Comments on: The Financial Economy and the Real Economy http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/ a radical newsletter in the struggle for peace and social justice Sun, 08 Nov 2009 18:42:51 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: siamdave http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/#comment-29864 siamdave Fri, 17 Oct 2008 14:26:02 +0000 http://www.dissidentvoice.org/?p=3938#comment-29864 useful info, but you need the basics too - where does the money come from in the first place, that all of these built-on schemes depend on? - BANKETEERING http://www.rudemacedon.ca/lgi/banketeering.html First we take back our brains, then we go for the country. useful info, but you need the basics too – where does the money come from in the first place, that all of these built-on schemes depend on? – BANKETEERING http://www.rudemacedon.ca/lgi/banketeering.html
First we take back our brains, then we go for the country.

]]> By: Max Shields http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/#comment-29863 Max Shields Fri, 17 Oct 2008 14:25:13 +0000 http://www.dissidentvoice.org/?p=3938#comment-29863 The fundamental psychology of inertia seems to be the simple but powerful element. In terms of energy and the baseless economy we collectively float on - called debt - our dilemma is harrowing. The only way we can conceive of our circumstances are the little voices played over and over again, the human desire to believe that yesterday, today and tomorrow will look much the same I'm reminded of two movies: Butch Cassidy and the Sundance Kid; and The Perfect Storm. Both movies end with the ever optimistic motives of the main characters having absolutely no capacity to even imagine what awaits them. For each it's just play it again, one more hurdle, a cycle, a blip in the chart. But in reality, they are about to face something, that for them, is unfathomable. Their belief in a kind of "flat world" theory that they will somehow keep away from the precipice because of some adolesent belief in immortality which persists even if only in a will to go on without changing the rules. What would Butch and Sundance have done if they'd known what awaited them? Who knows. Their response to the unknown was to tell themselves that this would be fairly simple - you go left; I'll go right and we'll meet beyond this momentary hurdle between death and freedom. And so it is with our economic calamities. The only real wealth is energy. There is no other bottom to this pit. It rules. Everything else is a postponement of the inevitable. If we can clearly see the scope of what we are facing, muster the will, we can go on (Beckett). The fundamental psychology of inertia seems to be the simple but powerful element.

In terms of energy and the baseless economy we collectively float on – called debt – our dilemma is harrowing.

The only way we can conceive of our circumstances are the little voices played over and over again, the human desire to believe that yesterday, today and tomorrow will look much the same I’m reminded of two movies: Butch Cassidy and the Sundance Kid; and The Perfect Storm.

Both movies end with the ever optimistic motives of the main characters having absolutely no capacity to even imagine what awaits them. For each it’s just play it again, one more hurdle, a cycle, a blip in the chart. But in reality, they are about to face something, that for them, is unfathomable. Their belief in a kind of “flat world” theory that they will somehow keep away from the precipice because of some adolesent belief in immortality which persists even if only in a will to go on without changing the rules.

What would Butch and Sundance have done if they’d known what awaited them?

Who knows. Their response to the unknown was to tell themselves that this would be fairly simple – you go left; I’ll go right and we’ll meet beyond this momentary hurdle between death and freedom.

And so it is with our economic calamities. The only real wealth is energy. There is no other bottom to this pit. It rules. Everything else is a postponement of the inevitable.

If we can clearly see the scope of what we are facing, muster the will, we can go on (Beckett).

]]> By: Sunil Sharma http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/#comment-29858 Sunil Sharma Fri, 17 Oct 2008 08:10:40 +0000 http://www.dissidentvoice.org/?p=3938#comment-29858 Good point, Lijandra. I’ve never really understood the peculiarly American fetish with home ownership. Especially during the run-up to the 2007 bubble deflation. Why people would want to pay such outlandish prices that are way beyond their means for even mediocre-condition homes rather than take the more logical economic route of renting is beyond me. If in a particular part of the country it makes more sense economically to buy a home than rent, or if you can actually afford to put down, say, at least 20% on a house that’s not being artificially valued at an unjustifiably high price (vis-a-vis market fundamentals), fine then. But to pay for a home that’s overvalued by 30% or more when we’re in the hundreds of thousands of dollar range, regardless if you’re getting into a questionable mortgage like a subprime ARM or a more solid A-Paper loan, when your potential debt-to-income ratio isn’t favorable is just plain ill-conceived. A lot of Americans got screwed by crooked loan, banking, and financial institutions that resorted to all kinds of chicanery to lure them into buying homes, but as many of these buyers are just as responsible for letting themselves be deceived into making a stupid financial decision that is leading them to foreclosure and economic ruin. Preoccupation with the material can be murder. . . – Sunil Good point, Lijandra. I’ve never really understood the peculiarly American fetish with home ownership. Especially during the run-up to the 2007 bubble deflation. Why people would want to pay such outlandish prices that are way beyond their means for even mediocre-condition homes rather than take the more logical economic route of renting is beyond me. If in a particular part of the country it makes more sense economically to buy a home than rent, or if you can actually afford to put down, say, at least 20% on a house that’s not being artificially valued at an unjustifiably high price (vis-a-vis market fundamentals), fine then. But to pay for a home that’s overvalued by 30% or more when we’re in the hundreds of thousands of dollar range, regardless if you’re getting into a questionable mortgage like a subprime ARM or a more solid A-Paper loan, when your potential debt-to-income ratio isn’t favorable is just plain ill-conceived.

A lot of Americans got screwed by crooked loan, banking, and financial institutions that resorted to all kinds of chicanery to lure them into buying homes, but as many of these buyers are just as responsible for letting themselves be deceived into making a stupid financial decision that is leading them to foreclosure and economic ruin. Preoccupation with the material can be murder. . .

– Sunil

]]> By: Lijandra http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/#comment-29824 Lijandra Thu, 16 Oct 2008 18:47:49 +0000 http://www.dissidentvoice.org/?p=3938#comment-29824 I'd like to add that a massive brainwashing scheme a.k.a. the "American Dream" has been used very effectively to inflate the housing prices. It convinced people that everyone must own a house at any cost else they are losers. Yet like any parasite eventually kills the animal they feed on, they made people pay for houses beyond what they can afford. I’d like to add that a massive brainwashing scheme a.k.a. the “American Dream” has been used very effectively to inflate the housing prices. It convinced people that everyone must own a house at any cost else they are losers. Yet like any parasite eventually kills the animal they feed on, they made people pay for houses beyond what they can afford.

]]> By: brs http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/#comment-29810 brs Thu, 16 Oct 2008 16:16:31 +0000 http://www.dissidentvoice.org/?p=3938#comment-29810 Imbalance of wealth and income is a primary culprit now and in the Great Depression. Another is speculation rather than investment. Most of the derivative schemes are like the margin investor of the 1920's. They are a get rich without working scheme and little more than fraud. Another issue is the pervasive influence of marketeering and sales types in business. They are in the business of slanting and convince themselves of the truth of their own lies. When a business or a country is run on spin with no substance eventually the real world catches up. That is happening now. It will be very hard and painful to recover. Getting salesmen to quit lying or believing their own lies is a herculean task. Hercules unleashed a river to do it. Getting them out of senior leadership positions and back to a more appropriate role before the businesses are driven into bankruptcy will be difficult. Getting people to live within their means and weaning society from credit will also be difficult. Better balance of wages between workers and owners is absolutely necessary so workers can afford to live within their means. Returning to an understanding that all wealth rises from produtive labor rather than sales hype and inheritance is necessary also. We must get away from Peales Power of Positive (wishful) Thinking and around a power of realistic thinking. Imbalance of wealth and income is a primary culprit now and in the Great Depression. Another is speculation rather than investment. Most of the derivative schemes are like the margin investor of the 1920’s. They are a get rich without working scheme and little more than fraud. Another issue is the pervasive influence of marketeering and sales types in business. They are in the business of slanting and convince themselves of the truth of their own lies. When a business or a country is run on spin with no substance eventually the real world catches up. That is happening now. It will be very hard and painful to recover. Getting salesmen to quit lying or believing their own lies is a herculean task. Hercules unleashed a river to do it. Getting them out of senior leadership positions and back to a more appropriate role before the businesses are driven into bankruptcy will be difficult. Getting people to live within their means and weaning society from credit will also be difficult. Better balance of wages between workers and owners is absolutely necessary so workers can afford to live within their means. Returning to an understanding that all wealth rises from produtive labor rather than sales hype and inheritance is necessary also. We must get away from Peales Power of Positive (wishful) Thinking and around a power of realistic thinking.

]]> By: john andrews http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/#comment-29800 john andrews Thu, 16 Oct 2008 07:12:56 +0000 http://www.dissidentvoice.org/?p=3938#comment-29800 This is a good explanation of economic principles for non-economists like me. I guess I was a little suprised not to see mention of something that seems particularly significant to me: the decrease of workers' wages. We're told that the present economic crisis is a consequence of 'bad' mortgages and that the banks are to blame. No doubt that's true - but surely it's only partly true, because the other side of the coin must concern people's ability to pay their mortgages. Surely the fact that governments have presided over economies that encourage decreasing worker's wages (whilst grossly inflating managers' salaries) meant that the inability of people to pay their mortgages would be inevitable? Surely once again the real finger of blame needs to be firmly pointed at the same governments who oversaw and maintained deregulation of banking whilst also deregulating employment rights and protections? This is a good explanation of economic principles for non-economists like me.

I guess I was a little suprised not to see mention of something that seems particularly significant to me: the decrease of workers’ wages.

We’re told that the present economic crisis is a consequence of ‘bad’ mortgages and that the banks are to blame. No doubt that’s true – but surely it’s only partly true, because the other side of the coin must concern people’s ability to pay their mortgages.

Surely the fact that governments have presided over economies that encourage decreasing worker’s wages (whilst grossly inflating managers’ salaries) meant that the inability of people to pay their mortgages would be inevitable? Surely once again the real finger of blame needs to be firmly pointed at the same governments who oversaw and maintained deregulation of banking whilst also deregulating employment rights and protections?

]]> By: colin brooks http://dissidentvoice.org/2008/10/the-financial-economy-and-the-real-economy/#comment-29793 colin brooks Wed, 15 Oct 2008 22:29:42 +0000 http://www.dissidentvoice.org/?p=3938#comment-29793 This is a very clear assessment of our current crisis and it's recent origins. It seems as though "we" are constantly in a battle to shift the bias of our institutions from benefiting the few to the many. Maybe the scope of our consciousness has not kept pace with the complexity of our society. Malcomb Gladwell describes the 150 person rule in the "Tipping Point" stating the natural regulation of a group conforming to that size. Beyond this number one must implement outside measures of control. Maybe we have an evolutionary "knee jerk" reaction of fear that "kicks" in when things get too big. A survival skill that applied to hunting and gathering but not to the kind of complex and global relationships that we have now. As with any form of life threatened with the adversity of change, we must evolve or die--or both... This evolution seems to be of a Conscious nature as we have amply demonstrated our physical ability to create a dizzying array of "instruments", financial and otherwise to hedge against the "Tyranny of the Real Economy" while not creating anything resembling wellbeing for the majority of the planet, physical or mental. I would go so far as to suggest that that means an involuntary evolution of intelligence that arises from the whole and is not centered in the mental capacity of our species. I dunno... This is a very clear assessment of our current crisis and it’s recent origins. It seems as though “we” are constantly in a battle to shift the bias of our institutions from benefiting the few to the many.

Maybe the scope of our consciousness has not kept pace with the complexity of our society. Malcomb Gladwell describes the 150 person rule in the “Tipping Point” stating the natural regulation of a group conforming to that size. Beyond this number one must implement outside measures of control. Maybe we have an evolutionary “knee jerk” reaction of fear that “kicks” in when things get too big. A survival skill that applied to hunting and gathering but not to the kind of complex and global relationships that we have now. As with any form of life threatened with the adversity of change, we must evolve or die–or both…

This evolution seems to be of a Conscious nature as we have amply demonstrated our physical ability to create a dizzying array of “instruments”, financial and otherwise to hedge against the “Tyranny of the Real Economy”
while not creating anything resembling wellbeing for the majority of the planet, physical or mental.

I would go so far as to suggest that that means an involuntary evolution of intelligence that arises from the whole and is not centered in the mental capacity of our species.

I dunno…

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