Thursday, May 6, 2010

Silly Talk!

Greetings good citizen,

There are normal people and there are economists. Perhaps economists perpetually get it wrong because they owe their existence, their entire profession, to supporting the unsupportable. Like the song says, ‘you’re economic theory makes no sense…’ [Sting: Dream of the Blue Turtles: “We work the Black Seam together”.]

Thus should no irony be lost on the fact that tonight’s offering was proposed by a card carrying ‘economist’…although faithful readers will recognize that they read this proposal here first.

Truth be told good citizen, it was not the proposal itself that drew my eye, it was the question “Why was Wall Street ‘saved’” that sparked my interest!

You know the answer to that, don’t you good citizen. (And if you don’t it only proves you’re too young to be thinking about retirement…)

Yessiree BOB! It all comes down to that Promise made to us by St. Ronnie that we would all retire millionaires if we’d just open up a stock IRA and ‘manage our own money’!

[What fucktard didn’t mention is you have to watch your money 24/7 and this still doesn’t protect you from the reckless actions of the ‘plan administrator’. For thirty years we have been pouring money into our IRA’s and the ‘average’ IRA has less than $50,000 in it today. Pretty far cry from a million bucks, ain’t it?]

Bottom line, good citizen is Wall Street was ‘saved’ so all of those ‘retirement accounts’ (all of the money most of these people had to their name) didn’t, er, ‘vanish’. If the account still exists, that preserved ‘hope’ that its contents could be salvaged.

What this really did was it prevented millions of disillusioned people from torching everything in their path…for now.

Sidebar again: it appears we are into the third straight day of global market declines…which really shouldn’t alarm anybody because we all know that stock prices are WAY overvalued…

Sadly, when stock prices once again ‘coincide’ with reality, the world will be a very different place.

If there are any such things as ‘stocks’ in the future…

Don’t Fix Wall Street, Create a New Economy

Congress shouldn't tweak the greed-driven Wall Street machine, it should create a new financial system that answers to communities. [STOP right there! Of all the phrases Bobo could have used, a ‘new economy’ is the poorest choice because it implies that we will somehow ‘escape’ the constraints Nature places upon us that ALWAYS provide the basis for any economic model. Some may call this ‘quibbling’ but rest assured good citizen, there will be very little ‘new’ in a ‘sustainable economic model’. The best that can be hoped for is a boatload of ‘different’.]

Financial reform is the Congressional political issue of the month. [?] Democrats say their bill will place essential controls on Wall Street to prevent abuse and a repeat of the financial crash. [And they know this how?] Republicans say it will encourage further Wall Street risk-taking by giving the big banks a guarantee of a future taxpayer bailout if reckless decisions trigger another financial crash. [And who was in office during the first bailout? Oh yeah, but he (suddenly) wasn’t a ‘real’ conservative! WTF!]

Each party would have us believe that its side has the better answer about how to prevent another financial collapse, limit future taxpayer exposure, and protect consumers from financial fraud. These are good objectives, but their focus is fixing Wall Street. [To head off rioting by Boomers nearing retirement…which is to point out this WASN’T an ‘accident’/coincidence]

No one in official circles seems to be asking the more fundamental question: “How do we create a financial services sector that directs money where it is needed: toward creating living wage jobs that provide essential goods and services for all Americans in ways consistent with a healthy environment?” [Because none of these weasels are being paid to address this issue! They’re being paid to stick their fingers in the dyke while the perps make their ‘getaway’.] Fixing Wall Street, as we presently know it, will do little, if anything, to achieve what should be our real purpose. Since the September 2008 financial collapse, Wall Street has conclusively demonstrated that it is concerned only for its own profits and bonuses.

Thanks to the taxpayer bailout and a constant flow of nearly free credit to the big banks from the Federal Reserve, Wall Street is once again reporting record profits and bonuses. Main Street, which has received far more modest public support, has not been so quick to recover from the effects of the crisis: high unemployment, low wages, consumer debt, bankruptcies, and foreclosures. It is a stunning contrast not lost on the properly outraged American public. [Until the Mercs can be moved into position, people might be astounded as to how little ‘resistance’ they would face if they attacked Wall Street…cops have pension funds too!]

Meanwhile Wall Street power brokers resist even modest financial reforms that might prevent a repeat of the collapse. After all, they have little reason to be concerned—they've rigged the system to assure that no matter how risky their actions, they will still get their bonuses and taxpayers will pick up the bill. This is a destructive system beyond repair. [No shit!]

Generally, Republicans believe that “too big to fail” Wall Street banks should have been left to collapse as a self-corrective act of market discipline. [This is why they ‘bailed ‘em out’!] Democrats would rather forestall another collapse by placing appropriate restraints on Wall Street excesses. [If only it wouldn’t hurt their prospects for re-election!] On one level, I’m sympathetic to both sides of this particular debate. Another bailout is not acceptable; banks that engage in overly risky behavior should fail; [Take that a step further, ‘For Profit Banking’ should NOT exist…period!] and we need strong government action to forestall a financial crash potentially far more devastating than the one that happened in September 2008. [What do you suppose the chances are of ‘strong government action’ when these self-centered ‘peckerheads’ can’t find common cause with one another?]

Neither side, however, is addressing the essential need to replace the Wall Street casino with a new financial system, one designed to provide essential financial services to the Main Street economies we depend upon to meet our daily need for jobs and essential goods and services like food, shelter, water, waste disposal, education, and public safety. [Ironically, this ‘refocusing’ on the ‘true purpose’ of commerce/government is ‘automatic’, it happens by itself once the ability to ‘interfere’ has been removed…and our current economic troubles are the end result of massive ‘interference’ BY THE PRIVATE SECTOR!]

Wall Street is a world of pure finance in the business of using money to make money—by whatever means—for people who have money. Any contribution to the production of real goods and services is purely an incidental byproduct.

Wall Street, in its current incarnation, has no interest in providing true financial services, except as instruments of predatory extraction. In the name of financial innovation, its institutions have perfected the arts of financial speculation, inflating asset bubbles, stripping corporate assets, predatory lending (usury), risk shifting, leveraging, and creating debt pyramids—none of which serves any beneficial public purpose. Rather than being fixed or restricted, most of Wall Street should be shut down. The institutions of a new service-oriented financial system could more efficiently and beneficially fulfill the essential financial functions that Wall Street now controls. [Here is the ‘elephant in the room’ good citizen, who paid the lobbyists to ‘de-regulate’ the commercial sector? Geez, that would be the private sector, wouldn’t it? The same private sector that made you ‘redundant’ and shipped your job off to Timbuktu! (To be done by people they don’t have to pay a living wage or benefits to…)]

Such a system cannot be created simply by restoring the regulations that once kept Wall Street’s tendency toward concentration and fraud in check. The system is now corrupt beyond repair. [Might have read that here first too!] A new system of financial services institutions designed to serve and be accountable to the people of place-based Main Street economies must be built from the bottom up.

The money system is to the modern economic system what the circulatory system is to the body. Where blood flows freely, the body’s cells flourish. Where blood flow is restricted, they become anemic and may die. Real resources follow the money, so we must design the financial system to put the money where it will produce the greatest living-wealth benefit. [Missing from this statement is ‘for the greatest number of people AND future generations, otherwise you end up ‘raping the planet for a buck in your pocket today.] Complicated though the details may be, the broad outline of what this means in practical terms is simple common sense.

Wall Street thrives and Main Street struggles because Wall Street controls the money flow. If you are a vulture speculator pushing the state of California toward bankruptcy by short selling California state government bonds, the Wall Street banks are there to be sure you have access to enough cheap money to make a big killing. If you are a Main Street entrepreneur serving real needs in your local economy, you’re forced to borrow against your credit card at predatory interest rates. This is the money system that Congress is debating how best to stabilize. [Um, the ‘real needs’ of the community should not become an individual’s ‘income stream’, that is how we got into this mess in the first place!]

A proper service-oriented financial sector will feature a decentralized system of local banks and credit unions, mostly organized as nonprofits and cooperatives, that hold local deposits, clear transactions, and provide credit to productive local businesses and home buyers at fair interest rates. In this system, state and local governments would not be facing bankruptcy, because they would capitalize and operate their own banks to issue themselves credit for beneficial public projects. [Did I mention that economists are idiots, even when they mean well? How they can come so close to the real problem and yet still fail to solve it remains a mystery! This clown dances right up to it and he still gets it wrong!]

At a national level, a Federal Reserve captive to Wall Street banking interests is currently giving the largest Wall Street banks interest-free loans that they in turn loan to the federal government at 3 percent interest to cover the federal deficits created by the bailout of these same Wall Street banks. Rather than using the bailout money to provide credit to Main Street businesses, the Wall Street banks have used it to pay record executive bonuses and dividends, grow even larger through mergers and acquisitions, and bet against the bonds that governments have issued to cover costs of bank bailouts and economic stimulus. None of this serves a beneficial public purpose.

Imagine how differently the economic recovery would be playing out if the federal government had taken over failing Wall Street banks and restructured them as locally owned, independent community banks and credit unions. [?] Imagine further that it had taken over the Federal Reserve and issued itself interest-free credit, not to fund Wall Street bank bailouts, but rather to fund adequate stimulus programs that create living wage jobs in the Main Street economy—jobs doing work that meets real needs. [Um, somebody’s been dipping into the ‘happy dust’, Wall Street or its owners aren’t interested in any of that. The whole crisis can be summed up as ‘regulatory failure’ (that isn’t going to fix itself!)] That money would now be flowing back into local banks as deposits and savings, which these banks would then lend back into their communities. [Needless exploitation] Main Street would be thriving, and Wall Street speculators would be the ones receiving foreclosure notices and hoping their unemployment benefits don’t run out before they find a new job. [Unrepentant Wall Streeters would be invited to take a long walk to prove their theoretical ‘self-sufficiency’.]

Current efforts by Washington politicians to limit the excesses of dysfunctional, predatory, and destructive Wall Street institutions may be well intentioned, but they are seriously misguided. The proper goal is not to avoid another Wall Street collapse, it is to replace Wall Street with a new money system designed to provide honest and efficient financial services to the Main Street economies that create real wealth.

David Korten is a former economist with USAID, author of "When Corporations Rule the World," and an associate of the International Forum on Globalization.

Have you stopped laughing yet?

How clueless do you have to be to come up with something like this? It literally puts ‘happy talk’ to shame!

He’s got the right idea but he sure is going about it from the wrong direction!

Which is to point out you have a far better chance of finding a snowball in hell than you do of ever being faced with Mr. Korten’s proposals…or mine for that matter.

But in my defense, I do base my proposals as ‘post’ revolt/collapse institutions and not as replacements for existing social structures the current owners don’t consider ‘broken’ or in need of replacement.


Thanks for letting me inside your head,


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