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Monday Message Board

October 20th, 2008

It’s time once again for the Monday Message Board. Post your thoughts on any issue. Civilised discussion only. Please avoid snarks and trolling and strictly no coarse language.

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  1. October 20th, 2008 at 13:20 | #1

    With the Oz market up 100 a minute ago, has it finally bottomed or will that happen as is traditional in the U.S when a Democrat gets elected president? Must’ve been a few real bargains at the opening prices this morning. But then I’m a lousy judge.

    Must find out what a snark is one of these days.

  2. O6
    October 20th, 2008 at 13:26 | #2

    No, they haven’t rung the bell yet. Even if the market doesn’t go down significantly further, history suggests that it won’t rise soon. Remember reading about the Rockefellers father and son buying selected sound equities in 1930, a year after the Great Crash? They weren’t in profit on those purchases for the best part of a decade.
    Of course this isn’t the great crash revisited, but cash will be king until fear is once more subdued by greed.

  3. observa
    October 20th, 2008 at 13:53 | #3

    “has it finally bottomed”
    Depends. The authorities have thrown a lot of fiat money at asset prices to avoid deleveraging, presumably to inflate our way out of the mess. With producer prices jumping 2% in the Sept quarter, perhaps they’ll have some modest success in nominal terms. It’s the real underlying mess that will ultimately concern us I fear.

  4. francis
    October 20th, 2008 at 14:12 | #4

    good day gentlefolks, a question for economics scenesters, i am currently shopping around looking at masters courses in economics. i have been reading and enjoying too many blogs like this one lately and suffering withdrawal from completing my last pair of degrees a few weeks ago.

    Any opinions on the courses available? I suspect i have a particular interest in the history of economics, political economy, and the economics of information and knowledge. My degrees so far are in law and IT so it would seem to follow on from there. also i’m in sydney, but i would be interested to hear about courses elsewhere – apparently ANU is a good place for this sort of thing?

  5. MontyA
    October 20th, 2008 at 14:18 | #5

    In The Age today there is a piece claiming changes to the CPI have been made to artificially lower inflation. The changes have disguised cuts in the real value of welfare benefits, government pensions and wages as the CPI index used to ‘maintain’ value is less than inflation. These savings which compound over time, and increased revenues from taxation bracket creep have been used to fund generous tax cuts for the wealthy. It seems clear that governments have become instruments of, and act for a very wealthy plutocracy and as in the 1920′s failed the rest of society.

    The falling real income of low and middle income earners was disguised by ready supplies of credit at low rates of interest and a perception of increasing wealth falsely arising from a housing bubble. In Australia an overvalued dollar based on another myth of shared wealth arising from a commodities boom added to that perception. (I contend the real reason for the rise and recent fall in the Australian dollar has more to do with differential interest rates between countries – the effects of falling commodity prices will result in further falls.)

    These factors have led to a large transfer of wealth and income from the poor and middle income earners to the top few percent in the income and wealth stakes. The present financial collapse was triggered when the cost of servicing ever increasing household debt; and rapid rises in the cost of energy that rapidly flowed on to transport, chemicals, fertilizers, fuels and food overwhelmed households’ ability to service their debts.

    The part played by rising energy costs in the current crisis has largely been ignored as the world deals with spectacular systemic failures of a seriously flawed and under regulated global financial system were triggered by wide scale mortgage defaults, starting in the US and now spreading through most developed countries.

    What amazes me is that almost no commentators or economists have called for a revision in taxation and other policies to reverse the concentration of wealth. Why is the impoverishment of a majority in our society so acceptable, even to those being impoverished?

  6. Nick K
    October 20th, 2008 at 14:36 | #6

    It has been suggested by some that expectations of a big Democratic victory in the United States may be having a negative impact on the US stock market.

    If Obama wins the presidency, and the Democrats consolidate their control of both houses of Congress (especially the Senate), then the US will have the most left-leaning federal government that has existed for quite some time. This is a major realignment of American politics that will have significant implications.

    Given that Obama has already flagged higher taxes at the higher end (including increased capital gains tax, higher payroll taxes on high-income earners), it would not be surprising if the prospect of tax hikes and increased regulation are spooking some investors.

    Obama’s economic program involves higher taxes on the wealthy in order to fund more tax cuts for middle and lower-income earners as well as more spending on various government programs. The only problem is that when the economy tanks, there are not going to be nearly as many wealthy people to pay all the extra taxes. The smart ones will probably have already sold up and sent their money overseas. Good luck with that one, Barack.

  7. October 20th, 2008 at 15:14 | #7

    Dear friends;

    Below I am providing a link to a recent article of mine – which has been published at ‘Znet’…

    The article covers the conservative legacy in Australia, and proposes a course of action for Rudd Labor – in the face of impending recession…

    Included are issues of welfare and tax, the question of mandate and contingency for Labor; counter-cyclical expenditure; ‘socialisation of risks and losses’; and more… There are some typos – but these are in the process of being rectified…

    As indicated – the article can be found at Znet -

    here: http://www.zmag.org/znet/viewArticle/19172

    Becoming a Znet member is easy – and Znet members have the option of commenting on articles…

    Your comments are welcome.

    Finally – it is my intention to publish the paper over at ‘Leftwrites’ soon as well…

    Comments there are also welcome also…

    sincerely,

    Tristan Ewins

  8. Chris Warren
    October 20th, 2008 at 15:48 | #8

    LIBOR down 0.5% which is probably useful although it is still at a local high.

    The graph of LIBOR going back 5 years is odd.

    What economic theory explains this behaviour?

    http://www.bloomberg.com/apps/quote?ticker=US0003M%3AIND

  9. observa
    October 20th, 2008 at 15:58 | #9

    “In The Age today there is a piece claiming changes to the CPI have been made to artificially lower inflation”

    Monty, John Williams has been banging on about US Govts cooking the inflation books for years here-
    http://www.shadowstats.com
    When our own central bank deliberately targets 2-3% annual reductions in the value of your saved monetary claims on production, what would you expect? (actually you’d expect with productivity increases those 1 and 2c pieces would buy more over the years rather than completely disappear)

    As to whether or not our Govts will get away with resort to the printing press to stagflate our way out of this mess, that remains to be seen. I have VERY serious concerns that it’s more of the same that got us into this mess, while some are getting downright hysterical about the goings on in their particular patch-
    http://www.atimes.com/atimes/Global_Economy/JJ18Dj01.html
    Given that Asians are holding much of this worthless paper and are getting somewhat hysterical about that themselves, they have much more empathy for such displays of hysterics than we in the West just at present. In that regard our MSM are only just beginning to awake from their comfortable slumber by the sounds of that AGE article. Remember, a recession is when you lose your job but a depression is when reporters’ livelihoods are threatened.

    As for,
    “What amazes me is that almost no commentators or economists have called for a revision in taxation and other policies to reverse the concentration of wealth”
    Well that’s the ticklish bit. Some believe that increasing income tax for the 57.8% of households that are left to pay it and legislating away private taxing rights to select CO2 emission holders will see us all tickety boo. Me, I’m somewhat skeptical of that approach and agree with you that we need a much more fundamental change in the constitution of our marketplace. I’m ever the eternal optimist on that score and there’s nothing like a decent depression to concentrate the body politic on the task at hand. The battle for constitutionally sensible price mechanisms over the divine quantity controls of elected kings is about to begin in earnest.

  10. October 20th, 2008 at 16:04 | #10

    Chris, it is probably better to look at the TED Spread, the difference between the LIBOR and Treasury bills.

    http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND

    My guess is the peak in the LIBOR 5 years ago represents higher official interest rates.

  11. October 20th, 2008 at 16:27 | #11

    This (courtesy of Lew Rockwell’s site) is for all those who were in favour of apologies all round.

  12. October 20th, 2008 at 17:02 | #12

    Thanks Peter

    Very interesting. The 5yr chart shows three distinct phases with a uni-directional ratchet.

    I wonder what commentary can accompany this trend.

    Ta

  13. Michael of Summer Hill
    October 20th, 2008 at 18:17 | #13

    John, since the 2001 Enron scandal the US Justice Department has won 1,000 convictions of white-collar criminals, including 167 CEOs and presidents. Last year the FBI convicted 206 people for mortgage fraud in scams totaling nearly $22-million. All told, G-men filed 1,204 mortgage fraud cases in fiscal year 2007, leading to 321 indictments and court orders for $595.9-million in restitution. But not sure of the total amount of deferred prosecutions allowing companies to pay a fine and avoid criminal prosecution.

  14. smiths
    October 20th, 2008 at 18:42 | #14

    future fund has gained 1% over same period stock market lost 40%

    does that mean government handles investing better than the market?

  15. Damocles
    October 20th, 2008 at 18:53 | #15

    Smiths – how much of that is due to the government putting more money in?

  16. TerjeP
    October 20th, 2008 at 20:55 | #16
  17. observa
    October 20th, 2008 at 21:44 | #17

    Yes PML, Mike Rozeff nails what’s going on- http://www.lewrockwell.com/rozeff/rozeff231.html
    It’s pretty obvious that as the Reserve drops interest rates to prevent true ‘price discovery’ I note my bank Westpac is still offering 6.8% at call, calculated daily, payable monthly. Looks like a hopeless rearguard action before the inevitable consumation of crony capitalism and Canberra bureaucracy. We’re all freaking doomed now by the looks of it, although Rudd and Co just need one more wake with small biz to finalise the last rites.

  18. Bingo Bango Boingo
    October 20th, 2008 at 22:32 | #18

    smiths, you adorable super-genius, the Future Fund is still mostly cash. It’s relative success is really a function of its slow-build strategy and therefore not having had the time to get stuck into the riskier asset classes. By the way, the Future Fund outsources a great number of investment decisions to private fund managers.

    BBB

  19. MontyA
    October 21st, 2008 at 00:44 | #19

    Observa, thanks for the link. Provided me with a good laugh and the urge to read some of the earlier columns of the Mogambu Guru (at the expense of a good nights sleep).

    The following link is to a piece written over 12 months ago on the Yen carry trade, his predictions are certainly coming true for Australia, if not the US. We’re freaking doomed.

    http://dailyreckoning.com/Writers/Mogambo/DREssays/MG092007.html

  20. Ubiquity
    October 21st, 2008 at 08:35 | #20

    The “Sub-prime crisis” defined:

    http://fr.youtube.com/watch?v=pFmYIFk5i1Q&feature=bz302

  21. Damocles
    October 21st, 2008 at 08:48 | #21

    Monty A, seeing as Mogambo freely admits he has no idea how much money is involved in the Yen carry trade with the US (much less Australia) and no idea what will happen if and when its unwound, your amazement at his “predictions” is itself amazing.

    In point of fact we now know pretty precisely what the impact on Australia of an end to the yen carry trade would be because it’s already happened.

    Why do you think the Australian dollar fell from around US 98 cents to around 65?

    Mind you it’s now back to 70 US cents but I’m sure the real catastrophe is just around the corner.

    It always is.

  22. Damocles
    October 21st, 2008 at 08:51 | #22

    Maybe the whole world really is turning socialist.

    It looks like China is:

    http://www.newscientist.com/article/dn14986-worlds-largest-health-system-rejects-free-market.html?DCMP=ILC-hmts&nsref=news10_head_dn14986

    Free-market economic reforms rolled out across the Chinese health system in 1978 have led to a collapse in healthcare provision for a fifth of the world’s population, researchers have concluded.

    The Chinese government, recognising the disparities in access to healthcare between the urban rich and rural poor, is planning to overhaul the world’s largest health system. The plan, entitled “Healthy China 2020″, aims to restore universal access to primary healthcare by 2010.

    “Before the reforms of 1978, more than 90% of the rural population was covered by a cooperative medical scheme,” says public health researcher Margaret Whitehead of the University of Liverpool, UK, and author of an analysis of the health system in China. “After market reforms, less than 10% of the rural population was covered,” she says.

    In 1980, 20% of total expenditure on health in China was funded in this way. By 2000, patients were paying for 59% of their healthcare, falling back to 49% by 2006. In France, the comparable figure is 11%.

    This has left 35% of urban households and 43% of rural households in China unable to afford medical care.

    At the same time, government funding for health has been almost exclusively consumed by municipal hospitals in cities. By 2005, only 10% of the state budget went to rural and urban health centres.

    Forcing health providers to cover most of their costs by charging patients has also corrupted the system, the authors say, encouraging doctors to charge for the most expensive instead of the most effective treatments.

    Collectively, the costs and reforms have bankrupted millions of families, pushing them into a “medical poverty trap” where they sell all their assets to pay for medical care.

  23. observa
    October 21st, 2008 at 11:12 | #23

    Monty(et al) Mogambo is a funny guy with a serious sting in his tail with those poignant stats and commentary roundups. Takes the piss out of those bureaucrats with their penchant for alphabetic capital soup too. In general the economic commentary in the Asia Times is strongly market/Austrian school flavoured and also broader columnists like Spengler appeal to the Asian view of the decadent West, fall of Rome stuff. Hence they get a good run there, whereas they are largely ignored by Western media hacks bottle fed on a constant Keynesian formula diet. Gerry Jackson is constantly scathing about that from a local Austrian perspective-
    http://brookesnews.com/081910ausrecession.html
    In general you need to be aware of their particular political biases and sort the wheat from the chaff, re the underlying economic analysis and message.

    Meanwhile in the Roman Empire, the patricians are beginning to pat themselves on the back that the worst of the crisis is over as stock markets begin to roar back somewhat with the various emperors’ promises of fools gold. I note our own revvin Kevin has quickly become the Swami of Slush. Out with Andrew Johns and other celebs on the weekend to start the walk against bipolar disorder, he pleasantly surprised the assembled multitudes with a $2mill ‘donation’, while Oily was busy anointing an ex-Olympic boss as whale envoy(well you know how it is with no Olympics to run) Nicely caps off a good week with those handouts to home buyers and guaranteeing all our savings deposits. Hail the all conquering Swami of Slush, but I notice some unpleasant dissonant grumblings-

    “RESERVE Bank governor Glenn Stevens is warning the Rudd Government its blanket guarantee of deposits is creating serious dislocation in the entire financial system and must be changed.”…

    “The RBA is arguing that the current version of the guarantee is completely distorting the market, particularly the short-term money market. It suggests the Government risks the perverse consequence of actually making it harder rather than easier for many Australian companies to raise funds.

    Despite the Government’s assurances that it is working closely with the regulators on the global financial crisis, the argument has strained relations between the RBA and Canberra.”

    And the Aust Conservation Foundation has done some unpleasant sums-
    http://www.acfonline.org.au/articles/news.asp?news_id=2033&c=21230

    Life wasn’t meant to be quite so easy for Swamis of Slush it seems.

  24. MontyA
    October 21st, 2008 at 11:28 | #24

    Damocles, I expressed amazement at the lack of open public resentment at the plutocrats ability to capture an ever increasing share of wealth and income.

    Your point that no one knows how much is involved in the carry trade can be extended to the whole global financial system.

    By the way how do you know the carry trade in the Aus$ dollar has been unwound if we do not know the extent of it?

  25. Steve
    October 21st, 2008 at 11:56 | #25

    The ever tedious Gerard Henderson has another opinion piece about someone else who gives their opinion. This time its steve keen.

    Poor Gerard, too timid to actually contribute some forward analysis of his own, but certainly not backward in pointing out the percieved shortcomings of the predictions of others.

  26. Smiley
    October 21st, 2008 at 12:11 | #26

    Last nights Four Corners report described how both the NSW and Queensland governments were attempting to pull future spending into the present by over allocating water rights and selling them to farmers. If it doesn’t rain, will the federal government have to bail out the farmers who have borrowed millions for those water rights or will the millions of dollars just disappear in a puff of blue smoke, putting further stress on the banking and financial sector? It looks like a really bad version of the game of pass-the-parcel.

    Actually one of the farmers interviewed had a great idea. Why not put meters at both the top end and the bottom end of the farms so that water usage could be measured accurately. Mind you, it appeared that he wasn’t very popular within his own community.

  27. smiths
    October 21st, 2008 at 12:18 | #27

    In point of fact we now know pretty precisely what the impact on Australia of an end to the yen carry trade would be because it’s already happened.

    Why do you think the Australian dollar fell from around US 98 cents to around 65?

    right.
    and there weren’t any other factors involved them say the collapse of the commodity prices, re-evaluation of chinas growth and the effect on australias economy … nope?

  28. smiths
    October 21st, 2008 at 12:20 | #28

    and on the carry trade heres an oldie but a goodie

    Global Credit Ocean Dries Up
    Ambrose Evans-Pritchard
    March 18, 2006, The Telegraph

    One by one, the eurozone, the Swedes, the Swiss and now even the Japanese, are turning off the tap of ultra-cheap credit that has flushed the global system for the past year, keeping the ageing asset boom alive.

    The “carry tradeâ€? – as it is known – is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1pc in Switzerland, to re-lend anywhere in the world that offers higher yields, whether Argentine notes or US mortgage securities.

    Arguably, it has prolonged asset bubbles everywhere, blunting the efforts of the US and other central banks to restrain over-heating in their own countries.

    “The carry trade has pervaded every single instrument imaginable, credit spreads, bond spreads: everything is poisoned,� said David Bloom, currency analyst at HSBC. “It’s going to come to an end later this year and it’s going to be ugly, even if we haven’t reached the shake-out just yet,� he said.

  29. observa
    October 21st, 2008 at 12:40 | #29

    “If it doesn’t rain, will the federal government have to bail out the farmers who have borrowed millions for those water rights..”

    Of course not smiley and you’re being downright mischevious in suggesting that. You know as well as I do the Govt will only bail out the depositors who put the money into the banks to lend on to the water rights buyers and speculators. Trust me on that because I live in the State that’s still paying off State Bank depositors all those years ago.

  30. observa
    October 21st, 2008 at 12:55 | #30

    I think that’s what many economists’ define as ‘redeemable fiat money’ smiley :(

  31. Damocles
    October 21st, 2008 at 12:55 | #31

    “right.
    and there weren’t any other factors involved them say the collapse of the commodity prices, re-evaluation of chinas growth and the effect on australias economy … nope?”

    You miss the point, the end of the yen carry trade AND ALL THE OTHER FACTORS YOU MENTIONED caused the A$ to declien by around US 30 cents – to a level still above its long term average,

    Therefore hypothesising about how the end of carry trade MAY produce an economic catastrophe in the future is simply stupid.

  32. smiths
    October 21st, 2008 at 12:57 | #32

    to the fairies who reckon that government and regulation have caused these problems i recommend again richard murphy at taxresearch.org.uk

    some highlights from the latest on flaws in the economic system

    First, the state has absolutely no control over the payment mechanisms on which our fundamental economic order depends. We had no choice but to bail out banks because they were the only people who could actually facilitate the exchange of money in our economy

    Second, the government has almost no control over the money supply in the UK. About 3% of the cash in the UK economy is actually issued by the Bank of England. The rest is electronic money created by the commercial banks and not by central government. The commercial banks do as a consequence take the profit from this activity. Unsurprisingly if they make cash out of thin air and then charge people for the privilege of using it, they do, during a period of massive monetary growth, maximise their profit by the creation of enormous quantities of new money through offering debt.

    Third, it is very obvious that the banks have been unable to regulate themselves, whether that be with regards to capital adequacy ratios, the payment of appropriate incentives, the appraisal of lending, money laundering (to which many of their tax haven subsidiaries appear to have been oblivious) or any other issue.

  33. Damocles
    October 21st, 2008 at 12:58 | #33

    “By the way how do you know the carry trade in the Aus$ dollar has been unwound if we do not know the extent of it?”

    Simple – you look at the daily volumes in the foreign exchange market and the volume and price of commercial paper.

    The carry trade involved borrowing in Tokyo for 30-90 days and investing that money in Australian short term debt.

    But that’s obviously less fun than constructing conspiracy theories about the “plutocrats”.

  34. Ernestine Gross
    October 21st, 2008 at 13:02 | #34

    Re 26. Smiley, you are spot on – debt brings forward in time the usage of natural resources. Roughly speaking, the more debt the faster the natural resource utilisation (depletion) and the greater environmental negative externalities. ‘Economic growth’, measured in GDP is important to economies with debt (as distinct from borrowing and lending of monetary savings by contemporary individuals).

  35. Joseph Clark
    October 21st, 2008 at 13:18 | #35

    Ernestine,
    I don’t like to quibble with your economics, and I welcome any argument against debt financing, but whether we borrow and deplete our resources now or wait to deplete them later has no clear effect on the level of externalities.

  36. sdfc
    October 21st, 2008 at 13:28 | #36

    Damocles, the relative movements in the currencies is also a dead give away. On days when sentiment has changed dramatically, the Aussie Yen cross has tended to have bigger swings than the Aussie / US and the other AUD cross rates.

  37. smiths
    October 21st, 2008 at 14:00 | #37

    yeah, those ridiculous conspiracies – ha ha

    there’s no plutocrats,
    its just kind of an accident that the entire bailout involves a transfer of wealth upwards and the decimation of the middle classes across most developed countries

    coincidences and accidents over and over,
    always with the same result

  38. Joseph Clark
    October 21st, 2008 at 14:34 | #38

    smiths,
    Be careful what you say. Damocles might be one of “them”.

  39. Michael of Summer Hill
    October 21st, 2008 at 14:56 | #39

    John, according to Glenn Stevens, “…the root issues of the global financial crisis were starting to come into place” which more or less confirms Turnbull’s stance that the PM may have over-hyped the financial crisis just a tad.

  40. smiths
    October 21st, 2008 at 15:11 | #40

    i spose you have to get your giggles where you can joseph,

    to me it seems funnier and more fantastical that people dont plan together secretly to commit illegal or wrongful acts,

    i do wonder why we have laws and police, or is that only for the lower classes,
    once you put a suit on and join a government some magic takes hold where even though the money and the stakes are far far greater, people act openly and decently,

    yes lloyd blankfein and hank paulson are both connected to goldman, but at the secret meeting to work out AIG it never crossed their minds to act in anything but the public interest – ha ha

    how naive i have been

  41. October 21st, 2008 at 15:46 | #41

    Ah, yes. It is all a conspiracy. Do you also know who the guy on the grassy knoll was or was it actually a space alien?
    Perhaps it was Damocles with his sword in the book depository.

  42. smiths
    October 21st, 2008 at 16:03 | #42

    why not actually address the specific case i included andrew instead of chiming in like an 11 year old in the playground,

    “Gretchen Morgenson in the New York Times reports that Goldman and no other Wall Street firm was involved in the AIG rescue talks and an AIG failure would have created a hole as big as $20 billion in Goldman’s balance sheet.”

    was this, or was this not a conspiracy?

    simple question

  43. Joseph Clark
    October 21st, 2008 at 16:19 | #43

    smiths,
    Paulson has no financial interest in Goldman Sachs. His interests include bird watching and advocating action of global warming. I can understand the delight of conspiracy theories but it takes the fun out if the conspiracy isn’t even remotely plausible.

  44. Damocles
    October 21st, 2008 at 16:37 | #44

    “its just kind of an accident that the entire bailout involves a transfer of wealth upwards and the decimation of the middle classes across most developed countries”

    I’d ask for proof but you really don’t do “proof”, do you?

    I’m sure the shareholders of AIG who lost around 90% of the value of their shares in the bail-out are laughing all the way to the bank.

  45. October 21st, 2008 at 16:55 | #45

    How about the shareholders of Bear Sterns? No – they missed out as well. Lehmann’s – wiped out. Northern Rock? Abbey National? WaMu? Wachovia?
    Most of the senior executives also lost their jobs as well as their bonuses (mostly paid in shares).
    OK, who made all this profit, then?

  46. Damocles
    October 21st, 2008 at 16:58 | #46

    Andrew – the international Jew Bankers, obviously.

  47. MontyA
    October 21st, 2008 at 17:03 | #47

    The financial systems and laws of our society should reflect the society we want to be. In the past 30 years our politicians have sold themselves to the plutocrats and have changed the laws and removed oversight that has enabled the very rich to become even richer. The US produces good statistics that clearly show this happening while the bottom earner’s share of the wealth actually is negative.

    If you dispute this Damocles do a google search. If you want an account of some of the suffering being inflicted in this crisis go to -
    http://www.motherjones.com/commentary/tomdispatch/2008/10/going-to-extremes-2.html

    The mug AIG shareholders may not be happy but you can bet your boots AIG’s CEO, other execs and traders are enjoying floating around on their golden parachutes with the bank accounts bulging from the bonuses for they received for enriching the shareholders.

  48. Damocles
    October 21st, 2008 at 17:30 | #48

    Monty, it is possible to recognise that income distribution has gotten worse in the US over the last several decades and believe that government should do something about it – Obama’s tax and health policies represent a pretty decent first step and not buy into conspiracy theories about the bail-out or swallow mindless piffle like Mongombo’s ramblings.

    The bail-out is a necessary response to the criminally irresponsible taxation and spending policies of the Bush administration.

    The consequences of failing to act would be far worse.

  49. smiths
    October 21st, 2008 at 17:33 | #49

    first to joseph you are wrong,

    “He does have potential personal conflicts of interest – not only regarding his associates, and his next finance position, but also the fact that part of his wealth almost certainly is in a blind trust that includes large holdings in Goldman Sachs and other funds,” said Robert Shapiro, president of Sonecon and the undersecretary of commerce in the Clinton White House.

    and second damocles, it is the most pathetic retort possible to smear a person implicitly when they discuss banking crimes, by bringing in ‘international jewish bankers’,
    it grossly muddies the discussion, it is contemptible and i find it personally offensive

    if it were my blog, i’d ban you for it no questions asked

  50. smiths
    October 21st, 2008 at 17:36 | #50

    The consequences of failing to act would be far worse.

    and if we dont get sadam the smoking gun will be a mushroom cloud over a US city

    the US corporate media want their talking points back damocles

  51. Damocles
    October 21st, 2008 at 17:44 | #51

    “and second damocles, it is the most pathetic retort possible to smear a person implicitly when they discuss banking crimes, by bringing in ‘international jewish bankers’,
    it grossly muddies the discussion, it is contemptible and i find it personally offensive”

    1. Stop accusing anyone who disagrees with boyu of being a. a moron and b. a tool of the international capitalist conspiracy and your complaints will have more credibility.

    2. I wasn’t referring to “international banking crimes”, I was referring to conspiracy theories. Feel free to substitute a reference to the Pope or the Illuminatai if it makes you feel better.

    3. If this were you blog, I can assure you I wouldn’t waste my time commenting in the first place.

  52. Damocles
    October 21st, 2008 at 17:56 | #52

    Incidentally Smiths since you’re happily applauding the views of so-called Austrian School economists can I take it you support their policy prescriptions such as;

    abolition of progressive income tax;
    repeal of most environmental protection legislation;
    repeal of all minimum wage and industrial safety laws;
    repeal of all product safety laws;
    repeal of bankrupcy laws (they’re an unfair state interference in private contracts fare better to go back ot the days of debtor’s prisons;
    abolition of essentially all forms of income support including pensions and unemployment benefits.

    So who’s the right-winger here again?

  53. smiths
    October 21st, 2008 at 17:56 | #53

    compounding inaccuracy

    i never accused anyone of being a moron, or even close,
    and i never accused anyone of being a tool of the international capitalist conspiracy,
    and we were in fact talking about the bailout of the banks, not any of the rubbish you mentioned

    as for credibility, 98% of the economists, pundits and media just got everything about as wrong as its possible to get it with regard to the world economy,

    credibility with them, or you, or andrew or joseph i do not seek,

    i merely read the unthinking crap that gets written and seek to add a counterpoint or two

  54. October 21st, 2008 at 18:23 | #54

    smiths,
    If you start the smearing you can hardly complain when it comes back to you.
    Instead of trying to smear Paulson, how about answering a point or two? It might be an interesting diversion to address a substantive issue.

  55. melanie
    October 21st, 2008 at 19:14 | #55

    http://iftheworldcouldvote.com/

    Maybe by the time you vote the Macedonians will have joined the rest of the world!

  56. smiths
    October 21st, 2008 at 19:48 | #56

    damocles said
    But that’s obviously less fun than constructing conspiracy theories about the “plutocrats�.

    i replied
    yeah, those ridiculous conspiracies – ha ha

    coincidences and accidents over and over,
    always with the same result

    joseph said
    Be careful what you say. Damocles might be one of “them�.

    and you andrew said
    Ah, yes. It is all a conspiracy. Do you also know who the guy on the grassy knoll was or was it actually a space alien?
    Perhaps it was Damocles with his sword in the book depository.

    i was still talking about the bankers and the bailout,
    the smearing of me was done by joseph and then you with your condescending stuff about the grassy knoll and space aliens

    i think the high moral ground you are looking for will elude you

  57. jquiggin
    October 21st, 2008 at 20:33 | #57

    I’m too busy right now to trace the rights and wrongs here, but can everyone please knock it off.

  58. smiths
    October 21st, 2008 at 21:42 | #58

    fair enough,

    sorry for my part in it

    i’ll try and frame my arguments with less of a of conspiratorial flavor

  59. MontyA
    October 22nd, 2008 at 00:27 | #59

    Damocles, I do not remember raising any conspiracy theories about the bailout. I gave a link to a Mogambu Guru column because it raised the problems of the carry trade over 12 months ago, and because I enjoyed his satirical humour. I passed no comment on his views.I have never been in favour of the mindless free market knows best, low tax, small government policies introduced by Thatcher/Reagan (and I find poetic justice in that they both went on to full blown develop Alzheimer’s). Bush’s policies could have been developed by someone with severe Korsakoff’s syndrome as they give the appearance of being confabulated by someone who lacks insight, has meagre thought content and a very short memory span. I would not go so far as to call his contradictory taxing and spending policies criminal, just insane. I would reserve the criminal bit for his wars. The world response to the bailout is far from thought through. It is hard for all those pollies and economic gurus have to reverse their public adulation of the holy trinity, the market, private enterprise and the perpetual growth of capitalism. The Great Bailout looks to me to be the old political knee jerk response – on a much larger scale and to the drum like beat of distant money printing presses just throw tanker loads of cash about to distract the hoi polloi, while casting about for scapegoats. It seems to be modelled on  Howard’s response to “The Little Children are Sacred” report. Lots of money and experts ver increasing numbers of refugees are fleeing the intervention to set up their camps in the towns from Darwin to the Alice and Mt Isa. If the bailout fails, and that remains a dreadful possibility then seeking low paid casual work in a dysfunctional community, somewhere ‘East of Eden’, may become the new black. 

  60. MontyA
    October 22nd, 2008 at 00:35 | #60

    &%^$
    The computer goblin removed the paragraphs and sent the above before spell check and proof read. In the fifth line from the bottom replace ‘ver’ with ‘while ever’

  61. Joseph Clark
    October 22nd, 2008 at 00:35 | #61

    Monty,
    All politics aside, it’s pretty disgusting to say that Alzheimer’s is any kind of justice.

  62. MontyA
    October 22nd, 2008 at 08:07 | #62

    Joseph. I know, I wouldn’t wish it on them.

    In my nihilistic view of the world and given the misery their policies inflicted on the poorest and weakest members of society I still see it as poetic justice.

  63. smiths
    October 22nd, 2008 at 10:38 | #63

    hey monty theres a great video at

    theautomaticearth.blogspot.com

    about thatcher and the civil unrest with a great song i’d never heard before by robert wyatt – shipbuilding

  64. October 27th, 2008 at 14:32 | #64

    The Atheists hit back and I’m loving it.

    http://www.justgiving.com/atheistbus

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