It’s Democracy’s Turn: Bankers of the World, Untie!

It wasn’t the housing bubble exactly. It was more the way the bubble was blown.

In the official language of the International Monetary Fund report for April 2009, “the crisis was largely caused by weak risk management in large institutions at the core of the global financial system combined with failures in financial regulation and supervision.”

After “the crisis” was caused, the weak risk managers along with their failed regulators and supervisors came back to loot the national debt.

In essence, the mortgage of the American Worker has been preyed upon to inflate the wealth and power of financiers. Twice.

From the IMF point of view, more debt looting or “fiscal adjustment” will be necessary to keep the world economy from worse channels of trouble. And so long as the money makes genuine entry into the credit system at lenient rates (if not terms), then it seems like sensible advice. I believe the IMF when it claims that worse trouble is possible.

Says the IMF: “Key transmission routes [of worse trouble] include deep corrections in national housing markets, especially but not exclusively in advanced economies; corporate stress, especially but not exclusively in emerging economies; deflation risks, mainly in advanced economies; and increasing vulnerabilities in public sector balance sheets, especially but not only in emerging economies.”

Sure as sewage runs downhill, downside risks remain.

And yet, behaving like crash victims who climb from wrecks and run around for awhile, whole classes of boosters may be seen doing double flips of joy because they think they feel the world bouncing off its bottom.

There are many gloomy charts in the IMF report on the global economy, but the one that chills me most shows how each economic region of the globe is expected to contribute to the world recovery that (we hope) will begin later this year.

When it comes to the crucial turning point for that recovery, the US is the only portion of the global economy that completely disappears from the bar graph. The US will make zero contribution to global growth in the 4th quarter of 2009, then a bit of a negative contribution in the 1st quarter of 2010, before slacking to zero again in the 2nd quarter of 2010.

As for “other advanced countries,” you will find them colored in dark blue below the line of recovery, indicating that they will be worse than no help. Above the line of positive Purchasing Power Parity, all the heaving lifting at the beginning of the second decade of the 21st Century will be upon the shoulders of China and the “rest of the world.”

This, my friends, is how you win a cold war without knowing the least reason why.

Along with my favorite storm watcher these days, Larry Kudlow, I also have faith that democracy and capital will figure out how to keep each other alive through this deluge, but I disagree with his forecast model.

For the past several decades capital has taken advantage of weakened democracy in the US. It is now time for democracy to return the favor. As US capital returns from subzero on the IMF recovery scale, democracy has to insist on new parameters.

If the Chinese can lead global growth in 2010, what happens to the claim that big governments must be incapable?

Therefore, health care coverage for all people, cap and trade for all creatures, a path to citizenship for every neighbor in the neighborhood, and a genuine national youth program, all of these things will elevate the US to a place we should have been 30 years ago.

When we voted for change last November we weren’t talking about pennies on the dollar. Bankers of the world, untie!

9 comments on this article so far ...

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  1. Kaelieh said on April 24th, 2009 at 12:17pm #

    “If the Chinese can lead global growth in 2010, what happens to the claim that big governments must be incapable?”

    Oh deargod help us all.

    “a genuine national youth program”

    Something about that sounds kinda freaky.

  2. Don Hawkins said on April 24th, 2009 at 4:43pm #

    (2) Increased public pressure. Peaceful public protests are growing – they seem to be essential to
    counter the influence of special interests on policy-makers.

    http://www.columbia.edu/~jeh1/mailings/2009/20090424_Australia.pdf

    James Hansen new.

  3. Mulga Mumblebrain said on April 24th, 2009 at 11:45pm #

    Sorry Greg, but there is zero congruence between real democracy and capitalism, particularly that euphemistically entitled ‘market capitalism’. In market capitalism money doesn’t just speak-it shrieks and screeches like a banshee, foretelling the imminent death of everything but money power. It destroys creatively, but the creation is of nasty things like debt, inequality, elite privilege, and the destruction is of human society, human amity and individual character, to be replaced, as capitalism moulds individual and group behaviour and psychology, with competition, avarice and rank self-interest. And contrary to the Bowdlerised and dumbed-down versions of Adam Smith’s ‘Invisible Hand’, the steady pursuit of self-interest, without conscience, and dominated by increasingly powerful plutocrats and a class of kleptocrats, the ‘free market’ brings nothing but misery for the mass of humanity. Above all else however, in its innately neoplastic nature, market capitalism lacks any sense of sufficiency and abidingness. It must grow, incessantly, like a cancer, or it will die. And there is simply no limit on the greed of its beneficiaries. They care not a fig whether humanity continues after their death, just so long as they can stand atop the dung-heap while they live and crow their immense self-satisfaction. So, while the economic implosion is being treated by application of bucket-loads of the same poisonous remedies, low interest rates, public subsidies and veritable tsunamis of new debt, that caused the malady in the first, second, third and so on, cases, guaranteeing even greater collapses in the near future, if they work this time, the direst calamity proceeds inexorably. The destruction of the planet’s life-support systems, from forests, fresh water, biodiversity of animals, plants and food crops, marine resources, and an equable and stable climate, is accelerating, without sign of any concerted action, and with new and deadly synergies emerging almost daily. And, let’s be candid-if market capitalism continues to call the shots, there will never be any ameliorative action, not so long as it threatens profits in any way, shape or form.

  4. Don Hawkins said on April 25th, 2009 at 4:13am #

    The agency said about 75 students at St. Francis Preparatory School had complained Thursday of nausea, fever, dizziness and aches and pains. Several of the students were said to have recently traveled to Mexico, NYT

    I just goggled swine flu and it looks like people are waking up as new reports ever two minutes. Go to CDC and read.

  5. Don Hawkins said on April 25th, 2009 at 5:04am #

    But it may be too late to contain the outbreak, given how widespread the known cases are. If the confirmed deaths are the first signs of a pandemic, then cases are probably incubating around the world by now, said Dr. Michael Osterholm, a pandemic flu expert at the University of Minnesota.

    No vaccine specifically protects against swine flu, and it is unclear how much protection current human flu vaccines might offer.
    A “seed stock” genetically matched to the new swine flu virus has been created by the CDC, said Dr. Richard Besser, the agency’s acting director. If the government decides vaccine production is necessary, manufacturers would need that stock to get started. Actually producing the vaccines could take months. ABC

  6. Tennessee-Chavizta said on April 25th, 2009 at 7:33am #

    HUGO CHAVEZ CLAIMS THAT EVEN THOUGH HE SHOOK THE HANDS OF BARACK OBAMA, THE USA IMPERIAL SYSTEM IS ALIVE AND OPPRESSING THE PEOPLE OF THIS WORLD !!

    (I know that the USA educational system sucks and that most americans cannot speak 2 languages like Europeans. But this article is in spanish)

    http://www.clavedigital.com/App_Pages/Noticias/NoticiasInt.aspx?Id_Articulo=24065

    Chávez advierte que, aunque “Di con gusto la mano a Obama, el imperio está vivito y coleando”
    Admitió que anhelaba que Obama “sea la dignidad de su raza y el último presidente imperialista de Estados Unidos”

    EFE/Clave Digital
    viernes, 24 de abril de 2009

    CARACAS, Venezuela.- El presidente de Venezuela, Hugo Chávez, dijo este viernes que hace una semana le dio “con gusto” la mano a su colega de Estados Unidos, Barack Obama, en la cumbre de Trinidad y Tobago, pero advirtió que “el imperio está vivito y coleando” .

    “Esta mano se la di con gusto al Presidente de Estados Unidos; él tuvo un gesto y yo tengo que reconocerlo”, dijo al revelar que fue Obama quien se le acercó momentos antes de la inauguración de la V Cumbre de las Américas.

    “El caballero Obama viene directo a darme la mano. Vino con una sonrisa, yo le sonrío; si hubiera venido con cara de bravo, le pongo cara de bravo; si me da un derechazo, le doy un izquierdazo. Ah, le di la mano, nos dimos la mano, lo cual causó un alboroto (…), porque muchos creen que yo soy un ogro”, manifestó.

    “La mano, sí; la sonrisa, sí; y una vez y dos veces y la tercera, y luego, en la despedida, se acercó y me dijo: ‘bye bye my friend’ y le dije: ‘bye bye Obama’, pero que nadie se equivoque, allí está el imperio vivito y coleando”, sostuvo, durante una alocución televisada.

    No obstante, admitió que anhelaba que Obama “sea la dignidad de su raza y el último presidente imperialista de Estados Unidos”.

    El jefe de Estado de Venezuela también explicó que le regaló a Obama el libro “Las Venas Abiertas de América Latina”, del uruguayo Eduardo Galeano, a manera de respuesta a un comentario suyo de que prefería hablar del futuro y no del pasado, algo con lo cual dijo no estar de acuerdo por ser “contra natura”.

    “Ese libro es una respuesta a lo que él dijo que venía a hablar del futuro y no del pasado (…); no se puede entender el presente sin el pasado, es contra natura”, remarcó.

    Una nota del Ministerio de Comunicación e Información venezolano afirmó el pasado 17 de abril que Chávez manifestó a Obama ese día que deseaba “ser su amigo”.

    “Con esta misma mano hace ocho años yo saludé a (George W.) Bush; quiero ser tu amigo”, expresó Chávez al estrechar la mano del nuevo gobernante de Estados Unidos, según reveló la información oficial venezolana que entonces incluyó fotografías en la que ambos se ven sonrientes.

    Venezuela y Estados Unidos suspendieron sus relaciones diplomáticas en septiembre de 2008 a raíz de la expulsión del embajador en Caracas, Patrick Duddy, en “solidaridad” con una acción similar que había tomado el presidente de Bolivia y estrecho aliado de Chávez, Evo Morales.

    El Gobierno de Bush respondió expulsando al embajador de Venezuela en Washington, Bernardo Álvarez, quien será reemplazado por el actual embajador de Venezuela en la Organización de Estados Americanos (OEA), Roy Chaderton, anunció Chávez en Trinidad y Tobago.

    A su regreso a Caracas tras la cumbre, Chávez afirmó el pasado domingo que la posición de “resistencia, dignidad y soberanía” que “desde hace 10 años” defiende su Gobierno “revolucionario” obtuvo en Trinidad y Tobago “uno de sus más grandes éxitos”.

    “Pareciera que los cambios que comenzaron en Venezuela en la última década del siglo XX han comenzado a llegar a la misma Norteamérica”, agregó y reveló que con Obama habló de la disposición de ambos de recomponer las malogradas relaciones diplomáticas.

  7. Don Hawkins said on April 25th, 2009 at 8:44am #

    Many people seem to be very worried about this swine flu. Right now you have to look very hard on line and read between the lines just a little to see if this pandemic possible pandemic is already spreading. So far it could be to late and 60 out of 1,000 don’t make it. There appears to be a lag time from when you contact the flu H1N1 and when you get rather sick. So far on the news CNN, MSNBC, FOX they are talking about the jazz and is Obama doing a good job. You would think that a pandemic might make the number one story but like in the movie Jaw’s where the mayor of the town was told to close the beaches he said no bad for business. This is nut’s I wonder at CNN or Fox do they have a stash of Tamiflu? Don’t worry listen to your leaders where the hell are they. We will know more I am sure by tonight or tomorrow.

  8. Kaelieh said on April 26th, 2009 at 9:59am #

    Sudden outbreak of a very bad flu strain (a la swine flu)? Seems sorta convenient. Anyone else suspicious?

  9. Ron Moss said on May 10th, 2009 at 10:06am #

    This well written composite omits a couple items of Law. Congress SHALL
    have power to coin money and regulate the value thereof, leaves no options, and the US supreme Court agreed, in Schecter Poultry Corp v US295US495 1935 when it ruled”Congress cannot abdicate it’s duty and delegate to another group” And, How much interest do we now pay to the fed to coin our own money, to print we pay $1.3 Billion a day. Why is it necessary to borrow our own money? the latin term Stare disisi should empower us to apply that same ruling to the Federal Reserve and eliminate it next month or tomorrow. This is not a Democracy but a Republic, The difference being, the source of it’s authority. We don’t need the mob on our side, just the rule of LAW!