mediapro

Credit Crisis Reality TV: Upcoming Hearings

Am I wrong, or do I hear the Freddie/Fannie mantra as the last gasp of trickle-down, Friedmanites as the ONLY cause for this great meltdown...duude?

Can Capitalism Survive Its Latest Entanglement With Socialism?

If you are really Jim Carey, get off your lazy duff and read the book.

It makes the most cogent argument possible of how the influence of Friedman and the Chicago School led us down this yellow brick road of fairy tales that pumping money into the hands of the wealthy, getting rid of all regulation and letting the market work would trickle down to all the peons.

Friedman even had a recipe for how to institute this radical, dangerous idea. He called it Shock Economics, using times of war and natural disaster to institute his policies while the country was literally in shock and looking for leaders to guide the country.

The Shock Doctrine details that path much better than any summary argument I could make. It is a cautionary tale far beyond the pseudo-economic opinions of me or anyone else that pretends to be an expert.

Can Capitalism Survive Its Latest Entanglement With Socialism?

Read Naomi Klein's "The Shock Doctrine" for the clearest explanation of The Mess.

For all you Milton Friedman addicts, der Fuhrer has been stripped of his clothing.

Can Capitalism Survive Its Latest Entanglement With Socialism?

TO Michael Z:

We either believe in capitalism or we don’t.

We will have displayed a pragmatic solution well within the parameters of capitalism.

While I agree with your conclusions about a proper rescue plan, maybe it's time we take a sober look at the fundamentals of the U.S. credit market. Everyone seems to admit that short-term lending to fund long-term investment has left us with a frozen credit market -- with lenders unwilling and sometimes unable to extend credit to other lenders.

There is another alternative, though I am sure that it will be frigthening to red-blooded capitalists.

Rather than beating around the bush by slowly nationalizing companies through the AIG model, take that $700 Billion and create the Bank of the United States of America. At a modest leveraged ratio of 10:1 the following would happen:

Begin lending to all of the credit worthy borrowers in the US that can't get credit from all of these crippled, dying banks -- with an equity stake of course, so the US taxpayer can get well after this crisis is over. Or let there be a reverse auction to find the 200 or 1000 strongest banks in the country, with the cleanest, strongest balance sheets, in each region, and inject equity capital into them. Congress ought to like that, since the most effective way to short circuit the recession would be to identify the BEST banks in each district, and inject $700 billion dollars worth of equity capital into them.

How to Spend $700B and Actually Solve the Problem

Couldn't agree more with the solution proposed by this article. Also, couldn't agree more with its political expediency as the main fault of the proposal. Also couldn't agree more with Tom B's analysis of the nearsighted Scrooge in the root cause.

So, where does that leave us? With a bunch of impractical and/or unpalitable "solutions" to the imminent crisis.

So,where are all the "capitalists" when we need them, salivating at the risk/reward opporunities? Why do we need government intervention is this supposedly "free market" of ideas and the homespun crap that we so often hear from "free market capitalists"?

All so strangely silent and willing to accept Paulson and Bernanke on their knees begging to save their Wall Street buddies.

Can anyone remember the last time that Paulson was on his knees?