Friday, September 26, 2008

On Bended Knee


The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.

“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room. ...

In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

What I find most remarkable about the past week is the spectacle of a Treasury secretary negotiating on behalf of Wall Street and private foreign banks against the American taxpayer. Could there be a better symbol of the profound institutional failure that defines this administration and the system itself? Yes, in some ways it's business as usual: someone in Washington wants a lot of money, and elected officials push and pull on behalf of their constituents. But if we've entered a period in which Treasury asserts the right to negotiate momentous issues on behalf of interests that aren't necessarily aligned with the public, is it time to think about introducing some independence and accountability by severing that department's ties to the executive branch? Is there a case for letting voters decide who runs Treasury?

One might ask the same question about the Fed. Part of the rationale for an independent Fed is to keep the hands of politicians (and by extension the public) away from the levers of money creation. Nice concept -- except when you get a flawed, congenitally political animal (Greenspan) or a pliant one who for decades helped shape the very system that has failed (Bernanke). The Fed's "independence" has been a running joke for years. So wouldn't it make sense to at least formalize some accountability there as well? Of course there would be inherent risks. But can the grocery and gas-buying public not be trusted to recognize when the Fed's mandate to balance maximum employment and price stability has tipped too far in one direction?

Right now we need sunlight and accountability, not anachronistic, idealistic models that have manifestly failed. Is the ballot box part of the solution?


Anonymous Anonymous said...

It's time to make Ben Stein the guy who runs the Federal Reserve. He's smart, he was funny in Ferris Buellers Day Off, and it just makes sense.

Bring back traditional Republicans to save the Republic.

God help us if Obama wins in November!!!

9/26/2008 7:56 AM  
Blogger Mike said...

Excellent post, CR.

Is Paulsen the new Fouquet?

9/26/2008 8:23 AM  
Anonymous Anonymous said...

Absolutely. Fire the coach, the management, and get a new team in. It'll be a good start.

Unfortunately, the folks in office today have a real deficit in credibility. They have left a long trail of destruction and lies. By the way, where is the dark, depressing, "deficits don't matter" Cheney? I can't help but wonder, what are they lying about now? What are they manipulating? And what's in it for them? It feels like 2002. The mushroom cloud is our money going up in smoke. Shock and Awe.

The Republican party does better as the opposition party, because they'll watch the Democrats. The Republicans don't watch themselves. They act like the spoiled child who has temper tantrums, runs wild, and the parent keeps telling them they can do no wrong. I'd rather have some watchers, rather than no watchers. Our political system in action, especially the way we conduct elections, is in need of help. A great nation should be able to count whole numbers easily and honestly. Eight years from the 2000 debacle, and it still stinks.

It would be nice, if someone would actually represent the people.

Thought provoking:
"Hence, the question - “Which Candidate Understands the Problem? The one who claims to be a deregulator and is now apologizing for this stance, or the other fellow? Is it the one who graduated number 894 out of 899 at the Naval Academy or the one who was head of the Harvard Law Review?"

9/26/2008 10:53 AM  
Anonymous Anonymous said...

I wish Milton Friedman were alive to see this.

The Chicago boys have a lot to answer for.

9/26/2008 11:58 AM  
Anonymous Anonymous said...

The Chicago boys have a lot to answer for.

But credit where credit's due, at least the professors signed a letter opposing the $700B giveaway to all their alums

9/26/2008 12:33 PM  
Anonymous goldhorder said...

the one who was head of the Harvard Law Review
Why is that a though provoking question? If anything that should work against Obama. What does an education from an Ivy league school do for the American People. All that means is they have been taught how to manipulate the masses for the benefit of the American elite. The Ivy League schools, all of washington DC, and all federal reserve banks should be burnt to the ground and the occupants strung up by their necks...then we might finally see a bit of an improvement.

Ben Bernanke
Educational Background
Bernanke earned an impressive set of academic credentials, including a Ph.D. in economics from Massachusetts Institute of Technology in 1979, and Bachelor of Arts in economics from Harvard in 1975, graduating summa cum laude. His academic prowess was apparent even in high school, where his SAT score of 1590 set a state record.

Professor Bernanke
Bernanke was also a professor of economic and public affairs at Princeton University from 1985-2002, where he chaired the economics department from 1996 to 2002. Prior to his arrival at Princeton, he was associate professor of economics from 1983 to 1985 at Stanford University and an assistant professor from 1973 to 1983. His long teaching career also includes serving as a visiting professor of economics at New York University in 1993 and at the Massachusetts Institute of Technology from 1989 to 1990.

Henry Paulson
Bachelor of Arts in English from Dartmouth College in 1968;[5] at Dartmouth he was a member of Phi Beta Kappa

In 1970 Paulson received a Master of Business Administration degree from Harvard Business School

9/26/2008 2:11 PM  
Anonymous goldhorder said...

Paulson on bended knee to Pelosi is hilarious!!! HAHAHA
I have to say if the disgruntled Republicans manage to block this...I might have to actually become a republican. I can't believe a handful of them are showing some balls here. I don't think it will last. I think they will cave.

9/26/2008 2:14 PM  
Anonymous Anonymous said...

“Which Candidate Understands the Problem?"

I'll go with "Neither."

9/26/2008 2:24 PM  
Anonymous KAIMU said...


It is best to take the HUMAN CONDITION out of our money supply. That is the essence of FIAT based money in that there are no brakes and what human with that condition does not write that "blank check" with as many zeroes as possible for their benefit?

Its PLANNED CHAOS ... which is the title of the book by Ludwig Von Mises written in 1947 that describes what is happening today.



The book ends with Chapter Ten.


So what has changed since time began or at least since 1947?

The days of Lucius Quinctius Cincinnatus are gone. IVY LEAGUE BULLIES RULE and look where that has gotten us since 1913!

9/26/2008 3:49 PM  
Anonymous Anonymous said...

You guys left GW Bush off as an Ivy League graduate.

btw...the liberals said that GW would bankrupt America.

You all laughed.

9/26/2008 4:20 PM  
Anonymous Anonymous said...

Paulson on bended knee to Pelosi is hilarious!!! HAHAHA
I have to say if the disgruntled Republicans manage to block this...I might have to actually become a republican. I can't believe a handful of them are showing some balls here. I don't think it will last. I think they will cave.

Looks to me like the Republicans, true to form, are simply exploiting a situation to score the cheapest points imaginable. I'm just surprised that the ignorant, sleazy fucks haven't started chanting "Drill baby drill" every time they ask Paulson or Bernanke a question.

In that sense McCain has shown himself the perfect representative of that toxic party. The worthless fuck tries to duck out of a debate, grandstands about "stopping" his campaign, and then lets slip that he "didn't have time" to read Paulson's original proposal -- all three pages of it. If this disgraceful, opportunistic, senile prick wins, we may as well return to the Articles of Confederation.

If the financial system is going to "lock up", I can't see how that will help anybody. In particular, it seems to me that this is where the pseudo-science of economics, and all its spin-off pseudo-sciences, like finance, have to take a back seat to primary realities, politics and psychology. I don't like this bail-out concept at all, but I think CR is dead-on with his "ready for anything nation" theme. A lot of people -- particularly those who fancy themselves students of the economics pseudo-science -- love to complain about the horrible 70's, but on the scale of human suffering that period was a pillow fight. I'll take a little inflation over economic seizure any day.

...If that's really at stake, of course. Hard to trust our "leaders", for sure.
-- sglover

9/26/2008 6:49 PM  
Anonymous judyo said...

Little Bush "graduated" from Yale; my gut says he got the lambskin the same way as he got to be our King in 2000. And that's all I have to say about that.

9/26/2008 7:02 PM  
Anonymous KAIMU said...


While on bended knee to Pelosi Paulson was busy loading the US TREASURY bus full of more GOLDMAN SACHS execs all Harvard alumni!

Paulson Taps Ex-Goldman Colleague Forst as Rescue Plan Adviser

Sept. 26 (Bloomberg) -- Treasury Secretary Henry Paulson hired former Goldman Sachs Group Inc. colleague Edward C. Forst to advise him on the government's $700 billion rescue plan, a Treasury spokeswoman said.

``He is here to provide the secretary and the domestic finance team with advice on financial market issues as they work through the legislative process,' department spokeswoman Brookly McLaughlin said today.

Forst, 47, left Goldman Sachs in June to become executive vice president at Harvard University. Paulson was Goldman's chairman and chief executive officer until taking up his Treasury post in July 2006.

Forst started work this week at Treasury and will work for several weeks as a ``contract employee' for $5,000 before returning to Harvard, McLaughlin said. He worked at New York- based Goldman for 14 years, most recently as global head of investment management, before joining Harvard to help supervise the university's $34.9 billion endowment.

In his more than two years at the Treasury, Paulson has recruited other executives from Goldman, including naming Kendrick Wilson as an adviser last month.END

9/26/2008 10:57 PM  
Anonymous goldhorder said...

I call bullshit anon. Link, post, and date of when the liberals said Bush would bankrupt us. I call bullshit. Liberals believe money grows on trees. They would never go on record saying such a thing.

9/27/2008 1:48 AM  
Anonymous Anonymous said...


I enjoy your blog and respect your posts but know I have to ask you.

Do you believe the claimed dangers of not bailing out are over-blown? I suspect they are not.

As far as inflation goes I think that has already been baked into the system for the last 8 years. I am not sure that another 700 billion (more or less) is going to make that much difference.

Do you think that ignoring the current liquidity crisis will not greatly increase the chance of a depression?

I am not trying to argue but simply to understand why you are so strongly against a bail out. Everyone hates the idea but besides wishing we did not find ourselves in this situation do you see a better alternative?



9/27/2008 1:48 AM  
Anonymous goldhorder said...

Who is the Kaimu guy. He actually knows something. But anyways...

Did anybody listen to the damned debates. I tried to avoid it...but I was went to the bar to have a pint or two and it was in my face. I tried not to listen to it but it was impossible. Anyways...I have a question for you liberals. My prediction came true. Obama's BS about how what a great triumph the surge was...McCain used to great advantage. I knew it. How could that happen? I don't know what Obama is being paid to throw the election but I hope it is substantial. My God. Do you dummies see what I'm talking about now? I mean...none of you had a word to say about it when I brought it up. I knew with 100 percent certainty that McCain would use it in the first debate. I'm not Ivy League educated. Obama and all his staff are Ivy League educated. How can they be that stupid if it is not on purpose? Any thoughts now that my prediction has come true? I know what I think...I'm just curious to see what you think about that. Especially since you guys have this great admiration of people with Ivy League degress.

9/27/2008 1:56 AM  
Anonymous goldhorder said...

Oh man sglover. You need some serious help. You don't seem dumb to me...send me an email. I want show you something.

but anyways... Ludvig Von Mises wrote a book called Human Action. It is the holy grail of books on economics you can trust. The false economics you speak of is certainly true. But the false economics you know about have been taught to you by the elite for a reason. What is that reason you ask? It is so that most Americans reach the conclusion...

I'll take a little inflation over economic seizure any day.

It pains me to see how successful they have been. It really does...I'm not joking at all in this instance.

You can read Von Mises online for free...but it will take ahwile. I can show you why I knew to buy gold before anybody else did. Even with 90 percent of the people telling me I am a lunatic. The proof I give you is wide open to the public and undeniable. I can't help the masses though. I can't pay for the propagand campaign it would take to get them on my side. I can help the occasional individual. I probably started blogging on TCR's site about the time he started the blog. He probably started the blog from disgust...which was the same reason I started buying gold.

But anyways....real economics. Meaning economics not tied to stealing money from the middle class.

the foreword of the book is truly wonderful. It describes Mises work to a tee
...He pointed out that the whole economy is the result of what individuals do. Individuals act. choose, cooperate, compete, and trade with one another. In this way Mises explained how complex market phenomena develop. Mises did not simply describe economic phenomena-prices, wates, interest rates, money, monopoly and even the trade cycle-he explained them as the outcomes of countless conscious, purposive actions, choices, and preferences of individuals, each of who was trying as best as he or she could under the circumstances to attain wants and ends and to avoid undesired consequences...

True economics is a study of human nature. Yes, human nature can be ugly...but it doesn't have to be. Good economics leads to better human behaviou, which leads to prosperity for a larger number of people.

9/27/2008 2:31 AM  
Anonymous goldhorder said...

little Bush graduated from Yale...and Harvard Judyo

9/27/2008 2:33 AM  
Anonymous goldhorder said...

Did I mention I'm really starting to like this Kaimu guy...hahaha

While on bended knee to Pelosi Paulson was busy loading the US TREASURY bus full of more GOLDMAN SACHS execs all Harvard alumni!

9/27/2008 2:35 AM  
Anonymous goldhorder said...


Ohhhhh mannnnnn....
You either pay now...or you pay later. What would be worse? Depression or hyper-inflation? Have you been paying attention to Zimbabwe? At least in a depression you haven't destroyed your is just that nobody has any money. In hyperinflation everybody has useless money. And it is very hard...even if you start doing things ever get confidence in your currency/government again. As far as "inflation baked into the system"...ohhh myyyy. You don't get it. You don't understand what is going on here. The banks, the investment firms, etc. all are loaded up with bad debts. debts that aren't ever going to be repaid...what the bailout will sell these loans to the government...if you haven't seen the states that hey...maybe the government will come out ahead in the deal if these debts wind up being paid!!!!!hahahahahahahahahaha....
Oh man you guys are dumb. Let me slap you in the face with a bit of reality. The government is about to buy 700 billion dollars worth of bad debt. hahahahahahaha. Where is the government going to get that money since it is 10 trillion dollars in debt. hahahahaha...Inflation? You want to see Inflation...boy are you going to see some inflation. You can keep trying to punt the ball down the road Kim. The further you kick the ball down the road the longer you are going to be from're not going to make it back before dark.

9/27/2008 2:55 AM  
Anonymous jay walker said...

Fuhgeddabout the $700bn, they're being given all the money they want already:

"U.S. banks and money managers borrowed a record amount from the Federal Reserve in the latest week, nearly $188 billion a day on average, showing the central bank went to extremes to keep the banking system afloat (...)

Federal Reserve data showed on Thursday the total amount banks borrowed nearly quadrupled the previous record of $47.97 billion per day notched just the week before. (...)

Borrowings by primary dealers via the Primary Dealer Credit Facility, and through another facility created on Sunday for Goldman Sachs, Morgan Stanley and Merrill Lynch and their London-based subsidiaries, totaled $105.66 billion as of Wednesday, the Fed said."

Will it go round in circles?

9/27/2008 7:50 AM  
Anonymous goldhorder said...

The 700 billion is just for starters. Anytime the government asks for money multiply it by 10. So they are looking for 7 trillion dollars to buy up all these bad debts. They want to double the national debt. Look at the inflation we have seen the last 8 years. Yes there is alot of loose money going around...and yes there is alot of inflation...inflation is going to double if this bail out thing goes down.

9/27/2008 11:57 AM  
Anonymous goldhorder said...

....As the regulatory structure has increased its control over the financial markets, the financial markets have found ways of beating the system. But they all depend on one assumption: the United States government will intervene in a crisis and load up on massive debt in the name of the People in order to bail out financial institutions that say they are going bankrupt. The entire system depends on the fact that the government will take over the obligations of big-time losers. This is called "moral hazard," and it has been a well-known phenomenon since the middle of the 19th century. The phrase is not recent. It is over 150 years old.

Now the politicians are going to flex their muscles. They stand in front of the cameras and tell the voters next time it will be different. Next time, we will impose restrictions on these greedy capitalists. "We will make certain that they don't get lots of profits." It is all a charade. Yes, they will pass legislation. This legislation will create careers for high-paid Wall Street lawyers and well-paid government agency lawyers. The lawyers will figure out ways to get around the regulations, just as they always have since 1933.

There is no question that these regulations will hamper the free market economy. It will transfer oligopoly status to large firms that can afford to hire lawyers that get paid $500 an hour to identify loopholes in the regulatory system. Small businesses will be penalized. Small businesses are where most of the economic growth originates. It will become more difficult for small businesses to raise capital.

Congress is insisting that senior managers will no longer be paid high salaries. Well, most senior managers were not paid high salaries. They were given stock options. So, they ran up the value of the stock options by using corporate money to buy shares of stock in the open market. Instead of developing new, creative ways of serving the consumer, they did what any self-respecting, self-interested official would do. They saw their opportunities and they took them.

They have now gone away, with tens of millions of dollars or hundreds of millions of dollars in their various financial accounts. This is why it is so important the government intervene to bail out the financial system. If the government did not do this, the former heads of these corporations, who took their money and left, might lose a lot of money. They don't want to lose money. So, Congress will intervene to make certain that they don't lose any money. Congress will do this in the name of the People.

This is called locking the barn door after the horses have escaped. The horses left behind a massive pile of droppings. Congress is going to use taxpayers' money to clean out the Augean stables. Meanwhile, the guys who got rich are gone, and the guys who replaced them will find it more difficult to get rich. But they will find ways to do this eventually. Their lawyers will find ways. Then, once again, Congress will be facing the need to bail out the financial markets.

9/27/2008 1:03 PM  
Anonymous nil said...

Hey goldhorder, is Krugman a liberal? Or is "liberal" the name you give Republicans?

I went to the krugman archive and had a look at Krugman's columns back to the 2000 campaign days of Clinton surpluses.

Assuming that discretionary spending does grow with the economy, the Auerbach-Gale paper projects a surplus over the next decade of only around $350 billion -- not even enough to make room for Al Gore's tax cuts, let alone Mr. Bush's. (Mr. Bush's cuts would produce a trillion-dollar deficit.) And that's assuming that nothing goes wrong -- no recession, no military emergency. The paper goes on to argue that if you take account of the demands on federal funds that will come when baby boomers retire, we are actually in long-term deficit.

The most likely prospect is that those big surpluses won't materialize. And when the chickens that didn't hatch come home to roost, we will rue the days when, misled by sloppy accounting and rosy scenarios, we gave away the national nest egg.

Originally published in The New York Times, 8.23.00

But when Mr. Bush declares (as he often does on the stump) that his tax cut will cost $1 trillion, when his own budget numbers indicate that the right number is roughly $1.6 trillion, everyone shrugs.

But reporters seem to be too busy chasing rats and dogs to look at what the candidates say about their actual policy proposals. So someone has to point out that in an interview intended to showcase his economic program, Mr. Bush did it again: he vastly exaggerated his spending plans, greatly understated the cost of his tax cut and misrepresented the issues on Social Security.

Originally published in The New York Times, 10.01.00

Mr. Cheney suggested — with more confidence in his forecast than any professional economist I know — that we face a looming recession. And this, he argued, means that we should press ahead with that $1.6 trillion tax cut.

[...]But now Mr. Cheney has signaled that he and Mr. Bush are as inclined as ever to push for big, irresponsible tax cuts.

And they may get them. Congress always has a hard time resisting calls to give away the store. It will be especially hard to maintain discipline after new budget projections are released next month. Because these projections will assume a higher rate of growth, and will not yet have factored in the revenue effects of slumping stock prices and the growth effects of declining technology investment, they will create a false sense that there is plenty of money to give away. Add a specious recession-fighting rationale and the temptation may be irresistible.

Some people have taken comfort from the fact that Mr. Bush will be a president without a mandate. But a president doesn't need a mandate to do a lot of economic damage.

Originally published in The New York Times, 12.6.00


Here's the arithmetic: the Congressional Budget Office has projected a 10-year surplus of $5.6 trillion. (I don't believe it, but never mind.) Take the Social Security and Medicare surpluses off the table, however, and you are left with only $2.7 trillion. That may sound like a lot, but the projected cost of Mr. Bush's tax cut has also grown, for reasons that are important but too boring to explain. It would now use up around $2 trillion of that surplus.

And what's left depends on the totally unrealistic assumption that federal spending, including defense spending, will not grow at all over the next decade, despite a growing population and a growing economy. Give the military what it says it needs, and we're already well into deficit — and that doesn't include missile defense, not to mention prescription drug coverage, new education programs and all that. Oh, and what about the trillion dollars of Social Security money that Mr. Bush has proposed to spend twice?

Nonetheless, Congress is about to go into a tax-cut feeding frenzy, adding huge tax breaks for corporations to Mr. Bush's proposal. The spectacle will be distressing, but it will be over quickly. Pretty soon, quite possibly as soon as this summer, we'll be worrying about deficits, not surpluses.

Originally published in The New York Times, 2.4.01

9/27/2008 1:18 PM  
Anonymous nil said...

It goes on and on. Want more?

Right now the federal government is running a large budget surplus; but most of that surplus comes from Social Security and Medicare, programs that rely on payroll taxes to pay benefits to retirees. Those programs must run surpluses now, while the baby boomers are still paying into them, if they are to avoid either sharp tax increases or sharp benefit cuts when the boomers retire. Both programs are, in other words, pretty much in the position of that middle-aged couple a decade or so from retirement.

Mr. Bush likes to declare that a surplus means that the government is collecting too much in taxes. But it means no such thing if the surplus is mainly a matter of preparing for the fiscal consequences of an aging population. And it is. Nonetheless, Mr. Bush's advisers continue to search for reasons that doing the responsible thing is actually a bad idea.

Originally published in The New York Times, 2.28.01

The important point is that the estimated cost of the tax cut hasn't exploded because of new information; it has exploded because the original estimates were simply dishonest. Mr. Bush knew from the start that he was misleading the public about the budget impact of his proposals, just as he knows that he is misleading people now about whose taxes will be cut and by how much.

Originally published in The New York Times, 3.18.01

Sorry about the length of the posts but that remark got to me. The truth of the matter is it's the Republicans who believe that money grows on trees. Deficits don't matter, right?

How about we turn the table now? Link, post, and date of when the liberals said money grows on trees.

9/27/2008 1:31 PM  
Anonymous Anonymous said...

Don't forget the Medicare Drug Program Bush gave us.

"The White House released budget figures yesterday indicating that the new Medicare prescription drug benefit will cost more than $1.2 trillion in the coming decade, a much higher price tag than President Bush suggested when he narrowly won passage of the law in late 2003."

"Medicare Drug Benefit May Cost $1.2 Trillion: Estimate Dwarfs Bush's Original Price Tag", by
By Ceci Connolly and Mike Allen
Washington Post, 02.09.05

9/27/2008 3:18 PM  
Blogger njdoc said...

I must admit that I secretly hoped that John McCain would oppose the bailout, with the Republican Congressional Insurgency giving him the opportunity to be a “Maverick’. I thought he would then call this rubbish the Bush-Obama Wall Street bailout, thus covering his greatest weakness. But alas, it’s obvious after last night’s debates that it was just wishful thinking. In fact, it was like watching American Idol with two contestants singing the same song. So this is where we are. The Congress is receiving phone calls of up to 100 to 1 against the bailout, yet they are about to sign into law perhaps the most unpopular piece of legislation in the history of our Republic. So one has to ask. What will happen after $700 Billion is engulfed by the Disappearing Deep Hole of Derivative Destruction? What will happen after the MOAB (Mother of All Bailouts)?
One has to believe that there will be a temporary increase in liquidity, which will be quickly sucked up by the system. But it has been obvious that every Fed and Treasury intervention has had more ephemeral staying power. So this intervention will help for maybe 3-6 months. Maybe. But what will happen when the sequel comes out? MOAB II, or perhaps the Son of MOAB? Don’t you think Americans will be even more pissed off? They will say, and justifiably so, you told us that this will save the system and now we’re right back to where we were a few months ago, and you are asking for another massive bailout! I am afraid that we are going down the slippery slope of ill-guided intervention. Didn’t Paulson and Bernanke say that there is no housing bubble, then they said that Subprime is contained, then they said that by nationalizing Fannie and Freddie that it puts a floor under the mess? WHAT WILL THEY SAY? There will probably be new actors, buy they will still have to read the same poorly scripted lines.
We are going down the path of self-destruction. Lenin said that there is no surer way to destroy a nation than to debase its currency. There is no surer way to debase the dollar than to continue down this misguided path. We have become so caught up in stock market and real estate losses, that we have taken our eyes of the real prize! Our greatest asset as a nation is our currency. Today, the US Dollar reigns supreme. But one has to ask how much longer will our creditors keep the credit flows open while we debase and inflate our way out of this self-inflicted greed wound. There are already grumblings of a Sino-Russian alliance, one that could put significant pressure on other nations to abolish the dollar standard. Once the dollar standard is usurped, we are TOAST!!!!!!! Expect massive tax increases, spending cuts and a drastic decrease in our standard of living. Yet, the guys on the yachts are smart. They will have diversified into other currencies, homes in other nations, and accounts in safety deposit boxes around the world. Much like the Nazi’s who bought their freedom after WWII, these criminals will save their hides. Caviar for them and feudalism for us. You’ve been warned.


9/27/2008 4:22 PM  
Anonymous Anonymous said...

The ballot box can't be "trusted."

9/27/2008 4:23 PM  
Anonymous Anonymous said...

Excellent video (1 hr), Crisis at Princeton, on why the crisis occured, and what some solutions might be.

9/27/2008 4:38 PM  
Anonymous rapier said...

Just as remarkable is that the Democrats are negotiating, if that's the right word, with Hank. While several hundred citizens think this play is a good one tens of millions don't. Stupid politicians are determined to do something, and they will, but they know not what they do, besides help 'confidence'. Just kill me.

9/28/2008 12:11 AM  
Anonymous rapier said...

I'm desperately searching for the link to a video where Stein said this spring, that Merrill Lynch is "an extraordinarily well run company".

A few months later Merrill doesn't really exist. The great dynamic innovative producers who ran our banking system have now lost more money this year than all US banks have made in total in all their history. They have gotten promises and are seeking more totally well over a trillion dollars from what they like to call parasites.

9/28/2008 12:21 AM  
Anonymous nil said...

Ben Stein? The proud ignoramus of "Expelled: No Intelligence Allowed"? You're kidding, right?

9/28/2008 9:18 AM  
Anonymous todd said...

TCR, you can't really trust the American electorate to pick qualified people as Fed Chairman and Treasury Secretary, can you?

All the wingnuts will make pro-life a litmus test for those jobs, too. And, they'll only vote for people they wanna have barbeque with or get drunk and watch football with.

Fox News would be touting down-home folks like Sarah Palin for Treasury Secretary and Mike Huckabee for Fed Chairman.

9/28/2008 12:14 PM  
Anonymous Anonymous said...

That "sucker" would be US, yes?

9/28/2008 4:16 PM  
Anonymous Anonymous said...

You accidentally made my point, glad to se we agree.


9/30/2008 3:09 AM  
Anonymous goldhorder said...

Ohhh...good God. Krugman. Well the war, the medicare entitlement package, the no child left behing act...all applauded and approved by the demcorats. The only thing they argued about were the tax cuts...Which were miniscule compared to the war spending. And now you have Obama talking tax what is the diff. I do consider Republicans to be the sense that totalitarian communists are leftists. The Neo-cons have their roots in the Democratic party...they moved over when it became clear the Repugs were going to be in power for the near future...don't be suprised if they switch back.

Krugman did talk about the end of the housing bubble but he then he supports Fannie Mae and Freddie Mac. The enabelers of the housing bubble. Krugman think Hillary's health care plan would have saved the friggin economy!

Krugman did say no deal on the bailout...can't argue with that.

Krugman is kind of screwed up you one breath he mentions war as a drag on the economy...than in the next breath he mentions it being good for the economy. He is often like that though. WW1 and WW2 was good for the economy because we won...the war was not fought on American soil...everybody elses infrastructure and manufacturing were destroyed. We woulnd up being king of the hill because of our fortunate geographic location...Korean War, Vietnam war, Operation Iraqi so much. It has benefited a few narrow interests. We have not had a clear cut victory like the first Iraq war. So it has been a continuos draw on our resources.

I don't particularly care for Krugman but at least (morally) he was against the war. So I guess he isn't all that bad.

My criticisms are more directed to the liberal main stream democrats. The Pelosis, Kerrys, Franks, Bidens, Feinsteins, Obamas of the world. Along with their Republican counterparts...Bush, Cheney, McCain, Romney, Lieberman(haha), etc.

There are many good "liberals" who although their economics scares the beejesus out of me...Sorry I just don't believe in socialism...I can at least relate to them on war and civil liberties issues...Alexander Cockburn, Chris Hedges, Glenn Greenwald...even some of the progressive politicians aren't so bad...they voted no on the bailout...Kucinich, Kaptur, Barbara Lee, good for them.

Still...come on ....Are you really going to deny the dems don't own any of this? I seem to remember when this congress took over from the repugs that they promissed to pass balanced budgets!!! What did they call it...the first hundred hours...mimmicking the Repugs contract with America...Have to give the Repugs some credit there. They were true about one year to the way...kind of helped with those surpluses you are crediting Clinton with. How long did it take the Dems to forget about the "first hundred hours"...hahahaha...I don't think it might have lasted a second because I don't remember it ever coming up again.

9/30/2008 4:51 PM  
Anonymous nil said...


I don't deny that democrats own much of "this", whatever this is. I just don't confuse Pelosi, Feinstein etc with liberals.

I see Washington as Versailles, with a corrupt millionaire political class showered with gifts and contributions from corporations, who abdicated its responsabilities to write laws and oversee the executive branch, surrounded by a sycophantic millionaire airhead press corps telling them how fabulous they all are, more interested in high-school gossiping and bitching than in analysis of policies or budget proposal - BORING!

Sure, I believe that republicans have gone way deeper revelling in irrationality, ideology, the worship of force, the contempt for competence and resentment for education and yet there is really bipartisan agreement on the basic tenets of imperial America: its moral superiority originating in american exceptionalism, its right to use military power to achieve political ends and "project dominance" to protect "national interests" (meaning big business) against this threat, or that threat, or maybe the one in the corner over there.

The contrast between how republicans celebrate their base (religious freaks, gun nuts, whatever) and the democrats ashamed of their own (union members, long-haired pacifists, whatever) wishing they would go away so they don't mess with their corporate endorsements is telling of how liberal that party is.

Sorry for rambling. It's late and I should be in bed.

10/02/2008 1:31 AM  
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