The "Greed is Good" crowd has become truly annoying

Here, Matt Taibbi explains how the greed crowd has so far managed to avoid a full-scale revolution. (maybe)

Will Goldman Sachs prove greed is God?

The investment bank's cult of self-interest is on trial against the whole idea of civilisation – the collective decision by all of us not to screw each other over even if we can

Matt Taibbi

The Guardian, Saturday 24 April 2010

So Goldman Sachs, the world's greatest and smuggest investment bank, has been sued for fraud by the American Securities and Exchange Commission. Legally, the case hangs on a technicality.

Morally, however, the Goldman Sachs case may turn into a final referendum on the greed-is-good ethos that conquered America sometime in the 80s – and in the years since has aped other horrifying American trends such as boybands and reality shows in spreading across the western world like a venereal disease. more

The best way to identify a Predator Class economist

Is to ask his opinion on inflation.  Even now with deflation stalking the planet, there are probably still economists cranking out mindless papers about their inflation worries.

It's As If The More Japan's Ancient Printing Press Keeps Churning, The More Prices Keep Deflating

Vincent Fernando, CFA | Apr. 30, 2010, 3:59 AM  

Japanese unemployment has continued to rise, while prices continued to fall according to latest monthly data.

The nation is also maintaining the same old policy near-zero interest rate policy. The Bank of Japan said they would keep their key policy rate unchanged at 0.1%.

We probably shouldn't expect a change from this for a long, long time. Japan has kept the printing press churning for quite some time now, yet prices keep falling, even after the modest economic rebound. more

The bankster's main tool is fraud

There are those who would have you believe that Wall Street fraud is an aberration.  It is NOT.  Fraud is THE essential element of the Predator Class operations.

CONFESSIONS OF A WALL ST. NIHILIST: FORGET ABOUT GOLDMAN SACHS, OUR ENTIRE ECONOMY IS BUILT ON FRAUD

By Mark Ames

There was a strange moment last week during President Obama’s speech at Cooper Union. There he was, groveling before a cast of Wall Street villains including Goldman Sachs chief Lloyd Blankfein, begging them to “Look into your heart!” like John Turturro’s character in Miller’s Crossing…when out of the blue, the POTUS dropped this bombshell: “The only people who ought to fear the kind of oversight and transparency that we’re proposing are those whose conduct will fail this scrutiny.”

The Big Secret, of course, is that every living creature within a 100-mile radius of Cooper Union would fail “this scrutiny”—or that scrutiny, or any scrutiny, period. Not just in a 100-mile radius, but wherever there are still signs of economic life beating in these 50 United States, the mere whiff of scrutiny would work like nerve gas on what’s left of the economy. Because in the 21st century, fraud is as American as baseball, apple pie and Chevrolet Volts—fraud’s all we got left, Doc. Scare off the fraud with Obama’s “scrutiny,” and the entire pyramid scheme collapses in a heap of smoldering savings accounts. more

Are we finally seeing the last gasps of "Free Market" madness?

One would certainly like to think so.  But the defenders of the Predator Classes seem impervious to reality.  No matter how wrong their "theories" may be, they still keep banging them out.

Unfree Markets: The Last Gasp of a (Literally) Bankrupt Ideology

RJ Eskow

April 29, 2010 - 11:12am

What we've been witnessing in Washington isn't just political positioning by one party looking to deny the other a victory, although it's certainly that. We're also seeing the death struggle of a dying ideology. This ideology provided intellectual cover to business and political elites for decades, but events have proved conclusively that it doesn't work. What's more, people are beginning to see that it's inconsistent with the country's traditional values of competition and free enterprise.

The ideology was cooked up in think tanks and boardrooms, then packaged and sold under a variety of conservative and libertarian guises. While the theories and rationalizations varied wildly, the conclusions were always the same: Deregulation was always the right approach, even (especially) for the most concentrated and rapacious businesses. Consumer regulations should be avoided because they hurt everybody, especially (somehow) consumers. And cutting taxes for the rich magically made things better for everybody else. more

The economics of volcano eruptions

Now that a small eruption has caused serious economic headaches to the north of Europe, (JUST the airlines are talking about losing $200 million euros a DAY) we are seeing some sober reflections of our vulnerabilities.

What links the banking crisis and the volcano? 

We rely globally on over-complex, over-strained systems. Act now, or wait for the much more brutal corrective of nature 

George Monbiot
guardian.co.uk, Monday 19 April 2010 20.00 BST 

Man proposes; nature disposes. We are seldom more vulnerable than when we feel insulated. The miracle of modern flight protected us from gravity, atmosphere, culture, geography. It made everywhere feel local, interchangeable. Nature interjects, and we encounter – tragically for many – the reality of thousands of miles of separation. We discover that we have not escaped from the physical world after all. 

(snip) 

We have several such vulnerabilities. The most catastrophic would be an unexpected coronal mass ejection – a solar storm – which causes a surge of direct current down our electricity grids, taking out the transformers. It could happen in seconds; the damage and collapse would take years to reverse, if we ever recovered. We would soon become aware of our dependence on electricity: an asset which, like oxygen, we notice only when it fails. 

As New Scientist magazine points out, an event like this would knacker most of the systems which keep us alive. It would take out water treatment plants and pumping stations. It would paralyse oil pumping and delivery, which would quickly bring down food supplies. It would clobber hospitals, financial systems and just about every kind of business – even the manufacturers of candles and paraffin lamps. Emergency generators would function only until the oil ran out. Burnt-out transformers cannot be repaired; they must be replaced. Over the past year I've sent freedom of information requests to electricity transmitters and distributors, asking them what contingency plans they have made, and whether they have stockpiled transformers to replace any destroyed by a solar storm. I haven't got to the end of it yet, but the early results suggest that they haven't. 

There's a similar lack of planning for the possibility that global supplies of oil might soon peak then go into decline. My FoI requests to the British government reveal that it has made no contingency plans, on the grounds that it doesn't believe it will happen. The issue remains the preserve of beardy lentil-eaters such as, er, the US joint forces command. Its latest report on possible future conflicts maintains that "a severe energy crunch is inevitable without a massive expansion of production and refining capacity". 

(snip)

For the third time in two years we've discovered that flying is one of the weakest links in our overstretched system. In 2008 the rising cost of fuel drove several airlines out of business. The recession compounded the damage; the volcano might ruin several more. 

Energy-hungry, weather-dependent, easily disrupted, a large aviation industry is one of the hardest sectors for any society to sustain, especially one beginning to encounter a series of crises. The greater our dependence on flying, the more vulnerable we are likely to become. 

Over the past few days people living under the flight paths have seen the future, and they like it. The state of global oil supplies, the industry's social and environmental costs and its extreme vulnerability mean that current levels of flying – let alone the growth the government anticipates – cannot be maintained indefinitely. We have a choice. We can start decommissioning this industry while there is time and find ways of living happily with less of it. Or we can sit and wait for physical reality to simplify the system by more brutal means. more

Actually more important than Tiger's sex life

Spectacular photos of the volcano in Iceland erupting.  more

It's all tied together, you know

A "little" volcano goes off in the mid atlantic and the effects are felt around the world.

Wake Up People: This Volcano Is About More Than Flights, It's About Agriculture, Energy, And Politics 

The Oil Drum | Apr. 18, 2010, 10:53 AM | 

While it is early in the morning in Europe the following picture shows the impact of the volcano in Iceland on European air traffic (as of Thursday), if you compare Northern (none) and Southern (60) European flights. The blue crosses are airports. The volcano has already had a stunning impact on Europe, although articles about it are already dropping below the lead headlines.

There is a thought that the plume may last another five days, and even though the cloud is largely invisible to those who are being impacted by it, the damage by neglecting these precautions could be severe. And given that the British election is on May 6th, the impact of a sustained eruption on the debates in the UK, and the result may go beyond just limiting the travel of those who would campaign, to become more dominant with the length of the flight curtailments and the responses to help resolve what are likely to be growing transportation problems. more

Let's keep this all in perspective

While it is no end of fun to watch Goldman Sachs face a tiny bit of justice for their criminal behavior, let's not forget the real crime here.  And the real crime is the absurd belief that if banking represents any part of the real economy, it is possible to realistically expect growth of more than 3% per year.

The BIG sin of modern economic thinking is the idea that we can have compound growth in a finite biosphere. Why even sweet little old ladies expect their investments to pay 7% compounded. In fact, only expecting 7% is considered a sign of greedless fiscal responsibility. Yet it is perfectly obvious that if the real economy only grows by 3% in a good year, anyone who expects 7% is either a fool or a crook.  And yet, folks in the banking business who would "settle" for a realistic rate of interest like 3% would lose their jobs VERY quickly.

Now we know the truth. The financial meltdown wasn't a mistake – it was a con

Will Hutton

The Observer, Sunday 18 April 2010

Hiding behind the complexities of our financial system, banks and other institutions are being accused of fraud and deception, with Goldman Sachs just the latest in the spotlight. more

Michael Lewis's Complete Guide To Who's Who In The CDO Scandal

Courtney Comstock | Apr. 16, 2010, 12:17 PM  

The huge SEC case against Goldman and Fabrice Tourre has brought the spotlight back on the mortgage crisis.

Tourre allegedly packaged CDOs filled with very risky mortgage bonds and then marketed them to investors by telling them that Paulson was also long them. He wasn't.

Michael Lewis's book, The Big Short, explains very well what happened during the crisis - who was long, who was short, and how they did it.

Take a quick refresher to remind yourself what exactly happened and you'll better understand the charges against Tourre. more

And Taibbi on Bloomberg TV.

 

Street demos against Wall Street?

The outrage makes sense.  Whether street theater will do much good is another question.  I tend to think that banks are well prepared for this sort of thing.

More Banker Outrage: Protesters Plan Marches on Wall Street Banks

By Alice Gomstyn and Rachel Humphries / ABC News

April 12th, 2010 12:36 AM

Outrage over bonuses, bailouts and home foreclosures have prompted angry demonstrations at bank office buildings, bank conferences and even bankers' homes since the financial crisis began. With Wall Street reform proposals up for debate in Congress and bank shareholder meetings taking place later this month, protest organizers say they're getting ready to rally the troops again with several new demonstrations expected to draw thousands.

"There's something fundamentally wrong with an economic and political system that allows the big banks to rewrite all the rules to stay afloat while allowing entire communities to collapse in the wake of the disaster caused by Wall Street," Anna Burger, the secretary-treasurer of the Service Employees International Union, said on a conference call with reporters Thursday. "That's why we're escalating and expanding this campaign."

The SEIU, one of the most vocal critics of Wall Street and big U.S. banks, is part of a coalition of at least six groups -- including the AFL-CIO; the National People's Action, a racial and economic justice advocacy group; PICO National Network, a faith-based group; and North Carolina United Power, an organization of religious and community groups -- planning demonstrations across the country later this month.

Organizers are calling on banks to help people stay in their homes, offer more small business loans, stop offering financing to payday lenders and stop attempts to block financial reforms. They say they're targeting their demands at the country's biggest banks: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo. more

The Great Depression was probably worse than folks remember

And compared to now, we actually were somewhat prepared to cope with the economic calamity of 1929-1940.

10 Million Americans Disappeared during the Great Depression Time

While America lectures Russia on the 1932-33 famine in Ukraine, Russian historian Boris Borisov asks what became of over seven million American citizens who disappeared from US population records in the 1930s.

RT: What made you research the history of what you call "American Holodomor"?

B.B: It was very simple. As I was doing comparative research of the American Great Depression in the 1930s, and the Great Depression of the 1990s in Russia, I grew interested in the social dimension of the tragedy. It was logical that I looked up official American documents and found out that the discrepancies were so obvious that any independent researcher would not but have doubt about the official U.S. statistic data. All appears to be rather interesting. I will come to that later.

The U.S. Congress added fuel to the fire by adopting resolutions nearly every year blaming the Soviet government for alleged staged famine in the 1930s in Ukraine. The first resolution came in 1988, 50 years after the events described. The current members of Congress wonder about the following, and I quote, "people in the government were aware of what was going on, but did not do anything to help the starving".

At that very period of 1930s, the wealthy city of New York saw kilometre-long lines of people for free soup. There were no queues on the city"s main streets though, but not because there were no hungry people but because most of the cities did not have any money ? they were just bankrupt.

So, I became curious about that and carried out some research that brought about interesting results.

RT: You say that America of the early 1930s made over seven million people perish. It"s a horrifying figure and it needs an explanation. What do you base your research on and why do you say the population statistics of the U.S. government of 1932-33 was falsified?

B.B.: Seven and a half million people does not mean the number of particular victims of the famine, but a general demographic loss, or the difference between the supposed population on the date of the census that was due to be held in 1940 and the factual number of people. In reality, the total demographic loss is bigger. The fact is not contested by anyone. The figure is more than ten million people. more

Deregulation

just a nice way of annoucing the criminals will soon run wild.  This is an excellent history of how deregulation of finance made it through congress.  Note, the hero is Bryan Dorgan of North Dakota.  I have told you how sophisticated those folks are when it comes to monetary matters.

Blast from the Past: Wall Street's Deregulation Eleven Years Ago 

by catchlightning

Tue Apr 06, 2010 at 07:32:24 PM CDT

posted at Working America's Main Street blog under the title A Remembrance of Things Passed 

The last time Congress took up major financial regulatory legislation they got it completely wrong. The result created a virtual certainty that within ten years we would face a combined economic and financial crisis the likes of which we had not experienced since the Great Depression.

It was 1999, and Senator Phil Gramm (R-TX) -- currently a vice chairman of the global banking giant UBS -- had ascended to the chairmanship of the Senate Banking Committee in the Republican-controlled Congress. It was Gramm who became the point man for the financial industry and chief sponsor of the deregulation plan known as Gramm-Leach-Bliley, the so-called Financial Services Modernization Act. Today, of course, there are many who point to the passing of that bill, and the following year's Commodity Futures Modernization Act, as having played a key role in eliminating many of the regulatory controls over a financial industry that was then allowed to run amok. more

The rage of the producing classes

is real--and utterly justified.

Why Working People Are Angry And Why Politicians Should Listen

By Richard Trumka

April 9, 2010 - 3:10pm ET

Remarks by AFL-CIO President Richard L. Trumka at the Institute of Politics, Harvard Kennedy School.

I am going to talk tonight about anger—and specifically the anger of working people. I want to explain why working people are right to be mad about what has happened to our economy and our country, and then I want to talk about why there is a difference between anger and hatred. There are forces in our country that are working hard to convert justifiable anger about an economy that only seems to work for a few of us into racist and homophobic hate and violence directed at our President and heroes like Congressman John Lewis. Most of all, those forces of hate seek to divide working people – to turn our anger against each other. 

So I also want to talk to you tonight about what I believe is the only way to fight the forces of hatred—with a strong progressive tradition that includes working people in action, organizing unions and organizing to elect public officials committed to bold action to address economic suffering. That progressive tradition has drawn its strength from an alliance of the poor and the middle class—everyone who works for a living. 

But the alliance between working people and public minded intellectuals is also crucial—it is all about standing up to entrenched economic power and the complacency of the affluent. It's an alliance that depends on intellectuals being critics, and not the servants, of economic privilege. more

Dealing with peak oil will NOT be fun

Especially if we don't plan for it.  And trust me on this, there is no planning going on that in any way matches the scale of the problem.

After Peak Oil, Are We Heading Towards Social Collapse?

Emily Spence

Recently, Glen Sweetnam, director of the International, Economic and Greenhouse Gas division of the Energy Information Administration at the DoE, announced that worldwide oil availability had reached a "plateau". However, his statement was not made known through a major U.S. mainstream media outlet. Instead, it was covered in France's "Le Monde."

One could assume that the U.S. assessment of the oil decline was exposed through this particular publication perhaps due to some arrangement that Barack Obama made with Nicolas Sarkozy. (Maybe it is an indirect way to alert the French while keeping most Americans still in the dark on the topic so that the later bunch can ignorantly carry onward as usual. After all, no unsettling prognosis should disturb their slow return into shopoholic ways that keep the economy, particularly China's on which the U.S. federal government depends for loans, going strong.) more

And one of the human activities directly threatened by peak oil.

Unsustainable levels of debt

This is an interesting post because it is aimed at folks who would be franchisees.  This is primitive, gut-level, pragmatic thinking on the subject of borrowing for the purpose of starting a business.  It is also quite philosophical.

I must admit I have a soft spot in my heart for this sort of thinking.  One of the reasons I fell in love with the writings of the Midwest progressives is that they took their life lessons from the struggle to get an enterprise (like a pioneer farm) to pay the bills.  From those lessons they formed their political movements.  It is true--the most successful political movements in USA history were created by hard-nosed, flinty-eyed, down-to-earth pragmatists.

On Unsustainable levels of Debt: 

By Les Stewart

There are many, many types of debt.

Financial debt is really only a bit player in the rich theatre of human history. A necessary evil; a loutish relative sent to help us develop our patience and forbearance.

The recent obsession with financial debt overshadows and distorts culturally much more significant types of debt such as: ethical, debt to yourself, moral, educational, spiritual.

Financial debt is a simple matter that is simply a child of contract law.

This type carries NO moral or ethical weight, whatsoever.

Many franchise contracts carry into them a severe imbalance of economic and information power.

Some contracts are entered into with fraudulent intent. more

In the end--it is ALL about debt

And how it is managed.

"No one wants to accept the fact that debts that can’t be paid, won’t be." 

The Fight is On

The Looming European Debt Wars

By MICHAEL HUDSON

Government debt in Greece is just the first in a series of European debt bombs that are set to explode. The mortgage debts in post-Soviet economies and Iceland are more explosive. Although these countries are not in the Eurozone, most of their debts are denominated in euros. Some 87 per cent of Latvia’s debts are in euros or other foreign currencies, and are owed mainly to Swedish banks, while Hungary and Romania owe euro-debts mainly to Austrian banks. So their government borrowing by non-euro members has been to support exchange rates to pay these private-sector debts to foreign banks, not to finance a domestic budget deficit as in Greece.

All these debts are unpayably high because most of these countries are running deepening trade deficits and are sinking into depression. Now that real estate prices are plunging, trade deficits are no longer financed by an inflow of foreign-currency mortgage lending and property buyouts. There is no visible means of support to stabilize currencies (e.g., healthy economies).

For the past year these countries have supported their exchange rates by borrowing from the EU and IMF. The terms of this borrowing are politically unsustainable: sharp public sector budget cuts, higher tax rates on already over-taxed labor, and austerity plans that shrink economies and drive more labor to emigrate.

Bankers in Sweden and Austria, Germany and Britain are about to discover that extending credit to nations that can’t (or won’t) pay may be their problem, not that of their debtors. No one wants to accept the fact that debts that can’t be paid, won’t be. Someone must bear the cost as debts go into default or are written down, to be paid in sharply depreciated currencies, but many legal experts find debt agreements calling for repayment in euros unenforceable. Every sovereign nation has the right to legislate its own debt terms, and the coming currency re-alignments and debt write-downs will be much more than mere “haircuts.” more

Standing up to the banksters

The best way to get rid of crooked bankers is to put them out of business.  And the best way to do that is to default on illegitimate debts.  And so the idea of a debtors revolt continues to spread.

The No-Pay Movement

MATT TAIBBI

Apr. 6 2010 - 10:13 am 

Often also called an activist, Mr. Keiser created quite a stir a few days ago when, on an Al Jazeera program, he claimed that Greece, for the past decade, has fallen victim to the “economic terrorists” of the Wall Street banking systems and the IMF. In the interview which followed, he claimed “if the Greeks want to be protected from the IMF, then they should nationalize their banks thus establishing government owned institutions so as to revive the banking system”, while at the same time “ceasing to pay back the loans which were issued illegally” via “cooking the books” of the Greek economy by Goldman Sachs. He proposed the expulsion from the country of American banks as well as the IMF. The consequence will be “two or three years of heavy recession”, during which time Greece will be able “to rebuild its economy”, ensuring its economic independence. 

(snip) 

I’m not sure I know enough about what the consequences of a plan like that would be to say whether this is feasible or not. But I think Keiser’s idea does underline an important point about the situation, which is that as powerful as these Wall Street banks may seem, they are also exquisitely vulnerable. Right now virtually all of them are dependent upon the government keeping accounting standards lax enough for all of them to claim to be functional businesses. It is generally accepted that if the major banks on Wall Street were forced to mark all of their assets to market tomorrow, they would all be either insolvent or close to it.

Thus their “healthy” financial status is already illusory. So imagine what would happen if large numbers of those dubious loans on their balance sheets that they have marked down as “performing” were suddenly pushed ahead of time into the default column. What if Greece, and the Pennsylvania school system, and Jefferson County, Alabama, and the countless other municipalities and states that are wrapped up in these corrupt deals just decided to declare their debts illegitimate and back out? more

James Hansen makes sense...again

Whenever I feel especially frustrated with the affairs of the world, I consider that I might have been James Hansen.  Here is a man who has been absolutely correct about virtually everything he has said since he first appeared in the national consciousness in 1987.  Yet what has he gotten for his efforts but organized, public, well-funded, lying, ridicule.  One wonders where he gets the motivation to carry on.  It would be VERY easy for him to, in the words of a country tune, claim "MY give-a-damn is busted."

With a name like Larson, it is easy to believe Hansen is another member of the tribe--although I don't know this for sure.  And there is probably no culture on earth that values truth-telling like the Nordic Lutherans.  Luther's first and most famous document begins, "Out of a love for the truth and the desire to bring it to light..."  Actually loving the truth is rare in most cultures--yet loving truth is the prime directive of the faith of the people of the north.  And it turns out, the act of discovering a new truth is a total rush and very addictive.

My guess is that Hansen is such a truth "junkie."  And that is what keeps him going in the face of utterly preposterous obstacles thrown in his path.

Obama's Second Chance on the Predominant Moral Issue of This Century

Dr. James Hansen

Climatologist

Posted: April 5, 2010 01:03 PM

President Obama, finally, took a get-involved get-tough approach to negotiations on health care legislation and the arms control treaty with Russia -- with success. Could this be the turn-around for what might still be a great presidency?

The predominant moral issue of the 21st century, almost surely, will be climate change, comparable to Nazism faced by Churchill in the 20th century and slavery faced by Lincoln in the 19th century. Our fossil fuel addiction, if unabated, threatens our children and grandchildren, and most species on the planet.

Yet the president, addressing climate in the State of the Union, was at his good-guy worst, leading with "I know that there are those who disagree..." with the scientific evidence. This weak entrée, almost legitimizing denialists, was predictably greeted by cheers and hoots from well-oiled coal-fired Congressmen. The president was embarrassed and his supporters cringed. more

Ellen Brown's latest

Hard not really admire this woman.  To get where she is intellectually took years of research during hostile intellectual times.  And yet she really "gets it!"

Here she is on the subject of governments getting into banking.

The Government is Now in the Banking Business

Cutting Out the Middlemen

By ELLEN BROWN

“We say in our platform that we believe that the right to coin money and issue money is a function of government. . . . Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson . . . and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business.”

— William Jennings Bryan, Democratic Convention, 1896

William Jennings Bryan would have been pleased. The government is now officially in the banking business. On March 30, 2010, President Obama signed the reconciliation “fix” to the health care reform bill passed by Congress last week. Slipped into it was student loan legislation the President calls “one of the most significant investments in higher education since the G.I. Bill.” Under the Student Aid and Fiscal Responsibility Act (SAFRA), the federal government will lend directly to students, ending billions of dollars in wasteful subsidies to firms providing student loans. The bill will save an estimated $68 billion over 11 years.  

Money for the program will come from the U.S. Treasury, which will lend it to the Education Department at 2.8% interest. The money will then be lent to students at 6.8% interest. Eliminating the middlemen will allow the Education Department to keep its 4% spread as profit, money that will be used to help impoverished students. If the Education Department were to set up its own bank, on the model of the Green Bank being proposed in the Energy Bill, it could generate even more money for higher education.

A Failed Experiment in Corporate Socialism

The student loan bill may look like a sudden, radical plunge into nationalization, but the government was actually funding over 80 percent of student loans already. Complete government takeover of the program was just the logical and predictable end of a failed 45-year experiment in government subsidies for private banking, involving unnecessary giveaways to Sallie Mae (SLM Corp., the nation’s largest student loan provider), Citibank, and other commercial banks exposed in blatantly exploiting the system. more

George Soros

Is supposed to be a lefty.  But since he made a billion bucks in one day short selling the British Pound, his commitment to any reasonable set of egalitarian principles is at best, superficial.

So now Mr. Soros has decided he wants to bankroll economists who want something a bit more interesting and competent than the current consensus opinion.  You will notice that with the possible exception of Stiglitz, all Soros' experts are reliably right-wing by ANY reasonable historical definition.

Meet The 26 Members Of George Soros's Secret Team To Rewrite Economics

Gregory White | Apr. 5, 2010, 11:30 AM | 15,567 | 16

George Soros has brought together a crack team of the world's top economists and financial thinkers. 

Its aim: To remake the world's economy as they see fit.

The New Institute of Economic Thinking is to be centered in London, but also fund programs around the world, the first of which will be in Oxford.

In order to reinvent economic thinking, he's brought together a crack team of top economic minds.

They're a "Justice League" if you will. more

The real threat to the country

The Wege asks an interesting question, "is there any foreign threat to the well being of this nation half as menacing as the threat posed by Wall Street and our predator class capitalist overlords?"  He "couldn’t think of a single nation that qualified except maybe the old Soviet Union ten years down the road after a major meth epidemic."  Seems like the Wege and Johnson of MIT reached roughly the same conclusion through some quite different thought processes.

Jamie Dimon: The Most Dangerous Man In America

Simon Johnson

MIT Professor and co-author of 13 Bankers

Posted: April 3, 2010 09:44 AM

There are two kinds of bankers to fear. The first is incompetent and runs a big bank. This includes such people as Chuck Prince (formerly of Citigroup) and Ken Lewis (Bank of America). These people run their banks onto the rocks -- and end up costing the taxpayer a great deal of money. But, on the other hand, you can see them coming and, if we ever get the politics of bank regulation straightened out again, work hard to contain the problems they present.

The second type of banker is much more dangerous. This person understands how to control risk within a massive organization, manage political relationships across the political spectrum, and generate the right kind of public relations. When all is said and done, this banker runs a big bank and -- here's the danger -- makes it even bigger.

Jamie Dimon is by far the most dangerous American banker of this or any other recent generation. more

Enlightenment comes to the IMF?

Anyone who has followed the workings of the International Monetary Fund over the years has probably long since concluded that they are guilty of inflicting enormous human suffering and economic disasters in the name "sound" economics.  Their economic advice is so bad, it usually triggers "IMF riots."

Does Wall Street Still Hold Sway?

Slow, Small Changes at the IMF

By MARK WEISBROT

Over the past year or two the IMF has made some positive changes in policy and in their published work, some of which challenges the conventional wisdom among central banks and even the past practice of the IMF itself. The Fund, which prior to the current decade was one of the most powerful financial institutions in the world, has presided over a number of economic disasters and was widely seen – at least in the low- and middle-income countries to which it has lent for the past four decades – as generally doing more harm than good. Now there is debate over how much it has changed, and what these changes mean for the IMF itself and its role in the global economy going forward.

First, the good news: Last year the IMF created some $283 billion of its reserve currency, Special Drawing Rights (SDRs), available for borrowing by its 186 member countries. This is exactly the kind of thing that should be done in a world economic downturn. It is similar to the “quantitative easing” – i.e. creating money – that the U.S. Federal Reserve and the Bank of England have done during the recession. Although the IMF is not a world central bank, in this case it was acting as one, in a positive way. And the SDRs were made available to member countries without any conditions attached – something the IMF has never done before. Unfortunately, the SDRs were allocated according to each country’s IMF quota, which meant that the high-income countries got the bulk of the money. And of course most of the low-income countries can’t afford to take on more debt. Nonetheless, this was a positive step for the IMF towards developing countries. more

Green industrial design (iPad)

I have been following the attempts at the green strategy of Design for Disassembly since the early 1990s.  In fact, one of the favorite pages on my website is about DFD.  The iPad seems to have adhered to basic DFD principles quite closely.

As for the iPad as a product.  I am not especially excited about this thing--even though I have been an Apple guy since 1985.  It was obviously not designed with me in mind--cannot imagine editing high-def video with Final Cut Pro on one, for example.  However, I do have a 74-year old friend who is interested in participating in the on-line world but has been massively frustrated by computers.  He frequents places with wi-fi so with an iPad, he doesn't even need to have an internet connection.  I'll bet he soon owns one.

The iPad (PHOTOS): How Green Is Apple's Latest Gadget?

Gazelle Emami Posted: 04- 2-10 07:59 PM

The release of Apple's iPad today has the web abuzz, and there's one question on the minds of the green-inclined: How eco-friendly is Apple's latest gadget? Some argue that it's an extraneous purchase, making it unenvironmental based on that alone. Then there's the recent discussion on cloud computing, which are shared computer servers that process user data requests to stream video, download, check email, etc. Basically, it's a huge power suck that, according to Greenpeace, releases more carbon into the atmosphere than previously thought, and the iPad falls under the cloud-computing umbrella.

But when it comes to the device alone, turns out the iPad fares pretty well, especially in comparison to other electronics. Apple has taken measures to ensure the iPad is energy-efficient and does less damage to the environment than it could if it followed some industry standards. We've compiled the attributes that make the iPad a green gadget. Take a look, and vote for your favorite feature! more

The main difference between Produces and Predators

Is that Producers must operate in a meritocracy whereas Predators are judged by how big are the disasters they leave in their wakes--the bigger, the better.

The Guys Who Got It Wrong

Obama's Economic Brain Trust

By PAM MARTENS

America is held out to the world as a meritocracy. You work hard, you play by the rules, you make sound judgment calls, you succeed. That’s the American dream. Right? That’s what the President of the United States should exemplify in his actions. Right? 

Then how does one explain the individuals who represent the abject failures of financial and regulatory theory chosen by the President to dominate the dialogue on financial reform. How does one reconcile President Obama appointing Lawrence Summers as head of the National Economic Council after Mr. Summers played a central role in rolling back the safeguards that led to the current financial crisis.

This is what Mr. Summers had to say at the November 12, 1999 signing ceremony for the Gramm-Leach-Bliley Act, the draconian legislation that repealed the Glass-Steagall Act and allowed commercial banks holding insured deposits to merge with investment banks, brokerage firms and insurance companies: the very same combinations that led to the 1929 stock market crash and ensuing Great Depression: 

“Let me welcome you all here today for the signing of this historic legislation. With this bill, the American financial system takes a major step forward towards the 21st century, one that will benefit American consumers, business, and the national economy for many years to come…I believe we have all found the right framework for America's future financial system.” 

Mr. Summers was wrong. This was not the “framework for America’s future” but the framework for epic financial collapse. Why isn’t Mr. Summers in an unemployment line along with the millions of Americans his bad judgment call put out of work. more

Time to get serious about climate change

In 1951, the year my brother was born, we had such a severe spring blizzard in Southwest Minnesota that my mother was in a state of near panic because her doctor was 10 miles away over roads blocked by 10-foot drifts.  The day before she delivered, my father discovered that the road to the town with the doctor was finally open.  Almost immediately, my mother went into labor.  My brother's birthday is April 17.  Spring blizzards in Minnesota were once considered normal.

This year, the snow is gone, the ice is out of the lakes, and we have had temperatures in the 60°s F for weeks.  It's only the 5th of April!  Anyone who can deny climate change around here has severely diminished powers of observation.

This Is The Moment. There Won't Be Another

by Turkana 

Fri Apr 02, 2010 at 09:58:50 AM CDT 

(snip) 

Anyone that pays attention to the science understands that humanity now faces an unprecedented, and possibly existential, threat. As Al Gore likes to say, we are conducting a giant chemistry experiment with our atmosphere, and the consequences are unknown. Frank Egler once made what I consider to be the most salient statement ever about the environment:

Nature is not only more complex than we think. It is more complex than we can think.

Ocean acidification, and methane release from thawing tundra, may, by themselves, threaten our very existence. Rising oceans, storms of unprecedented intensity, desertification, loss of arable land and potable water, migration of deadly diseases, massive extinctions and a host of other disasters certainly await. It has been estimated that there are already tens of millions of climate refugees, and it has been estimated that there are hundreds of millions more to come. Beyond the pure environmental impacts, try to imagine hundreds of millions of people forced to flee their homelands, in search of food, water, and shelter. Desperate people do desperate things. Desperate governments do desperate things. The world is brimming with all manner of deadly weaponry. The world is not brimming with wisdom and rationality. more

Anyone who claims I am being harsh when I call banksters predators

Has simply GOT to read Matt Taibbi's latest!

Looting Main Street

How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece

MATT TAIBBI

If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff's precincts had to be closed so that Wall Street banks could be paid.

As public services in and around Birmingham were stripped to the bone, Pack struggled to support her family on a weekly unemployment check of $260. Nearly a fourth of that went to pay for her health insurance, which the county no longer covered. She also fielded calls from laid-off co-workers who had it even tougher. "I'd be on the phone sometimes until two in the morning," she says. "I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I'd go to bed at night, and I'd be in tears." more

Of course the economy is a mess

And the reason it will be so hard to fix is that a tiny group of people have enormously benefitted from this mess.

Study Shows Economic Crisis and Response a Victory for the Rich

By: masaccio  

A recent paper shows the complete victory of the rich in the class war. If you had any doubt, consider these facts. In 1983, the 838,900 households comprising the top 1% in wealth held $6.6 trillion in financial assets (constant 2007 dollars). In 2007, the 1,161,200 households in the top 1% held $19.9 trillion. The average for each household went from $7,870,000 to $17,116,000.

To put this in perspective, in 1983, the middle quintile, the 16,779,000 households 10% on either side of the middle, held $261.7 billion, an average of $15,600 per household. That rose to $603 billion in 2007, when there were 23,224,000 households in that quintile. Each household in the middle quintile had an average of $26,000 in financial wealth. If just half of the gains to the top 20% were divided evenly among the other 80% of 2007 households, their average wealth would rise $157,776. more

Refining the mission

Blogs are about finding a niche.  In the case of real economics, that niche was supposed to be a site where I would mount a defense of the Economics of Prosperity that Progressives invented and then proved so successfully.  But what I have discovered is that I have mostly posted on the subject "Are the moneychangers just a bunch of crooks?"  And I don't much like it.  It's lazy--I mean, the supply of stories out there on the subjects of fraud and corruption in the financial services business is almost infinite.

The difference between what's legal and illegal to the financial types is usually a tiny distinction because their real goal is to maximize their cut of the economic output of other humans.  Since the purported benefits of financial "services" is an insignificant fraction of the cut the moneychangers want to charge, the rest must be fraud of some sort.  Any business that is founded with the primary goal of ripping off other humans is going to resent any restrictions on their abilities to meet that goal.  So it not surprising that the laws we passed to contain the predatory excesses of the moneychangers have been routinely ignored.

Fraud can be petty like the payday lenders who charge interest rates in the hundreds of percent or massive like the bailout of AIG or Goldman Sachs.  But none of these even comes close to the frauds surrounding the creation of money.  For the simple task of creating and stabilizing the money supply, the Federal Reserve System bills the citizens of the USA BILLIONS of dollars.  The whole system is an obscenity that literally prevents us from either addressing our real problems or employing our citizens.

What this REALLY means is that I feel I must address the divisive subject of Monetary Theory on this blog.  It NOT like I don't have things to say about this subject--I grew up in rural Minnesota where Monetary Theory was discussed in church basements and barber shops.  I heard my first explanation of fractional banking at 12--a full two-hour sit-down session with a guy who had a serious "son, you are probably going to want to know this" attitude.  Been following the subject closely ever since.

On the other hand, I am quite aware that many, perhaps the overwhelming majority, of folks with opinions on Monetary Theory are misguided at best, and often insane.  The subject will do that for you.  It pretty hard to understand why a funny-looking piece of paper or a reprogrammed computer chip can actually have value.  Coming up with a theory for why it is obviously true will take a toll.

So even though I know that Monetary Theory is a minefield that I would rather avoid, I am going to make it more a focus of this blog--mostly because it is a subject that can no longer be ignored.  It is also a subject with a lot of renewed interest because of Ron Paul.  Unfortunately, Paul maintains the positions and arguments of the traditional "hard-money" folks--the ones who believe in the gold standard and worry about the evils of inflation--he is on the side of history that brought us ever-recurring economics disasters.  So SOMEONE has to remind us that there have been other far more successful Monetary Theories in history. So in spite of the known minefields out there, I guess that someone should be me.

As a practical matter, this means I will be generating more original content.  This in turn means I will be posting less often.  I'll still post on financial fraud if the story is interesting enough.  But mostly I will try to create lessons on Monetary Theory that will result in an outcome where a regular visitor to this blog will be as literate in the subject as their grandfathers probably were.

Wish me luck because this is important.

Good Friday 2010

We thoroughly lapsed Lutherans still think this day is a big deal.  In Scandinavia, where no one goes to church, there are scores of performances of Bach's St. Matthew Passion on this day.  Takes almost three hours to do.  I listen to it on Good Friday because according to the "rules" of my people, this is enough to make you a good cultural Lutheran for another year.  Sung it twice when I was in the Bach Society, have seen it done live about 10 times, and have seven versions in my iTunes library.  If God is really a Lutheran like we were taught as children, this ought to get me into heaven.  But if you ever want to know why the Nordics have world-class engineers, are the best at industrial design, and have developed easily the greenest industrialization, remember, these people sing Bach for FUN.

This picture of my Swedish-American Lutheran preacher father was taken when I was 3 years old.  So would you let this guy bury your grandmother?

And three favorites from the St. Matthew Passion.

U.S. moves forward on high speed rail - barely

I have some rail industry news spread over the past week or so, which I'll use here to contrast the supposed progress of the United States with other countries that are far ahead.

First, we have the U.S. finally getting around to establishing a formal office with responsibility for high speed passenger rail transportation. In a letter to employees last week, Amtrak President Joe Boardman announced the creation of a High-Speed Rail Department. Read more. Note, of course, that this does not mean any high speed rail capability has actually been built in the U.S. yet. Just that we finally have an office that might get around to actually doing something.

Things are still be studied: the Rocky Mountain Rail Authority just released its study of HSR in Colorado, which found that two routes - between Fort Collins and Pueblo and between Denver International Airport and Eagle County - have the best "operating and cost-benefit results" of the various routes studied. Read more. What's interesting is that it pegs the cost for this small system at $21.1 billion, which highlights how inadequate is the estimate of getting HSR in California for just $10 billion.

By contrast, we next look to France, where high speed rail has been operating for a couple of decades (the LGV Sud-Est from Paris to Lyon opened in 1981). Railway Age reported:

A group led by Vinci SA has won a $9.7 billion contract to build and operate 186 miles of high speed rail between the French cities of Tours and Bordeaux. The deal, expected to be signed during the second half of the year, also includes consortium partners Axa SA and Caisse des Depots et Consignations.

The five-year project is expected to commence construction in 2011, according to French National Railways (SNCF).

Finally, we take note of how the economic crisis is severely affecting funding for urban transit. Ontario faces a deficit of C$21.3 billion, and has announced that it is cutting C$4 billion from construction of greater Toronto area transit infrastructure. Read more.

The situation in the U.S. is even more grim. We reported last month on the budget cuts to New York City's transit authority. Railway Age just reported that in California, the Board of Directors of the Sacramento Regional Transit District have decided to cut bus and light rail service by 22% in the face of a $11 million budget deficit. Read more.