Paul Krugman: "But a funny thing happened on the way to economic Armageddon: Iceland's very desperation made conventional behavior impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net. And there's a lesson here for the rest of us: The suffering that so many of our citizens are facing is unnecessary. If this is a time of incredible pain and a much harsher society, that was a choice. It didn't and doesn't have to be this way."
Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)
The Path Not Taken
28 October 11
Financial markets are cheering the deal that emerged from Brussels early Thursday morning. Indeed, relative to what could have happened - an acrimonious failure to agree on anything - the fact that European leaders agreed on something, however vague the details and however inadequate it may prove, is a positive development.
But it's worth stepping back to look at the larger picture, namely the abject failure of an economic doctrine - a doctrine that has inflicted huge damage both in Europe and in the United States.
The doctrine in question amounts to the assertion that, in the aftermath of a financial crisis, banks must be bailed out but the general public must pay the price. So a crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programs are slashed.
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NEVER VOTE REPUBLICAN !!
I've looked into whether the mortgages could have been paid off instead of bailing out the bankers too and it turns out we could have paid off every mortgage in the United States for about $10.6 Trillion rather than lending, spending or guaranteeing the $12.8 Trillion we committed to bail out Wall Street.
As Barbara said, the bankers could have been paid off for the mortgages and the people could have kept their homes.
The Banksters wouldn't have agreed to that though because it wouldn't have bailed them out at 100% for their various derivatives and other Toxic Assets that they are still unloading on us.
I hope everyone has read the news that Merrill Lynch is transferring $53 Trillion (yes Trillion) of toxic derivatives to Bank of America that they expect the FDIC to cover. The Fed is pushing that crime.
It should be stopped right away. $53 Trillion is at leat twice the entire world's GDP. We can't pay for all the
1%'s crimes! They need to go to prison. Now!
Take a wild guess where all of this is heading...
It is impossible in America. About a fifth of the states have more Senators than Representatives , and some shouldn't even have one Senator (and those states are mostly Republican). Those people get all the government grants and projects. Then, of the already-padded Senate, it takes 60 votes to confirm Justices, Cabinet, and bring some bills to the floor. Then, the House of Representatives is gerrymandered every ten years, so that the Representatives have no focus on either a region or the people in that region; their only focus can be outside of America because they know nothing about their own constituents. And, none of them is required to have any knowledge of history etc. The President is elected by the Electoral College, worse than the Senate in the small states. The Supreme Court is for life, and needs 60 of those Senators for confirmation. If anybody can find a democracy in this pretend system, please be assured it is only by accident that "the people" are ever listened to. Wall Street and agribusiness are close friends; those small states are agribusiness.
Every four years, Joe and Mary Sixpack get up off the couch and go vote, and decide how they will vote on the way to the polls. Maybe they don't vote at all because it's all so confusing. It doesn't matter that politicians were making campaign speeches for at least a year. Joe and Mary were too busy watching pro sports, Real Housewives, or American Idol.
In the state of Washington, some smart people have been proposing a state income tax for years, but Washington likes to be nice and asks the PEOPLE if they want one. Every time, a majority of the PEOPLE who bother to vote at all, vote NO because the richest people in the state spend millions of dollars to tell them it's a bad idea. They never tell the people that 40+ states already have an income tax and are no worse off than Washington, and a majority of the people are too dumb to figure it out for themselves.
It seems intuitive to me that paying 10% of my income to the state (that's the national average, by the way) in one tax instead of dribbling it out via 25 different sales taxes, utility taxes, bridge and highway tolls, and a property tax is the same amount of money, but I am just an engineer. What do I know?
Approximately 65% of Washington voters were led down the wrong path by unethical rich people who spent $3.5 million last fall to convince the gullible public that their tax worries "in this terrible economy" would be over if the PEOPLE would just "send the message" to the state to cut its profligate spending, and that the PEOPLE should refuse to "add the worst tax ever devised" to the horrible mix we already have.
By the way, you might be interested to know that Boeing built boats used by smugglers during Prohibition.
The only ways rich people in states without an income tax can pay their fair share is to buy and pay sales taxes on more expensive toys from sources within the state and live in mansions. We who live modestly and spend our excess money on foreign travel (as do many retirees) contribute relatively little to the local economy, unless an income tax provides equalization.
What hardly anyone thinks about, however, is that an income tax would do it all. All taxes are paid from someone's income. That's probably the principle behind the "tithe" in the Old Testament!
Problem solved
Super bravo to Iceland! But it could never happen here.
On Iceland, well, all well and good for the Icelanders, but the governments in the UK and Netherlands had to reimburse savers and investors who had lost money in the collapse of the Icelandic banks. We await compensation. Those savers and investors were reckless in investing in the Icelandic banks, but we taxpayers here have had to rescue them from loss of their investments and savings.
For every dollar that has been lent out. both good and bad investments; the bailout money must be distributed back to the customers.
Just think how many people may not have lost their homes. How many people, lucky enough to still have a job, will have more money to invigorate the economy.
We all keep forgetting that banks exist to facilitate a healthy economy. In a organic sense they are the heart and money is the blood. When the banks hold all the money, there is no blood pumping through the system and death is sure to follow.
Our economy suffered a heart attack in 2009. The cure kept the heart beating, but the only cure is stimulate the blood flow.
The IMF and the US Right Wing is all about applying leeches to suck out the "bad" blood. How has that worked out? Would you agree to leech therapy if you had a heart attack?
I didn't think so.
Raise your hand if you ever felt threatened by a Communist, a Muslim, or Hugo Chavez! Just as I thought...maybe the American people are starting to wise up to the constant barrage of hate propaganda being spewed out by the Manipulative Media.
One of my Senators gave a pretty speech about public campaign financing a couple of years ago at a banquet attended by several hundred people, but she has been unwilling or unable to do anything to bring it about. In the last few weeks, I have received at least three pleas for donations from her.
I am now telling ALL of my elected representatives something like this: "If you aren't smart enough to get elected without my donations, you aren't smart enough to serve the taxpayers who pay your salary in Congress (or the state legislature, or the county government). If you accept corporate donations, then I will watch and know who you work for."
Were it not for the Army of Conscience marching in our streets right now, we would be one hopeless lot. If a majority will wake and join them, we will pull out of this mess. Survival of democracy will require a new, uncorrupted Congress working under new, uncorrupted rules; a throw-out makeover of our courts; a less vulnerable elections system; a fair and just tax code -- and above all, our attention. Freedom does not thrive on ignorance and neglect.
Maher seems blithely convinced that engaging this draconian little dweeb in "civil discourse" about the rape and pillage of the 99%-and the late 19th century, Social Darwinistic magical thinking about no tax increases on the rich, ever again, no matter what-somehow burnishes his, Maher's, truly libertarian credentials. No pusillanimous sniveling little Democrat ally, he.
Instead, it makes for truly nauseating television, watching a putative progressive hero make nice with an Abramoff clone whose slime factor is off the charts, and sounds like he dreams about forbidden trysts with "Ronnie" Reagan, the Movie and Conservative Superstar. Bill: really lousy show.
Meanwhile, back at the ranch, we've got Dr. Krugman using Iceland--Iceland!--as a role model for attacking America's descent into corporate fascism. If this isn't scraping the bottom of the analogy barrel, maybe Finland or Luxemburg is a better fit?
So is Canada a good role model. None of its banks went bust because they weren't allowed to engage in the unethical practices that nearly brought the U.S. and Europe to ruin.
Check out little Slovakia, which told Europe "No dice" in helping to bail out Greece. Its economy is in good shape in comparison to most of the EU. So is neighboring Estonia, which is now enjoying the highest rate of GDP growth in Europe.
Brazil is another good example of a country that told Bush and company to go to hell and went its own way.
The Gold Standard is the bloc of Scandinavian countries that never joined the EU and have the highest standards of living and the best "quality of life" in the world. If they weren't so darn cold, I would move there myself.
Furthermore, to watch politicians bail out their greedy campaign supporters, with the people’s tax money; is a lesson in corruption 101. To believe the politician, when he/she says it is necessary, is stupidity 101.
Let's not allow ourselves to be manipulated here. The demise of Goldman, or Citi, or SocGen, will leave a very short-lived vacuum, to be quickly filled by others, as it will be a great opportunity to do things properly, for a real "change we can believe in"
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