Simon Johnson - The Quiet Coup

[santafe2]

I was reminded of this article today when my wife called me to say she'd heard an interview on NPR that was really intriguing. This guy, Simon Johnson, had some completely different ideas with regard to what was going on in this country. I can assure you this is the first time in 25 years my wife has taken notice of anything to do with the economy / economics / banking. I will take that as a signal that these ideas are starting to go mainstream. That's the first step toward real change.

Fred posted a link to this article here:
http://www.itulip.com/forums/showthr...8259#post88259

Or you can go here to read it on the Atlantic:
http://www.theatlantic.com/doc/200905/imf-advice

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.

But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.

[Glenn Black]

Re: Simon Johnson - The Quiet Coup

I was reminded of this article today when my wife called me to say she'd heard an interview on NPR that was really intriguing. This guy, Simon Johnson, had some completely different ideas with regard to what was going on in this country. I can assure you this is the first time in 25 years my wife has taken notice of anything to do with the economy / economics / banking. I will take that as a signal that these ideas are starting to go mainstream. That's the first step toward real change.

Fred posted a link to this article here:
http://www.itulip.com/forums/showthr...8259#post88259

Or you can go here to read it on the Atlantic:
http://www.theatlantic.com/doc/200905/imf-advice

Government + FIRE ===> People

Government and business working together against the people (citizens) is one of the classic definitions of fascism

[ThePythonicCow]

Re: Simon Johnson - The Quiet Coup

Or you can go here to read it on the Atlantic:
http://www.theatlantic.com/doc/200905/imf-advice

I don't recall if I read this article, "The Quiet Coup" by Simon Johnson, back when it came out in The Atlantic. But I just noticed it now, thanks to a link at http://jessescrossroadscafe.blogspot...lse-about.html

It's a quite interesting article. Johnson was a Director recently at the IMF. He concludes that such financial failures as this one don't recover until the corrupt political leaders and corrupt corporate leaders are weeded out. This is an intensely politcial process and difficult to accomplish until the country is on its knees and desparate. Unfortunately it is going to take some world wide nasty problems to put the U.S. on its knees. For now, the inside corruption continues, only worse, with no sign of return to a healthy economy.

Offhand, I sure can't see anything I disagree with here.

[BigBagel]

Re: Simon Johnson - The Quiet Coup

Simon Johnson also has a pretty interesting blog.

http://baselinescenario.com/

[ThePythonicCow]

Re: Simon Johnson - The Quiet Coup

Simon Johnson also has a pretty interesting blog.

http://baselinescenario.com/

Agreed. That blog is on the short list of blogs and such that I visit each day.

[tsetsefly]

Re: Simon Johnson - The Quiet Coup

Government + FIRE ===> People

Government and business working together against the people (citizens) is one of the classic definitions of fascism

On that note, I reference this article: http://mises.org/story/1935

Its on the comparisonns of the Italian and German economy of the 1930's with today's US economy.

The fascist form of interventionism in America was built on the rump of state corporatism that emerged during the Progressive Era and the experience of state planning during the First World War.[16] The former culminated in the establishment of the Federal Reserve System to fully centralize state control of banks and monetary inflation and the latter set precedents for New Deal programs.
With the Fed in full swing, the Italian pattern during the Great Depression was seen in America, also.[17] Monetary inflation and credit expansion during the 1920s led to the bust which was used to justify greater state control of investment, through fiscal expenditures and regulation. Like Mussolini, Hoover used protectionism to favor certain producers, increased funding for public works programs, and bailed out key businesses. Federal spending more than doubled from 1929 through 1934 and nearly tripled for the decade between 1929 and 1939. From a modest surplus in 1930, the federal budget was in deficit in every one of the next fifteen years. In 1932 the deficit was 142% of tax revenue and in 1933 it was 130%. In four of the five years between 1932 and 1936, the budget deficit was more than 100% of tax revenues.[18]
After the stock market crash in October 1929, the Fed tried unsuccessfully to re-inflate and to bolster the credit markets. When its effort failed, Hoover strong-armed big banks into establishing the National Credit Corporation to bailout banks. Capitalized with $500 million from the banks and the power to borrow up to $1 billion with Fed assistance, the NCC operated as a stopgap measure until the rebirth of the War Finance Corporation from the First World War as the Reconstruction Finance Corporation.
Born in January of 1932, the RFC was chartered to issue $1.5 billion in debt and to lend to distressed businesses. The first $1 billion was dispensed by June and 80% of it went to banks and railroads. In July the RFC was authorized by the Emergency Relief and Construction Act to extend its credit to $3.8 billion and it dispensed $2.3 billion for the year, $300 million of which was lent to the states for their relief programs.

Sounds similar to what is being done today...