Democracy or the Banks – which do you want? – Corrected.

The propaganda barrage in preparation of the next global assault on our well being is in full swing. IMF advisor Robert Shapiro giving the BBC an interview where he says there will be a global melt down in just two to three weeks unless the politicians address this financial crisis “in a credible way”. Meaning in a way the markets approve of. Which in turn means bailing out the banks with at least a trillion newly printed and/or borrowed Euros. Seen in light of this interview Mr King’s statement that this crisis may be the most dangerous ever is part of the same propaganda campaign.

I’m not saying they’re not right about the seriousness of the insolvency of the banks nor even the time scale of their present moment of crisis. What I am saying is that they are using this moment of crisis as they have the previous ones as a way to ram past us measures which we have not agreed to, have not heard discussed in any open way at all – all we get is the bully boy chorus of the self interested bankers  – and for which they have no mandate.

Will the new bail out happen?  The signs are that the critical partnership of French and German elites is breaking down. The French elite face the ruin of their banks and the confiscation of their wealth contained therein. The German elites are no longer sure they are best served by making common cause with their French counterparts. Whatever they agree to let us remember it is their wealth not our pensions which are most at risk here.

The there is Slovakia. What has Slovakia got to do with anything? Remember according to Europe’s’ rules any enlargement of the EFSF bail out fund or any creation of a new bail out fund can be agreed as many times as our political gimps like, but their agreement then has to be ratified by the elected parliament of each nation. I have seen papers via a friend showing that the leadership of one of the parties in Slovakia will NOT agree to the new bail out.

Without their agrrement the measure will not, cannot pass in Slovakia. And if it doesn’t pass there it cannot happen. End of story.

UPDATE /Correction – It has been pointed out to me that this may be incorrect. The EFSF has ben set up as a Luxemburg company, and so while each nation can decide if it wants to contribute or not, those who want to put more money in can do so. And this is so.  On the other hand the decision to increase the EFSF IS a decision that requires all parliaments to pass it. See this article from Bloomberg. So it is not clear to me if Slovakia’s refusal will or will not scupper the whole thing .  The following point about pressure being brought to bear still stands no matter what, I think, because of the negative publicity a refusal creates. As for the removal from democratic control – it already is. As a Lux company our elites can do what they like without any further need to ask the people or to keep them informed in any way at all. As it will all be covered by commercial confidentiality.  Again, sorry for the error.

Which leaves only two possibilities. Immense pressure will be brought to bear on the dissenters or the whole thing is removed from democratic control. And that is what I think we are facing. There is a growing feeling among the financial elite that democracy cannot be allowed to get in the way of their management. I think we are on the brink of  an profound, history changing assault on Democracy in Europe.

I think the financial elite will attempt to create a new organization (a European IMF an EMF) and put it beyond and above democratic control. They will talk about it in terms of making it ‘independent’ of politics. But in reality it will be nothing less than the creation of a  government above democracy. Democracy will continue much as the Roman Senate continued under the Caesars . It will become, even more than it already is, nothing more than the high status venue of choice for the wealthy to pursue favour, fortune and position.

I believe the people’s of Europe are at a moment of supreme danger and crisis. But the crisis is NOT financial it is political. We stand at the brink of letting Democracy become a dumb show, to rubber stamp what the elite leadership decides is best for them.

This is our moment, when we have to chose – and we all will even if it is by our inaction – what is it we value in Europe, what do we want to save here, the banks or democracy?

 

89 thoughts on “Democracy or the Banks – which do you want? – Corrected.”

  1. Golem, I think you are bang-on as usual, but all it would do is rubber-stamp what has effectively been the status quo for years.

    The EU has never been democratic, and both the UK and the US have been more or less one-party states for 30 years.

    I have no idea how anyone can begin to fight this, perhaps it will just implode on its own, (sadly taking everyone with it). At least then there might be the chance for something better to emerge.

    1. Mr Shigemitsu – fight a chimera and you award it substance. Struggle to reach a mirage and you hasten your end. No ‘one’ can fight this but ‘every’ one can destroy it.

      They have enticed us into the necessity of bank accounts and the ‘convenience’ of direct debits. Perhaps responsibilities prevent you from reneging on paying government, mortgage or utllity bills etc., this is understandable but suppose we were all to decide to draw our disposable cash in cash on one specific day of the month. Then with a change of day monthly thereafter?

      Perhaps we could be the virus that brings down the elephant.

  2. They are getting desparate now. I’m beginning to think that a revolution of the people is required to put the political elite back in their place. This need not be violent, but the public need to show sufficient numbers to win. They seemed to manage it in Iceland. surely its only a matter of time in Greece, they can only take so much.

  3. Not really sure what else Mervyn King was supposed to say under the circumstances though? Short of suggesting we overturn the financial orthodoxies of the last thirty or forty years which is the sort of thing that has to come from politicians not people in charge of central banks. I think he’s been playing a pretty shitty hand of cards very well.

    Mind you, wouldn’t it have been great if he’d reminded us of this sort of thing instead?

    (check out the link if you haven’t seen it. It’s one of the best onion articles ever)

  4. Err, it was Robert Shapiro not Alessio Rastani who gave that interview.

    That detail aside, you are quite right of course. This is fundamentally about democracy vs elite-favouring financialisation of the economy.

    One thing I am not quite clear about however is just how exposed pension funds are to the banks. (I’m imagining a scenario where the banks have to be recapitalised by a forced conversion of some or all of theirbonds into equity.)

    Given how much politicians hate any bad news – even as relatively minor bad news as for example that the economy has not grown for a quarter – I guess they will have a hard time telling voters that their mismanagement of the economy means that pensions, including existing ones, will be reduced by 25% or whatever with no hope of the government making up the loss.

    We live in interesting times.

  5. At one point Paxman asks: “If the banks go down, will that effect ordinary people?”
    Response: “Well it will have an effect on economic activity.”

    Priceless.

    Meanwhile: an interesting take on derivatives exposure in the US: http://goo.gl/zhZME
    “One thing that immediately jumps out is that JPM now has a total nominal derivatives position of about $78 Trillion.”

    This is what happens when you leave the cleverest men on the planet alone in a room full of computers.

    ‘Chimera’ is about right.

    DON’T PANIC!!!

      1. Bit fast to take in. Here’s an interview to read at your leisure: http://www.nakedcapitalism.com/2011/09/the-financial-zoo-an-interview-with-satyajit-das-%E2%80%93-part-i.html .

        Das (a derivatives expert who predicted the crash in Traders, Guns and Money) has since published Extreme Money: The Masters of the Universe and the Cult of Risk , which looks like yet another must-read if you have the time:

        http://www.amazon.co.uk/Extreme-Money-Masters-Universe-Financial/dp/0273723979/ref=ntt_at_ep_dpt_1 .

        1. I read Traders Guns and Money about two years ago.

          It was really well written and got to the heart of the fraud and deceit in modern finance.

          Das kept hammering home that high finance doesn’t create wealth – it just moves it around – i.e. steals it.

          After seeing the Keiser report interview Amazon is now about to deliver me his new book.

          Best of all, I like his “law of the conservation of risk” theory!

          Totally in line with my ICB submission. But hey, Mr Vickers you just ignored all that EVIDENCE and LOGICAL critique, didn’t you now!

    1. Thanks for this link Charles Wheeler its terrifying…if I understand it right. it seems to indicate that almost the entire Gold derivatives market is in the hands of one bank. So how close is this to saying that the entire gold market is effectively in the hands of one bank?

      It would be really good to have this article rewritten in a simpler less elliptical and knowing style for the less “au fait” (as this blog would term it) so the facts can then be more easily communicated and the implications understood better.

      The major brilliance of Golem’s blogs is not just their far ranging research but their clarity and in a sense simplicity when it comes to explaining the connections as to how dots join up ( clearly quite obvious to some)
      Knowing this stuff and being able then to explain it to others simply is the primary key to the resistence.

      1. I’m glad Wirlpit picked up on this. Charles Wheeler’s link refers to a quarterly report by the US Office of the Currency Comptroller.

        Some salient points:

        “JPM [JP Morgan] has about 80 percent of the gold derivatives in the world on its book, with HSBC holding the other 20 percent. And in other commodities, JPM holds a similar position as well as part of their overall ***$78 trillion*** derivatives book which is heavily dominated by interest rate and credit derivatives. […]

        JPM is not just Too Big to Fail. It IS the market.” [in gold]

        “the nominal leverage of Goldman Sachs at 537:1 is that of a hedge fund and not a commercial bank or trust. Even Morgan Stanley is running at a modest 26:1.”

        “the notion of commingling this sort of business with insured bank deposits and Federal Reserve subsidies is insane.

        Any major commodities player needs to be compact enough to wrap up in a carpet and get rolled out the door, sans bailouts, should conditions require. […]

        One cannot help but wonder if some of these mega banks have not become so interwined with government as to be in a virtual partnership in their implementers of fiscal and financial policy, which is a dangerous development indeed.”

        http://jessescrossroadscafe.blogspot.com/2011/09/precious-metals-duopoly-quarterly-occ.html

  6. Interesting quote from Gary Jenkins, head of fixed income at Evolution Securities, who says:

    “With the vote passed in the Netherlands all the major countries with the critical mass of guarantees are aboard and any upset in the last two countries will probably be worked around quietly.”

    So democratically elected parliaments are a minor inconvenience to be “worked around”. Truly, these people have no shame.

  7. Interesting post (as usual). I watched with my jaw on the floor as Emily Maitliss interviewed some financial goon on Newsnight just a few weeks ago. He was arguing that one of the problems for the Eurozone was that governments were unreliable (from the financial class’s point of view) as they kept trying to consider what their electorates would think (as if they do, but that’s another argument). The fragrant Miss Maitliss did not challenge this obvious attack on democracy, and seemed to accept that this was just a normal argument. Clearly the BBC should not take sides in an argument, but I’d have expected their journalists to confront an attack on democracy when they come across it.

    I don’t want to sound pessimistic, but I have no hope that things will get better through our present system of government. My one hope is that more and more people appear to be realising that our present political and economic systems are busted flushes, through which the vast majority of people will not thrive.

  8. I’m beginning to despair at the quality of economic debate on Newsnight. It’s been pretty obvious for some time that Jeremy Paxman is totally clueless. All he ever does is surround himself with so-called ‘experts’ who have a vested interest in maintaining the status quo and then accepts their perceived wisdom without a challenge. For a supposedly fearsome interviewer he is either very poorly briefed or complicit.

    1. People like Jeremy Paxman don’t need to understand this stuff. Or at least they think they don’t.

      Malvern College, Charterhouse, and Cambridge, where he read English.

      On £1m a year, his wealth and position are unassailable – he has far more in common with the elite then with any of us.

      Why would he feel the anger?

  9. I’m ahead of the game living in China, I’m living your future, China is the role model. The shadow banking system is aptly named, how can you fight a shadow? Sadly, I believe that just enough people think that common proles don’t deserve a vote because they get just enough out of the elite to make things worthwhile.

    Then there are the apathetic like me, I don’t vote because I have no-one to vote for. Millions agree with me as the none of the above party wins election after election. The mainstream concencus of supposedly intelligent broadsheet newspaper readers is, run an economy like a household, if we all live within our means all will be fine.

    Now if you ask these people what would the world look like if that happens all is silence. People have been brainwashed into the means without ever thinking of the ends or outcomes. At the opposite end people simply make no effort at all to engage with politics because they aren’t stupid and know the system is rigged.

    Democracy will soon be the distant dream it is here. Sham elections, sham politicians and a sham economy. I pray there is the will to fight back..

  10. I just reply to express support. I’m not actually a democrat – thinking of what we have more like Joseph Heller’s ‘Picture This’ version of the Athenian original. The problem with democracy is ignorance and the ease with which this is swayed. Yet we’ve had universal education for at least 70 years and things have got worse. My old man left school at 13 and became a head teacher via being a bookie’s runner and a warrant officer in the war. He and his often equally cranky peers did a fair job educating me.
    That the rich are looters is obvious to us – yet most kids we teach at university have no clue and are pretty much convinced hard work will get them on in the meritocracy they assume – though few work hard or even learn how to learn for themselves. Standards are so poor we get howlers like WW2 as ‘The Great War’ in final dissertations and we hope to get them capable of reading economic articles in the Grauniad and Times. And then remember half our kids don’t get this far. What Les says on Newsnight(shite) is true, but what are the reasons? Our US cousins think their country is more equal than it is, believe it should be much fairer than what they think and all classes I teach except those of mature students hold the same opinions. The problems extend beyond getting the truth out.

    1. With Churchill’s quote in mind, I’d be interested in the alternative to democracy?

      Plutocracy, oligarchy, monarchy, tyranny, dictatorship, … they’ve all been tried with varying degrees of success!

      1. richard in norway

        Direct democracy, we have the tools, internet, tv and somewhat educated population. It certainly couldn’t be worse and it would mean that people would have to take responsibility for their decisions. I would set an instant referendum system first and have referendums on all treaties and a referendum on the annual budget. But I can’t see any limits to direct democracy, for instance ordering new fighter jets could easily be decided by folk that were interested in such things, there would be forums like this one where folk would discuss the various merits of different designs. That the final decision would be made by a small minority would not matter because everyone would have a chance to vote on it but in practice only a small well informed one or two percent would be bothered. We would all still be talking about economic policy but we would be able to do something about it, we would probably be more moderate if we knew we were taking decisions that affected peoples lives, or maybe not.

        1. I think there should be direct citizen involvement with the important ‘backstop’ of rights to binding referenda (including removal of a gov if passed).

          But I see merit in people choosing public representation, elected & civil service (need to include this powerful group too!), as a vocation, as worthwhile. Albeit with strict conditions (for life & including immediate family) applying limitations to wealth aquisition. Cut out the corruption at source.

          News & factual media can be structured with similar principles in mind. Common ownership Co. structures, no advertising, funding derived from gov, but allocated to media providers via per capita ‘citizen vouchers’ according to citizens’ individual wishes. (I claim some originality for this idea but release it under ‘commons’ licence conditions – distribute freely whilst aknowledgeing the author! 😛 )

          1. richard in norway

            I have always imagined that the elected representatives would debate the issues and hoped that folk would get elected for their debating and analytic skills rather than their viewpoints. I thought also that the role of the speaker should be to appoint a representative to speak for and one to speak against any motion under consideration. I was disappointed when parliament was discussing the riots that no one dared to challenge the consensus, in my system the speaker would nominate someone to speak against the consensus and they would be obliged to do as good a job as they could even if they really agreed with the consensus. I also have ideas about jury’s being able to propose changes to the law or even completely new laws if necessary, sometimes I think its odd that cases are dropped because the law doesn’t stretch that far, when it seems sensible to me to ask a jury if the spirit of the law has been broken. I have some very strange thoughts sometimes

            I haven’t given much thought to media, I suppose that is because I have a feeling that when folk have the power to make decisions themselves they will demand more balanced and more intelligent media, also I think the days of traditional media are numbered. People like Golem are the journalists of the future, ok this site is a bit one issue but I’m sure that once Golem has sorted out the banks and money system he will turn his attention to other issues.

  11. IT’S DEJA VU ALL OVER AGAIN

    [Page 8]

    Before effective action can be taken to stop the devastating effects of the depression, it must be recognised that the breakdown of our present economic system is due to the failure of our political and financial leadership to intelligently deal with the money problem. In the real world there is no cause nor reason for the unemployment with its resultant destitution and suffering of fully one-third of our entire population. We have all and more of the material wealth which we had at the peak of our prosperity in the year 1929. Our people need and want everything which our abundant facilities and resources are able to provide for them. The problem of production has been solved, and we need no further capital accumulation for the present, which could only be utilised in further increasing our productive facilities or extending further foreign credits. We have a complete economic plant able to supply a superabundance of not only all the necessities of our people, but the comforts and luxuries as well. Our problem, then, becomes one purely of distribution. This can only be brought about by providing purchasing power sufficiently adequate to enable the people to obtain the consumption goods which we, as a nation, are able to produce. The economic system can serve no other purpose and expect to survive.

    If our problem is then the result of the failure of our money system to properly function, which today is generally recognised, we then must turn to the consideration of the necessary corrective measures to be brought about in that field; otherwise, we can only expect to sink deeper in our dilemma and distress, with possible revolution, with social disintegration, with the world in ruins, the network of its financial obligations in shreds, with the very basis of law and order shattered. Under such a condition nothing but a primitive society is possible. Difficult and slow would then be the process of rebuilding and it could only then be brought about on a basis of a new political, economic and social system. Why risk such a catastrophe when it can be averted by aggressive measures in the right direction on the part of the Government?

    * * *

    [page 9]

    The debt structure has obtained its present astronomical proportions due to an unbalanced distribution of wealth production as measured in buying power during our years of prosperity … The time came when we seemed to reach a point of saturation in the credit structure where, generally speaking, additional credi was no longer available, with the result that debtors were forced to curtail their consumption in an effort to create a margin to apply on the reduction of debts. This naturally reduced the demand for goods of all kinds, bringing about what appeared to be overproduction, but what in reality was underconsumption measured in terms of the real world and not the money world. This naturally brought about a falling in prices and unemployment. Unemployment further decreased the consumption of goods, which further increased unemployment, thus bringing about a continuing decline in prices. Earnings began to disappear, requiring economies of all kinds – decreases in wages, salaries, and time of those employed.

    [page 10]

    The debt structure, in spite of the great amount of liquidation during the past three years, is rapidly becoming unsupportable, with the result that foreclosures, receiverships and bankruptcies are increasing in every field; delinquent taxes are mounting and forcing the closing of schools, thus breaking down our educational system, and moratoriums of all kinds are being resorted to – all this resulting in a steady and gradual breaking down of our entire credit structure, which can only bring additional distress, fear, rebellion, and chaos.

    * * *

    [page 11]

    How was it that during the period of the prosperity after the war we were able in spite of what is termed our extravagance – which was not extravagance at all; we saved too much and consumed too little – how was it we were able to balance a $4,000,000,000 annual Budget, to pay off ten billion of the Government debt, to make four major reductions in our income tax rates (otherwise all of the Government debt would have been paid), to extend $10,000,000,000 credit to foreign countries represented by our surplus production which we shipped abroad, and add approximately $100,000,000,000 by capital accumulation to our national wealth, represented by plants, equipment, buildings, and construction of all kinds? In the light of this record, is it consistent for our political and financial leadership to demand at this time a balanced Budget by the inauguration of a general sales tax, further reducing the buying power of our people? Is it necessary to conserve Government credit to the point of providing a starvation existence for millions of our people in a land of superabundance? Is the universal demand for Government economy consistent at this time? Is the present lack of confidence due to an unbalanced Budget?

    What the public and the business men of this country are interested in is a revival of employment and purchasing power. This would automatically restore confidence and increase profits to a point where the Budget would automatically be balanced in just the same manner as the individual, corporation, State, and city budget would be balanced.

    [page 12]

    During the past three years there has been such tremendous liquidation and scaling down of debts that extraordinary measures have had to be taken to prevent a general collapse of the credit structure. If such a policy is continued what assurance is there that the influences radiating from a marking down of the claims of creditors will not result in a further decline of prices? In other words, after we have reduced all debts through a basis of scaling down 25 per cent to 50 per cent, what reason have we to expect that prices will not have a further decline by like amount? And then again, the practical difficulties of bringing about such a adjustment on a broad scale seem to be insurmountable.

    [page 15]

    … I see no way of correcting this situation except through Government action.

    … Of course, we are losing $2,000,000,000 per month in unemployment. I can conceive of no greater waste than the waste of reducing our national income about half of what it was. I can not conceive of any waste as great as that. Labor, after all, is our only source of wealth.

    [page 22]

    We now see, after nearly four years of depression, that private capital will not go into public works or self-liquidating projects except through government and that if we leave our “rugged individual” to follow his own interest under these conditions he does precisely the wrong thing. Each corporation for its own protection discharges men, reduces pay rolls, curtails its orders for raw materials, postpones construction of new plants and pays off bank loans, adding to the surplus of unusable funds. Every single thing it does to reduce the flow of money makes the situation worse for business as a whole.

    [page 33]

    Senator Shortridge: Then I take it you would have the tariffs reduced?

    Mr Eccles: No. Debts cancelled. Then I think with the prosperity that you would get in this country you can collect more than that in income and inheritance taxes when you stop this loss of $2,000,000,000 a month through unemployment. You start the process of wealth, and even a capitalist is far better off. I am a capitalist.

    * * *

    Such measures as I have proposed may frighten those of our people who possess wealth. However, they should feel reassured in reflecting upon the following quotation from one of our leading economists:

    It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.

    See: http://goo.gl/bJHJX

  12. A repost of mine from a Telegrapgh debate.

    You left a comment
    Interesting times, we about to find out who rules Europe, the banks or the politicians.

    A shilling says it’s the banks.
    6 days ago
    Banks putting eurozone rescue at risk by refusing to increase capital buffers28 people liked this

    The financial elite are going to walk all over unless we stop them.

  13. Continuing on the theme of the BBC’s macroeconomic ineptitude: I’ve long thought of Stephanie Flounders as being the City’s PR representative – this item seems to confirm it. http://goo.gl/fHE0a

    But she’s not alone, Robert Peston’s blog informs us that banks operate by taking in money from depositors and loaning it out to borrowers.

    With this degree of incomprehension (to be charitable) about how the monetary system works it’s not surprising that the BBC’s economics coverage is so woefully obtuse.

    1. +1

      ‘Flounders’ is utterly useless & Peston not much better. As for Kirsty Wark on economics pieces, well, beggars belief…

  14. @ Charles

    Nice post, with a few numbers changed could’ve been written yesterday

    @ Golem & all

    Another fine analysis. The banksters are indeed piling on the pressure for their useful idiot politicians to bail them out (again) with public backed money.

    The banksters play is to protect as much as possible of current debt (& most important debt service) obligations & continue with the austerity squeeze, drive down wages, public services etc. & grab public assets at firesale prices to enable even more monoploy ‘gouging’.

    Above all, maintain the status quo & fashion any new eurozone institutions or mechanisms in their favour, placed as far as possible from any democratic oversight.

    The politicians are presently stuck with a euro legal framework which far from enabling some solution is at the heart of the immediate problem. They understand this much, but have no clue where its real flaws lie, much less what to do about them. But they are facing ‘pushback’ from electorates perceiving that they will be paying for a mess they aren’t responsible for.

    The electorate are correct in thinking they will foot the bill, but have no no clue as to the real mechanisms of this.

    I don’t think a complete meltdown will occur or that there’s any real danger of it. It’s all about creating the fear & pressure to ensure, ultimately, that the ECB creates as much money as required, in clear contravention of its legal mandate, to cover any threatened financial institution. The politicians, in panic & haste will rubber stamp whatever the banksters put in front of them to legitimise the ECB’s actions. The coup program may then continue. The pols might even get to ‘crow’ about how they’ve managed the crisis. But even if they don’t, the banksters will back another Obama or Blair to offer the required illusion that some ‘democratic’ change can take place. I believe the banksters really are in charge & a meltdown isn’t in their interests. (It’s only marginally in ours, if at all. Sane voices are barely heard now, likely less so in the cacophony that would ensue.)

    Note that the money created by the ECB will not be a ‘cost’ to any taxpayers, except possibly the debt service element. However, whatever amount of the 440Billion EFSF fund is actually used, plus debt service, will be a real cost. But by far the biggest cost to citizens, all over europe, is the continuation of near all the current debt, debt service obligations & massive losses thru’ the ongoing austerity & neoliberal agenda.

    That said, I see some encouraging signs that ‘veil’ of public ignorance of the real solutions is wafting open. Watching ‘Question Time’ I noted more than person ask why, if the BoE can ‘print’ money for QE & give it to banks, can they not ‘print’ & distribute directly to where it would do most good – to citizens to spend & increase ‘demand’. These questioners received substantial spontaneous applause too. The program was made in Manchester with a local audience. Noting that Golem recently gave a talk there, I think he could perhaps take some credit for that! I don’t know how many ‘hits’ this blog is getting, but look at the growth in numbers of comments (189 recently!) & moreover the overwhelming quality of them. Civil, informative, well argued & more superb links than even I can keep up with. What a resource! Class & not least what a credit to this blog’s creator & commenters all.

    1. I agree with Mike Hall’s evaluation of the quality of the posts and comments on this blog. This is my first post, but I have been following the conversations since Golem’s comment peice in the Guardian a few months ago. This blog has been enormously helpful in developing my understanding of the financial crisis. My fear is that the energies of informed people are mainly focused on explaining the problems, both economic and political, and without some energy directed at solutions, we face a future of debt peonage ruled by financial oligarchs. People may be willing to protest against policy, but for major change, people need something to fight for. From a psychological perspective, if your experiences are interpreted from a negative viewpoint (focus on problems) and you believe that nothing can get better, you will sink into a state of learned helplessness, apathy and depression. Perfect from the persepective of existing rulers, but completely useless for those of us desiring economic and political change.

      1. Hi Nell. Welcome to the Golem training camp. I know what you are saying, but I think there are good signs that more people are copping on to the reality of the situation. I think that the Occupy Wall St. movement seems to be heading in the right direction, they seem apolitical, well organised, determined to be non-violent & are making people think. They seem to have mainly avoided the trap of being labelled as nutjobs by a fair share of the media & even Bernanke says he doesn’t blame them. It will be interesting to see what if any impact the London version will have.

        As for us, unlike the majority, I think we see through the fog that obscures the truth of this crisis & I do think that knowledge is power, that in our case will be used effectively when the time comes. It’s going to be a long haul though, but I honestly think that collectiively we can make a difference. I am either a fool or a cautious optimist, time will tell.

        http://www.cnbc.com/id/44800021

        I like this initiative by Occupy Wall St. Boycott the banks is a sign of the intelligence at the heart of that movement.

  15. Mike Hall,

    You’ll have to take some of the blame for providing good links and comments yourself and not try to blame it all on everyone else.

    As for hits to the blog now gets about 13K unique visits per week loading 22k pages a week. Which is good but has one sad side effect for me. I used to try to reply to every comment that seemed to demand one, read every suggested link and try to make sure people felt welcome. I find I can’t do that any more. There are simply too many comments.

    I hope people will understand that if I seem less welcoming it is not because I am no longer interested to take an active part in every discussion, i’d love to, it is just that I can’t.There just aren’t enough hours in my day.

    1. That guy is great on the unreleased Fox footage…why isn’t he on with Paxman?…he’d wipe the flaw ( i’ll leave that as it stands) with him.
      By the way can I ask everyone who thinks Newsnight is a joke and a bad one at that…writes in to the BBC Newsnight site….email is fine and tells them. (I think they might be getting tired of me by now….)

      They need to know that we are not fooled they are covering this in any sensible or truely incisive way.

  16. Paul Mason on thinking outside the 1930s box:

    “in a Greek poll this morning, the leaders of the far left (SYRIZA) and the far right (LAOS) were the most popular politicians, each with 38%.”

    http://www.bbc.co.uk/news/business-15217615

    And this:

    “If we now see a round of bank recapitalisations and long-term sovereign bond-buying by the ECB it will leave Europe at least in a state described by one of my City contacts thus:

    “I think that we face the quite real prospect that the market is removed as the determining mechanism for setting the price of capital within the eurozone at the sovereign level.”

    That is, Europe, through emergency, ad-hoc fiscal union, effectively removes its sovereign debt from the influence of market forces. If, in the process, the national states (backed by the IMF and EFSF) take major ownership stakes of recapitalised banks, you then also get the beginnings of state-directed lending, says my interlocutor:

    “This would put internal credit creation back under the control of the state,” they say, even if it only took the form of SME lending targets, credit easing and some infrastructure programmes.

    Once you consider the enormity of this – a situation that many in modern politics, finance and economics might regard as the definition of “unfreedom”, you understand why it has become so hard for Barroso, Merkel et al to formulate a plan. The plan is also their nightmare.”

    See also comments by Hawkeye.

  17. Neil.

    As the wonderful Marriner Eccles pointed out, thanks to Charles for the link, we cannot afford all these rich people. The economy cannot support how much they wish to save. This raises profound questions such as, Does a man have the right to earn as much as he can?

    The answer is yes but with caveats. The money has be active into boosting consumer demand most usually through job creation. The problem we have is that there are probably trillions on balance sheets that are doing nothing causing penury.

    Do individuals and corporations have the right to do this?

    1. I agree with ‘yes but with caveats’ Bill. And I think that the degree of inequality should another consideration.

      Besides that I think we are fast approaching (if haven’t already arrived at) a point where we need to collectively consider our priorities in use of resources. Specifically in reversing our present suicidal path to one of ecological sustainability.

      We already accept all kinds of limitations to personal behaviour in recognition of collective neccessity.

      The key is to enable comprehensive, inclusive & honest debate – at least if we value democratic principles. This is why I place such high importance on democratising & enabling plurality in the media. It’s far too important to leave it in such narrow control.

    2. An already wealthy individual with a profitable manufacturing company in Ireland is encouraged by major assholes in government, Bertie Ahern etc & Enterprise Ireland to go to China. ( although truth be told, he doesn’t need much encouragement } This is done, 60 jobs go within a small community, a few months later, man moves into much larger mansion.

      Also subsidise people with a lot of spare cash, mainly made from investing in the property bubble to do the same so they can go to Hong Kong or Chinese fairs to arrange importing all manner of products into Ireland at very keen prices, furniture, giftware, textiles etc. And while you are at it, let them hide the country of manufactures true origin by adding to the products ” Made in Ireland” This of course leads to the extinction of small manufacturers & provides little in the way of employment.

      If a government does not feel the need to have any social responsibility for it’s countries workforce, it’s hardly surprising that a bunch of greedy individuals don’t either.

  18. The only reason they can’t formulate a plan is because they insist on thinking solely within the neoliberal failed paradigm. Of course the banksters aren’t helping, wanting to remain in their privileged position & keep the free lunch flowing. The intellectual capture of mainstream economics doesn’t help either. Jobs and growth – aggregate demand is the way out of the immediate problems. That will then create the breathing space to properly restructure the euro. (It requires ‘back to square one’.) Marshal Auerback, Warren Mosler, Richard Douthwaite (& some others) have offered credible plans to create that space. Sure, there are treaty legalities that need tweaking to implement these short/medium term fixes, but the ECB has already driven a coach & horses through its present legal mandate anyway.

    Paul Mason has been one of the better journos but that’s mostly because the rest of the field is so lamentable.

    It’s quite disturbing that extreme right wing support has been growing. For their collective abject failure, the politicians, media & economists should be hanging their heads in shame. Beyond the banksters, they are absolutely culpable. That they aren’t even close to aknowledging this remains a major impediment to resolution.

  19. I guess my message to “the elites” would be that even donkeys are smart enough to stop working when they’re tired and hungry. If they push things much harder they will create a critical mass of people who will react and remove them from their unelected positions of power.

    The fake democracy we’ve lived under has been enough to placate the populace, but removing it would stir them into action.

  20. I’m reposting this from the Show Me The Money thread so it doesn’t get lost:

    Golem asks “Where is my money, Mr King?”

    This is the same Mervyn King who said in 2009:

    “The sheer scale of support to the banking sector is breathtaking. In the UK, in the form of direct or guaranteed loans and equity investment, it is not far short of a trillion (that is, one thousand billion) pounds, close to two-thirds of the annual output of the entire economy. To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”

    For an answer to Golem’s question, see the recent report by the New Economics Foundation, Where did our money go?

    http://www.neweconomics.org/publications/where-did-our-money-go

  21. backwardsevolution

    This is a very interesting story about the ponzi’s in China.

    “What happened in Shiji is a fraud that plays out every day in some corner of China’s murky economy, as local Communist Party officials and greedy entrepreneurs collude in vast pyramid schemes.
    “It all began when a man named Shi Guobao returned to Shiji after working in Beijing,” said Zhu Yi, the head official in the village.
    “He became a property developer, but he wanted to make a bigger fortune so he decided to also become a loan shark.” Together with 17 of his friends, Shi began tapping the villagers for their savings, promising to pay them 10 per cent interest each month.
    The gang quickly raised 350million yuan, (£35.5million) which they then lent out at rates of 30 per cent or more each month to borrowers including local property developers. Shi became known as “King Claw”, the man at the head of the pyramid.
    For a while, the scheme worked well. Other property developers borrowed from Shi in order to begin construction and the local government, which earned income from every acre sold to the developers, also prospered. […]
    But there was little demand in the end for the huge apartment blocks, which today stand empty and half–finished. And when the borrowers started defaulting on King Claw’s loans, the pyramid collapsed. Around 1,700 villagers have complained to the police, some having lost their entire life savings. Two villagers were killed in a mysterious car crash after trying to reclaim their money from one of the loan sharks.
    Today, the only luxurious cars left are parked outside the local county government offices and Shi and his 17 friends are either in prison or under house arrest.”

    http://www.telegraph.co.uk/news/worldnews/asia/china/8783588/BMW-town-crashes-in-pyramid-fraud.html

    1. I quoted Paul Mason earlier: ““in a Greek poll this morning, the leaders of the far left (SYRIZA) and the far right (LAOS) were the most popular politicians, each with 38%.” http://www.bbc.co.uk/news/business-15217615

      On checking the link Paul gave, however, I found this:

      “Twenty-two percent of respondents said Papandreou, 59, was the best choice for prime minister, down 4 percentage points, while 28 percent picked 60-year-old New Democracy leader Antonis Samaras, a gain of 6 percentage points from last month. Forty- seven percent said neither is a good choice. Papandreou had a negative rating of 73 percent compared with 59 percent for Samaras.”

      http://www.businessweek.com/news/2011-10-07/papandreou-support-at-2011-low-in-poll-after-budget-cuts.html

      New Democracy is a centre-right party. 28+22=50, so I don’t know where Paul got his figures from. It’s a relief that they’re wrong, anyhow.

      1. “we are about to get some very nasty actual events which will demand immediate and forceful intervention by the powers that be, something which Europe (and the US) has proven is virtually impossible. The events in question are, as Reuters reports, that i) “Dexia’s Funeral Will Be Announced On Sunday” and, as Bloomberg reports, that ii) Slovakia’s ruling Freedom and Solidarity party won’t back the overhaul of the European bailout mechanism after Prime Minister Iveta Radicova rejected the party’s conditions for approval, a lawmaker said.”
        http://www.zerohedge.com/news/dexias-funeral-will-be-announced-sunday-weakest-link-slovenia-prepares-bury-euro

    2. backwardsE…

      There are indeed many stories like this circulating. If I were Shi I would be very wary of the death sentence. However scale is very important here. There is no question that there is rampant corruption, greed, graft, bribery, collusion and cronyism and god knows what else occuring. The CCP tend to be very cross about this especially if they don’t get their cut.

      But to put it in context, as golem reported, This is a 10.7 trillion dollar sized problem. Just like with British benmefit payments incompetence far exceeds fraud. The truly frightening thing is that even 10.7 trillion is not all that large a sum of money on the grand scale of things.

      My two top tips would be don’t fail and pay the party at every level. The price of failure is death.

  22. The Psychopaths of Capitalism.

    The present aim of capitalism is quite simply to socialise the costs while being allowed to maximise and privatise the profits.

    In a nutshell, its capitalism without moral or social responsibility.

    In another article I called the players psychopaths. I used that pejorative term factually, not as a knee jerk reaction, but in the considered view of neuroscience and its application to the criminal traits of serial killers and their like.

    The majority of psychopaths know the law, are often astute in its application and are aware of the moral values deemed as normal benchmarks by society.

    Where their flaw becomes apparent is their indifference to the values placed by both the law and normal society on such dispirit issues as the minor offence of littering or the gravest offence of killing. They treat both with the same casual, if any, remorse.

    The same attitude has been adopted by all the players in this game, including those who are supposedly in the business of representing us and looking after our interests.

    Both, however, hide behind the façades of institutions; institutions which by design and practice have removed conscience from their covenants because applying it would increase costs at the expense of profits. They don’t see such an attitude as corrupt they just see it as the normal game of global business – the world of dog eat dog and eat what you kill.

    This explains their hubris and lack of remorse and appreciation of being saved from the stupidity of their own making; and their utter lack of conscience. To the extent they not only deem they had a right to be saved, they want to exploit the recovery by tilting the ballpark and reducing the rules all in their favour.

    They even have the audacity to threaten if they don’t get what they want they’ll take the huff and their ball and find a better pitch. Which would be laughable, if we had a competent government with a backbone who said – Go, but before you do, it’s our ball, our pitch, our rules and our clothes you’re wearing. So strip off and piss off as far as that big van that’s waiting for you by the touchline.

    Unfortunately there doesn’t seem to be a government (apart from possibly Iceland) any where in the world that has this biological necessity of backbone that, supposedly, separates man from mollusc.

    However, whatever the cost, – and I suspect to the normal citizen, if done fairly and in a forensic manner, they would be less than the approach presently adopted – their failures and the surreal fantasy of their values have been exposed, and we have had an expensive education in the worthless alchemy of their beliefs and the vacuous lexicon of their inner temples.

    So, in the immortal words (except for Bush): Fool us once; shame on you – Fool us twice; shame on us.

    But this is exactly what they are presently doing, with the connivance of governments.

    Why is our government conniving with them? Well it may be panic which has undermined their competence and confidence. That may be regrettable but excusable.

    But, with twenty two millionaires in the cabinet and a party bankrolled by big business that confidence has to be allied with trick – a confidence trick designed to protect the value of their investments and portfolios and those of their backers by passing the bucks to the bewildered herd under the guise of austerity.

    Austerity doesn’t feature in the concerns of the rich; it needs to be seismic, in the realms of catastrophe, before they feel the pinch. Meanwhile they hope the collateral damage inflicted by the shock and awe of their austerity measures will subdue the herd into stupefied subjection of stress, anguish and the chilling vice of penury.

    The price paid by millions to support the avarice of a few psychopaths.

    Think I’m being too harsh on them? Look for the remorse.

    John Souter
    2010.

    1. @John
      Too harsh on psychopaths, I don’t think so, here’s a series of articles on Psychopaths, that might interest you. Goering, Madhoff, snakes in suits etc. You have to scroll to the bottom to start.

        1. Thanks for the link Stevie – the article is essentially correct though I can tell you a research project being carried out at Berkeley (If memory serves) on whether or not psychopath’s had measurable differences in the make-up of their brains. These were shown to exist and were mapped as were the effects.

          Analysis of top decision makers showed many had these brain profiles and of those further analysis was done as to efficacy of the decisions and policies they had instigated. To cut it short none were inspirational. In effect it highlighted these decision makers could talk the talk but not walk the walk.

          There was however an intriguing twist to this study – that chap leading it had included himself and 11-12 of his family in the study one of whom was showing all the necessary distinctions for being a rampant psychopath.

          He discussed this with his family and they all agreed their coded identities should be matched to names in order for the individual to know the trick his genes had played on him/her. Obviously this was a bit of a disaster – they did another set of research this time using people with more compassionate achievements. They had similar results from high achievers within this category as the did amongst the CEO’s and power brokers.

          Daunted but determined they did further research of all those with the inherent ‘psychopathic’profile of brain and in the end the difference came down every time to one thing – nurture.

          If as a child they were brought up in a loving, compassionate, aspirational environment, the drive of their psychopathic tendencies were towards these ends. Nurtured on the competitiveness and cold culture of traditional elitism or the frigid opposite of penury creating a feral drive to succeed and you end up with the result we are seeing today.

          It turned out the ‘psychopath’ was him

          1. Ouch ! It makes sense, the last person I was employed by some years ago told me after a few whiskeys that his father who was also a businessman, much hated, by all accounts, initiated him into what he called the reality of life by making him when he was about 5 yrs old, drown a sack of kittens in a stream. That act & probably others seemed to do the trick, as my former boss fitted the profile of a psychopath.

  23. I’m a newcomer to this blog and enjoy the quality of posting and subsequent commentary alike. I hope my pontifications thus far haven’t been too dry or convoluted.

    Occupy Wall Street is, I believe, the tentative beginning of the leaderless, or idea-led revolution I’ve hoped to see since I started pondering and writing about the money system and its breakdown about three years ago. On this blog and elsewhere, hopefully not too annoyingly, I’ve mentioned Charles Eisenstein repeatedly, a thinker I rate as highly as anyone else I’ve come across these last years. He’s convinced me, along with others calling for similarly deep change, that nothing short of a total revolution of economics and politics can be enough. He recently wrote an article on Occupy Wall Street that is typical of his gentle compassion and clarity of expression. I link to it here in the hope that as many as possible consider deeply what it says:

    http://www.realitysandwich.com/occupy_wall_street_no_demand_big_enough

    1. From the latest report by the Tax Justice Network

      “The World Bank’s Stolen Asset Recovery (StAR) initiative has endorsed estimates that illicit financial flows across borders add up to $1-1.6 trillion per year, about half from developing and transitional economies. Others estimate that illicit financial flows out of developing countries alone stood at around $800 billion – $1.26 trillion in 2008. Looking at a related issue, the Tax Justice Network has estimated, conservatively, that about $250 billion is lost in taxes each year by governments worldwide, solely as a result of wealthy individuals holding their assets offshore. The revenue losses from corporate tax avoidance are greater. It’s not just developing countries that suffer: European countries like Greece, Italy and Portugal have been brought to their knees by decades of secrecy and tax evasion. ”

      http://taxjustice.blogspot.com/2011/10/tjn-launches-2011-financial-secrecy_4807.html

      Meanwhile some hedge funds are profiting from the crisis:

      http://www.thebureauinvestigates.com/2011/09/30/hedge-funds-profit-from-global-economic-crisis/

      The not-for-profit Bureau of Investigative Journalism, base at City University, London, looks to be well worth keeping up with as a source of news.

  24. Since Paxman’s name has come up a few times on this thread I should let you know that the has my book – I met him back in my BBC days – and he told me he was going to read it on a long flight he had coming up. That was months ago. I never heard back from him.

  25. I use natural models to try and understand the bigger picture, and for society as a whole I see us moving from primate sized groups,[whose brain is wired up for about 150 relationships] to a termite sized autocratic collective. The whole of the growth of civilization could be seen in terms of the friction between the primate need to have some semblance of democratic consensus and the constraints the collective necessarily impose on individuals. The constraining ideas in religion, politics, soap operas and films are analogous to the pheremones that keep the social insect imperiums spellbound and focussed on the goals of their leaders. If you look around its not difficult to see that even now many of our societies have a dictatorial centre served by a priviledged few all guarded by threats from within and without by a thugish warrior/police class, even that this is the preferred model for US client states. Perhaps sociopathy/psycopathy is an adaptation thats evolving to facilitate the smooth operation of this future mode of life. Certainly if we are not to be bounced further down this path by allowing [real life]game theory -market forces- to play out we need to constrain the size of organizations and the power any individual can express through them how we wrest control from an increasingly sociopathic elite i haven’t a clue.

    1. On Naked Capitalism (http://www.nakedcapitalism.com/2011/10/links-10911.html ), Stephan comments on Tom Ferguson’s discounting of the importance of the Slovakian vote (see Trackbacks at bottom of the page):

      “Me thinks Thomas Ferguson is wrong. The amendment to the EFSF framework agreement must be ratified by all parties who signed the original EFSF agreement. Otherwise the amendment can not come into effect as it alters the original contract and the Slovac Republic is party to the original agreement.

      More here: http://www.efsf.europa.eu/about/index.htm

      We’ll know soon enough anyway.

      1. Latest from Zerohedge:

        Slovakia On Why It Votes “No” To EFSF Expansion: “The Greatest Threat To The Euro Is The Bailout Fund Itself”
        http://www.zerohedge.com/news/slovakia-why-it-votes-no-efsf-expansion-greatest-threat-euro-bailout-fund-itself

        Actually, it’s an interview with the leader of the minority party that’s the fly in the ointment, who says:

        “It’s an attempt to use fresh debt to solve the debt crisis. That will never work.
        […]
        We have to observe three points: First, we have to strictly adhere to the existing rules, such as not being liable for others’ debts, just as it’s spelled out in Article 125 of the Lisbon Treaty. Second, we have to let Greece go bankrupt and have the banks involved in the debt-restructuring. The creditors will have to relinquish 50 to perhaps 70 percent of their claims. So far, the agreements on that have been a joke. Third, we have to be adamant about cost-cutting and manage budgets in a responsible way.”

        “The ruling coalition is composed of four parties. My party will vote “no”; the other three coalition parties intend to say “yes.” What the opposition says is decisive.”

        Another ZH headline: The CEO Of Failed Dexia Made €1.95 Million In 2009 And 2010. It’s about to be broken up and nationalised.

        For the Dexia back story, see http://www.bbc.co.uk/news/business-15180153 .

  26. @ johnm33 & Neil & others

    I think psychological & brain evolution aspects are really important to consider in how we should structure the key institutions of a functional democracy.

    One of two (connected) stand outs for me is US academic Nare Hagens’ work looking at human ‘discount rates’ (ie evaluation of possible outcomes vs time) & brain structure & evolution.

    My introduction to this was Nate’s presention at the ASPO6 (peak oil) conference held in Cork. Video here: (jump forward to Part II – Demand for the brain evolution bit)

    http://video.google.com/videoplay?docid=-4594222421880225840

    Slides here:

    http://aspoireland.files.wordpress.com/2010/04/3-3_aspo6_nhagens.pdf

    The other is Adam Curtis’ series of 4 programs made for the BBC about Edward Bernays & the history of advertising & propaganda, for which the latter Bernays coined the phrase ‘Public Relations’ (PR). Bernays used the expression PR, because, in his own words, ‘propaganda’ “…has connotations…”. (Goebbels was a fan & had all Bernays books.) He was Freud’s nephew & used a lot of his Uncle’s then novel ideas about human psychology to develop his business of selling anything for the largest corporations & also powerful politicians. In his books & the historical evidence it’s quite clear that Bernays was contemptuous of the idea of ‘real’ democracy, believing that meaningful participation by the masses was dangerous & was to be avoided. A view that resonated extraordinarily well with his wealthy corporate clients & politicians (mainly on the right) alike.

    The important take away for me was the realisation that modern media techniques, developed by Bernays, refined & continued to this day, aim precisely at the area of brain function with the steepest discount rates. This is the limbic & para-limbic, an evolutionary older part of the brain associated principally with emotion which largely excludes such ‘rational’ considerations of longer time span outcomes.

    Surely the entire narrative today of ‘instant self gratification’ is so overwhelming that it must seem completely normal to most people. Yet for my parents’ generation this was not the case with at least one illustrative episode. Following WWII, the UK Labour party won a surprise (to conservative authorities & media) lanslide victory on foot of a long term vision of transformational social welfare. From one who was there, I have been told this was the result of mass public discussion among all wishing to design a new future after the prewar class system & wartime deprivations.

    It’s obvious too that such techniques, besides universal adoption in advertising & PR, have become endemic in mainstream news & factual media presentation. Even over my lifetime the shift of focus from ‘issues’ to ‘personality’ soundbites appears seismic.

    Anyone who cares about climate change, or at least the presentation of an evidence based argument, & who has watched Mark Durkin’s appalling ‘polemics’ (Great Global Warming Swindle etc.)should understand just how powerful Bernays’ legacy is in driving humanity off a cliff.

    This why I think news and factual media provision needs treating very seriously, perhaps the most seriously of any aspect of democracy. We are where we are, in my view, largely because we allow it to be dominated by a mere handful of powerful corporate interests, thru’ advertising & ownership. The self interest of extremely wealthy media personalities is a further corruption.

    ‘TINA’, again, is just not acceptable. Simple & powerful solutions are possible.

      1. @Mike

        Thanks for the links, kept me awake last night, definitely a must see!

        On the thing os the importance of the Slovakian vote, when Merkel and Sarkozy were having their meeting a couple of weeks ago there was a news report saying that it didn’t matter if the smaller countries in the EU didn’t take part as their financial input would be minimal but then that was I think the ‘Sky News’ propaganda machine, I imagine that they have to agree to it in principle to allow it to go ahead though. Maybe like Lisbon for Ireland if they say no the first time they will be asked again ‘Are You Sure?’

    1. It’s obvious too that such techniques, besides universal adoption in advertising & PR, have become endemic in mainstream news & factual media presentation.

      Walter Lippmann’s ‘Public Opinon’ (http://www.gutenberg.org/ebooks/6456) is a seminal text on the ‘manufacturing of consent’ (a phrase he coined), while one of the books on Cameron’s reading list circulated to M.P.s was Robert Cialdini’s ‘Influence’ – a useful primer on the art of persuasion! http://goo.gl/6k4dL

      1. “news and factual media provision needs treating very seriously, perhaps the most seriously of any aspect of democracy”.

        I’d put education top of the list, even if the results of reform took a decade or more to come through. Any proper democracy would have politics as a compulsory part of its national curriculum. You can’t have a proper democracy without a populace that’s been educated in the basics of politics and taught to think critically about it (and about the media representation of politics).

        Re Adam Curtis (whose programmes are readily available on YouTube), there’s an excellent piece on his blog about what drove the changing attitude to debt: http://www.bbc.co.uk/blogs/adamcurtis/2010/07/let_them_eat_plastic.html .

        See also http://www.bbc.co.uk/blogs/adamcurtis/2010/02/the_economists_new_clothes.html on economic theories.

        I’d also strongly recommend Drew Westen’s The Political Brain, subtitled How We Make Up Our Minds Without Using Our Heads (in the US) and The Role of Emotion in Deciding the Fate of the Nation (in the UK). See http://www.amazon.co.uk/Political-Brain-Emotion-Deciding-Nation/dp/1586485733/ref=tmm_pap_title_0 .

        For an op-ed by Westen, see http://www.huffingtonpost.com/drew-westen/winning-hearts-and-minds-_b_52893.html .

        Westen’s a psychologist, and his ideas are based on experiments he carried out. Basically around 80% of the electorate vote according to how they *feel* about parties, candidates and issues – and if reason conflicts with their feelings, they stick to their feelings.

        1. I wouldn’t argue at all with your placement of education in the list of priorities. If we consider media as a key resource for continuing education, two sides of the same coin really.

          Great links, I think a great resource is developing here besides Golem’s incisive commentaries on events! Just goes to show how much evidence & info is really out there. Perhaps a further argument that the media could do a great deal more to broaden its scope if they had the inclination to look. I wasn’t aware of the work you’ve mentioned & I’m, well, generally ‘looking’. God knows how a more casual observer of things can gain a deeper understanding.

  27. I agree that things need to change. We (from the US) have all our stupid corporations running over the world chasing the lowest labor rates destroying lives, families, and economies to fill the corp coffers…..what if we instead thought of an economic model this way…..there are still many people all over the world that do not have the basics (food, clothing, shelter) …is there no way to make the global economy work for everyone??? what if there was a minimum global wage and a maximum hour work week globally so everyone could work and become consumers of the basics of life and get the global economy working for all….Is this possible????

      1. @ Jerry

        I think the US may have a leading postion in the league of corporate & bankister greed, but the margin is small with respect to most other countries.

        To answer your question, I believe yes, it is perfectly possible. I think all people, including the rich, perhaps especially them, need to realise that something truly wonderful awaits humanity if we can get beyond the mindset of selfishness & greed & the illusion that personal fulfillment & collective welfare are incompatible – in fact the truth is quite opposite.

        So, off the top my head, but drawing on ideas I’ve long held, taking note of cynicalHighlander’s well offered (but not so cynical!) link, a suggestion.

        What say we aimed to halve the 40 week for work that perhaps we need to contribute to provide for all our essential needs, food, shelter etc. Then with the rest of our time we pursue whatever creative, enlightening endeavours we choose? I think we could really surprise ourselves with just this measure of ‘freedom’ that the ‘Manifesto’ proposes?

        Can we design and implement a society that does this which is neither our unfettered sociopathic capitalism nor a centrally planned totalitarianism, fully democratic to extent that the present is not?

        Absolutely, 100%.

  28. “Raghuram Rajan has an extraordinary statistic. That if you look at the the growth in real incomes between 1976 and 2007, 58% of it went to the top 1%.

    Faced with this, governments made a political choice. Rather than reform society, they removed all restrictions, gave up on their moral disapproval, and allowed a system to be created by the bankers that let everyone borrow.

    It was better to give in and allow the “little people” to borrow rather than let them keep on striking and threaten social order. And what’s more you could make lots of money out of it.

    I am intrigued by this argument because it is the first time I have seen someone take the financial crisis and put it in a political and historical perspective.” Adam Curtis
    http://goo.gl/7aRP

    Reminded me of this: http://youtu.be/TZU3wfjtIJY?t=7m13s

  29. Hello readers,

    Anyone still reading this topic?

    I couldn’t see anywhere more appropriate to post this little gem, and couldn’t find an email address for Mr Malone himself to send it direct… assuming it’s true it’s a shame it’s not had much more coverage, especially before yesterday’s Occupy stuff.

    Anyway, it seems that earlier this year, US Senator Bernie Sanders (Vermont) asked the US General Accountability Office for an investigation into a particular set of circumstances and what they reported in July is a $16TRILLION [corrected from saying billion originally] bailout/loan/subsidy from the Fed to banks around the world. From his website:

    “As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sanders. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”

    http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

    If you were to make this stuff up, no one would believe you.

      1. For a table showing figures for banks including Barclays ($868 billion), RBS ($541bn) and Bank of Scotland ($181bn), see p. 131 of the document, http://sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf (p. 144 of the PDF) – easiest to search for “Scotland”.

        Note however, the qualification before the table:

        “Table 8 aggregates total dollar
        transaction amounts by adding the total dollar amount of all loans but
        does not adjust these amounts to reflect differences across programs in
        the term over which loans were outstanding. For example, an overnight
        PDCF loan of $10 billion that was renewed daily at the same level for 30
        business days would result in an aggregate amount borrowed of $300
        billion although the institution, in effect, borrowed only $10 billion over 30 days. In contrast, a TAF loan of $10 billion extended over a 1-month
        period would appear as $10 billion. As a result, the total transaction
        amounts shown in table 8 for PDCF are not directly comparable to the
        total transaction amounts shown for TAF and other programs that made
        loans for periods longer than overnight.”

  30. My apologies, I wrote $16billion when as you can see from the cut/paste it should have been $16trillion.

    That’s a lot of money either way.

Leave a Comment

Your email address will not be published.