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View Diary: "Enronomics" Is Just Another Word For Nothing Left To Lose (69 comments)

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  •  Why do you think that (6+ / 0-)

    Obama came out talking spending freeze?  IMO, the U.S. is overextended and it is a case of either reigning ourselves in, or having our creditors do so on their terms.

    Of course I advocate cutting military spending if we need to balance the budget and then taking the rest out of the hides of the kleptocrats.

    •  The Lira article cited above (1+ / 0-)
      Recommended by:

      Explains that the Volcker cure is a great alternative to EFPG Geithner's policy. But the resolution of the Latin American banking crisis involved impoverishing Latin America by bleeding the poor to build bank assets back up.

      •  So... (2+ / 0-)
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        Jagger, cybrestrike

        why are we on the hook exactly?  I fail to see how this negates the point that banks should be forced to come clean and clear their balance sheets through write downs and/or negotiated settlement.  As long as everyone knows that everyone else may have a basket of crap there will be no trust and credit will be glacial.

        Yes, if they fold we lose our 'investment', though IMO we might as well have lit a match to it anyway.  That is why I was furious about all the bailouts.

        I believe that the game was to make the big players whole (some for political reasons (read:other countries' banks that got screwed) then put the suckers (U.S. taxpayers) on the hook by backing this crap and then, once the special people have had time to save their asses, letting the whole thing crash on our head leaving us just like the Argentinians.

        We have been set up to take the fall, regardless of who triggers the event.

        Breaking up the banks and aiming for a gradual unwinding is probably the best we can do.

        •  we are on the hook (1+ / 0-)
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          because the bankers have huge, dominant, political and economic power. There is no way to simply reverse that with some regulations. So the administration approach, of stabilizing and gradually pushing back seems far smarter than an approach of confrontation and failure. I believe that the Republicans wanted Obama to "nationalize" a large bank like Citibank and then have the massive costs of that and collateral damage wipe out any chance of health care reform, stimulus, green energy - and trigger a "shock treatment" massive cut in social spending.

          Look at the TARP program. It was grossly corrupt, but without it the last major union industry in the US would have been sold for scrap. Repurposing TARP funds to have a chance of saving manufacturing was far more important than some idiot accounting rules that get ignored when convenient anyways.

          •  Yes, Like Latin America (1+ / 0-)
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            The debts were transferred to the poor and taken out of the social infrastructure because the banksters and aristocrats had captured the government. The governments had other ways to resolve those debts. If they were really supportive of their countries, and not paid cronies installed by economic hitmen, they might have preserved their social infrastructure and taken the money from the ruling class. or they could have done what Rafael Correa had the balls to do in Ecuador, and just defaulted. "FU IMF, the other government signed these checks. They were corrupt, they are gone now, we don't recognize their authority to sign checks the people will have to cash."

            We will see which way the leadership in the US goes.  The talk of entitlement commissions is not encouraging.

            •  look at the record of the first 1.5 years (0+ / 0-)

              In the face of the worst financial crisis in 50 years, the Obama administration has increased spending on infrastructure and social services. They have done that by refusing the well-meaning advice of Republicans and "progressives" who think bank balance sheet status is all important. There is a fundamental ideological divide between the finance-centric approach of neoliberal economists and the Obama administration where issues like income inequality are considered to be more important than accounting rules. My problem with Bob's oft-repeated argument is that he accepts the finance-centric view and sees the natural operation of finance as being due to some "scandal". That approach goes nowhere.

            •  also it is not so easy (0+ / 0-)


              Power is power. You can't simply talk tough and beat it.

          •  I didn't really have a problem with the (0+ / 0-)

            auto bailout.  It was peanuts compared to what has gone into supporting the banks and, unlike finance, they actually produce something.

            So, if I'm understanding your side, you think that we should basically continue with business as usual, just tinker around the edges, and hope everything works out alright?

            I don't think we can get back on solid ground without a real and transparent accounting of these companies financial positions because without transparency there can be no trust.  And I find it hard to believe that they can not be replaced and their functions taken over by other entities.  I call bullshit on too big to fail.

            I understand not wanting to start a crash and impose hardship on our citizens.  

            What I don't see is a way to avoid just such an outcome when the next meltdown hits if we continue on our present course of giving bankers a license to steal and insuring them against all losses while leaving them the profits.

            If we are going down anyway why not choose our own time line and take our pound of flesh?

            •  tinker around the edges is not what I suggest (0+ / 0-)

              My idea is that we should pick battles with finance and in the meantime try to build some alternative power centers. The Treasury department, for example, is working very hard to build up reformed credit unions and development organizations as sources of finance so that WS blackmail is less effective. Furthermore, we're seeing public finance as key in auto and green energy and now in education - bypassing WS.

              I don't see paper regulations as meaning much while Wall Street has its hands on the buttons. The government has to breathe life into the non-financial economy before it can hope to bring serious reform to WS.

              •  Ah (0+ / 0-)

                The Treasury department, for example, is working very hard to build up reformed credit unions and development organizations as sources of finance so that WS blackmail is less effective.

                So you are suggesting building up an alternative before attacking the crooks in question?  Hope we have enough time for that.

                Also the above could be an interesting diary...

                •  i'm going to try to write something up (1+ / 0-)
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                  To me, WS has a knife at the throat still. For example, even though the ratings agencies are bogus, they keep threatening to lower the rating on US bonds - which would cause a big mess. If you look above, you'll see someone argue that the US should just do what ecuador did and tell the banks to take a hike. Well, a couple of years later, ecuador is trying to make a deal because they cannot get any credit. obviously the US is not ecuador, but that's where bush and co. were taking us and we went a long way down the path.

    •  Ilex, you're wasting your time... (3+ / 0-)
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      soros, bigchin, cybrestrike
      ...because you're commenting with a person who will make up anything they wish to misrepresent their communications with you to suit their needs, up to and including just making stuff up out of thin air and continuing to lie about--and even publish diaries furthering those lies--based upon my experiences with this particular blogger over the past 36 hours. But, that's just my opinion...

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Tue Apr 06, 2010 at 06:30:01 AM PDT

      [ Parent ]

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