Forum Post: What went wrong in America?
Posted 12 years ago on Dec. 20, 2011, 8:02 p.m. EST by Doc4the99
(591)
from Washington, DC
This content is user submitted and not an official statement
We (USA) were able to establish a seemlingly unlimited credit card in the 70s that resulted in real stuff being provided by ROW in exchange for our promises (paper and digital) based upon our then trade surplus status -- this hugely advantageous arrangement allowed people in power (financial sector, MIC, politicians) to predictably recklessly take advantage of their pole position while keeping the rest of the populace quiescent by doling out entitlements, make-work jobs (TSA is the latest example) and easy credit. Now the ridiculous levels of debt (and non-performing debt at that) from this arrangement has become transparent and we are no longer able to pretend that we have a productive economy (we exchanged our productive economy for the right to acquire energy (and other commodities) and other goods and services in exchange for our paper and digits which gave us an artificial high standard of living far above what was justified by our economy). This arrangement is secured in place by our mighty military. Net-- it has been a great arrangement for the country but the distribution of the gains has been highly lopsided with folks in power snagging a large part of the loot.
The challenge is how to retain this advantageous trade arrangement but at the same time create meaningful jobs locally -- the assumption was that US would be able to stay ahead of other economies in creating high value jobs and industries and we would be able to offshore/outsource industries where the 3rd world is catching up but this has not panned out in volume. Now we are in a place where the ROW has caught on in many areas but we have not been able to create new industries into which our population could be eased into.
Blaming politicians and others in advantageous position is just blame game (if we are honest with ourselves, most people would easily be corrupted if put in similar circumstances -- that is human nature). While we like to believe democracy provides the framework for checks and balances, in reality it has not panned out -- requires very active participation of populace which cannot be sustained over long periods (demands unreasonable attention span of populace that it is incapable of).
From the post WWII boom (1945 to mid 60s) pent-up consumer demand fueled exceptionally strong economic growth in the post war period. The automobile industry successfully converted back to producing cars, and new industries such as aviation and electronics grew by leaps and bounds. A housing boom, stimulated in part by easily affordable mortgages for returning members of the military, added to the expansion. The nation's gross national product rose from about $200,000 million in 1940 to $300,000 million in 1950 and to more than $500,000 million in 1960. At the same time, the jump in postwar births, known as the "baby boom," increased the number of consumers. More and more Americans joined the middle class. Then, it seems like starting in the 1970s we have been on a slow/steady (now more rapid) decline. A decline in "real wages" for most salaried people has been the norm (not increasing minus inflation) since this time and being propped up by credit and dual income households, as well as an increasingly stripped US economy of any back bone (i.e. zero manufacturing). Starting with Regan and continuing on with Clinton, Bush (1 and 2), and even Obama in some ways, financial sector deregulation(s) have mainly continued. The bubble economy reigns supreme with some high level service jobs providing some economic security and many low level service jobs with little to no pay/ or benefits; while those who inherit vast amounts of wealth continue to enjoy low taxes and a variety of complicated tax loop holes or "death taxes" on their wealth.
My two cents.
What do other people think?
Without reading your comment I will tell you what went wrong with America - it's called "financial responsibility"
That's the reason of the collapse of the economy. The economy is flat because everyone is up to their "eyeballs in debe". Once that changes, the economy will change.
67% of the economy is based upon the spending habits of the people of this country and is reflected as such.
So, if you are in debt you have two choices - spend and use your credit card or spend and use cash.
Which do you think our society depends upon?
What went wrong? Valid question.
Answer: ch. 6, 38 Stat. 251, enacted December 23, 1913, 12 U.S.C. ch.3
Controversy about the Federal Reserve Act and the establishment of the Federal Reserve System has existed since prior to its passage. Some of the questions raised include: whether Congress has the Constitutional power to delegate its power to coin money or issue paper money, whether the Federal Reserve is a public cartel of private banks (also called a banking cartel) established to protect powerful financial interests, and whether the Federal Reserve's actions increased the severity of the Great Depression in the 1930s (and/or the severity or frequency of other boom-bust economic cycles, such as the Late-2000s recession). Allegations that it was passed while most of Congress was away for Christmas on December 23 are however not supported by the legislative history (House: yea:298 nay:60 not voting:76 with 34 announced pairs; Senate: yea:43 nay:25 not voting:27 with 13 announced pairs)[10] showing 70%-80% participation before accounting for announced pairs.
...from wikipedia
Nice little strawman there.
1. whether Congress has the Constitutional power to delegate its power
2. whether the Federal Reserve is a public cartel of private banks
3. whether the Federal Reserve's actions increased the severity of the Great Depression
and then: "Allegations that it was passed while most of Congress was away for Christmas on December 23 are however not supported"
We can never go to war with China because we would have to fight shoeless and naked and China would need to lend us the money to do it. At some point I hope that a basic American survival instinct will kick in and get us out of this overly dependent relationship. We need to be able to make our own stuff it's that simple.
agreed demcapitalist
Of course people have to accept responsibility for their contribution to this mess....but if we don't stop NDAA there will be nothing left of what we knew as making a free choice in a free country.
right on... we are about to be living in pretty much Russia. Google Gulag... Detention without out trial for citizens is basically the Gulag.
SOPA Alert!
Special session of the House Judiciary Committee meets tomorrow, Dec. 21 at 9:00 a.m. to mark-up SOPA and ram it out of committee, while the opposition Congressman are on vacation.
If SOPA get’s out unto the floor it will be too late to stop it.
For SOPA to be stopped, it has to be killed in committee.
Just like the fast one they pulled with the 'Indefinite Detention Bill', they had everyone placated with the idea the prez would veto it...it SAILED thru the senate and congress with almost 100% yes votes, and Obama did sign it after all. This bill with SOPA turns us into China, at best...yet no one cares, its all good because stocks are up.
The media is to blame. People not being able to adapt to a 24/7 news cycle is at the root of all our problems.
most of it garbage and spun...
"Howard Beale: I don't have to tell you things are bad. Everybody knows things are bad. It's a depression. Everybody's out of work or scared of losing their job. The dollar buys a nickel's worth, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there's nobody anywhere who seems to know what to do, and there's no end to it. We know the air is unfit to breathe and our food is unfit to eat, and we sit watching our TV's while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that's the way it's supposed to be. We know things are bad - worse than bad. They're crazy. It's like everything everywhere is going crazy, so we don't go out anymore. We sit in the house, and slowly the world we are living in is getting smaller, and all we say is, 'Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won't say anything. Just leave us alone.' Well, I'm not gonna leave you alone. I want you to get mad! I don't want you to protest. I don't want you to riot - I don't want you to write to your congressman because I wouldn't know what to tell you to write. I don't know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first you've got to get mad. You've got to say, 'I'm a HUMAN BEING, God damn it! My life has VALUE!' So I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell, 'I'M AS MAD AS HELL, AND I'M NOT GOING TO TAKE THIS ANYMORE!' I want you to get up right now, sit up, go to your windows, open them and stick your head out and yell - 'I'm as mad as hell and I'm not going to take this anymore!' Things have got to change. But first, you've gotta get mad!... You've got to say, 'I'm as mad as hell, and I'm not going to take this anymore!' Then we'll figure out what to do about the depression and the inflation and the oil crisis. But first get up out of your chairs, open the window, stick your head out, and yell, and say it: "I'M AS MAD AS HELL, AND I'M NOT GOING TO TAKE THIS ANYMORE!" ~Network (1976)
The amount of conspiracy theories on this forum should be an indicator that we cannot handle this level of media.
I don't believe in conspiracy theories personally either. However, I do think that a handful ( a few thousand or so ) billionaires in attempt to simply capitalize their profits ( relatively by accident and not conspired effect) as well as money, power, etc.-- their attempts at this and a sense of really only looking out for themselves (i.e. not conspiracy, but human nature since the beginning of time)-- could all that?-- ruin the world and screw over everybody else..??.. yes very much so
I am hoping that we soon begin to desensitize ourselves from the onslaught of information and opinion. In many ways we are addicted to disasters - or at least reading about them. Once people realize that the media has changed, not so much "the world," I believe we will begin to balance. We have our first generation completely raised on the Internet. It has been interesting to watch them.
people are generally illiterate; no one has respect for true academic reading...that's for sure... very few people... people might be educated on current disasters and celeb/ political gossip, but they are largely unable to think creatively...
or logically.
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Any business that is successful usually grows into a corporation. That's just how it is. There has always been a divide when it comes to personal wealth. There is no such thing as the 1 percent or the 99 percent IMO. The one thing people keep forgetting about the United States - there is nothing stopping anyone from becoming a top earner.
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I disagree. Anyone with an Internet connection and a true desire can have it all. I cannot speak for Australia, but here in the US of A it's all about desire.
There is no law or unwritten rule prohibiting anyone without a record to obtain wealth.
like your point builder
http://www.huffingtonpost.com/edward-murray/5-ways-you-can-occupy-wal_b_1147606.html
http://www.rollingstone.com/politics/blogs/taibblog/a-sign-occupy-wall-street-is-having-a-political-impact-20111219?link=mostpopular5
http://motherboard.vice.com/2011/12/14/three-months-in-occupy-wall-street-is-already-shaping-politics--2
http://www.mercurynews.com/news/ci_19534065
"Thousands of people across the world are actively maintaining the front line of the Occupy movement; this article is not for those people. Those protestors are currently engrossed in alchemizing pepper spray salves out of Maalox and moxie. This article is for those who don't consider themselves to be politically radical but say: "Sure, our country is operating under an unsustainable system of financial irresponsibility and pay-for-legislation that will eventually destroy the middle-class... but what can I do about it?"
Regardless of political party affiliation, we can all surely agree that our government kept the Too Big to Exist investment banks safe from any negative consequences stemming from their gambles that tanked the national economy. So, if Daddy Government and Mommy Media won't paddle the mischievous cheeks of those wily Lehman Boys, here are some things that normal people can do to help save America from eating itself.
The Glass-Steagall Act was enacted in 1933 and separated commercial banks (Chase, Citibank, and other institutions that most of us deal with everyday) from investment banks (Goldman Sachs, Merrill Lynch, AIG, and other institutions that most of us only know about because we see their commercials during football games).
By separating commercial and investment banks, Glass-Steagall made it so that investment banks would only invest money from people who specifically wanted to invest their money... in investments (mind blowing, I know). When Glass-Steagall was repealed, regular bank deposits and mortgages could then be gobbled up by investment banks or moved to investment arms of banking institutions -- giving birth to financial behemoths like Citigroup. With this capital on their balance sheets, these institutions made larger and larger speculative bets in various financial markets until their manic gambles crashed in a drunken explosion of ego-gilded excrement and contorted erections shaped like dollar signs.
It is a bad idea to give this kind of power to a horde of ravenous, investment 'banksters' who lack a social conscience. That's just my opinion... but it's also a fact. (See: Economic and employment data from years 2008-current. See also: Common sense.)
What You Can Do:
Write your representative. No, seriously. People actually do that. Write a letter, an e-mail, mail them a brick with a haiku scrawled on it in classroom chalk (proper postage, please) saying that you will not vote for them unless they make prioritizing the reinstatement of Glass-Steagall a major part of their platform.
This shouldn't be too difficult to do. The idea of reinstating Glass-Steagall is so reasonable that John McCain spearheaded a failed effort to do exactly that in 2009.
Maybe McCain would've succeeded if he spent less time playing bongo drums and smoking doobs on his iPad.
...Unemployed hippie.
This mandate would require anyone making over a million dollars a year to be taxed an extra 1 percent on their income. If you're a millionaire who opposes this, please express your stance to the person next to you. I have a feeling this conversational exchange will be brief:
X: "Why should the government get another 1 percent of my money just because I make over a million dollars?"
Y: "... because they can't tax you for just being an asshole?"
What You Can Do: Write your representative. Again, I know, it's a pain. If I were some sort of political party webmaster, I'd draw up some chic HTML doc where you could just click circles and auto-send based on your zip code. But I'm not... so everyone has to hit the "Compose New Message" button now and again.
Also, check out these millionaires who want to be taxed more.
I want them to be hugged more.
Finance journalist Matt Taibbi put together a great piece for Rolling Stone where he suggested that "... a tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about..."
Doesn't that mean stock traders will be taxed twice? Yes, any profits made from a stock will be taxed an additional 0.1 PERCENT on top of the capital-gains tax of 15 PERCENT that is applied when stocks are cashed in for a profit. This is still less than what anyone reading this article gets taxed on their income, except for income tax evaders and those who are below the poverty line (i.e. the majority of my readership.)
Regarding this tax, the cry will undoubtedly by: "Why should my stock money be taxed? I toiled for years guessing that Netflix would be popular!"
After a quick diaper change, a simple answer is welcome: "Because this tax will be used to create a Wall Street Bailout Fund which the industry can utilize for its own bailouts rather than knocking on the government's door begging for a handout. Here's your binky."
Oh wait... I'm sorry. Were we not supposed to directly address the hypocrisy of investment firms taking trillion-dollar risks within an unregulated capitalist market and then demanding a taxpayer-funded socialist bailout?
What You Can Do:
Start your own political party and run for office.
Just kidding, write your representative. Anyone else notice a pattern here?
X: "Why should I do move my money to a credit union?!"
Y: "It keeps your savings and checking accounts in your local economy and out of speculative investments."
X: "Well... why besides that?!"
Y: "(sigh)... Because they still give out free pens?"
X: "Deal."
What You Can Do:
This.
Yeah, I know, this is the boring one. That's why I saved it for last. But you gotta know that the richest 400 people in America possess more wealth than 60 percent of all American households.
You gotta know that the top 1 percent makes 24 percent of all income earned in the United States.
And you gotta know that the economic disparity in this country is at a level unseen since 1929.
What You Can Do:
Read. Care. Don't be afraid to talk about this stuff with others. Encouraging the conversation is a necessary component for change.
Now, you don't have to do all of these things. Hell, you don't have to do any of these things. This is America, after all. You are free to say "Yeah... There are a lot of problems in the world, but I'm just so tired after work that I don't want to do anything besides watch flash animation fart sketches and wait for death in a comfortable chair."
But now you do know some things you could do. If our citizenry says nothing, then is it any wonder why our politicians only hear the voices of lobbyists, financial firms, and corporations flush with cash and influence? A true democratic spirit demands an active, vocal citizenry that policies its legislators.
To prove how patriotic I am, I will quote a dead white guy:
"All tyranny needs to gain a foothold is for people of good conscience to remain silent."
And just for the record, I can think of few things more American than the flash animation fart sketch."
http://www.huffingtonpost.com/edward-murray/5-ways-you-can-occupy-wal_b_1147606.html
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3.5 months old. still too young to judge nothing or little being accomplished. Give it one year, then judge-- that's my thought.
http://www.dailykos.com/story/2011/12/11/1044337/-IL-10-Progressive-Congressional-Candidate-Gets-OWS
“The price good men pay for indifference to public affairs is to be ruled by evil men.” ― Plato
The growth stopped because of the retrenching baby boomers, which necessitated Corporate America to do likewise.
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but here is a legit question regarding the scam of the global economy and out-sourcing. Let's say:
We America (i.e. a corporation in America) ships, lets say an automobile manufacturing company, ships all their jobs overseas to China (there are better examples then this), but then the board of directors/ CEO, etc.-- benefits (largely in the short term), because profits increase in the short term (for them). However, those jobs leave and now all those people who bought GM cars can't afford them in the US. China is an oppressive communist state that does not allow unions or fair wages, those jobs stay in China because the state can set wages permanently low. In the mean time financial deregulation continues, but average people can't find normal jobs. America is turned into a 3rd world country, which is perfect because those with the billions can control the politicians and the poorer people much easier (now) with celebrity gossip and cheap goods at wal mart.
The population question or point you raise doesn't seem to fit.
Gordon Gekko: The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you. ~Wall Street (1987).
BINGO!!!!
"Arthur Jensen: You have meddled with the primal forces of nature, Mr. Beale, and I won't have it! Is that clear? You think you've merely stopped a business deal. That is not the case! The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU... WILL... ATONE! Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that... perfect world... in which there's no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused. And I have chosen you, Mr. Beale, to preach this evangel. Howard Beale: Why me? Arthur Jensen: Because you're on television, dummy. Sixty million people watch you every night of the week, Monday through Friday." ~Network (1976).
THANK YOU so much for posting these mind-boggling quotations.
"...The banks have said, leave us deregulated...don't put government in to meddle. Then with that freedom of maneuver they took huge gambles, and even made illegal actions, and then broke the world system. As soon as that happened then they rushed out to say 'bail us out, bail us out, if you don't bail us out, we're too big to fail, you have to save us'. As soon as that happened, they said 'oh, don't regulate us, we know what to do'....the public is standing there, amazed, because we just bailed you out how can you be paying yourself billions of dollars of bonuses again? And the bankers say, well we deserve it...And the problem that the Occupy Wall Street and other protesters have is: you don't deserve it, you nearly broke the system, you gamed the economy..., yet you're still in the White House [;] you're going to the state dinners, you're paying yourself huge bonuses...?" ~Jeffrey Sachs, Columbia University"
http://www.earth.columbia.edu/articles/view/1804
Thanks for another GREAT quote. I love Jeffrey Sachs.
"I hope a return to the sort of mentality that existed just after the Great Depression and the Second World War when the emphasis was on the income status of the general population rather than promoting the wealth of the very few at the top. We've gone down the elite road - the Macquarie bank vision of the world, promoting the speculators and the spivs rather than the working people. I give my students a quote from the white paper on employment that came out in 1945 to show what the mindset was like after the last great crisis. That whitepaper had the following statement, "The object of economic policy is to maintain such a pressure on employment as as to guarantee a shortage of jobs, rather than a shortage of men." ~Steve Keen
he is a smart man
He is the kind of guy Obama should have chosen as an advisor!
We've not only arrived at Orwell's 1984 (1984 meets A Brave New World)-- consider also the new Defense Bill passed overwhelmingly by the Senate this week, which allows for the indefinite detainment and imprisonment of American Citizens plucked from U.S. soil, without any charges ever having to be filed let alone due process of a trivial trial [sarcasm]] having to occur), Orwell, if he were to rise from the grave and visit his nation today, would utter W-T-F, before voluntarily crawling back into his grave.
A BRAVE NEW WORLD: "But, my dear chap, you're welcome, I assure you. You're welcome." Henry Foster patted the Assistant Predestinator on the shoulder. "Every one belongs to every one else, after all."
One hundred repetitions three nights a week for four years, thought Bernard Marx, who was a specialist on hypnopædia. Sixty-two thousand four hundred repetitions make one truth. Idiots! (3.149-50)" ~ A Brave New World, 1931
The hypnopaedic platitude "Every one belongs to every one else" is a great example of the sort of confinement we see in Brave New World. No one can be free because everyone is subject to the desires and urges of every other person. How can you have freedom when you're considered property? The fact that everyone is both master and slave is one of the horrifying, cyclical traps of this system.~Aldous Huxley
concur :-)
Gordon Gekko (Character) from Wall Street (1987)
Gordon Gekko: You're walking around blind without a cane, pal. A fool and his money are lucky enough to get together in the first place.
Bud Fox: How much is enough? Gordon Gekko: It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.
Gordon Gekko: I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought.
Gordon Gekko: If you need a friend, get a dog.
Gordon Gekko: The most valuable commodity I know of is information.
Gordon Gekko: Greed captures the essence of the evolutionary spirit.
~plus one
“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.” ― Kurt Vonnegut, God Bless You, Mr. Rosewater
"The financial elites of this country, notably the Morgan, Rockefeller, and Kuhn, Loeb interests, were responsible for putting through the Federal Reserve System as a governmentally created and sanctioned cartel device to enable the nation's banks to inflate the money supply in a coordinated fashion, without suffering quick retribution from depositors or noteholders demanding cash.
Recent researchers, however, have also highlighted the vital supporting role of the growing number of technocratic experts and academics, who were happy to lend the patina of their allegedly scientific expertise to the elite's drive for a central bank. To achieve a regime of big government and government control, power elites cannot achieve their goal of privilege through statism without the vital legitimizing support of the supposedly disinterested experts and the professoriate. To achieve the Leviathan State..." -Rothbard
In "The Republic," Plato sums up his views in an image of ignorant humanity, trapped in the depths and not even aware of its own limited perspective. The rare individual escapes the limitations of that cave and, through a long, tortuous intellectual journey, discovers a higher realm, a true reality, with a final, almost mystical awareness of Goodness as the origin of everything that exists. Such a person is then the best equipped to govern in society, having a knowledge of what is ultimately most worthwhile in life and not just a knowledge of techniques; but that person will frequently be misunderstood by those ordinary folks back in the cave who haven't shared in the intellectual insight. If he were living today, Plato might replace his rather awkward cave metaphor with a movie theater, with the projector replacing the fire, the film replacing the objects which cast shadows, the shadows on the cave wall with the projected movie on the screen, and the echo with the loudspeakers behind the screen. The essential point is that the prisoners in the cave are not seeing reality, but only a shadowy representation of it. The importance of the allegory lies in Plato's belief that there are invisible truths lying under the apparent surface of things which only the most enlightened can grasp. Used to the world of illusion in the cave, the prisoners at first resist enlightenment, as students resist education. But those who can achieve enlightenment deserve to be the leaders and rulers of all the rest. At the end of the passage, Plato expresses another of his favorite ideas: that education is not a process of putting knowledge into empty minds, but of making people realize that which they already know. This notion that truth is somehow embedded in our minds was also powerfully influential for many centuries...
And... the IMF/World bank via the "SDR's" can bail out the U.S. and subsequently De-value the dollar $$$. The FEDERAL Reserve is not working with-in U.S. interests at this point. America is dangerously close/on the verge of becoming-- basically-- a 3rd world country with a lower standard of living highly possible. Decreased opportunities for the mases. All while The Global financial-power elite(s) are going to great lengths to maintain the economic status quo. The sun will still rise as it always does. But, what's going on in the world is scary and sad and freaking frustrating.
Plus one... belly up yes... the unions we're made to believe that American workers are/were not competitive with the world, so they were eliminated (by shipping whole industries i.e. like steal for unnaturally cheap foreign steal) overseas for imports to US or just making them irreverent, etc. But human consciousness has woke... I think OWS will keep this debate going...
Fractional banking at 10:1; Bankers just can't resist creating money out of nothing behind everyone's back -- and it used to be punishable by death in the good old days.
The hyper leveraged world with counter party risks makes things a little more real when it comes to 401Ks, IRAs and other public/private pensions. Seems there can be no other outcome than they shall get disappeared like the MFG money...
And everyone will be forced to accept recompense in negative interest rates. But when 1.2 billion dollars of client money just 'legally' disappears at MF Global there is silence, and there are no calls for changing the system, putting anyone in jail, or to pass any new laws; and they have the nerve to treat Jon Corzine in Congressional testimony like he was an unfortunate victim who just ran into some bad luck. Think of a snake eating it's tail.
10 to 1 fractional banking would be a return to sanity. It was 30 to 1 when the real estate bubble burst and a bunch of the 1 was made up of CDO's that were breaking the buck in a big way. Mf Global was at 44 to 1 when they felt the need to dip into the personal accounts of customers to meet margin calls. The trade that broke MF Global was a conservative trade made into a time bomb due to the outrageous leverage used. We have no Idea how many banks are up to their necks in that same trade but I'd say quite a few cause the markets are having a fit every time the Italian debt goes over %7. We finally talked Europe into printing up money, that's why the markets went up yesterday and look hopeful today. I'm with you that all of this mess ultimately is based on our trade deficit. Same with Europe.
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"I hope a return to the sort of mentality that existed just after the Great Depression and the Second World War when the emphasis was on the income status of the general population rather than promoting the wealth of the very few at the top. We've gone down the elite road - the Macquarie bank vision of the world, promoting the speculators and the spivs rather than the working people. I give my students a quote from the white paper on employment that came out in 1945 to show what the mindset was like after the last great crisis. That whitepaper had the following statement, "The object of economic policy is to maintain such a pressure on employment as as to guarantee a shortage of jobs, rather than a shortage of men." ~Steve Keen
What do I think? This is a tower of babble .
house of cards
http://seekingalpha.com/article/301260-bank-of-america-dumps-75-trillion-in-derivatives-on-u-s-taxpayers-with-federal-approval
"Bloomberg reports that Bank of America (BAC) has shifted about $22 trillion worth of derivative obligations from Merrill Lynch and the BAC holding company to the FDIC insured retail deposit division. Along with this information came the revelation that the FDIC insured unit was already stuffed with $53 trillion worth of these potentially toxic obligations, making a total of $75 trillion.
Derivatives are highly volatile financial instruments that are occasionally used to hedge risk, but mostly used for speculation. They are bets upon the value of stocks, bonds, mortgages, other loans, currencies, commodities, volatility of financial indexes, and even weather changes. Many big banks, including Bank of America, issue derivatives because, if they are not triggered, they are highly profitable to the issuer, and result in big bonus payments to the executives who administer them. If they are triggered, of course, the obligations fall upon the corporate entity, not the executives involved. Ultimately, by allowing existing gambling bets to remain in insured retail banks, and endorsing the shift of additional bets into the insured retail division, the obligation falls upon the U.S. taxpayers and dollar-denominated savers...."
who is going to read this? another tower of babble !
ok, very insightful of you... your ideas are original and ground breaking
Debt and credit levels today make previous credit excesses look small. Losses to the working people, particularly unfunded liabilities and previous low marginal tax rates in the usa are a thing of the past. We will be taxed more and get less bennies. But we will muddle through. Your social security and medicare will be means tested ( a hidden tax increase or loss of benefits). But there will be blowback. It will be a world of malaise and no initiative nor energy, at least in the first world.
Just like in the roman empire when work and taxes became so unbearable the masses returned to subsistence farming and left their careers, in spite of laws against it.
"Shadow" (and real) collateral is evaporating, due to the ever decreasing cash flow generated by amortizing and depreciating assets.
The whole game is merely one where the declining asset base has to support an ever greater pillar of liabilities, which means the implied leverage assumed on assets (via Shadow banking transformation) is getting bigger and bigger. To summarize: traditional banking cap ratios may be declining at the expense of shadow leverage ratios which are exploding. As simple as it gets.
Shadow Banking: http://en.wikipedia.org/wiki/Shadow_banking_system
The shadow banking system is the infrastructure and practices which support financial transactions that occur beyond the reach of existing state sanctioned monitoring and regulation. It includes entities such as hedge funds, money market funds and Structured investment vehicles. Investment banks may conduct much of their business in the shadow banking system (SBS), but they are not SBS institutions themselves. The core activities of investment banks are subject to regulation and monitoring by central banks and other government institutions - but it has been common practice for investment banks to conduct many of their transactions in ways that don't show up on their conventional balance sheet accounting and so are not visible to regulators.
"The real owners are the big wealthy business interests that control things and make all the important decisions. Forget the politicians, they're an irrelevancy. The politicians are put there to give you the idea that you have freedom of choice. You don't. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They've long since bought and paid for the Senate, the Congress, the statehouses, the city halls. They've got the judges in their back pockets. And they own all the big media companies, so that they control just about all of the news and information you hear. They've got you by the balls. They spend billions of dollars every year lobbying lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else."
"But I'll tell you what they don't want. They don't want a population of citizens capable of critical thinking. They don't want well-informed, well-educated people capable of critical thinking. They're not interested in that. That doesn't help them. That's against their interests. They don't want people who are smart enough to sit around the kitchen table and figure out how badly they're getting fucked by a system that threw them overboard 30 fucking years ago.
"You know what they want? Obedient workers people who are just smart enough to run the machines and do the paperwork but just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it. And, now, they're coming for your Social Security. They want your fucking retirement money. They want it back, so they can give it to their criminal friends on Wall Street. And you know something? They'll get it. They'll get it all, sooner or later, because they own this fucking place. It's a big club, and you ain't in it. You and I are not in the big club."
"This country is finished." ~George Carlin
Of course there are some still employed in the 'private sector' in service industries and some few per cent employed in manufacturing. How long can this little group afford to bail out Euroland, the US, and continue to police the world?
http://www.nytimes.com/2011/12/21/business/global/a-fight-to-make-banks-hold-more-capital.html
A Fight to Make Banks More Prudent...
RANKFURT — For Philipp M. Hildebrand, it was a reminder of what happens when you get between bankers and their bonuses. Related
In 2008, UBS, based in Zurich, was hit hard by losses from investments in the American real estate market.
Mr. Hildebrand, the president of the Swiss central bank, was called “arrogant” and “egotistical” by bankers quoted anonymously in the pages of Swiss newspapers. His supposed sin: Wanting banks to hold extra capital. The fact that Mr. Hildebrand was himself a former hedge fund manager in New York seemed only to heighten the sense that he had betrayed his profession.
“He’ll never find another job in Switzerland,” the Swiss newspaper Der Sonntag quoted an unnamed high-ranking banker as threatening Mr. Hildebrand in 2010.
The unusually bitter attacks on a central bank chief were a measure of what was at stake. Mr. Hildebrand, 48, had a high-visibility role in a struggle between bankers trying to preserve their most lucrative business practices and regulators trying to defuse a system that, many believe, nearly blew up the world economy.
“Many of us on the public side had to deal with industry push-back, at times amplified by public coverage,” Mr. Hildebrand said. “One lesson that emerges is that the capacity of the financial industry to lobby for its short-term interests is far reaching.”
The debate centers on an international accord that most people outside the industry have never heard of, the so-called Basel III rules. The core issue and main point of dispute is capital — the money that banks accumulate through issuing stock and holding onto profits, money that they do not have to repay. The regulators want banks to finance their operations with more capital and less borrowed money. Advocates argue that the bigger the capital buffer, the greater the stability of the financial system. But financing operations from capital, rather than borrowing money, is less profitable, and that means lower bonuses.
“In the financial crisis the banks got the upside and the public got the downside,” said Stephen G. Cecchetti, head of the monetary and economic department of the Bank for International Settlements, in Basel, Switzerland. The bank houses the Basel Committee on Banking Supervision, the secretive panel that establishes global banking standards. “We want to make sure that doesn’t happen again.”
After some fierce battles, proponents of the tighter rules have achieved some success in pushing through measures that will force banks to reduce risk. The Federal Reserve on Tuesday published draft regulations that draw heavily on the agreements reached in Basel. But there is a long phase-in period that the banking industry could use to try to water down the rules. And many economists fear that the new regulatory regime still allows banks to take outsize risks.
Flaws in earlier Basel rules, known as Basel II, allowed the financial crisis to gather in the first place, many economists say, enabling the illusion that banks were comfortably cushioned against risk. In fact, the banks had badly underestimated the malignant potential of their holdings. Faulty regulation also worsened the European sovereign debt crisis, assigning government bonds virtually zero risk. That encouraged banks to extend billions in credit to countries like Greece and Italy, setting up a dangerous correlation between the solvency of countries and the health of banks. The thinking, in effect, was “Why imprison capital to insure against losses that were unlikely ever to happen?”
The technical term was “risk weighted assets.” It was as if a homeowner only had to make a down payment on the part of a house that might catch fire. Other parts of the property, like the swimming pool and the lawn, would not count.
The flaws in this model became obvious in the days after investment bank Lehman Brothers collapsed in 2008. Banks that appeared to be well capitalized discovered that they had hugely underestimated risk. Derivatives tied to the United States real estate market, with top credit ratings, suddenly became impossible to sell and effectively worthless.
One of the most vivid examples was right around the corner from Mr. Hildebrand’s office in Zurich, the Swiss bank UBS. In the years before the crisis, UBS was, on paper, one of the best capitalized banks in the world. But in the course of 2008 UBS rapidly depleted its cushion as it absorbed losses from investments in the American real estate market..."
http://www.nytimes.com/2011/12/21/business/global/a-fight-to-make-banks-hold-more-capital.html
What went wrong? Damn WHINERS,,,, that is what caused it.
really insightful donut; you must be pretty smart.
"Welcome to the revolution. Our elites have exposed their hand. They have nothing to offer. They can destroy but they cannot build. They can repress but they cannot lead. They can steal but they cannot share. They can talk but they cannot speak. They are as dead and useless to us as the water-soaked books, tents, sleeping bags, suitcases, food boxes and clothes that were tossed by sanitation workers Tuesday morning into garbage trucks in New York City. They have no ideas, no plans and no vision for the future.
Our decaying corporate regime has strutted in Portland, Oakland and New York with their baton-wielding cops into a fool’s paradise. They think they can clean up “the mess”—always employing the language of personal hygiene and public security—by making us disappear. They think we will all go home and accept their corporate nation, a nation where crime and government policy have become indistinguishable, where nothing in America, including the ordinary citizen, is deemed by those in power worth protecting or preserving, where corporate oligarchs awash in hundreds of millions of dollars are permitted to loot and pillage the last shreds of collective wealth, human capital and natural resources, a nation where the poor do not eat and workers do not work, a nation where the sick die and children go hungry, a nation where the consent of the governed and the voice of the people is a cruel joke.
Get back into your cages, they are telling us. Return to watching the lies, absurdities, trivia and celebrity gossip we feed you in 24-hour cycles on television. Invest your emotional energy in the vast system of popular entertainment. Run up your credit card debt. Pay your loans. Be thankful for the scraps we toss. Chant back to us our phrases about democracy, greatness and freedom. Vote in our rigged political theater. Send your young men and women to fight and die in useless, unwinnable wars that provide corporations with huge profits. Stand by mutely as our bipartisan congressional supercommittee, either through consensus or cynical dysfunction, plunges you into a society without basic social services including unemployment benefits. Pay for the crimes of Wall Street.
The rogues’ gallery of Wall Street crooks, such as Lloyd Blankfein at Goldman Sachs, Howard Milstein at New York Private Bank & Trust, the media tycoon Rupert Murdoch, the Koch brothers and Jamie Dimon at JPMorgan Chase & Co., no doubt think it’s over. They think it is back to the business of harvesting what is left of America to swell their personal and corporate fortunes. But they no longer have any concept of what is happening around them. They are as mystified and clueless about these uprisings as the courtiers at Versailles or in the Forbidden City who never understood until the very end that their world was collapsing. The billionaire mayor of New York, enriched by a deregulated Wall Street, is unable to grasp why people would spend two months sleeping in an open park and marching on banks. He says he understands that the Occupy protests are “cathartic” and “entertaining,” as if demonstrating against the pain of being homeless and unemployed is a form of therapy or diversion, but that it is time to let the adults handle the affairs of state. Democratic and Republican mayors, along with their parties, have sold us out. But for them this is the beginning of the end." ~Chris Hedges
Doc4the99
Very very nice!!!
This is exactly the stuff that should burn through every media outlet, whether it is conventional or social media. Even if it is only spread from one hand to another on a hand bill.
People share this stuff however you are able to.
We had the tech bubble of the late 90's that burst. A lot of people lost money. I didnt. Not one penny. As an adult I decided not to invest in tech stocks. Most recently people lost very expensive homes because they could not afford the payments on a house they should not have signed the contract on. I paid off my house in 24 years on a 30 year loan. I have made a lot of money in stocks. When the market crashes,, I dont sell just because. I ride it out and wait for it to come back,,, while buying more stock in the down economy. If I can do it as an adult,,, why cant you?
I know quite a bit about financial markets and statistical models. It's not about making money Donut. That's not the point. I work with War veterans (Combat/Army) who can't find jobs. Not everyone can be a hedge fund manger or high level service job employee (doctor, nurse, teacher, etc.).
Private banking, through their investment firms, hedge funds and various financial services, sold hundreds of trillions of dollars worth of debt, making billions and billions in profit, then when that fact became widely recognized and the LIBOR and EURIBOR froze (inter-bank lending --- not a 4% mortgage default rate as the propaganda specialists would have us believe), public monies are used to bail them out repeatedly, then they want global austerity programs to continue to fund their criminality.
First, we require freedom of the press today in America.
Next, immediately nationalize the Federal Reserve, along with the top ten banks in America, and reinstitute the financial transaction tax (which previously existed from 1914 to 1966).
End labor arbitrage and labor deflation. (The only jobs which should be off shored are those 40,000 lobbyist jobs.)...who spin these numbers to no end...
So, the question is how... if the elite(s); .0001 percent billionaire bankers/ hedge fund managers/ and a few inside politico's-- control the FED as well as the IMF/world bank-- it's extremely tough to do it. They write the policy and keep the magic machine running.
The markets [e.g. equity] are entirety anything but "fair and efficient" in which frontrunning for a select few is legal, in which insider trading is permitted for politicians and is masked as "expert networks" for others, in which the government itself leaks information to a hand-picked elite of the wealthiest investors, in which investment banks send out their "huddle" top picks to "whale" accounts before everyone else gets access; where hedge funds form collude in moving the market, in which daily record volatility triggers sell limits-- for all but the chosen few-- this make the prospect of breaking even TOUGH, let alone winning, quite daunting. In short: a rigged casino
You just overlooked one of your comments and one of mine. It does not matter who or how the market is moving. You see the TV news cast, "Ohhh,,, we lost all of our retirement money when the market crashed." I say,,,,, YOU IDIOTS. I didnt lose a penny. You only lose money if you sell at the bottom. The market has and will never hit the bottom. It goes down,,, at times way down (dont sell) and as predicted over many decades,,, it comes back. However, you just bought more stocks when it was pennys on the dollar. If you sold on the down side,,, your an idiot.
I am talking about the average people (i.e. the sheeple America has created with addictions to no real news and celeb gossip as well as consumption over production culture) on average, not myself specifically... again, not everyone can be a hedge fund manager and manipulate the markets...
In a derivative macro environment, liquidity can literally be created out of thin air (FED Reserve). So $18T is easy. That is really what happened yesterday, it was announced that the Euro will not die.
HOWEVER...Now we're pretty much milked out; much of the private equity is out of the market. It's getting too costly to food, clothe, and medicate all of the dependents.The latter requires real resources to be dug up and fashioned into things of REAL value. That's the rub, in the end. You can print all you want, but it doesn't produce any more yield of real necessities at some point. And competing interests produce many of those necessities.
So the powers are incompetent and this a... mess they created; and the question remains what (wtf) ruined America and its once relevant strong/ having a back bone economy.
Few of my friend invest in the market. Some make a lot of money and are great at saving. Some invest in property. One is a great gambler and has made a fortune in poker. There are a lot of ways to build equity and a hedge fund manager has very little impact.
exactly, our economy has been stripped of any real backbone. We no longer produce. We import and your friends are making money at gambling...? what does that do or produce for society or create... how is that creative or beneficial to humankind? Making money in markets or on interest or on bets or options or shorts, etc. does nothing but create or (lose) wealth, which may or may not be spent on anything relevant. the US economy has been stripped and gutted... No manufacturing; nothing. Service economy scam. Professors making money selling for degrees online via student loans. Pyramid scheme.Visit Detroit, MI -- recently? and witness what is basically the ruins of America like the pyramids in Egypt...
My friend makes money at gambling just as gamblers did in the wild west in the 1800's.
I totally get it. There was gambling in the 1800s... Totally insightful...
welcome to America, DonutDunkinDonut:
http://www.marchandmeffre.com/detroit/