The Collapse Of A 300 Year Ponzi Scheme:

[Joanne98]

“Admit it, mes amis, the rugged individualism and cutthroat capitalism that made America the land of unlimited opportunity has been shrink-wrapped by half a dozen short sellers in Greenwich, Conn., and FedExed to Washington, D.C., to be spoon-fed back to life by Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson. We’re now no different from any of those Western European semi-socialist welfare states that we love to deride.”

–Bill Saporito, “How We Became the United States of France,” Time (September 21, 2008)


Last night, the Presidential candidates had their last debate before the election. They talked of the baleful state of the economy and the stock market; but omitted from the discussion was what actually caused the credit freeze, and whether the banks should be nationalized as Treasury Secretary Hank Paulson is now proceeding to do. The omission was probably excusable, since the financial landscape has been changing so fast that it is hard to keep up. A year ago, the Dow Jones Industrial Average broke through 14,000 to make a new all-time high. Anyone predicting then that a year later the Dow would drop nearly by half and the Treasury would move to nationalize the banks would have been regarded with amused disbelief. But that is where we are today.1

Congress hastily voted to approve Treasury Secretary Hank Paulson’s $700 billion bank bailout plan on October 3, 2008, after a tumultuous week in which the Dow fell dangerously near the critical 10,000 level. The market, however, was not assuaged. The Dow proceeded to break through not only 10,000 but then 9,000 and 8,000, closing at 8,451 on Friday, October 10. The week was called the worst in U.S. stock market history.

On Monday, October 13, the market staged a comeback the likes of which had not been seen since 1933, rising a full 11% in one day. This happened after the government announced a plan to buy equity interests in key banks, partially nationalizing them; and the Federal Reserve led a push to flood the global financial system with dollars.

Edited to 3 paragraphs to conform to DU's fair use policy for copyrighted material.
Lithos
DU Moderator

The New Deal Revisited

Continued>>>

http://dandelionsalad.wordpress.com/2008/10/18/the-collapse-of-a-300-year-ponzi-scheme-the-real-debate-is-crony-socialism-or-financial-sovereignty/

[Auggie]

1. Recommended. Real reform must come at the expense at corporate fatcats --

IF they allow it happen.

[liam_laddie]

2. K & R n/t

[Gman]

3. This is as good an explanation of what's going on

as anything I've read to date. As long as banks can value their "assets" (and I use the term loosely) pretty much at any value they want in order to create the illusion of reserve, the system will remain frozen. For decades we have been warned about the debt of this country but the attitude has been that we'll worry about that later. Right now things are too good. Later has come and there is no more "later". How our economy operates has to now fundamentally change.

[Joe Chi Minh]

4. Imagine them being saved by "the cold, dead hand of Socialism, eh?"

... and then biting the hand that feeds them.

Always happens. The greed-heads smash the country's economy (while privately plundering it), and then "the cold, dead hand of Socialism" they sneer at even then, has to rescue it. The people have to pick up the pieces. Happens again and again.

[Diclotican]

6. KCabotDullesMarxIII

KCabotDullesMarxIII

I guess the old stars of the socialism, and then even communism would lafe in their graves over the irony.. That the US have to implement many of the same principles that they have been talking about.. A century or two before...

I even guess that Josef Stalin, the old bastard is lafing in his cofin.. The old man was once saying that he was giving the US the rope they need to burried themself.. Even that I never belived that to ever came to exist.. I liked some prosect of the american "dream"... But now when the economy is going down the tube, and in fact the whole economical system as we know it, can be destroyed becouse of greed... The system in itself is maybe not to wrong, but greed and corruption have destroyed the whole system. And I for one is beliving it is paramunt that we are making a better, more reliable and more just economical system this time.. Money in some form or another would be here for the time beeing.. But I would guess the system as we know it, would be an diferent one.. I hope

Diclotican

Sorry my bad english, not my native language

[Joe Chi Minh]

9. Not all. You write very coherently. Personally, though, I believe the system is

very, very wrong. The antonym of Socialism is Antisocialism in my book.

The way forward is probably a mixed economy. In a post-Christian country, a Communist state would just take over many of the worst traits of Anglo-Saxon capitalism (a kleptocracy), with little in the way of benefits to offset them. Our corporatism is the worst system of all. Without a single redeeming feature. Even the Christian evangelism of the Republicans - at least the bottom of the barrel, you have now - causes more scandal by its war-mongering, Mammom-worshipping hypocrisy and all their attendant vices, than the good it would engenderd with a modicum of sincerity. The reality is that it does much to subvert what Christianity remains.

A centralised Government is essential, but if left unchecked, it can be twisted into a tyranny. Underneath, sometimes unbeknown to themselves at the start of their careers, most politicians are ambitious worldlings like any other, but more closely focused on direct power. Their political party can often be a mere detail.

[Diclotican]

15. KCabotDullesMarxIII

KCabotDullesMarxIII

The system in it self is not dead, or very ill I believe (the little I know about it then). But I do believe it to be in need of a major overhaul..

In most european country, specially after ww2 the road forward was an mix of state and private capitalism.. In some county's after ww2 the private and state was coming together to make a deal where both sides would work together to build up what was destroyed in the war.. Her in Norway the State have always have a great power when it come to how the country have been govern. The almost total lack of native noblesse meant that when the state was strong enough to govern the whole area. It was in everyones interest to work together with the government...

And specially after ww2, when Norway have to build up what was bombed down and out, we choose the path of sosialdemocracy, even if the government was not sosialdemocratic they all agree about the need to rebuild the country. by many of the same lines that was put forward by the first government that was put together in 1945 to get the idea of how much was destroyed, and what needed to be rebuild first... And 50-60 year after I would say our "system" where both the private and the government have their share of economic life is rather successfully.. Yes of of course the system are not perfect, and some have said it to be like "communism soft" a lighter type of communism.. I have to say I disagree.. But as long as we have a good system I do not fear that the government would do to much harm in the "name of the state".. Rather it means that both sides have their fair share of whatever comes into Norway

And we have struck luck to, when we discovered oil, and that we do not was doing as FRP (the,right, right pary" was willing to do, give he all away for 1 milliard dollar.. We choose to work together with the oil companies, who have to pay for the privileged of pumping up oil, And the government of Norway have also some control over where the oil is drilled, and where it is been shipped too. And Norway have today as one of very few country zero debt to other country. And some thick pocket where the money are.. Even that we have been losing a lot of money lately...

It is important to have check and balances between the government,and between the capitalistic system as a whole.. What we have been seeing tha last 30 or so year,is capitalism going amok. And that to many have believed that an free capitalistic system will rule them-self. That is wrong, something I have been saying for more than a decade.. Unchecked capitalism are as dangerous as unchecked Capitalism.. Both need supervision, and both need that someone have some control, either by international law, or by national law.

Have seen a lot unchecked capitalism in the former east european country.. It is full av stories of crimes, and corruption. Not to mention Plutocracy.. Where mere thief's are been made billions over night.. And for the most part the ordinary folks have been made poorer than they was before the wall was been tearing down.. I would guess nobody really believed that so many in east European country should be that poor for so long time.. After 1989 I guess it was a serious belief in most country that the eastern block would rice up, and be part of the modern european world in no time.. Nobody believed that the eastern part of europa was not just a couple of year behind, but decades, maybe half a century in some places.. Even East Germany who in many cases was the richest and most modern eastern block country, was more than a decade behind Western Germany.. And still today it is more than just an old border between East and West Germany.. In the mind of the people the East and West is very alive even today.. And the same is the case in many of the eastern european country.. And you don't need to travel so far away from the big city's to look 20 and 30 year in the past..

I hope the economical system as a whole would be reformed. And that a lot of new laws would be the end product of what happened now. It is proven that free capitalism are not working. In fact the free economical system would in the end kill itself in the greed for more money. Power corrupt, and absolutely power corrupt absolutely are the old saying. And I have to say, in this case it is true. The system who have grown to a ulster the last 35 year, have destroyed a lot, in the name of profit..

I am not an expert of the system, but an more fair, and democratic system where government both nationally and internationally have far more power over the production, and in fact some of the money who else would be send to offshore banks in Cayman Islands and such should be used to rebuild, and give hope for the millions of poor people who today have no hope.. If ONE percent of the nett sum of money who have been made every year have been used to educate and to get the basic to the poor. 3 billion people would have enough to eat,School, up to university, total healtcare and fresh water for the rest of their life.. One percent..

And if 6 billion people, both in the rich country, and in the poorer country get a Chance to work together for a better future. I would guess that many of the wars, many of the most horrible condition we are so much known to in the news and on TV would a thing of the past.. Starving of millions are something we can stop.. We can stop it today in fact. If we wanted.. But it is millions, or not billions in money, to get the food out, when the need is most.. It is an disgusting trade.. To starve the poor to the brink of starvation to get some more money..

I guess that the Mindset of humanity have to change, rather drastic so the whole system would be changed.. And it would take some time to get it true.. But if someone are willing to go in the front. The rest of the flock would follow.. And I would guess that even after 8 year with "mr catastrophe" US are still in the position to go up in the front.. If they dear it..

Diclotican

Sorry my bad english, not my native language

[Joe Chi Minh]

16. Very interesting post, Diclotican. I find it rather ironical that the countries

of the Vikings, the Scandinvians, which conquered Europe from Ireland to Italy to Russia, should have got over their empire-building infantilism, and evolved into arguably the most advanced societies on the planet, in terms of a civilised balance between technological progress and social development.

As regards Communism in post-Christian societies, it was the efficiency of their totalitarian oppression that was so dangerous and long-lasting, whereas our American and British leaders have always been primitive greed-heads, spiritual knuckle-draggers. (Although there was that brief interval of sanity and decency after WWII). No sooner do they get it together, and start to really impose police-state monitoring of the populace than their blind, insensate greed destroys their economies, and... lo and behold... a shift to the left occurs.

It is indicative of what endemic blackguards British Governments have been that, since oil was discovered and piped from the North Sea, the British people have derived zero direct benefit from our North Sea oil. Still after a tax cut, we pay more than any other country in the world - most presumably without their own oil! Moreover, together with an extraordinarily high level of car tax, very little of the tax on petrol has been used for the benefit of the motorist, road repairs, etc. In fact, they have been used as yet more flat taxes to lighten the income-tax "burden" on the richest, quite small section of the population. Now that neo-liberalism has been so thoroughly discredited, there is no longer even the most specious excuse for it. One wonders how those crooks at Westminster would have fared without the North Sea oil revenues.

[glitch]

7. They don't mind (has something to do with "private plunder"), they'll be back once we've fattened

up again.
I can't wait until we all get a clue, AND KEEP IT long enough to pass down through generations.

[Demeter]

5. It Was More LIke 300 Years of Perversion of American Principles

and I doubt that we can undo it all in 4 years, but we can make a good start!

[girl gone mad]

8. Scary:

"The G-7 nations’ financial planners, who met in Washington D.C. this past weekend, appear intent on supporting the banking system with enough government-debt-backed “liquidity” to produce what Jim Rogers calls “an inflationary holocaust.” As the U.S. private banking system self-destructs, we need to ensure that a public credit system is in place and ready to serve the people’s needs in its stead."

[bemildred]

10. K&R, Well done. She even uses the correct word "parasite" for the "investment banking system". nt

[Joe Chi Minh]

11. Wow! It sounds as if, were it not for the power of the very people responsible

for what looks like the impending econmic catastrophe, it looks like it could be averted! I thought it was all over bar the shouting. Maybe their hand will be forced.

Of course, it would make sense to the G7 kleptocrats, to wring the last penny from the tax-payers for their private banking friends, before turning to FDR's solution or anything close to it.

[dixiegrrrrl]

12. Yeah, ironic, ain't it?

Unlimited greed is blind.

Interesting that so many "radical" economists ( Keiser, Denninger, Jim Rogers) have been
warning about this for years, while the people responsible for the problem couldn't seem to see it coming.
Unless the destruction of the dollar was the plan, of course.

Why they would want the dollar destroyed is a whole other thread.

[Joe Chi Minh]

13. Love your tagline. All too true, alas.

[urgk]

14. Republican economic policy is a pyramid scheme...

...that encourages poor people to buy in with their votes amid promises that they'll get wealthy. But we all know the only people who make money are the ones at the top who got in early.