Randy doesn't make as much of the role of fraud as I would have in light of the work of Bill Black in enumerating the list of factors resulting in the crisis. However, Randy is a colleague of Black and has co-authored with him, so I don't think he would disagree that this factor needs to be emphasized, too.
10 comments:
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Wasn't aware of Mecpoc. Great resource. Thank you, Clonal.
Mr. Hickey:
It seems that Randal Wray foresees another leg down in the economy soon and that leads to a question for you.
On another post you wrote about the possibility of a thind party and I wanted to point out that the people at firedoglake are trying to start a third party. But, to me it seems that campaign finance reform is the answer and I'm talking about completely ending private money in campaigns and using only public funds. I realize that the Congress will never pass such a bill, but is there any chance of using a proposition, like the people do in California, for such a change?
My idea is that progressives should be ready to present some type of election reform if there is another financial crisis.
Concerning the debt crisis, check out Yves Smith at Real News.
I have long said that until there is through-going reform that gets the money out of politics and closes the revolving door the US will remain institutional corrupt and it will not get worse as political campaigns get more costly.
I thin that we are entering the second level down in Great Depression II. I said in a comment at Credit Writedowns a couple of days ago that globally this is 1930 rather than 1937 in the US. I see from Krugman's most recent column that this is his view, too.
All it will take is a shock like the failure of Credit Anstalt in 1931 to push the world into depression, and there is extreme political instability in the US, the EZ is imploding, China is contracting, Japan is reeling already, and it looks like Canada and Australia both have credit bubbles that have not yet popped.
The conditions are there and without real finesse, which I see little evidence of, it is only a matter of time before some shock hits that destabilizes an unstable global economy.
Of course, none of this needs to be happening anywhere. It is all about the financial sector that controls most countries running amok. Unless we figure a way to bridle this runaway, it promises to be quite a ride. But given the political power of wealth and influence, it is not going to be easy and may prove impossible before the system crashes big time.
I don't see the emergence of a third party in time to affect this election, unless the GOP splits and there is a Tea Party candidate running against the establishment nominee, e.g., Romney. If Romney is nominated, this is quite possible.
Right now, odds are that the GOP keeps the House and gains the Senate, and Obama is reelected, But it is still very early and a lot can happen in the meanwhile to change this. But if that is the dase, nothing will get done until after the '16 election, and if '12-'16 is unstable, anything can happen. If it does, maybe we'll see some change after the smoke clears.
The trend now is declining global stability. The rising price of gold and CHF with US bonds strong even in the face of temporary default/downgrade shows that a lot money is seeking a safe haven in what looks to be a developing storm.
To add to what Tom Hickey says, a short commentary. There is also a pressing issue underlying world economy: There is a clear mounting evidence that world industrial and consumption model only works with cheap oil prices.
High prices are unstabilizing their-shelves and trigger balance of trade deficits which at the same time it's a contractionary pressure for economic growth for the same countries. Hence inflationary policies may be counter-productive as long as this issue persist (spending probably should be targeted highly at energy efficiency and relax dependencies on cheap oil/gas).
Just a thought I had observing the data and market behaviour last years.
Right. The resource and energy oriented folks like Gai the Actuary at Our Finite World, as well as others at The Oil Drum, have been flagging this for some time. Now some financial types like Jeremy Grantham are sounding the alarm, too. The days of abundant cheap energy and "infinite" resources are behind us, soon to be way behind us as population grows. The world just hit the 7 billion mark.
Oops. Should be Gail the Actuary. Sorry Gail.
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