge the billons they've given to the foreign automakers to relocate to southern states.
We in the States I fear are not so good at according respect to our own Nobel Laureates; look how much love it's gotten Jimmy Carter or Al Gore. (And most Americans probably don't even know who Jane Addams was; I myself thought they were talking about the wife of John or John Q there for a minute...) It seems more like the Nobels get caught up in our general disdain for what the rest of the world thinks---because of course they're all anti-American pseudo-French commies or something. -_-;;
But I also loves me some Paul Krugman. ^__^ I remember people talking about why doesn't Obama appoint him to something, and the response that he's way too valuable on the outside. (And he called himself "tempermentally unsuited;" I suspect he can't suffer fools gladly enough to work inside the system, and I can empathise with that... ^_^;;;)
Honestly, tho, as far as needing 60 votes to get things done, when it comes to something really important like Universal Health Care (I think they should have done this on S-Chip), I want to see the dems throw the "gentlemen's agreement" out the window, and if the Rs say they're gonna filibuster, look them in the eye and say "bring it." If they want to stop health care for little babies, they should have to stand under those lights and take the full political heat for their stance, as long as they can stand it.
Republican Senators up for re-election in 2010.
* Richard Shelby of Alabama
* Lisa Murkowski of Alaska
* John McCain of Arizona
* Mel Martinez of Florida - will not run in 2010 (announced 12-02-08)
* Johnny Isakson of Georgia
* Mike Crapo of Idaho
* Chuck Grassley of Iowa
* Jim Bunning of Kentucky
* David Vitter of Louisiana
* Kit Bond of Missouri
* Judd Gregg of New Hampshire
* Richard Burr of North Carolina
* George Voinovich of Ohio
* Tom Coburn of Oklahoma
* Arlen Specter of Pennsylvania
* Jim DeMint of South Carolina
* John Thune of South Dakota
* Bob Bennett of Utah
That's 18 of them. Almost half of the 41 or 42 Republicans in the Senate.
LA Times says 19 R seats & 15 D seats up for election, so perhaps this list omits one Republican.
As a side note I think you can put Steny Hoyer on the same boat out of town as Boner. for some reason i don't like or more important, trust Steny. He cares much more about his hair and his tan than the work that NEEDS to be done. He just wreaks of corruption. maybe I'm wrong.
One Republican and one Democrat do not make it bipartisan. What you need is one Republican and one Democrat and 330,000,000 American citizens ready to kick their asses if they don’t stop fu**king around and get the work done. I for one believe that we will never get anything done until we replace every last one of these political human chap bags and put in people that are not going to make a career out of the job of being a member of Congress.
Love the tap dance. "Sure I'm for bi-partisanship as long as you agree with me."
We've got an opening. Let's take it.
Russian professor predicts end of US and civil war by 2010
http://online.wsj.com/article/SB1230511007096...
Igor see's America dividing like the USSR did, I'm afraid he doesn't understand the "United States" very well, it's not like we are a conglomerate of countries mixed into a republic replete with language barriers and clear ethic division by region like the USSR had.
My immediate thought was that Sarah Palin will be very upset if this happens, but we need not worry. She can see them out of her window as they come and defend Alaska with the national guard against the takeover -- it would add greatly to her CIC experience when she runs for president in 2012.
I must admit that I've long thought the US was too large and too POLITICALLY diverse to govern as one nation, and we might be better off broken into smaller sovereign nations, some conservative, some liberal, perhaps as Europe is now. Such a fracturing of the US would take enormous destructive forces though, and there would be chaos and mayhem before it happened. Don't know if economic forces would do it or not -- the meltdown would have to be pretty much complete, leaving everybody to start from scratch again.
If that happens (which it won't) you can kiss whatever hope you had goodbye.
IF ONLY! I like Krugman and he is right about much but lets be clear, his Nobel prize was awarded "for his analysis of trade patterns and location of economic activity" NOT economic downturns. It seems to me C&L wants to rest their economic position on one man because he got a noted prize.
There are others who saw this moment coming and warned us 3 and even 6 years ago in bold dire terms more so than Krugman. Among them most notably are:
* Jim Rogers
* Marc Faber
* Max Keiser
* Michael Maloney
* Nouriel Roubini
* Peter Schiff
* Robert Kiyosaki
* Richard Duncan
* Warren Buffett
Krugman, Buffett, and Roubini believe we can keep pulling levers and hit buttons to fix this, the others however think it will make things worse, the difference being between a short V shaped recession and long L shaped recession.
It would be good if C&L reviewed others positions on this and find out why they think the opposite, I have read both sides and have yet to see a good explanation as to how and why...
* A bailout is good?
* Where the money is going to come from?
* Serious recognition foreign debt is the problem?
* How a printing press will save us from disaster?
* How spending money (call it investing in infrastructure if you must) we don't have is going to help us out of severe debt?
* How spending money we don't have is going begin to address $53 trillion in entitlement programs social security, Medicaid, Medicare, that have already been robbed. What David Walker head comptroller of the GAO says is unsustainable.
It seems to me we can’t afford to get this wrong, remember both parties voted for the bailout, now is NOT the time to blindly back our party. We need to hold all politician’s feet to the fire! We need to make sure what we are doing will work. Face it Washington collectively has been clueless on this, if we’re not careful Obama will be a one term president.
The deflation that many analysts describe is actually a systemic liquidation that will be difficult to reverse. What many are not paying attention to is the monetary inflation that is happening right now.
Take a long hard look at the FED’s own charts and ask yourself if you think we are going not going to experience hyperinflation in the near future. I give it until March before we start to see that can of worms get recognition. What happens "when" China decides it’s tired of holding 2 trillion US dollars and floods our system with that excess liquidity? Quantitative easing will take on a whole new meaning.
How many dollars have we printed?
http://research.stlouisfed.org/publications/u...
More charts dating back to when the FED started keeping records
http://research.stlouisfed.org/fred2/fredgraph?s[1][id]=AMBNS
http://research.stlouisfed.org/fred2/series/E...
http://research.stlouisfed.org/fred2/series/R...
http://research.stlouisfed.org/fred2/series/b...
http://research.stlouisfed.org/fred2/series/C...
We get this wrong and we are all going to be sorry
I'm not sure bipartisanship is the answer. NAFTA and other agreements were largely bipartisan. People argue, although I oppose it, that the "war" in Iraq was bipartisanly decided. In the interest of "fairness", bipartisans will probably insist Union members give up perks, while only lightly touching, if at all the money that flows to the top in the form of executive packages, benefits and severences.
Bipartisanship usually works more efficiently on foreign policy, but not to our betterment. It's the whole foreign policy debate ends at the seashore argument, so a national tragedy like Vietnam just goes on and on and on with no one challenging it, for the sake of appearing in uniformity to the rest of the world.
And I've been advocating for a more efficient health care system for close to 30 years now, but no one's given me a Nobel Prize. Of course, if it doesn't have a chocolate nugget core, I'd probably not be interested.
Mayhaps this'll explain my sense of humor:
http://www.youtube.com/watch?v=RRNTQvXSsfA&fe...
The destruction of our economy is irreversible. The Dems and Repugs are two political wings of the same corporate ruling class, existing only to give us a facade of plurality. It's quite possible a race war will preceed a civil war because a black man will preside over the final stages of the fall of the US.
This giant mess we and the world are in has been in the making for 30 years or more. Bush and the republicans have achieved an incredible, unprecedented 68 years worth of mess making in just eight years. They have elevated the art of disaster creation to a level never before seen by mankind. Dose Krugman actually think that even with total co-operation from the republican side of the isle they could fix the damage done by at least 98 years worth of disastrous policies and financial adventures in wonderland? After the bankers, insurance companies and the wall street lizards along with our government and some guy named Lenny ripped off most of the nations money they sold assets for zillions more than the asset's were worth creating paper wealth that every one just loved until they found out it was just paper and that every one from the guy who just bought a double wide in BFE to the Saudi Prince got sucked into a super mega world wide ponzi scheme that even the schemers didn't really know if they were ponzing or not. The situation is incredibly bad but it's so amazingly stupid it's even worse. Anyway all this lost money didn't really exist to begin with. How do you fix something that's nothing to begin with. Even our money that we have in our pockets doesn't really exist either. What the hell will happen when we all figure that out. Right now Printmore Ben over at the Fed is cranking out artificial cash 24/7 to bail out everyone on Treasury's who's who list. I guess they are trading this new fake money in as fast as they can for gold and Ipods before everyone catches on. And Obama wants to give us this huge multiple trillion stimulus package. He doesn't have any money. Not unless he get's it from us. Lets see.... he gets it from us so he can give it back to us so we can be stimulated. WTF! Now old Printmore can make him up a big batch out of thin air. So he can give that fake money to us so we pay it back with real interest for the next 360 years on top of the bills we already can't pay with real money that doesn't exist. That's not stimulating to me, what about you? And all of this is to be done with money that is fake, backed by nothing. The only reason our money is worth anything is because China, Russia and almost every other county of any size hold so much of this nonexistent money that they insist it exists otherwise other wise they wouldn't have any existing money. In other words for the time being everyone is pretending that they have money that they don't have because they think they have it. Even a supposedly smart business like Wal-Mart will take fake money for a real product. This is amazing and stupid. We can still get something real with pretend money! How long will that last? People might someday want to be paid with real money for their real work if they get wise to the scam. Our government thinks this hoax will last forever. But then the governments live on a somewhat different planet than we do. We will be looking at a real big problem when this fantasy blows up like a cluster bomb. We live in interesting times, we live in bazaar and stupid times and the greatest masters of illusion by delusion are at the helm of the cruse ship earth.
The problem may not so much be that there is nothing backing the value of the paper that serves as currency, but rather that our monetary system is a kind of pseudo-religion in which the people are losing, or have already lost, faith.
That statement requires some explanation:
Any monetary system is a substitute for barter. There is no material commodity that has intrinsic worth, one above another. Gold? It has functional uses, but is it really anything that deserves the worth or value that we have collectively assigned to it? Diamonds? Platinum? Silver? Wampum? Aside from specific functional uses, their only value as instruments of wealth are determined strictly by the faith that people put in them. They have value above and beyond their intrinsic practical worth only because everybody agrees that they do. No other reason. Aside from land that is owned outright, can be held and defended and from which the necessities of life can be obtained, the only thing of enduring worth, if you get past the psychological belief systems about what gives money its worth, is barter.
A perfect example of what I'm talking about is diamonds, considered to be far more valuable than gold or platinum. But, the only reason diamonds are collectively considered valuable is that a century old cartel limits the global availlablility of the commodity and meticulously crafted a myth of value, desirablity and prestige of ownership about diamonds. In truth, the true value of even the finest diamonds is only pennies per gram weight. If the complete supply of diamonds were made readily avaibable, the cost of diamonds would collapse almost instantly to their real value. The only intrinsic worth of a diamond is derived from the practical uses to which they can be put: cutting tools, heat sinks and infra red windows, while diamond thin-film coatings give non-stick and abrasion resistance properties to whatever they are applied. I have the knowledge and skills to produce, from any carbon source, gem quality diamonds in ton-weight quantities that far exceed the perfection of natural diamonds and are indistinguishable from the natural substance. To date, pretty much the entire global supply of diamonds used for machining and cutting tools are synthetically produced. Only gentlemens' agreements prevent the world from being flooded with gem quality diamonds.
It would be easy as hell to back our entire monetary system with diamonds. We could manufacture them as readily as we print out dollars. But, what good would it do? In the end, whatever you use as a backing for currency is just so much dust, dust that's taken on one form (gold, perhaps?) or another (or maybe silver?). Just dust, nothing more. From that perspective, a piece of paper with some very artful engraving is as good as a 1 carat, flawless diamond crystal. In the end, currency is just a substitute for barter, just a bit of dust that we have all collectively agreed to put our faith and trust into in lieu of barter. If everybody agrees to be a believer, the currency will be accepted as a thing of real value. It could just as easily be "credits", as seen in your favorite futurist science fiction work.
What really determines whether a currency succeeds or fails, whether it has value or not, is the integrity of the system sytem that issues it. Is it fair? Can its keepers be trusted? Is the system that manages the currency itself trustworthy? If it is accepted as renumeration for work, goods and services, can it be used in kind to aquire work, goods and services at fair value? And if accepted, can it be issued in quantities of collectively agreed upon value, so that it represents the net worth of a nation's material assets, production, productivity and potential for growth? If so, no matter what it's backing, the currency will serve the purpose as a substitute for the net amount of work, goods and services that could be obtained from barter....with one important improvement over barter: if spares us the need to limit our society, its potential and diversity in the ways that are directly brought about by adherance to a barter system.
The reason our economy is failing is because the monetary system, and our government that should be faithfully managing, it, is corrupt to its deepest core. It has been gamed to within an inch of its life. Our economy is profoundly unjust, is in control of a malign criminal class, is exploitive and predatory, ad nauseaum. And, because of this, the inevitable has happened: the true believers are losing their faith in the pseudo-religion. Ironically, the worst apostates are the bankers themselves. They've lost so much confidence in the system that they created and so much faith in their fellow co-conspiraors and co-criminals, that they have turned on each other and circled their wagons against each other. Hence the credit crunch. For the rest of us, it's as if people are realizing that they are not getting, and have no hope of getting, a fair return on their labor - as if what they could not obtain was fair barter for the expenditure of their life's energy and time. Everybody is losing their faith.
If the economy collapses completely, we will rapidly return to a system of not only barter, but black-marketing and black market-based valuations. The only thing that will restore faith and trust in the psuedo-religion of our monetary system(?): The corrupt system must be closed down and the bad guys brought to justice. The existing system must then be completely reformed and returned to integrity, or more easily, a new one must be started from scratch. If not, it will takes decades, at least a generation, to restore order and functionality to the monetary/economic system. And, the longer that takes, the more our society will come to resemble a fuedal system.
To use the fuedal analogy, I do not believe we will make the changes that are required until the serfs storm the lord's castle gates with pitchforks and torches. The "elites" who created this mess, the lords of the castles, will never willingly do the right thing. Thus, the serfs must call to remembrance their power to compel service from those who would, if left to their own devices, serve nobody but themselves.
It will be interesting to see how many of the Senate Republicans respond to Obama’s bipartisan approach. Up to now, bipartisanship has been a one way street leading to minority party domination of the legislative process. The Republican Congressional leadership now blatantly advocates obstructionism as a tactical maneuver to avoid compromise. To date the Republican strategy has worked because of MSM complicity in not exposing their tactics for what they truly represent, and weak Democratic leadership failing to stand by their convictions. If Obama is to pull this Nation out of the financial and moral quandary in which we find ourselves, the Administration and Democratic Congressional leadership will need to have “Plan B” ready to roll out, if they find bipartisanship is still a one way street. But in order for “Plan B” to be effective they will have to mobilize the support of the public and implant a spine in Harry Reid.
I guarantee that the GOP will not want Obama to succeed and will do everything in their power to try and torpedo his adminstration.
The Democrats will have to be skilled to show that it will be the Republicans that are stopping the progress of the country.
The Republicans are out for blood and will do everything they can to make sure the Obama's adminstration is a failure.
My feeling is that we have seen nothing yet regarding how low the Republicans will go. It is always looking out for themselves and their individual careers first, then their party, then big business and finally the country. Country is always last with the Republicans.
I just loves me some Paul Krugman. In a just world, a man of his credentials (hello?!?! Nobel Prize in Economics?) would have far more weight than the bozos on the business channels still touting Friedman economics as the iceberg crashes into the bow and the water rises to their necks.
Milton Friedman also won the Nobel Prize in Economics. If Krugman's opinion is to be respected for having that credential. . .
In the so-called "reality based community" facts ought to matter.
"Your Honor, we of the jury find this corrupt Republican bastard defendant guilty of all charges."
Gavel pounds marble, wham!
the coordinated uncontested repetition of the GOP party line by limbaugh and crew make talk of bipartisanship absurd. talk radio is their power and it holds their base together and no matter what a republcan senator or rep says it is not their decision. any rep who steps out of line and gets independent gets named by limbaugh first and then the rest pile on and the traitor is tarred and feathered quick time. as long as they maintain that talk radio monopoly dems who speak of bipartisanship are either naive or disingenuous. republicans who talk of it are just idiots.
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