Illustration: Here is one view of the would-be VP. See www.whatnowtoons.com
The Absurd Times has done its best to avoid any copyright infractions. Keith has been good enough, for example, to allow us to repost his work, but we would never steal it, even though we don't make a cent with this exercise in futility. However, there are apparently some problems for artists and I'm including Keith's posting about it here. Then I will go on the the bailout:
-----Inline Attachment Follows-----
The two artists organizations I'm active in, the National Cartoonists Society and the Association of American Editorial Cartoonists, and dozens of other trade organizations, are urging their members to write to their congressmen at this hour, because there is a risk that the House will pass the Senate version of the bill, again without debate and without a vote, by adding it to a larger budget or bailout bill at the end of the current session, in the next few hours.
The Orphan Works bill is being pushed by Google, which plans to catalogue millions of images and doesn't want to deal with the rights of copyright holders. The bill will make it easy for anyone to reprint copyrighted work, without the permission of the copyright holder, and artists will find that it is difficult or impossible to control where their work is reprinted. The bill also imposes new costs and procedures on artists, all to benefit Google.
I'd like to ask everyone who reads my blog, or subscribes to my newsletter, to do the cartoonists a favor by emailing their congressman and asking him or her to oppose the Orphan Works Bill now, by visiting this web site, which helps you to send an automatic email to your congressman. It is quick and easy to send this email, and it would be much appreciated by the desperate cartoonists.
To learn more about the Orphan Works Bill, visit here.
I've done my best to tolerate this absurdity, honest. From what I can tell, it is just a last minute pillaging of the till by the Bushman. Some articles below are the work of people with more generosity than I have.
Here's How to Fix the Wall Street Mess ...from Michael Moore
The richest 400 Americans -- that's right, just four hundred people -- own MORE than the bottom 150 million Americans combined. 400 rich Americans have got more stashed away than half the entire country! Their combined net worth is $1.6 trillion. During the eight years of the Bush Administration, their wealth has increased by nearly $700 billion -- the same amount that they are now demanding we give to them for the "bailout." Why don't they just spend the money they made under Bush to bail themselves out? They'd still have nearly a trillion dollars left over to spread amongst themselves!
Of course, they are not going to do that -- at least not voluntarily. George W. Bush was handed a $127 billion surplus when Bill Clinton left office. Because that money was OUR money and not his, he did what the rich prefer to do -- spend it and never look back. Now we have a $9.5 trillion debt. Why on earth would we even think of giving these robber barons any more of our money?
I would like to propose my own bailout plan. My suggestions, listed below, are predicated on the singular and simple belief that the rich must pull themselves up by their own platinum bootstraps. Sorry, fellows, but you drilled it into our heads one too many times: There... is... no... free... lunch. And thank you for encouraging us to hate people on welfare! So, there will be no handouts from us to you. The Senate, tonight, is going to try to rush their version of a "bailout" bill to a vote. They must be stopped. We did it on Monday with the House, and we can do it again today with the Senate.
It is clear, though, that we cannot simply keep protesting without proposing exactly what it is we think Congress should do. So, after consulting with a number of people smarter than Phil Gramm, here is my proposal, now known as "Mike's Rescue Plan." It has 10 simple, straightforward points. They are:
1. APPOINT A SPECIAL PROSECUTOR TO CRIMINALLY INDICT ANYONE ON WALL STREET WHO KNOWINGLY CONTRIBUTED TO THIS COLLAPSE. Before any new money is expended, Congress must commit, by resolution, to criminally prosecute anyone who had anything to do with the attempted sacking of our economy. This means that anyone who committed insider trading, securities fraud or any action that helped bring about this collapse must go to jail. This Congress must call for a Special Prosecutor who will vigorously go after everyone who created the mess, and anyone else who attempts to scam the public in the future.
2. THE RICH MUST PAY FOR THEIR OWN BAILOUT. They may have to live in 5 houses instead of 7. They may have to drive 9 cars instead of 13. The chef for their mini-terriers may have to be reassigned. But there is no way in hell, after forcing family incomes to go down more than $2,000 dollars during the Bush years, that working people and the middle class are going to fork over one dime to underwrite the next yacht purchase.
If they truly need the $700 billion they say they need, well, here is an easy way they can raise it:
a) Every couple who makes over a million dollars a year and every single taxpayer who makes over $500,000 a year will pay a 10% surcharge tax for five years. (It's the Senator Sanders plan. He's like Colonel Sanders, only he's out to fry the right chickens.) That means the rich will still be paying less income tax than when Carter was president. This will raise a total of $300 billion.
b) Like nearly every other democracy, charge a 0.25% tax on every stock transaction. This will raise more than $200 billion in a year.
c) Because every stockholder is a patriotic American, stockholders will forgo receiving a dividend check for one quarter and instead this money will go the treasury to help pay for the bailout.
d) 25% of major U.S. corporations currently pay NO federal income tax. Federal corporate tax revenues currently amount to 1.7% of the GDP compared to 5% in the 1950s. If we raise the corporate income tax back to the level of the 1950s, that gives us an extra $500 billion.
All of this combined should be enough to end the calamity. The rich will get to keep their mansions and their servants, and our United States government ("COUNTRY FIRST!") will have a little leftover to repair some roads, bridges and schools.
3. BAIL OUT THE PEOPLE LOSING THEIR HOMES, NOT THE PEOPLE WHO WILL BUILD AN EIGHTH HOME. There are 1.3 million homes in foreclosure right now. That is what is at the heart of this problem. So instead of giving the money to the banks as a gift, pay down each of these mortgages by $100,000. Force the banks to renegotiate the mortgage so the homeowner can pay on its current value. To insure that this help does no go to speculators and those who have tried to make money by flipping houses, this bailout is only for people's primary residence. And in return for the $100K paydown on the existing mortgage, the government gets to share in the holding of the mortgage so that it can get some of its money back. Thus, the total initial cost of fixing the mortgage crisis at its roots (instead of with the greedy lenders) is $150 billion, not $700 billion.
And let's set the record straight. People who have defaulted on their mortgages are not "bad risks." They are our fellow Americans, and all they wanted was what we all want and most of us still get: a home to call their own. But during the Bush years, millions of them lost the decent paying jobs they had. Six million fell into poverty. Seven million lost their health insurance. And every one of them saw their real wages go down by $2,000. Those who dare to look down on these Americans who got hit with one bad break after another should be ashamed. We are a better, stronger, safer and happier society when all of our citizens can afford to live in a home that they own.
4. IF YOUR BANK OR COMPANY GETS ANY OF OUR MONEY IN A "BAILOUT," THEN WE OWN YOU. Sorry, that's how it's done. If the bank gives me money so I can buy a house, the bank "owns" that house until I pay it all back -- with interest. Same deal for Wall Street. Whatever money you need to stay afloat, if our government considers you a safe risk -- and necessary for the good of the country -- then you can get a loan, but we will own you. If you default, we will sell you. This is how the Swedish government did it and it worked.
5. ALL REGULATIONS MUST BE RESTORED. THE REAGAN REVOLUTION IS DEAD. This catastrophe happened because we let the fox have the keys to the henhouse. In 1999, Phil Gramm authored a bill to remove all the regulations that governed Wall Street and our banking system. The bill passed and Clinton signed it. Here's what Sen. Phil Gramm, McCain's chief economic advisor, said at the bill signing:
"In the 1930s ... it was believed that government was the answer. It was believed that stability and growth came from government overriding the functioning of free markets.
"We are here today to repeal [that] because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom.
"I am proud to be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality."
This bill must be repealed. Bill Clinton can help by leading the effort for the repeal of the Gramm bill and the reinstating of even tougher regulations regarding our financial institutions. And when they're done with that, they can restore the regulations for the airlines, the inspection of our food, the oil industry, OSHA, and every other entity that affects our daily lives. All oversight provisions for any "bailout" must have enforcement monies attached to them and criminal penalties for all offenders.
6. IF IT'S TOO BIG TO FAIL, THEN THAT MEANS IT'S TOO BIG TO EXIST. Allowing the creation of these mega-mergers and not enforcing the monopoly and anti-trust laws has allowed a number of financial institutions and corporations to become so large, the very thought of their collapse means an even bigger collapse across the entire economy. No one or two companies should have this kind of power. The so-called "economic Pearl Harbor" can't happen when you have hundreds -- thousands -- of institutions where people have their money. When you have a dozen auto companies, if one goes belly-up, we don't face a national disaster. If you have three separately-owned daily newspapers in your town, then one media company can't call all the shots (I know... What am I thinking?! Who reads a paper anymore? Sure glad all those mergers and buyouts left us with a strong and free press!). Laws must be enacted to prevent companies from being so large and dominant that with one slingshot to the eye, the giant falls and dies. And no institution should be allowed to set up money schemes that no one can understand. If you can't explain it in two sentences, you shouldn't be taking anyone's money.
7. NO EXECUTIVE SHOULD BE PAID MORE THAN 40 TIMES THEIR AVERAGE EMPLOYEE, AND NO EXECUTIVE SHOULD RECEIVE ANY KIND OF "PARACHUTE" OTHER THAN THE VERY GENEROUS SALARY HE OR SHE MADE WHILE WORKING FOR THE COMPANY. In 1980, the average American CEO made 45 times what their employees made. By 2003, they were making 254 times what their workers made. After 8 years of Bush, they now make over 400 times what their average employee makes. How this can happen at publicly held companies is beyond reason. In Britain, the average CEO makes 28 times what their average employee makes. In Japan, it's only 17 times! The last I heard, the CEO of Toyota was living the high life in Tokyo. How does he do it on so little money? Seriously, this is an outrage. We have created the mess we're in by letting the people at the top become bloated beyond belief with millions of dollars. This has to stop. Not only should no executive who receives help out of this mess profit from it, but any executive who was in charge of running his company into the ground should be fired before the company receives any help.
8. STRENGTHEN THE FDIC AND MAKE IT A MODEL FOR PROTECTING NOT ONLY PEOPLE'S SAVINGS, BUT ALSO THEIR PENSIONS AND THEIR HOMES. Obama was correct yesterday to propose expanding FDIC protection of people's savings in their banks to $250,000. But this same sort of government insurance must be given to our nation's pension funds. People should never have to worry about whether or not the money they've put away for their old age will be there. This will mean strict government oversight of companies who manage their employees' funds -- or perhaps it means that the companies will have to turn over those funds and their management to the government. People's private retirement funds must also be protected, but perhaps it's time to consider not having one's retirement invested in the casino known as the stock market. Our government should have a solemn duty to guarantee that no one who grows old in this country has to worry about ending up destitute.
9. EVERYBODY NEEDS TO TAKE A DEEP BREATH, CALM DOWN, AND NOT LET FEAR RULE THE DAY. Turn off the TV! We are not in the Second Great Depression. The sky is not falling. Pundits and politicians are lying to us so fast and furious it's hard not to be affected by all the fear mongering. Even I, yesterday, wrote to you and repeated what I heard on the news, that the Dow had the biggest one day drop in its history. Well, that's true in terms of points, but its 7% drop came nowhere close to Black Monday in 1987 when the stock market in one day lost 23% of its value. In the '80s, 3,000 banks closed, but America didn't go out of business. These institutions have always had their ups and downs and eventually it works out. It has to, because the rich do not like their wealth being disrupted! They have a vested interest in calming things down and getting back into the Jacuzzi.
As crazy as things are right now, tens of thousands of people got a car loan this week. Thousands went to the bank and got a mortgage to buy a home. Students just back to college found banks more than happy to put them into hock for the next 15 years with a student loan. Life has gone on. Not a single person has lost any of their money if it's in a bank or a treasury note or a CD. And the most amazing thing is that the American public hasn't bought the scare campaign. The citizens didn't blink, and instead told Congress to take that bailout and shove it. THAT was impressive. Why didn't the population succumb to the fright-filled warnings from their president and his cronies? Well, you can only say 'Saddam has da bomb' so many times before the people realize you're a lying sack of shite. After eight long years, the nation is worn out and simply can't take it any longer.
10. CREATE A NATIONAL BANK, A "PEOPLE'S BANK." If we really are itching to print up a trillion dollars, instead of giving it to a few rich people, why don't we give it to ourselves? Now that we own Freddie and Fannie, why not set up a people's bank? One that can provide low-interest loans for all sorts of people who want to own a home, start a small business, go to school, come up with the cure for cancer or create the next great invention. And now that we own AIG, the country's largest insurance company, let's take the next step and provide health insurance for everyone. Medicare for all. It will save us so much money in the long run. And we won't be 12th on the life expectancy list. We'll be able to have a longer life, enjoying our government-protected pension, and living to see the day when the corporate criminals who caused so much misery are let out of prison so that we can help reacclimate them to civilian life -- a life with one nice home and a gas-free car that was invented with help from the People's Bank.
P.S. Call your Senators now. Here's a backup link in case we crash that site again. They are going to attempt their own version of the Looting of America tonight. And let your reps know if you agree with my 10-point plan.
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Capitalism Reaches a Crossroads
October 04, 2008 By Carl Bloice
Carl Bloice's ZSpace Page
'Even now, someone somewhere is penning a book with a snappy title The End of Capitalism,' columnist Philip Stephens, associate editor of the Financial Times wrote recently. Not to worry, he continued, that's not about to happen. However, eight days earlier Martin Wolf, associate editor and chief economics commentator at the same paper observed that what was 'until recently, the brave new financial system is melting away before our eyes.' On the night of September 18 members of Congress were summoned to a Capitol Hill conference room where they were told that if they did not act quickly to approve a radical revamp of how the government deals with the economy, capitalism might indeed collapse. That's before President George W. Bush said, 'If money isn't loosened up, this sucker could go down.'
Not to worry, cautioned the editor of the conservative German newspaper Die Weit. 'These are all trials and crises, but they will not spell the end of America's distinctiveness.'
'The country will never convert to socialism, nor will it become a mega-state. Faced with similar circumstances, that might be the response of the pessimistic Europeans. America's culture of optimism - which all too often gets on the Europeans' nerves because they consider it to be naïve and superficial - also has the power to identify a setback as exactly that and not the end of the world,' the paper editorialized. That was a few days before the U.S. Treasury took responsibility for the well-being of distressed financial institutions all over the world.
No, the U.S. is not about to become socialist any time too soon. That alternative has not been placed before the public in a way that could be considered preferable to what we've got. Besides, a system ceases to be when it is replaced by something else. But with each passing day, as the crisis has deepened, it has become more and more obvious that 'unfettered' capitalism and 'market fundamentalism' and the neo-liberal policies they produce are discredited. Indeed, most of the world had rejected them before the current crisis began.
'The globalization agenda has been closely linked with the market fundamentalists - the ideology of free markets and financial liberalization,' economist Joseph Stiglitz told Nathan Gardels on the Huffington Post recently. 'In this crisis, we see the most market- oriented institutions in the most market-oriented economy failing and running to the government for help.' Everyone in the world will say now that this is the end of market fundamentalism.
'In this sense, the fall of Wall Street is for market fundamentalism what the fall of the Berlin Wall was for communism - it tells the world that this way of economic organization turns out not to be sustainable,' said Stiglitz. 'In the end, everyone says, that model doesn't work. This moment is a marker that the claims of financial market liberalization were bogus.'
Conservative commentator and political operative, Newt Gingrich, has come up with the terms 'crony capitalism' and 'bureaucratic capitalism,' both of which he says will be the outcome of the Bush Administration's bailout scheme. The former will mean 'a welfare state for rich investors,' he says, the latter 'salary caps and other government regulatory requirements which would drive the `private' out of `private enterprise'.'
There's a lot of talk out there about the bailout being 'socialism for the rich.' That's all so much seemingly clever rhetoric designed to make a political point, but of no substance. Nothing the Bush Administration is pushing (with the help of a Democratic Congress) bears any resemblance to anything that could remotely be called socialism. In fact, it looks far more like Italy under Mussolini than the USSR under Brezhnev. As truthdig.com columnist Robert Sheer noted last week, 'what is proposed is not the nationalization of private corporations but rather a corporate takeover of government. The marriage of highly concentrated corporate power with an authoritarian state that services the politico-economic elite at the expense of the people is more accurately referred to as `financial fascism'.'
The new Treasury Department fund 'will share many characteristics of the expanding government-sponsored pools known as sovereign funds,' wrote Landon Thomas, Jr. in the New York Times September 23.
'The new fund, assuming it is approved by Congress, could pull the United States deeper into a form of capitalism in which the most powerful financial entities are not risk-happy investment banks, but more cautious state-sponsored entities,' wrote Thomas. 'While not necessarily a third economic way, this general approach presumes that the government - in addition to the private sector - plays a crucial role in deciding how best to deploy a nation's investment capital.'
'This gets to the point of state capitalism and defining what the role of the government is in a free- market economy,' Douglas Rediker, a former investment banker at the New America Foundation in Washington, told Thomas.
'The result of the bailout would be that the government would virtually control many of the largest financial institutions in the country,' wrote Dan La Botz in Monthly Review online. 'The U.S. government and the banks of the country would suddenly be fused - or perhaps entangled would be a better word - into one extremely powerful political-economic entity. While the proposal does not envision state control of the economy as a long-term proposition, merely long enough to save the bankers, still the impact of the current proposals now being debated in Congress will be far-reaching. The American government and the people have suddenly found themselves at a turning point which was not foreseen and for which no one was prepared.'
'If you wanted to devise a name for this approach, you might pick the phrase economist Arnold Kling has used: Progressive Corporatism.,' wrote Times columnist David Brooks the same day. 'We're not entering a phase in which government stands back and lets the chips fall. We're not entering an era when the government pounds the powerful on behalf of the people. We're entering an era of the educated establishment, in which government acts to create a stable - and often oligarchic - framework for capitalist endeavor.'
'After a liberal era and then a conservative era, we're getting a glimpse of what comes next,' wrote Brooks
I can hardy wait.
An inevitable consequence of globalization is that many of the critical problems facing the planet today can only be solved through international cooperation and coordination. These include: climate change and other threats to the biosphere, aids and other infectious diseases, human migration and international finance.
The current economic crisis is an international one yet the recourse chosen by Washington to deal with it globally is to 'press' other countries to adopt measures similar to those adopted in the U.S. Under such circumstances the chance of a collective effort to restructure world capitalism would seem remote, if possible. But the demand for such is out there and how our country responds will go a long way in determining the contours of international affairs for decades to come. One has only to grasp the nature of the remarks at the recent opening of the United National General Assembly to appreciate the seriousness of the challenge.
Last week in New York, one after another, heads-of- state rose to the Assembly rostrum to drive home the message: the 'credit crunch' in the U.S. is much more than a crisis in U.S. banking; it reflects a problem threatening economic devastation across the globe. It requires an international cooperative effort in which diktat, posing as 'leadership', cannot be tolerated. Don't even think about handing the problem to the World Bank or the International Monetary Fund. The UN itself should be the arena for countries to discuss a solution for the global financial crisis, said Brazil's President, Luiz Inacio Lula da Silva: 'The global nature of this crisis means that the solutions we adopt must also be global, and decided upon within legitimate, trusted multilateral forum, with no impositions.'
Arguably some of the strongest remarks to the UN came from the leaders of Latin American countries but the most fundamental challenges came from traditional U.S. allies such as France and Germany. These are capitalist countries and for the foreseeable future will remain so. But they have a strikingly different view of how the international economy should function.
German chancellor, Angela Merkel, even revealed that an attempt had been made to enlist Washington in a collective effort to head off the crisis. At last year's meeting of the major industrial powers, she said, she had - in the world of the New York Times - 'strongly urged both the United States and Britain to be more rigorous in supervising financial activities, and even offered specific proposals to be applied to banks and other institutions.' But the U.S. was unresponsive, she said, while seeming 'to express a certain exasperation that the United States was now asking Europe for help, after inflicting damage on the rest of the world that could have been avoided.'
'At the moment, I don't think Japan needs to launch a program similar to that of the United States,' Japanese Vice Finance Minister Kazuyuki Sugimoto told reporters in Tokyo, while the European Union let it be known that its members would not be putting up money to rescue banks. 'This crisis originated in the
US and is mainly hitting the US,' German Finance Minister Steinbeck said last week. In Europe and Germany, such a package would be 'neither sensible nor necessary.'
The U.S. 'has not only turned away from decades of rhetoric about the virtues of the free market and the dangers of government intervention, but it has also probably undercut future American efforts to promote such policies abroad,' wrote the New York Times' Nelson Schwartz from Paris September 18. And most of the other governments are none to happy about it. Japanese commentators were quick to note that the Treasury bailout is precisely what Washington told them not to try when that country faced an economic crisis only a few years ago. (A condition of help for South Korea when it faced an economic crisis in the 90s was that Seoul not bail out banks and other failing enterprises.)
Last Friday, editors of the center-right German newspaper Allegemeine Zeitung compared the U.S. financial crisis to 911 saying 'this time, the attack on all-American doctrines is not the work of some foreign enemy. It comes from within, from the depths of the system. Largely unobstructed by its own state controls, American capitalism has created its own suicide bomber whose explosives - derivatives - have had an even greater effect than the flying bombs of the jihadists. The whole world - and not just New York - has a new ground zero now - Wall Street.'
French political leaders immediately seized on the latest bailout moves to trumpet their own version of 'economic patriotism.' 'We're not going to accept to pay for the broken dishes of a failed regulation' and a 'corruption of capitalism,' said French Prime Minister Francois Fillon. Nicolas Sarkozy has called for a world to 'learn the lessons of the worst financial crisis since the 1930s.' He proposed to 'moralize' capitalism, freeing it from speculators whom he labeled 'the new terrorists.' Last week, as President Bush went on television to admit the crisis is grave, Sarkozy stoutly defended capitalism but observed that 'A certain idea of globalization is drawing to a close with the end of a financial capitalism that had imposed its logic on the whole economy and contributed to perverting it.'
'The crisis is not a crisis of capitalism,' said Sarkozy. 'It is the crisis of a system that is far from the values of capitalism and betrayed capitalism.'
In 2006, long before there was any acknowledgement of the chaos to come (I put it that way because working people in the U.S. were already facing home foreclosures),when the world's elite gathered at Davos, Switzerland, chancellor Merkel had observed that 'What we have is a completely new balance of power in the world today.'
That too was evident in the General Assembly debate. In prior years no one would have expected Latin American governments to openly challenge Washington and Wall Street's conduct in the international economy. However, over a brief recent period, left-leaning political forces have taken power electorally in a number of countries, having in common a rejection of the exploitative policies of the World Bank and IMF, and the influence of the same 'market fundamentalists' that the Asians are repulsing and who have led the U.S., itself, into the present economic cul-de-sac.
No one was surprised that Cuban first vice-president Jose Ramon Machado Ventura would tell the UN that the drive for profits was increasing poverty and that the current crisis threatened the 'existence of mankind.' 'Fabulous fortunes cannot be wasted while millions are starving and dying of curable diseases,' he said. 'For a large part of the non-aligned nations, the situation is becoming unsustainable. Our nations have paid and will continue to pay the cost and consequences of the irrationality, wastefulness and speculation of a few countries in the...north.'
'The prevailing world order, unjust and uncontained, must be replaced,' Machado Ventura said.
'We don't want to conceive of the idea that the rescue of the dignity of the world's poor does not have the same priority or the same urgency of saving the institutions that operate the most powerful financial centre in the world,' said Dominican Republic president Leonel Fernandez. 'We need an international financial plan that is as urgent and as bold as the one to save Freddie Mac, Fannie Mae, Bear Stearns, Merrill Lynch and American International Group.' Fernandez added that while $700 billion is being set aside to rescue U.S. financial institutions, for something like $50 billion millions around the world could be spared a miserable existence.
'We're not going to accept to pay for the broken dishes of a failed regulation' and a 'corruption of capitalism,' said French Prime Minister Francois Fillon. Sarkozy called for a world to 'learn the lessons of the worst financial crisis since the 1930s.' 'Let's create a regulated capitalism,' he said.
On September 24 in Berlin, German Finance Steinbruck repeated Merkel's charge that Washington had, last year, resisted specific calls for regulations in the financial marketplace. 'Crisis management alone will not rebuild the lost confidence,' he said. 'We must civilize financial markets, and not just through moral appeals against excess and speculation. Self-regulation is no longer sufficient.' The US belief in 'laisser- faire capitalism; the notion that markets should be as free as possible from regulation; these arguments were wrong and dangerous,' he said. 'This largely under- regulated system is collapsing today.'
Steinbeck went on to propose new regulations and said that amid the current economic crisis the US is poised to lose its role as a global financial 'superpower.' The new world will become 'multipolar' with the emergence of stronger, better capitalized centers in Asia and Europe, he said.
Meanwhile, Oskar Lafontaine, leader of Germany's fast growing and increasingly influential Left Party, said the world is confronted with more than a banking or economic crisis and - in the words of Der Spiegel - 'but rather one of the entire intellectual and moral direction of Western society.' 'We no longer have a social market economy because of the regimes of the international financial markets,' Lafontaine said the consequence of which is increased privatization of the social services and a threat to the retirement security of millions of people. Lafontaine said the Left party wants the re-creation of a Bretton Woods-style system of foreign exchange controls with fixed trading bands, controls on international capital flows and on financial products.
'We believe that financial products should be forced to get official stamps of approval just like pharmaceutical products,' Lafontaine, the former head of the country's Social Democratic Party, said. 'Because the bitter truth is that many extremely greedy bankers don't even understand themselves what they've done. These are people who started something without knowing what they were doing and it's ended in disaster.'
'When enough banks have been nationalized or gone bust, when the last reputations have been properly shredded, and when prices of Fifth Avenue apartments and Mayfair town houses have fallen finally to earth, politicians are going to have to think hard about the lessons of the financial crash of 2008,' wrote Stephens of the Financial Times. 'Even now, someone somewhere is penning The End of Capitalism. Experience tells us snappy book titles should be treated with caution. The global financial system will never be the same again. But just as history survived the collapse of communism, so the market economy will weather the demise of Bear Stearns, Lehman, Merrill Lynch and HBOS.'
'The credit crunch and the financial firestorm have also provided a neat metaphor for the big shift in economic power in the world,' writes Stephens. He goes on to endorse the call for 'more global governance: credible international rules.'
'Capitalism will survive these financial shocks,' said Stephens. Probably it will; in any case it's good to have faith.
On Monday, the House of Representatives voted down the final draft of the bailout plan hurriedly crafted by the Administration and Congressional leaders from the two major parties. This set the stage for what was certain to be desperate attempts to put together a compromise that could win legislative approval. This takes place against a backdrop of widespread public opposition to the original plan and ever greater turmoil in the foreign money markets and on Wall Street.
Meanwhile, the dangers and challenges over the next few weeks and months are enormous. On the world scene, the U.S. could join in an international - and more democratic - effort at reconstructing capitalism in an effort to save it, or the White House - whoever lives there - and the Congress could lead us along a path of international isolation in which the rest of the world goes about its business, leaving us in economic mire. On the home front, the policymakers could enshrine a new form of corporate and more authoritarian capitalism or enact policies bent toward greater equality, solidarity and social and economic justice (things real socialists have never ceased advocating). The latter is what we should be insisting upon.
BlackCommentator.com Editorial Board member Carl Bloice is a writer in San Francisco, a member of the National Coordinating Committee of the Committees of Correspondence for Democracy and Socialism and formerly worked for a healthcare union.
The Queston That Should Be At The Heart Of The Bailout Debate: Will The Paulson Plan Work Or Potentially Make Things Worse?
Most of the people who oppose the bailout do so for ideological reasons. Conservative Republicans fear the advance of socialism in the form of government intervention. They picture themselves as saving the Republic from collectivist marauders out to destroy the free market. And that includes Henry Paulson the former head of Goldman Sachs who came to government from Wall Street and still embodies its values.
Democrats are divided too. Some say the voting for the bill while holding their noses. Others say they have to "do something" or else, and have no alternative plan. Still others see it as rewarding the people who created the crisis.
What the media often misses are the people who argue that the measure is unlikely to restore confidence or get credit flowing again. These people are actually pragmatists and work in the financial industry. In large part because politics is polarized along partisan lines, their non-partisan assessments are not taken seriously
Others don't really analyze what's in the bill and present it in symbolic terms as a needed solution without noting that in just a week it went from just three pages to over 451.
Actually, since everyone agrees that the crisis is unlikely to go away anytime soon, we have to look at more than one bill.
As for the insiders, there's David Tice, a respected Denver investment advisor who told Investment News: "We don't believe these bailout packages will fix the Wall Street credit mechanism," he said. "Credit will be restrictive no matter what happens with the bailout package."
Tice is projecting pain, doom and gloom for the next five years. The business outlet reported, "Mr. Tice provided a litany of reasons why he believes the U.S. economy is headed toward recession, if not a full-blown depression."
The bill the Treasury Department insisted had to be simple and "clean" and could not allow the adding of provisions for bankruptcy reform ended up getting vast tax breaks tacked on as Bloomberg reported, "The U.S. Senate approved tax cuts valued at more than $100 billion, including a host of alternative energy credits and dozens of breaks for businesses and individuals, as part of its $700 billion bank rescue bill."
Websites like Naked Capitalism were filled with contributions by economists and traders pointing to technical flaws in the plan that will undermine its effectiveness.
Example: "I think it's very telling that in two days of hearings and two weeks of discussion we have yet to see *any* detailed mechanism for how Paulson's plan will increase the supply of, say, inventory loans. It's not that every economist in the world is an idiot, it's just not going to help. I think people have fallen into the fallacy that if it costs a lot it must be valuable. Paulson's plan falls into the category of very expensive way to hurt ourselves. (As for its cost, A treasury official was pressed on why they sought $700 billion: "where did that number come from, a study or data point?" No, he replied, we just wanted it to be big!")
As for the bill itself, listen to Ralph Nader's dissection, even if you think he's a hasbeen.
"The revised bailout legislation is the same $700 billion piece of burnt toast, with some window dressing, sugar coating, and $150 billion of pork tax cuts covering everything from casinos to coal.
But this isn't even the main course that Senate is serving up for Congress on Friday. The main course is on page 92 of the 451 page document:
BORROWING LIMITS TEMPORARILY LIFTED. - During the period beginning on the date of enactment of this Act and ending on December 31, 2009, the Board of Directors of the Corporation may request from the Secretary, and the Secretary shall approve, a loan or loans in an amount or amounts necessary to carry out this subsection, without regard to the limitations on such borrowing under section 14(a) and 15(c) of the Federal Deposit Insurance Act (12 U.S.C. 1824(a), 1825(c)).
Translation: Bush, McCain, and Obama want Congress to co-sign off on the mother of all blank checks, paving the way for a sinking dollar and higher interest rates."
So before you turn the bailout into an argument between the sensible and responsible versus the emotional and angry, look at the details, consider the costs and ask why you are persuaded it will have the effect its proponents claim. TED spread is at a new record. Bad news
On Friday morning, the economist Paul Krugman sounded like a desperado:
"Double plus ungood news on multiple fronts this morning. The credit crunch is getting worse: LIBOR jumped again, the on employment: payrolls down 159,000, average work week down, official unemployment rate flat at 6.1 percent but broad measure (U6) up from 10.7 to 11.
We are going over the edge."
China's Premier Wen Jiabao told China Daily on Friday, "I'm very concerned." He didn't seem to buy into all the fear mongering, asking: "What is the actual degree of the problem? How will develop? What will be the effect on the US and the world." His advice: "Pluck up one's courage and be confident as these are more important than gold or currency.,
Ok, I am "plucked," even as they plunder on, but we still don't know with any certainty if the ever expanding bailout will straighten a system out of wack, create jobs, restore capitalism and make it all ok again? Remember the NY Times first described the bailout as a "hail Mary play" in which you throw the football and pray. Has it come to that?
What if all of this "debate" is just more sound and fury, signifying less than meets the eye? Markets are still deeply "stressed" and its unlikely that the solution our Congress is backing will solve anything.
Danny Schechter is the author of PLUNDER: Investigating Our Economic Calamity (Cosimo-Newsdissector.com/Plunder) and the director of IN DEBT WE TRUST the film that warned of the crisis. (indebtwetrust.com)
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