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The Cause of the 2008 Financial Crisis
Guest Column | By James F. Davis | October 14, 2008
As someone who spent the majority of his life as an international bank analyst and executive, I learned, that to fix a problem, one needs to understand what caused it. It can be difficult to see because sometimes it takes time for the effects of bad decisions to manifest themselves. It also requires that we examine the facts rather than our emotional biases.
The facts are that approximately 6% of all mortgage loans in United States are in default. Historically, defaults were less than one-third of that, i.e., from 0.25% to 2%.
A huge portion of the increased mortgage loan defaults are what are referred to as ‘sub-prime’ loans. Most of the sub-prime loans have been made to borrowers with poor credit ratings, no down payment on the home financed, and/or no verification of income or assets (Alt-A’s). Close to 25% of sub-prime and Alt-A’s loans are in default.
These loans increased dramatically as a 9/30/99 New York Times article explained, “In a move that could help increase homeownership rates among minorities and low income consumers, the Fannie Mae Corp. is easing the credit requirements on loans that it will purchase from banks and other lenders.”
Why would banks make such risky loans? The answer is that the Clinton administration pressured the banks to help poor people become homeowners, a noble liberal idea. Also the Clinton Justice Department threatened banks with lawsuits and fines ($10,000 per application) for redlining (discrimination) if they did not make these loans. Also ACORN (Obama’s community service organization) was instrumental in providing borrowers and pressuring the banks to make these loans.
To allow Fannie Mae to make more loans, President Clinton also reduced Fannie Mae’s reserve requirement to 2.5%. That means it could purchase and/or guarantee $97.50 in mortgages for every $2.50 it had in equity to cover possible bad debts. If more than 2.5% of the loans go bad, the taxpayers (us) have to pay for them. That is what this bailout is all about. It is not the government paying the banks for the bad loans, it is us!!
Principally Senate Democrats demanded that Fannie Mae & Freddie Mac (FM&FM) buy more of these risky loans to help the poor. Since the mortgages purchased and guaranteed by FM&FM are backed by the U.S. government, the loans were re-sold primarily to investment banks which in turn bundled most of them, taking a hefty fee, and sold the mortgages to investors all over the world as virtually risk free.
As long as the Federal Reserve (another government created agency) kept interest rates artificially low, monthly mortgage payments were low and housing prices went up. Many home owners got home equity loans to pay their first mortgages and credit card debt.
Unfortunately home prices peaked in the winter of 2005-06 and the house of cards started to crumble. People could no longer increase their mortgage debt to pay previous debts. Now, we taxpayers are being told we have to bail out the banks and everyone in the world who bought these highly risky loans. The politicians in Congress (mostly Democrats) do not want you to know they caused the mess.
During the past eight years, the Bush administration made 17 attempts to reform FM&FM, having been made aware by whistleblowers that the books had been cooked by Clinton appointees, James Johnson and Franklin Raines (most recently Barack Obama financial advisors) who gave large bonuses to themselves and other Clinton appointees by falsely showing huge profits.
In 2005, John McCain submitted a Fannie Mae reform bill. Democrats blocked it in Committee from getting to the Senate floor for a vote.
By 2006 there was enough evidence of malfeasance that Raines was forced out. He had paid himself over $90 million. Recently the court ordered him to pay back $40 million in fines, bonuses and stock options that he gave himself based on false financial statements of Fannie Mae profits.
In the 2006 elections, the Democrats took control of the House and Senate. There are plenty of videos on the Internet showing many Democrats including Senate Banking Committee Chairman Democrat Christopher Dodd and House Banking Committee Chairman Barney Frank, responsible with overseeing FM&FM, assuring us that there were no problems with FM&FM right up to their collapse.
Not surprisingly, virtually all the investment banks that are in trouble and being bailed out are run by financial supporters of Obama and other Democrats. Secretary of the Treasury Paulsen was head of Goldman Sachs. The new head of the $700 million bailout is also from Goldman Sachs. This is like letting the fox be in charge of hen house security.
It was announced that our government will infuse capital into the troubled banks. This gives whoever is in power of our government the ability to force the same kind of abuses that have caused this massive banking crisis in the first place.
Barack Obama has received more campaign donations that any other politician in the past three years from Fannie Mae and Wall Street. FM&FC have been virtually private piggy banks of campaign contributions for Democrats for the past 10 years. Yes, a token amount went to some Republicans.
And there is plenty of blame to go around in this financial crisis, but the reason it happened was 100% caused by a Democrat run government that forced a liberal policy initiated by President Clinton and reforms primarily blocked by Democrats. One would never know this by watching the news or reading newspapers.
Until the majority of our citizens understand whom (government liberals) and what (liberalism/socialism) caused this mess, we will allow our elected officials, through massive inflation, to lower the standard of living of those of us who are financially prudent and give our earnings to those who are not prudent.
The big excuse for the bailout is that credit markets have frozen up. But it is not true. There is plenty of credit available for good credit risks.
The only way this can be rectified is to allow the people who made the mistakes to take their losses. It is called taking personal responsibility for one’s actions.
Already we see that the bailout has had virtually no effect on the markets other than to cause huge sell offs because smart investors see that the U.S. is adopting failed liberal socialist policies. Our government is following in the footsteps of Hoover and Roosevelt.
We do not need to have another depression, but the government is taking the steps to make it happen. The taxpayer financed bailout should be reversed immediately as it will only encourage more irresponsible fraudulent behavior.
Mr. Davis can be contacted at (JavaScript must be enabled to view this email address)
James F. Davis is a Director of Accuracy in Media. He spent 20 years as an international banker, of which 5 years were as head of the Latin American Division. He is married to a Chilean.
Guest columns do not necessarily reflect the views of Accuracy in Media or its staff.
69 Comments | Post a Comment
“...liberal policy initiated by President Clinton and reforms primarily blocked by Democrats.”
Excuse me, I think your time machine is broken.
Who controlled congress during the Clinton administration and most of Dubya’s?
Or, I think, like in the film “The Fly”, something stupid and misguided climbed into your time machine and combined its DNA with you (or is it that you have corrupted the intelligence of a cockroach? If so, my apologies to the roach).
To address the sarcastic comments of Mr. Goodis: Unfortunately, the comments at the end of the article about my being head of Latin America and having a Chilean wife were taken from an article I had written previously about Chile. For the record I was head of First Interstate Bank’s Latin American Division in NY which was merged into Wells Fargo and I was later head of the International Division of Manufacturers and Traders Bank.
As to his clear lack of knowledge of what happened in Chile, first I must mention that my Chilean wife’s father was a personal adviser to Marxist president Allende and her uncle, Luis Corvalan, was a Senator and head of the Communist Party of Chile for about 50 years, so I have a ‘bit’ more primary knowledge of Chile. Second, the country was destitute after three years of Marxist rule and government regulation. During the following 16 years of deregulation and privatization by President Pinochet, Chile had the highest real economic growth rate of any country in the world according to World Bank and UN studies.
Concerning Mr. Trolls comments, who also did not address the substance of my remarks, I only will say: (1)In the Attorney General’s office, Bush has removed only 8 of the 250+ attorneys appointed by Clinton. (2) Check to see which party controlled the Senate from 1992 until 2008. He will discover that in only a couple of those years did the Republicans have a slim majority and that having equal numbers of each party on many committees meant that the Democrats could and did block all reform measures.
But, James F Davis, while the country did experience growth, it also suffered massive inflation (at one point citizens expected to pay 74% of their income on things like bread, where under Allende it had been only 17%), record unemployment, and experienced (surprise, surprise) a publically-funded bailout when the system eventually crashed. The only thing that saved the country, it has been argued, was the state-owned copper mine Codelco, which provided roughly 85% of the country’s export revenues.
This is what deregulation, privatization and cuts in social spending (the free market wizardry that conservatives in America are in love with) did to that economy. Of course it fosters rapid growth—it’s supposed to. The outcomes of that growth—vertiginous and often fictional—in several Latin American countries, were ultimately disastrous.
And we might also remember the torture and disappearance of many opponents of these free market ideas.
I may be way off base, here… but aren’t we forgetting a couple of small details in the “cause” derogation? First is that many or most global banks decided to deleverage their Balance Sheets at once early this summer. This does the same thing to security values as it would to the value of use cars in a market where everyone decided to trade in their clunker on a new one at the same time. Used cars would be a glut on the market and priced accordingly in line with what you may have learned in Econ 101, as happened to the highly leveraged securities market; thus dropping the bottom out of the balance sheet of any bank that was caught with its securities in house. My own hypothesis is that the banks dumping these securities simultaneously covered their positions with put options, thus moving the money from the Balance Sheet to the Income Statement while catching unsuspecting institutions out. Note here that “marking to the market” is what drove the Balance Sheets down, not necessarily the inherent value in the securities; as the banks caught out in the South American Loan debacle in the 70’s were allowed to write off the useless loans over a 5 or 10 year period so as to ameliorate the impact on their
balance Sheets - that option was removed with the “mark to market” rule.
Secondly, those securities were purchased and priced in line with an expected 20-25% default rate - even a 50% default rate would have still conveyed a 13% profit on those devalued instruments, so where is the panic?
I can find absolutely no rationale for the sudden deleveraging that brought about the much publicised “panic” since these issues had been trning over fairly predictably for some time. Indeed, while many banks were over leveraged - up to 40%+ in between quarterly inspections, perhaps it was the quarterly adjustments for inspectors that brought about a sudden decision to shift everything, in turn driving the prices even lower than expected. However, the underlying securities are probably still fundamentally as sound as the housing market which, while “soft”, is not in a complete melt-down - unless your income is currently dependent on selling houses, that is.
There are a lot of questions in this matter that are not being answered or investigated, but appear to be glossed over in hopes that people won’t realise that they’ve been “had”, though perhaps manipulated is a more accurate term.
Sorry, I blew the correction on my first sentence, it should read:
I may be way off base, here… but aren’t we forgetting a couple of small details in the application of “cause” to this “crisis”.
sorry.
It’s a damned shame our esteemed left leaning fellow travelers cannot seem to ingest even a smattering of truth without spouting the well used vocabulary taught by the Lenin crowd so many years ago. That is why I have suggested that the Democratic Party be changed to the “Socialistic/ Democratic Party”, as so many are card bearing members of one or more Socialist groups,and Dan Webster would no doubt concur by their actions.
This article is a bunch of one-sided, partisan crap!
The problem is a faulty (and corrupt) domestic economic policy resulting in, among other things, a legislated lack of proper regulation and oversight of the financial services industry and it’s a problem that’s been developing over the last 25 years. It began in the Reagan administration and has run unabated until now.
TK - please, if you are seeking attribution, put it back to Nixon who took us completely off Gold accountability world-wide - thus loosening the printing presses for the Fed to go as wild as it has, leading to the bubbles we have been experiencing.
I’m afraid you are confusing regulatory issues over business with the regulation over the issuance of currency that Congress should have maintained but abdicated in 1913. Had Wilson not created the sub-contracting Federal Reserve private bank, there is some doubt that 1929 would have been anything more than another ordinary year, though the 20’s leading up to that would have been comparably unremarkable, as well.
Dr. Duncan= TK is so transfixed on his big Govt policy (Socialistic) viewpoint, that your well parsed explanations are totally lost in translation. Notice the reference to “Reagan”.This is obviously a try to politicize your historic and learned reseach on Economic policy. Facts remain facts, no matter how much manure gets spread over them.
To Ancient Birdman, Post 10;
It certainly seems to me that the socialistic nationalization of our heretofore “free market” financial services sector was, in fact, led by the Republican Bush II administration, supported by any number of so-called conservatives, neoconservatives and assorted other Republicans, including the current GOP presidential candidate and his supposedly very conservative running mate!
And, in case you hadn’t noticed, the Bush II administration has expanded the size of government (and its annual deficits and its additions to the national debt) by a greater factor than any other president in history, including even the partisan GOP’s favorite ogre, FDR!
On the last matter, I will defer to your personal expertise and experience with manure.
To Dr. Duncan Druhl, Post 9;
I agree with your comment on Nixon and gold, as well as your comments on Congress and the Federal Reserve. And it may well be that these issues are the actual “foundation” of the current problem. But I do believe that the possibly inexorable progress towards the current problem was singularly exacerbated by “deregulation of” and “lack of proper oversight over” certain kinds of financial services businesses and their practices.
To me, at least domestically, poorly regulated “securitization” and questionable “profitization” are catalyst causes of the problem at hand.
TK,
Prior to Carter legalising (because it was outside the common code of practise beforehand, as you might expect) and requiring banks to make mortgage loans that were expected to default, the bases for this summer’s debacle were pretty much non-existent. The Clinton administration sped up the process by first allowing, then expediting the bundling of sub-prime loans and their purchase by Fannie and Freddie. Before 1993, they wouldn’t touch them. Aside from fulfilling a probable campaign promise to interests that I’m sure generously contributed to his campaign, this action also released considerable funds for the banks to allocate to safer or, again, risky loans. Then, when the Fed loosed the printing presses in the early years of this decade, there was so much money floating around and increased pressure to make risky loans (spurred on by the likes of ACORN), that the development of the mortgage backed securities was either a planned event or a creative insight - take your pick. Those are the key elements in creating this problem, not GWB. It was, in fact, his Chief Economic Adviser who cautioned Congress early in the first administration that Fannie and Freddie were in danger of being seriously overexposed to high-risk loan portfolios.
I’ll repeat something I noted earlier, at 12:30 local time, the actual cause of the “crisis” was an overloading of the market by banks deleveraging their Balance Sheets either to create the “crisis” or in overly anticipating the quarterly review of their leverage position. Within those 90 day windows, banks were often carrying hugely leveraged positions - and it isn’t as though they suddenly decided that these were bad investments - no, my hypothesis is that a few or many decided to force the situation, for whatever reason, and probably covered themselves with put options to move the money to the income statement side. From the buy-ups since the “crisis”, somebody surely has a lot of money to spend, eh? Remember, too, with international banks, money moves wherever they want it to be, so results in some countries are not the same as those reported in others.
This is a banking operation, TK, not a failure of regulation since US or even western world regulations could not have effectively stopped it. Indeed, though, if you “regulate” that market, then what about the futures markets in grains, oil, bonds, pork bellies? Dabble in those and you’ll find the farmers up in arms; or, actually, agricultural conglomerates who donate untold dollars to election campaigns. My suspicion is that regulations will not actually be forthcoming except those that spin well on the media, but do nothing.
So, why did it happen? If you follow my thinking, there is a hint that there was no real underlying financial reason (see above, 12:30) because the banks had been carrying those highly risky assets for years in some cases and the default rate was within the original price parameters; but there does happen to be an election this year in the US.
And “...when you have eliminated the impossible, whatever remains, however improbable, must be the truth.” is probably my favourite Sherlock Holmes quote - and it fits here, I think.
The Power Brokers Have Corrupted Washington and are Destroying Capitalism.
My father recently sent me an article that you have written The Cause of the 2008 Financial Crisis.
This story is similar to a theory that I have had for quite some time. It is the reason that I started our Family Investment Company.
Banks, Insurance Companies and Mutual Funds control most major corporations in the United States. They do this with the American Taxpayers Deposits, Premiums and Investments in Mutual Funds and 401ks. With our money they control more than 50% of most major corporations voting rights, elect the Board of Directors who in turn decide who runs the corporations.
Although I am unaware of who receives the political donations I know it is happening. If you have any way for me to find more about this information I would be grateful.
I would like your input on a solution for this problem as I will outline mine simply and briefly below.
Voting Rights for Bank, Insurance Companies and Mutual Fund Management Companies.
o All banks are to become mutual in ownership and not publically traded. Each account holder shall have one vote.
o All insurance companies are to become mutual in ownership and not publically traded. Each account holder shall have one vote.
o All mutual fund shareholders should be able to elect their management company; shareholders shall have one vote per account.
Ownership of Publically Traded Corporations by Banks, Insurance Companies and Mutual Fund Management Companies.
o All banks should be prohibited from owning stock in any publically traded corporation.
o All insurance companies should be prohibited from owning voting stock in any publically traded corporation.
o All mutual fund management companies should be prohibited from voting for publically traded companies.
Political Donations and Fundraising by Banks, Insurance Companies and Mutual Fund Management Companies.
o All banks, insurance companies and mutual fund management companies should be prohibited from political donations and fundraising.
Thomas Jefferson once said: “I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks (Example: The Federal Reserve Bank) to control the issue of their currency, first by inflation, then by deflation (Example of the Recent Real Estate Market), the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”—Thomas Jefferson—The Debate Over The Re-charter Of The Bank Bill, (1809)
Abraham Lincoln once said: I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.
U.S. President Abraham Lincoln, Nov. 21, 1864
(letter to Col. William F. Elkins)
It doesnt take a genius to see whats going on beneath the veil, just as Abe could see back in the day. People everywhere from Main Street to Wall Street can tell you this and are waking up to the fact that corporations, though originally chartered to serve the public interest, need to bring their practices back in line with modern values.
The true driving force of our economy.
Small business (500 or fewer employees) account for 97% of all businesses in the United States. - SBA Small Business Administration
Small business generate approximately 70% of all new jobs. - SBA Small Business Administration
Small Business employ approximately 50% of the work force. - SBA Small Business Administration
Small Business Created 20,000 net new jobs in August 2008 - ADP Small Business Payroll Report.
Small Business Created 28,000 net new jobs in September 2008 - ADP Small Business Payroll Report.
Two Thirds of the top tax bracket are small business owners. - Steve Forbes
Thank You
Michael L. OBrien
An American Taxpayer
“All that is necessary for evil to triumph is for good men to do nothing.” - Edmund Burke
Mr. Goodis education of Chile suggests he has been given a lot of misinformation. Inflation was running about 1,000% and copper was providing more than 80% of all foreign currency earnings when Allende blew his brains out and the military (Pinochet) took over in late 1973. Copper prices dropped after Pinochet took over and most of the world’s banks refused to lend to Chile. Nonetheless, by instituting free market reforms, inflation was brought down to 1/100th of what it was, copper revenue dependence dropped to below 50% and the nation prospered. All one needs to be is intellectually honest and check the statistics out.
To Dr. Duncan Druhl, Post 13
Just today, Henry Paulson personally stated that “the current crisis is the result of Wall Street failures as well as failures of a variety of regulatory authorties”.
My original point was simply that these particular “failures” that Paulson alludes to actually began in earnest some 20+ years ago and were accentuated and amplified since that time, most egregiously over the last four to five years.
And, from what I’ve seen, those blaming what amounts to domestic economic policy failures on giving “mortgages to people who couldn’t pay them back”, on community agencies like ACORN, or even policies of Fannie, Freddie, etc., are not on the mark: I’ve heard that the normal historical default rate on residential mortgages as a whole is normally 2.50% to 2.75% and that the current average rate of default is about 6.00%. Granted, the current rate of default is more than double the normal rate of default, but it’s still only 6%! With 94% of mortgagors fulfilling their obligations, it sure doesn’t seem that 6% of defaults (regardless of the demographics of or the causes of the defaults) could possibly cause the current multi-trillion-dollar problem (???)
I believe there’s a whole lot more to the problem than the political partisans are yapping about, the GOPs blaming Carter and Clinton and the DEMs blaming Reagan and Bush. (Although, it does seem clear that the deregulation of the S & Ls under Reagan did lead to the $200+ billion S & L bailout in the early ‘90s - - and this seems similar to that in many respects.)
Personally, I think it’s the blowing of smoke or plain naivete to blame the entire current economic situation on urban-area sub-prime and alt-A residential mortgages. And, likewise, the proximate cause or catalyst is very probably NOT specific policies of FDR 75 years ago or the policies of Nixon 35 years ago (???)
(I happen to live in the suburbs and the most numerous foreclosures in my county are occurring in some pretty exclusive and pretty expensive suburban gated communities where the homes sold from $650k up, rather than within, shall we say, the more “affordable” neighborhoods of my local city’s core. I do believe that’s pretty much the case nationwide with regard to residential mortgage foreclosures.)
Mr. Davis, read through Naomi Klein’s The Shock Doctrine. It contains exactly the account I was referencing. No one so far has argued with her details, and I haven’t found any other sources that dispute it. If you’re in possession of better information, please write directly to her.
David,
I started reading Naomi Kleins’The Shock Doctrine some time ago, but it was so full of nonsense that I did not finish it. It is a great disservice to you that you have read and believed her and did not check statistical databases like the World Bank and UN. I was the first banker to lend to the private sector after Pinochet took over in the 70’s and had first hand access to the financials of the country. Unemployment was over 30% when Pinochet took over, inflation was over 1,000%. It is true that in 1975 the Chilean economy had a 25% contraction as government enterprises were being sold back to the private sector and many government bureaucrats lost their jobs in the transition. But after that the country was the fastest growing economy in the world (with about 13% inflation, a historical low at the time) until Pinochet stepped down and the socialist took over again. You would be surprised to learn that Pinochet was most supported by the poor in Chile because he did more to raise their standard of living than the socialist ever did.
We are only at fault if we do nothing to fix the problem.
Financial Institutions control more than 50% of major US corporations who are supposed to serve the public interest.
Financial Institutions Donate major amounts of money to Presidential Campaigns.
Los Angeles Times March 21, 2008
2000 - Bush $4 million, Gore $1.4 Million
2004 - Bush $8.8 million, Kerry $4.4 Million
2008 - H. Clinton $6.29 Million, Obama $6.03 Million, McCain $6.03 Million
These are our Deposits, Premiums and Investments. What do we the American Tax Payer get for this?
We get to bail them out @ $3,500 per tax payer.
We get a government that works for the institutions.
We get institutions that control the government.
Small business is the driving force in America with more than 50% of the total jobs and 70% of new jobs created. Now Obama wants to tax small business owners which in turn will only hurt the American Worker.
An expiration of the Bush tax cuts will double taxes for a worker making $42,000 a year. Now I guess that is not raising taxes, it is doing nothing. None the less it is a tax increase!
Michael L OBrien
American Tax Payer
“All that is necessary for evil to triumph is for good men to do nothing.” - Edmund Burke
To DK and Dr. Duncan. TO keep the article short, I zeroed in on the main reasons we had this crisis. But I agree with Dr. Duncan’s points that the creation of the FED started inflation and that going off the gold standard made it worse and allowed our politicians to be more irresponsible.
Reagan’s deregulation of the S&L;industry saved it. Our government had previously fixed the interest rates banks could charge for mortgages. Due to the Carter inflationary policies, the cost of banks borrowing money was more than twice what they were allowed to lend at, so the banks started doing high risk, high return business to stay afloat. Deregulation of interest rates on mortgages saved the industry, but the mess had to be cleaned up first.
I must make a correction to McCains Donation’s received from financial institutions - $2.59 Million.
Michael L. O’Brien
American Tax Payer
The figures were in an article in the Los Angeles Times back in March and from figures compiled by The Center for Responsive Politics.
Mr. Davis—I’ve read a lot of criticism of the book (some of which Naomi Klein has addressed at her website), but none of it has dealt with her assertions about the specifics of Chile’s economy. Her claims in the book are obviously wide-ranging, and, because they are, I’ve tried to find accounts that balance hers. The sections on Chile are extensively annotated, so I had no reason to believe that the numbers were fudged. You are honestly the first source I’ve ever come across to say that they are, and in fairness I tried consulting the databases you suggested. However, they don’t go back far enough.
I’m interested, now, in your take on Orlando Letelier, since he plays such a pivotal role in the Chilean narrative (his reading of the “inner harmony” between free market practices and political terror seems in many ways foundational for Klein’s whole text). He’s a subject one can more easily research, but I was wondering if you also had a first-hand version of his story.
What started as an aggravated pot-shot is now getting interesting. Thanks for answering my posts. (I also have to say I’m sorry for the intial sarcasm—I’ve found, unfortunately, that some internet writers only drop the mask when they’re under attack.)
take this the situation due to the amarican influnce on differnt countries. amarica in trouble due to the unfare war against muslims.
Despite any arguments about the rate of inflation, there have been many reassessments of the effects of neoliberal policies on Latin America, and many of them argue that those policies mainly helped concentrate the highest amounts of wealth in only the smallest band of the population. That seems to have happened in this country as well. Stripped of its errors or drama, Klein’s argument about the class effects of the free market economy seem quite accurate.
The readings I’ve done in free market economics are very ambiguous when it comes to assessing the human impact of these practices. By looking at one area of assessment, there is often a general shearing away of negative consequences. Will Wilkinson’s happiness studies, in all their wide-ranging considerations, never take the economic practices that foster happiness as anything other than neutral; if Americans’ overall happiness is coextensive with disatrous cultural or environmental consequences, that relationship is never mentioned. Tyler Cowen, in a conversation with reason.com, talks about cultural loss as a reality which, as an economist, he is willing to accept. There seem to me to be underlying anthropological, human and ethical mistakes here. Seen this way, Klein’s book and others merely seek to correct them.
I would agree that while we were coming out of recession we were struck on September 11th.
My Father did not make it into work that day because he had to vote. He has not worked since. My baseball coach from when I was a little kid died and a friend that I grew up with also died on that day, both were New York City Fireman.
I don’t feel that economically we have recovered from that yet. I do know that we have not been struck on our soil since.
I also know that in this country and the way I was raised; many religions and races live under One God in Peace. Our Great Country is not just great because of the Freedoms and Structure of our Government that our forefathers laid out, but also the diversity of many people and countries rolled into one. Our form of Government known as a Republic (Not a Democracy as some like to think) keeps the power out of the hands of a few and spreads it throughout our land. There are fifty states, over 80,000 different tax jurisdictions’ and to be elected President you must obtain 270 electoral votes. This is the way our country spreads the power and doesn’t allow majority to rule.
Although I do have my concerns that too much power is in the hands of the financial institutions which conflicts with our national representatives I am confident that we will fix the problem as a nation.
If you look around the world there are many nations with fewer Religions, Races and Cultures that cannot say that they have made it work.
My friend, we are not at war against Muslims or the Muslim Religion.
Religion should never be used to divide. That is why the United States Works.
Thank You
Michael L. O’Brien
American Tax Payer
I wonder what you think of the theory in the following article.
Thankyou.
To JAWoods, Post 27;
For me, there’s a statement in the article that says it all:
“There is so much partisan commentary being published on the topic that trying to find the facts becomes surprisingly difficult.”
I believe extreme ideological partisanship, if it continues and if it continually grows as it has been over the last fifteen years, is the single greatest threat to the continued well-being of the nation. We may already be at the point where extreme partisanship is making it nearly impossible to resolve even the most serious of problems in a unified, collaborative, consensus-supported fashion.
Further, personally, I don’t feel there’s really much difference between extreme political “partisanship” and blatant personal “prejudice”.
“That is why I have suggested that the Democratic Party be changed to the “Socialistic/ Democratic Party”, as so many are card bearing members of one or more Socialist groups,and Dan Webster would no doubt concur by their actions.”
my, how utterly clever of you! Dan would also, doubtless, consider you a Summer’s Eve.
“... We may already be at the point where extreme partisanship is making it nearly impossible to resolve even the most serious of problems in a unified, collaborative, consensus-supported fashion. ...” - TK
Tell us why such a resolution is desirable as opposed to say, a rational, fact-based and future-building resolution? Could it be anti-rationality intrudes where Reason should rule?
ancient bird-
“Aha….did I detect a little liberal spin?”
I suspect you detect that EVERYWHERE. Everyones a SOCIALIST, or a LENINIST, or a COMMIE! OOOOH, very scary, boys and girls!
Earth to Bird: It ain’t the 1950’s any more!
“Earth to Bird: It ain’t the 1950’s any more! ” - Peat Zapped
Earth to Peet:
The beatniks, hippies, and violent, radical revolutionaries of the 50s and 60s have NOT gone away or changed their ways. They instead moved into “the establishment” in order to destroy it from within.
http://www.discoverthenetworks.org/printgroupProfile.asp?grpid=6967
“The beatniks, hippies, and violent, radical revolutionaries of the 50s and 60s have NOT gone away or changed their ways. They instead moved into “the establishment” in order to destroy it from within.”
Believe it or not, John Galt is one of the NORMAL ones on these boards!
Oy vey!
“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known, and he carries his banners openly. But the traitor moves among those within the gates freely, his sly whispers rustling through all the alleys, heard in the very hall of government itself. For the traitor appears no traitor. He speaks in the accents familiar to his victims, and he wears their face and their garments, and he appeals to the baseness that lies deep in hearts of men. He rots the soul of a nation. He works secretly and unknown in the night to undermine the pillars of a city. He infects the body politic so that it can no longer resist. A Murderer Is Less To Be Feared.” Cicero, 42 B.C.
To Mr. Woods on the lengthy article he attached. I agree with just about everything the author said, an excellent article. I was just trying to: (1) keep my article short enough so that a broader audience would read it and understand the fundamental causes and (2) make the point that government intervention created this problem. Perhaps I should not have mentioned that it was overwhelmingly Democrats that did the damage because it makes partisans stick their head in the sand.
Dr. Druhl also made some excellent points which I did not address in order to keep my article short. Also his comments about certain investment banks forcing the situation by deleveraging all at once to precipitate the crisis for self interest and political reasons is something I think also but I do not have the proof, so I omitted them.
To Mr. Goodis concerning Orlando Letilier. When he was murdered, he was an illegal unregistered agent of Cuba and the USSR. His briefcase had evidence to that effect. He was supporting Marxist MIRISTA terrorists in Chile who were killing innocent people, blowing up banks, etc. The free market does not create terrorist, it creates things that others are willing to pay for without coercion. Marxist use terrorism as a matter of policy to force their way because they are basically robbers of others wealth.
If you get a copy of the latest “Economic Freedom of the World Annual Report” by James Gwartney & Robert Lawson you will note that the countries with the greatest amount of economic freedom (capitalism) have the highest standards of living. That is why people below the poverty line in the USA have a much higher standard of living than 98% of Africans. The fact that some have more than others is the reason that the lower strata has so much more than anywhere else. A good book to read is “The Perfect Latin American Idiot”
To Mr. O’Brien: You make a lot of good points, but one vote per account would not be fair to the person or entity that has 90% of the exposure. I also would be against prohibiting the institutions from buying stocks since it is up to them to maximize the stockholders returns, and for the same reason I agree with you that making any type of charitable donations reduces the profits of the shareholders.
To find who gives to political candidates, go to http://www.fec.gov.
I’ll look into the book. However, the experience of Latin America itself is an experience of narratives and counter-narratives: right versus left, Marxism versus capitalism, socialism versus dictatorship. All the players involved have different accounts of events. The “facts” seem to depend largely on which side you support. If you endorse the free market, Pinochet’s uses of violence were legitimate, and one sees a terrain where Marxism was rightly banished. However, if his violence is not legitimized, one must regard his disappearance, murder and imprisonment of members of the left as something entirely different. The most interesting thing to me is that right-wing descriptions of Marxism foreground the violence of communist regimes while simultaneously placing the brutality of free market capitalism neatly into the background.
As a sidenote—your assertion, “The fact that some have more than others is the reason that the lower strata has so much more than anywhere else,” seems like a statement of trickle-down economics. Is it?
Great article james, i like reading it, keep it up.
I think your article was great Mr. Davis. It brought out a lot of good response. I agree that one share per owner is a bit on the protectionist side of things but I have a real problem with the American ownership of the means of production through banks, insurance companies and mutual funds. They are invested in US businesses and actually own more than 50% of most major corporations to increase their profits but in many ways are failing at their own business. Hence the bail out. These are the institutions who really own America not the American People. Funny thing is we keep giving them that power and We the People are not benefitting from it. It is many times used against us or for other purposes than our Republic. We are a Quasi Socialist/Capitalist society moving more towards socialism and most American’s don’t even know it. I believe we are in revolutionary times, not the violent type but the type formed from ideas. I am not a very wealthy man but a little better off than most and President of Family Holding Corporation for 10 years(Family Investment Company) Officer of Centurion Networks (Family Computer Network Company) President of PSL Baseball and former Vice President of a local Little League. I moved to Florida 15 years ago with $500 in my pocket and my girl friend and her two daughters now my step daughters. Now father of four. The people must know that the American Dream is alive if you are willing to work for it. It seems many want it given to them or believe they can not obtain their goals. I am starting a project that you may be interested in http://www.fhcgroup.com it is not for a profit but rather a Passion of mine to help educate the American People and bring responses and ideas just as your article has done.
The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite - Thomas Jefferson
Thank You Very Much Mr. Davis
Michael L. O’Brien
American Tax Payer
David, Free Markets are about voluntary exchange where both parties benefit or there is no exchange. So there is no violence with voluntary exchange. Anyone writing that free markets cause violence is disingenious at best.
Pinochet’s regime violence over 16 years was overwhemingly against Marxist who were blowing up and stealing from banks, killing innocent people and assaination attempts. During the three years of Allende’s Marxist rule there were more innocent people killed while Allende and most of the media was ignoring the violent armed murderous takeover of farms and manufacturing businesses. I know of this first hand.
And yes, when wealth is created, it trickles down. When someone finds a cheaper way of making something, they earn a profit. For example, autos were too expensive for the first 20 years for anyone but the super rich to buy. Henry Ford make a fortune by building an auto that the middle class could buy - and now 95% of the people below the povery level in the USA have autos. In the socialist countries only the elite rulers can afford an auto. There is virtually no innovation where there is no freedom.
TO: Michael O’Brien. Your web site appeared very impressive. I could not get into the individual items, so I do not know if it is a work in progress. Since the majority of the media and schools do not give us much useful historical and current information, we need to connect through the Internet. Yours is a great idea.
It is amazing to me that the Repugs manage to continue to blame the Democrats for every single thing that happens even when THEY are in complete control of the government - the Executive Branch, the House, the Senate and even the Supreme Court. For the past 7 out of 8 years, the Repugs controlled all branches of government, and for the last year of eight, the Democrats only had a tiny majority in the House, with Republican majorities in all other main branches of government.
Isn’t it amazing how POWERFUL the Democrats are—that even when they aren’t in control of these institutions they are able to make the poor little Republicans do their mighty bidding?
Hey, Republicans, when are you going to stop demonizing the Democrats, siphoning the wealth of our country off to the Robber Barons, and start working to restore the middle and working class of this country?
Well, the answer is never, because you are telling the sheeple what they really want to hear. The sad thing is, the by the time the sheeple realize they’ve been had, voting against their own interests for so long—it truly will be too late to undo it all. Maybe it is too late even now….
Kalyson, you are absolutely correct. The target of the people’s hostility should be at the party that most represents Mercantilism in all its evil manipulations of the market to secure benefits for their (corporate or overseas) sponsors.
These days, given that there may be one Jeffersonian Democrat in the House, the trick is to identify the folks that represent the people as opposed to their corporate and “other” sponsors. Do so, and you could win the magic prize: realisation that the US government has become the best government that money can buy. There isn’t lick-spittle difference between the major political parties, as all those folks that voted for “change” will discover if they haven’t already.
“Change”, but the way, continues to mean the same thing it meant in the late 60’s and early 70’s: change the people in charge from your people to ‘our’ people. That’s it and that’s all. One group might be a bit more Stalinist than the next, but over time, we won’t notice the difference, really. Keep watching television, y’all.
I couldn’t agree more to something political than both parties are actually the same. “One Big Mess!”
We first must look at the “Money Changers” who actually control this country and are looking to control the World. A move from the Federal Reserve Bank to a World Bank.“The New World Order”. The biggest scam on man all time - Economic Slavery!It does not descriminate.
Thomas Jefferson once said: “I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks (Example: The Federal Reserve Bank) to control the issue of their currency, first by inflation, then by deflation (Example of the Recent Real Estate Market), the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”—Thomas Jefferson—The Debate Over The Re-charter Of The Bank Bill, (1809)
Is it not clear that our Government whether a Tax and Spend or Borrow and Spend policy doesn’t work?
The inflationary policies of the Federal Reserve have actually devalued our Dollar from $1 in 1913 to 4 Cents today.
With the innovation and technolical advances our standard of living should be 1000 times it is today. We have been robbed!
Real Change means moving back to the Constitution. That would be an actual change in direction for either party.
No New Spending!
No New Taxes!
No New Borrowing!
We American Consumers are 70% of the US Economy and 25% of the World Economy. We still have the power in our hands 300 million strong. We must take control of our Government Stop the Spending, Taxing and Borrowing and start printing our own currency which is constitutional. Remove the Federal Reserve from Power!
Most importantly we can not allow them to divide all of us into political parties. We are the American People and Together We Stand for this Great Country and are Protected by the Constitution.
Michael L. O’Brien
American Tax Payer
kalyson, Post 43;
Pretty funny - but, sadly, true!
It seems the GOPs’ only purpose (and its singular platform plank) is to be “anti-Democrat” or “anti-liberal”. Just anti-, anti- and more anti-.
(Which is, apparently, the legacy of the Falwell-Robertson Religious Right, the anti-Clintonites, and the politics of personal destruction of the alleged “gurus” like Rove and Gingrich and useless nitwits like Limbaugh, Hannity and Coulter, et al)
The comment left by Kalyson, post 43, Was the most typical, elitist, liberal response to my comments tha I have received yet!! Why is this groups education limited to the New York Times rag? How do we get these peoples head out of their ass and get them to think like Americans again?
Chuck
If supposedly the Democrats caused all this mess, why did they blow away the Republicans in the November elections?
Two main reasons the democrats blew out the Republicans in November;
The Republicans are the worst communicators in the history of politics.
The Republicans in office today do not represent the average working American.
We have professional policitians running our country into the ground! The founding Fathers never intended this to be the case.
Our country needs a leader to step forward and speak with courage, truth, integrity, and commitment.
Our experiment as an information society has proven to be an economic failure! We are and have been the greatest industrial nation the world has ever seen. We need to get back to basics producing wealth and quit producing debt!
Chuck Luca, Post 49;
Probably the most accurate and to-the-point post I’ve ever seen on the AIM forums and website!
I heartily agree. And, I especially agree with your statement: “Our experiment as an information society has proven to be an economic failure! We are and have been the greatest industrial nation the world has ever seen. We need to get back to basics producing wealth and quit producing debt!”
I’ve been an avid observer of the American political and economic scenes since 1950 - and in my perspective, I believe the worst of the problems you now delineate really began in earnest with the Reagan administration, Reaganomics and the twin absurdities of “trickle-down” and “deregulation” - furthered by both Bush I and Clinton - and brought by Bush II to the nearly total economic and political collapse we’re experiencing today.
I can’t believe some of the economic and political crap the American voting public has accepted (like little lambs and lemmings) over the last 28 years!
However, there’s always that sad old saying to fall back on: “People living in a democracy always get the government they deserve.”
Today’s unholy alliance? Professional Politicians and Wall Street Robber Barons!
And both major political parties suck!
The Republicans would not have lost had the majority of the American public known the facts in my article. But in case you have not noticed, 95% of the media were parroting Democratic and Obama spin and did there best to hide the obvious to anyone who checked the facts.
The comments on the Republicans having majorities in both houses during five of the past eight years demonstrates that the writers are unaware of the committee sharing (equal number of Republicans and Democrats)that meant that the Democrats could and did block all the attempts by Republicans to stop the risky lending promoted by Frannie Mae, etc.
To my friend Chuck, “Trickle down” worked. Reagan reduced tax rates form a high of 70% down to 28% and government tax revenues increased by over 25% despite the lower rates because it resulted in the creation of 22 million new jobs, many of them high paying. This meant that a lot more people were paying taxes which more than offset the lower rates.
Davis, Post 51;
Your comment:
“To my friend Chuck, “Trickle down” worked. Reagan reduced tax rates form a high of 70% down to 28% and government tax revenues increased by over 25% despite the lower rates because it resulted in the creation of 22 million new jobs, many of them high paying. This meant that a lot more people were paying taxes which more than offset the lower rates.”
So, what happened to those supposed “22 million jobs”? And what’s happened here now since Bush II reduced taxes even further?
And, aren’t the “lot more people ...paying taxes” most likely the primary result of significant natural population growth - coupled with, who knows, 10-20-30 million illegal immigrants - some of whom might be paying some form of taxes.
And, when Carter left office, the total accumulated national debt at that time was about $800 billion. After, especially, Reagan, Bush I and Bush II - - it’s more than 17 TIMES that amount! Now, some $13.5 TRILLION! (And - - HOW many lost jobs over the last eight years?)
You’re peddling ideology and your own occupational/professional ethnocentrism, not any reality that the rest of us are familiar with!
Davis, check this out:
David, Are you aware that Andre Gunder Frank was a Marxist oriented economic historian and sociologist who advised Allende to implement the reforms that destroyed the economy of Chile. That the economy of Chile was destroyed during Allende’s 3 years of power is fact. So it is not surprising that this piece is a bit of “get even” Marxist revisionism, with no real evidence to back up his numerous claims. What is fact is that the country was bankrupted during his three years of following Frank’s advise and expropriation of agriculture caused severe food shortages which carried into 1974. There was a 25% contraction in the Chilean economy in 74-75 when Frank wrote this rambling piece. And there was widespread hardship. What cannot also be denied is that the Chicago Boys he so hates turned the economy around in ‘75 and Chile had the highest real growth rate of any country in the world for the rest of Pinochet’s reign.
Well the plan is working! Keep the people who love America and what it stands for fighting with each other. This way the politicians can do whatever they damn well please.
Politics, Religion or Race what ever it takes - Divide and Conquer! Who are they doing this too? The Americans - Together We Stand, Divided We Fall!
Fact is whether it is the New Republicans Borrow & Spend on Warfare or the Traditional Democrat’s Tax and Spend on Welfare it doesn’t work!
It really has become a one party system that spends on whoever donates the most to them. National Media and Wall Street to name a few.
I prefer to refer to it as bribery!
The Greatest Frauds of All Time:
The Social Security System Robs Americans of 15% of their salary for Life. (A Ponzi Scheme)
The Federal Reserve System of Fractional Banking that has devalued our dollar from $1 to 4 cents worth of purchasing power since their inception in 1913. (A Pyramid Scheme) Watch out for a World Federal Reserve Bank!!! Run by maybe a United Nations???
The Internal Revenue Service also brought to power in 1913 and used to collect taxes to pay the Federal Reserve interest on Money the US Government borrows.
Real Estate taxes that don’t allow true ownership of land. We actually only rent our land from the Government.
What we need to do:
Bring our Great American Men and Woman Soldiers home and put them on the borders and in the Airports and Shipping Yards.
No more bailing out the weak failure banks and corporations. There is a reason they are failing. They don’t work. If they failed because of Fraud or wrong doing Jail the ones responsible!
Move towards a Sales and Use Tax which is the only Constitutional Tax.
Abolish the secretive Federal Reserve that truly runs this country of ours and start printing our own currency again from the Treasury like JFK tried to six months before his assassination.
Get back to business of being the most creative and powerful business culture in the world that no one can compete with. Trade from our Strength!
Stop the economic slavery and put our men and woman back to work!!!
Are We a Country of the Government for the Government? or Are We a Country of the People for the People?
Create term limits to stop career politicians.
There is no Gold in Fort Knox! It’s in the Federal Reserve Bank of NY. My fellow Americans, we’ve been robbed!!!
One of Two things should be real clear to everyone right now. The Government doesn’t have a clue what they are doing or they are doing what is in their self interest.
Michael L. O’Brien
American Tax Payer
Small Business Owner
Bail out the bad loans that the banks are carrying and don’t bail out the dinosaur businesses like GM.
I agree we should not bail out the Auto Makers and it is because they can not compete with their business model. Say Union NO!!!
Why should we bail out the International banking cartel? Let them fail too!!!
The American Tax Payer will take it on the chin either way but will be better off in the long run if Government stops interfering and most of all stops spending more and more money.
Use small local banks that are not part of the Federal Reserve System.
Support small business instead of Large Multinational Corporations who export jobs and money.
Walmart and companies like them (I think are few and far between) who do what corporations should. Balance the Customer, Employee and Shareholder needs.
Most of all say no to a world bank!!! They are going to try and take our sovereignty away from us.
Michael L. O’Brien
American Tax Payer
Small Business Owner
Re: Post 57:
Your comment:
“Walmart and companies like them (I think are few and far between) who do what corporations should. Balance the Customer, Employee and Shareholder needs.”
You gotta’ be kiddin’ ???
Over the last 25 years, “customers” and “employees” have been sold out by campaign money0grubbing politicians and big business in favor of “the investor class” - e.g., Main Street has been sold out in favor of Wall Street.
During Bush II’s last term - the income of the Top 2% of income earners in this country rose 79% - while the income of the remaining 98% fell more than 2%. The once-upwardly-mobile working middle -class has shrunk in size even as the population has exploded; working family disposable income, adjusted for inflation, is no greater than it was in 1972; and the U.S. average individual income has declined nearly $2,000 over the last eight years. And, as a percentage of the population, poverty in the U.S. has been increasing at the most alarming rate since WW II.
The U.S. middle-class is disappearing and we are heading towards a society comprised of a small (5%) “investor class” running the whole show and a very large “underclass” of working poor - - not a helluva lot unlike the “landed gentry” and working “serfs” socio-economic relationship of the Middle Ages.
The current crisis is the result of fatcats running amok under the guise of the fictitious “trickle-down” and “laissez-faire” concepts!
I agree that the government should not be using our tax dollars to bail out ANY failed businesses. It is blatantly unconstitutional. The government has caused these problems and the Federal Reserve is in the process of wiping out ALL of our savings and investment (needed to create new jobs) through the various vehicles it uses to create money out of thin air. These measures will result in massive inflation in the future.
Please read my comment again TK.
I think you will see that we agree.
I used Walmart as an example because they are one of the few multinational corporations who:
1. actually drive down prices for their consumers.
2.Give a solid benefit foundation for their employees. Without unions!!!
3. Reward their long term shareholders many who consist of their employees and consumers.
I do not believe in the trickle down theory either. It all starts locally with the
1. Individual,
2.Local and state government and not large Federal Government like the last 20 years have proved and the next 4. They are all guilty!!!
3. Small Business who employ more than 50% of the work force and create 70% of all new jobs.
4. Small local banks who do not belong to the Federal Reserve and International Banking Cartel.
That is the heart and Soul of America from the Bottom up.
Forget Pennsylvania Avenue and Wall Street they are in bed together.
Look at who we have in the White House Cabinet Today.
Robert Ruben, Mr Sommers and Geithner
Mr Ruben when in the Clinton administration was one of the promoters of getting rid of the Glass Stegal Act. Then went to City Group and I think that is a bigger Mess than AIG personally.
Read Rich Dad’s New Book online for Free “Conspiracy of the Rich” I think you will like it.
Main street is the only one who is going to take care of Main Street!!!
Michael L. O’Brien
American Tax Payer
Small Business Owner
Main Streeter!!!
I completely agree with you again Mr Davis.
I am buying gold every chance I get and preparing for Hyper Inflation.
Can anyone say Weirmar Republic?
What a Brilliant Scheme they have created to collapse the Dollar and move towards the World Bank and New World Order that they have been planning and putting people in place for many years.
Glenn Beck at Fox News has a Great Video of actually how much money has been printed by our Beloved Federal Reserve who always takes care of us!!!
Never before in the history of mankind. What that spells is Devaluing of the Dollar and Converted into Hyper Inflation like Mankind has Never Seen!!!
Michael L. O’Brien
American Tax Payer
Small Business Owner
Main Streeter!!!
The stock market has voted! Obama policies are a failure! They have inspired no “CONFIDENCE” in the market place! The sad part of this is that the process was started by George bush & Paulson!
Write your Senators and Representatives now, Republicans and Democrats. Encourage them to vote no on all of the bail outs and Obamas policy changes. Failure always presents an opportunity for future success! Does anybody know where all this money is going that we are giving to AIG?
This is America, if we don’t give up there are better days ahead. Prepare now for the next election. Get active in your local political party!
James, you are right. trickle down worked but INTEGRITY was missing!
Chuck
If you think enough time has elapsed to judge the policies of the new President, you are a dolt.
Re: Post 63;
The economic policies that are now coming home to roost came into play during the Reagan administration and were furthered by Bush I, Clinton and, most notably, Bush II - - some 25-28 years in the making. Therefore, it is absurd that anyone would start ranting, raving and engaging in ideological fits after the new guy has only been in office a grand total of 45 days!
It’s taken 25+ years to demonstrate, unequivocally, that “trickle-down” is a joke; it will take several more years, an activist Congress, a dedicated administration and a lot of learning by all the invested participants to remedy the situation.
Do we all consider ourselves American’s?
I think we can go all the way back to Roosevelt if we wanted. All of the Presidents may have meant well and believed in American Values. I have not metioned Barak Obama once. I don’t believe it is the President who is really at fault but the one who will take all of the blame.
Carter left Reagan with a recession, Reagan left Bush I with a recession, Bush I left Clinton with a recession, Clinton left Bush II with a recession and Bush II left Obama with a recession and maybe a depression.
Recently Wall Street Donated 6 Million to Obama, 6 Million to Clinton and 3 Million to McCain. Our whole system of Federal Government has been corrupted.
The Millions Donated by corporations are Bribes and the 9,000 ear marks are pay backs. They will only benefit Pennsylvania Avenue and Wall Street. The ear marks are 60% Democrat and 40% Republican.That might be close to the actual amount of Democrats to Rebublicans.
The only real difference between the two parties is who donate to them and who our elected officials give OUR money to.
I am totally against the bail outs. Blame it on Bush II or Obama. I really could care less. What really irks me is that it is being given to International comapnies who claim to be American.
I really think what we should all be working on is defining Main Street and what will work for Main Street because we are the ones who carry the burden and are the only ones who in the end will take care of us!
Thank You
Michael L. O’Brien
American Tax Payer
Small Business Owner
Main Streeter
Can we work on a project together?
Can we fix Main Street Together?
No Politicians who except donations please!!!
Only True American’s, from all view points.
I will give you my definition of Main Street and let’s see how we differ. I would also like help with this (corrections and additions).
We the People
300 million people
100 million tax payers
Where we work
43% for Small Businesses
42% for Large Businesses
15% Government
Where we invest
70% Own Homes
50% Own Investments
??% Own Small Businesses (two thirds of the top tax bracket)
US Consumer Percent of GDP
67% of US GDP
25% of World GDP
In summary We the People own our home but many are losing them do to the inflationary/deflationary practices of the Federal Reserve.
Half of all American’s have investments which are evaporating partly do to the fact that we have put our trust in the hands of Mutual Funds, Banks and Insurance Companies where our Power of Ownership is Transferred to the hands of too few.
While I believe that small business and the American Worker are the true driving force of the American economy where historically small business consist of 97% of all business, create 70% of all new jobs and are more than 50% of the private sector work force; bail out money is not going to them the productive. Instead bail outs are going to the Large International companies who are exporting our money and our jobs from the United States at the expense of We the People “The American Tax Payer”. Non Productive Government jobs again are being created at our expense; We the People “The American Tax Payer.
Our Country is indebted to China???
20 States do have a bill in their State Congress to send to the President and most agree that it should have been sent long ago that the Federal Government has overstepped its bounds and voided the Constitution which makes the Federal Government Null and Void!!!???
A Central Private Bank that we know as the Federal Reserve has printed money as never before been seen. This will devalue the Dollar and create Hyper Inflation. The most important point that I try to bring out of this statement is that even our Federal Government by law they created has no control over the Federal Reserve System that they created.
I ask you my fellow American’s are you ready to take care of yourself?
Main Street is the only one who will take care of Main Street!
We still do have the power on our side.
The power to vote. As Citizens, Workers, Consumers and Investors.
We must remove from office all that voted for the 9,000 ear marks. They have no right to spend our money like that.
We must protect our workers by supporting the productive small businesses with both consumption and investment. Boycotts do work.
We must buy US Government T Bills because I know none of us want one Billion Chinese over here demanding their money back.
We must buy gold and oil to protect ourselves from the coming Hyper Inflation.
We must take Main Street back! Once we do we will take Pennsylvania Avenue & Wall Street back and restore Government to the People “US” to work for the People!
“The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite” - Thomas Jefferson
Thank You
Michael L. O’Brien
American Tax Payer
Small Business Owner
Main Streeter
There is a great video on the internet of Phil Donahue interviewing Milton Friedman. Phil, who was probalbling making more than Friedman, was trying to get Friedman to say that captialism was a bad economic system. So Friedman asked Phil if he thought communism was better?
Friedman than said and I quote “the world runs on individuals persuing their own self interest.” Sounds like a free market system is best suited for this persuit. I might add that when men of good conscience work together to persue their common self interest with limited interference from governmemt, they are then free to maximize their abilities and interests which in the long run will benefit everyone! I do not beleive that giving taxpayer money to people who have failed so they can continue to fail will benefit anyone.
Post 67;
Personally, everyone running around “pursuing their own self-interest” sounds pretty chaotic to me - like trying to herd cats - or the proverbial “Chinese Fire Drill”.
And, one of the more significant bases for some of the worst of the current failures within our economy is that Allan Greenspan and federal government policy over recent years focused on “de-regulation” (your ideal ...“limited interference from government”...), in particular, within the financial services sector of the economy, with the now demonstrably false belief that the various businesses in that sector, in their own self-interest, would “self-regulate” for themselves and the “common good” of the sector.
UNFORTUNATELY, they DID NOT “self-regulate” - and Greenspan has repeated that his erroneous belief in this regard is the “worst mistake” he made as Chairman of the Federal Reserve System.
???
(P.S. Do you recall how tens of thousands of people in New Orleans “pursued their own self-interest” in the aftermath of Hurricane Katrina in ‘05? How about the tens of thousands of illegal Mexican immigrants coming over our border to “pursue their own self-interest” in using our country’s resources to benefit themselves? How about all those “free market” Mexican drug kingpins killing each other off in Juarez so the survivors can “pursue their own self-interest” in terms of being the ones who can then sell their drugs in the U.S.?)
To TK #68 and Chuck Luca #67.
The problem with our Free Market System is too much power in the hands of too few. We aren’t a true Capitalist Society. We are a Quasi Capitalist Society. Banks, Mutual Funds and Insurance Companies control more than 50% of most major corporations using our money and voting power. Putting their people in charge of management and donating politically through lobbyists to have laws made that favor them.
The Glass Stegal Act is the biggest form of deregulation that ocurred permitting Banks, insurance companies and investment companies to form under one roof. This further consolidated too much power in the hands of too few.
There should always be laws to protect the innocent from fraud and theft and there are.
Going back to political donations and pressure from lobbyists; besides making laws that favor the donators and lobbyists beneficiaries may also look the other way.
Our problems that we are experiencing are directly tied to The Federal Reserve System, Banks that fall under the Federal Reserve System, Insurance Companies, Mutual Funds, Political Donations, Ear Marks or Pork Barrell Spending and Lobbyists.
Who is suffering? We the people are! But Yet the system that created this MESS is taking more money from us to protect the system. Whether you like smoking or not Federal Cigarette Tax just went up 60 cents per pack this week. Demographically more people down the economic scale smoke than higher on the ecomnomic scale. I believe this another step to bail out the system!!!
Can anyone truly disagree with this analysis?
“The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite” - Thomas Jefferson
Thank You
Michael L. O’Brien
American Tax Payer
Small Business Owner
Main Streeter
October 14 at 9:22 pm | #1 | Link
Why is it important to know that James F. Davis is married to a “Chilean?”
As head of the Latin America Division (of what, exactly?) Davis must be aware that the causes of this crisis reach back far more deeply than just into the Clinton administration; he must remember that the neoliberal deregulatory schemes that helped foster this chaos had their first real-time trials down there in the Southern Cone. Or was he just too busy on his honeymoon? “Another glass of sparkling Pinochet, honey?”