No Time for Utopian Anti-Interventionism

[LabMonkey]

Re: No Time for Utopian Anti-Interventionism

http://www.cnbc.com/id/15840232?video=873682522

"Hundreds of billions of dollars are going to bail out FOREIGN INVESTORS. They know it, they demanded it, and the bill has been carefully written to make sure that can happen."

"Paulson... we would have had a bill already. Paulson insists that there be no limit on million dollar a month salaries to executives at wall street firms that are bailed out and that there be no limit hundreds of billions of dollars going to foreign investors. Not American companies that are owned by foreigner's, but foreign banks. We would have already voted for a bill - you can't call it a crisis and threaten a veto."

-Brad Sherman (D) California

Looks like congress isn't the only one holding this thing up.

[xela]

Re: No Time for Utopian Anti-Interventionism

What's the fuss?
Anyone seriously thinks this bailout (albeit modified) will not be passed by friday? Is it me or does it not already seem like the Treasury & Fed went along with it in the meantime? :cool:

[Supercilious]

Re: No Time for Utopian Anti-Interventionism

What's the fuss?
Anyone seriously thinks this bailout (albeit modified) will not be passed by friday? Is it me or does it not already seem like the Treasury & Fed went along with it in the meantime? :cool:

,

Probably by Friday, but in order to have that, we have to go first through an engineered market crash when everybody gets brown pants and Creammer's head explodes in panic live on TV

When everybody has the Fed's knife on the neck, we will have to acknowledge we are all hostages and each of us will have to give them the $2700 they need for their financial gambling habit.

This is how a mugging works regardless if it is done in a dark street or on the Wall Street

[Chris Coles]

Re: No Time for Utopian Anti-Interventionism

EJ,

My first impressions of your post were entirely positive until I too reached the conclusion that you had driven off track by suggesting the King Plan.

I believe that the Paulson rescue plan is akin to an equivalent contribution being asked for from US taxpayers to prop up the Nazi party just before the end of WW2. The current banking system has done untold damage to those of us who live in the world of innovation and honest hard working enterprise, just as it is now clearly recognised that the Nazi party damaged Europe. To my way of thinking, Paulson is something like Joseph Goebbels http://en.wikipedia.org/wiki/Joseph_Goebbels asking us all to pay him to continue the war.

There are a lot of significant differences between the 1930's and today. First of all, the only sector that is in deep trouble is the financial system itself. Secondly, you make the point that the majority of the income of the financial sector does not stem from what we on the outside consider to be "normal" trade. Most of their income comes from speculation. It is speculation, and the instruments that have been created by speculation, that lie at the heart of their problem.

Their problem.

The underlying problem for all of us outside of the financial system is that we have come to depend upon them for our access to normal trade. And that access is dependant upon access to credit. Access to funds to continue to trade is our problem.

Our problem.

I believe we should all of us concentrate upon our problem not theirs.

The best way forward is where I thought you were initially headed, until you brought up King.

We need to create and capitalise a series of new banking institutions.

To do that we also need to recognise the need to create a substantial set of new and acceptable banking regulations. That is acceptable to those of us OUTSIDE of the present financial system.

Before that, we must also recognise that if we keep the present banking elite in place as though nothing had happened, we will get nothing more than a repeat of the entrenched failings. They are as locked into the system as any addict. But, having said that, we must also learn from the mistake made in Iraq when we destroyed the lives of all of the members of the Bathe Party. There were many within that were better kept onside. So we also need to recognise the benefits earned by only hanging out to dry the principle individuals.

Europe, Germany in particular, came out of WW2 much stronger because they learned the lessons, on the one hand and were re-capitalised by a United States driven Marshall Plan. http://en.wikipedia.org/wiki/Marshall_Plan

You will note that the WIKI entry shows my own country, the UK, got the most money. You will also note that we spent the money on a socialist system for a National Health Service. The UK has now lost most of its heavy industry and is as dominated by a failed banking system as the US.

Germany spent the majority on capital investment in new, family owned business, mainly manufacturing. They went on to create Landesbanks that very effectively created small operations in many communities that then invested into small local companies. And, instead of expecting those investments to fail, they stood by them and did everything they could, (in free market terms), to make sure they succeeded. They have a strong manufacturing base, but like the rest of us are now suffering from "Our Problem" too.

I believe that the iTulip community should set out to emulate the success of the Marshall Plan and the subsequent success of the German Landesbanks. We have enough good thinkers and we have all the communications we need already in place. The internet gives us that.

We should create an international movement called iTulip Bank.

[*T*]

Re: No Time for Utopian Anti-Interventionism

Thesis, antithesis, synthesis... that is the dialectic process that brings me here.
Let us remain open to new thinking.

It strikes me that the essential problem is excessive concentration of power, be that the government, the banks or whoever. Pure capitalism concentrates the power with the capital, despite what libertarians say. Communism contentrated the power with the ruling elite rather than the working classes, despite what Marx hoped. Fascism, well, that was the point of fascism. An anarchist non-state has never really survived long enough for us to find out. Democracy is supposed to do a delicate balancing between all these, but usually ends up as a dictatorship of the (middle class, property owning) marginal voter.

Perhaps we should view the political corpus as a process rather than a choice between ideologies. Where power is excessively and abusively concentrated, it is destroyed or implodes.

Practically, the excessive concentration of power with the banks could have been reduced by limiting their individual size. Most importantly, the OTC derivative markets should never have got too large.

When I first learnt about the CDS (in my first job) my first thought was 'what a great idea'. My second was 'why isn't this traded on an exchange?'. The answer is that it is too profitable for JP Morgan. And they are too powerful for anyone to change the status quo.

People and institutions need saving from themselves.
But who watches the watchers? The angry mob.

[GRG55]

Re: No Time for Utopian Anti-Interventionism

Eric, based on my read of Rothbard's 'Great Depression,' it is clear to me that Hoover was an interventionalist, big-time, over '30-'32, and that FDR merely amplified the radical interventions that Hoover took. Thus, there was no attempt at 'self correction' in the G.D.

...

That's a point that remains in dispute. Hoover in his memoirs characterized himself as a "interventionist" but his Treasury Secretary of the time, Andrew Mellon, is credited with this statement:

"Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
-Andrew W. Mellon

Can you imagine Hank Paulson saying anything like this today?

[kingcopper]

Re: No Time for Utopian Anti-Interventionism

The facts speak for themselves. Small and mid sized regional banks are bucking the Wall Street trend and are performing fine. The large institutions are already corpses and are sucking capital in and shitting out CEO bailouts and lies to the millions of honest investors. The best bailout would be to add capital to the smaller institutions to help expand our economy and then buy some popcorn and watch Cramer suck wind as BOA, Citi, and their ilk shutter the doors. Afterall, if the securities and derivatives on the balance sheets of these titans is so toxic, let it die on the vine!

[rj1]

Re: No Time for Utopian Anti-Interventionism

One thing I will add for all of you who fear the angry masses... Do not worry. They are prostrate. It may be the 1930s in economic terms, but it isn't in political terms. There is no threat of any ideological or popular socialism. There is hardly even a threat of unionization. No, it will be what C. Wright Mills called "The Power Elite" that will be arbitrating this particular debacle... (yet everyone still irrationally sees the specter of socialism threatening to enserf us all).

The people who are having government take over the financial sector are technocrats. That is a different problem, but merely one more on the list of problems that are invisible to those who see the world in simple Hayekian or Cold War terms.

So you think it's a good thing that we're going to be taken advantage of and made state servants, but there's no political movement for us to go to? Isn't that the reason our country is as f*cked up as it is? The Democrats and Republicans take the voters for granted and so they vote as they please with little regard to us because a Republican knows his voter will most likely never entertain voting for a Democrat and vice versa, and there are no such things as solid third parties that can draw votes from them.

Honestly, if that's your point of view, we might as well all get out our guns and start shooting to instigate a coup because it would be no worse. I live near a ton of military personnel, I'm sure I can convince one general to take complete control.

[GRG55]

Re: No Time for Utopian Anti-Interventionism

Some folks around here need to stick with debating the issue(s) and forget about the personal attacks and insults. It's not only unnecessary, it's unbecoming.

[GRG55]

Re: No Time for Utopian Anti-Interventionism

EJ,

My first impressions of your post were entirely positive until I too reached the conclusion that you had driven off track by suggesting the King Plan.

I believe that the Paulson rescue plan is akin to an equivalent contribution being asked for from US taxpayers to prop up the Nazi party just before the end of WW2. The current banking system has done untold damage to those of us who live in the world of innovation and honest hard working enterprise, just as it is now clearly recognised that the Nazi party damaged Europe. To my way of thinking, Paulson is something like Joseph Goebbels http://en.wikipedia.org/wiki/Joseph_Goebbels asking us all to pay him to continue the war.

There are a lot of significant differences between the 1930's and today. First of all, the only sector that is in deep trouble is the financial system itself. Secondly, you make the point that the majority of the income of the financial sector does not stem from what we on the outside consider to be "normal" trade. Most of their income comes from speculation. It is speculation, and the instruments that have been created by speculation, that lie at the heart of their problem.

Their problem.

The underlying problem for all of us outside of the financial system is that we have come to depend upon them for our access to normal trade. And that access is dependant upon access to credit. Access to funds to continue to trade is our problem.

Our problem.

I believe we should all of us concentrate upon our problem not theirs.

The best way forward is where I thought you were initially headed, until you brought up King.

We need to create and capitalise a series of new banking institutions.

To do that we also need to recognise the need to create a substantial set of new and acceptable banking regulations. That is acceptable to those of us OUTSIDE of the present financial system.

Before that, we must also recognise that if we keep the present banking elite in place as though nothing had happened, we will get nothing more than a repeat of the entrenched failings. They are as locked into the system as any addict. But, having said that, we must also learn from the mistake made in Iraq when we destroyed the lives of all of the members of the Bathe Party. There were many within that were better kept onside. So we also need to recognise the benefits earned by only hanging out to dry the principle individuals.

Europe, Germany in particular, came out of WW2 much stronger because they learned the lessons, on the one hand and were re-capitalised by a United States driven Marshall Plan. http://en.wikipedia.org/wiki/Marshall_Plan

You will note that the WIKI entry shows my own country, the UK, got the most money. You will also note that we spent the money on a socialist system for a National Health Service. The UK has now lost most of its heavy industry and is as dominated by a failed banking system as the US.

Germany spent the majority on capital investment in new, family owned business, mainly manufacturing. They went on to create Landesbanks that very effectively created small operations in many communities that then invested into small local companies. And, instead of expecting those investments to fail, they stood by them and did everything they could, (in free market terms), to make sure they succeeded. They have a strong manufacturing base, but like the rest of us are now suffering from "Our Problem" too.

I believe that the iTulip community should set out to emulate the success of the Marshall Plan and the subsequent success of the German Landesbanks. We have enough good thinkers and we have all the communications we need already in place. The internet gives us that.

We should create an international movement called iTulip Bank.

Pardon me all to hell, but I seem to recall that more than one or two of those vaunted Landesbanks have had to be bailed out by the German Government in the past year or so...

27.08.2007
Another Landesbank bites the dust

By: Wolfgang Münchau
Three German financial institutions have filled the traditional news gap during this summer. WestLB, IKB Deutsche Kreditbank and SachsenLB, are all, or partly, publically owned banks, and they suffered severe liquidity problems, partly as a result of exposure to subprime investments...

...The German public sector banks enjoy effective protection against default. This is important. Their default-free status is not implicit, as for example similar to the status of the US mortgage institutions Fannie Mae and Freddy Mac. Their protection is guaranteed, and everybody who works for these banks knows it. It is this guarantee that has made investment managers and traders – and their superiors - far more risk-prone than their counterparts in the private sector...
More...

[GRG55]

Re: No Time for Utopian Anti-Interventionism

Indeed, and just like there is no such thing as being a little bit pregnant, there is nothing quite so permanent as temporary socialism, temporary fascism, etc.

Exactly.

The underlying assumption behind the "let-it-burn-down-and-let's-start-over-again" crowd is that the result will automatically emulate all that is "best" about the USA through its history [thrift, hard work, innovation, self-sacrifice, moral leadership, etc.] while somehow completely avoiding the recent excesses that have compromised its personal liberties, sapped its economic strength, damaged its reputation, detracted from its international standing, and reduced its moral authority.

It's almost as if people believe that such a unique [by historical and current global standards] outcome is coded into the national DNA of the US and therefore, after allowing the inevitable cleansing melt-down, surely it will be "born-again" in that former image. I would love to believe that would be the case.

But I have heard not one cogent argument from the burn-baby-burn cohort on this site explaining why we should anticipate such an optimistic outcome, as opposed to something darker, perhaps much darker; closer to what bart infers...

[Chris Coles]

Re: No Time for Utopian Anti-Interventionism

Pardon me all to hell, but I seem to recall that more than one or two of those vaunted Landesbanks have had to be bailed out by the German Government in the past year or so...

27.08.2007
Another Landesbank bites the dust

By: Wolfgang Münchau
Three German financial institutions have filled the traditional news gap during this summer. WestLB, IKB Deutsche Kreditbank and SachsenLB, are all, or partly, publically owned banks, and they suffered severe liquidity problems, partly as a result of exposure to subprime investments...

...The German public sector banks enjoy effective protection against default. This is important. Their default-free status is not implicit, as for example similar to the status of the US mortgage institutions Fannie Mae and Freddy Mac. Their protection is guaranteed, and everybody who works for these banks knows it. It is this guarantee that has made investment managers and traders – and their superiors - far more risk-prone than their counterparts in the private sector...
More...

I am not talking about the present situation where we are all very aware that the speculative disease has been caught by many banks world wide, including, quite right to point out - Landesbanks. What I am saying is that prior to the outbreak, much of what had gone before was good, worked well and delivered success for many.

I am simply suggesting that there are lessons to be learned and we should take them on board.

Your previous post alluded to your being upset by someones post. You should have let us see what it was that so upset you.

[defomcduff]

Re: No Time for Utopian Anti-Interventionism

As a fellow Libertarian (with less talent for the identifying the practical than EJ), I say Bravo to Eric Janszen.

This plan resonates with me since it clearly distinguishes between government *control* and government *support*. To the extent that we can have the latter without the former, I'm on board.

Best regards,
DeForest McDuff

[bart]

Re: No Time for Utopian Anti-Interventionism

But I have heard not one cogent argument from the burn-baby-burn cohort on this site explaining why we should anticipate such an optimistic outcome, as opposed to something darker, perhaps much darker; closer to what bart infers...

I'm probably not nearly as dark as some (many?) think, but I'm certainly not very optimistic. I'm also very much not in the burn baby burn crowd - that's almost psychotic in my opinion and in the be careful what you wish for department at best.

My father experienced both Weimar Germany and the Great Depression first hand and although I wish I'd listened much more (like most offspring), I heard enough to know that its worthwhile to take some chances to try and avoid either.

Hopefully, many realize that the King plan (and others) are far superior to Paulson's original abomination. Although I truly dislike getting into the political area and expressing an opinion, I'm in favor of both doing something small almost immediately and also continuing to work on a plan that makes more sense and is fairer to all. We still do have a chance to improve conditions, and continuing to write, call or fax one's Congress critters is part of what a democracy (with all its failings) is all about.

Laissez faire does after all mean an economic doctrine that opposes governmental regulation of or interference in commerce beyond the minimum necessary for a free-enterprise system to operate according to its own economic laws.

I wish us all (even including most politicians and bankers) good luck and Godspeed.

[jtabeb]

Re: No Time for Utopian Anti-Interventionism

Some folks around here need to stick with debating the issue(s) and forget about the personal attacks and insults. It's not only unnecessary, it's unbecoming.

I will take a hit on this, but I was trying to illustrate that exact point.

(no the ends, don't justify the means)

Just calling a spade "a spade" when I see one. You are both correct, I was a spade in this case too.