Skip to main content

I wrote a bit on this in my diary yesterday on the now universally acknowledged busting of the financial bubble, but I think it is worth revisiting.

The current financial crisis literally begs for the left to reclaim the political initiative and say out loud some hard truths about the devastating economic policies of the past 25 years inflicted upon the world by Reagan and Thatcher with the support of the neo-libs and the rightwing noise machine.

Unless these points are made, the wrong lessons will be drawn from this crash. Because make no mistake about it, the sole cause of this bubble and its consequences is the feudalist economic ideology of the right.

Blaming rating agencies and computer models, as is being done, or focusing on the bits of data that still look fine (the meaningless unemployment rate, the wealthy-confiscated average growth, the absolute level of the Dow Jones), are just a way to avoid the real debates, the ideological ones:

  • that over the supposed superiority of the "efficient markets" to drive economic behavior,
  • that over the insistence that things be valued in dollars (discounted cash flow) or be worthless,
  •  that over the idea that greed is good and leads to socially acceptable outcomes.

The core of the Reagan-Thatcher revolution is that greed (especially that of financiers capturing future cash flows of the real world for their personal, immediate profit) spontaneously improves the common good (because it generates apparent GDP out of thin air, and that GDP could be shared) and that all regulations and taxes that limit it should be dismantled.

Well, we're about to see the price of that grand collective delusion. But we should not mistake our target. Bankers and financiers should be made to pay for their follies but that is only a small part of it. The big thing is to blame it on the failed, and utterly dangerous, ideology of the efficient-markets/society-doesn't-exist/government-is-the-problem crowd.

Otherwise it will start again - and not only that, but their proposed remedy WILL be lower wages, fewer worker rights, lower taxes and the other usual "reforms."

As I argued in yesterday's diary, the fact that a bubble is now publicly acknowledged ensures that there will be a major economic correction, irrespective of whether there is a full financial meltdown or not. There will be pain. There will be calls for bailouts. There will be further pressure on the lower and middle classes to bear the brunt of the price. Unless we have a coherent alternative economic discourse on the crisis - that of strict regulation of the financial world (real regulation, not the busybody but pretend kind like we have right now), financiers and their paymasters, the wealthy, will continue to capture wealth, even as the pie shrinks.

This is what needs to be blamed, again:

  • the ideology of greed (this is the core of the conservative talking point: the idea that being selfish is somehow good for others as it creates more wealth, and thus that unregulated markets are good for society);
  • the idea that only financial valuations give worth to anything (again, the cult of the dollar, and the underlying notion that trying to get rich is a good thing for society);
  • the notion that wage inflation is bad but not asset price inflation (money going to the poor is bad, money going to the rich is good);
  • the shockingly lax monetary policy of the past decade (when markets go up, fuelled by what is essentially easy public money,  it's capitalism at work; when markets go down, because of poor investments by the rich, it's a systemic crisis and the rich need to be bailed out or else);
  • the cheerleading by politicians of finance as the new engine of growth and wealth creation (industry, balanced budgets, communities are so yesterday and downright communist and evil);
  • the unraveling of existing regulations (like Glass-Steagall) in the name of market efficiency, and the corresponding death of those old engineering concepts, resiliency, safety margins, redundancies, and of old old ethical ideas: reputation, community, duty to future generations.

This suggests a very simple political discourse; fighting these above trends with positive messages.

Wealth is not defined by how the richest fare, and should not be counted via how much they accumulate, but only by how the poorest amongst us are doing.

Society is not doing well when the rich get richer, but when communities care for their members, leave no one behind, and do not focus exclusively on how much money one has to rank and judge members. Richer does not mean better. Together is better.

Things built to last are the most valuable, even if they create no profit today. Infrastructure, education, careful nurturing of rare resources are investments that pay for all in the long run and can be handed over to future generations. Many government tasks are investments, not costs.

The financial crisis, if properly described, provides (together with the Iraq mess, the recent bridge collapse and other tales of Republican corruption) an unbeatable opportunity to make these points loud and clear - and to carry a positive message, not just the "we are not Bush" one.

Buyt if the left does not make that case, I am certain that the current mindset will continue to prevail and the dominant economic ideology will stay, to the detriment of the vast, but empoverishing middle class.

Originally posted to Jerome a Paris on Fri Aug 17, 2007 at 05:51 AM PDT.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Tip Jar - 17 August (401+ / 0-)
    Recommended by:
    Mary, PeWi, Colorado Luis, MoDem, lryer, Lupin, Spit, Alumbrados, trillian, cdreid, vicki, Marek, SteveLCo, pb, Bill in Portland Maine, Irfo, Common Sense Mainer, dratman, eugene, melo, SarahLee, alyosha, bluecayuga, natasha, apsmith, gaianne, XOVER, Trendar, gogol, AlanF, miasmo, left of center, kateNC, peggy, abarefootboy, TrueBlueMajority, NYmom, whataboutbob, sarac, mem from somerville, melvynny, DebtorsPrison, JTML, sphealey, Robespierrette, RAST, Shockwave, wu ming, Sherri in TX, billlaurelMD, Jim W, LEP, rhubarb, AWhitneyBrown, GayHillbilly, eeff, moira977, autoegocrat, d3n4l1, The Maven, TarheelDem, ZAPatty, theran, RFK Lives, gjohnsit, mataliandy, exNYinTX, Creosote, Vitarai, alou73, eyeswideopen, opinionated, 1040SU, raines, MC in NY, mackellanpatrick, Hatu, bronte17, mmacdDE, pondside, Euroliberal, groggy, MD patriot, srkp23, awakentech, DaleA, highacidity, Geonomist, scamp, retrograde, smhbubbles, Aquarius40, chimpy, roses, Colman, oceanspray, Rona, splashy, arkdem, antirove, heiderose1, nitetalker, Eddie C, pexio, baad, kharma, hhex65, dejavu, psnyder, Alizaryn, MrSandman, jakyra, oldjohnbrown, Dallasdoc, mrkvica, DeadB0y, CitizenOfEarth, coconutjones, BmoreMD, MTgirl, Bailey Savings and Loan, cometman, susie dow, johanus, hairspray, Kidspeak, churchylafemme, BMarshall, Chirons apprentice, MmeVoltaire, RuralLiberal, dnn, jmknapp, AbsurdEyes, chillindame, FLDemJax, Eddie Haskell, Anna Luc, Pohjola, lubarsh, inclusiveheart, Dave925, cevad, walkshills, LatidaSothere, ChiGirl88, anneschu, zip the pusa, parkslopper50, Tasini, bronxite, side pocket, overturned turtle, YetiMonk, Redbug, Sopiane, Clzwld, poemworld, bablhous, kd texan, homogenius, eve, Josiah Bartlett, bibble, gsbadj, Dave Brown, cohe, sawgrass727, kmbaya, sxwarren, Brecht, rapala, sarahlane, Recovering Southern Baptist, jabney, radarlady, 3goldens, Chris Kulczycki, Doolittle Sothere, NoMoreLies, BluejayRN, JanetT in MD, SherwoodB, zaraspooksthra, bluewolverine, Mad Mom, Chinton, ignorant bystander, irate, PBen, ejmw, sap, kamarvt, Simplify, truong son traveler, eightlivesleft, TN yellow dog, Cmyst, ChemBob, stitchmd, reahti, drewfromct, TigerMom, Brooke In Seattle, mmcole, volballplr, Byrnt, afew, fixxit, Mz Kleen, Beetwasher, cris0000, farmerchuck, cfk, buckeyedem08, majcmb1, EconAtheist, dunderhead, GreyHawk, annefrank, CT yanqui, brenda, Eric K, blue jersey mom, Joy Busey, antiapollon, techno, wulidancer, Anna M, Floja Roja, FindingMyVoice, desordre remplir, loggersbrat, LithiumCola, Brian B, captainlaser, waltoon, DaveVH, JanL, Ekaterin, tigerdog, kkjohnson, SleeplessinSeattle, hedgey, Land of Enchantment, melvin, RainyDay, hatdog, Tigana, Asinus Asinum Fricat, fhcec, CCSDem, FrankFrink, dus7, esquimaux, Liberal Protestant, BachFan, danmac, Icy, Do Tell, Keone Michaels, highfive, vigilant meerkat, Black Knight, emeraldmaiden, stonemason, Yellow Canary, martyc35, Scientician, cliffradz, Nestor Makhnow, saxcat, greenearth, Lefty Coaster, ormondotvos, BranfordBoy, MJ via Chicago, StrayCat, condoleaser, RepugRepellant, FreeTradeIsYourEpitaph, PapaChach, armadillo, Jjc2006, mhw, ER Doc, ElMateo, edgery, feduphoosier, Andy30tx, oakroyd, murphthesurf, txdemfem, Pete Rock, profh, spotDawa, doingbusinessas, Mae, va dare, MrJersey, Cassiodorus, cherryXXX69, Dreaming of Better Days, Carbide Bit, kurt, scoff0165, shaharazade, crystal eyes, FMArouet, bstotts, Autarkh, Snarcalita, kidneystones, sasher, goon 01, Cliss, fredouil, One Pissed Off Liberal, old wobbly, J Royce, marykk, Elco B, gardenkitty, xaxado, Ken in MN, EclecticFloridian, Cronesense, chrischen, SparkleMotion, Loudoun County Dem, drmah, camlbacker, Cottagerose, FWIW, milkbone, moodyinsavannah, maxalb, jds1978, ramsfan, power2truth, Jimdotz, terabytes, frisbee, ilex, mouser68, Canyon Lefty, ca democrat, manwithnoname, stratocasterman, mcc777c2, Carib and Ting, tcdup, SeaTurtle, NMDan, technolinguist, leonard145b, Brahman Colorado, keikekaze, Predictor, TomP, alba, zenobia, MKinTN, slade7, kafkananda, memofromturner, seriously70, glaser, Roger Fox, tucsonlynn, dragoneyes, rjones2818, christiana, Chilean Jew, marmar, calibpatriot, herding old cats, nickajak scalawag, Saint Saddam, NuclearJo, lineatus, Prairie Populist, wagdog, State Department, Greasy Grant, CenFlaDem, TH Seed, CC Music Factory, saildude, Tam in CA, kyril, Ferrofluid, Blogvirgin, Jodster, junta0201, CatfishBlues, Issek, chadmichael, revelwoodie, ZeroGee, protectspice
        •  Meanwhile, down on the street... (45+ / 0-)

          prices of some basic foodstuffs have been rising at double digit rates in the past year: 19.5 percent for eggs and 13.3 percent for milk. See this excellent survey from McClatchy from earlier in the week.

          I am also picking up anecdotal data on surprisingly empty parking lots at Wal-Marts and of high losses from food thefts from Wal-Marts. Expect weak consumer spending data in coming months.

          Throw in the rise in gasoline prices during the last year--a rise not even reflected in the "core" CPI data from the Bureau of Labor Statistics--and it is clear that the working class is experiencing severe stress.

          Treasury Secretary Henry Paulson and his President's Working Group on Financial Markets, along with Ben Bernanke and his Magic Monetary Wand, are doing their best to prop up the markets to bail out the Big Boys, but at some point the Ponzi scheme can no longer be sustained.

          On Wednesday Nouriel Roubini had a good description of the currently collapsing Ponzi schemes.

          •  AP radio news reported yesterday (21+ / 0-)

            That Gasoline price drop contributed to the eased inflation fears....

            But since they no longer include gas in the CPI, what are they using to decide this?

            If I remember correctly, they removed gas from the index when it started going up exponentialy so they could claim inflation was flat. Are they going to add it back in when it suits their purposes and no one in the media will call them on it?

            Or do I misremember the time frame...

            The biggest threat to America is not communism, it's moving America toward a fascist theocracy... -- Frank Zappa

            by NCrefugee on Fri Aug 17, 2007 at 08:01:35 AM PDT

            [ Parent ]

            •  Here is an interesting view on the CPI (8+ / 0-)
            •  The price of gasoline is governed by (8+ / 0-)

              oligopolic price structures.  Oil is over $70.00, and a few month ago this was considered a crisis.  The price of gasoline is what the Exxons, et als determine it should be, with profit the first motive, but politcs, as in elections and market stability secondary.  Petro prices have not been market driven for years.

              Patriotism may be the last refuge of scoundrels, but religion is assuredly the first.

              by StrayCat on Fri Aug 17, 2007 at 10:48:20 AM PDT

              [ Parent ]

              •  Pretty broad statement (0+ / 0-)

                This-

                Petro prices have not been market driven for years.

                is quite a pronouncement. Can you back it up with facts?

                "This document is totally non-redactable and non-segregable and cannot even be meaningfully described"

                by dratman on Fri Aug 17, 2007 at 12:26:05 PM PDT

                [ Parent ]

                •  Please forgive any incoherence. Lack of sleep (1+ / 0-)
                  Recommended by:
                  StrayCat

                  Gas (petroleum fuel) prices are solely due to corporate price fixing, but blamed on lack of refining capability, the war, et al.

                  But when you specifically do not build new refinerys you cannot increase the production of the end product. At no time during the past oh, seven years, has there been an oil shortage. There has however supposedly been a shortage of refined petroleum. At least that was the excuse as all the petroleum companies followed each other in raising prices dramaticaly post-Katrina.

                  Interesting chart

                  (more and better at here  and herebut be warned there are a lot of them and useful for different things)

                  In March 2003 the average price was 165.5. From that point the price steadily to a July 2005 rate of 252.9. That is a 65% increase in price in 30 months. Pretty nice interest rate there. Even the credit card companies are jealous. Within a month the price went to 295.1. According to the oil companies due to lack of production capability that they had decreased and locked long before Katrina. 17% a month. Nice little dividend there.Prices fluctuated as per usual (only larger increases) til the July 2007 price of 301.1. That is an 81.2% increase in price in just over four years. Percentages wall street would kill for despite a steady, predictable increase in consumption. (See DOE link above). Despite the Saudis and others increasing production during the Iraq war to minimise economic impact. Destpite years to recover from the claimed Katrina production shortages.

                  Heres the thing everyone misses. Gas prices usually track with crude prices generally. However we've seen nearly a doubling in price. And over such a large increase the price of crude and refined gasoline should not track. For every three barrels of crude the companies basically produce two barrels of gasoline and one barrel of heating oil(diesel). The costs of conversion should remain fairly static. The taxes do Not increase (gas taxes are per gallon rather than a percentage). Byproduct prices have also increased.

                  As the Center for American Progress put it much more coherently..

                  The American Petroleum Institute ran full page ads in The Washington Post this week declaring that the oil industry only made a 9.5 cent profit for every dollar spent on gasoline in 2006. Yet when they made this claim, it seems like they were banking on readers not remembering the similar ads that ran last year in The New York Times.

                  Last year’s New York Times ads showed oil industry earnings for 2005 at just 8.5 cents on each dollar of gasoline sales. By the industry’s own numbers, that means that the profit margin of the oil companies increased by 11.7 percent from 2005 to 2006, at a time when gasoline and crude oil prices rose.

                  We're being Gouged.

                  "All you have to do to qualify for human rights is to be human" An 11yo Girl. Unbossed.com

                  by cdreid on Sat Aug 18, 2007 at 07:50:50 AM PDT

                  [ Parent ]

              •  The price of a barrel of oil (7+ / 0-)

                Exxon, et al, do not arbitrarily set the price of oil.   The market sets the price.   Is based on the most expensive barrel of oil that someone has to buy.

                This explanation is based on what Jerome has told us in the past about how the markets are structured, with me extrapolating how those structures function under stress.

                Oil is highly commodified with public markets and everyone basically knows what others are paying and prices track each other to fractions of a cent.   To simplify things I will assume that all oil is the same grade and that transportation costs to destination are the same.

                Oil from different oil wells costs different amounts to extract.   This is crucial to understanding the market behavior.   If you have a market with 5 oil wells:
                   Cost/barrel    Capacity in Barrels per day
                      10              1000
                      20              1000
                      30              1000
                      40              1000
                      50              1000
                Then if the demand for oil is 1999 barrels per day, the cost is $20 and 3 of the wells sit idle rather than sell oil at a loss.   If the demand increases to 2001 barrels per day, the cost is $30.   Those with the $10 and $20/barrel extraction costs (with a marginal profit) make a windfall.   They know that if they raise their price to $29.99, nobody else can undercut their price because all the under $30 barrels are being sold.    So, that is why the price of every barrel sold tracks the price of the most expensive barrel that can actually be sold.   The 2001st barrel of oil has to be purchased at $30 and that shows up on the board and everyone knows they can raise their prices.  

                When supply of oil from cheap wells exceeds demand, the market will efficiently track the low price but when the demand exceeds that supply (even though it is less than total supply), the market tracks the cost of the most expensive barrel that can be sold.    A highly competitive market does not guarantee the lowest price possible, as is commonly assumed, unless the lowest cost provider has abundant capacity.

                Now, suppose the demand is still 2001 barrels per day and the $10 and $20 per barrel oil wells run dry.   Now the price is $50/barrel.   Welcome to peak oil.   Increased US demand and demand from emerging markets such as china   increase the number of barrels required at the same time supply is starting to dwindle.

                So, the greed comes in with each barrel of oil being sold for the maximum the commodity market will bear and the structure of that market that permits this.   And the CEOs are required by law (fiduciary responsibility to stockholders) to charge as much for each barrel as the markets will allow (not that they wouldn't do so anyway).

                --
                -6.25, -6.36 Worst. President. Dictator. Ever.

                by whitis on Fri Aug 17, 2007 at 03:21:28 PM PDT

                [ Parent ]

                •  This is the problem (1+ / 0-)
                  Recommended by:
                  Jerome a Paris

                  Jerome's goals are noble, but the difference between him and people posting on this site is he understands how finance and economics works.  Too many here are just utterly clueless.  Maybe it is reflective of the level of understanding of the general public, but I don't see how we can have an enlightened conversation when so many people do not know the first thing what they are talking about.  

                  You'll see a lot of knee jerk agreement with Jerome in this diary, but I am not convinced the people agreeing with him, in fact share his outlook, or truly understand where he is coming from.  

                  Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

                  by Asak on Fri Aug 17, 2007 at 05:16:43 PM PDT

                  [ Parent ]

                •  The price of oil (1+ / 0-)
                  Recommended by:
                  StrayCat

                  and the price of Gasoline (refined petroleum products) are NOT set by the same factors.

                  The price of crude is set by the supply and demand of crude. The price of gasoline is set by the supply and demand of gasoline. Crude supply is determined at will by suppliers. Demand according to the DOE increases predictably and steadily. Petroleum products supply is affected by many facors including refining capability (which is intentionally limited by big oil), international politics, etc etc. Demand for petroleum products is affected by many factors totally unrelated to crude. However demand according to the DOE is increasing predictably. Please check my other post.

                  And Asak my friend that was a rather unthoughtful critique of Kossacks.

                  "All you have to do to qualify for human rights is to be human" An 11yo Girl. Unbossed.com

                  by cdreid on Sat Aug 18, 2007 at 08:07:14 AM PDT

                  [ Parent ]

                  •  refining capacity (0+ / 0-)

                    I am not convinced that the limitation on refining capacity is a great conspiracy to drive up gas prices.    Jerome wrote a bit about refining capacity before.    Consider that a refinery is a 30 year asset.    Would you build more refineries if you knew you had or were about to reach peak oil?   If you knew that the cost of the inputs to those refineries would drive up cost of the outputs to the point where sooner or later it would be likely to reduce demand for the outputs?   When oil exploration costs are going way up and are now showing a negative return on investment?

                    Might they have avoided building more refineries to artificially drive up the cost of gas?   Yes.   Might they have arrived at the same decision for other reasons? Yes.

                    And with the total supply of crude clearly limited (1/2 has already been used), trying to sell as many gallons of gas as possible rather than trying to get as much as possible for each gallon is not a good long term business strategy.
                    And some of us here have advocated that a higher price for gas might be a good thing in terms of the environment, national security, and long term stability.    But that is
                    hard to take now with an economy that can be blown over with a stiff breeze.    Phasing in long term price increases starting in 1974, would have helped the economy from moving in an unsustainable direction.   Prices did more than double but then they stagnated for two decades.

                    As for why pump prices go up quickly in response to news of impending shortages before the costs actually percolate througth the system, part of that could just be that station owners are used to using the proceeds from the sale of their last storage tank full of gas to purchase the next tank full rather than dipping into their cash reserves.   While one way of looking at it is that each gallon of gas in the tank should be sold at what it cost to buy plus a fair profit, for someone who runs a station may look at the first tank of gas as part of the start up cost and each gallon sold after that is valued at what it will cost to replace.  Of course, there may be an asymmetry in response to price increases vs price decreases.   Refinery capacity bottomed out from 1985-1994 and has slowly increased 16% since then.   A table of montly refinery utilization since 1985 shows an average 10% idle capacity (less in the summer).   So shortages in refinery capacity are probably temporary.   Aside from missing data for 1996 and 1998, there has been excess average refinery capacity every year since 1982 though it was very low in 2004/2005, around the time katrina hit.    And I think Jerome mentioned a lot of refineries apparently had to be replaced for environmental reasons.   Even right after katrina, the refineries were only running at 88% nationwide suggesting distribution problems.  The change in operable capacity immediately after katrina was not significant, though the number of barrels processed dropped 12% from Aug to Oct 1995 and gasoline sales dropped 7% in the same period.    Nationwide average gas prices jumped 33% between the first week of aug and the first week of september.    There was a 10% reduction due to refineries being down or shut in on sept 1, 2005.

                    If you want to talk about refinery capacity, there is lots of data in the public record at EIA.

                    Whether or not crude supply is limited by suppliers (or originating nations), there are fundamental changes that are driving the price up without changing the quotas.   And since crude is a limited resource, it is not unreasonable to be doling it out like a limited resource rather than an unlimited one.    

                    Whatever factors affect the price of gas independently of crude, the rising cost of crude ultimately dictates higher gas prices.

                    If you look at historical graph, gas prices do tend to track crude prices but are less volatile.
                    http://inflationdata.com/...
                    Every major change in the annual average cost of gas is related to a change in the annual average cost of crude.

                    Not saying the oil companies are great corporate citizens or aren't making a lot of money.   But prices just aren't as arbitrary as the general public seems to think.

                    EIA Gasoline Prices Primer:
                    http://www.eia.doe.gov/...

                    --
                    -6.25, -6.36 Worst. President. Dictator. Ever.

                    by whitis on Sat Aug 18, 2007 at 02:45:37 PM PDT

                    [ Parent ]

                    •  You have very reasonable views (0+ / 0-)

                      But if you read my other post on the issue, and the posts of others including experts with no conflict of interest you'll find you're in error.

                      As i stated crude and gasoline prices do track generally. But not precisely. And they actually should not track over such a large increase. As crude prices rise the other costs remain static.

                      On refining capacity you believe there is no attempt to use capacity to increase prices. Yet every expert on the subject generally seems to accept it as fact. Not only has big oil not built more refineries it has shut refineries down. Note the claim by big oil post Katrina that capacity was the problem. Yet no efforts to solve that problem.

                      And to make it more clear and simple. Read the snippet at the end of the post i directed you too. Profit margins went up by ten percent in a one year period. Ask any businessman on the planet if he'd like to have just two or three years like that in his lifetime.

                      "All you have to do to qualify for human rights is to be human" An 11yo Girl. Unbossed.com

                      by cdreid on Sun Aug 19, 2007 at 03:27:57 AM PDT

                      [ Parent ]

                      •  Re: You have very reasonable view (0+ / 0-)

                        Read your other post, wasn't impressed by your argument.
                        Your own numbers indicate that oil company profits increased much less than I would have expected.  You threw some statistics around in misleading ways, citing a statistic as if it measures one thing when it really measures another.
                        Maybe that was the sleep deprivation.

                        And you seem to make the mistake of assuming in a couple places that where crude is concerned that because supply is not limited, the price shouldn't go up.   But the supply is there because the price went up.  Not every barrel costs the same to produce.

                        We agree that crude and gas prices track roughly.   I also agree that they should not be 100% proportional since only about 53% of the cost of gas comes from crude (refining, distribution, taxes account for the rest).   And in practice, the variation in gas prices is less than crude, as you would expect.    Currently, gas prices have gone up less than the amount crude has though more than you might expect based on the 53% number.

                        I don't fault any business for making a roughly 10% profit or for seeing a 10% increase in that profit in one year.   If you don't try to make at least that much, you stand a good chance of taking a loss.    Now, since it is 10% of a larger number, the absolute profit was higher, I will grant you that.   But investors are, reasonably, going to want to see a return on each dollar spent.   If you had two businesses to invest in, one that made 10% on 1 million and another that made 5% on 2 million, even though they made the same absolute profit you are going to invest in the one that made 10% because a 5% perturbation in the other business will result in a loss.   It is called net profit margin.   Every dollar spent is risk.   When costs go up, risk goes up, and you expect more absolute profit in exchange for that risk (i.e. fixed net profit margin).   And volatility went up that year which means you may need to pad the net profit margin a bit to cover additional risk.

                        Even the "fixed" costs of refining and distribution are
                        not fixed.   Every business or business unit along the way is going to increase the cost of its end product if the input cost goes up.   If you buy the petroleum yourself and then contract a trucking company to move it, then if the cost doubles, you are at least going to see the added cost of insurance.    If you buy the delivered petroleum from the trucking or pipeline company and they pay for the input
                        then you are probably going to pay something closer to
                        a fixed multiple of the input cost than the input cost plus a fixed fee.     Likewise for refining.   So only the tax is really a fixed cost.   Sometimes the refining company is independent or it might be a competing company.

                        You argue that a businessman would be ecstatic to have just two or three years of a 10% increase in net profit margin in his lifetime.   In a word, no.   A 10% increase is not that impressive, a ten percentage point increase (10% to 20%), would be much more so.    And many business see much more than 10% increase from year to year (often offset by decreases in other years).   A growing business can see
                        much more than that; indeed some have serious growth pains just trying to keep up with expansion.

                        The Oil Industry Profit Review 2005 compares the profits of the oil industry to other industries:

                             Two profit rates, return on sales and return on equity, are presented in Table 1.
                        In an advertisement appearing soon after the oil companies announced their 4th
                        quarter 2005 financial results, the American Petroleum Institute (API) sought to
                        compare the returns earned in the oil industry to other American industries.3 They
                        compared return on sales in the oil industry to returns earned in seven other
                        industries, as well as U.S. industry as a whole, for the period October 2000 through
                        September 2005. They found that the oil and natural gas industry earned only 0.3%
                        more than industry as a whole, and was ranked sixth of the eight covered industries,
                        just above the average for all U.S. industry[4] The integrated oil companies, earning
                        returns of 8.2% on sales in 2005, exceeded the historical API rates of return by over
                        41%.

                        [4]  Banks led with returns of 17.3%, followed by pharmaceuticals at 16.2%, real estate at
                        10.8%, health care at 7.7%, software and services at 7.6%, oil and natural gas at 5.8%,
                        utilities at 5.2%, retailing at 3.4%, and all U.S. industry at 5.5%.

                        Oil companies have had considerable expense repairing katrina damage.   And expect similar expenses in the future.
                        So investors are going to see increased risk there and expect some increase in total return to compensate.

                        Refining capacity was a problem immediately after katrina but it wasn't so much the total refining capacity (which was a little tight).  It was the fact that some functional refineries were shut in - the couldn't move stuff in or out of the refineries.   You say there are "no efforts to solve that problem" and that refineries were shut down but US refining capacity has, in fact, increased since katrina and every year since 1994.   And refineries may need to be shut down due to environmental regulations or because they wear out.   Now peak demand is a bit uncomfortably close to total refining capacity.   From a business perspective, refining capacity is right about where it should be.   From a national policy perspective it is a little low if you are concerned about shortages and price fluctuations and secondary effects on the economy and too high if you are concerned about global warming and dependence on foreign oil.    Any excess capacity over average demand is a significant expense since you have expensive assets sitting idle.    If the price goes up in some areas due to peak (often summer) demand, you are effectively charging more for on peak usage which is actually a common practice in industries that have similar problems (but worse on-peak/average ratios) like electricity and telecommunications.  Now refining profits were high in 2004 which was also a year in which excess average capacity was very low so that may be where you are getting your ideas about refining capacity driving prices but total capacity and excess capacity have increased since then (driven, apparently, by the profits of 2004 and katrina).

                        The high returns to operating refineries did provide an incentive to companies with damaged facilities to get them
                        back on line as quickly as possible.
                        [Oil Industry Profit Review 2005]

                        You treat the rise in gas prices like a 17% per month interest rate for the oil companies.   But it isn't.   It isn't an interest rate or a return on investment unless you are buying gas and holding it.     Your own numbers show that their profits (absolute or relative) didn't increase anywhere close to 17% per month.   If you look at your 11.7% net profit margin increase and use the peak price difference of 33% as revenue increase for that year, then you would expect investors to see a 16% higher total return on investment.   Return on equity for the integrated oil companies was 26.8% for 2005.   That is a pretty high number, though within the range charged by credit card companies.

                        Stock buy-backs and other activities complicate the issue.

                        Here is a more conservative view on the windfall profits:

                            Sen. Byron Dorgan (D-N.D.), meanwhile, was outraged by the thought of giant oil companies making money merely for supplying the nation's energy needs. He claimed they will reap $80 billion in "windfall profits" and wants the government to confiscate a large share of that sum through a special federal tax.

                           But the prospect of occasional "windfall" profits is one reason corporations are willing to risk their money drilling wells that may turn out to be drier than Alan Greenspan's reading list. Take them away, and investors may decide they'd rather speculate in real estate.

                           Speaking of real estate, Americans seem to feel no moral compunction about getting rich from unforeseen increases in the price of another vital necessity. You think home sellers in Baton Rouge haven't raised their asking prices in the last 10 days? You think Dorgan wants to tax their windfall?

                           It's hard to see why oil companies shouldn't make a lot of money when the commodity they provide is suddenly in short supply. After all, they are vulnerable to weak profits or even losses during times of glut. Back when Americans were enjoying abundant cheap gasoline, the joke was that the surest way to make a small fortune in the oil industry was to start with a large fortune.

                           Oil companies are also subject to the whims of nature. No one is holding a charity fundraiser for the businesspeople whose rigs and refineries were smashed by Katrina. No one will come to their aid if prices drop by half.

                        Ok, a bit too conservative for me.   And yeah, the oil industry would go to the government with their hands out if prices crashed.

                        Now smaller independent companies which only owned oil wells saw a 92% increase in absolute profits (net income) in 2005 on a 35% increase in revenues.   That is a windfall.   Likewise for the Independent Refiners (92% net profit increase on 43% revenue increase).   That is more consistent with what we would expect from the crude market factors I mentioned in the first comment.  The integrated companies showed 8.2% return on sales and 26.8% return on equity.   Two companies (Marathon, Hess) showed only around 5% return on sales while another (Occidental) showed $34.7%

                        Now, I do have a lot of problems with the oil industry for their political shenanigans.   Exxon Mobil anti-global-warming propaganda.    Getting the tax payers to foot the bill for the military costs of maintaining the oil supplies (not to mention the cost in human lives, puppet governments, etc.) which lowers the apparent cost at the pump.   At the very least, consumers should pay the true price of these when they visit the gas pump which would motivate them to conserve.   he Iraq war should be paid for with a gas tax.     Taxpayers are going to pay for it one way or another (gas tax or income tax) and paying as a gas tax encourages conservation.   And every gallon of gas used to ship products here from places like china should be taxed, too, even if the shipper buys it someplace else.

                        Gas prices should be higher.   The problem is the economy has been run into the ground so consumers are too strapped to pay the additional costs or make the investments in conservation.   But they are going to pay, one way or another.

                        Yeah, the oil industry made record profits in 2005 while it was a bad year for most of the rest of us due to higher gas prices.    But that seems to be the result of normal market behavior, not some conspiracy to fix prices.   They do not appear have been holding back the flow of oil but rather were trying hard to get it moving again.   Did they deserve those profits?  No.   It was wealth extraction, not wealth creation.   So I can see taxing them heavily, though it is somewhat questionable legally to retroactively tax such a windfall.

                        --
                        -6.25, -6.36 Worst. President. Dictator. Ever.

                        by whitis on Sun Aug 19, 2007 at 05:47:23 PM PDT

                        [ Parent ]

                        •  All i can conclude (0+ / 0-)

                          is that you're unwilling to let the facts interfere with your Faith.

                          Profits increased by ten percent in one year. The oil companies made historic profits unheard of in any industry beginning that year. Profits.. not gross revenue. And with no real increase in demand. The law of supply and demand, economics 101, suggest that with demand flat and no change in supply prices should remain steady.

                          And by the way.. there was NO shortage of crude.

                          So while im not sure if you work for the oil companies, have some interest in protecting them, or just refuse to believe the facts i cannot argue statistics, profit margins and economics with someone who uses faith as a guide.

                          "All you have to do to qualify for human rights is to be human" An 11yo Girl. Unbossed.com

                          by cdreid on Mon Aug 20, 2007 at 07:01:45 AM PDT

                          [ Parent ]

                          •  re: All i can conclude (0+ / 0-)

                            I use facts and rational thought to form my opinions rather than rationalize my prejudices or argue from ego.   If anyone is guilty of being unwilling to let the facts interfere with faith, it is you.  I am willing to follow the facts wherever they lead.

                            I have no ties with, allegiances to, or love of the oil industry.   The higher cost of gas hurts me personally, though I accept that and am more concerned about their politics.   I have a great deal of dislike for the oil companies.  If you had reality based criticisms of the oil companies, I would have been delighted to read them; it isn't like there is a shortage of material.

                            Maybe oil companies are blaming refining shortages for high gas prices.   Evil regulations -> Refinery shortage -> high gas prices.    Admitting to peak oil so publicly, on the other hand, could result in conservation measures, such as hybrid cars, by consumers reducing demand.
                            See this:

                            According to the Department of Energy, in 1982 there were 263 refineries operating in the US; by 2005 this number had dropped to 151.  The primary culprit cited in these closures is tightening emissions standards in the US compared to those in the ‘near abroad’—the Caribbean, South and Central America. However, a less highlighted fact is that over the
                            same period, the amount of oil refined in the US has increased from 11.8 million barrels per day to 15.5mpbd in 2005. So while we may not be increasing the number of refineries, we are increasing their capacity.

                            Factors associated with decline in number of refineries is inefficiency (i.e. non-competitiveness), regulations, and Not In My Back Yard.   It is hard to build a new refinery, even on the site of an old one, due to NIMBY.   People don't want refineries near their beach houses.  New refineries are likely to be located outside the US.  If refining capacity was a major problem and peak oil related extraction costs was not, you would expect the price of crude to drop based on your favorite rule of supply and demand.
                            Oh, and BTW, that source shows that while in the short term a few years before Katrina and a few months after, refineries did take a cut of rising crude prices, in the longer term their cut doesn't rise with crude prices.

                            That you are still clinging to "Profits increased by ten percent in one year" is a pathetic.   Yeah profits on sales increased by a mere 10% or so.   That isn't anomalous or sinister.    And only the truly naive would fall for that argument.  At least you could argue profits on equity which is a much more anomalous number.  Historic profits were a better argument.   Your argument that with "demand flat and no change in supply", is a gross oversimplification and inaccurate.   Supply of cheap oil is different from supply of oil at any price.    Some oil reserves were so simple to extract they literally bubbled up from the ground and others are so hard to extract that you have to build a nuclear reactor at the well head to get them out.    And in the period immediately following katrina, there were real interruptions in the flow of oil and gasoline which
                            in your simplified to the point of irrelevance model of supply and demand need to be regarded as a supply shortage.
                            Your economic arguments have been economics 101 all right - first week of economics 101.   Your usage of supply and demand has been a zeroith order model, and a shoddy one at that, while mine has been of a higher order.

                            Scapegoating the oil companies for the oil prices is ignoring the fundamental problems in the oil supply that even without global warming mean we need to prepare for serious changes.   Blaming the oil companies diverts attention away from the real problems.    Yeah, oil company profits add about $0.30 per gallon to the cost of gas.   For a little perspective, taxes add $0.39 per gallon (Gas Price Primer).  But a much greater portion of the increase is due to real problems in the quality (ease of extraction) rather than quantity of supply.   You could force the oil companies to operate as not-for-profit organizations and gas prices would only go down around 10%, based on your own numbers.   And if you added in the hidden costs of oil, the price would be higher.

                            Visit this wikipedia article:
                              http://en.wikipedia.org/...
                            Notice that supply and demand are not constants but that each is a curve that depends on price.   That is consistent with my analysis, not yours.   Econ 101.

                            Print out this thread and take it to your Econ 101 professor and ask him/her who is arguing from facts and who from faith, who understands supply and demand, who needs a remedial econ 101 class, and who gets a B and who gets a D.  

                            Or maybe you should just look at your poll results on your peak oil "myth" diary, a diary that made a lot of unsupported
                            assertions (other than that some links to biodiesel
                            sites that had little to do with your thesis).   Readers disagreed with your thesis 8:1.   And who can blame us?  On the one hand, you offered exactly zero documented facts to back up your thesis and on the other Jerome is a liberal with a PhD in economics who follows the industry closely and backs up his assertions with detailed analysis and scores of documented facts.

                            In this thread, you have documented that prices went up and that oil industry profits went up (facts we all knew), offered uncited media claims of serious preexisting refinery shortages (which is at odds with the actual statistics which show it is marginal but adequate), and jumped to the conclusion that there was price fixing.

                            Rather than accept that your facts did not support your thesis and your analysis was badly flawed, you accuse me
                            of favoring faith over facts.   Hell, I even gave you some facts and arguments in your favor since you were so inept at arguing your thesis.   Any facts I found in your favor, I shared.

                            We seem to agree that we shouldn't keep using fossil fuels like we have been.   We seem to agree that alternative energy is a good thing and even be in agreement that nuclear should be used more.   I am more skeptical about space based power and think that splitting the difference using flying electric generators is probably more practical but both are unproven technologies.

                            --
                            -6.25, -6.36 Worst. President. Dictator. Ever.

                            by whitis on Mon Aug 20, 2007 at 03:42:02 PM PDT

                            [ Parent ]

                    •  This is the relevant link (0+ / 0-)

                      I didnt just make this stuff up. Read this post i think you'll change your mind.

                      "All you have to do to qualify for human rights is to be human" An 11yo Girl. Unbossed.com

                      by cdreid on Sun Aug 19, 2007 at 03:31:00 AM PDT

                      [ Parent ]

            •  You can't give out cheap credit if (3+ / 0-)
              Recommended by:
              opinionated, FMArouet, kyril

              you include inflationary indices like the price of oil.

              Those who can make you believe absurdities, can make you commit atrocities-Voltaire

              by hairspray on Fri Aug 17, 2007 at 11:24:34 AM PDT

              [ Parent ]

          •  an attack (5+ / 0-)

            on Iran would help those poor oil companies who have doubled the price of fuel in the past years.  We know where the WH pledge of allegiance lies.

            Peace is a good thing. War is the ultimate political failure.

            by FreeTradeIsYourEpitaph on Fri Aug 17, 2007 at 08:04:22 AM PDT

            [ Parent ]

          •  Indeed... (3+ / 0-)
            Recommended by:
            mataliandy, StrayCat, kyril

            prices of some basic foodstuffs have been rising at double digit rates in the past year: 19.5 percent for eggs and 13.3 percent for milk.

            It's a good thing I'm a vegan, then...

            "How long? Not long." -- Martin Luther King, Jr.

            by Cassiodorus on Fri Aug 17, 2007 at 08:41:11 AM PDT

            [ Parent ]

        •  Yeah, but... (18+ / 0-)

          ...the strong links just say "who needs a chain"?  This is, at its most fundamental level, a philosophical divide between individualists and those who believe in the human community and the web of resposibilities that bind us together.

          To me, that is the definition of immoral and moral people, respectively.  I guess that makes me a "values voter."

          •  Who needs a chain? (5+ / 0-)

            Anyone who needs a bridge.  Or traffic signals.  Or security at airports, or... or...

            There is no way for individuals to provide themselves with a vast array of items that they need.

            "Who needs a chain" is just a childish statement on the part of the weak links and we ought not let them get away with it.

            If you want something other than the obvious to happen - you've got to do something other than the obvious...Douglas Adams

            by trillian on Fri Aug 17, 2007 at 10:22:24 AM PDT

            [ Parent ]

          •  Trillions in Hedge Funds + Zero Regulation = (2+ / 0-)
            Recommended by:
            drewfromct, FMArouet

            uncertianty of the value of these investments that are shrouded in secrecy. That is creating panic.

            A Government dominated by Corporate power is incapable of dealing with the challenges we face in the 21st Century

            by Lefty Coaster on Sat Aug 18, 2007 at 12:39:13 AM PDT

            [ Parent ]

        •  You sound like that other commie traitor (0+ / 0-)

          You know.. that guy

          25:40 And the King shall answer and say unto them, Verily I say unto you, Inasmuch as ye have done  unto one of the least of these my brethren, ye have done  unto me.

          "All you have to do to qualify for human rights is to be human" An 11yo Girl. Unbossed.com

          by cdreid on Sat Aug 18, 2007 at 06:02:08 AM PDT

          [ Parent ]

      •  This was my favorite (49+ / 0-)

        Society is not doing well when the rich get richer, but when communities care for their members, leave no one behind, and do not focus exclusively on how much money one has to rank and judge members. Richer does not mean better. Together is better.

        Community is the secret ingredient in sustainability... and in wealth! I can live simply yet live a very rich life because of the choices I co-create, building community. Let us measure success by our ability to bring those choices to everybody, to educate each other and create new options.

        Raines

        •  and don't forget the rich already have (30+ / 0-)

          a nice community, all working together to help each other out, working hard to stay rich and powerful.  But we don't want to start a class war or anything.

          •  The market is way up now but nothing changes (34+ / 0-)

            in terms of Jerome's analysis about the nature of the problem. The U.S. economy cannot continue to grow based on the U.S. consumer going deeper into debt.

            Increasing consumer spending must be supported by wage growth by the working and middle classes or it's unsustainable.

            "It's the planet, stupid."

            by FishOutofWater on Fri Aug 17, 2007 at 07:00:46 AM PDT

            [ Parent ]

            •  Not so sure (17+ / 0-)

              Money is essentially a social fiction. So is debt. If you work, you can get money through wages, but it also "entitles" you to money through debt. When you spend it, the dollar doesn't care where it comes from. So in real terms, the total compensation for a given career is not just wages provided, but the total of wages plus debt provided to the worker. In both cases, what's being distributed is essentially a fiction; but because almost everybody's in the game, the "virtual" wealth of available money can be spent on solid things whose value is not solely fictional, but partly objective.

              Should workers accept this shift from wages to credit as compensation? Of course not, since it puts them in a supplicant position to their creditors. But meanwhile it keeps the economy going just as much as if the compensation were entirely wages, with no significant credit extended at all.

              If the world had one rich person and one poor, and the rich person paid the poor person entirely in wages, the money paid would be just out the door. But by paying the poor person half in credit, then the poor person is obligated to return all of her or his wages to the rich person to pay off that debt. Roughly, as long as less than half of worker compensation is credit, there is every reason for our capitalist system to increase credit. At its worst, when credit is never repaid, it just becomes the equivalent of wages out the door. Any payback at all is a bonus.

              That's assuming the essential unity of the banks and the employers. But what else is new?

              •  jp morgan's legacy (3+ / 0-)
                Recommended by:
                NYFM, StrayCat, kyril
              •  Debt is not a fiction, even if money is. (3+ / 0-)
                Recommended by:
                JuliaAnn, SeaTurtle, kyril

                When you owe someone, and you don't pay them, there are consequences. What do you think happens in a prison environment when you owe your cellmate and you don't pay what you owe?

                The only solution I've found, to this situaton is to abolish income taxes and make the supporters of the war pay the debt.

                But if abolishing the income tax is the wrong policy, ultimately the goal has to be that somehow the government taxes the right people, and somehow the debt gets shifted to the right people. This could mean anything from taxing corporations while removing income taxes on individuals, to negative income taxes, to reducing the workday to 6 hours, to simply having the federal government hire massive amounts of workers to build a huge rail system.

                Ultimately, I don't know how, but I do know we need to find a way to make the people who supported this war pay for it.

              •  Credit is not compensation, it comes due. (2+ / 0-)
                Recommended by:
                mataliandy, bluewolverine

                The retirement of the baby boomers is going to be an interesting proposition. Those who are heavily in debt with insufficient savings and assets will have a very difficult old age. Many boomers have done well and will be fine, but the have nots who are in debt will face bankruptcy in old age.

                "It's the planet, stupid."

                by FishOutofWater on Fri Aug 17, 2007 at 10:50:58 AM PDT

                [ Parent ]

                •  Most boomers have done terribly (2+ / 0-)
                  Recommended by:
                  bluewolverine, drewfromct

                  A lot will get by, but only a very few have the assets necessary to fund their retirement.  And, I'm sorry, but it's not just the fault of Reagan and Thatcher and the "rich", personal irresponsibility is a big part of this too.  Just because debt is provided to you does not mean you have to go into debt.  Just because everyone else is keeping up with the Joneses doesn't mean you have to also.  

                  We do need to tax the rich at a fair rate, absolutely.  But what I don't like is seeing so many who believe all of their problems are someone else's fault.  That everyone, even with a modest amount of money (which perversely puts you in an elite percentage since so many save absolutely nothing) is taking advantage of the system and deserves to be hosed.  

                  Regulation is good and necessary.  Taxes need to be graduated and actually take their fair share from the rich.  But we have a lot more problems than just the "greed is good" mentality.  We also have the problem that people are obsessed with materialism and think nothing of going into debt.  

                  Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

                  by Asak on Fri Aug 17, 2007 at 05:24:08 PM PDT

                  [ Parent ]

                  •  You're at least half right. (3+ / 0-)
                    Recommended by:
                    3goldens, bluewolverine, drewfromct

                    But bear in mind that the people who sell the stuff ... sell the stuff. I know it drives some people nuts to say this, but the average citizen is immersed from birth in a glowing plasma of messages designed to inculcate insatiety, and not surprisingly, succumbs.

                    I am further of the opinion that the President must be impeached and removed from office!

                    by UntimelyRippd on Fri Aug 17, 2007 at 06:20:09 PM PDT

                    [ Parent ]

                  •  Who are all these people (3+ / 0-)

                    who supposedly blame everyone else for all their problems? Does this describe the people you know? Not the ones I know. I find that people have mostly absorbed the belief that we control our own destinies, and are pretty hard on themselves for whatever problems they have in this life.

                    We're not all smart and we don't all have good judgment. Is that a crime? Do we deserve to eat dog food and live on sidewalks in our old age because we we didn't have the foresight not to take the credit that was pushed at us from all sides?

              •  We owe our souls to the Company Store (10+ / 0-)

                Ernie Ford RIP

                US Attorneys are Presidential appointees. Making them "political" is precisely the problem. paraphrasing Technopolitical of Daily Kos

                by Carbide Bit on Fri Aug 17, 2007 at 11:02:51 AM PDT

                [ Parent ]

              •  chits at the company store (1+ / 0-)
                Recommended by:
                drewfromct

                Should workers accept this shift from wages to credit as compensation?

                Seems like the best we can get these days.

              •  Payment in Credit (2+ / 0-)
                Recommended by:
                Jerome a Paris, drewfromct

                as a way to keep the employed under control.  New thought (to me) and scary, but it feels very accurate.

                "Great works are performed not by strength, but by perseverance." Samuel Johnson

                by Rona on Fri Aug 17, 2007 at 07:07:58 PM PDT

                [ Parent ]

            •  what goes up must come down (1+ / 0-)
              Recommended by:
              kyril

              even the market.

              Politics is like driving. To go backward, put it in R. To go forward, put it in D.
              IMPEACH CHENEY FIRST.

              by TrueBlueMajority on Fri Aug 17, 2007 at 09:39:23 AM PDT

              [ Parent ]

            •  Why not just let the government pay consumers ? (1+ / 0-)
              Recommended by:
              kyril

              If the government funds consumer spending by directly paying consumers, through a negative income tax, you get the same exact situation without having to depend on corporations raising wages (which will never happen in a global economy).

              Ultimately, the government will have to pay consumers somehow. Either through tax cuts, tax benefits, free college education, or something.

              So either the government can pay you, or the corporations can pay you, otherwise you'll be paying for the debt.

              •  Not true (1+ / 0-)
                Recommended by:
                drewfromct

                Wages are going up in China.  Sure they are still extremely low, but they are going up.  

                Americans need to stop consuming so much and it needs to fall on other countries to consume instead.  People in this country do not deserve, nor do they need, so much junk.  

                Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

                by Asak on Fri Aug 17, 2007 at 05:25:31 PM PDT

                [ Parent ]

                •  depends who you're talking about (1+ / 0-)
                  Recommended by:
                  Jerome a Paris

                  income has been flat for most farmers and many worker since the early reform era, from 1982-86. some people arte making a ton of money, a lot of people are seeing small improvements and rising costs, and a whole lot of people are either running toi stand in place or else busted and migrating to cities surreptitiously to do the equivalent of illegal immigrant jobs.

                  it's a big economy, and although the tide is rising, it is not lifting all boats. standard neoliberalism.

                  surf putah, your friendly neighborhood central valley samizdat

                  by wu ming on Sat Aug 18, 2007 at 01:29:14 AM PDT

                  [ Parent ]

            •  I wish I could recommend this comment 1000X (9+ / 0-)

              The U.S. economy cannot continue to grow based on the U.S. consumer going deeper into debt.

              What does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God?- Micah 6:8

              by Mad Mom on Fri Aug 17, 2007 at 11:18:22 AM PDT

              [ Parent ]

          •  We don't? (3+ / 0-)
            Recommended by:
            drewfromct, J Royce, kyril

            Just kidding -- of course we don't need a class war.  But we certainly need to do something proactive.  People don't share their wealth because we ask them to.  That's the core truth behind the failure of trickle-down economics.

            •  We don't need it - we're just losing it (37+ / 0-)

              As Warren Buffett said, the rich are waging class war - and winning it. This is precisely what this diary is about. Yes, we need to fight back. Let them call it 'class war', as if it were an evil thing. In fact, it's more a damning signifier for them than for us.

              •  Semantics, I think (8+ / 0-)

                When I say "we don't need a class war," I mean we don't want an armed revolution.

                If by "class war" you're talking about a civil effort, like the civil rights and anti-war movements of the 60s, then I'm right there with you.

                When do we storm the castle?

                •  Here is a solution I think we can agree on (0+ / 0-)

                  Give tax cuts to the "good" rich, like say, rich minorities. This would actually help the poor indirectly, as well as help the Democratic party indirectly.

                  Rich minorities tend to vote Democrat, and tend to give  to charities and back to the community. Why not some type of tax relief for female and minority entrepreneurs?

                  Democrats should not make the mistake of shunning THEIR rich. A lot of rich people in hollywood and in the entertainment industry never supported the war. A lot are minorities who protested the war on TV, etc.

                  Shouldn't we give these people a break?

                  •  They don't need a break (9+ / 0-)

                    they have plenty already.

                    Rich is rich. It doesn't matter to the money what your politics are. It might change how you spend the money, but it doesn't make those changes REQUIRED.

                    That's what's needed - making SOME changes in how the rich spend their money. Or DON'T spend it, in many cases.

                    I don't have a problem with people having money. I have a problem with people having so much money that they couldn't EVER spend it all, not in 100 lifetimes. At that point, some of it needs to be returned to society, whether the rich like it or not.

                    That can be done with estate taxes, or taxes on obscene wealth (which can be calculated in some way), or windfall taxes (so that you build wealth up slowly, not get a 100 mil CEO bonus and keep the vast majority of it). But it needs to be done.

                    •  This is why the rich vote Republican (1+ / 0-)
                      Recommended by:
                      Jerome a Paris

                      Because if you just take the attitude that you hate ALL rich, and that rich is rich, well then poor is poor, and why not hate all the poor just as equally?

                      If you want to change how the rich spend their money, use tax incentives.

                      If you believe Democrats are the poverty party, I'm not going to be a Democrat anytime soon, and I'm not even rich. I just think the Democrats need to represent VALUES and not class. I will never support a party that represents race/class/ or any special interest groups.

                      I will only support a party, that represents values!

                      And you should not have a problem with liberals who share your values having money, It's essential that people who share your values have the money to promote your values, otherwise your values will be meaningless as you'll have no leaders to stand up for your values.

                      If the top hundred richest men in the world were liberals, you'd get a permanent majority in congress, senate, etc. Thats what you want right?

                      However if liberals become the party of poverty, and they shun and reject their own rich, it will be impossible for the Democrats to ever be anything besides a party of special interest groups.

                      A lot of minorities are becoming rich now, like Jay Z for example. How can you punish these people for beating the odds and being successful? What kinda party punishes it's success stories and lasts?

                      The way to win, is to reward those who become successful without selling out and changing their values. If you don't reward them, why should they support your party?

                      •  Why equate taxing the rich with hating them? eom (4+ / 0-)

                        I am further of the opinion that the President must be impeached and removed from office!

                        by UntimelyRippd on Fri Aug 17, 2007 at 06:26:08 PM PDT

                        [ Parent ]

                        •  Because treating the rich as a group is classist. (0+ / 0-)

                          It's equal to when people treat certain races as groups, imagine if someone say "lets tax the whites", it would have the same sorta negative consequences as "lets tax the rich", because it does nothing to individualize those being taxed.

                          Carbon Taxes, Eco-taxes, taxes on pollution and crime, these are the sorts of taxes which I support. I do not support class based tax policy.

                          And we should all be demanding lower taxes after stories like this

                          WASHINGTON — Top Commerce and Treasury Departments officials appeared with Republican candidates and doled out millions in federal money in battleground congressional districts and states after receiving White House political briefings detailing GOP election strategy.

                          Political appointees in the Treasury Department received at least 10 political briefings from July 2001 to August 2006, officials familiar with the meetings said. Their counterparts at the Commerce Department received at least four briefings — all in the election years of 2002, 2004 and 2006.

                          The House Oversight Committee is investigating whether the White House's political briefings to at least 15 agencies, including to the Justice Department, the General Services Administration and the State Department, violated a ban on the use of government resources for campaign activities.

                          Under the Hatch Act, Cabinet members are permitted to attend political briefings and appear with members of Congress. But Cabinet members and other political appointees aren't permitted to spend taxpayer money with the aim of benefiting candidates.

                          During the briefings at Treasury and Commerce, then-Bush administration political director Ken Mehlman and other White House aides detailed competitive congressional districts, battleground election states and key media markets and outlined GOP strategy for getting out the vote.

                          Commerce and Treasury political appointees later made numerous public appearances and grant announcements that often correlated with GOP interests, according to a review of the events by McClatchy Newspapers. The pattern raises the possibility that the events were arranged with the White House's political guidance in mind.

                          The briefings are part of the legacy of White House political adviser Karl Rove, who announced this week that he's stepping down at the end of the month to spend more time with his family. Despite Rove's departure, investigations into the briefings are expected to continue.

                          One congressional aide, who asked to remain anonymous, said the investigation was revealing "a number of remarkable coincidences" similar to how Treasury and Commerce events appeared to coincide with the strategy in the political briefings. However, it remains to be seen whether the subsequent department actions were intentional, said the aide, who asked not to be named because the investigation is ongoing.

                          As part of the probe, committee investigators found that White House drug czar John Walters took 20 trips at taxpayers' expense in 2006 to appear with Republican congressional candidates.

                          In a separate investigation, the independent Office of Special Counsel concluded that GSA Administrator Lurita Alexis Doan violated the Hatch Act, which limits the political activities of government employees. Witnesses told investigators that Doan asked at the end of one political briefing in January 2007 what her agency could do to help GOP candidates. Doan has said she doesn't recall that remark.

                          Violations of the Hatch Act are treated as administrative, not criminal, matters, and punishment for violations ranges from suspension to termination. The administration has not taken any action against Doan.

                          Even so, the Hatch Act "is an important statute and it needs to be enforced," said James Mitchell, spokesman for the Office of Special Counsel. "One of the effects we hope our investigations will have is to deter violations during the upcoming election cycle."

                          In the months leading up to the 2002 election, then-Commerce Secretary Don Evans, Bush's former campaign finance chairman, made eight appearances or announcements with Republican incumbents in districts deemed by White House aides either as competitive districts or battleground presidential states.

                          During the stops, he doled out millions of dollars in grants, including in two public announcements with Rep. Heather Wilson, a New Mexico Republican in a competitive district.

                          Republicans ultimately regained control of the Senate and expanded their majority in the House of Representatives in the 2002 elections.

                          In 2004, Evans and his aides significantly scaled back appearances with candidates, but an assistant treasury secretary returned to New Mexico to announce with Republicans Sen. Pete Domenici and Rep. Steve Pierce the release of $2.5 million in economic development funds.

                          Evans, who now heads the Financial Services Forum, a trade association for financiers, declined comment, a Forum spokesman said.

                          In 2006, Evans' successor, Carlos Gutierrez, and his aides also made public announcements with several Republican congressional incumbents, including in the battleground states of Missouri, Pennsylvania and New Mexico. Weeks before the 2006 election, Gutierrez and Congresswoman Wilson announced $3.45 million in grants for Albuquerque organizations. Also in the weeks before the election, a deputy secretary and Republican Sen. Rick Santorum announced that the department would be investing $2.25 million in Philadelphia.

                          The same year, then-Treasury Secretary John Snow and Santorum announced an award of millions in tax credits to Pennsylvania organizations. Santorum later lost his seat.

                          Snow and his aides also made appearances in 2006 with Republican incumbents or doled out grants in Virginia, Iowa and Ohio, states seen as crucial to the GOP retaining control of Congress.

                          Bush's first treasury secretary, Paul O'Neill, stuck mainly to giving speeches praising President Bush's economic policies rather than appearing with candidates. O'Neill was unceremoniously dumped after disagreeing repeatedly with the White House.

                          Current Treasury Secretary Henry Paulson Jr. was sworn in shortly before the 2006 elections. He and his aides have made few grant announcements.

                          Administration officials denied that any Treasury and Commerce events were orchestrated to help the Republican Party win elections. The officials said White House aides who briefed the departments were careful not to encourage the appointees to act on behalf of the Republican Party on government time.

                          Commerce Department spokesman Dan Nelson described the meetings as merely "informational."

                          "They were not a call to action," he said.

                          Nelson said grants are awarded after a competitive process and aren't selected based on political considerations.

                          Ted Kassinger, the Commerce Department's former general counsel and a deputy secretary in the Bush administration, said the department was especially careful about avoiding the appearance of political favoritism during Evans' tenure because of the former secretary's close ties to President Bush.

                          Kassinger, who left in 2005, said the department turned down several requests from political candidates to make appearances because they seemed to be campaign events.

                          "It was certainly a concern of mine that the work in the department be separated from campaign activities," he said. "At the top level there was never a discussion of 'What can you do to help these guys?'"

                          One former political appointee who attended a briefing said for all the hoopla over the briefings, he wasn't impressed with them at the time.

                          "It wasn't rocket science," said the appointee, who asked to remain anonymous because he didn't want to be publicly linked to the controversy. "It's like, 'Yeah, no kidding. We know.'

                          But John D. "Jerry" Hawke, who served as Treasury undersecretary for domestic finance in the Clinton administration, said the campaign-style briefings for Treasury appointees were unusual.

                          "Nothing remotely like that happened," during the Clinton administration, Hawke said. "I never experienced anything like that. The notion that the White House would be holding meetings with Treasury appointees just didn't fit."

                          -Commerce, Treasury funds, helped boost GOP campaigns

                          THEY ARE STEALING YOUR MONEY! The only way to keep your money is to demand a tax cut for people with the ight values and to demand a corruption tax be imposed. How are you going to take your country back if you can't take your money back?

                          •  The only group identity I assign to the rich ... (0+ / 0-)

                            ... is the one of having more money than the rest of us.

                            Like most Americans, I've been undertaxed for most of my adult life. Which is why the country is falling apart.

                            Whenever someone uses the phrases "your money," or "our money," when discussing government spending, i know that they inhabit an entirely different philosophical universe from mine.

                            I am further of the opinion that the President must be impeached and removed from office!

                            by UntimelyRippd on Sat Aug 18, 2007 at 08:03:00 AM PDT

                            [ Parent ]

                          •  Suuure (0+ / 0-)
                            Your taxes are being used to fund the Republican elections, to launch wars, and to ignore the ghetto and hurricane Katrina victims.

                            I don't see how anyone can have faith in government after that. You got to watch an entire city sink under water, while your tax funded federal government did nothing. So why pay taxes if the government will abandon you in an emergency?

                            What are you paying for?

                          •  If people in this country paid significant taxes, (0+ / 0-)

                            maybe they wouldn't put up with a government that fucks up so badly with the money it does spend.

                            My taxes? More than half of my federal tax burden goes to pay for health care and above-poverty living standards for the elderly (as well as support for the children of workers who have died before their kids are grown). Presuming that certain current guarantees are not reneged on by our children -- though it would be hard at this point to blame them for reneging, considering the self-indulgent orgy we've been on for the last 25 years -- it will also go to support me in my old age.

                            And if Libertarians would stop electing Republicans (in sympathy with their "government can't solve any problems" attitude) we might have a government that we could trust with our money.

                            None of which has anything to do with your bizarre scheme for somehow cutting taxes for the rich left. I'd rather raise taxes on one large chunk of the rich left, by making the source of much of their wealth -- advertising dollars -- a highly-taxed expenditure.

                            Since the Republicans have declined to raise a tax to pay for the Iraq war, I'm not sure I concur that my taxes -- or anyone else's -- are paying for it.

                            I am further of the opinion that the President must be impeached and removed from office!

                            by UntimelyRippd on Sat Aug 18, 2007 at 01:53:21 PM PDT

                            [ Parent ]

                  •  Minority=good? (0+ / 0-)

                    Just because someone is a member of a minority does not automatically make them good, regardless of their wealth status. If we're going to use tax incentives, we should award them based on good behavior.Better we should reward companies and individuals who use their wealth to create good paying jobs here at home in a new green economy. Conversely, the tax code should be used to punish bad behavior like CEOverpay, poor working conditions, pollution, and the like.

                    Al Qeada is a faith-based initiative.

                    by drewfromct on Sat Aug 18, 2007 at 04:59:07 AM PDT

                    [ Parent ]

              •  And the rich don't stop (10+ / 0-)

                They've been pushing their agenda of deregulation and tax cuts for decades.  They can afford to pay lobbyists, lawyers and political campaigns to get what they want.

                And even if we (the little people) win some battles, the rich will be back, with the same arguments, with the same motivation.  This war doesn't end.

                Problem is that most Americans who participate in politics A) refuse to either admit that they are in the "have-not" class or B) refuse to give up the dream that someday they will be among the "haves."

                I think that it's impossible to overstate how deeply ingrained the "American dream" is in the collective mind/soul of White America.  

                It's what motivates millions of lower- and middle-class people to cast votes that are completely antithetical to their social, economic and class interests.

                "I intend to live forever. So far, so good." Steven Wright

                by gsbadj on Fri Aug 17, 2007 at 09:22:01 AM PDT

                [ Parent ]

                •  Which is why there needs to be (2+ / 0-)
                  Recommended by:
                  bluewolverine, kyril

                  some exemption for windfall wealth. Not totally, of course, but some of it. Maybe the first $1 mil of winnings is exempt? Or maybe just exempt all lottery/game show/gambling winnings?

                  Then you'd probably see more support for taxes on the rich. Because for the vast majority, the only way they'll EVER get that rich is by winning it - and that would be tax exempt.

                  Now, not that many people win money like that, and the vast majority will just spend what they win. But it would definitely have huge support.

                  •  Sadly... (2+ / 0-)
                    Recommended by:
                    danz, drewfromct

                    The vast majority in the middle class have the potential to be millionaires.  If they are thrift they can do it.  A high salary is not required.  I have seen it done.  

                    There are much higher percentage ways of getting "rich" than winning the lottery.  You'll still never be among the ultra rich, but you can end up rich.  

                    The ironic thing is the way you end up rich is by not living like you are rich, even after you are.  

                    The reality is materialism is the chain that binds most of us.  If you break that chain, you can truly be free.  

                    Now, for those who are truly poor, things are more difficult.  Social mobility is a lot more difficult and may not be possible.  

                    Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

                    by Asak on Fri Aug 17, 2007 at 05:31:17 PM PDT

                    [ Parent ]

                    •  You sound like a personal financial planner (3+ / 0-)
                      Recommended by:
                      mmacdDE, bluewolverine, drewfromct

                      Quit excoriating the un-rich. You keep saying I can play Monopoly and get a lot of houses if I just live right. I'm telling you the game is rigged from the get-go: rich guy already has an "option" on most the good real estate and he's in bed with government for tax breaks which I don't get cuz I'm lousy middle class.

                      "There are four boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order." Ed Howdershelt

                      by JuliaAnn on Fri Aug 17, 2007 at 05:57:49 PM PDT

                      [ Parent ]

              •  It's not really about rich and poor. (0+ / 0-)

                You have to remember that a lot of rich people are Democrats who share the same values.

                The problem is, Democrats don't communicate very well to rich people. It's really just about good and bad, not rich and poor. If a rich person shares your values, then it does not matter that they are rich.

                So, Democrats have to find a way to support their rich, while not supporting the wrong rich people. Maybe through some ultra targetted tax relief to go directly to say, rich minorities, or women, etc.

                •  Exactly (0+ / 0-)

                  Brooke Astor which passed away this week was an example of a gracious wealthy woman.  Her son however . . . luckily she had a grandson looking out for her.

                •  No. (2+ / 0-)
                  Recommended by:
                  bluewolverine, kyril

                  Rich is rich. They're all subject to the same tax laws. The laws are what need to be changed, not giving out exemptions for the 'right' people.

                  There are already plenty of ways for the rich to give away their money and get tax benefits.

                  •  Yeah but they share those values (1+ / 0-)
                    Recommended by:
                    bluewolverine

                    Those with a similar mindset will agree that they should be taxed at a higher rate and give more money back.  Rich and poor alike don't all vote their self interest.  Unfortunately, there are more poor who do not do so.  

                    Don't like XOM and OPEC? What have YOU done to reduce your oil consumption? Hot air does NOT constitute a renewable resource!

                    by Asak on Fri Aug 17, 2007 at 05:33:02 PM PDT

                    [ Parent ]

                    •  I don't think taxes always help the poor. (0+ / 0-)

                      What have taxes done for ghettos? Absolutely nothing.

                      Then look at what Magic Johnson has done for his community, by using his riches to start development corporations to build his community up, to provide jobs, and raise employement rates in the areas and neighborhood HE came from.

                      Why do you want the government to decrease his ability to help his community, by taxing him, when you know this government wont help rebuild ghettos. No government has, Democrat or Republican, invested in our ghettos. The only people who do that are the people who came from ghettos and who have a personal investment in that community.

                      From a community development standpoint, federal taxes of this sort make poverty and unemployment. There simply are not enough government jobs to employ everyone living in poverty, and unless the federal government plans to adopt a full employement policy, why should we have a full taxation policy?

                      When the government guarentees employement, for everyone, so everyone in this country can work in a federal agency if they can't find work, then we can have any tax system. But as things are right now, you have hopeless people, still living in trailers as a result of hurricane Katrina, and the only people who helped were private citizens who volunteered time and money.

                      You saw how effective the federal governmwnt was during hurricane Katrina, so why ever have a situation like that again?

                      •  And I'm sure (0+ / 0-)

                        that poor people just love having to BEG some rich rap star for help.

                        "Please, sir, could I have a little more?"

                        Bull. Nobody wants to tax them into the poorhouse - but if they paid the same percentage of their income that YOU do, it would be a HUGE increase.

                        •  What are you talking about? (0+ / 0-)
                          Rich rappers employ studio technicians, producers, artists of all sorts, media exectuvies, entertainment executives, the entertainment industry is one of the main sources of jobs for liberals who live in ghettos.

                          You should be offering tax cuts to the entertainment industry to support your base. You should be offering tax cuts to your base the same way Republicans offer tax cuts to theirs, it's just reasonable.

                          Also, after hurricane Katrina, who in any ghetto trusts the goverment to save them? People would rather beg celebrities to help them than the feds right now.

                  •  Maybe they want to give jobs? (0+ / 0-)

                    What is wrong with say, someone like Jay-Z who came from the ghetto, or Magic Johnson, giving back by actually using their wealth to generate new wealth for people living in ghettos?

                    The government NEVER helps people living in ghettos, the only people who do, are people who do so privately.

                    Why do you want to hurt people who share your values? Thats really the only thing seperating Democrat from Republican. The Democratic party is their values, they are not their policies, or their special interest group, they are not the poverty party!

        •  Ah, but... (5+ / 0-)

          Society is not doing well when the rich get richer

          but that's the only statistic that they really care about getting right... the other ones are open to fabrication...

          "How long? Not long." -- Martin Luther King, Jr.

          by Cassiodorus on Fri Aug 17, 2007 at 08:43:00 AM PDT

          [ Parent ]

        •  What if the rich Democrats get richer? (1+ / 0-)
          Recommended by:
          pkbarbiedoll

          Don't assume the Democrats have to be the poverty party.

          It's not always bad when the rich get richer, if it's the rich people with your values getting richer.

          •  It's only good. . . (11+ / 0-)

            . . . if the rich are paying a higher share of taxes. Then their increased worth translates into infrastructure, education and lowered debt payments for everyone.

            And real rich Democrats believe that. We need to raise the top marginal income-tax rates, increase the basic income tax deduction, and increase or abolish the cap on the payroll tax. We also need to institute a floor on the payroll tax to help the working poor. People should be getting credit for Social Security and Medicare for how long they've worked, not how much they earned while doing it.

            What would Gandhi do? "The cause of liberty becomes a mockery if the price to be paid is the wholesale destruction of those who are to enjoy liberty."

            by Robespierrette on Fri Aug 17, 2007 at 11:29:51 AM PDT

            [ Parent ]

          •  Money is denoted with an "$", not a (D) or (R) (4+ / 0-)
            Recommended by:
            mmacdDE, bluewolverine, drewfromct, kyril

            And the class warrriors don't reside on one side of the aisle.
            Regardless of party affiliation, if a rich person (who, btw, is not defined as 'not poor') works to keep the unfair advantages built into the system by paying lobbyists, supporting the status quo, etc, then they are a part of the problem. Capital gains are taxed at a lower rate than work, tax shelters are available for the wealthy, law enforcement is skewed in their favor, and on and on.
            When I see Bill and Melinda Gates donating many billions of dollars to charity, I am gladdened, but it is tempered by the fact that our system allows such obscene amounts of wealth to be accumulated in large part by the labor of others.
            There are too many very wealthy people who would never do what the Gates' did, and they aren't all Republicans.
            Democrats are not the 'poverty party' because there is no poverty party. But we do like the mantle of social justice, equal pay, and helping the least of us. That requires repudiation of a system devised by and for the rich.

            Osama Bin Laden's a punk. He doesn't scare me. Cheney/Bush scares me plenty. Mission Accomplished.

            by kamarvt on Fri Aug 17, 2007 at 11:36:05 AM PDT

            [ Parent ]

      •  Limousine Liberals (14+ / 0-)

        The problem is that wealthy people have enough resources to sell their agenda.  They've successfully marketed trickle-down economics to millions of poor and lower middle class Americans.

        The "have-nots" can't afford that kind of representation.  It's the responsibility of every person of conscience to speak up for those people and force the legislative agenda we need.

        I guess that makes me a Limousine Liberal.  I know that's supposed to be a derogatory term, but it shouldn't be.  Basically, you're being accused of being a successful person who believes in sharing their prosperity with those less fortunate.  And that's bad...how?

        •  Well that just means wealthy liberals have to (0+ / 0-)

          Wealthy liberals have to help liberals get wealthy too.

          Most important is that people share your values, if they do, it wont matter how much money they have. Finally, liberals have to actually help each other more, there are many minority business owners who are becoming rich or who are rich, who are helping their community, and who might be hurt by some of the tax plans offered by Democrats.

          This means Democrats need to precisely target their tax  plan so that certain rich individuals are given a pass.

          •  Bull (2+ / 0-)
            Recommended by:
            bluewolverine, milkbone

            if they're helping the community, there are plenty of ways for them to do it AND get tax breaks for it.

            If they don't know how, they need to find out.

            The laws need to be applied EQUALLY.

            •  What if they help by hiring? (0+ / 0-)

              Can't you think outside of the box? Why do you want liberals to be the party of poverty?

              Despite what you say, it's irrational to promote poverty and failure in any community. Take an individual like Sean Combs or Jay Z, who grows up in the worst ghettos, and somehow they make it. Your policies would punish the sorta people who make it!

              So I cannot support that. I think we need to encourage success, in ANY party, community or country. When it gets to the point where the community punishes success of all members equally without taking the details of that success into account, you eventually tax yourself into permanent minority status.

              Don't tax the rich as a group, otherwise this will unite the rich against the poor, as a group. Instead tax the rich who are most corrupt, and support the rich who decide to do the right thing.

              You want to influence the behavior of rich people right? or do you just want to punish them?

      •  I think wealth is defined by quality of life. (4+ / 0-)

        Democrats should keep saying that quality of life has gone down, that misery is increasing.

        This is real, and even rich people notice that their quality of life goes down, because a rich person does not always feel good about the direction of this country, and may not feel good when people around them are suffering.

      •  the hard truths (3+ / 0-)

        i agree completely

        the cold hard truths must be told

        the truth of how america and europe came to have a "middle class"

        two massive wars on the eurasian land mass enabled america to stand alone for a period as the supplier to the world. the second of those wars permitted the united states to crawl out of depression intact as a single nation.

        as that war came to conclusion what was to be done with the millions of american soldiers returning home? and the even many more millions of american civilians enjoying full employment because of the war, what work would there be now the war was over?

        there'd be more war, of course!

        a "cold war" with multiple branches and tributaries. a cold war that not only facilitated the modern american middle class, but also created its rise in europe. with the "iron curtain" the west european did not have to compete with his eastern and central cousins. wages and social conditions could slowly rise as there was now "living space" and "breathing room"

        now with the cold war and iron curtain resting in a dust bin, today's problem is how to maintain those american and european middle classes. how do you counter the rise of previously non-existent worldwide competition?

        we are now in uncharted territory and there are only two choices that man has developed and utilized during his existence: frantic non-violent manipulation of all economic levers and war

        and this is the hard truth of both "left" and "right"

      •  Long live Chairman Mao (1+ / 0-)
        Recommended by:
        ormondotvos

        who said it first.

        Anyone who has been tortured, remains tortured. Primo Levi The Drowned and the Saved

        by abbeysbooks on Fri Aug 17, 2007 at 01:05:03 PM PDT

        [ Parent ]

        •  Mao was a bad guy...why the long live salute? (0+ / 0-)

          from wiki:...Mao's policies and socio-political programs such as the Great Leap Forward and the Cultural Revolution are blamed by critics from both within and outside China for causing severe damage to the culture, society, economy and foreign relations of China, as well as enormous and unnecessary loss of lives, a peacetime death toll in the tens of millions.

          •  because he's a troll... (n/t) (0+ / 0-)
          •  I agree with what you have said (1+ / 0-)
            Recommended by:
            ormondotvos

            but an incredible lot of good came out of it too. It was a feudal society under Chang whom we supported. Now look at it.

            No one is going to be able to change a society of unnumbered masses of people quickly without bloodshed. And there was no democracy movement at all then. His ideas were wonderful but their instrumentation went badly in many cases. Whereas Stalin never intended it to go well.

            Anyone who has been tortured, remains tortured. Primo Levi The Drowned and the Saved

            by abbeysbooks on Fri Aug 17, 2007 at 03:16:39 PM PDT

            [ Parent ]

      •  Make congressional salaries... (2+ / 0-)
        Recommended by:
        Jerome a Paris, JuliaAnn

        a multiple of the incomes of the poorest 20% of the population and let taxpayers finance election campaigns and you might see some real change.   Oh, and make the congressional health care system cover the same percentage of their health care costs as is covered for the population (including the uninsured) on average.

        Or make the salaries depend on the lowest of these multiples:
        Top    20% * 1
              20% * 2
        Middle 20% * 3
              20% * 7
        Bottom 20% * 10
        That provides some protection for each economic class and allows some stratification.

        --
        -6.25, -6.36 Worst. President. Dictator. Ever.

        by whitis on Fri Aug 17, 2007 at 03:35:30 PM PDT

        [ Parent ]

      •  It's to calm the markets...... (19+ / 0-)

        It's intersting given that only a very short time ago the Fed said they wouldn't unless there was an indication of a serious downturn in the economy.

        How much money has the Fed pumped into the markets in the last week?  About what, close to $70 billion now?  
        T - R - O - U - B - L - E.  

        Ladies and gentlemen, fasten your seatbelts, we're in for a very bumpy ride.

        If the people lead, the leaders will follow.

        by Mz Kleen on Fri Aug 17, 2007 at 06:14:51 AM PDT

        [ Parent ]

        •  Patching a roof on a house with a bad foundation (17+ / 0-)

          is not rational.

          FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

          by Roger Fox on Fri Aug 17, 2007 at 06:45:02 AM PDT

          [ Parent ]

          •  Leads to inflation. (1+ / 0-)
            Recommended by:
            Roger Fox

            The collapse of the dollar is near.

          •  An excellent analogy !!! (0+ / 0-)

            Those most benefiting from our present economy are the wealthiest one percent.  At the same time that million dollar plus homes are selling at record levels we see the bottom dropping out for the working and middle classes with bankruptcies and foreclosures hitting all but the wealthiest at all-time highs.  Our lack of a working health system in this country is a major culprit along with failed ponzy financing schemes promoted by the lenders.

            Our economy is beginning to reach the critical melt-down point and is no longer sustainable as is.  I believe that we are at one of those critical turning points in how we see our economy and government such as we were in 1932.

        •  No, the fed said it wouldn't cut the overall fed (5+ / 0-)

          funds rate (and they left in the language, at this time).  This is not a cut to the fed funds rate, but to the discount rate (which was a full 100 basis points higher), which has been acting as somewhat of a penalty that has in their view been furthering the liquidity crisis in the market.

          •  Agreed. (0+ / 0-)

            I think that what alot of people don't see here is that this cut of the discount rate; therefore, it is not meant to help the consumer immediately.

            However, it is going to bail out large mortgage companies like Countrywide, etc and that will eventually trickle down to their borrowers.

            I think, eventually, that Fanny or Sally will help out the people who made the emotional purchase of a home without studying the details of the loan.

            I mean, isn't a home pretty much the definition of The American Dream?

            What we need here, in the long term, is better oversight of the subprime mortgage companies and allow for more simple visibility of exactly what a borrower is getting.

            •  Trickle down?? (13+ / 0-)

              So it's going to work this time??

              All those banks who made millions, all those Wall Streeters who made billions and now we're gonna let help trickle down to the ordinary folk.

              I was talking to a Wall Street pal yesterday. His whole take was that people wanted what they couldn't afford and it was the consumers fault -- not toxic traunches, not bundle-and-run securities.

              He's gonna do his part to make sure any help trickles down to those poor fools who should have known better, I'm sure.

              •  Still Being Pissed On (26+ / 0-)

                Even if trickle down works.

                I was talking to a Wall Street pal yesterday. His whole take was that people wanted what they couldn't afford and it was the consumers fault -- not toxic traunches, not bundle-and-run securities.

                I saw Matthew Simmons, the oil investment banker who now is speaking out about peak oil, talk at Harvard a year or two ago.  He ended his talk by blaming the public for wanting cheap energy, after he spent his career financing the oil industry and making oodles of bucks at it.

                At question time, I told him that was crap, that for the past thirty years there hasn't been one poll showing less than 70% public approval for funding renewables and efficiency over fossil fuels and nuclear but it never happens.  I said how dare you blame the people in the street for this situation.  He was taken aback as was I when I got a round of applause.

                It's always the amorphous "them" and never the specific "me" with these guys.

                Solar is civil defense. Video of my small scale solar experiments at http://solarray.blogspot.com/2006/03/solar-video.html

                by gmoke on Fri Aug 17, 2007 at 08:01:32 AM PDT

                [ Parent ]

                •  I'll applaud! (8+ / 0-)

                  At question time, I told him that was crap, that for the past thirty years there hasn't been one poll showing less than 70% public approval for funding renewables and efficiency over fossil fuels and nuclear but it never happens.  I said how dare you blame the people in the street for this situation.  He was taken aback as was I when I got a round of applause.

                  The "peak oil" people are still just trying to save capitalism for a dying planet...

                  "How long? Not long." -- Martin Luther King, Jr.

                  by Cassiodorus on Fri Aug 17, 2007 at 08:46:25 AM PDT

                  [ Parent ]

                •  Same in finance (4+ / 0-)

                  Lenders make crappy loans to people who eventually can't afford to pay...  and it's the borrower's fault???

                  I guess those underwriting departments just sit around and do nothing.

                  "I intend to live forever. So far, so good." Steven Wright

                  by gsbadj on Fri Aug 17, 2007 at 09:27:55 AM PDT

                  [ Parent ]

                •  Re (2+ / 0-)
                  Recommended by:
                  drewfromct, majcmb1

                  At question time, I told him that was crap, that for the past thirty years there hasn't been one poll showing less than 70% public approval for funding renewables and efficiency over fossil fuels and nuclear but it never happens.

                  Yeah? Whose fault is that? It is their fault. We have made the stupendously bad decision to build an infrastructure and economic system dependent on fossil fuels. Remember, the 'government' is just 'the people'.

                  Just because people vote "yes" on questions like whether the government should invest in nebulous energy independence programs doesn't mean jack.

                  Post a poll as to whether the government should levy a gas tax that increases by 10c/gallon/year and we'll see how committed people are to renewables (hint, not as committed as they are to cheap gas and the driving 'lifestyle'). Post another poll on whether the government should levy taxes that double the price of non-renewable electricity and see what the poll results are.

                  Everybody likes renewable energy, until they have to make the sacrifices necessary to make it a reality.

                  •  The tax of 10 cents a gallon a year is too small (0+ / 0-)

                    to do the job.  I'd vote for 35-50 cents a gallon, and use the tax income to fund research, from soil science to energy production.

                    Patriotism may be the last refuge of scoundrels, but religion is assuredly the first.

                    by StrayCat on Fri Aug 17, 2007 at 11:14:51 AM PDT

                    [ Parent ]

                    •  it needs to increase regularly (2+ / 0-)
                      Recommended by:
                      drewfromct, StrayCat

                      otherwise people get used to the new prices. See Europe.We have lots of SUVs now, despite the much higher gas prices, because taxes haven't been increasedin 10-15 years.

                      •  People do get used to high prices (4+ / 0-)
                        Recommended by:
                        Sparhawk, miasmo, mimi, StrayCat

                        amazingly quickly. The easiest way to increase taxes is to do so when prices are going down. Blame the ups on increasing oil prices, and people won't notice the lack of downs. Really. It worked in europe.

                        •  Jerome.... (0+ / 0-)

                          what do you think about the private equity industry. With leverage going up on highly leveraged transactions as well as with companies issuing high yield bonds do you see problems in the private equity world and the high yield bond markets generally?

                          Furthermore, I would add that the stock of many of these highly leveraged firms are held by hedge funds.

                          In addition, what do you think about the cap gains taxes and the proposals to increase it to the same as the top income rate? I personally think it could lead to a drying up of capital and don't support it like I do some other taxes such as increasing the dividend tax to income levels - your thoughts?

                          Honor bound to defend freedom. Freedom is long-standing army regulations.

                          by RichardG on Sat Aug 18, 2007 at 03:00:14 AM PDT

                          [ Parent ]

                          •  I probably did not ask this the way I would have. (0+ / 0-)

                            liked to.

                            The big question is - how much do you feel the appetite for high yield/high risk credit will change as a result of current events with a focus on the private equity industry?

                            In any case, never mind - I was able to catch up on peoples views of some of these matters today. However, a response would have been appreciated.

                            Honor bound to defend freedom. Freedom is long-standing army regulations.

                            by RichardG on Sun Aug 19, 2007 at 12:02:17 AM PDT

                            [ Parent ]

                  •  Mea Culpa, Youa Culpa, Wea Culpa, Theya Culpa Too (1+ / 0-)
                    Recommended by:
                    drewfromct

                    Yeah? Whose fault is that? It is their fault. We have made the stupendously bad decision to build an infrastructure and economic system dependent on fossil fuels. Remember, the 'government' is just 'the people'.

                    Mebbe so, mebbe so.  Perhaps it is your fault and my fault and all our fault as private citizens because we didn't fight harder.  However, my point was that even the easy steps, the popular possibilities weren't tried ostensibly because the powers that be, the not so private citizens, those who are more equal than others didn't want them to happen.  I'd say Matthew Simmons tends to have more leverage economically and politically than I do.  I know he sure has more money.

                    Solar is civil defense. Video of my small scale solar experiments at http://solarray.blogspot.com/2006/03/solar-video.html

                    by gmoke on Fri Aug 17, 2007 at 06:34:48 PM PDT

                    [ Parent ]

              •  Trickle Down (0+ / 0-)

                was a poor use of words on my part.  Since the government came in and decided to help Countrywide and like companies, they won't have to do anything drastic to their borrowers.

              •  But... (0+ / 0-)

                Trickle down worked for me in a sort of bizarre way.  I took my 2005 tax cut and put the whole thing into way out-of-the-money call options on Chesapeake Energy.  I took a huge risk and expected to lose it all.

                Well, the hurricanes came and shot the price of CHK through the roof.  I cashed out in October, 2005.  It was alot of luck but it worked.  It worked so well that I will no longer be receiving anymore tax cut checks.

                And before ya'll call me out on profiting on the hurricanes -- 10% went to the Red Cross.

                So, yeah, trickle down can work real well.

            •  Sally Mae & compassion (1+ / 0-)
              Recommended by:
              ShaunMcDonnell

              Sally Mae has no heart and absolutely no compassion towards those overburdened with debt.  Look to our student loan borrowers for proof.

        •  Read your diary the other day... (6+ / 0-)

          ...on this subject.  I learned a lot about how all this stuff works.  That's part of the problem.  People can accept the line they're being fed because, like me, they don't have a real understanding of what's going on.  The public needs a lesson in modern economics.  
          Just as so many right wingers are fond of pointing out that pure Communism is a proven failure, We should now be able to see that pure Capitalism is a proven failure.

          •  my thought on capitalism (10+ / 0-)

            is that we don't HAVE that among the people, only corporations.

            I'm ready to take flames, but capitalism itself could arguably exist using agriculture and hand-manufactured goods (simplest scenario) sans money of any kind, and especially sans finance.  Then we would have mere economics at work.  If you and I trade corn and cattle between ourselves with no cash involved, we have an economic relationship.

            When your cows calve out, have you increased your "capital?"  I guess so.  When your tiny corn seeds become plants which bear food you can sell/trade for something else, have you capitalized on your corn seeds?  I think so again.

            Once the voodoo of capitalizing on currency (i.e. money lending, making money on interest rates, then projecting "future interest income" on your asset sheet to create a new "asset" to use as collateral to buy more debt (repeat ad infinitum) takes hold, evil oozes out of every pore.

            Anyone?

            •  Yes, but that's what pure Capitalism necessitates (8+ / 0-)

              Capitalism, in it's pure form, rejects any attempts at regulation and control.  That leads directly to the insanity we're seeing today.  It also allows no mechanism by which the fruits of a prosperous society are shared by all those within that society.

              Capitalism is afforded a sacrosanct status in our culture.  People want it to continue unfettered as a matter of belief.  My belief is that any system which subjugates the majority of the population to the prosperity of a few is inherently evil.

              Would it work better in a simple, agrarian economy?  If we went back in time and asked some feudal serfs that question, they may disagree.  The interests of the poor working class have never been advanced by anything other than legislation and government action, compelled, when necessary, by the demands of the people.

              •  how about this (0+ / 0-)

                an economic system characterized by private or corporation ownership of capital goods, by investments that are determined by private decision rather than by state control, and by prices, production and the distribution of goods that are determined mainly in a free market

                • websters

                What if capitalism were free (within reason and law) for individual initiative... but the gummnt rigorously monitored the economic activities of any corporate entity?

                Right now we have the reverse.

            •  It's past time to kill captalism (1+ / 0-)
              Recommended by:
              stonemason

              Eventually we're going to have to move beyond money as a species.  It was a stepping stone from a barter economy but I think eventually we'll have to reach a place where there is no such thing as money.  People will work because they want to do something to improve themselves and their world and to grow.  And in return things like food, shelter and healthcare will be freely available.  It may sound naive but certainly no more than trying to bomb people into loving, fearing or respecting us.  Oh yeah, we could get rid of the military and the prisons while we're at it.  I'd say it's probably 150 to 200 years away.

            •  if everyone is broke enough (0+ / 0-)

              don't we have to barter and to use sweat equity anyhow?

              What happens after the orgy is that everyone wakes up with a headache, fouly taste in his mouth, and starts to clean up the mess, one man, one household's finances at a time. And then you start to barter.

              "False language, evil in itself, infects the soul with evil." ----Socrates

              by mimi on Sat Aug 18, 2007 at 02:54:30 AM PDT

              [ Parent ]

        •  Thats because we aren't paying the debt. (1+ / 0-)
          Recommended by:
          stonemason

          What do we expect China to do when we don't pay our debts and run out economy into the ground?

      •  Is this another S&L type bailout (5+ / 0-)

        Is this fund cut bailing out the subprime lenders?

        Is this going to give implicit approval that it is fine to make loans for million dollar McMansions to people with no verifiable income.

        Are these sleezy companies being bailed out by the working poor?

        •  A new kind of bailout? (0+ / 0-)

          I haven't seen discussions anywhere of providing relief of some kind to the affected borrowers. Voiding pre-payment penalties would help many. A drop in the bucket, but maybe achievable politically.

          Stronger measures, sure to anger lobbyists, would have an even greater effect.

          The fed has already show willingness to spend taxpayer money to buy up mortgage-backed securities. Why not give that directly to some borrowers? Mortgage-backed securities would be strengthened, since the money would flow to the lenders, and the borrowers would not be forced from their homes; would not be economically ruined; and could continue spending money on goods which feed the economy, instead of dropping off the economic radar screen.

          How can this be framed in a way which silences the inevitable screeches from the greedy monkeys?

          If a bailout has to happen, it should go to the lowest level possible. The bailout money can bubble back up, multiplying value as it goes. Giving it directly to lenders is just dumping it into a black hole.

          "Dear Buddha, I'd like a pony and a plastic rocket"
          --Malcolm Reynolds

          by drobnox on Fri Aug 17, 2007 at 10:11:26 AM PDT

          [ Parent ]

      •  Doesn't the diary suggest (9+ / 0-)

        that "calming the markets" and "keeping the rich calm" are mostly the same thing?

        Do not rec this comment.

        by I on Fri Aug 17, 2007 at 06:28:23 AM PDT

        [ Parent ]

      •  It's to reward the rich for making (3+ / 0-)
        Recommended by:
        Jerome a Paris, arkdem, liker26

        bad decisions.  I'm guessing the theory is, 'They must be bailed out'.

        Hedge funds have been touted as 'regulation free' as opposed to other investments, and therefore, better.

        The chickens have come home to roost.  Regulations and rules have a purpose.

        Is the secondary mortgage markets the junk bonds of today?

        Everything is funny as long as it is happening to somebody else. --Will Rogers

        by groggy on Fri Aug 17, 2007 at 07:49:28 AM PDT

        [ Parent ]

      •  Fed is simply doing its job (0+ / 0-)

        Full text of the Fed’s accompanying statement:

        Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.

        It seems hard to argue with their reasoning.  And this is what they are supposed to do.

      •  Both (0+ / 0-)

        because the rich won't give to the candidates if they're feeling 'poor'.

        And because the Fed is scared to death.

    •  Lafayette (2+ / 0-)
      Recommended by:
      Dave925, herding old cats

      sends a good message. I dare say, though, that all the finger pointing will aim in the wrong direction.

      All these things you say are true. But everyone knows its much easier to yell:  No New Taxes! and voila, you're elected.

      To call the Commander in Chief detached from reality would be an insult to paranoid schizophrenics everywhere. --billmon

      by vicki on Fri Aug 17, 2007 at 06:27:29 AM PDT

      [ Parent ]

    •  This is one of the most important diaries (16+ / 0-)

      Ever posted at Daily Kos.

      Thank you for it.

      I'm not part of a redneck agenda - Green Day

      by eugene on Fri Aug 17, 2007 at 07:35:06 AM PDT

      [ Parent ]

    •  perfectly said....I'll say no more....n/t (3+ / 0-)

      and why the sea is boiling hot, and whether pigs have wings....

      by farmerchuck on Fri Aug 17, 2007 at 08:12:46 AM PDT

      [ Parent ]

    •  Merci, Jerome! (12+ / 0-)

      It recalls to mind an excellent quote, I believe, by Gore Vidal in one of his essays: "What we have in this country (USA) is socialism for the rich and free market economy for the poor."

      I like what you have to say about the role of the government.

      Many government tasks are investments, not costs.

      Amen, frère Jerome!

      Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedy. -- Groucho Marx

      by technolinguist on Fri Aug 17, 2007 at 09:05:27 AM PDT

      [ Parent ]

    •  Wealth and deregulation (0+ / 0-)

      Ultimately the source of much of the problems with this particular bubble is the poor regulation of the hedge funds.  The logic, theoretically, is that because the people who invest in hedge funds are wealthy and know what they are doing, they can be less regulated.

      But if you accept the logic of trickle down economics it completely discredits that regulatory theory.  If by providing the wealthy with more money that they can invest, you can bring up the whole economy, then aren't they more critical to keeping the economy running smoothly?  Isn't it more critical to make sure that those people are in a well regulated and transparent environment?  They may be less prone to mistakes overall (debatable), but when a mistake happens, the consequences are far more severe.

      If I, as an individual investor, screw up, then I pay a  price for that.  But if you're throwing around several million or even billions of dollars, now your mistakes are amplified.  So if anything, there should be even more regulation on these individuals and organizations than on investors like myself.

      --- It's always easier to tear down other people's dreams than to build them

      by sterno on Fri Aug 17, 2007 at 09:18:46 AM PDT

      [ Parent ]

    •  I think at this point we know there is a crisis. (0+ / 0-)

      I think the problem Democrats have is, they only communiate to Democrats.

      Yes this is a chance to discuss pollution taxes on Corporations. Yes this is a chance for Democrats to discuss tax relief plans.

      But I don't think that will happen. I think the debt will increase, inflation will make everything more expensive, and Democrats will simply tell people to work harder and longer to pay the debt down, thats if Democrats don't actually raise taxes.

    •  Thanks for bringing this up (1+ / 0-)
      Recommended by:
      Jerome a Paris

      Unfortunately the current economic mindset won't change until it has to.
        People are economically ignorant and mentally lazy. They don't understand economics, so they let other people tell them what it is supposed to be.
        Of course that shouldn't stop us from trying to get people to understand economics and think about it. But until people can't buy food, they won't much care.

      "PC Load Letter"? What the fuck does that mean?

      by gjohnsit on Fri Aug 17, 2007 at 10:41:28 AM PDT

      [ Parent ]

    •  Ravi Batra of SMU (0+ / 0-)

      laid out an excellent description of how  production went from demand driven to supply driven with cheap credit on a recent Air America show.  Even a dummy like me could understand it.  Thanks for this additional insight.

      Those who can make you believe absurdities, can make you commit atrocities-Voltaire

      by hairspray on Fri Aug 17, 2007 at 11:23:01 AM PDT

      [ Parent ]

    •  Amen, Jerome. (1+ / 0-)
      Recommended by:
      Jerome a Paris

      I hope this time we can get that message through.

      During times of universal deceit, telling the truth becomes a revolutionary act. - George Orwell

      by kyril on Fri Aug 17, 2007 at 11:49:14 AM PDT

      [ Parent ]

    •  My favorite parts... (1+ / 0-)
      Recommended by:
      Jerome a Paris

      that the rich capture future cash flows.
      that not every social good can be valued in dollars
      that greed is not a virtue
      that when the rich lose money, it could be because they made investment mistakes rather than because there is a systemic crisis.

      This is one of your best.  Thanks!

    •  Jerome (0+ / 0-)

      You just blew the mindfuses of every dlcer and open republican who visits this site.

      The nerve. To suggest the goal of economics should be anything but enriching the rich and empowering the empowered. Treason!

      "All you have to do to qualify for human rights is to be human" An 11yo Girl. Unbossed.com

      by cdreid on Sat Aug 18, 2007 at 05:41:29 AM PDT

      [ Parent ]

  •  How long can central banks continue (29+ / 0-)

    to prop up the markets by flooding them with money?  What's the efffect of the flooding going to have on inflation?

    Trust no organizaton bigger than two, and even those are suspect!

    by rjones2818 on Fri Aug 17, 2007 at 05:54:44 AM PDT

  •  Jerome (3+ / 0-)

    I knew you were out there somewhere...

    I have a very "bonehead" satire up on the quants today... I think it is distinct enough from yours to remain up on the diary list.  May I have your permission to link this and yesterday's diaries?

    Thank you for your great work.  I was wondering when you would come around to rescue the US mortgage holder tied to the railroad tracks for the scapegoat game...

  •  The folks on CNBC are positively apoplectic (39+ / 0-)

    about the possibility that this spiral is going to provoke the response you are advocating Jerome.

    They keep saying that "the market teaches" and that they are learning.  Shaking head.  There was one guy yesterday who to his credit kept asking why if people were so great at learning did it have to get to the point where everyone was going to have to pay such a high price for the lesson.  None of the others had a good answer.

    Also, you're a good person to ask this question I think...  If this is such a "free market" then why are these people so convinced that they are entitled to a Fed bailout now that they've totally screwed up?  Where's the "personal responsibility" they've been so fond of citing to promote their economic policies?!

  •  Is there an index of the (US) Middle Class? (6+ / 0-)

    Americans love to keep score, and ask all day long "How am I doing?"  Is there any way to tell, even just financially?  I agree that there must be other ways to value what we do as a society other than the financial ones, but even what we currently have misstates how the middle class is doing financially.  A significant part of the argument the left can make is that the middle class has been robbed by the greed-motivated rich;  properly fashioned, this fact can be a cudgel used to curb the excesses of greed.

    BushCheneyCo: If we don't kidnap, torture, rape, and murder -- the criminals will WIN!

    by Yellow Canary on Fri Aug 17, 2007 at 06:04:44 AM PDT

  •  It's about time to recognize that there is (17+ / 0-)

    more to life than short-term profits. Long-term investments, in education, infrostructure, and alternative energy, will pay dividends in the future and will create social capital, which, IMHO, is far more important that individual wealth.

    •  Unfortunately many companies, including (6+ / 0-)

      the biggest ones out there are only looking at the short term.  Very few are doing anything long-term.  That short-term thinking has to change, and I think investors that go to these annual meetings ought to ask where are the long-term investments and why aren't they making them?

      If the people lead, the leaders will follow.

      by Mz Kleen on Fri Aug 17, 2007 at 06:09:29 AM PDT

      [ Parent ]

      •  OMHP regressive taxation allows for this (13+ / 0-)

        only looking at the short term.

        progressive taxation causes a more focused, looking for quality, and looking long term pay offs, after all you want a good long term pay back if your going to pay 50%+ in corporate taxes and 91% in personal. There is no reason to be as careless in a progressive tax environment, as you might in a regressive tax mode.

        Photo Sharing and Video Hosting at Photobucket

        Note much of our existing infrastructure was built ~1930's & 50's & 60's~ when the top personal rate was over 50 or 60%.

        Photo Sharing and Video Hosting at Photobucket

        Photo Sharing and Video Hosting at Photobucket

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Fri Aug 17, 2007 at 06:35:50 AM PDT

        [ Parent ]

        •  I Don't Know if This Computes But My Take On Your (4+ / 0-)
          Recommended by:
          wu ming, Jerome a Paris, lotlizard, fhcec

          sentiment, being an economic layman, is more functional.

          What I see without steep brakes on top end wealth and market share accumulation, is that a post-subsistence economy can generate rewards in amounts and speeds utterly beyond the human scale.

          So that top end management/ownership can win permanent lifetime jackpots in short periods.

          Thus there's no interest to them in the longterm health of either their business or their society, because of their capacity to completely cash out.

          With progressive brakes kicking in a some level I can't compute relating to the scale of human needs and lifespan, everyone's future remains permanently dependent on the welfare of society, and at least middle- to long-term dependent on the welfare of their business or sector.

          We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

          by Gooserock on Fri Aug 17, 2007 at 11:25:40 AM PDT

          [ Parent ]

  •  Watching the division on CNBC, (8+ / 0-)

    the financial/business cable tv news channel.  Some are screaming for the government to step in to save the hedge funds and financiers that invested in the bubble, some are screaming that the rich can take care of themselves.  

    Read Obama's 2002 speech against invading Iraq. http://usliberals.about.com/od/extraordinaryspeeches/a/Obama2002War.htm

    by Inland on Fri Aug 17, 2007 at 06:07:51 AM PDT

  •  I might add (9+ / 0-)

    I had a hissyfit yesterday on another diary.  It made me so mad I couldn't see when the US mortgage holder was held up as the responsible party with no mention of the hubris of the hedge fund managers and their failing quant systems.

    Thank you for championing the truth by exposing the greed behind all of this.

  •  Magnifique, Jerome! (8+ / 0-)

    Completely agree that in this moment, which is the foreseeable outcome of a particular kind of ideology, we have a chance to argue for big changes, and to reset the prevailing narrative.

    Truly outstanding diary, J--among your many great ones!

  •  Are you contending that (2+ / 0-)
    Recommended by:
    TastyCurry, ShaunMcDonnell

    a 10% correction is equivalent to a market crash?  I mean, we are really only back down to levels we saw last year (which was a pretty good year) and it hardly looks like a crash is imminent (but a slowdown maybe).

  •  Gee...Much Smoke and Noise - Fed Cut!!! (4+ / 0-)
    Recommended by:
    JuliaAnn, bigchin, Roger Fox, junta0201

    But pay attention, it's only the "discount" rate to banks bringing paper to the Fed...

    it doesn't make people more qualified to get loans, and it doesn't do a thing to ease the bad loans getting hammered out there...

    or did I miss something?

    "We are all of us broken, only some more-so than others..." TMWNP

    by TheManWithNoPoint on Fri Aug 17, 2007 at 06:11:32 AM PDT

  •  Been there (25+ / 0-)

    I'm one of those who used to believe that the pursuit of self-interest (greed and selfishness - essentially) is actually in the best interests of all.  But then I grew up.

    But I still understand why it is so compelling for so many.  There's nothing quite like an ideology that tells you that what you want to do is in fact the best thing for you to do  - for you and everyone else!  It's win, win, win!  And if there is the tiniest nugget of truth in that ideology you are going to cling to it like a life raft.

    And there is a nugget of truth.  If everyone acting in a given market possessed all the information necessary to make rational decisions and everyone were willing to act in their rational self-interest - such an ideology might work fairly well.  That's the nugget of truth.  The problem is those conditions can't be met.  That is, we don't the information we need (just try to find out what seafood in your local market is from China), and we don't make decisions in our rational self-interest.  Thus the  greed theory can't function as advertised.

    The example I use most with my GOP friends (many of whom are dangerously overweight)- is that left unrestrained to pursue our wants/self-interest the vast bulk of people will make irrational choices that are not in their own self-interest. For proof - look no further than the obesity problem.  The vast majority of Americans know it is in their rational self-interest to eat a healthy diet and to exercise.  Most have the means to do it.  And yet we can't say no to things we want that we KNOW are bad for ourselves.  We are in sole control of our diets and we are eating ourselves to death. And we are letting our children eat themselves to death.

    It's the best example I can come up with to show how, given the choice, people often don't act in their own self interest.  Market theory can't work unless most of the actors in the market place make rational decisions in their own self-interest.  A handful of smart people making good decisions can't influence the market.

    Another good talking point is to discuss the tragedy of the commons.  Without government regulation - resources owned by no one (essentials like clean air, clear water, etc.) are inevitably abused by all.  The truth in that nugget is hard to deny.

    If you want something other than the obvious to happen - you've got to do something other than the obvious...Douglas Adams

    by trillian on Fri Aug 17, 2007 at 06:17:22 AM PDT

  •  I don't understand what 'efficient markets' (2+ / 0-)
    Recommended by:
    stonemason, Roger Fox

    have to do with the problem. I thought that the efficient market theory just meant that it is impossible to beat the market in the long run. The 'quants', whose investment strategies contributed to the most current mess, don't believe in an efficient market, they think there is pattern that can be played to beat the market averages.

    You fell victim to one of the classic blunders, the most famous of which is "Never get involved in a land war in Asia".

    by yellowdog on Fri Aug 17, 2007 at 06:17:24 AM PDT

  •  Excellent, Jerome. (16+ / 0-)

    Richer does not mean better. Together is better.

    We are all richer when the least among us is better off.  

    America has been way off track since Reagan was elected, but the tide is turning.

    Thanks for all your great work here.

    "The greatest anti-poverty movement in American history is the organized labor movement." John Edwards

    by TomP on Fri Aug 17, 2007 at 06:19:28 AM PDT

  •  Regulation is not a dirty word (27+ / 0-)

    I would love to hear Dems point out how so many of the excesses that have caused the bubble and financial problems are due to a lack of sufficient regulation. I'm tired of hearing regulation treated as a bad word - standards are what help keep people honest and are a quite necessary to put boundaries around greed.

    I think it's Thom Hartman I have heard most talk about regulated capitalism and it makes a lot of sense to me. It is the lack of controls, limits, and safeguards that have allowed the current mess to develop. Just look at the relaxation of standards in the mortgage market or let's not forget the lovely telecom deregulation debacle. There is always a balance to be found to be sure, but we're so far to the extreme of market "freedom" (a relative term quite dependent on one's financial situation) that some serious counter measures need to be taken.

    Interestingly, I was just reading "The Man Who Was Thursday" by G.K. Chesterton and there's an interesting comment in it about the wealthy being the true anarchists because they don't want to be governed or restricted in anything they do....sounds a lot like free-market ideology (idolatry) to me!

    •  Ho Ho (17+ / 0-)

      Had it right when he said that capitalism without regulations is like ice hockey without rules.  It can't work.

      I also agree that he was right when he said that corporations aren't immoral, but they are amoral.  Properly functioning corporations aren't capable of making a moral choice (like not dumping toxic waste in a public water source) on purely moral grounds.  They can only make it on amoral economic grounds of cost benefit analysis - which often leads to a result that the public doesn't want.

      If we can recognize the limitations that corporations operate within - without hating them for not being "moral" - then the need for some regulation becomes clear. Some decisions (i.e. regulations) do need to be forced on business - because their own operating parameters don't allow them to make certain decisions for the public good, or the long term good.

      If you want something other than the obvious to happen - you've got to do something other than the obvious...Douglas Adams

      by trillian on Fri Aug 17, 2007 at 06:34:25 AM PDT

      [ Parent ]

    •  I wonder if (16+ / 0-)

      capitalism even exists for people (not corporations):

      an economic system characterized by private or corporation ownership of capital goods, by investments that are determined by private decision rather than by state control, and by prices, production and the distribution of goods that are determined mainly in a free market

      • websters

      Children are being regulated out of business when they set up lemonaid stands.  There is no spontaneous "street" economy in the US such as we see here in Mexico where everybody and his cousin take to the street to sell roast chicken, clothes, what-have-you.

      Corporations on the other hand have been turned loose to do whatever they want.  In the process they have gone offshore and churn out US dollar-denominated "assets" (these now worthless securities) which are uncounted, unregulated and unnameable.  No one voices concern about watering down the dollar and destroying international trust due to attaching myriad and infinite debt to the dollar!

      I think we only have corporate capitalism in place in the US.  The people are strangled by the state.  Perhaps if it was the other way around the economy would bear scant relationship to the needs of the people.

    •  the 'market' (3+ / 0-)
      Recommended by:
      IndySteve, esquimaux, StrayCat

      and 'capitalism' is much like a wild horse except dumber than a wild animal...in order to make it work for you, it has to be broken in (not broken) and a bit put in its freakin mouth.
      Even a texas rancher can understand that one...no wonder gwb is so scared of horses...the 'rancher' ha

      Peace is a good thing. War is the ultimate political failure.

      by FreeTradeIsYourEpitaph on Fri Aug 17, 2007 at 08:41:58 AM PDT

      [ Parent ]

  •  Print this diary! (4+ / 0-)
    Recommended by:
    vicki, Colman, wordene, StrayCat

    Dear Jerome, you make it all seem so easy.  You cut through all the theory and subterfuge and out pops the Truth.  I will print this diary so I can remember your words the next time (probably later this morning) I have an argument with a local neo-con.

    Many thanks to you. Have a great weekend!

  •  The Gospel according to Gekko (greed is good)... (18+ / 0-)

    has been the defining national creed for over 25 years now.  I still recall my shock and my dismay when the '81 tax cuts passed in a process that Reagan's own OMB director described as "hogs feeding at the trough."  As bad as that was, I didn't realize that it would set the tone for most of my adult life.

    While this Gospel has been the reigning ideology of the GOP, far too many Dems have been far too complicit in it for far too long.  The whole point of the DLC was to accept this basic tenet while moderating its worst consequences.  The Dems have never tried to confront this utterly destructive concept head-on.

    Today, we have 3 leading Dem contenders, one who is openly confronting this issue, one whose entire campaign strategy is based upon obtaining $2,300 contributions from those who have benefitted from this orgy of greed, and one who's still on the fence about this issue.  Unfortunately, the MSM frame is only large enough to fit the latter 2 candidates.  The entire "debate" of this campaign is between the favored candidate of "Fortune" magazine and a candidate who is trying to compete w/ HRC for $2,300 contributions w/o losing his soul in the process.

    I really would've hoped for more this time, but I hoped for more w/ the Simon and Jackson candidacies in 1988 and w/ the Harkin and the Brown candidacies* in 1992.  The party establishment showed no interest in populist candidacies then, and I don't see it showing much interest in them now.  While Edwards and Kucinich are moving the Overton Windows over a little on economic issues, I don't see Edwards getting nominated, and Kucinich doesn't, in his wildest dreams, see Kucinich getting nominated.

    I really hope that I'm proven wrong on Edwards.

    *Ironically enough, WJC, the DLC's fair haired boy, sealed the deal over Brown in the decisive NY primary in '92 on the issue of tax equity.

    Some men see things as they are and ask why. I see things that never were and ask why not?

    by RFK Lives on Fri Aug 17, 2007 at 06:24:38 AM PDT

  •  Brilliant analysis. (8+ / 0-)

    But communicating these economic ideas to the great unwashed, especially in the face of a half century of propaganda, is not going to be easy.

    Give thought to how these ideas can be communicated because I and many other would find it most interesting.

  •  feudalist ideology thru Regressive taxation (7+ / 0-)

    Regressive taxation allows for willy nilly investment. The wealthy can put their money just about anywhere and make a decent profit. They like that. But the important needs of society go under-financed, such as infrastructure, Education, etc.

    Progressive taxation disallows those tertiary investment opportunities and tends to focus venture capital in more long term, prioritized projects. That tend to pay off big time over many decades.

    Regressive taxation is highly inefficient, especially for the long term, while progressive taxation tends to force a more careful investment mind set...... & is thusly far more efficient.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Fri Aug 17, 2007 at 06:25:46 AM PDT

  •  Some things never change even after 30-50 years (3+ / 0-)

    ...years ago, a group of economists managed to convince British politicians that they had foolproof technical means to make Britain great again. Pandora's Box tells the saga of how their experiments have led the country deeper into economic decline, and asks - is their game finally up?

    http://www.youtube.com/...

    "OK, joke's over. Put back the Constitution!"

    by Ferrofluid on Fri Aug 17, 2007 at 06:26:24 AM PDT

  •  WHAT left? (14+ / 0-)

    Buyt if the left does not make that case, I am certain that the current mindset will continue to prevail and the dominant economic ideology will stay, to the detriment of the vast, but empoverishing middle class.

    What left?  You certainly won't find it here.  Unless I've overlooked something, not one single diary on the markets was frontpaged on this blog yesterday, despite having a few good ones to choose from.  The frontpagers were still busy wanking over Kos' appearance on Colbert and nattering about Senate campaigns and resigning Republicans.

    This place is Dinosaur Central when it comes to discussing vital issues of the left; still riding that "netroots bubble" (which rests on the "two-party bubble" that rests on the financial bubble of which you speak).

  •  You don't have to be a financial wizard (2+ / 0-)
    Recommended by:
    Jerome a Paris, JuliaAnn

    to know that the idea of cutting a big source of federal income (taxes) and increasing our debt will cause problems with our economy! How come so many have been so stupid to have fallen for the lies of the corrupt administration?

    "Blessed are the Peacemakers" - Jesus

    by SisTwo on Fri Aug 17, 2007 at 06:37:50 AM PDT

  •  Perhaps the central fallacy of our time is (12+ / 0-)

    The core of the Reagan-Thatcher revolution is that greed (especially that of financiers capturing future cash flows of the real world for their personal, immediate profit)

    Global warming also results from extracting, consuming and combusting living and organic matter today with no consideration of the needs of future generations. Business schools teach the politics of the quarterly ROI (return on investment) as the primary responsibility of the business manager or CEO, and the fiduciary obligation to return profits to the owner or shareholders each quarter. These ae the blinders on the eyes of our leaders.

    It's long past time to draw from ancestral native wisdom that considers the consequences of our behavior for the next seven generations. But it's obvious that to say our business leaders should learn to think that way is laughable and unthinkable. Thus we are likely to have economic paralysis, global warming, 100's of millions of refugees from both, leading to overwhelming of social systems and breakdown of civilization and planetary viability, which is also somewhat unthinkable. So it's time to start thinking some unthinkable thoughts.

    Has any business school ever taught that?

    Let's have fewer kids, and share them.

    by howardfromUSA on Fri Aug 17, 2007 at 06:41:25 AM PDT

    •  they should (3+ / 0-)
      Recommended by:
      opinionated, lotlizard, junta0201

      I've always been fascinated by how many pre-industrial cultural traditions treated the earth with reverence as a mother.  Contrast that with our modern cultural tradition, which, to the extent it consists of anything other than greed and prefabricated economic optimism, treats the earth as exploitable whore.  Someday people will wish they had venerated the natural world that nourished and sustained them instead of demanding rate cuts and praying for Dow 21,000.

  •  Oh Jerome... (3+ / 0-)
    Recommended by:
    Idioteque, back2basics, Inland

    ...I mean, I know the opportunity here must be hard to resist, but the market is barely one thousand points below its all-time high right now.

    Some hedge funds will fail, Jerome.  That's inherent in their premise.  This "crash" is all of a week old.  There isn't anything absolute about it yet.  And without arguing the points of this diary, I don't see anything in it that wasn't what you believed a month ago.  Which means that it has little to do with the "crash".

    The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

    by Jay Elias on Fri Aug 17, 2007 at 06:49:08 AM PDT

    •  Thank you. Some reality. [nt] (1+ / 0-)
      Recommended by:
      Jay Elias
    •  Tell that to private equity firms (9+ / 0-)

      who can no longer borrow a cent and therefore can no longer buy anything.

      Tell that to the banks that are busily trying to understand how much exposure they have to "assets" they suddenly are unable to value in any meaningful way.

      Tell that to the mortgage holders whose last hope to repay their loan was to sell the house at a good price and who know now, like everybody else, that prices certainly won't go up for a long while.

      Market psychology has radically changed. The sky's no longer the limit. Retreat, consolidate, wait will be the key words. And that's not going to go away. And that's enough to trigger many other things when so many debtors are overstrectched.

      But what lessons are drawn now that noone can deny any longer the sea change is still an open question.

      •  For now... (1+ / 0-)
        Recommended by:
        QuestionableSanity

        ...private equity isn't going to go away.  And their problems and the market's problems aren't the same.

        Meanwhile, the subprime crisis is a real issue, to be sure.  But the subprime crisis and the market crash is not the same thing.  And it was only a few years ago - 2001 if we remember - that the market psychology last changed and the sky wasn't the limit.  And then, not that much later, it changed back.  That is how the market works.

        The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

        by Jay Elias on Fri Aug 17, 2007 at 07:26:45 AM PDT

        [ Parent ]

        •  It's not just a subprime crisis (14+ / 0-)

          The problem is that too many people focus on the declining market as a measure of the economy. In fact, it is merely a symptom of a much deeper problem.

          Foreclosures are at their highest rate in 16 years, across the nation, and across mortgage classes - Alt-A and even some Prime borrowers are facing foreclosure. The real estate market - which was the ONLY thing driving the economy in such places as Florida and Southern California - is now dead in the water. As home values drop, foreclosures will rise even further. As the liquidity crisis continues, people will lose their jobs - not just in the mortgage industry, but people who indirectly owed their jobs to that activity, from Starbucks baristas to Home Depot workers.

          This comes against an underlying economic weakness. Wages have been stagnant, yet costs have soared. The result is an overly indebted American, who has very little savings and is living paycheck to paycheck. Even a modest recession will be considerably amplified by those factors. Energy prices have nowhere to go but up, and America's job base remains weak.

          Ultimately, we should not be dependent on market psychology. We need instead a return to policies that have proven to avoid these kind of calamities. Revive the New Deal, and its basic premise of economic security. The market will be reined in and limited, although profit will still exist. It will just be controlled for the good of everyone.

          Of course, libertarians do not believe in the public good, and care nothing for the suffering that is happening and will intensify as a result of this economic crisis.

          I'm not part of a redneck agenda - Green Day

          by eugene on Fri Aug 17, 2007 at 07:44:09 AM PDT

          [ Parent ]

          •  Why do you make a post... (1+ / 0-)
            Recommended by:
            Idioteque

            ....with so much that I agree with, and then throw in that stupid last sentence?

            Of course libertarians believe in the public good, and of course they (and I) care about the suffering of all people.  What I don't believe is that increasing government's role in the economy will result in greater public good.  But don't tell me I don't care; not only are you wrong and insulting, but fatuous as well.

            The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

            by Jay Elias on Fri Aug 17, 2007 at 07:50:55 AM PDT

            [ Parent ]

            •  It's those kind of policies that got us here (6+ / 0-)

              Less government regulation and protection for individuals is what has made this situation possible. You can argue that a smaller government role in the economy "will result in greater good" but the evidence over the last 100 years - from the current problems back through the long, sustained boom the New Deal produced - suggests otherwise.

              I'm not part of a redneck agenda - Green Day

              by eugene on Fri Aug 17, 2007 at 08:10:47 AM PDT

              [ Parent ]

              •  I'm not at all sure... (0+ / 0-)

                ...why that has anything at all to do with your choice to insult me and say that I don't believe in the public good or care about people who are suffering.

                Not agreeing with you is not the same thing as not giving a shit.

                The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

                by Jay Elias on Fri Aug 17, 2007 at 08:15:12 AM PDT

                [ Parent ]

                •  You can claim you do (2+ / 0-)
                  Recommended by:
                  TrueBlueMajority, Jerome a Paris

                  That's fine, but forgive me if I am skeptical of the actual record of the policies you champion.

                  I'm not part of a redneck agenda - Green Day

                  by eugene on Fri Aug 17, 2007 at 08:25:18 AM PDT

                  [ Parent ]

                •  I don't believe eugene (4+ / 0-)

                  intended at all to insult you Jay.  I believe the point is the 'pure' Laissez-faire economic policies with driving-toward-zilch regulation and oversight by government simply doesn't work and will never work.  
                  And the resulting suffering from these policies that has been unrelenting....actually makes persons who embrace libertarian ideology LOOK like don't give a shit.  Its not personal thing, its a policy thing...the policy is causing the suffering and that suffering translates back at finger pointing to libertarians who APPEAR to be pure globalists.

                  Ron Paul is a good example.  He says he believes in free-markets but not free trade.  But the globalists will claim free trade is free markets.  Libertarians really are between a rock and hard place because the real nuances of their economic ideology that differentiates them from the globalists is extremely difficult for most people to decipher.  I don't know what the differences really are even though I support nationalizing the federal reserve.

                  Peace is a good thing. War is the ultimate political failure.

                  by FreeTradeIsYourEpitaph on Fri Aug 17, 2007 at 09:01:22 AM PDT

                  [ Parent ]

            •  libertarians believe in the public good? (1+ / 0-)
              Recommended by:
              JuliaAnn

              i've never heard that before.

              i've heard libertarians claim to believe in the public good in the abstract, but have seen little evidence of libertarians approving of the kind of concerted action that actually benefits the common good.

              i don't mean to be rude by jumping into what looks like a private argument, and of course you are free to tell me to STFU, but if you say "of course" libertarians believe in the public good, can you back that up anywhere?  not just with yourself as an individual example, but with some other evidence?

              Politics is like driving. To go backward, put it in R. To go forward, put it in D.
              IMPEACH CHENEY FIRST.

              by TrueBlueMajority on Fri Aug 17, 2007 at 09:54:47 AM PDT

              [ Parent ]

          •  Agree with most except energy prices (2+ / 0-)
            Recommended by:
            Jerome a Paris, StrayCat

            I believe it may be an ironic twist to this but as the economic crisis deepens and impacts across the US landscape,less driving,less consumption of fuel will create a drop temporarily of gasoline prices.

             The point is there will be a glut because the US driving demand will slacken (less need to drive to work, less disposable income). That will be offset partially by continued demand in China and India but even there with the shrinking of the US market (less loans, less purchasing power) that will be slowed
            by retrenching of their manufacturing for export.

            That is what happened in 1997/8 Japan and the rest of Asia because of overbuilding capacity.

             It won't be pretty and it won't be obvious, but we are headed into recession.The only questions are how far, how wide. how deep, and how we will be affected?

             The figures that boondad had of a DOUBLING in US mortgages between 2001 to 2007 (4.9 trillion to 9.8 trillion) is amazing.  Even if only 15-20% is truly subprime ,remembering in six years a modest amount of debt was retired, that is a huge amount to add.

             If one trillion dollars defaults either directly or dragging down other collateralized investments held at a distance - we have a major deflationary bubble busting with heavy fallout. It can't be otherwise.

             At a minimum it means builders, contractors, and
            suppliers to the industry, sales of pickup trucks,
            wood, roofing tile, copper, plastic tube, glass, concrete, rugmakers fixtures, realtors, retailing and associated labor with that is going to contract in a big way over the next couple of years. Less disposable income means tourism, boating, vacations etc.,will be hit also.

              How long will this shakeout persist? I don't believe it will be 3-6months. Maybe 3 years? It is uncharted territory. A year and a half from now there will be serious pain in many, many area.

             Jerome's call to assess correctly the genesis of this and the ideology of solving it or "patching it up" is a critically important part of the discussion.

            America has been stolen, your citizenship is a hollow fraud, and you have no power. What will YOU do to reverse these hurts, crimes, outrages?

            by Pete Rock on Fri Aug 17, 2007 at 08:22:16 AM PDT

            [ Parent ]

        •  it "changed back" (5+ / 0-)
          Recommended by:
          eugene, wu ming, cevad, StrayCat, bigchin

          because it was given unlimited free money by Greenspan and Bush. Instead of actually unwinding the previous bubble, we just patched it over with an even bigger one!

          •  That's partially true... (0+ / 0-)

            ...although it had nothing to do with why so many more investors turned to hedge funds and private equity.  But you still have no evidence at all for a permanent change in either the market or in the psychology of those who invest in it.

            The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

            by Jay Elias on Fri Aug 17, 2007 at 07:52:22 AM PDT

            [ Parent ]

            •  A permanent change will always be hard to prove (0+ / 0-)

              Especially as we never know it will be "permanent" until several years down the line.

              But there IS a change. How widespread? Hard to say. How long will it last? Hard to say.

              Here's an example, from today's LA Times - an article on a rush to withdraw deposits from Countrywide's banking division:

              "It started out with this global credit crunch we've been reading about," he said as another Countrywide depositor left the bank's office. "It's now gotten down to affecting people like him and me who are closing our accounts."

              The other depositor shook his head as he climbed into his car.

              "It's all over," he said, and drove away.

              I'm not part of a redneck agenda - Green Day

              by eugene on Fri Aug 17, 2007 at 08:09:02 AM PDT

              [ Parent ]

              •  Anecdotal evidence... (1+ / 0-)
                Recommended by:
                junta0201

                ...is not actual evidence.  You know that, right?

                Meanwhile, the market is up over 120 points at the moment.  So, it isn't "all over" for a lot of people.  Meanwhile, as there is a $100,000 FDIC guarantee on all deposits, this story is about a completely false fear on the part of some depositors.

                The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

                by Jay Elias on Fri Aug 17, 2007 at 08:18:26 AM PDT

                [ Parent ]

                •  False or not (0+ / 0-)

                  It's a sign that psychology IS changing. For everyone or just a few? Hard to say, but, a run on a region-wide bank, involving at least a thousand customers, is not anecdotal evidence. It's actual evidence, though how wide it spreads is of course impossible to say at this time.

                  I'm not part of a redneck agenda - Green Day

                  by eugene on Fri Aug 17, 2007 at 08:24:29 AM PDT

                  [ Parent ]

                  •  People with bank accounts... (0+ / 0-)

                    ...are not market professionals, who is whom Jerome claimed are having a "permanent change" in their psychology.  And even a foolish run by a thousand customers (which is a small fraction of the customer base of a region-wide bank) is not evidence of a permanent or fundamental change in everything.  Are these people going to stop putting their money in banks?  Is that what you are suggesting?  For years?  For the rest of their lives?  

                    What on earth is the point of this debate we're having?  What does it have to do with the diary or my criticism of it?  Particularly when the only criticism I've made is that A) there isn't a sure "market crash" yet, and B) Jerome's opinions are simply his opinions, not his opinions of the possible "market crash"?

                    The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

                    by Jay Elias on Fri Aug 17, 2007 at 08:28:43 AM PDT

                    [ Parent ]

                    •  My error, then (4+ / 0-)
                      Recommended by:
                      wu ming, arkdem, Jay Elias, StrayCat

                      I ought to have included the name of the person in that blockquote:

                      Bill Ashmore drove his Porsche Cayenne to Countrywide's Laguna Niguel office and waited half an hour to cash out $500,000, which he then wired to an account at Bank of America.

                      "It's because of the fear of the bankruptcy," said Ashmore, president of Irvine's Impac Mortgage Holdings, which escaped bankruptcy itself recently by shutting down virtually all its lending and laying off hundreds of employees.

                      "It's got my wife totally freaked out," he said. "I just don't want to deal with it. I don't care about losing 90 days' interest, I don't care if it's FDIC-insured -- I just want it out."

                      He was the one who later said "It's now gotten down to affecting people like him and me who are closing our accounts."

                      Obviously market professionals have diverging opinions. Not all of them will agree. But among some of them, and some in the public, a psychological change IS occurring - just as for some, who are helping the Dow show a gain today, there is not yet a change.

                      The point of this, then, is to show that Jerome's analysis is more than just his opinion, that there are other confirmations of his views out there.

                      I'm not part of a redneck agenda - Green Day

                      by eugene on Fri Aug 17, 2007 at 08:43:52 AM PDT

                      [ Parent ]

                      •  Well... (1+ / 0-)
                        Recommended by:
                        Jerome a Paris

                        ...his opinions and views are based in quality analysis, and there are other confirmations of them, to be sure.  Indeed, I would say that on economic matters, Jerome is often more right than I am.

                        My issue is that I don't think his views are rooted in a week-old market crash.  I believe that he believes them, and there is a lot of truth in them.  I just don't think these views are due to the markets activities over the last week and a half.

                        The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

                        by Jay Elias on Fri Aug 17, 2007 at 08:47:33 AM PDT

                        [ Parent ]

                •  Anecdotal evidence is evidence, it's just not (0+ / 0-)

                  as probitive as the data based stuff.  Actually anecdotal evidence is not proof, which is a different proposition.  By the way, that FDIC guarantee only applies to a limited kind of accounts in a large, but not total number of financial institutons.  401(k)s, for example, are generally not insured.

                  Patriotism may be the last refuge of scoundrels, but religion is assuredly the first.

                  by StrayCat on Fri Aug 17, 2007 at 12:14:44 PM PDT

                  [ Parent ]

        •  Here's my problem (0+ / 0-)

          It seems to me that the subprime lending fiasco was the logical result of a too easy credit fiasco which fueled wild ill advised spending by the general public on which our economy is now totally depending.  

          What is going to happen when the spending spigot is shut off?  Consumer over spending by the affluent folks I hang out with has been on the dime of HELOCs they took out based on overly inflated real estate values.

          It seems to me like a house of cards that can only keep trucking along as long as the American consumer can continue to spend more money than he or she has.  But once the credit cards are maxxed and the HELOCs tapped - where is that cash going to come from.

          If you want something other than the obvious to happen - you've got to do something other than the obvious...Douglas Adams

          by trillian on Fri Aug 17, 2007 at 10:39:07 AM PDT

          [ Parent ]

      •  psychology is more important than fundamentals (0+ / 0-)

        It's over simply because it feels over.  That's what one would expect when prices don't match values, and our debt-ridden economy is driven by little more than speculation, computer programs, and financiers envisioning a bonus.

        The downside to voicing a bearish opinion is that it is un-American to do so, even when you drive around and the obviousness of it all unfolds like a pleasant summer day.

    •  The bursting bubbles are in both financial (2+ / 0-)
      Recommended by:
      StrayCat, Cassiodorus

      and housing markets. They're going to be dragging each other down. If you stay in denial about this, you're going to make some silly investment choices.

      •  I believe... (3+ / 0-)
        Recommended by:
        Jerome a Paris, StrayCat, Cassiodorus

        ...that we're in a bear market and probably the beginnings of a recession.  But I don't think we'll see the bottom fall out of the markets, nor that we're seeing a crash, but predictable market behavior that has been a long time coming.  

        The current government has cut taxes and pissed away two trillion dollars in Iraq, while performing machinations to increase government revenues.  This is how the market is supposed to react.

        The urge to save humanity is almost always a false face for the urge to rule it. ~ H.L. Mencken

        by Jay Elias on Fri Aug 17, 2007 at 08:52:35 AM PDT

        [ Parent ]

        •  OK, but my question is why (2+ / 0-)
          Recommended by:
          lotlizard, bigchin

          is Wall Street wanting to be bailed out? Krugman's column goes into that today. I think they see it going farther down. I guess it's a question of what actually constitutes a crash. Some people call it a correction and some people see a crash.

          Also, I think that we're going to be going into a recession, just from the housing bubble bursting. That's got to have an effect on employment rates. We've already seen housing starts hit 11 year lows.

          •  I Don't Hear Wall Street Calling For Bailout (0+ / 0-)

            Could you point this out to me?

            I hear people discussing regulating mortgages, or not.  Secretary of the Treasury Paulson, formerly of Goldman, doesn't want to regulate.  But that's how we got here.

            The Fed lowering the discount rate was not a bailout of Wall Street.  If anything at all, it's ameliorative toward the borrowers whose rates are about to be reset and who might go bankrupt without it.

            •  Here it s (0+ / 0-)

              I got it from Krugman's column today. See the second paragraph.

              Meanwhile, it’s becoming clear that the mortgage problem is anything but contained. For one thing, it’s not confined to subprime mortgages, which are loans to people who don’t satisfy the standard financial criteria. There are also growing problems in so-called Alt-A mortgages (don’t ask), which are another 20 percent of the mortgage market. Problems are starting to appear in prime loans, too — all of which is what you would expect given the depth of the housing slump.

              Many on Wall Street are clamoring for a bailout — for Fannie Mae or the Federal Reserve or someone to step in and buy mortgage-backed securities from troubled hedge funds. But that would be like having the taxpayers bail out Enron or WorldCom when they went bust — it would be saving bad actors from the consequences of their misdeeds.

        •  Yes, this is how the market is "supposed" to (0+ / 0-)

          react, but I agree with JaP that there are further reactions coming, based on the housing, employment and financial mess.  It's not going to be easily contained, and the pressures by the money boys will limit what can be done. Long, rough ride, IMHO.

          Patriotism may be the last refuge of scoundrels, but religion is assuredly the first.

          by StrayCat on Fri Aug 17, 2007 at 12:18:38 PM PDT

          [ Parent ]

  •  Imagine (2+ / 0-)
    Recommended by:
    TrueBlueMajority, Anna M

    Society is not doing well when the rich get richer, but when communities care for their members, leave no one behind, and do not focus exclusively on how much money one has to rank and judge members. Richer does not mean better. Together is better.

    Where do you get such notions?  Seriously, great list of causes:  Greed being number one.  

    I have to keep reminding myself:  money to the poor is bad; more money for the rich is good.   Wage inflation is bad; asset inflation is good.  Okay, I think I've got it.  Thanks.

  •  Hobby Horse (9+ / 0-)

    My latest hobby horse is about the effect of money in determining the norms of economic and social philosophy.

    The libertarian movement only has traction because it is funded by a small group of the super wealthy who use its intellectual veneer to cover up their self-centered motives.

    None of the think tanks like Cato would exist if it wasn't for this funding. None of the libertarian economics departments would exist if their faculty wasn't hired by grants from these same individuals.

    The purpose of these libertarian institutions is to promote a fringe economic and moral system and make it sound reasonable. They also manage to attract a group of true believers who become their cheering section. This group is so deluded that they don't even realize they are working against their own self interest. They are not super wealthy and they are not being paid for propagandizing so they aren't even getting some recompense for their activity. Amazing what 40 years of unrelenting propaganda can do.

    If you are interested in an example of how this funding works I posted an essay on the activities of just one person, Charles Koch, the other day. Here's the link if you are interested:

    Diary

    If you want to skip my editorializing just read this instead:

    Media Transparency

    I keep harping on this because most people on the left think that this a battle of ideas, but it isn't, the deck is stacked. Those being paid to promote greed are not interested in a philosophical discussion. They are interested in keeping their sponsors happy.

  •  I think the natives are restless (2+ / 0-)
    Recommended by:
    overturned turtle, StrayCat

    Get the pitchforks and scythes!  Rush the castle!  Free the Bastille!

    •  I'd love to see that kind of protest, actually (2+ / 0-)
      Recommended by:
      BigBite, StrayCat

      Thousands of Democrats with pitchforks.  Nice.

      •  From The Tone of This Diary (3+ / 0-)
        Recommended by:
        Jerome a Paris, klarfax, junta0201

        It sounds like people are ready to get some pitchforks and start some bonfires - and chase the monster into the castle tower.  My personal view is people seem pretty confused about what is really going on, even some of the best diarists, in my opinion, are not actually writing about this issue very well here.  It's an extremely complex set of issues.  

        However, the fact that people are about to lose their homes; that the government is not doing anything about that and seems to have no heart; that we are wasting billions upon billions in an unnecessary war (killing and maiming tens or hundreds of thousands) and propping up the price of oil by evading alternatives; all of these things seem to have lit a fuse that has been burning slowly and the fuse seems about to hit the dynamite.  Emotionally speaking.

        Whether people really understand the complexity of modern finance, even the most well read, best motivated and most intellectual here, seems to be questionable.  That people have reason to doubt the sincerity and credibility of those who they feel sold them a bad set of goods is obvious and very real.

        If Democratic leaders are not reading this and willing to deal with this state of affairs and address it, ala FDR, I think the frustration of the common person will only get worse.  I think the country is getting into a really serious set of problems, and those problems could be so frustrating, and so incomprehensible to most citizens as to make finding solutions very very difficult.  Populism is both valuable and dangerous at times like these.  It can be a force for progressive change, but it can be either a force for progressive constructive change or destructive change (progressive or unprogressive).  I hope it won't be a force for destructive change, but people don't really know what the difference is, given the destruction the current order is causing to the good lives of regular people.  People clearly just want it to stop, so we can go back to a simpler time.

        Simpler times are not coming back, even if we could turn back the clock (laws and all) and make everyone act simpler than they do now - there is just too much that is different already in our lives.  But, people want simple answers.  And like the Republicans of the 1980's, who wanted simple black and white answers, I think Democrats want simple black and white answers too.  Maybe we can find a way to get that satisfaction, or maybe the demogoguery will ultumately just bring frustration and more of the same.

  •  The Fed have already started the bailout (2+ / 0-)
    Recommended by:
    ShaunMcDonnell, banger

    with the 0.5 point drop, pushing the market up 300+ points. Howeve, Jerome, I don't see how you control greed. You can have policies that tax the rich to give some succor to the poor. But blaming greed on the left is like the war on terror on the right: they both take aim at abstract concepts.

    Well? Shall we go? Yes, let's go.

    by whenwego on Fri Aug 17, 2007 at 07:00:25 AM PDT

    •  I think you make a good point (1+ / 0-)
      Recommended by:
      eightlivesleft

      Greed is not really the problem we face. What we face is the inability of the American people as a cultural entity and as individuals to be rational and define terms. We live in an atmosphere that is all spin and vague terms--we have people being clearly taken of advantage of cheering the people who are doing it to them. That can only be done when you live in a cultural situation where television, public relations, and propaganda are dominant.

    •  One way to control greed (6+ / 0-)

      is to bring back the progressive tax structure on income, and revert back to the much higher rates of taxation on Capital Gains.  I would even advocate a progressive taxation on those Capital Gains, where gains on investments of less than one year are taxed at 50%, and dropping by 5% for every year afterwards with a floor of 10% at nine years or more.

      -8.88, -7.77 THERE IS DEFINITELY NO THREAT WORTH SUSPENSION OF CIVIL LIBERTIES.

      by wordene on Fri Aug 17, 2007 at 07:40:40 AM PDT

      [ Parent ]

      •  Rich people would simply (0+ / 0-)

        invest outside the US and not pay any US capital gains taxes.

        The US could collect 91% in 1945 because Europe was either bombed out or suffering rationing as in Britain. My neighbor was born in post-war Britain and the limited nutrition available is responsible for her Twiggy body.

        •  Investment is still investment. (0+ / 0-)

          I'm not saying that there needs to be taxation on investment, just on the gains made when those investments are sold.  The graduated decline in the rate is to support long-term investment.  If this plan needs to be tweaked in order to penalize foreign tax dodges, then so be it.

          -8.88, -7.77 THERE IS DEFINITELY NO THREAT WORTH SUSPENSION OF CIVIL LIBERTIES.

          by wordene on Fri Aug 17, 2007 at 10:56:42 AM PDT

          [ Parent ]

  •  Insiders have the advantage (11+ / 0-)

    Interesting to find out who jumped into the market yesterday when it was down over 300 points and why?

    My conclusion is selective buyers knew ahead of time what the Fed would do today.
    We go after NBA  an referee who tipped bookies with insider information with outrage and  an extensive investigation? Where is the scrutiny on Wall Street?

    It cats could talk, they wouldn't.

    by crystal eyes on Fri Aug 17, 2007 at 07:01:13 AM PDT

  •  Another excellent diary, Jerome (5+ / 0-)

    I remember being tempted to buy a house in 2004 by one of these mortgage loan deals.  I couldn't get over this nagging feeling that I was being scammed.  They said that my salary would go up to cover the rise in the mortgage payments in the following years.  Hah! What a joke. My salary has barely gone up.  I'm so glad now I didn't buy the house.

    I have mixed feelings about the people who did buy houses - they really should have known better. All you need is some basic arithmetic skills to figure out what your costs would be.  Bail them out?  I don't know.  On the other hand, I have zero compassion for those loan bankers and real estate people.  They shouldn't be bailed out - let them work at minimum wage at Wal Mart for awhile.  It would do them some good.

  •  I have to laugh at Cudlow and his Corporatist (7+ / 0-)

    cronies (on CNBC) crying for the Fed to cut rates immediately to bail them out for playing the real estate Ponzi scheme. Sadly, I have no doubt that Bush will force a govt bailout and the taxpayer will pick up the tab. God forbid that the rich should be a little less rich for their own folly.

    Shameless pimp of my Website, please ignore.

    by CitizenOfEarth on Fri Aug 17, 2007 at 07:03:02 AM PDT

  •  I Cannot Recommend This Diary Enough! (5+ / 0-)

    Spot on!

  •  Shouldn't all this "liquidity" depreciate (2+ / 0-)
    Recommended by:
    AmericanHope, Aquarius40

    the dollar ultimately?... and significantly?

    "You can't be neutral on a moving train." - Howard Zinn

    by bigchin on Fri Aug 17, 2007 at 07:09:39 AM PDT

    •  Eventually (2+ / 0-)
      Recommended by:
      AmericanHope, bigchin

      Some claim that a flight to cash will appreciate the dollar in the short term, but the long-term fundamentals will ensure a depreciation, likely in a few years' time although it could come sooner if conditions worsen.

      I'm not part of a redneck agenda - Green Day

      by eugene on Fri Aug 17, 2007 at 07:45:25 AM PDT

      [ Parent ]

    •  Yes, but the US can always print more money. (1+ / 0-)
      Recommended by:
      bigchin

      It would work for a time, though the inflation would reach positively Yugoslav levels (and look what happened there, heh), but it would work for a time, since every country with dolar reserves would be hurt significantly more than the United States.

      There are three problems to this strategy, though. Firstly, you still suffer. Secondly, everyone whose economy you hurt will hate your guts and switch to euros or the yen, ensuring you cannot pull it iff the second time. Finally, you haven't solved a single goddamn thing by doing it.

      I'd still expect the Bush cabal to try it, though.

      Omne malum nascens facile opprimitur, inveteratum fit plerumque robustius. - Cicero

      by Dauphin on Fri Aug 17, 2007 at 09:09:57 AM PDT

      [ Parent ]

  •  Thank you for this diary. (3+ / 0-)

    It's the truth, and a big truth at that.

    We hang the petty thieves and appoint the great ones to public office. Aesop (620 - 560 BC) -8.13, -7.74

    by AWhitneyBrown on Fri Aug 17, 2007 at 07:14:14 AM PDT

  •  Corollary to your main thesis (4+ / 0-)

    The policies of the Right are from Reagan and Thatcher.  But Clinton was/is a corporatist, too, and a centrist who ceded much to the Right.  Yet there's still loud phrase mongering from the Right insisting that both Bill and Hillary represent not just the Left, but the extreme Left.  

    Please!  This is very far from the truth.  Very far indeed.

    "Every single Democratic candidate is immeasurably better than what we have in the White House now." - Sen. Joe Biden paraphrased

    by Land of Enchantment on Fri Aug 17, 2007 at 07:27:01 AM PDT

  •  Trickle down economics (7+ / 0-)

    The only trickle down effect experienced by most middle class individuals these past years has been that feeling of having been pissed on.

  •  excellent, thanks! (1+ / 0-)
    Recommended by:
    Jerome a Paris

    "I've got swingin' doors, a jukebox and a barstool, My new home has a flashin' neon sign..."

    by memofromturner on Fri Aug 17, 2007 at 07:28:25 AM PDT

  •  Blame supply-side economic theories. (6+ / 0-)

    This Chicago-school/Milton Friedman series of policies championed by Reagan, et al, is the source of the problems extant.  Their belief that Keynesian policies were wrong is the chief reason for the economic problems we are facing now.  This is yet another reason to fault the neo-conservative "movement" for the dire situation in which we now find ourselves.

    -8.88, -7.77 THERE IS DEFINITELY NO THREAT WORTH SUSPENSION OF CIVIL LIBERTIES.

    by wordene on Fri Aug 17, 2007 at 07:30:52 AM PDT

  •  yesterday's market rebound (3+ / 0-)
    Recommended by:
    ctsteve, arkdem, StrayCat

    may well have been based on some insider information supplied to certain favored Wall Street insiders--not saying it happened but I would am suspicious since that rally was based on little new information it "just happened".

  •  Truer words could not be spoken! (4+ / 0-)

    Wealth is not defined by how the richest fare, and should not be counted via how much they accumulate, but only by how the poorest amongst us are doing.

    (emphasis mine)
    Well said, Jerome!

    -8.88, -7.77 THERE IS DEFINITELY NO THREAT WORTH SUSPENSION OF CIVIL LIBERTIES.

    by wordene on Fri Aug 17, 2007 at 07:33:39 AM PDT

  •  Oh, Jerome, you Christian, you! (5+ / 0-)

    Gee, wouldn't this be a way to conduct ourselves in business, personal relationships, and in life:

    Wealth is not defined by how the richest fare, and should not be counted via how much they accumulate, but only by how the poorest amongst us are doing.

    Crazy communitarian, you!

    Nice diary.

    BTW, where's that $100/bbl oil?  I want to guess right and win the bottle of champagne!

  •  five stars Jerome (8+ / 0-)

    The big thing is to blame it on the failed, and utterly dangerous, ideology of the efficient-markets/society-doesn't-exist/government-is-the-problem crowd.

    the society doesn't exist mantra is what allows us to do business with China, and to ACCEPT their economic model of governance as something we should emulate. Jon Stewart caught Erin Burnett of CNBC making her China is good speech, on last nights Daily Show..

    " If you really want more regulation in China, you better be prepared for higher prices at Wal Mart.

    It was hardly funny.

    the notion that wage inflation is bad but not asset price inflation (money going to the poor is bad, money going to the rich is good);

    This point should be carved in stone, just about every inflationary factor in todays economy, except wage inflation has been ignored by the Fed. Higher fuel costs don't matter, higher food costs, likewise. We know that we are in a low inflationary cycle, shouldn't that apply to the diluted effect that rising wages have on inflation as well?

    the shockingly lax monetary policy of the past decade (when markets go up, fuelled by what is essentially easy public money,  it's capitalism at work; when markets go down, because of poor investments by the rich, it's a systemic crisis and the rich need to be bailed out or else);

    this is all you hear lately, the Cramer rant, people on Wall Street are losing their jobs. The Fed better cut rates to bail out the mortgage holders. what bullshit. (This morning the Fed threw the Wall Street boys a bone, and last night the PPT bought the futures into the close, ham handedness, and cronyism.)

    The financial crisis, if properly described, provides (together with the Iraq mess, the recent bridge collapse and other tales of Republican corruption) an unbeatable opportunity to make these points loud and clear - and to carry a positive message, not just the "we are not Bush" one.

    Tales of Republican neglect, let's start with Katrina again.

    best diary I've read in months

    "Everything is chrome in the future..." Sponge Bob Square Pants

    by agent double o soul on Fri Aug 17, 2007 at 07:39:25 AM PDT

  •  My brother (6+ / 0-)

    teaches freshman economics, and has his students read two works:  Adam Smith's Wealth of Nations, and Niehbuhr's Moral Man and Immoral Society.  The first, of course, argues that venal individuals, acting in their own self-interest, coalesce into an economic system that makes a rational, and therefore just, allocation of resources.  The latter turns the argument on its head, arguing that as individuals we have a desire to be moral, but collectively we can create unjust societies.

  •  Diary of the Month!!!! (6+ / 0-)

    Bravo!!!!!!!!!!!!!!!!!!

  •  This is a good diary (2+ / 0-)
    Recommended by:
    highacidity, Joelarama

    but I don't see the events of the last week as a crash but a much needed market correction for an overvalued market.

    (no bailouts though, that's just dumb.)

    scott kleeb didn't give me wood :( blogroll

    by terrypinder on Fri Aug 17, 2007 at 07:42:37 AM PDT

  •  Economic security (9+ / 0-)

    The New Deal's basic premise was that Americans needed economic security. They needed a stable economy that provided for their needs, instead of one that was oriented to service the greed of financial markets.

    Financial markets cannot be trusted to provide that security on their own. They will ALWAYS collapse like this - it happened every 20 years or so, from 1817 to 1933. Such markets emphasize greed and short-term profit, while everyone else holds the risk bag.

    FDR's solution was to provide that basic level of stability by reining in these markets and limiting profit. The markets continued to grow and provide returns for investors. Businesses continued to turn a profit and provide employment. For 40 years the system worked.

    But as Republicans and Democrats embraced neoliberalism, the system failed us. Since 1980 we have not had economic security - instead financial deregulation has brought us ever-worsening recessions, and the periods of economic growth we have had were short, based on asset bubbles, and benefited fewer people.

    Ultimately this event proves that we need to abandon neoliberalism, abandon deregulation and free markets, and return to economic security. We need to NOT listen to those who got us into this mess, the free marketers who created this crisis and now claim to be the only ones able to solve it.

    I'm not part of a redneck agenda - Green Day

    by eugene on Fri Aug 17, 2007 at 07:50:23 AM PDT

    •  Also, those who got us into this mess (2+ / 0-)
      Recommended by:
      Jerome a Paris, StrayCat

      made a LOT of money by doing so.

      •  The question is: will they make money.... (2+ / 0-)
        Recommended by:
        Jerome a Paris, highacidity

        getting all of "us" out of it too? Watch out if we start hearing about a morgage bailout Bill proposed by Congress or Bushco.

        •  Wall Street already wants a bailout (4+ / 0-)
          Recommended by:
          arkdem, antirove, fhcec, StrayCat

          Apparently Wall Street is really wanting a bail out.
          Here's part of Krugman's column today that adresses this:

          Many on Wall Street are clamoring for a bailout — for Fannie Mae or the Federal Reserve or someone to step in and buy mortgage-backed securities from troubled hedge funds. But that would be like having the taxpayers bail out Enron or WorldCom when they went bust — it would be saving bad actors from the consequences of their misdeeds.

          For it is becoming increasingly clear that the real-estate bubble of recent years, like the stock bubble of the late 1990s, both caused and was fed by widespread malfeasance. Rating agencies like Moody’s Investors Service, which get paid a lot of money for rating mortgage-backed securities, seem to have played a similar role to that played by complaisant accountants in the corporate scandals of a few years ago. In the ’90s, accountants certified dubious earning statements; in this decade, rating agencies declared dubious mortgage-backed securities to be highest-quality, AAA assets.

  •  So True (1+ / 0-)
    Recommended by:
    Jerome a Paris

    Deregulation and privatization have come home to roost; greed and exploitation rule America.  The Middle Class will pay the bills till they are broke.  

  •  Thanks Jerome for rallying us (6+ / 0-)

    to reassert progressive economic values over runaway corrupt corporatism. Adam Smith would roll over in his grave, I think, if he saw what was being done in the name of "free markets" and "capitalism".

    The brutality from and instability to our economic life of permitting runaway greed to trump regulations such as the U.S. Securities and Exchange Acts of 1933 and 1934 ties in with what Naomi Klein spoke about at the American Sociological Association and featured on Democracy Now:

    Amy Goodman's Democracy Now August 15th, featured Naoimi Klein:

    'Is Another World Possible?' That was the theme of this year's annual meeting of the American Sociological Association that was held in New York City this past weekend. "We did not lose the battles of ideas. We were not outsmarted and we were not out-argued," journalist and author Naomi Klein said. "We lost because we were crushed. Sometimes we were crushed by army tanks, and sometimes we were crushed by think tanks. And by think tanks I mean the people who are paid to think by the makers of tanks." Klein is author of the forthcoming book, "The Shock Doctrine: The Rise of Disaster Capitalism." [includes rush transcript]

    Naomi Klein gave a fine talk which can be heard here:
    http://www.democracynow.org/...

    The quest to impose a single world market has casualties now in the millions, from Chile then to Iraq today. These blueprints for another world were crushed and disappeared because they are popular and because, when tried, they work. They're popular because they have the power to give millions of people lives with dignity, with the basics guaranteed. They are dangerous because they put real limits on the rich, who respond accordingly. Understanding this history, understanding that we never lost the battle of ideas, that we only lost a series of dirty wars, is key to building the confidence that we lack, to igniting the passionate intensity that we need.

    Wes Clark, an enlightened choice for 2008

    by eve on Fri Aug 17, 2007 at 07:59:29 AM PDT

  •  Quiz: What politician already advocates this? (4+ / 0-)

    Here are some hints matched with the diarist's points of blame.

    • the ideology of greed (this is the core of the conservative talking point: the idea that being selfish is somehow good for others as it creates more wealth, and thus that unregulated markets are good for society);

    The mystery politician says that the entire world must embrace regulation aimed at conservation, education and elimination of poverty to preserve society.

    • the idea that only financial valuations give worth to anything (again, the cult of the dollar, and the underlying notion that trying to get rich is a good thing for society);

    The mystery politician advocates a set of values that encourage lifestyles at once self-fulling and considerate of society and our environment.

    • the notion that wage inflation is bad but not asset price inflation (money going to the poor is bad, money going to the rich is good);

    The mystery politician points out the waste of creativity and productivity the poor represent. This politician equates increased education with a rise in personal contribution to society, overall investment, and future trade.

    • the shockingly lax monetary policy of the past decade (when markets go up, fuelled by what is essentially easy public money,  it's capitalism at work; when markets go down, because of poor investments by the rich, it's a systemic crisis and the rich need to be bailed out or else);

    The mystery politician advocates distributed access to energy through research in clean alternative energy. This diffusion of energy access necessarily diversifies financial markets, since it widely disperses wealth-making potential.

    • the cheerleading by politicians of finance as the new engine of growth and wealth creation (industry, balanced budgets, communities are so yesterday and downright communist and evil);

    The mystery politician offers a vision of distributed control of wealth creation to smaller and smaller units of society through a desire to solve the dangers of climate change by wider, wiser distribution of the sources of energy/wealth.

    • the unraveling of existing regulations (like Glass-Steagall) in the name of market efficiency, and the corresponding death of those old engineering concepts, resiliency, safety margins, redundancies, and of old old ethical ideas: reputation, community, duty to future generations.

    The mystery politician, overall, advocates seriously addressing climate change in ways that, worldwide, will create a new, more human-friendly, finer-grained, self-motivated economic approach.

    I confess to having taken some liberties with the assertions of the mystery politician. These are more extensions of the basic approach to their ultimate effects, than changes to the platform of this politician.

    What? You don't know who this politician is? You can find the answer here.

    We are all criminals until we restore Habeas Corpus, empty secret gulags, end torture and illegal wiretaps. (-2.25, -2.56)

    by EclecticFloridian on Fri Aug 17, 2007 at 08:01:12 AM PDT

    •  the whole of the political class (2+ / 0-)
      Recommended by:
      esquimaux, junta0201

      is in favor of of neoliberalism -- that's the essence of Kees van der Pijl's article on the defeat of the left, and the reason for this political lock-step is clear: finance is in charge of politics and neoliberalism has become a prerequisite for management of the capitalist state.

      thus Jerome's statement:

      The current financial crisis literally begs for the left to reclaim the political initiative and say out loud some hard truths about the devastating economic policies of the past 25 years inflicted upon the world by Reagan and Thatcher with the support of the neo-libs and the rightwing noise machine.

      left me scratching my head.  The left can claim all the political initiatives it wants, but nobody among the political class is going to listen.

      "How long? Not long." -- Martin Luther King, Jr.

      by Cassiodorus on Fri Aug 17, 2007 at 08:59:03 AM PDT

      [ Parent ]

    •  Gore gets it (4+ / 0-)

      I asked him about his position on wealth inequality, and he gave an answer that proved to me that he truly understood the problem and knew how to change things for the better.  I can't remember the details of the answer, but he nailed it.

      •  You gave the answer away! :-) (3+ / 0-)
        Recommended by:
        antirove, klarfax, StrayCat

        Since watching the TV special, I realized he really is in politics. I'm not surprised to hear you say this about his understanding.

        It finally dawned on me that the only way his quest can succeed is to change access to the building blocks of wealth. If you change how energy is created, distributed and used, you necessarily change education, food distribution and the whole economic picture.

        I suspect that's why we won't see him in politics as usual. He's tackling the problem from an angle that is perfectly understandable by everyone, then letting that understanding change the way governments are run.

        He's got a pretty good start with 1 billion people on his side. Politicians better start getting on the bandwagon or they'll find themselves run over in the dust.

        We are all criminals until we restore Habeas Corpus, empty secret gulags, end torture and illegal wiretaps. (-2.25, -2.56)

        by EclecticFloridian on Fri Aug 17, 2007 at 10:00:56 AM PDT

        [ Parent ]

  •  Corporate Feudalism (10+ / 0-)

    Because make no mistake about it, the sole cause of this bubble and its consequences is the feudalist economic ideology of the right.

    Thanks for writing it out loud and clearly.  The fact is that the Reaganite/Thatcherite/neolib economics is all about owning people, wage slaves to debt serfs while a tenth of one percent get to enjoy the fruits of all that labor, none of it their own.

    We need to keep making this point:  the dream of the wealthy and powerful is a return to feudalism.  They want to own people outright.

    Solar is civil defense. Video of my small scale solar experiments at http://solarray.blogspot.com/2006/03/solar-video.html

    by gmoke on Fri Aug 17, 2007 at 08:11:32 AM PDT

  •  the discount rate is symbolic? (0+ / 0-)

    why did cnn say the discount rate is mostly symbolic

    those were good times, as far as we knew --colbert

    by AmericanHope on Fri Aug 17, 2007 at 08:13:32 AM PDT

    •  because (4+ / 0-)

      a bank taking advantage of it is pretty much admitting they're in trouble.

    •  Symbolism (5+ / 0-)

      CNBC commentators seem to be in an explanatory mode that this whole market meltdown is "psychological," "irrational," "fear of fear itself"--rather than portending a widespread, serious problem. Thus it makes sense that they have a psychological explanation for the fed remedy.

      It's a weirdly reductionist view they are promulgating--first, that it only affects the "subprime" sector (you know those people) and not "the rest of us." Then the contagion spreads to AAA bonds and they want to nervously draw the line there, complaining about the "irrational" investor who simply can't see that the GlobalEconomyIsSound(tm).

      It's weird, because it's so easy to see why the contagion will spread, as significant amounts of capital are removed from the consumer economy (through disappearing HELOCs) and furthermore, as house prices fall, the equity that those loans were based on evaporates, leaving only the very real debt, at 8% and up. That has to put a huge crimp on consumer spending.

    •  Generally, the discount rate isn't the important. (1+ / 0-)
      Recommended by:
      Jerome a Paris

      FED rate since it is the rate banks pay the FED on overnight loans. Banks don't generally borrow directly from the FED (since it invites FED scrutiny). They borrow from each other using the FED funds rate which the FED also controls. That is the "real" rate which I predict the FED will lower by at least a 1/4% in the next month.

  •  Excellent commentary (3+ / 0-)

    But there is one thing that must be realized: people don't act in the interests of their community until forced to by circumstances.

    FDR would never have been elected in 1920 or 1924 or 1928.  During a time period where people were out for themselves, where people were not concerned with those around them, a candidate who said that we need to act as a community could not get a hearing.

    Likewise, it is amazing that Gore did as well as he did in 2000 (actually winning the election, of course).  The economy, after all, despite a hiccup, was in far better shape than it is today. People were still thinking that they could get rich off of stock options obtained from companies not producing revenue or profits.  In that environment, too many people were concerned with lower taxes and less regulation, instead of wise tax and investment policies.

    The question today, therefore, is this: are their enough people suffering economically to overwhelm those who continue to think only of themselves? Are their enough people who realize that greed is actually counterproductive?

    I think the answer is "we're getting there, but we may not be there yet".

    But one thing is certain: any Democratic candidate that starts saying "it's the economy, stupid" will begin to attract a following.

  •  Karl Marx (3+ / 0-)
    Recommended by:
    AmericanHope, nicta, Cassiodorus

    You're diary pretty much agrees with Marx, who has been unfairly demonized.  You are right, he was mostly right.  Labor is not the only creator of wealth, but it is the most important one.  Communism is not what Marx had in mind--the business class has made sure to conflate the two for fear value.

    •  Only in Kos's democracy (0+ / 0-)

      is Marx still "mostly right".  "Marx is mostly right" is, forgive me, not the tag line for modern progressivism.

      •  Actually... (3+ / 0-)
        Recommended by:
        melvynny, wu ming, bigchin

        Marx, as a matter of fact, is still mostly right, economically, whether you agree with his political views or not, which is the reason he is still cherished - and studied! - at universities worldwide, even in the United States, both in economics and sociology.

        Marx' deductions are perfectly accurate insofar as they pertain to the state of capitalism at the time, and his economic system is funstional, insofar as the prerequisites are met (such as a closed economy and absence of technical progress for certain reproductive tables, for example). At identifying certain economic tendencies at laws, he is without peer.

        The problem, of course, is ideology. Marx' law of constant (and ever-increasing) cycles of market growth and recession were perfectly accurate for liberal capitalism of the 19th century. That's why the New Deal was introduced - to stop that cycle and ensure a living standard for everyone.

        Once circumstances changed and new venues became possible, Marxism after Marx should have adapted. But it didn't, instead sticking ideologically to form while ignoring the reality and even Marx' own prerequisites for certain economic models. That's the main reason it failed.

        Omne malum nascens facile opprimitur, inveteratum fit plerumque robustius. - Cicero

        by Dauphin on Fri Aug 17, 2007 at 09:40:06 AM PDT

        [ Parent ]

  •  immigration deform caused this (0+ / 0-)

    lookie here fellas: the neo-nazis gain enough power to run off many of the latin american immigrants, inner cities collapse as white folks move further out into nowheresville, housing market collapses. see jeremiah 7:6 thru verse 7

  •  This ought to be the text of every sermon (2+ / 0-)
    Recommended by:
    Jerome a Paris, junta0201

    preached this coming Sunday.

  •  When the poor and middle classes drown in debt (2+ / 0-)
    Recommended by:
    Jerome a Paris, ormondotvos

    who's gonna row the damn boat back to shore?

    "We are called to be architects of the future, not its victims." R. Buckminster Fuller

    by scoff0165 on Fri Aug 17, 2007 at 08:24:18 AM PDT

    •  well (2+ / 0-)
      Recommended by:
      Jerome a Paris, scoff0165

      the free market of course. (so said repugs)

      Use Tor and PGP on the net. (google it)

      by fugue on Fri Aug 17, 2007 at 08:29:58 AM PDT

      [ Parent ]

    •  Debt is fake. (2+ / 0-)
      Recommended by:
      StrayCat, junta0201

      Got your attention, did it?

      Ever hear of bankruptcy? Bailout? Cancellation?

      Even poor people have bankruptcy, or they did, until it was taken away and turned into debtor's prison.

      Oh, you object that there is no debtor's prison?

      If you defy a court order to pay your medical bills, you can be jailed for contempt of court, a little detail pointed out to me by a bankruptcy lawyer (great field to get into, except now the lawyer is responsible for the accuracy of the statements on the bankruptcy petition.)

      I wonder when the first bankrupt farmer is going to immolate himself on the White House lawn?

      That's what it will take.

      Accountability: the ultimate Progressive Value...

      by ormondotvos on Fri Aug 17, 2007 at 11:18:00 AM PDT

      [ Parent ]

  •  the feds rescue the republicans.. (2+ / 0-)
    Recommended by:
    Jerome a Paris, ctsteve

    that should be the headline....once everyone realizes that every thing is politcal things will change...don't call me cynical..it's just the reality...

    •  It is a bailout of the top one percenters (3+ / 0-)
      Recommended by:
      Jerome a Paris, Aquarius40, esquimaux

      by the working poor.

      Heaven forbid when universal health insurance is brought up, there is no money to be found. Also these same Repubs are then spewing how govt shouldn't be in the business of bailing people out. How they have earned everything with no help from the govt....yada, yada.

      Let the building of McMansions for the no-income verifiable commense.

      •  Making loans available and lowering the... (4+ / 0-)

        discount rate isn't a bailout -- yet. It is just that: providing cash (liquidity) to the financial system so that it doesn't spread to the general economy. No taxpayer money is involved. The FED buys back more securities than it planned to in order to inject cash into the system.

        The bailout may come if Wall Street, hedge funds and the mortgage cos. come to Congress asking for tax monies to save their sorry asses. Of course, it will be rationalized as saving your average joe or suzy but it will be a bailout of the wealthy.

      •  This was never more true than in (3+ / 0-)
        Recommended by:
        Jerome a Paris, ctsteve, StrayCat

        the debate over the bankruptcy bill, which left credit card holders basically unable to ever get out of debt. Somehow now it's OK for all these elites to be bailed out of their stupid, greed-based decisions, but it's "individual responsibility" for those forced into bankruptcy - and think it's like 40-50% of them are ruined by medical bills.

        I think something's going to have to give on this - might take us a while longer, but I see this as a harbinger of change if the next President will make it an issue. Hmmmm, I may just have convinced myself to vote for Edwards!

  •  Trickle up economics...the hallmark of (5+ / 0-)

    Reagan-Bush-Bush economics has been to use the power of government to create wealth for capital. Even Clinton bought into that with unregulated trade agreements that guaranteed more profits as capital could move offshore to flood our markets with cheap products produced by neo-slave labor.

    Hopefully, people are waking up to the fraud of neo-liberal economics which promises growing wealth for the middle class but is basically an ideology and mechanism for transferring wealth to the powerful.

    Thanks for the diary...

  •  With all due respect (4+ / 0-)

    this is not a "market crash", it's barely a correction.  If a person weighed 200 lbs in 2000, and weighed 300 in 2007 and suddenly lost 50 lbs, he wouldn't be "skinny."  

    "I can't believe men like you were once running a country." from "The Lives of Others"

    by Shappy on Fri Aug 17, 2007 at 08:35:04 AM PDT

    •  it aint (6+ / 0-)

      it aint over, no matter how much cash a few institutions throw at it to try to keep it afloat, this market is headed DOWN.... imho.

      Generals gathered in their masses Just like witches at black masses.. Evil minds that plot destruction Sorcerers of deaths construction..........

      by pissedpatriot on Fri Aug 17, 2007 at 08:39:51 AM PDT

      [ Parent ]

    •  So right. 20% market correct is 12 months ago (0+ / 0-)

      Gee...I'm as rich as I was a year ago with a huge market correction for a relatively small financial problem that will quickly correct.

      And we are likely only going to see a 10% actual correction putting us "back" 6 months but giving us a much more stable and accurately valued market.

      •  relax (0+ / 0-)

        It ain't over yet. You'd have plenty of opportunity to feel you are rich now in the future.

        1. Chertof gut feeling
        1. NOLA style hurricane this year
        1. Iraq/persian gulf oil.

        each one of this has the potential to shave 1-2%.

        Use Tor and PGP on the net. (google it)

        by fugue on Fri Aug 17, 2007 at 09:04:36 AM PDT

        [ Parent ]

        •  You miss the point of current market adjustment. (2+ / 0-)
          Recommended by:
          fhcec, junta0201

          The market is waking up to the fact that it was lending way too much money on overvalued extremely risky investments at way too low a cost.

          I have an 20% overvalued property with a 110% loan by a buyer who can't pay it back if it rains tomorrow. That investment is "worth" -20% at a minimum. At best you'd end up with a property worth 80% of what you lent.

          That would be OK if you were willing to risk it and charge 30% and could afford to end up taking a 20% loss if it fell apart.

          Of course at the actual risk of 30%, no one, not the original buyer or seller or secondary lender would have gone through with the deal. It would be CRAZY.

          So we need to rewrite the banking regs so folks can do the above deals but the original lenders have to have 100% of assets to cover it because it's soooo risky.

          Then we need to rewrite the awful bankruptcy law Biden pushed through (main reason he should not be president) so that buyers under $400K can declare bankruptcy and get our from under predatory loans. Again, put the onus on lenders who push high risk credit, cards and loans.

          •  sarcasm (0+ / 0-)

            okay that wasn't a good sarcasm obviously. hah...

            waht I am trying to say. This whole shenanigans isn't over yet. All this so called "wealth" created under Bush, it's really his Iraq war budget driving up prices.

            There simply too much dollar floating around in the world. All this industrial commodity price and various "instruments", loans, papers, etc are driven up by easy money.

            There is almost nothing underneath it. So if somebody wakes up and start dumping those meaningless paper money (read china)... the whole Bush economy will implode.

            Use Tor and PGP on the net. (google it)

            by fugue on Fri Aug 17, 2007 at 09:22:07 AM PDT

            [ Parent ]

            •  Nothing to do with Bush really. (0+ / 0-)

              Bush regulatory changes didn't create this mess.

              It's a meat and potatoes real estate bubble, as old as the hills.

              One could argue Biden's bankruptcy bill helped fuel it a bit making creditors think that if they pushed credit on people who could not afford it, they had a means of forcing their victims to repay them. But even that is tenuous.

              "So if somebody wakes up and start dumping those meaningless paper money"

              Get a grip. As big and bad as it is, US national debt is $30K per person, $120K for a family of four.

          •  Biden pushed that bill because the big (3+ / 0-)
            Recommended by:
            Downriver Gal, StrayCat, junta0201

            credit card companies virtually own Delaware.  He gave that to them to help his own state, but screwed the rest of the nation.  Another way that all politics is local.

            And it feels like I'm livin'in the wasteland of the free ~ Iris DeMent, 1996

            by MrJersey on Fri Aug 17, 2007 at 10:02:36 AM PDT

            [ Parent ]

            •  Biden did it for money. Bad bill for US and DE. (4+ / 0-)

              It doesn't help Delaware in any way.  

              Corporations use Delaware due to Delaware STATE laws, not Federal laws.

              Biden did it for financial backing from the credit card issuers. Really bad bill.

              Biden is secure enough in DE that he doesn't need the money to stay in office so his pushing such a bad bill  through Congress indicates he lacks political courage for hard decision, Iraq and bankruptcy bill mean he's weak with poor judgement.

          •  In theory (0+ / 0-)

            the Biden Bankruptcy Bill is an ex post facto law barred by the US Constitution and a lawyer may be able to get you out under the old law.

            Beware of signing a new credit agreement without consulting a lawyer if you are in a bind.

  •  if (3+ / 0-)
    Recommended by:
    Jerome a Paris, klarfax, junta0201

    well said,

    if greed is good, then the world would still be ruled by the feudal system. Since Kings, barons,nobles, and serfs would have prospered for millenia.  Of ocurse e know the truth, and the truth is america has just become another ( well disguised) feudal system.

    Generals gathered in their masses Just like witches at black masses.. Evil minds that plot destruction Sorcerers of deaths construction..........

    by pissedpatriot on Fri Aug 17, 2007 at 08:37:54 AM PDT

  •  The difference between this and the dotcom... (3+ / 0-)
    Recommended by:
    Jerome a Paris, NYFM, liker26

    crash is that these mortgages DO have an asset behind them. Admittedly, it may be a declining value asset but it will provide a floor to the crisis. Eventually, the mortgage is NOT entirely lost since the underlying asset can be sold. The problem is more about liquidity crisis than a crash.

    Now, it the liquidity crisis turns into a generalized downturn mainly because people turn fearful and stop spending (consumption drops) that could show up in layoffs and declining incomes.

  •  Great Naomi Klein interview traces some of (3+ / 0-)
    Recommended by:
    StrayCat, bigchin, junta0201

    a the quest to impose a single world market. See the Democracy Now interview here..

    She says very interesting things about what happened in 1989 and even includes an example of US support of Pinochet in Chile as an example of how the US wanted to get rid of any examples of alternative ways of doing things.

    If I can get my own writing done this afternoon I am thinking about diarying it. If someone else is inspired to do so before I do, feel free.

  •  Bursting real estate bubble is not "crisis" (3+ / 0-)
    Recommended by:
    AmericanHope, NYFM, liker26

    It's a normal and necessary market adjustment to reality.

    Treating the demise of unsustainable financial and real estate schemes as a "crisis" that needs to be propped up totally misses what the problem is and how to fix it.

    The only political adjustment would be increased banking regulations to make sure mortgage companies had 100% cash assets for any non-conventional (other than 20% down, 30 year fixed rate) mortgage. That would likely end it.

    Additionally we should revisit the bankruptcy law that Biden pushed and correct it so that we restore ability of those suckered in into non-conventional mortgages under $400K can get out from under.

    •  Paul Krugman disagrees with you (4+ / 0-)

      An excerpt from his column today.

      But the time for denial is past.

      According to data released yesterday, both housing starts and applications for building permits have fallen to their lowest levels in a decade, showing that home construction is still in free fall. And if historical relationships are any guide, home prices are still way too high. The housing slump will probably be with us for years, not months.

      Meanwhile, it’s becoming clear that the mortgage problem is anything but contained. For one thing, it’s not confined to subprime mortgages, which are loans to people who don’t satisfy the standard financial criteria. There are also growing problems in so-called Alt-A mortgages (don’t ask), which are another 20 percent of the mortgage market. Problems are starting to appear in prime loans, too — all of which is what you would expect given the depth of the housing slump.

      •  My roof will need replacing in about (0+ / 0-)

        five years.

        Work will be available.

        My roof is not the only one that will need replacing. My neighbor Manny could use a new roof now.

        If you insist on $200/man-hour, you may find me up on my roof in five years.

        If you wish to put $300 worth of materials up there and charge $3,500 total, there will probably be work available.

      •  Krugman agrees housing bubble burst. (0+ / 0-)

        "There are also growing problems in so-called Alt-A mortgages..."

        Sounds like you don't know that "Alt-A" mortgages are bad loans also. They are people who can't confirm they have the income to pay off the loan.  Perhaps you thought the "A" stood for something good.

        Nope. Just another person who should not be purchasing a house they can't afford.

  •  I am in violent agreement with (10+ / 0-)

    attacking the philosophical underpinnings of the neo-lib economic philosophy.  

    We also need to be offer a coherent alternative philosophy, which cannot be simply an opposite of the neo-lib madness.  I believe that we very much need to revive and own the idea of "economic rent" as it was understood in classical economics although we also need to re-tool the language and the computations around it.  

    I have proposed here before that economic rent be re-defined as the potential income from government-created privileges. Taxes as they have been thought of in recent decades would be scrapped in favor of "charges" for privileges.  These "charges" would strike at the heart of income inequality with much greater force than any income tax ever could.  Assets such as land, oil, minerals, and broadcast spectrum (all privileges) are concentrated in ownership to a much greater proportion than is income.  Charges against privilege will never stifle economic activity, and will generally make the economic system work more freely and with greater opportunities for all.

    We also need to revive and own the idea of a public realm with specific rights accruing to the public. Property owners don't have a right to assault the rest of us with hideous billboards or grotesquely ugly buildings.  The broadcast spectrum must be brought back into the publc realm and managed in a manner that serves everyone.  Think of our historical town squares.  Some behavior is acceptable and encouraged while other crass commercial behavior is not acceptable.   The broadcast spectra are part of the modern day town square and should not be managed for private gain, period.

    I urge precision in how we attack the neo-lib edifice.  For example "self interest" has its place in human affairs, but it should not be the only interest or impulse.  I personally think that one of the most damaging legacies of the neo-lib economic theory is the elevation of narrow self-interest to the status of "main guiding principle".  But it would be folly to speak of trying to abolish self-interst.  We need to coral "self-interst" within a set of rules and morality that prevent the inevitable impulses of "self-interest" from beign allowed to harm other people's "self-interest" or the public realm.

    The Long War is not on Iraq, Afghanistan, or Iran. It is on the American people.

    by Geonomist on Fri Aug 17, 2007 at 08:45:53 AM PDT

    •  windfall profits tax... (0+ / 0-)

      on property values solely due to changes in zoning... Why should the effects of a government action so disproportionately benefit the wealthy at the expense of everyone else?

      Why should landowners who've let their property (city housing, empty manufacturing plants) go to hell in a handbasket for years get huge profits on the land when they sell it to developers for extremely dense upscale housing? To the detriment of those remaining in nearby neighborhoods but to the huge benefit of landowners.

      Is there any city that hasn't had this experience in recent years?

      Perhaps there is a different taxation regime that would handle this... but in a state like CA where tax increases are so constrained and opportunities increasingly unequal, some approach is needed to change the balance and right the social wrongs.

      Maybe one positive fall out of this real estate bubble is that the pressures to rezone the land will diminish.

  •  This is a very Rawlsian sense of justice.... (2+ / 0-)
    Recommended by:
    Jerome a Paris, StrayCat

    Society is not doing well when the rich get richer, but when communities care for their members, leave no one behind, and do not focus exclusively on how much money one has to rank and judge members. Richer does not mean better. Together is better.

    We only accept an economy and economic growth/development that brings up the least advantaged member of society.

  •  Health care, etc. (3+ / 0-)
    Recommended by:
    Jerome a Paris, bigchin, junta0201

    This ideology is also behind the US's insane health care situation.  It's this worship of the free market (I like to call it "market fundamentalism") that has led us to allow insurance companies to take 25% or more of our health care dollars to spend on things like executive pay, shareholder profits, advertising, and political kickbacks.  The market fundamentalists argue that the fact that this is market driven makes it efficient.  While competition can indeed increase efficiency, they're totally incorrect to think that it's driving real efficiency increases in health insurance--there's just not much to be gained by competition there.

    Markets often fail to produce efficient outcomes, and it's about fucking time for America and the right to wake up to this.  Nobody here will deny that markets and competition frequently increase efficiency, but we need a balance between markets and regulation and the pendulum has swung way too far away from regulation now.  Abandoning regulation entirely leads to feudalism, and this seems to be what many of the ideological nuts want.

    It's also time for the country to accept the idea that the tax system is a reasonable and proper mechanism for the redistribution of wealth.  Taxing wealth (or land, as in the land value tax) rather than work would go a long way to encouraging productivity and greater equality.

  •  The Global Warming Bubble (4+ / 0-)

    The latest Harper's has an article about how much money can be made from a melting planet.  It's not online yet so I can't post exerpts but a coupla points being made are that the headlines about Russia planting a flag at the North Pole is related to a larger rush to the Artic because as the ice melts savings in sea passage of goods will be huge.  Also, there's a lot of oil and other resources up there.

    As the temps heat up it will be devastating for Africa, SE Asia, Australia, but will be an economic stimulant for US, Canada, and the northern countries in general.  For example, Australia's wheat yield will plunge while the US growing season will be extended.  All kinds of financial and political players are currently positioning themselves to reap the benifits of these changes.

    "Yes dear. Conspiracy theories really do come true." (tuck, tuck)

    by tribalecho on Fri Aug 17, 2007 at 09:01:21 AM PDT

  •  Here is a link to all the (4+ / 0-)

    NYT articles on the Banking deregulation bill in 1999

    Most are in the times select section but even from the blurbs

    Banking deregulation has been vigorously lobbied and debated for 20 years by three of nation's wealthiest industries: banking, insurance and securities; Center for Responsive Politics says in 1997 and 1998 alone, these three industries gave $58 million to Federal political candidates; they donated $87 million in so-called soft money to political parties, and they reported spending $163 million in additional lobbying expenses; donations to some key legislators by three industries

    it is easy to see who benefited from this deregulation.

    Not one democrat in the Senate, not even the Blue dogs voted for it. But still it was signed into law by President Clinton.

    The new law gutted the Glass-Steagall act of 1933 which was a major component of Roosevelt's New Deal.

    To sin by silence when they should protest makes cowards of men~~ Abraham Lincoln

    by Tanya on Fri Aug 17, 2007 at 09:12:42 AM PDT

  •  Only th Screaming Traitor Left Believes This Alas (3+ / 0-)
    Recommended by:
    wu ming, bigchin, herding old cats

    But it's nice to see what an opportunity looks like even though nobody can take it.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Fri Aug 17, 2007 at 09:31:51 AM PDT

  •  Tie-in to far humbler diaries :) (5+ / 0-)

    Solving the World's Problems

    The Ecological Restoration
    Promoting Civic Culture

    The Point - Toward A Change in Values

    1. Promote rational as opposed to impulsive behavior in persons and societies; from that, all else follows.
    1. Emphasize the economics of sufficiency -- eating, drinking, using what you need rather than what you can.
    1. Reduce the developmental footprint; disperse infrastructure, to leave green and open spaces.
    1. Promote institutions, channels and norms of peaceful conflict resolution.
    1. Reduce land use; expand wilderness or preserve areas. This is not just giving away to nature or an aesthetic; this is about investing in the ability of the ecosphere to give human civilization the time to undo its own damage.
    1. Improve investment in technology and scientific expertise with an eye toward innovation. Science is not bad; science has taught us (a) what the problem is and (b) offered many tools to use to solve them.
    1. Emphasize sufficiency for domestic defense, not preparedness for military adventures abroad. Dovetailed with an advocacy for civil society at home and peacemaking institutions and norms abroad, a salutary cycle of greater peace, expectations of peaceful conduct and real reduction in defense expenditures should occur.
    1. Reduce population or mitigate growth of same. There are simply too many people; at some point a gradual decline in human population on Earth will have to be managed, and the mortgage on the environment for supporting so many extra inhabitants paid over time. We need to recognize that we cannot childbirth out way out of overpopulation.
    1. Promote Equality under Law and Custom, of Opportunity and Access.
    1. Promote the culture of concern. Encourage care for those at the edges of life -- its beginnings, its endings and its extremities of trauma and despair.
    1. Encourage the values of association, accommodation, and acceptance --first in ourselves, then in friends and our communities. Make it utterly unacceptable to feel a little taller by stepping on the neck of another.
    1. Reject the absurdity of force-fed democracy. The lesson of freedom at gunpoint is to feel free to use guns.
    1. Protect genetic diversity of all kinds. The more critters there are, the more genetic and species diversity which is good for all sorts of things like, oh, pollinating crops. I mean, really. What if the honeybees never came back?
    1. Embrace international ties -- not just among states but among individuals. Cross-border lines of communication and -- far more -- community are what drives the success of the peace among democracies. Two open societies, with free movement, conversation and commerce between them become less separate and more of a common society, though their laws and customs and desires may remain separate.
    1. Accomodate national and international population movements. Up to the limits of a given segment of territory (and no further!) --- the more, the merrier.
    1. Invest aggressively and cheerfully in the education of the young. Per Aristotle, it is the single most essential task of any government. Societies that do so well win jobs; societies that fail their children fail themselves.

    That's it so far. More on the way.

    What this war needs is more cowbell.

    by cskendrick on Fri Aug 17, 2007 at 09:32:34 AM PDT

  •  Excellent! (6+ / 0-)

    -- one reason why it's so difficult for us to understand much of what goes on in the economy is that accounting lacks the tools for capturing all the real costs.  IIRC Peter Drucker once said something like there may be no such thing as profit, it may be nothing more than unrecognized or impossible to capture future costs that were incurred in the present.  Like oil and coal vs. renewable energy.  The comparison is usually limited to cost of KW production today and doesn't include environmental and health costs that we know are incurred in the burning fossil fuels.  Capturing and including only a small portion of those would make oil more expensive than solar and wind power.  Same with public transit vs. automobiles.

    What FDR giveth; GWB taketh away.

    by Marie on Fri Aug 17, 2007 at 09:34:43 AM PDT

  •  Jerome, Please Expound (3+ / 0-)

    Please expand your discussion of the three points in your critique of conservative normative economics:

    1.  that over the supposed superiority of the "efficient markets" to drive economic behavior,
    1.  that over the insistence that things be valued in dollars (discounted cash flow) or be worthless,
    1.  that over the idea that greed is good and leads to socially acceptable outcomes.

    Please expand on both the right's actual use of these arguments (especially 1 and 2) and on why they are wrong (especially 1 and 2).  

    I am somewhat familiar with the  first item, but the second one is opaque to me.  Are you aruing against the Capital Assets Pricing Model, or something much broader?  Thanks for the very interesting two diaries.

  •  I'm reading Democracy in America (4+ / 0-)

    by de Tocuqueville, and it is making me more aware of the strains in our culture which go way back. It has always struck me that a lot of Americans equate capitalism with democracy, the battling elements of individualism vs collectivism. We seem to fear socialism, because it will impinge on our individual right to get rich, the big American dream (illusion).

    This fear or belief only makes the situation worse for the real economy. Deregulation, privitazation and maximized profit are all seen as good. We seem to repeat the pattern of allowing unfettered greed to accumulate power with our blessing believing it's best for society, this time around the government both parties seems to be owned by the market and has no interest at all in the economy, other then as one vast consumer.

    If government becomes the enforcer for Big money, and is only representing 'business' how can we as middle class people ever break this pattern? Does it have to totally break down as in the depression, or can we somehow get the corporations out of the government and return some balance. My worry is that the concept of free market has been sold to us to the point where it's an ingrained belief that this is  an undisputable law of nature and how it has to be.  

    "And if my thought-dreams could be seen They'd probably put my head in a guillotine" Bob Dylan

    by shaharazade on Fri Aug 17, 2007 at 10:10:05 AM PDT

  •  Economic Efficiency (2+ / 0-)
    Recommended by:
    Jerome a Paris, StrayCat

    Jerome like many I've seen here seems to rail against the concept of economic efficiency as if it's a bad thing. It's not, it's more complext than that. The truth is that there are more than one kind of efficiency in an economic system. Most economists focus on just one kind, the efficiency of pricing.

    But there is also the efficiency of production and of distribution, not just of monies but of goods and services.

    For example, China can produce most goods more efficiently than we can in the US, but they are able to do that because they don't have to worry about environmental protections, labor unions, or a host of other issues that we have to worry about.

    There is a real cost to these things that needs to be figured in. In truth, economic efficiency is a good thing and benefits everyone, but only if it is viewed holistically and takes all factors into account. Conservative economists tend to forget about these other aspects of efficiency and that is what get's us to where we are today.

    •  I Think This Is a Pre Information Age Idea (3+ / 0-)
      Recommended by:
      wu ming, nicta, bigchin

      We now have the ability to automate both labor and problem solving.

      Markets never had that before, it's only been about one generation in earnest, and among the things it has made possible is massive conglomeration and global outsourcing by its ability to replicate solutions thus needing fewer thinkers and innovators per unit of production.

      Today we're just beginning to see the onset of higher level artificial problem solving.

      I think it's very plausible that technology will enable the production side of the economy to outgrow its need for a labor population the size of the market population it wants to sell to.

      My very first job as a programmer 20 years ago was automating whitecollar student and work-study jobs the university shed permanently. My work didn't create new better kinds of jobs for them.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Fri Aug 17, 2007 at 11:41:31 AM PDT

      [ Parent ]

      •  As a software engineer myself (0+ / 0-)

        I do see a lot of truth in this. On the other hand though, no matter how much we automate, there always seems to be more work to be done than the staff can reasonably handle in just about every business environment I have ever seen over my own 25 years in IT.

        It's like it all really generates more work, or more business or both, which of course is part of the purpose of automation to begin with.

        The product get's cheaper, which increases sales, which requires the hiring of additional people to handle the additional volume. What really changes is not necessarily the raw numbers of people employed in the business, it's their role.

        For example maybe an insurance business needs fewer claims administrators because the claims process is more automated, but now it needs more accounting and clerical resources to deal with the additional business.

      •  automating (0+ / 0-)

        is the invisible outsourcing. hard to hate, because while we're accustomed to hating foreigners, it's all rather abstract to hate technological processes (and highly counterintuitive to a society that sees technological innovation as "progress" itself).

        surf putah, your friendly neighborhood central valley samizdat

        by wu ming on Sat Aug 18, 2007 at 02:04:33 AM PDT

        [ Parent ]

  •  The blame game of attacking the so-called poor (2+ / 0-)
    Recommended by:
    Jerome a Paris, StrayCat

    or "subprime borrowers" when in fact many were middle class people hoodwinked into variable loans over good 30 year fixed loans.  They could have paid a point or so more, and many would have, had they not be given the hard sell by banker pimp mortgage brokers who told people these variables would go up gradually and they'd  have a chance to refinance.

    So, the banks are like drug dealers who got people hooked then moved them to the big expensive stuff.  And when they can't pay triple their mortgage rates, their penalty is they get a home ala an old fashioned monopoly game.

    I agree with the diarist's reframing, and my case here is we can also take it a step further, by castigating the "drug dealer mentality" of the unconscionably greedy.

    Separation of Church and State AND Corporation

    by Einsteinia on Fri Aug 17, 2007 at 10:16:53 AM PDT

  •  Irrational growth assumptions. (2+ / 0-)
    Recommended by:
    Jerome a Paris, StrayCat

    In my educated and professional opinion, so many of the financial crises have nothing to do with the failure of the market per se, but of the humans who irrationally accept wildly excessive assumptions of growth.

    For example, our current housing-based bubble is largely caused by irrational assumptions that real estate values will go up and up and up so that the credit value is overestimated.

  •  We all do better... (4+ / 0-)

    ...when we ALL do better!!!

    What part of that don't they understand???

    Proud to call James Webb my Senator!!! Sign up and contribute to Jim Webb's PAC - Born Fighting PAC

    by Loudoun County Dem on Fri Aug 17, 2007 at 10:24:31 AM PDT

  •  Everytime I read this kind of... (1+ / 0-)
    Recommended by:
    ormondotvos

    diary, I find myself feeling more irrelevant, because as one individual I cannot change what has grown such entangled roots; something like of which you write.

    Think about it (as I know YOU have)...the economic machine has gears running in every aspect controlling what is spent where. And somewhere there is a gear that is suppose to serve us, but does get the oiling it should -even though it is us greasing the gears???!!!

    Money for universal health care? No.
    Money for rebuilding our infrastructure? No.
    Money to fully funding education? No.
    Money to....and on and on.... No. No, and No.

    I vote, therefore I speak. But how loud an influence do I have when I check the scoreboard?

    Not much.

    See why I feel irrelevant?

    •  IF U Assassinate a rich person, for ideological (0+ / 0-)

      reasons.

      You'll have an effect.

      All that keeps the rich in power is the meekness of the poor.

      That's why it's illegal to advocate violent overthrow of the state.

      So we do hypotheticals.

      Accountability: the ultimate Progressive Value...

      by ormondotvos on Fri Aug 17, 2007 at 11:29:27 AM PDT

      [ Parent ]

  •  Hey, how's that $100 oil thing going? (1+ / 0-)
    Recommended by:
    Jerome a Paris

    You haven't written about that for a while. Jerome, you're pretty good with the bromides. And most people here would agree with you on sentiment. But I take issue with the title of your diary. There is no "crash". The market has lost less than 10% of its value, retreating from any all-time high. If you look at P/E's, corporate profits, oil prices, consumer demand, etc, you don't see anything approaching a crash. In fact, apart from the mortgage issue, there isn't even a sign of a bear market, which might explain the amazing lack of panic that a "crash" might suggest. That's not to say there won't be one in the future but it ain't happening today.

    Ambition is when you follow your dreams. Insanity is when they follow you.

    by Batfish on Fri Aug 17, 2007 at 10:33:30 AM PDT

    •  Dream on. No one can predict a crash, (1+ / 0-)
      Recommended by:
      StrayCat

      but there is a thing called statistics.

      And you ignore plenty of them.

      We can't tell if Jerome is right, but he mentions things you gleefully ignore.

      Wishful thinking, the aspirin of reality.

      Accountability: the ultimate Progressive Value...

      by ormondotvos on Fri Aug 17, 2007 at 11:32:24 AM PDT

      [ Parent ]

      •  I am really not gleeful (1+ / 0-)
        Recommended by:
        ormondotvos

        And it is a certifiable fact, O pilgrim to the altar of St. jerome, that there is no crash to speak of. There has been a modest decline in the market, but nothing major. Jerome spoke of there actually having been a crash. I was pointing out that it is not the case. There is no crash, so there is no politics of a crash. Jerome is guilty of wishful thinking.

        Ambition is when you follow your dreams. Insanity is when they follow you.

        by Batfish on Fri Aug 17, 2007 at 11:44:39 AM PDT

        [ Parent ]

        •  A number of markets have crashed (4+ / 0-)
          Recommended by:
          wu ming, ormondotvos, bigchin, xaxado

          As I mentioned to Jay Elias above, the private equity leverage buy out market has brutally disappeared. It's gone, finito. Same with a number of other debt markets.

          That's not highly visible, but that's pretty damn major.

          And real estate is a crash, just a slow motion one. And as I wrote yesterday, what matters is that the psychology of the bubble (it will continue to go up) is gone - thus the market will no longer go up.

          •  Well, it's a matter of definition (1+ / 0-)
            Recommended by:
            Jerome a Paris

            Right now, it's hard to quantify exactly where we are. The uncertainty in the market is coming from an inability to discern what has happened with over $2 trillion held by about 10,000 hedge funds. You call it a crash; I call it a correction.

            But the implication of the term "crash" is that this is a 1929 replay, and I just don't agree with that assessment. A crash, by the way, can't be slow motion or it's not a crash. Try stringing a car hitting a tree out over 3 days. Sure, the end result would be the same, but time is an important parameter. Plenty of time for people to get out of the way. Slow down a crash enough and it becomes merely an unfortunate event.

            Ambition is when you follow your dreams. Insanity is when they follow you.

            by Batfish on Fri Aug 17, 2007 at 01:09:03 PM PDT

            [ Parent ]

  •  New Construction Bubble -- Again! (8+ / 0-)

    Alan Greenspan engineered a New Construction Bubble, which:

    1.  created a revenue stream for the financialization side of the economy.
    1.  overexpanded jobs in the construction industry to cover export of ather blue collar jobs
    1.  temporarily added relatively low skill white collar jobs in the mortgage and real estate sectors to cover long term job exports in services
    1. expanded the share of home sales going to large construction companies

    The effects of this were to:

    1.  Cover the export of jobs offshore so that no political pressure was placed on China.  This was important because US banking firms wanted into that economy, where consumer credit had more potential upside.
    1.  Create jobs in the US in sectors that were unlikely to be unionized
    1.  Send revenue to large construction companies, traditional Republican backers, who then funded things like the swiftboating of John Kerry.
    1.  Rip off all who invested in the system, especially middle class mom and pop investors nearing retirement.

    The oversupply of houses in the market is a deliberate consequence of artificially high new construction levels, which was a key goal of the entire system.  Reagan did this with commercial construction by creating the REIT system, which led to overbuilding of skyscrapers that remained vacant and ended up selling for pennies on the dollar to foreign investors (Japanese), contributing to the trillion dollars lost in the Savings and Loan faisco.  

    They have pulled Reagan's scam off again in a slightly altered form.  Republicans seem to skim economic growth every 20 to 25 years through a bogus war and financial meltdown.  It takes another generation to rebuild and then they ruin them.

    •  Gramm cracker (0+ / 0-)

      We should be waterboarding Phil and Wendy Gramm about all of this.

    •  Recommended for Best Comment! (0+ / 0-)

      Accountability: the ultimate Progressive Value...

      by ormondotvos on Fri Aug 17, 2007 at 11:41:54 AM PDT

      [ Parent ]

    •  But it probably can't happen a third time (1+ / 0-)
      Recommended by:
      ormondotvos

      Their criminal enerprise worked twice, but I doubth there will be a third try for this particular system of interlocking scams. Republicans and their Texas oil pals killed the goose that laid the golden housing bubble.

      Peak oil, inevitable slow or sudden collapse of the dollar, global disdain for U.S. power all now contribute to push the U.S. inexorably toward fiefdom to some outside power... such as, say, Saudi Arabia. Oh, wait, I forgot. The Saudi royal family are at the top of the Republican feudal system already.

      "This document is totally non-redactable and non-segregable and cannot even be meaningfully described"

      by dratman on Fri Aug 17, 2007 at 12:08:31 PM PDT

      [ Parent ]

  •  It's about (2+ / 0-)
    Recommended by:
    Jerome a Paris, Floja Roja

    Long term commitments to the common good. . . health, education, infrastructure, care for our national resources and treasures.  THAT would be a "Great Society" and sustainable.  Excellent diary.  

  •  A delicious post.. (2+ / 0-)
    Recommended by:
    Jerome a Paris, poemless

    I read it with a nice Chianti and some Fava beans....

    poignant and relevant ...Kudos sir

    Next on Jerry Springer - Republicans, Republican'ts, and the Democrats who enable them!!

    by RepugRepellant on Fri Aug 17, 2007 at 11:38:47 AM PDT

  •  This is a great paragraph Mahalo once again! (2+ / 0-)
    Recommended by:
    Jerome a Paris, StrayCat

    This is what needs to be blamed, again:

       * the ideology of greed (this is the core of the conservative talking point: the idea that being selfish is somehow good for others as it creates more wealth, and thus that unregulated markets are good for society);
       * the idea that only financial valuations give worth to anything (again, the cult of the dollar, and the underlying notion that trying to get rich is a good thing for society);
       * the notion that wage inflation is bad but not asset price inflation (money going to the poor is bad, money going to the rich is good);
       * the shockingly lax monetary policy of the past decade (when markets go up, fuelled by what is essentially easy public money,  it's capitalism at work; when markets go down, because of poor investments by the rich, it's a systemic crisis and the rich need to be bailed out or else);
       * the cheerleading by politicians of finance as the new engine of growth and wealth creation (industry, balanced budgets, communities are so yesterday and downright communist and evil);
       * the unraveling of existing regulations (like Glass-Steagall) in the name of market efficiency, and the corresponding death of those old engineering concepts, resiliency, safety margins, redundancies, and of old old ethical ideas: reputation, community, duty to future generations.

    This suggests a very simple political discourse; fighting these above trends with positive messages.

    Wealth is not defined by how the richest fare, and should not be counted via how much they accumulate, but only by how the poorest amongst us are doing.

  •  "Feudalistic economic ideology" describes it 2aT (2+ / 0-)
    Recommended by:
    Jerome a Paris, JuliaAnn

    Jerome, your phrase

    feudalist economic ideology of the right

    ... is exactly correct. And I appreciate that you didn't write "system," but rather "ideology," because their way of doing things hardly rises to the level of an economic system. Taken to its limit, the current Republican chain of resource transfer would create a fiefdom of local warlords who pay tribute to regional uber-lords like Jack Abramoff, who would in turn pay tribute to a Master Enforcer, like, say... Karl Rove.

    "This document is totally non-redactable and non-segregable and cannot even be meaningfully described"

    by dratman on Fri Aug 17, 2007 at 11:45:20 AM PDT

  •  "Greed is good" (3+ / 0-)
    Recommended by:
    Jerome a Paris, JuliaAnn, junta0201

    Yes, "greed is good" is their central... no, their only tenet. It's Adam Smith, but extended to breaking any and every rule of the game, especially if supported and protected by one's pals in government, who will be rewarded later.

    It's all greed! So it's all good.

    The contemporary Republican method of economic governance could be called Survival of the Greediest... only for G*d's sake don't mention that to the Evangelidiot supporters! Those maniacs don't want anything that sounds Darwinian.

    "This document is totally non-redactable and non-segregable and cannot even be meaningfully described"

    by dratman on Fri Aug 17, 2007 at 11:58:10 AM PDT

  •  Fixing elections is good greed, too (2+ / 0-)
    Recommended by:
    Jerome a Paris, JuliaAnn

    Fixing elections also fits in perfectly with "Greed is good." Politicians who want to stay in office are greedy, are they not? And their friends in the electronic voting industry are also greedy. Therefore it's all good. Speed up election theft and you help the economy!

    That's why their media shills proclaim that all news is good news for Republicans. The ruling Rethuglican clique only have to extend the scope of their criminal activities, and they can compensate for any kind of news whatsoever.

    "This document is totally non-redactable and non-segregable and cannot even be meaningfully described"

    by dratman on Fri Aug 17, 2007 at 12:21:58 PM PDT

  •  inflation (2+ / 0-)
    Recommended by:
    Jerome a Paris, JuliaAnn

    the notion that wage inflation is bad but not asset price inflation (money going to the poor is bad, money going to the rich is good);

    I guess the conventional wisdom of economic "experts" (people trained and paid to say whatever the rich want to hear) is that wage inflation leads to price inflation. This thinking seems flawed to my non-expert mind. It seems to me that if prices remain constant while productivity increases, then their is a big ever-increasing pie of wealth created that can be shared by workers and owners of capital without causing price inflation. Corporate billionaires and their propagandists want to keep wages low so they can have the whole pie for themselves. Hence the hyped inflation fears attached to rising wages. Democrats should advocate the goal of having the median wage increase to match productivity gains.

    miasmo.com If you're not a liberal, you're a dick.

    by miasmo on Fri Aug 17, 2007 at 12:29:29 PM PDT

  •  Jerome, in this benighted country, (3+ / 0-)
    Recommended by:
    Jerome a Paris, JuliaAnn, bigchin
    the bankers and financiers do NOT pay for their folly.   The taxpayers do.  It's happened before and it is about to happen again.

    The ignorance of one voter in a democracy impairs the security of all - JFK- 5/18/63-Vanderbilt Univ.

    by oibme on Fri Aug 17, 2007 at 12:43:21 PM PDT

  •  Yay! (3+ / 0-)
    Recommended by:
    Jerome a Paris, Floja Roja, junta0201

    Wealth is not defined by how the richest fare, and should not be counted via how much they accumulate, but only by how the poorest amongst us are doing.

    Society is not doing well when the rich get richer, but when communities care for their members, leave no one behind, and do not focus exclusively on how much money one has to rank and judge members. Richer does not mean better. Together is better.

    And that doesn't mean some people can't do well and prosper. The rest of society just needs to be taken along for the ride (otherwise you're prospering off of misery of others!)

    "History will judge the GOP abdication to NeoCons as the single worst tactical blunder since the Taliban gave safe harbor to Osama bin Laden"

    by BentLiberal on Fri Aug 17, 2007 at 12:53:20 PM PDT

  •  Long live Chairman Mao who would approve of this (0+ / 0-)

    diary. All must rise together. Inequities lead to all the problems we have, have had, or will have.

    We must combine and become synergistic.

    Am reading The Tom Peters Seminiar and I think it is a WOW!

    Anyone who has been tortured, remains tortured. Primo Levi The Drowned and the Saved

    by abbeysbooks on Fri Aug 17, 2007 at 01:04:17 PM PDT

    •  um, you really need to re-read mao (1+ / 0-)
      Recommended by:
      abbeysbooks

      love him or hate him (personally, i'm content with just trying to understand him, historically), he was unambiguously opposed to the liberal ideal of salving the class divide by helping everyone, and ardently convinced of the inevitability of permanent class conflict as a dialectic force that drove history forward.

      mao was not interested in everyone rising together, he was interested in beating the living hell out of the wealthy and powerful, and establishing a dictatorship of the proletariat.

      surf putah, your friendly neighborhood central valley samizdat

      by wu ming on Sat Aug 18, 2007 at 02:11:12 AM PDT

      [ Parent ]

      •  His practice was cruel (0+ / 0-)

        And when you are out to change a culture and control its economic base you are in for trouble. Only fascism witll work under command and control. In any aspect of society.

        When I went to work in a mental hospital the first words were: Welcome aboard. So I knew I was in the military.

        Anyone who has been tortured, remains tortured. Primo Levi The Drowned and the Saved

        by abbeysbooks on Sat Aug 18, 2007 at 02:50:00 PM PDT

        [ Parent ]

  •  The Fed cuts interest rate (0+ / 0-)

    I gotta think the resulting inflation from the rate cut might give the Chinese pause when they consider the 1.73 trillion dollars in American Monopoly Money they now hold!

    Hold on to your shorts, it's going to be a wild ride!

  •  People are going to lose their homes. . . (4+ / 0-)

    so the immediate impact (on the markets, banks, funds), isn't what we should be focused on.  Yeah, the rich will get bailed out.  And people who wanted, and needed, cheap loans to own a piece of the American dream are going to suffer because the rich can't make a buck on them.  

    I wonder how many of these people are Republicans, and how many will wake up to the fact that they are the suckers in a suckers game.

    All politics is class-warfare.

    by dhfsfc on Fri Aug 17, 2007 at 01:58:44 PM PDT

    •  Too bad...should never have taken risky loans. (1+ / 0-)
      Recommended by:
      Jerome a Paris

      there has to be SOME level of responsibility here if you are going to sign your name to a $300,000 document. You can't just plead total stupidity.

      The buyers were as greedy as the lenders, wanting what the could not afford by any rational calculation.

      Buying a $30 program like Quicken would have told them what they were doing was financially reckless.

      I would certainly revisit the Biden bankruptcy law so they could make a new start but they don't get a free pass.  I'd even go so far as say they can simply hand the house back to the lender without going through bankruptcy.  If they lender can't afford that transaction, then the lender was financially reckless and he has to bear his share of the burden.

  •  A New Econ Paradigm (1+ / 0-)
    Recommended by:
    Jerome a Paris

    This was discussed at some length over on EuroTrib -- what was it, eighteen months ago?  

    The concepts were laid out about a decade ago.  See people-centered economic development, which argues exactly what is being argued in this diary/essay.  

    But it's not just concepts and ideas any more.  Here and here is an example of exactly how it works -- a blueprint.  Best of all, guess who's about to pony up at least $750 million to move things along?  The U.S.

    Nice to see you on board, Jerome.

    =====
    Peace. It's cheaper and more fun.
    U.S. in the World

    by USexpat Ukraine on Fri Aug 17, 2007 at 02:24:39 PM PDT

    •  So there is hope. Real hope. (0+ / 0-)
      You know, what Clinton was saying fifteen years ago.

      It's up to you.  Plural.  In this forum.  You get to choose -- regardless of world-class dark machinations that "elected" US leaders seek or allow to rain down upon the heads of the rest of humanity.

      It's up to you.  You have the new paradigm now, it is yours.  Ours.

      Godspeed.

      =====
      Peace. It's cheaper and more fun.
      U.S. in the World

      by USexpat Ukraine on Fri Aug 17, 2007 at 06:53:44 PM PDT

      [ Parent ]

  •  Damned good diary, Jerome! (1+ / 0-)
    Recommended by:
    Jerome a Paris

    Also, market psychology is one link in the whole unstable system, the most unstable and the hardest to predict time-certain. What's sure is that the weaknesses you mark are there, and there is no self-correction mechanism capable of fixing them. Any fixing will be ultimately political.

  •  Monetarism is partly to blame (4+ / 0-)
    Recommended by:
    Jerome a Paris, ohcanada, bigchin, xaxado

    I'm not an economist but an architectural designer.  I know something about structure. And also about the housing market.  I have friends who are caught in the bubble right now, forfeiting a home purchase because they can't sell their current house in the glutted Santa Fe, NM. market.  

    Today's infusion of credit liquidity by the Fed's lowering the discount rate by 50% is the monetarist blanket solution to economic inbalance applied to the structural economic problem of uncertainty in mortgage derivative (CDO's, etc) value.

    Lower interest rates help financial institutions borrow thus freeing capital flow in part of the financial system.  However it does nothing to compensate for the structural void that caused the problem;  mortage derivatives that can't be valued because they're traded so infrequently that they're marked to model (the now-discredited notion of endless housig growth), rather than marked to  market (price determined by buyers and sellers).  The price of houses is falling, ARM mortgages are coming to term.  Homeowners are becoming insolvent because their spending habits aren't backed by stable equity. Mortgage rates are rising because the value of collateral is falling.  The subprime foundation of the housing market is bankrupt.  The void is expanding.  

    Monetary policy -  the adjustment of money supply is as good a solution to this structural disaster as painting your house when the footing's collapsing.

    Until the people agree on transparent economic rules (political economy) the citizens' equity will be questionable.

    Connski

  •  Am reminded of an old saying (2+ / 0-)
    Recommended by:
    klarfax, junta0201

    "What's mine is mine; and what's yours is ours."

    What belongs to Bush's rich cronies is theirs, they say; not to be shared with the struggling majority. But, when their greed threatens them with ruin, suddenly the problem is "ours" and the cost comes out of our pockets. In contrast, when a low- or middle-income family asks for government assistance, the upppercrust trot out their "personal responsibility" mantra.

    The current financial mess shows the necon concept of is a cruel hoax used by the powerful to shake down the powerless.

    Among a people generally corrupt, liberty cannot long exist. - Edmund Burke

    by Deep Harm on Fri Aug 17, 2007 at 06:01:12 PM PDT

  •  J.a.P., I recommend J.R.S. (1+ / 0-)
    Recommended by:
    Jerome a Paris

    Don't know whether you've read the works of John Ralston Saul, but if not, I enthusiastically recommend them. I'm not sure you'd learn anything new, but I think you'd enjoy them immensely.

    I am further of the opinion that the President must be impeached and removed from office!

    by UntimelyRippd on Fri Aug 17, 2007 at 06:11:24 PM PDT

  •  Wonderful, wonderful diary (2+ / 0-)
    Recommended by:
    Jerome a Paris, junta0201

    It IS the economy, stupid - and, far beyond that, we are only as rich as our poorest brothers and sisters.  My father died one month ago next week - a successful businessman who told his kids over and over that real wealth lies in the love we feel and give to others.  When he died, there was no "estate" left, thanks to a long, lingering struggle with Parkinson's.  All that was left was our love and respect and desire to live our lives as he did.  We are infinitely richer than George W.Bush will ever be.

  •  F***** By The Feds (3+ / 0-)
    Recommended by:
    kmbaya, ormondotvos, xaxado

    Thursday, after being in a downward trend, the financials, and the worst of the lot started to go up, it was rather remarkable, but on Friday, before the bell, the feds announce a lower borrowing rate for the failed financials, and the market is up 300 pre opening.  We were fleeced again, playing against the disgracful house, with marked cards.  As someone said the faith based administration has now given us faith based currency.  Every institution in this country is corrupt.

  •  Yes to everything you say here . . . (1+ / 0-)
    Recommended by:
    Jerome a Paris

    Like Bill Moyers said, God and greed have destroyed our republic.

  •   Not that complicated (2+ / 0-)
    Recommended by:
    wu ming, Jerome a Paris

    Thew whole mortgage bubble centers around two salient facts:

    1. The average American believes that he or she is entitled to own a single-family detached home
    1. The Reagan/Thatcher/neolib economic policies that favor the corporate overlords relative to the working stiff has made it more and more difficult for the average American to afford to buy a home under responsible financing conditions.

    Basically, not only has worker's income been falling over the past three decades, their job security has also been heading south.  And this has been affecting professional and managerial workers as well as the usual blue-collar working stiffs.  It's a crazy world where many of the suits are in the same boat as the guys in overalls.

    But the political fallout (in the USA at least) of the "powers that be" admitting to the masses that the might as well forget about the "American Dream" is so toxic that those powers are willing to do anything to give the masses the illusion that this "dream" is possible. And so the subprime junk mortgages were devised and marketed to people who had no business taking on that kind of debt.

    Not that the borrowers are totally free of responsibility.  Rather than focusing on the fact that the junk loan being offered them would allow them to become nominal homeowners, they should have been focusing on the fact that they couldn't qualify for a regular 30 year fixed rate mortgage with  traditional terms.  And then started thinking about why it was the case that their parents and grandparents (often with more low status jobs than they had) were able to afford to buy a decent house while they couldn't.  And maybe they could do two things:

    1. Accept that they can't afford what the real estate marketers have made the "American Dream" and live within their means, and
    1. Raise hell with the politician scum who brought us this mess.

    Surely we can make the world a better place short of an armed uprising.  But it's the responsibility of all of us to make that happen.

  •  The miners (2+ / 0-)
    Recommended by:
    Jerome a Paris, junta0201

    IMHO, it is no coincidence that the wheels are coming off of the Greed Train.

    It is time for Labor to push back. Hard.

    "Never trust the teller. Trust the tale." --- D.H. Lawrence

    by Spoonfulofsugar on Fri Aug 17, 2007 at 07:54:56 PM PDT

  •  The Retirement Dream ... (3+ / 0-)
    Recommended by:
    gaianne, Jerome a Paris, ohcanada

    ... is just a scheme for the Investment Companies to make a swimming profit.

    In other words, "Bust you ass off now for the sake of Big Business, and we'll give you something to look forward to. Like Viagra and sunsets..." No need to stop and smell the roses along the way. Just roll the dice. Here's hoping lightning or cancer doesn't strike. Better yet, we can sell you some lightning or cancer insurance...

    "Never trust the teller. Trust the tale." --- D.H. Lawrence

    by Spoonfulofsugar on Fri Aug 17, 2007 at 08:02:56 PM PDT

  •  brilliant (2+ / 0-)
    Recommended by:
    Jerome a Paris, FMArouet

    you do a great job here of bringing together some core principles of what ought to be solid left politics. and your cautionary tone about the necessity of gaining the initiative WRT the narrative of this crash bears repeating:

    if the people who set up this mess are allowed to control the explanation and narrative of this mess after the fact, they will shape the policy response to the mess, and set up the next one. simply pointing the finger at them or analyzing their mistakes is not enouigh: if we want to stop this destructive cycle, we are going to have to go after them on the level of narrative, and offer our own explanatiuon for how we got here and what must be done.

    of course, that is dependent on us rejecting the right wing neoliberal economic model, and coming up with an economic vision for america that goes beyond restoring the 1990s and the clinton years, which were pretty damn neoliberal.

    surf putah, your friendly neighborhood central valley samizdat

    by wu ming on Sat Aug 18, 2007 at 02:18:32 AM PDT

  •  great diary n/t (1+ / 0-)
    Recommended by:
    Jerome a Paris
jcbhan, cdalygo, Mary, ElitistJohn, PeWi, Colorado Luis, fly, pedant, claude, MoDem, Lupin, Spit, Alumbrados, trillian, Ed in Montana, zzyzx, Frank, vicki, Marek, SteveLCo, Maccabee, Zero, PLS, LeislerNYC, Aeolus, pb, Bill in Portland Maine, Irfo, radish, Common Sense Mainer, dratman, eugene, murphy, Rayne, SarahLee, georgiacmt, alyosha, teacherken, Marie, ks, Cathy Willey, natasha, gaianne, casamurphy, XOVER, Trendar, chassler, gogol, Liberal Thinking, Downriver Gal, SaveDemocracy, Geenius at Wrok, abarefootboy, Mountain Don, artr2, gaspare, TrueBlueMajority, Robert Ullmann, Unstable Isotope, Powered Grace, NYmom, whataboutbob, melvynny, mimi, Reino, IndySteve, Knut Wicksell, wytcld, Bob Love, bdtlaw, JTML, bread, sphealey, Robespierrette, tommurphy, krwada, Shockwave, Bernhard, wu ming, LynChi, m maddog, Wintermute, billlaurelMD, Pondite, bramish, Jim W, Arlyn, LEP, linnen, rhubarb, AWhitneyBrown, GayHillbilly, eeff, Mnemosyne, jeremybloom, Page van der Linden, d3n4l1, Woody, Mumon, lawnorder, dash888, ZAPatty, theran, RFK Lives, gjohnsit, mataliandy, exNYinTX, zeitshabba, Creosote, redtravelmaster, Vitarai, Plan9, maggiemae, eyeswideopen, alain2112, darcyh, jackspace, opinionated, 1040SU, raines, MC in NY, Hatu, bronte17, Joe Sixpack, RichardG, robertdfeinman, Einsteinia, brillig, pondside, bonddad, nyceve, SecondComing, ScantronPresident, srkp23, ScrewySquirrel, awakentech, DaleA, ask, sayitaintso, poemless, wanderindiana, PBnJ, scamp, retrograde, gayntom, smhbubbles, Transmission, Aquarius40, chimpy, roses, chechecule, redlami, JuliaAnn, Colman, LondonYank, oceanspray, larryrant, exconservative, dcvote, corncam, rioduran, splashy, arkdem, dmsilev, Cedwyn, antirove, ginatx, csuchas, Chrisfs, nitetalker, nuttymango, dksbook, Eddie C, Janet Strange, DemocracyLover in NYC, pexio, NMRed, Braindead, WeatherDem, kharma, nicta, hhex65, scorpiorising, dejavu, psnyder, Alizaryn, MrSandman, sockpuppet, jakyra, oldjohnbrown, Dallasdoc, mrkvica, Quentin, CitizenOfEarth, coconutjones, Chicago Lulu, crkrjx, wordene, BmoreMD, sooner, MTgirl, cometman, susie dow, johanus, TrainWreck, Daniel Donner, baxxor, Hawksana, peternight, churchylafemme, laughingriver, BMarshall, Dale Read, Science and Art, NYFM, Chirons apprentice, Scarce, chachabowl, MmeVoltaire, cat chew, Catte Nappe, MaximusNYC, betson08, snakelass, RuralLiberal, dnn, jmknapp, AbsurdEyes, wecandoit7, Frankenoid, mrsnart, Eddie Haskell, sommervr, Anna Luc, 4jkb4ia, Pohjola, Democratic Hawk, Tenuous Leemployed, inclusiveheart, lahke, cevad, walkshills, LatidaSothere, CabinGirl, bwintx, anneschu, parkslopper50, fugue, side pocket, YetiMonk, Redbug, Sopiane, DrReason, Wife of Bath, sfluke, poemworld, DarkSyde, jcinkc, bablhous, djpat, kd texan, homogenius, eve, Toddlerbob, bibble, gsbadj, cohe, oortdust, drewvsea, sawgrass727, Gowrie Gal, Jersey Joe, dvx, sxwarren, greenskeeper, MichDeb, sarahlane, Skennet Boch, Recovering Southern Baptist, jabney, mediaprisoner, cantwait08, Bluesee, ChemGeek, radarlady, 3goldens, Tinfoil Hat, Owl of Minerva, Chris Kulczycki, Doolittle Sothere, NoMoreLies, vinylgirl, baccaruda, Marching Orders, JanetT in MD, SherwoodB, zaraspooksthra, bluewolverine, Mad Mom, Chinton, ignorant bystander, democracy inaction, OpherGopher, irate, PBen, ejmw, sap, rob9, Alien Abductee, clammyc, eightlivesleft, TN yellow dog, terrypinder, ChemBob, snacksandpop, TigerMom, Brooke In Seattle, anonymousredvest18, volballplr, scottso, Laurence Lewis, afew, eru, Mz Kleen, howardfromUSA, lennysfo, Beetwasher, mojo workin, cfk, buckeyedem08, majcmb1, SaraBeth, katymine, Frank Palmer, nailmaker, EconAtheist, washingtonsmith, Sara R, dunderhead, Inland, GreyHawk, Kayakbiker, cassidy3, annefrank, brenda, BobOak, Eric K, blue jersey mom, abbeysbooks, antiapollon, RickE, techno, klarfax, Thaddaeus Toad, wulidancer, Anna M, neroden, FindingMyVoice, desordre remplir, loggersbrat, LithiumCola, Ekaterin, ohcanada, tigerdog, kkjohnson, Land of Enchantment, melvin, RainyDay, hatdog, soyinkafan, Bernard, ThatBritGuy, simplicio, Tigana, Asinus Asinum Fricat, Paper Cup, fhcec, CJnyc, debedb, forbodyandmind, CCSDem, Reptile, cre8fire, Coherent Viewpoint, LeftOverAmerica, dus7, esquimaux, Liberal Protestant, BachFan, danmac, Icy, Metatone, irishwitch, Keone Michaels, jsamuel, Milly Watt, vigilant meerkat, alefnot, BlueInARedState, the freak, Naranjadia, stonemason, Yellow Canary, martyc35, Buffalo50, Scientician, buhdydharma, flygrrl, The Wizard, Nestor Makhnow, dewey of the desert, madcitymelvin, Lurky Lu, kck, greenearth, blueoasis, ormondotvos, Flippant to the Last, TalkieToaster, BranfordBoy, global citizen, StrayCat, zorba, Tanya, Bush Bites, condoleaser, PapaChach, NewAmericanLeft, Rusty1776, Preston S, gabriella, AndyS In Colorado, ER Doc, ElMateo, edgery, feduphoosier, Andy30tx, oakroyd, TayTay, Pete Rock, LJR, JeffinQC, profh, asque, doingbusinessas, va dare, Cassiodorus, MarketTrustee, Carbide Bit, judasdisney, kurt, scoff0165, shaharazade, Bernie68, pkbarbiedoll, bstotts, Autarkh, Snarcalita, kidneystones, Jay D, Temmoku, AltruisticSkeptic, sasher, OHdog, beverly, AntKat, BentLiberal, xrepublican, DBunn, fredouil, bigchin, One Pissed Off Liberal, old wobbly, J Royce, drational, Elco B, xaxado, Ken in MN, dotsright, Cronesense, xgz, chrischen, meowmissy, SparkleMotion, Quinton, Loudoun County Dem, JohnMac, Cottagerose, FWIW, california keefer, moodyinsavannah, suburi, Sam from Ithaca, America08, FishOutofWater, NCDem Amy, Jimdotz, terabytes, ilex, londubh, Unbozo, ronlib, Canyon Lefty, manwithnoname, stratocasterman, mcc777c2, tcdup, SeaTurtle, rrheard, pioneer111, slowheels, leonard145b, Brahman Colorado, keikekaze, Hens Teeth, Predictor, TomP, gr8flmo, alba, zenobia, AJ WI, kafkananda, cynndara, memofromturner, seriously70, chapter1, Spoonfulofsugar, tucsonlynn, dragoneyes, I, SilverOz, karin x, Chilean Jew, mamamedusa, herding old cats, Aureas2, Janosik, Remembering Jello, Cat Servant, Saint Saddam, lineatus, Residentcynic, wvablue, State Department, Greasy Grant, Bastoche, Deep Harm, Ocelopotamus, toddpw, MsWings, dmnyct, Chomskyface, dantyrant, Victory Coffee, xysea, Jodster, junta0201, to hell with George W Bush, brave little park, Fuzzy5150, chadmichael, revelwoodie

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site