USA was 3 hrs away from Economic, Political Collapse... last Sept. by pizmobeach

I believe in solving problems, not sharing them.

Yes, the monetary system was in panic mode. And I don't mean that fluttery-feeling-in-your-tummy-before-your-first-prom kind kind of panic. I mean the "run on the bank" kind of panic, when traders (or their software) start crowding the teller windows to get-their-money-out-first.

I don't think people realized how very close we were to "the end of the world as we know it". And I don't think that people realize NOW how very close we are to an economic death spiral (as opposed to a financial one). Economists who predicted this fiasco- Roubini, Krugman- are pointing and gibbering at what they see coming down the pike. Meanwhile, Republicans fiddle that same old tune Money for the Rich while Rome burns.

If I believed in hell I would wish for them to rot in it.

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It's the end of the world as we know it, and I feel fine.

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Wednesday, February 11, 2009 11:04 AM

I have a vote and I'm not afraid to use it!

I knew about it. In my small way, I was part of it - taking my money out of the banks. I was going to get mine first, before others caught on - just in case.

And yes, we're still on the tracks, and the train is still coming.

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Wednesday, February 11, 2009 11:15 AM

PIZMOBEACH

... fully loaded, safety off...

Quote:
Originally posted by rue:
I knew about it. In my small way, I was part of it - taking my money out of the banks. I was going to get mine first, before others caught on - just in case.

Well thx for that... that was probably the last 50 bucks that tipped the scales.

And now that you're flush and it's in your hands and not the bank's, you may want to consider spending some on a way to protect it... like a lightweight, auto load shotgun. I'm sure there are plenty on the boards that could help you pick one out.

Fwiw - and this is more of a question for O2TB and others of his ilk, but I don't think paper would be worth much in the event of the scenario mentioned above.

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Wednesday, February 11, 2009 11:18 AM

JAYNEZTOWN

Quote:
Originally posted by pizmobeach:

The Treasury opened up its window to help. They pumped $105 billion into the system and quickly realized that they could not stem the tide.

The Fed is a disaster, not only have they blown 700 Billion, campaigned to get Obama's 800 Billion stimulus. they now admit to blowing another $105 Billion which basically had no effect on the system whatsoever

I laugh at your economic apocalypse
http://lolfed.com/

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Wednesday, February 11, 2009 11:24 AM

I have a vote and I'm not afraid to use it!

"... I don't think paper would be worth much in the event of the scenario mentioned above... "

SignyM posted a very long discussion on which way an economic collapse can go - and it's either inflationary or deflationary. For various reasons that made a lot of sense to me, she predicted a deflationary scenario. In that case, you'd really want to have cash, b/c cash will be far more valuable than goods - even gold. The downside to having goods in a deflationary scenario is that you'd really like to have that cash you spent to buy those goods, rather than those goods.

As for the money I pulled out of the bank - it's in a ahem SAFE place not at home.

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Wednesday, February 11, 2009 11:29 AM

I believe in solving problems, not sharing them.

Quote:
The Fed is a disaster, not only have they blown 700 Billion, campaigned to get Obama's 800 Billion stimulus. they now admit to blowing another $105 Billion which basically had no effect on the system whatsoever

It kept the system from collpasing. It's not the Fed or the gummint which is the disaster, it's the system. The Fed and the gummint are just trying to keep it alive. The system, BTW, is capitalism.

Personally, I think we should just let it go down the toilet since it's obviously not self-sustaining.

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It's the end of the world as we know it, and I feel fine.

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Wednesday, February 11, 2009 11:32 AM

http://youtu.be/VUnGTXRxGHg

And replacce it with what, sweetheart?

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Wednesday, February 11, 2009 11:33 AM

I believe in solving problems, not sharing them.

Whatever develops.

There are peeps here who think that gummint is the root of all evil. So if capitalism blows itself up every several decades and the gummint isn't the answer either then who the frak cares what comes next?

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It's the end of the world as we know it, and I feel fine.

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Wednesday, February 11, 2009 11:36 AM

I have a vote and I'm not afraid to use it!

Many 'socialist' economies seem to be doing relatively well, even considering the global economy has been pulled down by US-generated chaos.

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Wednesday, February 11, 2009 11:37 AM

http://youtu.be/VUnGTXRxGHg

As in...you have no idea.

Capitalism does work. The problem is that too many people have the power now to affect too many OTHER people.

The basic idea behidn capitalism is this (and it SHOULD sound familiar)...I do the work, then I get paid for the work. Period.

BUT, the government, and the coroporations now control so much of the flow of the income that it more like....I do the work, and I hope youll pay me enough to live on and maybe even enough to afford to breed.

In other words, they are trying to turn the system in a socialistic set. Where those in power control the resources.

I never did get why ANYONE would think Socialism is a viable alternative...

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Wednesday, February 11, 2009 11:38 AM

I believe in solving problems, not sharing them.

Yeah but that's..... *GASP!!*.... socialism! I mean, god forbid we as a people get together and try to do something for each other!

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Wednesday, February 11, 2009 11:40 AM

I have a vote and I'm not afraid to use it!

Wulf -

"I do the work, then I get paid for the work. Period."

That's not capitalsim. Capitalism is: "I own the factory so you make the goods while I get the profits." DUH.

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Wednesday, February 11, 2009 11:41 AM

http://youtu.be/VUnGTXRxGHg

Except you know better. Thats NOT how it would work out.

It would be the state controlling the food, the water, the living conditions ect.

Ever been to a housing project? Would you want to live there? Thats socialism. Thats where it leads.

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Wednesday, February 11, 2009 11:41 AM

I believe in solving problems, not sharing them.

Quote:
The basic idea behidn capitalism is this (and it SHOULD sound familiar)...I do the work, then I get paid for the work. Period.

That is NOT the basic idea behind capitalism, silly! The basic idea behind captalism is... YOU do the work and I get paid.

Hey, I hate arguing with peeps who don't know what they're talking about, so look it up.

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Wednesday, February 11, 2009 11:42 AM

Quote:
Originally posted by Wulfenstar:
The basic idea behidn capitalism is this (and it SHOULD sound familiar)...I do the work, then I get paid for the work. Period.

That's not the basic concept of capitalism.

And:

Quote:
BUT, the government, and the coroporations now control so much of the flow of the income that it more like....I do the work, and I hope youll pay me enough to live on and maybe even enough to afford to breed.

In other words, they are trying to turn the system in a socialistic set. Where those in power control the resources.

That's not Socialism.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Wednesday, February 11, 2009 11:42 AM

I have a vote and I'm not afraid to use it!

Ever been to Sweden ? Denmark ? Canada ? Would you want to live there? Thats socialism. That's where it leads.

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Wednesday, February 11, 2009 11:43 AM

http://youtu.be/VUnGTXRxGHg

Canada sucks...and the only good thing about Sweden are the women.

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Wednesday, February 11, 2009 11:43 AM

Quote:
Originally posted by Wulfenstar:
Except you know better. Thats NOT how it would work out.

It would be the state controlling the food, the water, the living conditions ect.

Nope, that would be Communism. Communism != Socialism. Good effort though, most people are ignorant of the differences for some reason.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Wednesday, February 11, 2009 11:50 AM

I believe in solving problems, not sharing them.

It's like trying to teach a dog to read.

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Wednesday, February 11, 2009 11:51 AM

I have a vote and I'm not afraid to use it!

"Canada sucks ..."

Straight up - you've been there for more than a week ? 'Cause I think you're just spouting stuff you've heard and of which don't really know anything about.

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Wednesday, February 11, 2009 1:34 PM

http://youtu.be/VUnGTXRxGHg

They tried Socialism on a National scale years ago.

In Germany.

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Wednesday, February 11, 2009 1:42 PM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)

Quote:

Ever been to a housing project? Would you want to live there? Thats socialism. Thats where it leads.

Ever been to a newly-remodeled $1.2 million dollar Wall Street office? Would you want to work there? That's socialism. That's where it leads.

Mike

"It is complete now; the hands of time are neatly tied."

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Wednesday, February 11, 2009 1:46 PM

Quote:
Originally posted by Wulfenstar:
They tried Socialism on a National scale years ago.

In Germany.

Nope, that was totalitarian fascism. They called themselves socialists, but that was to get the workers on board. They were in fact rather right wing, which is possibly why so many American business leaders were pro Nazi.

You see, sometimes people say things about themselves that aren't true. For instance the Democratic Republic of Congo, which is neither Democratic nor a Republic. I wouldn't worry about it, lost of people get confused about stuff like that.

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Wednesday, February 11, 2009 1:56 PM

I have a vote and I'm not afraid to use it!

"They tried Socialism on a National scale years ago."

I take by your evasion of the question your answer is no - you've never been to Canada, Denmark, Sweden or indeed ANY 'socialist' country. In other words, you are, once again, posting out of ignorance.

And all b/c you can't some up with one good and accurate thing to say about capitalism.

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Wednesday, February 11, 2009 3:00 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.

Quote:
you've never been to Canada, Denmark, Sweden or indeed ANY 'socialist' country

I thought that socialism was essentially collective ownership of the means of production. In all the countries you've listed industry is predominantly in private control...

Can you explain your definition of socialism?

Heads should roll

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Wednesday, February 11, 2009 3:13 PM

I have a vote and I'm not afraid to use it!

Which is why I put 'socialism' in quotes - since all of the naysayers bray that government healthcare is 'socialism', public transport is 'socialism', public day care and schooling is 'socialism', government housing assistance is 'socialism', minimum standard of living is 'socialism', parental leave is 'socialism', unions are 'socialism' ... and so on. HEE HAAWwww ...

But if you want to quibble, I'll use a different word. What do you suggest ?

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Wednesday, February 11, 2009 3:21 PM

KWICKO

Quote:
I'll use a different word. What do you suggest ?

Non-collapsing?

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Wednesday, February 11, 2009 4:07 PM

PIZMOBEACH

... fully loaded, safety off...

Quote:
Originally posted by rue:
As for the money I pulled out of the bank - it's in a ahem SAFE place not at home.

I wanted to stash some cash too, but cannot think of a safe place. So let me discuss my options on the internet...

1. Withdraw $x and there's a paper trail and any evil chucklehead at the bank can see it. And they have my address and it's gone..

2. Coffee can in the back yard - neighbor sees and it's gone.

3. Basement and I have to worry about it + house burns down and it's gone.

4. Safe deposit box in a bank and they say "don't store cash here - we won't insure." I suspect that's because they want you to just put it in your savings account so they can lose it, er, invest it, but still, uninsured and it's gone.

I still don't have a good place, just rolling the dice and I don't like that either. It feels like a bad movie waiting to happen.

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Wednesday, February 11, 2009 4:11 PM

KPO

Sometimes you own the libs. Sometimes, the libs own you.

Quote:
Which is why I put 'socialism' in quotes - since all of the naysayers bray that government healthcare is 'socialism', public transport is 'socialism', public day care and schooling is 'socialism', government housing assistance is 'socialism', minimum standard of living is 'socialism', parental leave is 'socialism', unions are 'socialism' ... and so on. HEE HAAWwww ...

But if you want to quibble, I'll use a different word. What do you suggest ?

Right, I thought the inverted commas were there for a sneaky reason :-p

Answering your Q, I've heard the term 'soft socialism' used to describe european countries before, which I think is more pardonable since it makes a distinction.

Here is my economic understanding (tho I'm no expert): I imagine the countries you listed as running on capitalist engines, while being weighed down by quite hefty social welfare programmes.

So I don't see how any of their economic success could be credited to socialism, since the only aspect of these countries that is (vaguely) socialistic is an economic burden.

Are you guys all still waiting for an exemplary, purely socialist, model state that you can hail as a success? Because a lot of times people have got hold of countries and tried to create one... I'd be interested to know how you account for quite a long catalogue of failures.

Heads should roll

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Wednesday, February 11, 2009 4:14 PM

I have a vote and I'm not afraid to use it!

Pizmo

If you are looking for non-obvious places in the home may I suggest the compressor compartment in your refrigerator ? Or the gap behind the kickplate under your kitchen counters ? My stuff's not at home, but if it was, these seem like good places.

Hey Frem - what do you think ?

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Wednesday, February 11, 2009 4:20 PM

I have a vote and I'm not afraid to use it!

kpo

The 'weight' that you seem to think is 'soft socialism' is actually the fuel that keeps capitalism running.

Under capitalism, money collects in very few hands, leading to an inability to spend on the part of nearly all, and a collapse of the economy. Unless you redistribute wealth in order to preserve the ability to spend, depressions are part and parcel of a capitalist economy. (It's like entropy - you can't argue against the ultimate endpoint.)

I know for a fact you cannot have a sustainable purely capitalist economy. I think it MIGHT be possible on purely theoretical grounds to have a purely socialist one.

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Wednesday, February 11, 2009 4:44 PM

I believe in solving problems, not sharing them.

Quote:
Here is my economic understanding (tho I'm no expert): I imagine the countries you listed as running on capitalist engines, while being weighed down by quite hefty social welfare programmes.

As opposed to exploding in a death-spiral every several decades? That's due to the reason that Rue has outlined. But if that explanation didn't make sense to you I'll try tackling it from a different angle and see if it's any clearer. Suffice it to say that major depressions (booms and busts) are part and parcel of capitalism. AND, to make it even juicier, there is no theoretical mechanism for a major economic depression to "cure itself".

Redistributing wealth keeps capitalism from falling into that death-spiral. If a captialist bust were to go unchecked and unabated by government, we prolly would wind up with a revolution.

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It's the end of the world as we know it, and I feel fine.

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Wednesday, February 11, 2009 4:49 PM

DREAMTROVE

I'm not reading this thread but

Quote:

Quote:
you've never been to Canada, Denmark, Sweden or indeed ANY 'socialist' country

I thought that socialism was essentially collective ownership of the means of production. In all the countries you've listed industry is predominantly in private control...

Can you explain your definition of socialism?

KPO is right, there's nothing particularly socialist about any of these countries. I mean, most of the world has state health, including britain which has never been accused of being "socialist." The US has state education, and yet none of y'all is calling it socialist. Actually, the US economy is around 30% govt. controlled at the moment. That's significantly higher than even some socialist/capitalist hybrid economies.

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Wednesday, February 11, 2009 5:43 PM

KWICKO

Quote:
The US has state education, and yet none of y'all is calling it socialist.

Actually, I've tried to bring that up several times in response to people calling out "the evils of socialism". I brought up education, roads, police, fire departments, military...

Just imagine if you called the fire department, and they showed up demanding credit references and a payment plan before they even started putting the fire out. How much fire department help can YOU afford? You call the police, and they say a domestic disturbance complaint will set you back, say $2500. Still want them to come by? But they'll probably quiet down your neighbors for a couple hundred, right?

We ARE in a socialistic country; we just don't like to admit it.

Mike

"It is complete now; the hands of time are neatly tied."

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Wednesday, February 11, 2009 5:47 PM

I have a vote and I'm not afraid to use it!

There are a few posters here who object to ANY government agency, program or service. They do think it's socialist, and they think that private enterprise can do all of it, and better.

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Wednesday, February 11, 2009 6:06 PM

I have a vote and I'm not afraid to use it!

Well, I seem to have killed a few threads. My work here is done.

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Wednesday, February 11, 2009 6:16 PM

I have a vote and I'm not afraid to use it!

Or maybe this might be of interest to some:

It Is Time to Nationalize Insolvent Banking Systems

Nouriel Roubini | Feb 10, 2009

A year ago I predicted that losses by US financial institutions would be at least $1 trillion and possibly as high as $2 trillion. At that time the consensus was such estimates were grossly exaggerated as the naïve optimists had in mind about $200 billion of expected subprime mortgage losses. But, as I pointed out then, losses would rapidly mount well beyond subprime mortgages as the US and global economy would spin into a most severe financial crisis and an ugly recession. I then argued that we would then see rising losses on subprime, near prime and prime mortgages; commercial real estate; credit cards, auto loans, student loans; industrial and commercial loans; corporate bonds; sovereign bonds and state and local government bonds; and massive losses on all of the assets (CDOs, CLOs, ABS, and the entire alphabet of credit derivatives) that had securitized such loans. By now writedowns by US banks have already passed the $1 trillion mark (my floor estimate of losses) and now institutions such as the IMF and Goldman Sachs predict losses of over $2 trillion (close to my original expected ceiling for such losses).

But if you think that $2 trillion is already huge, our latest estimates RGE Monitor (available in a paper for our clients) suggest that total losses on loans made by U.S. financial firms and the fall in the market value of the assets they are holding will be at their peak about $3.6 trillion. The U.S. banks and broker dealers are exposed to half of this figure, or $1.8 trillion; the rest is borne by other financial institutions in the US and abroad. The capital backing the banks assets was last fall only $1.4 trillion, leaving the U.S. banking system some $400 billion in the hole, or close to zero even after the government and private sector recapitalization of such banks. Thus, another $1.4 trillion will be needed to bring back the capital of banks to the level they had before the crisis; and such massive additional recapitalization is needed to resolve the credit crunch and restore lending to the private sector. So these figures suggests that the US banking system is effectively insolvent in the aggregate; most of the UK banking system looks insolvent too; and many other banks in continental Europe are also insolvent.

There are four basic approaches to a clean-up of a banking system that is facing a systemic crisis:

1. recapitalization together with the purchase by a government “bad bank” of the toxic assets;

2. recapitalization together with government guarantees – after a first loss by the banks – of the toxic assets;

3. private purchase of toxic assets with a government guarantee and/or – semi-equivalently - provision of public capital to set up a public-private bad bank where private investors participate in the purchase of such assets (something similar to the US government plan presented by Tim Geithner today for a Public-Private Investment Fund);

4. outright government takeover (call it nationalization or “receivership" if you don’t like the dirty N-word) of insolvent banks to be cleaned after takeover and then resold to the private sector.

Of the four options the first three have serious flaws: in the bad bank model the government may overpay for the bad assets – at a high cost for the taxpayer - as the true value of them is uncertain; and if it does not overpay for the assets many banks are bust as the mark-to-market haircut they need to recognize is too large for them to bear.

Even in the guarantee (after first loss) model there are massive valuation problems and there can be very expensive risk for the tax-payer (an excessive guarantee that is not properly priced by the first loss of the bank, the fees paid and the value of equity that that the government receives for the guarantee) as the true value of the assets is as uncertain as in the purchase of bas assets model. The shady guarantee deals recently done with Citi and Bank of America were even less transparent than an outright government purchase of bad asset as the bad asset purchase model at least has the advantage of transparency of the price paid for toxic assets.

In the bad bank model the government has the additional problem of having to manage all the bad assets it purchased, something that the government does not have much expertise in. At least in the guarantee model the assets stay with the banks and the banks know better how to manage and have a greater incentive than the government to eventually work out such bad assets.

The very cumbersome U.S. Treasury proposal to dispose of toxic assets - that was presented by Treasury Secretary Tim Geithner today - can be best understood (subject to the large fog of uncertainty about its many details) as combining taking the toxic asset off the banks’ balance sheet with providing government guarantees to those private investors that will purchase them (and/or public capital provision to fund a public-private bad bank that would purchase such assets). But this plan is so non-transparent and complicated that it received a thumbs down by the markets as soon as it was announced today as all major US equity indices went sharply down.

The main problem with the Treasury plan – that in some ways it may resemble the deal between Merrill Lynch (ML) and Lone Star (LS) - is the following: Merrill sold its CDOs to Lone Star for 22 cents on the dollar; and even in that case ML remained on the hook in case the value of the assets were to fall below 22 as LS paid initially only 11 cents (i.e. ML guaranteed the LS downside risk). But today a bank like Citi has similar CDOs that, until recently, were still sitting on its books, at a deluded and fake value of 60 cents. So, since the government knows that no one in the private sector would buy those most toxic assets at 60 cents it may have to promise a guarantee (formally or informally by putting capital into a public-private bad bank that will receive extra lending from the private sector) to limit the downside risk to private investors from purchasing such assets. But that implicit or explicit guarantee would be hugely expensive if you need to induce private folks to buy at 60 what is worth only 20 or even 11. So the new Treasury plan may end up being again a royal rip-off of the taxpayer if the guarantee is excessive given the true value of the underlying assets. And if instead the implicit or explicit guarantee is not excessive (if the public-private bank truly tries to discover the value of such assets as in the formal Treasury proposal) the banks need to sell the toxic assets at their true underlying value that implies massive writedowns that will uncover the insolvency of such banks. I.e. the emperor has no clothes and a true valuation of the bad assets – without a huge taxpayers’ bailout of the shareholders and unsecured creditors of banks – implies that banks are bankrupt and should be taken over by the government.

Thus all the schemes that have been so far proposed to deal with the toxic assets of the banks may be a big fudge that either does not work or works only if the government bails out shareholders and unsecured creditors of the banks.

Thus, paradoxically nationalization may be a more market friendly solution of a banking crisis: it creates the biggest hit for common and preferred shareholders of clearly insolvent institutions and – most certainly – even the unsecured creditors in case the bank insolvency hole is too large; it provides a fair upside to the tax-payer. It can also resolve the problem of avoiding having the government manage the bad assets: if you sell back all of the assets and deposits of the bank to new private shareholders after a clean-up of the bank together with a partial government guarantee of the bad assets (as it was done in the resolution of the Indy Mac bank failure) you avoid having the government managing the bad assets. Alternatively, if the bad assets are kept by the government after a takeover of the banks and only the good ones are sold back in a re-privatization scheme, the government could outsource the job of managing and working out such assets to private asset managers if it does not want to create its own RTC bank to work out such bad assets.

Nationalization also resolves the too-big-too-fail problem of banks that are systemically important and that thus need to be rescued by the government at a high cost to the taxpayer. This too-big-to-fail problem has now become an even-bigger-to-fail problem as the current approach has lead weak banks to take over even weaker banks. Merging two zombie banks is like have two drunks trying to help each other to stand up. The JPMorgan takeover of insolvent Bear Stearns and WaMu; the Bank of America takeover of insolvent Countrywide and Merrill Lynch; and the Wells Fargo takeover of insolvent Wachovia show that the too-big-to-fail monster has become even bigger. In the Wachovia case you had two wounded institutions (Citi and Wells Fargo) bidding for a zombie insolvent one. Why? Because they both knew that becoming even bigger-to-fail was the right strategy to extract an even larger bailout from the government. Instead, with nationalization approach the government can break-up these financial supermarket monstrosities into smaller pieces to be sold to private investors as smaller good banks.

This “nationalization” approach was the one successfully taken by Sweden while the current US and UK approach may end up looking like the zombie banks of Japan that were never properly restructured and ended up perpetuating the credit crunch and credit freeze. Japan ended up having a decade long near-depression because of its failure to clean up the banks and the bad debts. The US, the UK and other economies risk a similar near depression and stag-deflation (multi-year recession and price deflation) if they fail to appropriately tackle this most severe banking crisis.

So why is the US government temporizing and avoiding doing the right thing, i.e. take over the insolvent banks? There are two reasons. First, there is still some small hope and a small probability that the economy will recover sooner than expected, that expected credit losses will be smaller than expected and that the current approach of recapping the banks and somehow working out the bad assets will work in due time. Second, taking over the banks – call it nationalization or, in a more politically correct way, “receivership” – is a radical action that requires most banks be clearly beyond pale and insolvent to be undertaken. Today Citi and Bank of America clearly look like near-insolvent and ready to be taken over but JPMorgan and Wells Fargo do not yet. But with the sharp rise in delinquencies and charge-off rates that we are experiencing now on mortgages, commercial real estate and consumer credit in a matter of six to twelve months even JPMorgan and Wells will likely look as near-insolvent (as suggested by Chris Whalen, one of the leading independent analysts of the banking system).

Thus, if the government were to take over only Citi and Bank of America today (and wipe out common and preferred shareholders and also force unsecured creditors to take a haircut) a panic may ensue for other banks and the Lehman fallout that resulted from having unsecured creditors taking losses on their bonds will be repeated again. Instead if, as likely, the current fudging strategy - of temporizing and hoping that things will improve for the economy and the banks - does not work and in 6-12 months most banks (the major four and the a good part of the remaining regional banks) all look clearly insolvent you can then take them all over, wipe out common shareholders and preferred shareholders and even force unsecured creditors to accept losses (in the form of a conversion of debt into equity and/or haircut on the face value of their bond claims) as the losses will be so large that not treating such unsecured creditors would be fiscally too expensive.

So, the current strategy – Plan A - may not work and the Plan B (or better Plan N for nationalization) may end up the way to go later this year. Wasting another 6-12 months to do the right thing may be a mistake but the political constrains facing the new administration – and the remaining small probability that the current strategy may by some miracle or luck work – suggest that Plan A should be first exhausted before there is a move to Plan N. Wasting another 6-12 months may risk turning a U-shaped recession into an L-shaped near depression but currently Plan N is not yet politically feasible.

But with the government forcing Citi to shed some of its units/assets and the government starting stress tests to figure out which institutions are so massively undercapitalized that they need to be taken over by the FDIC the administration is putting in place the steps for the eventual and necessary takeover of the insolvent banks.

You can expect a similar path and an eventual government takeover of most financial institutions in other countries – such as the UK – where many banks are effectively insolvent.

So while Plan A is now underway today’s very negative market response to this Treasury plan suggest that it will not fly. Markets were expecting a more clear plan but also a plan that would bail out shareholders and creditors of insolvent banks. Unfortunately that is not politically and fiscally feasible. It is thus time to start to think and plan ahead for for Plan N (“nationalization” of insolvent banks).

***************************************************************

Silence is consent.

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Wednesday, February 11, 2009 6:54 PM

SERGEANTX

Quote:
Originally posted by dreamtrove:
...The US has state education, and yet none of y'all is calling it socialist. Actually, the US economy is around 30% govt.

None of us?

Quote:
Spitefully posted by rue:
... all of the naysayers bray that government healthcare is 'socialism', public transport is 'socialism', public day care and schooling is 'socialism', government housing assistance is 'socialism', minimum standard of living is 'socialism', parental leave is 'socialism', unions are 'socialism' ... and so on. HEE HAAWwww ...

All of that stuff IS socialistic and represents a move away from free market ideals. You may think they are worthwhile compromises (and we might even agree on a few), but it doesn't serve the purpose of honest debate to redefine words willy nilly. Have the courage of your convictions and defend your positions honestly.

But it is good to see you're still doing well with the jackass impersonation.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Wednesday, February 11, 2009 8:33 PM

I believe in solving problems, not sharing them.

Quote:
But it is good to see you're still doing well with the jackass impersonation.

SargeX, YOU seem to be the jackass here. Rue made it very plain (and I tend to agree) that Repubs and other right-wingers tend to call ANY government social programs "socialist". She asked for a substitute word to replace the term THEY use (socialism) with one that might be less confusing and more accurate.

I didn't hear you come up with one, did I?

Eh, no?

Then what have you added to the discussion?

But thanks for the ad hominem. You can always be counted on to provide one, whether or not you have anything real to say.

---------------------------------
It's the end of the world as we know it, and I feel fine.

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Wednesday, February 11, 2009 9:35 PM

SHINYGOODGUY

Capitalism v. Socialism

Capitalism - is an economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled. In capitalism, the land, labor, and capital are owned, operated, and traded by private individuals or corporations, and investments, distribution, income, production, pricing and supply of goods, commodities and services are primarily determined by voluntary private decision in a market economy largely free of government intervention.

I've heard some argue that we should be a strictly capitalist society and have no "social" institutions such as schools, fire departments, police and public roads. Well I think back to the part in the above paragraph that states: "commodities and services are primarily determined by voluntary private decision", so if it were up to Merril Lynch or Citibank do you think they would invest in building a school or paying the fire department for putting out a fire at the home they sold you? How about insurance companies? What do we do with them? Aren't they just another form of socialism?

How about the banking system? We place our hard-earned money into a bank that then makes a loan to Mr. Smith to start a car dealership. The bank actually uses the money from several depositers to loan him charging him 10% and paying the depositers a mere 2% for their savings. Socialism or capitalism? One man is benefitting from the loan that came from the many depositers at that bank.

Mr. Smith could have cut out the middle man (the bank) and went to those people depositing their money and said "I'll pay out 5% if you'll just lend me the money to start this business." He pays out less interest for the "loan" and the depositers make more than the measly 2% return on investment. I know, this is too simplistic a treatment to ever work in real life. My point is capitalism still relies upon the general population purchasing a product or service. It is this close to the unthinkable (for those that think strict and unchecked capitalism is the answer).

Socialism - refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the means of production and distribution of goods, and a society characterized by equal opportunities for all individuals with a fair or egalitarian method of compensation.

I can't imagine this country running solely on the benevolence of big business and filthy rich individuals. Still though schools, hospitals and police and fire departments are built off the blood, sweat and tears of the American people. One way or another, we pay.

SGG

Tawabawho?

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Wednesday, February 11, 2009 9:58 PM

NEWOLDBROWNCOAT

Ta get back to the original subject of this thread:

How come nobody else anywhere respectable has reported this?

Gotta be somebody somewhere so desperate for circulation, or Nielsens or something that they'd report it. Oh, yeah, I fergot-- " they're ALL part of the Liberal Main Stream Media conspiracy."

How come ElRusho ain't talking about this? or O'Reiley? or those libbies at the Birch Society? or the GOP members of the House or Senate?

How come Kanjorski is just talking about this on a C-SPAN talk show? How come he's not on the record, asking about it from the floor of Congress? How come nobody anywhere will coroborate what he says?

" They're all too afraid of scaring the American people. They're *A*L*L* afraid to tell the *T*R*U*T*H* ! ! ! !"

I searched with AltaVista ( Hey, it's the search engine I use. Tain't fancy like Google or Yahoo, but it's been around and has a NEWS subcategory.) Came up with a few links to the same video clip, a couple of people who doubt its credibility, and Kanj talking about other stuff.THIS POST EDITED TO CORRECT THE SPELLING OF THE GUY'S NAME I DID SEARCH WITH THE CORRECT SPELLING.

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Thursday, February 12, 2009 2:49 AM

SERGEANTX

Quote:
Originally posted by SignyM:
SargeX, YOU seem to be the jackass here.

Rather than argue a coherent point, rue chose to characterize anyone describing government programs as 'socialist' as "braying" morons. To me, that is asinine and detracts from the discussion.

Quote:
Rue made it very plain (and I tend to agree) that Repubs and other right-wingers tend to call ANY government social programs "socialist". She asked for a substitute word to replace the term THEY use (socialism) with one that might be less confusing and more accurate.

I didn't hear you come up with one, did I?

Because there's no need. Programs that redistribute wealth, or otherwise impose governmental control over the economy are socialistic. As has been noted here, pretty much all modern governments impose elements of socialism on the economy, including our own. I just don't see any value in inventing new words to avoid uncomfortable observations.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Thursday, February 12, 2009 2:50 AM

Quote:
Originally posted by kpo:
So I don't see how any of their economic success could be credited to socialism, since the only aspect of these countries that is (vaguely) socialistic is an economic burden.

Seems more a vague ideological dismissal of evidence than anything else. You're unwarrantably dismissing any positive effects these "socialistic economic burdens" may have on society and it's economy. Perhaps they're not net burdens? Perhaps they cost on the front end, and pay for themselves many times over on the back.

I think it's interesting that the more heavily socialism plays in the states of Europe, the better their economies perform per-capita. Denmark for instance, probably one of if not the most socialist of all the states of Europe, is the second highest per capita economy in the world. It's outstripped only by Luxembourg, which is a tiny principality and tax haven for the rich.

While your calling them 'soft-socialism' and remarking on how all the success is really down to capitalism, you might want to remember that the implication of 'soft-socialism' is that they're also operating 'soft-capitalism'. I'd put it that neither socialism OR capitalism really create a workable system, which is why no state has successfully implemented either (try to find a purely capitalist society now or in history). It's pretty clear to me, that Capitalism can't function without 'socialist' programs like the police, like a universal education system, hell like the dole and even universal health care. Think about it, you fall ill you can't work. You lose your job and there's no safety net, you might never again become a productive member of society, I'd be willing to bet that's more costly to the economy overall than the cost of the programs in the first place.

Your statement could be fairly easily turned on it's head. Perhaps the success of these countries is all down to socialism, and Capitalism is just a social drag, that helps pay for it.

Quote:
Originally posted by kpo:
Are you guys all still waiting for an exemplary, purely socialist, model state that you can hail as a success? Because a lot of times people have got hold of countries and tried to create one... I'd be interested to know how you account for quite a long catalogue of failures.

There have never been any socialist states. Show me an example of one. There's been some communist ones, and a few that have called themselves socialist, but that's a different thing entirely. As I said elsewhere, the Democratic Republic of Congo is neither Democratic, a Republic, or in the Congo (which is a river that runs through it, also known as the zaire).

More insane ramblings by the people who brought you beeeer milkshakes!
No one can see their reflection in running water. It is only in still water that we can see.

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Thursday, February 12, 2009 4:01 AM

I believe in solving problems, not sharing them.

Quote:
Because there's no need. Programs that redistribute wealth, or otherwise impose governmental control over the economy are socialistic. As has been noted here, pretty much all modern governments impose elements of socialism on the economy, including our own. I just don't see any value in inventing new words to avoid uncomfortable observations.

The official definition of socialism is not "redistribution of wealth", as anyone who cares to look into a dictionary would find out. YOU are the person redefining words, not Rue. Rue is trying to make a distinction not recognized or allowed by braying jackasses.

But feel free to defend braying jackassism and irrelevant definitions, if that's what you choose to do. I won't argue with you if you include yourself in that group.

---------------------------------
It's the end of the world as we know it, and I feel fine.

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Thursday, February 12, 2009 4:21 AM

SERGEANTX

Quote:
Originally posted by SignyM:
But feel free to defend braying jackassism and irrelevant definitions, if that's what you choose to do. I won't argue with you if you include yourself in that group.

Good grief. You two would be easier to take seriously, and a lot more interesting to talk to, if you didn't have to rely on insults to make your points.

Regardless, socialism is about government control over the production of goods and services. That seems well understood by most here. When the government provides those goods and services it's socialism. In addition:

Quote:
Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the means of production and distribution of goods, and a society characterized by equal opportunities for all individuals with a fair or egalitarian method of compensation.

That's the first line of the first search result for 'socialism' on Google.

Anyway, this is stupid. It's one thing to clarify definitions that are vague, but you're trying to obfuscate the argument with distractions over semantics and definitions. It's tedious and kills threads, but I suppose that's your intention.

SergeantX

"Dream a little dream or you can live a little dream. I'd rather live it, cause dreamers always chase but never get it." Aesop Rock

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Thursday, February 12, 2009 4:27 AM

I believe in solving problems, not sharing them.

"Socialism refers to a broad set of economic theories of social organization advocating state or collective ownership and administration of the means of production."

Means of production?

That's the first part of the first definition.

See anyone here advocating the state or collective ownership of the means of production?

FWIW, what the right wing refers to as "socialism" fails to meet the most basic definition. So maybe we could call it a "welfarism" but not socialism.

Quote:
It's one thing to clarify definitions that are vague, but you're trying to obfuscate the argument with distractions over semantics and definitions.

Only a fool would continue to discuss a topic and not pay attention to the important terms that are being used. That is the first lesson of logic: define your terms. Otherwise you'll be in a hopeless mess and your thinking will be tangled.

Now, YOU may choose to define ANY government involvement in the economic sphere as "socialism", but it's not a definition recognized even by your very first cite.

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It's the end of the world as we know it, and I feel fine.

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Thursday, February 12, 2009 4:39 AM