As the week's news can attest, the current financial system is in pretty bad shape; we're not at complete meltdown, but it's pretty scary. Here are a few thoughts for the environmental community (aside from the general concern we should all share as citizens):
- When "bread and butter" economic concerns rise, the environment as an issue tends to recede (even more than usual).
- This makes it important to try to link environmental policies directly to economic strength; e.g., a comprehensive energy policy can help reinvigorate the manufacturing sector, create jobs, and decrease energy prices.
- Stringent environmental regulation can help to give us a competitive advantage by leading the world in a "race to the top" for the highest environmental compliance (for more on how the E.U. is already doing this, see Mark Schapiro's work).
- To help stimulate the economy, the government could subsidize the retrofitting and improvements of power plants and water systems, which will result in both new jobs and life-saving environmental improvements (instead of just sending out rebate checks).
One final point.
It is times likes these when people should take a step back and be grateful that people like Ben Bernanke, trained in complex economic analysis for decades, are at the helm of our financial system (and doing it for a pittance, I might add).
Those -- a minority at Grist -- who think that economics is little more than fancy mumbo jumbo should ask themselves who they would rather have in charge right now, when the world economy is on the line. Be honest. And if you're still in doubt, peruse Paul Krugman's blog to get a sense of how complex this stuff really is.
I'm making no claim that economics can solve everything, but more often than not, when crises arise, it's a good thing to have world-class economists on the scene. It's one thing to express legitimate criticisms of how we got into this mess -- mostly the usual suspects: greed, stupidity, and the far right ideology that says markets don't require regulation -- but now that we're here, it's good to know that the adults are in charge.
Comments
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David Roberts Posted 6:31 am
17 Mar 2008
The economists got us into this mess. Bernanke included. The amount of incompetence on display in both the business and economics communities in the run up to this fubar is historical. Unbelievable. Jaw-dropping. And now you want us ignorant plebes to feel good about the fact that they're at the helm when the shit hits the fan? A fracking monkey could do as well. Color me distinctly not comforted.
grist.org
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Jon Rynn Posted 6:52 am
17 Mar 2008
As for the alleged font of wisdom emanating from economics departments, it may surprise some to know that the Federal Reserve system is privately owned, mostly by the banks. You can buy shares. So it comes as no surprise that they will funnel money, public money, back into their sector.
If we had a rational financial system (well, what I would consider rational), whenever a bank failed, the government would take it over. Which would lead to another green idea (yeah, I know, a radical one): convert citibank (if it fails, and it might) into citi-green-bank, use it as a network of local infrastructure banks that would be used for the type of thing I was talking about earlier, loaning the money for capital costs of greening buildings, cities, etc.
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Jon Rynn Posted 7:33 am
17 Mar 2008
There are also a number of excellent articles from Mike Whitney at Counterpunch.com that, at the least, give counterpoint to the view that Bernanke and company, well, can bail out the financial system.
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odograph Posted 7:49 am
17 Mar 2008
We concern ourselves with a lot of questions, like fishery health, or global climate, that require serious study (PhDs even). It's borderline amusing that the AGW deniers will often fall back to a position of simply rejecting "high priests" and "academic consensus."
It's an unfortunate parallel.
I wonder what you'd seriously do without the economists David. Are you one of those extreme free marketers who would abolish the Federal Reserve?
And if you keep the Reserve, who would you have run it, if not those who have done the studies?
(I think the Greenspan Fed made serious errors, and that Bernanke has been bailing as fast as he can. I also think this meets a craven kind of free marketer out there ... one who wants less regulation until he needs the Fed to patch things up again. Some economists did of course call for tighter lending standards & etc. early on. I blogged this for a while, and still have some good links there ..)
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kmp Posted 7:50 am
17 Mar 2008
Jason, most of us don't need ths week's news to know that we're in a recession. Most of us can tell by buying gas, going to the supermarket, or feeling the ever-slimming bulk of our wallets. To quote Elizabeth Imbrie "...and belts will be worn tighter this Spring."
Should we be grateful for this train wreck? And should we be grateful that the people who have been driving the train are still driving the train?
This is the kind of thinking that drives conservative politics. Like "Well, sure George may not be perfect, and he might have exaggerated a bit on that "weapons of mass destruction" thing, and the war is costing us just a teensy bit more than we thought, but now that the climate is f*cked and the economy is f*cked and Bin Laden is still out there... we should be grateful that George is at the helm (and making a pittance, too)."
Maybe we could submit W & Ben for sainthood?
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infp Posted 8:00 am
17 Mar 2008
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odograph Posted 8:04 am
17 Mar 2008
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David Roberts Posted 8:09 am
17 Mar 2008
No one -- not me at least -- is questioning the study of economics. We're not talking about a grad school bull session here, we're talking about people whose manifest incompetence is ruining thousands of their fellow citizens' lives. And now they're trying to engineer a way out of it that socializes costs while privatizing benefits and leaves them totally unaccountable. What I'm questioning is the absurd cult of expertise that seems to have give Jason a case of Stockholm Syndrome.
grist.org
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odograph Posted 8:18 am
17 Mar 2008
I don't like the rich gaming the system (they keep their profits but the government covers their losses), but unfortunately a failed banking system might be even worse.
The critical error was in not regulating more safety and less risk into the banking system (including the shadow banking system) years ago. Now we have to bolt the barn door, and keep the farm from burning down ...
But beyond that you may not like who I really blame. I wrote here at gristmill on Jan 23:
BTW, I am unpopular for putting blame on a "debt friendly society."
That is society from top to bottom.
I'll happily fault those fast-talkers who repacked junk and sold it to the unsuspecting ... but let's not forget all those among us who leveraged further and further ... because everybody was doing it.
(I'm actually surprised for the number of google hits for "odograph" and "debt" at grist.org. It must have been my hobby horse, eh?)
On the original post, and the safety of our safety net ... I'm not so sure. I recommend The Big Picture for ongoing coverage (and the already-linked Krugman).
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GreyFlcn Posted 8:25 am
17 Mar 2008
http://greyfalcon.net/debt.png
http://greyfalcon.net/canadadebt.png
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Craig Allen Posted 8:28 am
17 Mar 2008
Whenever the treasurers of the government and the opposition get into debate on TV, they do battle by flinging theories and factoids at each other which are attributed to various economists. But when they are presented with an economic point of view that they find inconvenient, they often attempt to deflect it by stating that you can always find an economist or economic theory to suit your argument, and that the public should not trust what economists say.
Both treasurers are economists!
Given that over the course on my life I will have seen most of the planet turned into a wasteland come toilet, and that our economies and therefore economists are largely responsible; I concur with their opinions of themselves, but little else.
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odograph Posted 8:30 am
17 Mar 2008
Did I get it right?
(Maybe Art Laffer made his first apperance in 1993?)
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GreyFlcn Posted 8:33 am
17 Mar 2008
Hence "CanadaDebt.png"
Just thought I'd toss that one in there since I was blogging with a Canadian yesterday.
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odograph Posted 8:34 am
17 Mar 2008
Given that over the course on my life I will have seen most of the planet turned into a wasteland come toilet, and that our economies and therefore [humans] are largely responsible
But it kind of ruins this one, doesn't it?
I concur with their opinions of themselves, but little else.
Humans (or American debt fiends) tend not to think of themselves (they keep their high opinion of themselves), but instead to look for the convenient effigy.
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Rune Posted 8:34 am
17 Mar 2008
investments in renewable technologies and public infrastructure have very little risk, obviously compared to the kind of crap that's been going on on Wall Street. What could be more sure than the Berkeley policy of loaning homeowners money up front to solarize their houses, and being paid back on the savings?
Sigh. When one considers that such solar installations tend to be mounted atop houses that are at the center of the very mortgage crisis that is still adding downward momentum to the sinking world financial system, and add to that the prospect of being repaid in rapidly devaluing dollars by home owners living on ever shakier investments or vanishing jobs, low risk does not stand out as a leading selling point of financing alternative energy projects owned an operated by by the typical American homeowner. (Okay, so Berkeley homeowners may not be typical of most Americans, but you get the point.)
Look, environmental mitigation is treated as a luxury good the world over. When the chips are down, the tendency is to externalize the costs of environmental damage as a quick and dirty way to cut costs in th short term, with or without the intention to make up for the damage (perhaps at someone else's expense) if and when financial distress is reduced. Nothing the leading talking heads from the financial and mainstream economic circles have tended to say or do gives hope that things will be different this time around. To the contrary, they are most likely to help hide the implications for further environmental degradation stemming from their own recipes for sweetening the bottom lines of their favorite Wall Street and global economic institutions.
Rather than looking for a future pay off in a destabilized and unpredictable dollar economy, I think we are better off zooming forward in time to the increasingly likely moment when even Americans no longer accept their own cash as a credible store of value and means of exchange and ask ourselves how we can reorganize to keep ourselves and our planet as safe as possible in the chaos that will follow. Getting real about just how which and how much stuff we need is a part of the answer (as well as part of the change that makes serious economic collapse all the more likely).
Perhaps more importantly, however, is the prospect of coming together in a crisis that does not offer quick or certain solutions to help each of us thrive with less so as to minimize the collective planetary damages we must all share if we act in haste and the typical sense of unbridled self interest that has led us into this mess. That may seem unworkable to those who continue to use idealistic and unrealistic economic models as their guide to real world behavior and consequences. If so, they might do well to ask themselves whether the choices that have been made to bring about this perfect storm of environmental economic crises are what rational beings guided by the magical, invisible hands of the market would choose for themselves. It is all fine and well to dream of techno-tweaks to bring about markets with efficiency to match the faith so many have put in them, but when we are standing near what seems to be the ground zero of a cascading collapse of multiple market failures, it might just be time to step outside that box for a moment.
In short, we need a very different set of values, expectations, and "social contracts" (remember those?) if we are to encourage the sort of resource conservation and social resilience that make obvious sense in the context of current macro-ecological and macro-economic trends. That is not likely to happen if what is proving to have been a dim-witted financial calculus based on currency based transactions and endemically distorted information remains as our leading light as we search for safe ways out of the deep hole we have wallowed into.
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Tom Philpott Posted 8:37 am
17 Mar 2008
Instead, they got this (from Reuters):
Financial trading and interbank lending almost ground to a halt on Monday as banks grew fearful of dealing with each other following Friday's near collapse of U.S. investment firm Bear Stearns (BSC.N: Quote, Profile, Research), prompting talk of another round of coordinated central bank aid.
As banking stock prices and the U.S. dollar plummeted, banks' access to unsecured borrowing from other banks fell to a relative trickle and dealers said the over-the-counter market had become highly discriminatory, depending on the bank name.
In other words, while Jason may be fanning himself and thanking his lucky stars that Uncle Ben is there to sort things out, actual investors and financial market players have their serious doubts. That old devil Greenspan, who puffed his share of wind into the mortgage bubble, is chuckling (or crying) into his martini somewhere.
Meanwhile, anyone want to talk about the nearly trillion dollars in credit card debt Americans are sitting on ahead of a recession -- which has been bundled into securities and sold to hedge funds, investments banks, etc, much like mortgage assets? Or the fact that the Fed's main lever for getting the credit markets rolling again -- slashing interest rates -- is killing the dollar and sending oil prices ever higher, thus fanning inflation?
Victual Reality
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Tom Philpott Posted 8:50 am
17 Mar 2008
In other words, the Fed is in a pickle -- the worst one, it seems to me, since the early 1980s, when Paul Volker faced the specter of "stagflation": rising prices in a shrinking economy.
...
That's why Fed chief Bernanke finds himself in such a tight corner. If he lowers rates to shield Wall Street and the banks from getting hammered by all of the subprime mortgage paper they're holding, he risks stoking inflationary pressures already smoldering from high food and energy prices.
If he jacks up rates to get a handle on inflation and shore up the dollar, he risks unleashing a financial crisis that will burn not only the bankers and speculators, but also thousands [I should have said millions] of financially strapped homeowners. (The latter will get it even worse, especially after Bush tightened up rules on personal bankruptcy.)
Victual Reality
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Jon Rynn Posted 8:57 am
17 Mar 2008
At some point, as this guy named Adam Smith pointed out, all the financial shenanigans and currency paper and gold in the world means nothing if the people of your country do not create goods and services with their labor. That's why he called his book "The Wealth of Nations", because the mercantilists of the day thought gold was the true measure of wealth.
These days we think finance and money are the measures of wealth, almost exactly parallel to Adam Smith's day. Everyone is going to keep running around like chickens with their heads cut off (sorry, cc), the sky will be falling, etc., but the real problem (odo, get ready for the hammer) is the decline of the manufacturing base and the attendant humongous trade deficit that is devaluing the currency -- and yes, all the oil coming in certainly contributes. So unless and until some combination of elites and mass publics decide that the production base of the country needs to be rebuilt -- in a green way, hopefully -- these crises will fester and continue, and we will stumble into a long emergency.
And by the Rune, glad to see you here again!
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elbarto Posted 9:04 am
17 Mar 2008
On easter island, the Economists (chiefs, wise men, whatever) proposed building ever bigger Moai. That really helped didn't it? You'd have to assume that some of the people on Easter Island were saying "hey maybe we should stop cutting down all these trees to build Moai because we need those tree for boat building etc." - they were probably run through with spears.
It seems like a simplistic argument but if you compare the basic elements of what happened on Easter Island and what is happening on Earth now how is it really any different? The Earth is a finite island, we keep cutting down trees and the only solution presented to us by the wise men and high priests is to increase the rate at which we cut down trees. (Tree cutting being an analogy for any irreversable depletion of resources).
I ask the economists; "How long can economic growth continue through the production of evermore widgets which require the finite resources of this planet?"
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odograph Posted 9:14 am
17 Mar 2008
The sad thing is that here in California solar-thermal, built in our deserts, is the most efficient form of solar power available.
We only fund solar cells, on the rooftops of foggy Bay Area homes, because that appeals to us emotionally.
If we had sense, as a species, we'd throw some of that stimulus spending goodness out there among the mesquite bushes.
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Jon Rynn Posted 9:26 am
17 Mar 2008
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sunflower Posted 9:30 am
17 Mar 2008
We must guard against Bush programs that will be rammed through during a period of intense economic shock, programs that we would never accept under normal conditions. The opportunity for the rich to become obscenely wealthy via privatization of our government and public services may occur during our darkest hour. Resist.
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Jason D Scorse Posted 9:33 am
17 Mar 2008
Ben Bernanke got us into this mess? Huh? He just got on the scene as the mess was starting. He's one of the best macroeconomists in the world and is doing his utmost to stop a world financial meltdown. If people at Grist had their way maybe we could put Dave Roberts in charge and he could go on a tirade about the evils of capitalism while the the world felt apart. And maybe some of you would be happy since going back to hunter-gatheredville would cut CO2 emissions.
Economists aren't a uniform bunch; there are rightwing ideologues like Greenspan and pragmatists like Bernanke. Like I said, many economists made bad predictions, but many, like Krugman were calling for greater regulation a long time ago.
Don't confuse investment banking with economics- they are different professions- economists are not stock pickers, they are researchers and academics. To my knowledge the Treasury Secretary has little to no economics training, which isn't surprising given that he's a Bush appointee.
Just because things are bad right now, they could be a lot worse. No one is claiming this is going to be painless- it's not. But I wish there was a parallel universe I could send Tom and Dave to for a minute where sociologists, psychologists, or whatever their choice of expert had the role of getting us out of this mess to see how much worse things would be. It's easy to throw stones when crises hit, but much harder to understand them, and solve them. That's for adults. And yes, Bernanke, who is getting 1/10 the salary he could for working 5 times as hard deserves some thanks. But no, I won't expect that from the hater crowd.
Just about every policy option discussed on Grist has a strong economic component or the theory came from economists. If you don't understand economics you can kiss a sustainable society goodbye.
J.S.
I teach environmental economics and blog at http://www.voicesofreason.info.
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odograph Posted 9:38 am
17 Mar 2008
Go ahead, do that math. Compare it to the energy costs of creating solar panels that are then badly placed and badly maintained.
and also the benefits of having a decentralized energy system, which is inherently more resilient
Only if they are properly positioned, in a proper micro-climate, and properly maintained.
I am skeptical that this would ever come to pass. More likely rich duffers will brag about their tax credits, and after checking their bill for a few months, forget about it ... leaving the cells to rot.
(In the towns around me solar-thermal pool heaters rot by the thousands.)
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sunflower Posted 9:43 am
17 Mar 2008
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infp Posted 9:43 am
17 Mar 2008
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David Roberts Posted 9:51 am
17 Mar 2008
Back in the real world, economic forecasts turn out wrong again and again (and again), and no economist ever faces the slightest penalty. (Turn on cable tv if you doubt me.) Isolated economists (e.g. Krugman) predicted the shitstorm we're in, but the vast majority did not. Indeed, insofar as economists left the ivory tower and got involved in shaping the course of events, their influence has been just as pernicious as it has been helpful.
Cap and trade? I'll make you a bet: every single economic model predicting the effects of a cap and trade system in the U.S. will prove to be wrong. I could come as close by throwing darts at a board. Yes, there's some basic economic theory behind it, but why do people, including you, want to ascribe powers to economists they just don't have?
And by the way, nobody's ranting against capitalism. That's your straw man. I'm ranting against the jackasses that drove my country into a ditch. Where were your precious economists when it was happening? And if they couldn't do a damn thing to predict or stop it, why should their presence now be such a cause for comfort?
Sorry, but the grown-ups won't save us. There are none. Just you and me and the citizens of the country. Time to take some responsibility for our own fate instead of hoping the latter-day priests will rescue us.
grist.org
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Jon Rynn Posted 9:58 am
17 Mar 2008
So evidently, the free market failed. Anytime a government-led economic process fails, cries go up that the government can't do anything (e.g., ethanol). So if the market screws up -- and screws up royally -- can I then complain that the market can't do anything? Actually, i don't even want to argue that -- just that the 3 trillion that might be needed to bail out the current financial mess, if I read Krugman today correctly, is quite a mistake.
In fact, the 3 trillion might match Bush's Iraq war mistake. So, the military can screw up, the market can screw up, and the financial system can screw up, but they all need to be bailed out. But we can't talk about spending hundreds of billions or trillions to put PVs on roofs, or pick your favorite sustainable technology. makes me wanna holler, in marvin gaye's timeless prose.
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Pompey Road Posted 10:03 am
17 Mar 2008
We live from bubble to bubble since we do not produce or manufacture any more. We do not have the good faith or value of gold to prop up our dollar. Only the good faith in our financial institutions and government regulators to be conservative and have fiscal responsibility.
Guess what, the last sub-prime pyramid scheme showed the world what kind of fiscal responsibility we have. That is why the dollar is falling like a brick
Oil is sold on the dollar standard. Everyone who visits this page should be familiar with the Peak Oil Theory. Guess what again? We have peaked and from now on oil will only get higher, dramatically higher and with the possibility of dragging the world into a recession.
We had our chance for a soft landing in 1973, over 30 years to find alternative sources of energy. You can thank big oil for this depression, you can thank Reagan for deregulating the financial institutions or at least starting us down the slippery slope.
Perfect storm, Peak Oil and a worthless dollar brought on by deregulated money markets and speculators. It was good while it lasted!
More major banks to post 1st quarter earnings tomorrow. If any more fail, don't stand under tall buildings by weeks end. The supreme court may force a few more jumpers this time.
If they ban handguns they may not have a pistol to wrap their lips around.
The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.
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Jon Rynn Posted 10:11 am
17 Mar 2008
Jason, it might work better if you could be a tad more positive and point to some more interesting economists.
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sunflower Posted 10:24 am
17 Mar 2008
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anotherID Posted 10:53 am
17 Mar 2008
Dean Baker (called the housing bubble and regularly calls for introducing accountability to the economics "profession" in the same way economist advocate for accountability for janitors, if you do your job badly you get fired.)
Robert Shiller (called the tech bubble and housing bubble and is relatively free from talking his book)
Chris Thornburg (called the housing bubble and left UCLA when Real Estate interests bought the Anderson forecast with donations)
Contrast that with the dirty paid shill Economists like David Lereah (pumped both the tech and housing bubbles for a salary), Lawrence Yun (still pumping the housing bubble), Alan Greenspan (still denying the error of his asymmetric response to bubbles), Nicolas Retsinas of Harvard, etc.
Bernanke was a compliant Fed Governor under the bulk of Greenspan's reign, so he is in the latter category. For the last six months his line about the sub-prime, then Alt-A now prime mortgage debacle was that it was contained and the economic damage was minor. What an astute economist with a gift of accurate forecasting!!
Bernanke falls into the hack economist category right along with Lereah, Yun, Greenspan.
Here is a funny economist joke:
A mathematician, an accountant and an economist apply for the same job.
The interviewer calls in the mathematician and asks "What do two plus two equal?"
The mathematician replies "Four."
The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says
"Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
Then the interviewer calls in the economist and poses the same question "What do two plus two equal?"
The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says "What do you want it to equal?"
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KenG Posted 10:58 am
17 Mar 2008
Maybe this is really just a badly managed correction. It seems to me that 95% of the people I know have thought the housing market was irrational for years. (This isn't hindsight, people have really been talking about it for years.) However, a small number of people, aided by nonsense lending practices were able to keep the bubble going.
How about the rest of the economy? Business profits are good, the commercial/industrial construction markets are healthy, unemployment is low and (absent abandonment of free trade) the falling dollar should fuel a surge in US business.
The only way this can be a crisis is if we let the media and politicians convince us things are worse than they are.
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odograph Posted 11:33 am
17 Mar 2008
perhaps that's what you heard, but for what it's worth, I got trolled in by this boldface comment:
The economists got us into this mess.
Hardly a defensible nor rational position, especially when it causes us to forget who took on all that debt.
Let's blame them, shall we?
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Colin Wright Posted 11:35 am
17 Mar 2008
I think it's also important to point out it's not necessarily a Democrat vs. Republican issue. I think it's more of a populist vs. neoliberal issue. Afterall, it was Clinton and Ruben (and Greenspan) who broke the barrier between banks and securities. Here's Roberts , Reagan's Assistant Secretary of the Treasury (!) again:
No doubt but that greed, fraud, and bad policy all played their roles. But at the heart of the problem is a 1999 "reform" that repealed an earlier reform known as the Glass-Steagall Act.
In 1933 the Glass-Steagall Act separated commercial banking from the securities business. It prevented securities speculation from destroying bank capital and shrinking bank deposits from bank failures and runs on banks by depositors. Congress and President Bill Clinton foolishly repealed the Glass-Steagall Act in 1999. The repeal of the 1933 law was driven by profit lust in the banking industry and by "free market" ideology, which claims the unfettered marketplace is always superior to regulation.
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Jon Rynn Posted 11:39 am
17 Mar 2008
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amazingdrx Posted 12:20 pm
17 Mar 2008
Words fail me. Now I know why I stopped reading this "economists" pronouncements oh so long ago.
Oh please save us, o mighty adult economists.
Bernanke is a disaster. He is the "brownie" (as in "yur doin a heckuva job brownie") of this recession turning into depression.
"This makes it important to try to link environmental policies directly to economic strength; e.g., a comprehensive energy policy can help reinvigorate the manufacturing sector, create jobs, and decrease energy prices.'
Some of us have been doing that for a few years already, to derision from "economic" circles.
"far right ideology that says markets don't require regulation"
You mean the one that thinks market forces will surely fix everything without government intervention? That ideology? The one that many have warned against as corporatist propaganda? Used by hedge funds to keep their market manipulation insider trading bonanza going?
Here's an ideology, suggested by the HBO series "John Adams". Get out the tar and feathers. Virtual blog style, and the rail....neehaaw give this "adult" a little ride.
http://amazngdrx.blogharbor.com/blog
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sunsetbeachguy Posted 12:28 pm
17 Mar 2008
One other economist that might be able to be trusted is Herman Daly but ecological economics would upset the apple cart WAY more than putting Dean Baker in charge.
I must say I haven't yet agreed with Jason but he sure knows how to get multiple posts.
If Ben Bernanke would take Dean Baker up on his accountability offer, then I might have some confidence in the Greenspan toady know as Bernanke.
Sunsetbeachguy
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sunsetbeachguy Posted 12:30 pm
17 Mar 2008
http://www.prospect.org/csnc/blogs/beat_the_press_archive ...
Sunsetbeachguy
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amazingdrx Posted 12:49 pm
17 Mar 2008
Every rate lowering weakens the dollar, which raises oil prices in dollars. Which spirals the economy down another rung into the circle of financial hell that bushco hath wrought. ramping up a whole new round of inflation.
http://amazngdrx.blogharbor.com/blog
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Biodiversivist Posted 1:23 pm
17 Mar 2008
I conjured up a crappy analogy to explain this in a review of Sicko, as you might remember.
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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steepcreek Posted 1:36 pm
17 Mar 2008
energy...that storage capacity is quickly used up. That means that if the sun doesn't shine or the wind doesn't blow for a few days you either do without power or you fall back on coal/nuclear/gas...current forms of baseload power. Since big coal/nuclear power plants are not turned on/off like a light switch nor even significantly dialed up/down in output to instantly meet demand as renewables unpredictably and continuously go on/off line,how can you construct a fortified decentralized grid? These renewables seem almost superflous if the traditional forms of baseload power must be constantly up and running in the background to keep the grid from crashing as renewable contributions wax and wane. I'm also under the impression that per kw/hr costs of wind and solar are very high relatively speaking. Residential solar installations are very expensive and take more than a decade to pay for themselves. How does the incessant push for these renewable forms of energy revitalize the economy? They seem like unreliable bad investments. Someone lay out a grid concept built on wind and solar for this economy.
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Rune Posted 1:42 pm
17 Mar 2008
So evidently, the free market failed. Anytime a government-led economic process fails, cries go up that the government can't do anything (e.g., ethanol). So if the market screws up -- and screws up royally -- can I then complain that the market can't do anything?
I don't mean to be picking on you, Jon, you just happen to be coming up with the most succinct quotes regarding some common ideas I have been thinking a out lately.
I don't see anything to suggest the market has screwed up. It is functioning predictably to deliver predictable results. Similarly, the government is not screwing up, it is functioning fairly well and predictably to deliver the same predictable results.
The real problem, if you want to call it that (I do!), is that the primary objective function of the game involves sequestering as much power as possible, then using that power (political, economic, social, it makes no difference ultimately) to further maximize the accumulation of power. That always leads some or all of the heavy hitters to try to cheat the system through deceit and coercion, especially as the game appears to be nearing an end or meltdown of some sort due to the great success of some players leading to diminished opportunities for further gains once they enticed the rest of the field to offer up as much value as possible through "fair play."
It doesn't matter if we are talking about a managed economy, a democracy, a "free" market economy, a totalitarian government, etc., the problem remains the same so long as the primary objective function of the game remains the same. The best laid plans to deliver the greatest good to the greatest number (or the most deserving, or what have you) will eventually be overtly and overwhelmingly corrupted when the power imbalance becomes great, which is a likely state to land in given that maximizing the primary objective function of the game usually involves maximizing a corrolary objective function, that of comparative advantage (which is taken as a sort of virtue in most economic thought and business strategies stemming from such schools of thought).
The reason this is a problem is that what most people want and enjoy is not being in a dangerous game of dominating the Earth and it people but having enough resources and options to be healthy and secure and not in a state of lack relative to their neighbors. That was not always assumed to be the case, hence the praises of the grab-all-you-can lifestyle encouraged by classical economics back in the day. Today, however, there is plenty of evidence pointing in that direction, just as there is plenty of evidence that large, wealthy societies based on values and social mores that promote greed and domination threaten to bring the whole cycle of boom and bust to a grim end once and for all.
I think most of us know at some level that we would prefer a society that encourages the most able and ambitious to gain the social and economic standing they seek by putting some of their efforts into seeing that future generations and/or less gifted neighbors have better opportunities to be secure and fulfilled, too. At the same time, there are always those who resent the prospect of free riders to the point that they reject anything that smacks of welfare, social aid, or mandatory transfers of wealth to those who have or create less. The thing is, at a time when we are collectively killing the planet and with it the best prospects for each and all of us, there is a compelling case to be made for the notion that less really is more, at least in matters of material consumption.
Which brings us to the bright dreams of salvation through clean, renewable energy. Sorry, I just don't buy it. First of all, the deck is set to grow demand for more energy as fast or faster than we can bring new supplies on line, which means we are unlikely to be significantly displacing much of the dirtier, deadly energy sources of concern so much as we will augment them with renewables. But more importantly, more energy, whether or not it is clean, will be used to dominate and destroy natural resources being pressed to dangerous limits by a human population growing the billions so long as those limits can be extended--as hey generally can given enough energy availability at a given moment.
Again, we need to start rethinking what it is we want out of government, productivity, trade, etc., if we are to avoid the final collapse from which very few, if any rebound and most or all suffer terribly. A simple start might be to refine poverty in terms of fraction of the most wealthy and, rather than fighting poverty start thinking in terms of limiting wealth to a certain multiple (say, 8 or 10) of the poorest among us. We might take in s step further and start thinking of wealth more in terms of the amount of help and promotion one can call from society when putting forward an effort to satisfy one's self interests without unduly foreclosing opportunities for later generations rather than focusing on locking up and consuming or degrading as many physical resources as possible regardless of the consequences for present and future generations.
Sound idealistic? Sure it is. And half baked, too! But just how realistic and rational is our current system of measuring and pursuing welfare at a time when economic, environmental, and military destruction loom large in the minds of most of us. I think we can do a lot better for ourselves in that regard. I think we must.
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ce1907 Posted 1:57 pm
17 Mar 2008
Remember, Greenspan said that there was a terrible risk that we would soon run out of public debt because of the budget surplus
The press bought it, and the pols hid
But mostly it passed because THE PUBLIC WANTED TO BELIEVE IT. Money back from the Gov, hurray!
In these situations, it is not just what is "true" that matters.
It is trying to arrive at sensible policies in terms acceptable to public prejudices.
My guess is that bringing all credit creation under one regulator (probably the Fed) is a no-brainer, and imposing standards and regulation on the credit evaluation services like Standard & Poors are reforms that will gather support.
Demand will need pumping. Green infrastructure makes sense. Pitch it "responsibly" to generate jobs and do good things. (Avoid claims for values beyond common sense and helping people.)
Pray that we get lucky for reasons not presently apparent. It is better to be lucky than good.
Being able to say I told you so has its appeal, but the satisfaction is slight next to the misery and fear bound to follow a real depression.
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amazingdrx Posted 1:57 pm
17 Mar 2008
The studies and the rationale are here in the blog, going back months upon months.
First conservation must be used to vastly reduce demand. Then smart grid technology is used to match supply and demand by storing heating/cooling energy in buildings.
Widely spread wind, solar, water, and biogas power are used to smooth supply. With diverse locations for these renewable sources they are reliable.
Industrial loads are supplied with onsite renewable energy systems, like solar furnaces, and from excess power transported across the grid from high renewable output areas to industrial sites.
Manufacturing loads like glass and metal recycling are timed with smart grid technology. Cogeneration of power by industrial waste heat supplies power from cooling recycled materials.
These technologies are emerging and haven't been widely enough known to publicly counter the conventional wisdom that you repeat about renewable energy unreliability.
The robust economy will come from the huge boom in new jobs and manufacturing and lower energy costs. Utility companies like Excel energy are already constructing distributed generation and storage smart grids.
This is a short summary of the bigger picture, not enough to explain it all. And the links to the pertinent studies, research, and ongoing projects are all over this blog.
The objections you are bringing up have come up here over and over and have been answered over and over.
http://amazngdrx.blogharbor.com/blog
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amazingdrx Posted 2:03 pm
17 Mar 2008
Not to mention his meeting with hedge fund operators so they could explain the nature of the crisis to him. This is some sort of mass insanity. Only the WSJ becoming a foxnews outlet can even begin to explain the silence.
It's like Bernanke is from another planet, just landed, and has never heard of the fed or the US and world economy.
http://amazngdrx.blogharbor.com/blog
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Jon Rynn Posted 3:28 pm
17 Mar 2008
But as ridiculous as it may sound, much of the Right likes to argue that markets are perfect, so this is an important time to point out, or even yell and scream, that this proves that regulation is a necessary part of "capitalism", again depending on how you define that. You are seeing why Polanyi in his classic book "The Great Transformation" argued that an unregulated capitalism would destroy itself.
Rune -- You've actually touched on a topic dear to international relations scholars, that is, the idea of comparative power -- the classic "realist" idea, that drives "liberals" crazy, is that sometimes a country will want to deny another country more well-being or power, even if the denying country would also gain, because the denied country would gain more power than the denying country.
Liberals, who are generally more in the tradition of neoclassical economists, like to look for win-win situations, not win-lose. But when an individual or group is making great gains in power while the rest are not, it can kick into a positive feedback spiral and wind up in a dictatorial or other exploitative situation, and this can happen in either international systems or economies -- witness the rise of huge, global corporations.
The way this situation is dealt with in the international system is by the "balance of power", such as when Nazi Germany was countered by the US and USSR, even though the they hated each other. In economics, the US has had the idea of antitrust, much as it has not been used lately.
I see economic democracy, in many forms, but most clearly in Mondragon, as a way to get around this accumulation of power problem, or part of it. That's hard enough, I realize, but then we have the human (well, most lifeforms) desire to have more and more, sort of like algae.
I hope that if power was distributed more widely, local people would have power over their local environment, both work-related and ecologically-related, and that they would then care for it more than in the current "absentee" and hierarchical form of capitalism, in which people who don't live or work in the firm own it, and/or the people at the top act as if they basically own it, with all of the ways in which hierarchical control warps social systems.
Of course, the shit could hit the fan before the society gets its act together, although at least we'd be in the position of being able to say "I told you so", which we should definitely do, and we'd also be in the position of saying, "and we have a plan to get out of this mess". Although at that point it would be much harder.
As to whether more renewable energy will simply feed the beast, yes, of course it could, which is why it would be better to open up the perspectives from "simply" energy to the environment as a whole. If global warming were solved tomorrow (I don't know, let's say someone figured out warm fusion, just for yucks), we'd still be heading off a cliff because of the abuse of all of the planet's ecosystems, and peak everything would still be a problem. So renewable energy is a necessary but not sufficient goal. oh boy, got to use some logic!
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bookerly Posted 4:17 pm
17 Mar 2008
Dear Jason,
Kudos!!! No one can stir people up better than you can!!! Only the "trash the meat eaters" posts draw more comments (it seems to me).
But, do you really believe what you write?
Objecting to economics is like objecting to the sun and the moon. Nothing changes.
However, knowing that there is a sun and moon doesn't mean that we have to go along with every idiot who claims to speak for them.
The Federal Reserve acts like it is scared and lost, trying to move its finger from hole to hole as needed, while disparately ignoring the cracking walls.
Heck, folks here are wondering about the American economy. A $600 bicycle patch isn't going to make much difference to people drowning in a world of debt.
The banks are scared to borrow, lend or invest. (I believe this is one of the four signs of the Apocalypse (the Norse Gods Version).)
The world is staring at a huge mound of debt, which a year ago was valued as gold, and now seems to have turned a dark brown color while beginning to smell.
The folks in charge, hating government intervention, are waiting for .... what??? They don't seem to know.
The rest of us are waiting for the next "Shirley Temple" to keep us from feeling the pain of it all...
patrick in Beijing
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Rune Posted 5:40 pm
17 Mar 2008
The problem of absenteeism and alienation is central to the tendency toward corruption in national and international institutions. When the players are relatively close to the action that concerns them, as in the Mondragon co-op collective, it is much easier to maintain accountability and proactively head off attempts to game or mooch the system. As enterprises become much larger and their functions become more abstract and distant from those they impact, the opportunities and temptations to corrupt the game increase.
I don't think renewable energy is much of a goal, if by goal we mean an outcome that satisfies our major concerns. Rather, renewable energy may be an objective that supports goals of environmental restoration, "sustainability," etc. So long as the name of the game is domination through unlimited hoarding of resources, however, the best we can get out of increases in efficiency or marginal reductions in environmental impact per unit of consumption is a temporary reduction in the degree of unsustainability of day to day life. Actually pursuing something that might pass for sustainability and increasing ecological resilience will require fundamentally different values and beliefs about what is desirable and socially acceptable, I believe.
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Delay And Deny Posted 5:48 pm
17 Mar 2008
Do I cry?
At the same time, the fact that Neo-Greens are so concerned with "the economy" as in the old highly asymmetric economy exposes everything I've held forth about them: that they are all part and parcel of the mess. They want the DOW Jones to rise so they can collect their tithes from industry via guilt and taxation. The last thing a Neo-Green wants is a free and individualist populace making things for itself in its own way. They could never get really well paying committee jobs that way.
Oh, if you want a lengthy discourse on the current state of the economy, be sure to see Jack Black's Be Kind, Rewind.
The Manhattan Declaration
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LegumeSam Posted 6:09 pm
17 Mar 2008
For the past thirty-five years the world-economy has been a great Potemkin village erected for the sake of preserving US hegemony while "goods and services" flow in an unceasing stream from the nations of the south to the nations of the north.
The main financial mechanism fitting this situation in this place was what Henry C. K. Liu called "dollar hegemony." To quote Liu:
World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy.
How did it work? Liu again:
The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies. To prevent speculative and manipulative attacks on their currencies, the world's central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world's central banks to acquire and hold more dollar reserves, making it stronger.
The wheels have apparently come off of dollar hegemony. The foundation of dollar hegemony was the inflation of the global dollar economy so the banks could all have lots of dollars. A lot of this inflation was also contained in the housing bubble, which has been in a state of deflation for at least the last couple of years. The Fed is going to cover for the banking system, which has had to suck up debts made unpayable by the deflation of the housing bubble, by printing even more money. Real estate will go bust, the dollar will go bust, and the cost of living will go way up.
No?
What does this have to do with "the environment"? (As if we only spent part of our lives living in "the environment"? Huh?) Well, as our predatory capitalist economy tanks, fewer environmentally-destructive projects will get off of the ground financially. That will be good. But life will suck, and that will be bad. The majorities which will be hurt by this great economic "correction" should go back to living off of the land; as the money economy will suffer great losses in credibility from this downturn, people should become less dependent upon it. Bring back the "victory gardens."
At any rate, the grownups aren't in charge; they haven't been in charge for thirty-five years. Before that time, they didn't have to be grownups, since at that time they trusted in the theories of an important historical grownup named John Maynard Keynes. After that point, the need for a grownup went up, and they didn't meet it.
http://www.dailykos.com/User/Cassiodorus
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bookerly Posted 6:25 pm
17 Mar 2008
Err, covering for the banks. I agree with L. Sam, that is what it looks like they are doing. One by one rescuing each bank as it collapses, perhaps in the hope that no one will step back and look at the big picture.
Can the Fed inflate its way out of this mess? Perhaps.
Usually, in doing so, it would transfer a lot of wealth from the poor upwards to pay for it all.
A current problem, is that having done so for so long, many of the poor (as a mass) lack enough wealth to transfer up.
So, the rich would need to pay. So far, they seem unlikely to do so. The amazing fact that banks are still handing out tens of millions in bonuses to executives even while they are collapsing is a bad sign.
On the other hand, if there is money that can be spent by politicians to quiet the problem down, it will certainly be spent in this, a presidential election year.
Unless the politicians are so stupid that they actually believe their press releases and think the market will solve everything.
Ah!! Relief!!! No one can be THAT stupid.
Roll of the drums.
George Bush.
patrick in Beijing
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trock Posted 10:17 pm
17 Mar 2008
The economy was based on the Greater Fool theory that it was ok to buy the house as long as there was a Greater Fool who would come by after you to pay even more for the house. We just based our economy on Greater Fools because its so much easier selling houses to ourselves rather than selling to the rest of the world.
My neighbor and I both make a million dollars a year. I clean his house for 500 dollars an hour and he cleans my house for 500 dollars an hour and with 2000 hours a year of doing this, we both make a million dollars a year. If 2 people do this it is farce, if a million people do it it's a bubble.
Just like if someone eats themselves to 400 pounds, I can't tell you on which day their bad health is going to catch up with them but I know that it will, I can't tell you in which quarter the housing bubble was going to catch up with us. Or the budget deficits was going to catch up with us. Or the trade deficits was going to catch up with us. Or the peak oil problem was going to catch up with us. Or the social security problem was going to catch up to us. Or the global warming problem was going to catch up with us.
But they are going to catch up to us.
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odograph Posted 10:36 pm
17 Mar 2008
Part of that lack of moderation came from free marketeers who pressed for less and less regulation as the problems built. That is true.
But I still see most of you unwilling to tell the other half of the story. This credit-driven crisis simply could not have happened if people had not borrowed to such unsafe levels.
As I've said before this is about exploding debt at the personal, local government, state, and federal level.
In the polarized world of American politics it becomes "bail out the homeowners" or "bail out the bankers."
Too bad such bail-outs leave so much of the real problem unstated.
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LegumeSam Posted 11:38 pm
17 Mar 2008
Sorry, dad. As for the rest of us, if we wanted to buy housing in the first seven years of the "zeros," and pay mortgages instead of rents, we would either have to purchase abandoned homes in western North Dakota, or we would have to "borrow to such unsafe levels."
Meanwhile, you have Dick "deficits don't matter" Cheney running the roost in DC against a spineless (and probably powerless) Congress. Both elections were rigged. Is that the people's fault?
And that economy run on dollar hegemony. It must be the public's fault. Yeah, blame the average guy.
Too bad such bail-outs leave so much of the real problem unstated.
The real problem, at this point, is capitalism, in which it's still too profitable to pump, refine, and burn the oil while fishing the oceans dry, ripping down the forests, etc. Under capitalism, those who poach the commons are rewarded with profit.
http://www.dailykos.com/User/Cassiodorus
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sunsetbeachguy Posted 11:59 pm
17 Mar 2008
There are many, many, many debtpeople.
Sunsetbeachguy
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sunsetbeachguy Posted 12:12 am
18 Mar 2008
Renting a SFH is a near perfect substitution for buying a bubble "asset".
Ever heard of delayed gratification, that former hallmark of the middle class?
I have sat out the bubble for 2004, 2005, 2006, 2007 but now the housing market is coming to me.
2001 prices for all, if we don't overshoot. No matter what Bernanke does.
Sunsetbeachguy
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amazingdrx Posted 12:23 am
18 Mar 2008
So you aren't a socialist? What form of anarchy do you prefer? Dictatorship of the proletariat, like walmart?
http://amazngdrx.blogharbor.com/blog
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odograph Posted 12:26 am
18 Mar 2008
They took it out again, as debt
The little people did what Wall Street does. They used their "paper profits" as collateral for new loans and more debt.
They increased their debt to income ratio.
They didn't always use that debt for capital improvements or to improve their financial position. Too often they used it to fund short-term consumption. And, as environmentalists we should see the connection - home equity withdrawals, and large SUVs went together.
Which is why I say this was a debt problem from the bottom to the top of our society.
(Another tidbit on that, I've heard that sales of Ford F150 pickups has dropped, as the "subprime" loans so often used to buy them dry up.)
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LegumeSam Posted 12:28 am
18 Mar 2008
And now that the housing crash has forced former "owners" onto the rental market, you can see a consequent expansion in rental rates. At least the long-term renters were able to enjoy a few years of "irrational bubble," whereas now, in the new era of "rational economics"...
http://www.dailykos.com/User/Cassiodorus
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amazingdrx Posted 12:35 am
18 Mar 2008
Does anyone you know really have a secure enough job to take on a budget busting mortgage? A job not subject to outsourcing or failing mega corporation manipulated markets?
Thanks to the foolishness of relying on bankers half way across the world to finance manufacturing in your home town, no job is safe anymore. This financial cancer is here to stay.
Only local economic revival will get you a good job now. Local energy, local organic ag, local manufacturing. Manufacturing that converts everything to green power. Feeding off the detritus of the old corporatist culture.
We the people...are on our own. No help will be forthcoming from stanky 'nanke for US. Billion dollar bail outs are only for the fat cats that use our government official and reps like hand puppets.
Catch Jim Kramer (the screaming moron who is always wrong) screaming at his viewers not to sell bear sterns, just last week. How many 100s of millions did that cost them? Where is that clip? The Daily show I think?
http://amazngdrx.blogharbor.com/blog
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sunsetbeachguy Posted 12:57 am
18 Mar 2008
If I cared to move to the rental next door I could save $400/mo for the same size house.
Rents will deflate as we move through our housing induced recession.
Rental rates will go up for the suckers. Like those that got sucked into the bubble and are now having to look for rentals.
The moral of this whole thread is don't let the economists make you into a sucker!
Sunsetbeachguy
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LegumeSam Posted 1:00 am
18 Mar 2008
And this is what kept the economy afloat, according to Robert Brenner. Stupid fools!
http://www.dailykos.com/User/Cassiodorus
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LegumeSam Posted 1:16 am
18 Mar 2008
From Reuters:
"The U.S. rental market was nearly flat between 2000 and 2005," said Ken Fears, an economist at the National Association of Realtors. "Some landlords were so desperate to get tenants that we saw cases where they would offer three months free rent and other promotions to fill vacancies."
"Now mortgage rates have risen and it's harder to gain access to credit, allowing landlords to jack up rents for the first time in years," he added.
http://www.dailykos.com/User/Cassiodorus
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Tom Philpott Posted 1:55 am
18 Mar 2008
Colin, way above (in one of the few substantial comments on this post), mentioned Paul Craig Roberts on Counterpunch suggesting a suspension of the mark-to-market rule as a way to mitigate the crisis.
How would that help? Isn't the problem lack of transparency -- ie, no one knows how the hell to value these bundled mortgage assets? Seems to me that suspending mark to market would only decrease transparency and lead to more, not less, panic about what's festering on balance sheets. What am i missing?
Victual Reality
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anotherID Posted 2:05 am
18 Mar 2008
It is a solvency crisis.
What can the Fed do to fix a solvency crisis?
Not much, rock meet hard place.
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odograph Posted 2:11 am
18 Mar 2008
Foolish growth comes home to roost.
(Tom, as I understand it part of the problem is repricing some securities for their newly perceived risk. How big that part is depends on how many debt obligations of all stripes face an unpriced "recession risk." Halting "mark to market" might slow the feedback on that, but it can't make newly discovered risk again salable. Nor can it make new debt offerings attractive.)
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amazingdrx Posted 2:11 am
18 Mar 2008
Starting over with a lot of good old fashioned trust busting would be the way to go.
But a plan to guarantee mortgages would be needed, a government mortgage insurance plan that protects families from job outsourcing and downsizing. That would stop the blood flowing in the streets. Hurting real people with real jobs.
The corpoRATS must be sacrificed though. These are not real working people. They ARE real con men.
Clean out the hedge funds and investment "banks" (they just started calling them banks last week, to justify 200 billion in taxpayer funds doled out to them)of inside traders and market manipulators, fill up the white collar country club "jails".
Eventually honest financial companies would step in again once mortgage insurance stops the real pain of real people. Forget the bankrupt loser "banks" and hedge funds, let them all fail. They don't deserve any bailout except maybe 2 hots and a cot in prison.
http://amazngdrx.blogharbor.com/blog
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nkdawe Posted 2:58 am
18 Mar 2008
Or we can just let the economists speak for themselves:
"Man has probably always worried about his environment because he was once totally dependent on it."
Fisher and Peterson
The Environment in Economics: A Survey, 1976
"A commitment to the welfare of human beings takes precedence over a general devotion to the well being of the earth."
Kevin Schmiesing, 2005
Economist
Center for Academic Research, Acton Institute
"If it is very easy to substitute other factors for natural resources, then ... the world can, in effect, get along without natural resources, so exhaustion is just an event, not a catastrophe."
Robert Solow
Nobel Economist
Economists at the [World Bank] meeting rejected the idea that resources could be finite. Said one: "The notion that there are limits that can't be taken care of by capital has to be rejected." Science, 15 May 1987, p.769.
"We have in our hands now...the technology to feed, clothe, and supply energy to an ever-growing population for the next seven billion years..."
Julian Simon
Economist and Presidential and Corporate advisor, 1995
Note: A population of 5.5 billion (1995) growing at .01% (the global population today is increasing at 1.1%) for 7 million (with an M) years
would grow to 5.7 x 10^313 people. Physicist's estimate of the number of atoms in the universe: 3 x 10^85
"There are no... limits to the carrying capacity of the earth that are likely to bind any time in the foreseeable future. There isn't a risk of an apocalypse due to global warming or anything else. The idea that we should put limits on growth because of some natural limit, is a profound error and one that, were it ever to prove influential, would have staggering social costs."
Lawrence Summers
Chief Economist of World Bank, 1991
Summers was also United States Secretary of the Treasury and President of Harvard
Summers is famous for a leaked memo
(http://www.whirledbank.org/ourwords/summers.html) where he states, in part "I think the economic logic behind dumping a load of toxic waste in
the lowest wage country is impeccable and we should face up to that."
"Because of increases in knowledge, the earth's "carrying capacity" has been increasing to such an extent ... that the term "carrying capacity" has by now no useful meaning.
Simon and Kahn
Economists
"It is really agriculture that is affected [by climate change]. But even if agricultural productivity declined by a third over the next half century, the per capita GNP we might have achieved by 2050 we would achieve only in 2051."
Thomas Schelling,
Nobel Laureate Economist
Some Economics of Global Warming (1992)
Global warming is "the biggest market failure ever seen."
Sir Nicholas Stern, 2007
Economist
Cut down the last redwood for chopsticks, harpoon the last blue whale for sushi, and the additional mouths fed will nourish additional human brains, which will soon invent ways to replace blubber with olestra and pine with plastic. Humanity can survive just fine in a planet-covering crypt of concrete and computers.... There is not the slightest scientific reason to suppose that such a world must collapse under its own weight or that it will be any less stable than the one we now inhabit.
Peter Huber, 2000
Senior Fellow
Manhattan Institute for Policy Research
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odograph Posted 3:11 am
18 Mar 2008
I'm lazy/busy, so I'll just throw one link:
http://www.greeneconomics.net
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anotherID Posted 3:12 am
18 Mar 2008
Economists are the market's high priests and as RMI has stated.
Markets make great servants, Terrible masters and horrible religons!
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odograph Posted 3:24 am
18 Mar 2008
Should we make sure no one studies economies, and should we just blunder on with whatever we get?
Again that sounds like the old AGW denier's argument that no one should respect climatologists and that we should just blunder on and take what we get.
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odograph Posted 3:26 am
18 Mar 2008
"Normative economics is the branch of economics that incorporates value judgments about what the economy should be like or what particular policy actions should be recommended to achieve a desirable goal. Normative economics looks at the desirability of certain aspects of the economy. It underlies expressions of support for particular economic policies."
Actually, you critics are getting pretty "normative" in your "economics."
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nkdawe Posted 3:27 am
18 Mar 2008
I should have said "neoclassical economists got us into this mess."
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odograph Posted 3:40 am
18 Mar 2008
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Jon Rynn Posted 3:43 am
18 Mar 2008
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odograph Posted 3:46 am
18 Mar 2008
you might enjoy this
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Jon Rynn Posted 3:58 am
18 Mar 2008
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Pompey Road Posted 4:01 am
18 Mar 2008
Lets figure out if we have hit Peak Oil Production and are beginning to slide down the minus side. If we have its to late. If we still have an optomistic 20 years, we had better take advantage this time and come up with some alternative energy.
If Oil was faced with several alternative energies plus a strong dollar we would not be in this mess. The price of oil would be much lower.
If however we have hit the peak with oil tied to the dollars as it is, we are screwed. I know of nothing that will shore up the dollar, interest rates hikes, printing fewer of them, going back on the gold standard. Its to late now if we have hit peak.
Best case scenario, we got 15 or 20 years left and we can get the oil lobby out of D.C.
Both being next to impossible task!
The eons of time and nature was good to us down here. It was not until we become civilized that destroying our habitat become fathomable or fashionable.
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odograph Posted 4:10 am
18 Mar 2008
All that is left in that case is an escape to fantasy.
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amazingdrx Posted 6:02 am
18 Mar 2008
"But Fed officials had been startled and frustrated that their previous rate reductions were doing nothing to lower the long-term interest rates that are most relevant for expanding a business or buying homes or cars."
http://www.nytimes.com/2008/03/18/business/18cnd-fed.html ...
Real interest rate, figuring in inflation, already below zero. Bulls running wild!
Catch a falling knife and win the lottery!! Yippee!
Meanwhile real people are left to lose real money. The scammers are playing with the new denomination. 'Nanke dollars.
http://amazngdrx.blogharbor.com/blog
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Pangolin Posted 9:56 am
18 Mar 2008
Just for starters they get to invent the money at the stroke of a keyboard and then lend (give) it to their cronies based upon rules that they invent also and change at will.
Then it gets worse.
Somebody producing actual goods or services in the current economy has no idea what the value of his/or her work is because next week Ben Bernanke and big oil can deflate his currency and inflate his costs.
The value of your labor, house, car, diamond ring or any other asset is a moving target that you never get to fully understand. Your labor, skills, goods or assets could be illegal to sell already or made illegal at the stroke of a pen. The general medium of exchange changes in value so much that it should writhe in your hand so that you spend it as fast as possible.
Of course there are credit cards. Does anybody, anywhere understand thier credit card contract? I heard a Harvard Law professor say on NPR that they are opaque to reasoned thought.
It's like a world ruled by a Stephen King novel where good 'ol Steve is allowed to take bribes from the characters in exchange for favorable rewrites. In truth we have become a nation of "marching morons" eager to have Bernanke and his happy crew send us all to Venus for a holiday.
The Constitution appeared to dictate a gold standard for US currency that is now defunct. The current system makes no more sense than using leaves for money. At least the Fed couldn't create 200 billion leaves overnight and use them to bail out their cronies.
Put the Carbon Back
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amazingdrx Posted 1:38 pm
18 Mar 2008
Of course political lip service will be given to regulation and enforcement, but that won't really happen. Crisis deffered. Hedge funds already building another bubble in ethanol growing farmland.
Get ready for this next crisis, it will be even huger! Ho hum.
http://amazngdrx.blogharbor.com/blog
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Pangolin Posted 7:31 pm
18 Mar 2008
I understand that it could be argued that since the price of houses is falling that cancels the rise in the costs of food, energy and imported goods but they never counted houses as inflationary when they were going up did they?
The Fed overheating the printing presses amounts to a massive raid on peoples savings, retirements and pensions that will never be reimbursed in order to bail out those that already have more money than they can responsibly spend.
.....back to knitting shrouds.
Put the Carbon Back
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LegumeSam Posted 10:09 pm
18 Mar 2008
This is the whirlwind reaped from dollar hegemony.
http://www.dailykos.com/User/Cassiodorus
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JMG Posted 11:48 pm
18 Mar 2008
The comments are good too
http://jezebel.com/369447/dear-ben-please-explain-how-thi ...
Dear Ben: Really, Next Time, F*** Wall Street.
Save the world: Reduce greenhouse gas emissions 5% annually.
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stevenearlsalmony Posted 12:03 am
19 Mar 2008
< http://break.com/index/how-we-got-into-the-subprime-mess. ... >
Steven Earl Salmony
AWAREness Campaign on The Human Population
established 2001
http://sustainabilitysoutheast.org/
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amazingdrx Posted 12:24 am
19 Mar 2008
Kinda ironic eyyh, with inflation running rampant already, fed by the weak dollar, further weakened by the fed. And record profits for heavily subsidized energy companies that push oil, gas, and coal.
The Cheney energy plan (from the still secret meeting) was (most likely)to bankrupt the economy so there wouldn't be enough capital left to invest in renewables and conservation. So that last drop of oil and lump of coal would fetch enormous prenium prices.
"Misson acomplished!" We been dicked.
http://amazngdrx.blogharbor.com/blog
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Jon Rynn Posted 1:02 am
19 Mar 2008
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amazingdrx Posted 1:19 am
19 Mar 2008
Let's consider Russia as an example of where we are heading. Rubles are still being printed, aern't they? But no one wants them. Russian pensioners try in vain to exchange them for dollars (probably Euros now?).
The fed IS too big to fail. Why? Because they control the (largely virtual nowadays)printing presses that make the currency. But will the money they print be worth anything when we all get to retirement?
Or will it be rubble like the ruble.
I asked a Russian exchange student about wether he and his family were worried about the decline of the ruble. This was 10 years or so ago. He said no, his family's assets were all in dollars. His grandfather was in charge of building the missle defense system around Moscow.
His main concern was kidnapping, the main growth industry at the time in Russia. He now works in the financial industry in Switzerland. Very smart and fortunate.
http://amazngdrx.blogharbor.com/blog
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Jason D Scorse Posted 12:39 pm
19 Mar 2008
To say economists got us into this mess really should disqualify anyone from serious discourse, but what can I say, blame the economists all you want- those omnipotent men smoking cigars in the back room. It's a view of the world that isn't befitting a toddler.
David- I'd love to bet you on the issue of cap and trade so name your terms. You say economists make predictions that are no better than throwing darts- ok, so let's think of a series of potential future outcomes with respect to a number of environment issues (more than just cap and trade) and I'll use economic logic and you use a random number generator for your predictions. To make things interesting let's put some money on it? If you're game email me and we'll work out the terms and post them on Grist for everybody to see.
J.S.
I teach environmental economics and blog at http://www.voicesofreason.info.
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Jason D Scorse Posted 12:44 pm
19 Mar 2008
Robert Stavins
Michael Hanneman
Paul Portney
Robert Solow
Gary Becker
Dani Rodrik
Amartya Sen
Kenneth Arrow
Partha Dasgupta
and the list goes on.
the blog env-econ.net is very good as well. So is the organization Resources for the Future.
Enjoy....
I teach environmental economics and blog at http://www.voicesofreason.info.
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Jason D Scorse Posted 12:57 pm
19 Mar 2008
http://www.choicesmagazine.org/2005-1/environment/2005-1- ...
the program wasn't without its flaws but it definitely worked better than if people had thrown darts- in fact, it would've never happened without decades of economic theory.
Yet another example of how economics is really an ally of the environmental community- if only environmentalists could open their eyes and take a breath they might see that they have much more to gain from understanding economics than bashing it.
On this note, in the next few months I will be making a book available entitled "What Environmentalists Need to Know About Economics: A Practical Guide". I'll keep you all posted.
Thanks,
J.S.
I teach environmental economics and blog at http://www.voicesofreason.info.
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amazingdrx Posted 1:56 pm
19 Mar 2008
Even though I almost never agree with you, except on vegetarianism's great benefits and animal rights, your honest perspective illuminates the usually dreary, unintelligible realm of economists.
Controversy is good for the bloggerel. Keep it up. Looking forward to the book.
http://amazngdrx.blogharbor.com/blog
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stevenearlsalmony Posted 8:14 pm
29 Mar 2008
R. J. Samuelson
Robert Stavins
Michael Hanneman
Paul Portney
Robert Solow
Gary Becker
Dani Rodrik
Amartya Sen
Kenneth Arrow
Ben Bernanke:
Perhaps one or more of you, or others in the Gristmill community will kindly comment on the following article,
http://www.spiegel.de/international/business/0,1518,54358 ...
Sincerely,
Steve
Steven Earl Salmony, Ph.D., M.P.A.
AWAREness Campaign on The Human Population,
established 2001
http://sustainabilitysoutheast.org/
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