Major Points of Agreement at G20 Conference Miss the Main Point
By Olivia Lake
November 16, 2008
http://upsidetothemeltdown.com
The Washington Post article,World Leaders Agree to Seek Major Reform, claims that the action plan they developed would “begin to reshape international financial institutions and reform worldwide regulatory and accounting rules.” I wondered what was wrong with reshaping these institutions and rules now, since they have so clearly brought a financial tsunami to most of the planet’s inhabitants. “The leaders…agreed that the dramatic failure of market oversight in some advanced countries was among the root causes of the financial crisis.” So, what should be done, according to the G20?
Let’s examine these major points of agreement.
• China, Brazil, India and other such countries would gain power and responsibility as part of the restructuring of the international financial system.
• European leaders won a commitment to new regulations and controls on banks, rating agencies, and exotic financial securities.
• A “College of Supervisors,” a new regulatory body, will examine the books of major financial institutions that operate across national borders. In this way, regulators can obtain a more complete picture of these banks’ operations.
• Greater scrutiny of hedge funds
• A clearinghouse system to standardize and limit risk on opaque and risky financial derivatives.
• Allowing the IMF to conduct regular, vigorous reviews of national financial systems.
• Curbs on executive pay schemes that reward excessive risk-taking.
And finally, the IMF is calling for more growth stimulation. “Dominque Strauss-Kahn, managing director of the IMF, called on nations to approve a fiscal stimulus equal to 2 percent of gross domestic product.”
We do not need growth. We need a steady-state economy. Capitalism requires growth to survive, by definition. The quest for constant growth is the CAUSE of the current global economic disaster. Organisms and organizations that must grow or die consume their hosts eventually. I see no real solutions presented here and I predict that these initiatives will fail to stop the global financial catastrophe.
And finally, shame on the US government for not even being brave enough to take responsibility for this disaster.
“The communique minced no words in outlining the causes of the crisis, blaming "weak underwriting standards, unsound risk-management practices, increasingly complex and opaque financial products and consequent excessive leverage." While many nations have blamed the United States for failing to monitor excesses in the securities markets, the communique diplomatically did not.
“A British official, speaking on condition of anonymity because he was not authorized to speak publicly, said U.S officials privately acknowledged their role in the crisis. ‘The U.S. threw up their hands and said that our subprime mortgage industry left a lot to be desired,’ the official said. ‘But there was determination not to have any finger-pointing.’”
We threw up our hands about the subprime mortgage industry? We, the “greatest nation”, the “shining city on the hill”, cannot even stand up and take responsibility for our catastrophic negligence, recklessness, and intent to funnel every dime to the top 1%? Obvious scapegoating of only one part of the systematic meltdown is making other nations happy? Well, I am not happy. I call on every single policy official and every single CEO and COO to acknowledge their complicity in this horror.
Every single person on the planet will be damaged somehow by their laissez-faire attitude. They owe us an acknowledgment of their responsibility, and they owe us their support for an economic system that is not guaranteed to immiserate the world every few decades.
10.25.2008
The Bailout Explained: By Forrest Gump
(channeled by a retired judge)
Mortgage Backed Securities are like boxes of chocolates. Criminals on Wall Street stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors. Eventually somebody bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide.
Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $700 billion dollars until the market for turds returns to normal. Meanwhile, Hank's buddies, the Wall Street criminals who stole all the good chocolates, are not being investigated, arrested, or indicted. Nor is the Bush administration, whose evil minions invalidated state consumer protection regulations in their push for the so-called "ownership society."
Mama always said: "Sniff the chocolates first, Forrest".
10.23.2008
A long day at the computer, helping to give birth to a new chatroom, has produced some nice juicy bits for us to savor!
Relocalization
As the economy contracts, we will have to learn to rely more on local sources for our daily needs and to maintain our infrastructure.
http://ecolocalizer.com/2008/05/28/willits-ca-a-relocalization-inspiration/
It works in cities, too! http://www.livelocalmilwaukee.org/
See the movie! Stealing America,vote by vote.
http://www.stealingamericathemovie.org/
For you dictionary lovers! (It's ok. I understand. Your secret is safe with me. There are no Word Junkies Anonymous groups anyway.)
http://www.urbandictionary.com/
If the World Could Vote..
http://www.iftheworldcouldvote.com/results
Republican Hate Mail
https://donate.barackobama.com/page/contribute/mailing1?source=20081023_DP_DNC
Donna Brazile sparkles here
She says she doesn't mind if the Democrats lose on the issues. But they sure better not lose because of prejudice! Scroll down the page a ways. The site template is out of whack.
http://jezebel.com/5059945/donna-brazile-is-not-going-to-the-back-of-the-bus
Women's Salaries
Women are Screwed, Even If They Used to be Men!
Republican Attacks Have Been Outsourced to Romania!
Now, that's innovative. Much more disrespectful than having American flags made in China.
http://www.billingsgazette.net/articles/2008/10/23/news/local/18-romania.txt
10.22.2008
Some Differences Between Republicans and Democrats
A Republican thinks that if you bought a ranch two years before you ran for President, that you are a rancher. And that at that ranch, you cut your own brush, even though you were born with a silver spoon in your mouth and never really was good at anything useful.
A Republican thinks that if they say that they are a Christian, regardless of how immoral they are, they are STILL more moral than anyone else. Do they really think that other people are more evil than they, despite the bottomless depth of their malevolence? It is better to look christian than be moral, eh?
The irreligious Republicans, the legions of them, practice certain moral precepts in many cases, but their religion is ultimately their money and the money they don't yet have.
A Republican thinks that if a woman has blonde hair and regular features, she is to be believed. Viz. Nancy Pfotenhauer, that Dana Perino woman, Elizabeth Hasselbeck. Also to be believed are women with fake personalities, like Sarah Palin. The occasional redhead and brunette are allowed into the "to be believed" club, viz. Katherine Harris, Michele Bachmann. But they are disposable.
Cindy McCain.
Cindy McCain. Who wears her hair like a prom queen everywhere she goes, who never makes a policy statement, who does not share loving looks with her husband...their idea of a first lady?
A Katherine Harris parody video sent me today by Ess Jay reminded me of the unselfconscious venality of these people.
http://harrisvideo.cf.huffingtonpost.com/
Which of course immediately reminded me of Sarah Palin, whose vapid exterior covers a rapacious interior. As she climbed the political ladder, she bit the hand of most who supported her on the way up. She filled appointed positions with lackeys who were beholden to her. Anyone who disagreed with her was labeled a "hater" and dispatched expeditiously. Wasilla appointed a city manager after Palin became mayor, because she had precipitously fired so many people that the City was open to expensive legal action.
In short, for Palin, public office is a convenient platform from which to harm enemies and nurture personal projects. She borrowed lots of money on the public dime, gave her friends the inside path to lucrative contracts, and bought off the voters with rebates in a state with an educational system in crisis, in order to acquire political power.
'Tis indeed better to look Christian than be moral for Sarah Palin. The McCain campaign has abandoned the Rev. Wright smears this time around. They know just how vile the minister and the theology of the Wasilla Assembly of God is and if the Democrats told the public the truth about Pastor Ed Kalnins it would likely erode Republican eroded ranks yet further.
http://sarahpalintheantichrist.blogspot.com/2008/09/alaskans-speak-in-frightened-whisper.html
http://sarahpalinunfit.blogspot.com/2008/09/sarah-palins-churches-and-third-wave.html
The Four Pillars of a Free Market
David Ricardo, (1772-1823) was not a pinko liberal Communiss socialist terrist, but an Englishman with a host of interesting friends, including Jeremy Bentham, James Mill, and Thomas Malthus.
He read Adam Smith's The Wealth of Nations in 1799 on a holiday at Bath, which became a springboard for his growth as a political economist. Was it the book, or the holiday, or the bath, that inspired him? Who knows? Anyway..
Ricardo achieved fame by articulating the theory of comparative advantage, which I will cover in another post. Here, I hope to explain Ricardo's principles of the free market.
So:
1. Many buyers and sellers: so that no group of buyers or sellers can set a price.
2. Homogeneous goods: so competition centers on price, making products easily comparable.
3. Low barriers to entry: to discourage collusion.
4. Perfect knowledge: so buyers and sellers can make rational price-based decisions based on the price of competing products.
The problem? None of these principles apply in the present global monopoly capital regime.
1. When only 10 banks and two investment banks are setting the markets, we have a group of sellers setting the price.
2. Homogeneous goods? With the growth of econometrically-produced monetary instruments, we haven't the faintest idea with the "goods" really are.
3. The barriers to entry into these markets are not scalable expect for those already in the markets. We do not have new entrants; we have consolidation of participants.
4. Complete and utter lack of knowledge; see number 2.
Grrr. I don't want to hear any more free-market smack until you clear up these tiny problems with the controlling theory of free markets.
There never have been free markets. There will never be free markets. Markets are always controlled by governments. Which side is YOUR government on? The side of corporations, or the side of its citizens?
Swapping Secrecy for Transparency
Christopher Cox, current head of the Securities and Exchange Commission, is certainly no pinko liberal Communiss. When I pointed out that the credit swap market was roughly equivalent to the ENTIRE PLANET'S Gross Annual National Product last spring, people either shrugged their shoulders or heaped me with contempt.
When Cox says the same things that I have been saying, perhaps I will no longer be regarded as Satan's handmistress bent on ushering socialist platitudes into "good american patriotic free-market" economic analysis. I kinda doubt it, but as they say, hope springs eternal. Presenting facts should not be viewed as an ideological action. -O.L.
Once upon a time a man appeared in a village and announced to the villagers that he would buy monkeys for $10 each.
The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their effort. He next announced that he would now buy monkeys at $20 each. This renewed the efforts of the villagers and they started catching monkeys again.
Explain it to us again, please?
My friend Shanatu in India sent this to me. An excellent background provided here by a player in the derivatives market. Some new factors struck me as I read. As the returns for US T Bills dropped into the 1% range, foreign corporations and other countries thirsted for higher returns with an instrument viewed with the same degree of safety. The growth in mortgage-backed securities was thus fueled in part by choices made by the Federal Reserve to keep rates low here, purportedly to control inflation, and thus creating artificially cheap credit. Cheap credit pushes up home prices. Voila, a bubble! -O.L.
