I've always admired and learned a great deal from the diaries of Jerome a Paris. Yesterday he wrote a particularly cogent one The crisis is so bad the financial press turns bolshie synthesizing the thinking of major economic writers of the Financial Times who are recommending strong action. These are people who must be taken seriously.
(I don't know if it's appropriate to write a diary praising another person's diary. But it was great.)
He illustrated his solutions in a concise way, pushing for (among other things):
An acknowledgement that government can be the solution rather than the problem, and that redistribution, taxes and regulations can be good things--and are absolutely necessary.
And that Washington is [filled with multimillionaires who have more in common with each other than those with less income, no matter what kind of rhetoric they spew.]
The bond insurers are losing their triple-A credit ratings and as a result, municipalities and student loans will be slapped with usurious interest rates (from 4% to 20% in a week). Not only will the infrastructure of cities, etc. deteriorate because of neglect, the cost of projects will become prohibitively expensive at a time when tax coffers are shriveling.
In my diary FDR is on the way! Happy Valentine's Day! I quoted from a highly-placed European economist, Bernard Connolly, who compared the 2000s credit bubble and deflating asset values to the 1920s and the Great Depression. He offered up some governmental solutions similar to FDR's interventions, such as buying up deflating assets to raise their prices.
In countries other than the "free market" bastion of the United States, citizens are pretty pissed off at the monied elite who try to get something for nothing and foist their externalities onto the rest. In today's New York Times elections in Germany may actually be affected by the corruption of the rich:
Evidence that Germany's rich tucked away their cash in Liechtenstein and other tax havens is creating a new narrative in German politics: the betrayal of the elites, who have spent the last decade calling for a painful reform of the welfare state, even as they apparently avoided paying their fair share.
The tax scandal comes at a moment when Germany is undergoing what analysts describe as a shift to the left politically...[M]any Germans are dissatisfied with stagnant wage growth and do not feel that they are sharing in the gains, according to surveys.
The starkest example of this shift was the surprising strength of the Left Party in recent regional elections.
Where's the righteous anger here in America? Is it because politicians are deathly afraid of mentioning any rearrangement of the current financial system even though it is imploding? Are they more concerned with keeping their jobs than fixing the problems, fast? If only they feared losing their jobs if they didn't act.
It reminds me of a story a friend of mine in San Diego told me. She lives in a fire-prone area where houses are constantly burning down and rebuilt on the same lot. Residents are unwilling to pay taxes to support a year-round fire department, yet they willingly pay over $20,000 a pop annually to have a private service spray their homes with "fire retardant".
Maybe we can phrase solutions differently. Semantics can be our friend.