Collapse of the Economy in 24 hours. . .

[KGW]

Fearmongering?

[Sapiens]

Re: Collapse of the Economy in 24 hours. . .

"[I]f you don't have a banking system, you don't have an economy."

It is important that we must pay attention and decipher the doublespeak my fellow iTulipers! What Rep. Kanjorski meant to say was: “Without a banking system, there is no way to fleece the masses!”

In other words, the banking system is nothing but an efficient system to extract wealth (labor) from the many to the benefit of the few.

If there was no banking system in place, wealth could not be concentrated in the apex of few individuals. Wealth would be diffused into many little pools of talented individuals.

Of course, I doubt that Rep. Kanjorski meant that without a banking system people would cease to trade.

[BrianL]

Re: Collapse of the Economy in 24 hours. . .

I don't think it is intentional fearmongering on his part. I assume that is about how it played out - that he is repeating the information he was told. Now, I doubt well ever know how it would have played out without the FDIC change.

The paradox here is in the feedback loop. The public is angry because they lack informtion and education about what is going on. If everyone was spontaneously informed and acted in their own self interest, would the system collapse?

I don't think the people making the calls know. Or they don't believe the public knowledge can be grown in a productive way. Or they don't believe the public needs to be dealt with yet, as that would just make the process take longer. In any case, as a result the public gets most of its understanding through pundits with agendas. This adds more misinformation and anger into the system, pushing closer to an explosion.

Trying to inform the public at this stage and use the feedback to drive the process could be like passing out ballots for to decide action during the Cuban missile crisis.

[BrianL]

Re: Collapse of the Economy in 24 hours. . .

As an aside, I've talked with various very educated and street smart people - successful entrepreneurs, upper middle class tech workers, educators - and heard their views over the last few weeks. Those who have been studying the situation have views somewhat in line with itulip.

Those who haven't invested personal time getting educated generally believe the problem is a crisis of confidence among American spenders. They believe that if the government stopped telling us what was going on and if the newspapers stopped writing about it, the problem would resolve itself as people returned to regular spending patterns.

[don]

Re: Collapse of the Economy in 24 hours. . .

As an aside, I've talked with various very educated and street smart people - successful entrepreneurs, upper middle class tech workers, educators - and heard their views over the last few weeks. Those who have been studying the situation have views somewhat in line with itulip.

Those who haven't invested personal time getting educated generally believe the problem is a crisis of confidence among American spenders. They believe that if the government stopped telling us what was going on and if the newspapers stopped writing about it, the problem would resolve itself as people returned to regular spending patterns.

iTulip on the FIRE-ing line

[CanuckinTX]

Re: Collapse of the Economy in 24 hours. . .

Those who haven't invested personal time getting educated generally believe the problem is a crisis of confidence among American spenders. They believe that if the government stopped telling us what was going on and if the newspapers stopped writing about it, the problem would resolve itself as people returned to regular spending patterns.

This is exactly what I heard from my mother this past weekend when she asked me "why does Obama keep spreading fear?". She is, to put it delicately, one of the less-learned people that watch MSM and nothing else. I've learned to just say, "yeah, I don't know."

What's going on now and what is to come is difficult enough for me to understand (especially if there was no iTulip) so how can you teach the masses the intricacies of this meltdown?

[EJ]

Re: Collapse of the Economy in 24 hours. . .

This is not fear mongering. It is, unfortunately, the truth.

During that week when Paulson and Bernanke in their ham handed way proposed the emergency bailout to Congress, before I wrote No Time for Utopian Anti-Interventionism, I talked to Dr. Peter Warburton (see Inside the Whirlpool: Interview with Dr. Peter Warburton), Martin Mayer and other experts. The conclusion: the patent, the US banking system, had gone into cardiac arrest and died while Congress bickered for two weeks about whether or how to apply a defibrillator.

It has never recovered.

The global economy has been collapsing ever since.

Now we watch Congress bicker about lame acts of fiscal stimulus to try to revive demand. But the fact is it's too late to do much but watch in horror.

A smoother transition from the FIRE Economy to a New Economy could have been managed, but for one of the more dysfunctional aspects of what I call the Inexorable Logic of the US Political Economy: the political system and the financial system have an impedance mismatch; one turns slowly and the other very, very quickly.

So, unfortunately, we shall have a Great Depression II following the collapse of FIRE Economy V2.0 worse than the Great Depression I that followed the collapse of FIRE Economy V1.0 in the 1930s. I'd hoped for better, but here we are.

We may not have liked the old government and private credit-based money system any more than anyone else -- believed it was corrupt and produced gross inequalities and risks -- but it was the system we were using.

The Titanic is an excellent metaphor, with a twist.

Some of the passengers complained that the propulsion system was poorly conceived and should be replaced. Some, in fact, asserted it should be destroyed.

What these passengers forget is that they, too, are passengers on the same boat with everyone else, and that if the system crashed they are doing down with everyone else. In fact, for anyone with any special flotation devices I guarantee that before this is over you will be sharing them with the survivors whether you like it or not. This is another aspect of the Inexorable Logic of the US Political Economy that I have warned about for years.

I don't take any pleasure in communicating this vision of the future, but after 10 years of running this site, I see no reason why, if a logical theory has predicted a sequence of events A, B, C, D, E, F, G, H, I, J, K and L, over those 10 years that events M and N will not follow the same chain of logic over the next few.

[Sapiens]

Re: Collapse of the Economy in 24 hours. . .

The Titanic is an excellent metaphor, with a twist.

Some of the passengers complained that the propulsion system was poorly conceived and should be replaced. Some, in fact, asserted it should be destroyed.

What these passengers forget is that they, too, are passengers on the same boat with everyone else, and that if the system crashed they are doing down with everyone else. In fact, for anyone with any special flotation devices I guarantee that before this is over you will be sharing them with the survivors whether you like it or not. This is another aspect of the Inexorable Logic of the US Political Economy that I have warned about for years.

I don't take any pleasure in communicating this vision of the future, but after 10 years of running this site, I see no reason why, if a logical theory has predicted a sequence of events A, B, C, D, E, F, G, H, I, J, K and L, over those 10 years that events M and N will not follow the same chain of logic over the next few.

I only fear for my grandchildren, but then, they are being given the tools to make the best of it. Such is Life.

[Verrocchio]

Re: Collapse of the Economy in 24 hours. . .

Taken at face value, the Representative "Clueless" Kanjorski's comments are as scary as anything I've heard thus far.

Is he trying to stampede the Sheeple? I don't think so. Neither he nor the other pols seem to have any idea what to do. "Get input from her [the caller] – maybe she has a better idea." Har-har, what farce. If he had said this before we entered the current dire economic period, a gag writer could have used it for a Jay Leno standup routine or in a political comedy skit.

Kanjorski's summary of the current situation is "Somebody threw us in the middle of the Atlantic Ocean without a life raft and we're trying to determine which is the closest shore and whether there's any chance in the world to swim that far. We don't know! His summary is at once disingenuous, desperate, and dangerous. There was no somebody. As a senior member of the Financial Services Committee and Chairman of the Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, he has a certain amount of responsibility for our "splashdown." In effect he has admitted that he and all of the other King's Men have no idea how to put Humpty Dumpty back together again. That betrays his desperation and at the same time further undermines the confidence of Americans and others around the world.

[bill]

Re: Collapse of the Economy in 24 hours. . .

"[i]“Without a banking system, there is no way to fleece the masses!”

In other words, the banking system is nothing but an efficient system to extract wealth (labor) from the many to the benefit of the few.

If there was no banking system in place, wealth could not be concentrated in the apex of few individuals. Wealth would be diffused into many little pools of talented individuals.

Of course, I doubt that Rep. Kanjorski meant that without a banking system people would cease to trade.

And who do they send to the rescue, hedge fund sharks making more loans causing future asset liquidation.
http://online.wsj.com/article/SB1233...googlenews_wsj