No Time for Utopian Anti-Interventionism

[Supercilious]

Re: No Time for Utopian Anti-Interventionism

The risk of our government devolving into a dictatorship, considerable as it may be, is not my primary reason for wanting to see the King plan implemented versus non-intervention. We lack the experienced leadership needed to steward the economy through the kind of crisis an unmanaged debt deflation will create. For that reason I believe that road leads to disaster.

Sorry EJ but you posts seems to me like an endorsement of another compromise with the devil. The King Plan has nothing to do with all great quotes you used in your message.

IMHO an utopian anarchist/libertarian, like Jim Rogers, who knows nothing about markets, makes more sense than your support for the King Plan:

[metalman]

Re: No Time for Utopian Anti-Interventionism

Sorry EJ but you posts seems to me like an endorsement of another compromise with the devil. The King Plan has nothing to do with all great quotes you used in your message.

IMHO an utopian anarchist/libertarian, like Jim Rogers, who knows nothing about markets, makes more sense than your support for the King Plan:

easy for him to say since he got out of dodge and is now living in china.

they sure as hell don't let markets collapse on their own there.

jim says one thing but does another. does not much enhance his credibility.

what is your fantasy anyhow? that the debt goes away and everyone just continues on their merry way? you seen itulip's 'before' pictures?



what do you think the 'after' pic is gonna look like?

what do you think the millions of crushed debtors are going to vote for?

'oh, i didn't want my kids going to college anyway. oh, i didn't need that car anyway. oh, i don't need to see the doctor for my diabetes, it'll get better. oh,...'

riiiiiight.

what do you think is gonna happen in the usa if we get the economic crash you dream of? think the poor will get richer? don't think the rich will dodge the bullet? think: argentina type wealth and poverty distribution when it's over.

or maybe you're hoping for wealth redistribution?

why don't you fundamentalist libertarians all go move to some 3rd world country with the gated communities ringed with guns and barbed wire... your idea of the dream life apparently... instead of trying to turn my country into one.

[jtabeb]

Re: No Time for Utopian Anti-Interventionism

In a perfect world, of course.

Adam Smith said, "The natural effort of every individual to better his own condition ... is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations. Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things." - The Wealth of Nations Book IV Chapter V Section IV

But following a crash of the US economy, are peace and a reasonable administration of justice the likely outcomes after a few hundred million people are suddenly denied the standard of living to which they have become accustomed?

A prerequisite for the constructive outcome of the US re-developing in the way Adam Smith describes: competent leadership.

What is that?

"All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership." - John Kenneth Galbraith

Do you see anyone who is currently running for president who is confronting unequivocally the major anxiety of the American people in our time? I do not. I see politicians who have lost the trust of their people and their credibility. They are conveying false hopes about the outcome of US domestic and foreign debt.

No one who is running is telling the people the truth: "My fellow Americans, we can never pay it back. Not the home mortgages. Nor the credit cards. Nor the hospital bills. Nor the college tuitions. Nor the foreign debts to China, Japan, Russia. We have to write most of it down, and when we do we will not be able to borrow from overseas again for many years. We shall then be materially more poor for a decade than we were 20 years ago while we dig ourselves out of the hole we'd dug ourselves into since the early 1980s. But if we work hard and save and invest we will reemerge better and stronger than ever. Here is how we are going to do it."

That is what my book does. It levels with the American people. It offers no "let's get rich on the coming collapse" nonsense. It is about the restoration of all that we have lost that made us great.

"If there is a country in the world where concord, according to common calculation, would be least expected, it is America. Made up as it is of people from different nations, accustomed to different forms and habits of government, speaking different languages, and more different in their modes of worship, it would appear that the union of such a people was impracticable; but by the simple operation of constructing government on the principles of society and the rights of man, every difficulty retires, and all the parts are brought into cordial unison. There the poor are not oppressed, the rich are not privileged. Industry is not mortified by the splendid extravagance of a court rioting at its expense. Their taxes are few, because their government is just: and as there is nothing to render them wretched, there is nothing to engender riots and tumults." - Thomas Paine

What would Paine say about America today? He'd note that the poor are oppressed by debt and taxes, that a system of debt serfdom not unlike the one the first settlers came to America to escape. He'd note that the rich have constructed a system of privilege that concentrates wealth and power and diminishes the productivity of the people. He'd see a government mortifying industry by subsidizing finance at its expense. He'd see an economy staggering under a hopeless load of debt. In sum, he'd be horrified.

But, as I said, to return the US to its roots takes leadership. Unfortunately, the FIRE Economy has captured our political system so we are not likely to get any while the economy is imploding. Change will instead occur from the bottom up.

"All successful revolutions are the kicking in of a rotten door. The violence of revolutions is the violence of men who charge into a vacuum." - John Kenneth Galbraith

And this is where optimists and pessimists can argue. The US got off easy with FDR during the last depression. Other nations that suffered through the last depression were not so fortunate.

In one corner:

"The world economic crisis is merely the last and worst of the periodic crises inevitable under the capitalist system, whose production invariably outruns the demand every ten years or so because the capitalist producers withhold the profits from the working population and the gradual accumulation of this mass of profit becomes, so to speak, 'frozen' at the end of each period—or is exported—whereas under the Socialist system every cent of 'profit' is returned to the workers, not only in the form of wages but in material and cultural construction. Thus in the Socialist state—in Soviet Russia—there is no frozen money, so that supply and demand are adjusted automatically." - Stalin On Everything, Time Magazine, Jul 14, 1930

In the other:

"Up to today not even President Hoover has been able to work [economic] miracles," [he] said last week, "and he is the most powerful man in the world at the head of the richest country in the world." Facing [him] in a respectful crescent sat Italian Capital & Labor, not metaphorically but in solemn fact. This was the inaugural session of the new National Council of Corporations. It was to hear the Prime Minister's personal examination of Depression, his prophecy of when Prosperity will return.

"Not All Can Be Saved!"

"In our usual blunt, precise Fascist style, without euphemism and without reticence, we admit," said [he], "that our general economic situation has grown worse since last October, when the American crisis burst with the violence of dynamite. . . .

"The Fascist Government is not passive in the face of the present difficult situation, as vile anti-Fascist scandalmongers say. The government has its hand on the pulse of the nation and hears distress signals from whatever source they come. But not all can be saved and some indeed deserve to go to the bottom. The majority of the latter belong to the category—enormously increased during and after the War—of business improvisers, men more reckless than enterprising, acrobats of industry and finance, men supremely encyclopedic in their initiatives."

"Pyramid Trusts Flayed"

"The mountebanks of the economic world," [he] continued, looking several such on the Council benches directly in the eye, "complicate everything with innumerable companies on a chain system, with boards of directors composed of nonentities who exercise no true leadership, often with faked balance sheets and non-existent dividends. They are the true, authentic, most dangerous kind of anti-Fascists because they speculate on the good faith of the public. Prison is small retribution for their misdeeds. They sow such infinite ruin and misery and they do such harm that they truly deserve Death!

"Some examples have already been made, but henceforward such men will be shown even more clearly that the public can not be defrauded and hard-earned savings cannot be misused with impunity." - Report on a speech by Prime Minister Benito Mussolini, "No Miracles Today," Time Magazine, Oct. 13, 1930

Beating up on the crashed FIRE Economy 1.0 was a rallying cry for dictators on both the left and right.

For any hope to see a positive outcome – history is clear on this – do not vote for the candidate who aspires to be a dictator. Going into this period of economic crisis, no one can be more dangerous.

The risk of our government devolving into a dictatorship, considerable as it may be, is not my primary reason for wanting to see the King plan implemented versus non-intervention. We lack the experienced leadership needed to steward the economy through the kind of crisis an unmanaged debt deflation will create. For that reason I believe that road leads to disaster.

How much to send a copy of your book out to each memeber of house and senate? I'll pony up for that (a good portion, at least).

[j4f2h0]

Re: No Time for Utopian Anti-Interventionism

I think Howard Zinn's "A People's History of the US" describes what will inevitably happen here from a historical perspective. Government will come up with some sort of plan that is tricky enough to fool uneducated popular support. This program will directly benefit the ruling class, leaving the "people" most likely with far less freedoms and access to capital as they has before. Government always does what is best for the few at the top, giving away only the minimum that is required to "please" the masses.

[metalman]

Re: No Time for Utopian Anti-Interventionism

In a perfect world, of course.

Adam Smith said, "The natural effort of every individual to better his own condition ... is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations. Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things." - The Wealth of Nations Book IV Chapter V Section IV

But following a crash of the US economy, are peace and a reasonable administration of justice the likely outcomes after a few hundred million people are suddenly denied the standard of living to which they have become accustomed?

A prerequisite for the constructive outcome of the US re-developing in the way Adam Smith describes: competent leadership.

What is that?

"All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership." - John Kenneth Galbraith

Do you see anyone who is currently running for president who is confronting unequivocally the major anxiety of the American people in our time? I do not. I see politicians who have lost the trust of their people and their credibility. They are conveying false hopes about the outcome of US domestic and foreign debt.

No one who is running is telling the people the truth: "My fellow Americans, we can never pay it back. Not the home mortgages. Nor the credit cards. Nor the hospital bills. Nor the college tuitions. Nor the foreign debts to China, Japan, Russia. We have to write most of it down, and when we do we will not be able to borrow from overseas again for many years. We shall then be materially more poor for a decade than we were 20 years ago while we dig ourselves out of the hole we'd dug ourselves into since the early 1980s. But if we work hard and save and invest we will reemerge better and stronger than ever. Here is how we are going to do it."

That is what my book does. It levels with the American people. It offers no "let's get rich on the coming collapse" nonsense. It is about the restoration of all that we have lost that made us great.

"If there is a country in the world where concord, according to common calculation, would be least expected, it is America. Made up as it is of people from different nations, accustomed to different forms and habits of government, speaking different languages, and more different in their modes of worship, it would appear that the union of such a people was impracticable; but by the simple operation of constructing government on the principles of society and the rights of man, every difficulty retires, and all the parts are brought into cordial unison. There the poor are not oppressed, the rich are not privileged. Industry is not mortified by the splendid extravagance of a court rioting at its expense. Their taxes are few, because their government is just: and as there is nothing to render them wretched, there is nothing to engender riots and tumults." - Thomas Paine

What would Paine say about America today? He'd note that the poor are oppressed by debt and taxes, that a system of debt serfdom not unlike the one the first settlers came to America to escape. He'd note that the rich have constructed a system of privilege that concentrates wealth and power and diminishes the productivity of the people. He'd see a government mortifying industry by subsidizing finance at its expense. He'd see an economy staggering under a hopeless load of debt. In sum, he'd be horrified.

But, as I said, to return the US to its roots takes leadership. Unfortunately, the FIRE Economy has captured our political system so we are not likely to get any while the economy is imploding. Change will instead occur from the bottom up.

"All successful revolutions are the kicking in of a rotten door. The violence of revolutions is the violence of men who charge into a vacuum." - John Kenneth Galbraith

And this is where optimists and pessimists can argue. The US got off easy with FDR during the last depression. Other nations that suffered through the last depression were not so fortunate.

In one corner:

"The world economic crisis is merely the last and worst of the periodic crises inevitable under the capitalist system, whose production invariably outruns the demand every ten years or so because the capitalist producers withhold the profits from the working population and the gradual accumulation of this mass of profit becomes, so to speak, 'frozen' at the end of each period—or is exported—whereas under the Socialist system every cent of 'profit' is returned to the workers, not only in the form of wages but in material and cultural construction. Thus in the Socialist state—in Soviet Russia—there is no frozen money, so that supply and demand are adjusted automatically." - Stalin On Everything, Time Magazine, Jul 14, 1930

In the other:

"Up to today not even President Hoover has been able to work [economic] miracles," [he] said last week, "and he is the most powerful man in the world at the head of the richest country in the world." Facing [him] in a respectful crescent sat Italian Capital & Labor, not metaphorically but in solemn fact. This was the inaugural session of the new National Council of Corporations. It was to hear the Prime Minister's personal examination of Depression, his prophecy of when Prosperity will return.

"Not All Can Be Saved!"

"In our usual blunt, precise Fascist style, without euphemism and without reticence, we admit," said [he], "that our general economic situation has grown worse since last October, when the American crisis burst with the violence of dynamite. . . .

"The Fascist Government is not passive in the face of the present difficult situation, as vile anti-Fascist scandalmongers say. The government has its hand on the pulse of the nation and hears distress signals from whatever source they come. But not all can be saved and some indeed deserve to go to the bottom. The majority of the latter belong to the category—enormously increased during and after the War—of business improvisers, men more reckless than enterprising, acrobats of industry and finance, men supremely encyclopedic in their initiatives."

"Pyramid Trusts Flayed"

"The mountebanks of the economic world," [he] continued, looking several such on the Council benches directly in the eye, "complicate everything with innumerable companies on a chain system, with boards of directors composed of nonentities who exercise no true leadership, often with faked balance sheets and non-existent dividends. They are the true, authentic, most dangerous kind of anti-Fascists because they speculate on the good faith of the public. Prison is small retribution for their misdeeds. They sow such infinite ruin and misery and they do such harm that they truly deserve Death!

"Some examples have already been made, but henceforward such men will be shown even more clearly that the public can not be defrauded and hard-earned savings cannot be misused with impunity." - Report on a speech by Prime Minister Benito Mussolini, "No Miracles Today," Time Magazine, Oct. 13, 1930

Beating up on the crashed FIRE Economy 1.0 was a rallying cry for dictators on both the left and right.

For any hope to see a positive outcome – history is clear on this – do not vote for the candidate who aspires to be a dictator. Going into this period of economic crisis, no one can be more dangerous.

The risk of our government devolving into a dictatorship, considerable as it may be, is not my primary reason for wanting to see the King plan implemented versus non-intervention. We lack the experienced leadership needed to steward the economy through the kind of crisis an unmanaged debt deflation will create. For that reason I believe that road leads to disaster.

am i the only one to notice that these quotes from stalin and mussolini are from july and oct 1930? the first is only 9 months after the economy was booming and the second only a year later. guess these debt deflations go fast, eh?

ah, yes. let's spend more time arguing about bailouts or not. dum de dum dum.

[akrowne]

Re: No Time for Utopian Anti-Interventionism

Eric, I agree with many of your and King's points. In theory, the optimal way to handle this is to wean the real economy off the dysfunctional financial economy we've had by providing intermediate facilities -- even if the ultimate outcome is to become "more" libertarian.

Maybe it can work. But the damn difficult part is not crowding out the market and the market's recovery once you put government facilities in place -- even if "temporary".

Yes, not much was done at the beginning of the Great Depression (but also not "nothing"). Still, when the New Deal provisions were put in place under FDR, they didn't solve the depression either.

I'm wondering if maybe this doesn't have to do with the fact that sound money always seems to be off the menu of potential solutions.

We've never solved a Depression in the United States under fiat currency. We just used a war to switch to a current account surplus (which is isn't working this time).

Incidentally, Japan hasn't either.

And while I'm not an expert on their latest condition, I don't think Argentina has either.

I suspect this might be because it can't be done.

Transitioning back to sound money right now would have a number of big benefits that would help put us back on track.

One is to attract capital back to the United States, which will be sorely needed to recapitalize (and just to stem capital flight).

Another is to lower inflation and alleviate cost pressures on the people.

Another would be to dampen aggressive speculative activity in the markets, since synthetic hedges would no longer be needed to preserve capital.

Long-term, we need to eliminate the FDIC as well, as it causes self-destructive behavior by banks. But I think a strong case can be made in the near-term that the FDIC coverage should go universal, so it is very hard to square these two pressures.

I think the two focii for government crisis policy should be getting homeowners out of underwater loans, and keeping industry funded (if not redeveloping). There are a variety of ways to implement these things. I'm not sure how the King plan really gets people out of ill-founded loans simply by capitalizing community banks, however...

[Supercilious]

Re: No Time for Utopian Anti-Interventionism

Some food for EJ's thought:

(Yves Smith from Naked Capitalism)

http://bloggingheads.tv/diavlogs/14850

[akrowne]

Re: No Time for Utopian Anti-Interventionism

Too true. It is highly associated with the individualism that is only enabled by socially-generated wealth. Call it the libertarian blind spot...

Not really. The core of libertarianism is non-coercion, not "individualism" as such. To advocate some sort of "pure" individualism would be to suggest all humans could live without a society, which is nonsense.

Society is an axiom; but it works best with freedom of association. That's the libertarian take. Even many who call themselves libertarians don't get it.

[akrowne]

Re: No Time for Utopian Anti-Interventionism

Harry Browne said "You CAN be free in an Unfree World" ..

Those who don't agree can just say NO to F.I.R.E. economy elites and keep their money outside the dollar system.

Other's who believe socializing these things is the best way to go can stay and continue making sausage.

That's the real beauty of it all!!!

Good point!!!! ;)

[vinoveri]

Re: No Time for Utopian Anti-Interventionism

No one who is running is telling the people the truth: "My fellow Americans, we can never pay it back. Not the home mortgages. Nor the credit cards. Nor the hospital bills. Nor the college tuitions. Nor the foreign debts to China, Japan, Russia. We have to write most of it down, and when we do we will not be able to borrow from overseas again for many years. We shall then be materially more poor for a decade than we were 20 years ago while we dig ourselves out of the hole we'd dug ourselves into since the early 1980s. But if we work hard and save and invest we will reemerge better and stronger than ever. Here is how we are going to do it."

Yes, this would be real leadership and what we need, and the sooner the better.
Such a position, while not pleasant to hear, just might be radical enough to get you an interview with the MSM - hey what's a few rotten tomatoes if you can get the truth out.

Receptivity to this message requires a population whose "patriot dreams see beyond the years". I fear we are no longer a unified society with enough common love of country and community for this message to resonate, but cold hard reality will catch up either way.

[akrowne]

Re: No Time for Utopian Anti-Interventionism

Speaking of intervention, my latest:
The Top Five Reasons The Bailout Interventions Are Making Things Worse

Maybe a productive intervention is possible, but what has been done so far sure as hell isn't it.

[metalman]

Re: No Time for Utopian Anti-Interventionism

Some food for EJ's thought:

(Yves Smith from Naked Capitalism)

http://bloggingheads.tv/diavlogs/14850

why send me off to watch two clueless people ramble about the bailout?

here, try this.

Banking Crises Around The World
The Liscio Report On the Economy
October 1, 2008

Having rejected Henry Paulson's rescue plan, it's not clear what Congress --or those in the broad population opposed to a "bailout"-- propose to do to keep the financial system from imploding. But a database of systemic banking crises recently assembled by IMF economists Luc Laevan and Fabian Valencia (http://www.imf.org/external/pubs/cat...cfm?sk=22345.0) provides a useful map of how crises play out and what does and doesn't work.

Laevan and Valencia identify 124 systemic banking crises between 1970 and 2007, and assemble detailed information on 42 of them, representing 37 countries. (Some countries, like Argentina, appear multiple times.)

In almost every case, governments took active measures to mitigate the crisis, so there is no real test of whether rescue schemes actually work; no politician seems willing to face the consequences of letting the chips fall where they may. But the work of Laevan and Valencia does offer some guidance as to what works best.

Dithering Costs

One crucial lesson stands out: speed matters. This is obvious to anyone who followed Japan's dithering in the 1990s; standing aside and hoping the problem goes away is not a good idea. Relatedly, "forbearance" --regulatory indulgence, such as permitting insolvent banks to continue in business-- does not work, as has been established in earlier research. As the authors say, "The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance." This suggests that suspending mark-to-market requirements is not a good idea.

Since forbearance does not work, some sort of systemic restructuring is a key component of almost every banking crisis, meaning forced closures, mergers, and nationalizations. Shareholders frequently lose money in systemic restructuring, often lots of it, and are even forced to inject fresh capital. The creation of asset management companies to handle distressed assets is a frequent feature of restructurings, but they do not appear to be terribly successful. More successful are recapitalizations using public money (which can often be partly or even fully recouped through privatization after the crisis passes); recaps seem to result in smaller hits to GDP. But they're not cheap: they average 6% of GDP, which for the U.S. would be about $850 billion.

Total fiscal costs, net of eventual asset recoveries, average 13% of GDP (over $1.8 trillion for the U.S.); the average recovery of public outlays is around 18% of the gross outlay.

But those who don't want to spend that kind of taxpayer money should consider this: Laevan and Valencia find that "[t]here appears to be a negative correlation between output losses and fiscal costs, suggesting that the cost of a crisis is paid either through fiscal costs or larger output losses." And if the economy goes into the tank, government revenues take a big hit, so what's saved on the expenditure side could well be lost on the revenue side.

Oh, and about half the countries that have experienced crises have had some form of deposit insurance. So merely expanding the FDIC's coverage is not likely to do the trick --and, in any case, it's going to be hard to escape the huge expense of a systemic recapitalization, though using the FDIC might simplify the politics of the rescue.

(A note on the politics of the rescue: an ABC poll shows the public to be far more worried about the economic consequences of the bailout's defeat than Congress seems to be. There's not a lot of enthusiasm for what's seen as handing money over to Wall Street --but if properly structured and sold, say with more cost recovery prospects for the government, more relief for debtors, a rescue is not as unpopular as some would have it.)

Relevant Examples

Most of the countries in the Laevan/Valencia database are in the developing world, and are of questionable relevance to the U.S. But TLR has taken a closer look at four countries that offer more relevant models: Japan, Korea, Norway, and Sweden. Some major stats for the four and the U.S. are in the table at the end of the newsletter, and graphs of some important indicators are there as well.

Sweden, now widely seen as a model of swift, bold action, kept its ultimate fiscal costs relatively low --3.6% of GDP at first, almost all of which was recovered through stock and asset sales-- but was unable to avoid a deep recession. At the other end of the spectrum, Japan, the model of foot-dragging half-measures, saved no money through its procrastination; its fiscal outlay was 24% of GDP, almost none of which was recovered. And it was unable to avoid recession.

Note, though, that some of the worried talk surrounding the financial market impact of bank bailouts looks misplaced, at least on these models. Three years after the outbreak of crisis, inflation was lower and stock prices higher in all four countries, and government bond yields were lower in all but Japan. It's likely that the deflationary effects of a credit crunch outweigh the inflationary effects of debt finance.

Although the U.S. in 2007 had a lot in common with other countries on the brink of a banking crisis, one thing stands out: the depth of the current account deficit. Of the four comparison countries, only Korea comes close to the U.S. level of red ink. The unweighted average current account deficit of the 42 countries in the Laevan/Valencia database was 3.9% of GDP --compared with 6.2% for the U.S. That suggests that the U.S. has more to deal with than just resolving a banking crisis.

A Better Bailout

So, with the modified Paulson plan dead for now, what might a better bailout scheme look like in light of the Laevan/Valencia historical database?

First, it must be adopted quickly. Perhaps operating through the FDIC would be a way to accomplish that, though the FDIC will almost certainly need to have its coffers copiously refilled.

Second, forbearance would be a bad idea; it does no one any good not to face reality.

Third, purchasing bad assets and turning them over to an asset management corporation is not a promising strategy.

Fourth, recapitalizing the banks should be the heart of any policy; as the authors say, it should be selective, meaning supporting those institutions with hope of revival, and letting the terminal go down.

And fifth, targeted relief for distressed debtors, supported with public funds, has also shown success in earlier banking crises, and should be part of any rescue scheme in the U.S. as well.

Crises like this are manageable. They're expensive and painful to resolve, but even more expensive and painful when left to fester.

-- Philippa Dunne & Doug Henwoo

[Supercilious]

Re: No Time for Utopian Anti-Interventionism

why send me off to watch two clueless people ramble about the bailout?

Yves Smith clueless????:eek: That is a best Princess Fiona-style quote i've ever heard from you.

You made my day metalman...

[metalman]

Re: No Time for Utopian Anti-Interventionism

Yves Smith clueless????:eek: That is a best Princess Fiona-style quote i've ever heard from you.

You made my day metalman...

Yves Smith has written the blog "Naked Capitalism" since 2006. She has spent more than 25 years in the financial services industry and currently heads Aurora Advisors, a New York-based management consulting firm specializing in corporate finance advisory and financial services. Prior to that, she worked for Goldman Sachs (in corporate finance), McKinsey & Co., and Sumitomo Bank (as head of mergers and acquisitions). Smith has written for publications in the United States and Australia, including The New York Times, The Conference Board Review, Institutional Investor, The Daily Deal and the Australian Financial Review. She is a graduate of Harvard College and Harvard Business School.

but on this topic she is clueless. anyone could see the 1st bailout was bogus. you don't have to be a harvard grad to see that. does not follow that no bailout makes sense. she ought to read ej.

[Louie.G]

Re: No Time for Utopian Anti-Interventionism

hmmm very interesting postulations so allow me to throw my little spanner in the works.

IMHO when inflation is tracked back to its ultimate source there are only ever two causes.... Greed or inefficiency.

I guess one could say Wall Street has provided the greed (I have had trouble trying to find any difference between Vegas and Wall Street, other than the Flashier slot machines) and Government has supplied the inefficiency. I am not an economist, I just own my own little business. My business is only as good as its worst employee in my eyes. When someone makes a mistake or has a bad day, I foot the bill and I take responsibility.

The one thing that seems to be so often missing in financial discussions is people and thus emotion. In the US over the past ten days I have spoken to several associates whose sales are down 80 - 90% in last years same week sales. Seems people may have put away their wallets. (would this be close to a "Sudden Stop"??)

We can all attribute blame, but what is blame?? I call it - Blatant Lies At My Expense.

In other words I can choose to not accept responsibility and pass it over to someone else so I feel better, else I can look at me and say, what is REALLY happening here. Blame is such a futile excuse.

I have read that the game has changed/is changing and the next 20 years will be nothing like the last 20. The whole financial system is changing, so therefore might not the rules need to change as well?? The only thing that is ever constant is change. It is just the degree of change that changes.

We hear about all the banks on the"watch list" that will fail. By my count there are a lot of banks out there who will not fail (all going well). So why not do an about face and support those institutions that have proven to be more diligent rather than throw another bet into the Wall Street Casino. If politicians want to be re elected, then supporting their constituents local bank would surely find much more favour than another Wall Street gamble. Plus it just might make the population feel a lot more at ease, feel like someone actually cares about them. They just might start to relax a little and maybe even start to believe in something positive again. Hell they might even go out and Buy something. Now that might be a good thing, don't you think??

I don't doubt that my comments may bring some adverse replies and that is fine, because it will allow me to look at me and see if I have it wrong. Then I can either change me or live on in my delusion.

I greatly appreciate all of the comments here and have learnt a lot through the writings of each and every one of you.

Perspective is all that keeps us apart, but somewhere inside this mess there is a Truth and That Truth shall set you free, if it is ever found amongst this huge pile of exposed greed and deceit that we are ALL faced with now.

It doesn't really hurt that much when you step outside of the box and look at something from a different perspective. In fact doing just that is what has allowed us ALL to evolve and live in a world full of amazing technology and instant hamburgers. Finance is not sacred, there are no fixed rules. PEOPLE are sacred, ALL people. Be they Asian, Anglo saxon, African, purple, pink or green. THEY are the other side of the balance sheet. Too often, that simple fact is forgotten, usually because of Ego or Greed. The greatest wealth of any economy lies in its people.

There is great wealth here at itulip because of all of you.

Cheers