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"Health care is a fundamental right." (Ted Kennedy, 8/26/08)
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The Progressive Platform Project

Panic of 2008

Beyond Glass-Steagall: Repairing Investment Banking

by: BruceMcF

Fri Nov 11, 2011 at 23:26:52 PM EST

We've heard some mutterings from the radical reactionary camp about breaking up TooBigTooFail (TBTF) banks. Over at Agent Orange, I reacted as followed:
Breaking up TBTF banks is a ...
... one-off intervention. Given a commitment at the same time to unfettered corporate bank activity, within a short time, the TBTF banks will be reconstituted.

What we need is to ban chartered corporations or subsidiaries of chartered corporations from engaging in investment banking activities.

Having the economic institutions that engage in creation and underwriting of corporate share and debentures for sales in publicly traded markets be publicly traded corporations themselves has been proven by the past thirty years to be a catastrophically flawed institution, and we should return to the days of investment banks as independent partnerships.

"Break up the TBTF banks" is just an empty slogan to fill up air, and help keep real solutions from being heard.

 
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Geithner reveals exactly what is wrong with his view of the Economy

by: BruceMcF

Wed Aug 03, 2011 at 15:43:50 PM EST

Burning the Midnight Oil for the Economics of Freedom

Quoted by digby:

TIM GEITHNER: Well, let's start with what this deal does. The most important thing is it creates more room for the private sector to grow because although it locks in some very substantial long term savings, the near term cuts are very modest. So that-- that was the really critical thing in making sure that this economy continue to grow and recover. Now, it locks in a very big down payment and it sets in motion what we think is going to be a very effective process for forcing congress to come together...

Now, for the ordinary person reading this carefully, the only reasonable response is, WTF?. However, as your insider correspondent from the quite bizarre Economist Tribe, my response is, "oh, yeah, that bullshit again."

Ah, well, economics is not the only science {*} where analyzing scat is a necessary research tool. Join me after the fold.

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Republicans run public deficits because that increases private wealth.

by: BruceMcF

Fri Apr 15, 2011 at 18:21:46 PM EST

Burning the Midnight Oil for Progressive Populism

Suppose that you were a political party devoted to the interests of the top 1% wealthiest in the country. And suppose that either you or your puppeteers knew that public debt is private wealth. And suppose that it was politically convenient to attack programs that provide no benefit to the top 1% as generating public debt. What would you do?

(1) Pretend that you are opposed to generating public debt whenever there is a risk that government money will get spent on the 99ers ~ that is, the bottom 99%, though the 99ers in terms of running out of unemployment benefits are obviously one part of the broader 99ers.

(2) Take actions to run deficits whenever you have the opportunity to set fiscal policy.

(3) Take action to get the 99ers into debt to your paymasters, so get all of the private wealth created into your paymaster's hands.

(4) Collect your 5% tip from your paymasters, and live high off the hog.

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Rescuing the Constitutional Framework from the Senate

by: BruceMcF

Sat Feb 13, 2010 at 19:43:53 PM EST

Rachel Maddow tells us that "filibuster" is a boring word, even if it originally meant private adventurers going off risking life and limb trying to make themselves President of some Central American country.

So I will use the other common English language phrase for it, "Talking a Bill to Death".

The ability to Talk a Bill to Death was introduced by mistake when Aaron Burr in 1806 argued for removal of the motion to "move the previous question". This is a motion that can be used to postpone debate, when a measure does not yet have a majority, and can of course also be used to bring a measure to a vote, if it has a majority. Aaron Burr appealed to the fact that it had only passed once in the previous four years - but then again, the Senate did not at that time have a filibuster tradition.

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Waddya know ... some people saw the meltdown coming. UPDATED

by: BruceMcF

Mon Jul 13, 2009 at 10:54:02 AM EST

(color me surprised...not... - promoted by poligirl)

(h/t ChrisCook)


Click for full size table image

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So that we won't need a Memorial Day for the US economy

by: BruceMcF

Mon May 25, 2009 at 14:23:49 PM EST

(it's always midnight somewhere... - promoted by poligirl)

... or perhaps that should be, so we no longer need a memorial day for the US economy.

In It need not be a calamity, I wrote:

But ... well, we know this. We have known since the 1970's that we would become increasingly dependent under the Old Energy Economy. We have known since the 1970's that our four centuries of energy self-sufficiency since European Settlement of the eastern seaboard of North America would be coming to an end unless we made substantial changes.

And then our ruling elites collectively decided to pretend that social division of national product is a more fundamental question than the ability to continue producing it, and we descended into the last thirty years of the wealthy focusing in grabbing a bigger share of the pie, while assuming that the baking of the pie would magically take care of itself.

Crossposted from Burning the Midnight Oil for a Brawny Recovery and The Economic Populist

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It Need Not Be a Calamity

by: BruceMcF

Wed May 20, 2009 at 13:57:34 PM EST

(on climate change... - promoted by poligirl)

Betwixt and Between, I find myself. I observe the validity of D00m.P0rn shrill warnings about the future ... when seen as possible outcomes rather than when seen as certainties. Yet I also see the potential for better outcomes.

And with respect to the strategy of sitting on the sidelines, weighing the likelihood of one versus the other ... I'm against it. Simply the decision to sit on the sidelines makes the calamity more likely as a result. So I am for getting into the fray and trying to make the calamity less likely and the hopeful outcome more likely.


The Calamity Cavalcade

As far as potential calamities, we do not have to look far for those.

We are on track to have a higher concentration of CO2 in the atmosphere than at any other time in the Holocene. We are engaged in this experiments with absolutely no serious evidence to suggest that it is known to be safe. Indeed, those benefiting in the short term from the reckless experiment will even try to reverse the sane burden of proof and place it on those who do not approve of undertaking the reckless experiment.

The argument being, in essence, that if you are driving through a thick fog, then as long as you don't see any cars coming, its OK to speed.

And of course, before the peril of climate chaos came to our attention, there was already the risk of ecosystem collapse hanging over our head, as more and more populations on the planet rely on an industrial technology that is quite clearly ecologically unsustainable and therefore certain to collapse sooner or later, unless we restructure our technological base to approach sustainability faster than we approach ecosystem collapse.

And then of course, even before the risk of ecosystem collapse was widely understood, the threat of nuclear holocaust.

Flood, Nuclear fire followed by Nuclear Winter, Famine and Plague ... and all three involved in or certainly leading to War ... surely rather than Four Horsemen of the Apocalypse, there is a whole Cavalry Unit.

Against that backdrop, it may seem provincial to worry about a mere collapse of a single national economy from first world to banana republic status, but that is the specific calamity that I am focusing on here.

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The Bad News and the Worse News on Unemployment.

by: BruceMcF

Sun May 10, 2009 at 18:02:00 PM EST

(the bad news on the economy... - promoted by poligirl)

The April employment numbers are out. The Broad Based (U6) unemployment figures ... the best measure of the "total people available to take on more work" ... give, on the one hand, bad news, and on the other hand, worse news. This is, of course, treated as "good news", because the expectation was that it would be on the one hand worse news and on the other hand catastrophic news.
.
..
...
..
.

U6 seasonally adjusted JANFEBMARAPRMAYJUN JUL AUGSEPOCTNOVDEC
20089.0%8.9%9.1%9.2%9.7% 9.9%10.3%10.9%11.2%12.0%12.6%13.5%
200913.9%14.8%15.6%15.8%

This is not the "headline" rate, or U3, which takes everyone working any hours at all as "employed", even if they want more work, and anyone who has not actively sought work in the last four weeks is dropped out altogether.

Instead, its the "broad" or "U6" rate, where those who express an interest in working who have looked for work in the past year are included, as well as those who are "involuntary part-time" employees. So the U6 series is the best measure of the "total people available to take on more work".

Also note that BLS unemployment statistics are not determined by the numbers of people drawing unemployment ... it includes a broad range of data sources, including an ongoing telephone survey.

... or in terms of changes in the unemployment rate.
Change in U6 JANFEBMARAPRMAYJUN JUL AUGSEPOCTNOVDEC
2008-0.1%+0.2%+0.1%+0.5% +0.2%+0.4%+0.6%+0.3%+0.8%+0.6%+0.9%
2009+0.4%+0.9%+0.8%+0.2%

The bad news is, of course broad based unemployment is still rising. The worse news is that it is more than halfway to the "depths of the Great Depression" benchmark of around 1 in 4 out of work.

Even more, the populace has been trained to accept as "normal" unemployment rates what would have been considered an economic emergency back in the 1960's.

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For lack of a better term, call it Capitalism

by: BruceMcF

Fri Mar 20, 2009 at 20:59:35 PM EST

(it's always midnight somewhere...  :D - promoted by poligirl)

Burning the Midnight Oil for the Beauty Platform

Johnny Venom, in an extended comment on a Robert Oak post at The Economic Populist, says (note ... much good stuff snipped, so click through):

My take on all this madness

What's happening here is the collision of several realities:

1. You had institutions, who years if not decades, believing the hype they built themselves to sell to their clients.  ...

2. That you can't simply create your own damn financial instrument to meet a client's needs. ...

3. Derivatives products work when they are designed well and implemented on a regulated environment. ...

4. Many of these items will never be liquid.  This brings us to today.  The reality of the situation is that we now have to be discriminating between those derivatives that are somewhat liquid and those that aren't.  The former can have mark to market, but there needs to be a proper exchange for these things.  Both the CME and ICE are going to have such a thing, and these banks should be made to trade them on it to get these things off their books.  As for the iliquid ones, well unless our goal is to bankrupt these banks in some attempt to punish them, we will have to facilitate either a suspension of FASB 157 for these or some hybrid. ...

5. Banks holding on to these illiquid derivative step children, that must be re-engineered, will have to realize they won't get all their money back. ...

6. Lastly, new accounting rules and financial regulations must be in place to keep in check the establishment of new positions. ...

My response and thoughts after the fold.

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Turning Good Bank / Bad Bank on its head (Update)

by: BruceMcF

Tue Mar 17, 2009 at 14:08:58 PM EST

(it's always midnight somewhere...  :D - promoted by poligirl)

Burning the Midnight Oil for the Beauty Platform and Economic Populism

The problem with the "Good Bank / Bad Bank" (see also Dr. Seuss version) plan is, of course, ... {drum roll}

... in order to "rescue" banks that distributed a massive amount of contingency reserves as if it was income ... by pretending that massive downsides did not exist ...

... we "have to" reward the people who proved to be grossly incompetent in the core competency for senior executive management of a bank.

Except, as Joe Stiglitz points out, we don't have to at all.

In other words, there is good and bad in the Good Bank / Bad Bank plan. And if we reverse who ends up with the Good Assets and who ends up with the Bad Assets, we can have all of the Good, and avoid most of the Bad.


UPDATE

Keith Olbermann cites "my" plan on the Tonight show ... posted at the Big Orange

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You're From Ohio, You Idiot, Don't Screw With Our Train

by: BruceMcF

Sat Feb 14, 2009 at 19:16:43 PM EST

(more Midnight Oil for a brawny recovery... - promoted by poligirl)

Burning the Midnight Oil for a Brawny Recovery

"Tell me how spending $8 billion,"
asked House Minority Leader John Boehner (R-OH) on the floor,
"in this bill to have a high-speed rail line between Los Angeles and Las Vegas is going to help the construction worker in my district."

(h/t Matthew Yglesias)

Now, lets look at the Federally Designated Corridors -- and you have to have a designated corridor to get any of the $8b.

Yup, no corridor to Vegas. Oh, and what's that we see ... two, count 'em TWO corridors through Ohio ... Cleveland to Chicago and Cleveland / Columbus / Dayton / Cincinnati.

There's More... :: (11 Comments, 353 words in story)
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A stirring tale of how progressives built America and lessons on creating the next Big Change Moment, from OpenLeft's Mike Lux.

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