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Arts and Culture

Fred Branfman on ‘The Big Short’

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Posted on May 6, 2010
bookcover

By Fred Branfman

(Page 3)

The November 2008 financial crisis is thus properly understood not as an aberration but the logical culmination of 30 years of incompetence throughout every sector of the U.S. economy. Those involved in the financial crash, as Eisman explains, included:

—THE FINANCIAL INDUSTRY: “The subprime mortgage loan was a cheat. You’re basically drawing them in by telling them, `You’re going to pay off all your other loans—your credit card debt, your auto loans—by taking this one loan. And look at the low rate!’ But that low rate isn’t the real rate. It’s a teaser rate.” Eisman also learned from the CEO of Golden West Financial Corp. that free checking “was just a tax on poor people—in the form of fines for overdrawing their checking accounts. ... That’s when I decided the system was really, `fuck the poor.’ ”

—THE FED: “Greenspan he viewed as almost beneath his contempt, which was saying something. `I think Alan Greenspan will go down as the worst chairman of the Federal Reserve in history. I’m convinced he knew what was happening in sub-prime and he ignored it, because the consumer getting screwed was not his problem. I sort of feel sorry for him because he’s a guy who is really smart and was basically wrong about everything.’ ”

—THE RATING FIRMS: “ `They’re underpaid. The smartest ones leave for Wall Street firms so they can help manipulate the companies they used to work for. There should be no greater thing you can do as an analyst than to be the Moody’s analyst. ... Instead, it’s the bottom! ...’ To judge from their behavior, all the rating agencies worried about was maximizing the number of deals they rated for Wall Street investment banks, and the fees they collected from them.”

—THE MEDIA: His assistant Danny Moses explained that “we turned off CNBC. It was very frustrating that they weren’t in touch with reality anymore. If something negative happened, they’d spin it positive. If something positive happened, they’d blow it out of proportion.”

Lewis sums up this saga of incompetence thusly:

“The people in a position to resolve the financial crisis were, of course, the very same people who had failed to foresee it. All shared a distinction: they had proven far less capable of grasping basic truths in the heart of the U.S. financial system than a one-eyed money manager with Asperger’s syndrome. … The world’s most powerful and most highly paid financiers had been entirely discredited; without government intervention every single one of them would have lost his job; and yet these same financiers were using the government to enrich themselves.”

 

book cover

 

The Big Short: Inside the Doomsday Machine

 

By Michael Lewis

 

W. W. Norton & Company, 266 pages

 

Buy the book

And as for the financiers, so too for much of the rest of the top tiers of the American economy. The key question now is how long it will take the general public to realize that most of the entire private sector has failed, and that entirely new arrangements are needed—featuring strict regulation, bank nationalization where appropriate, greater worker control, public members on corporate boards and a national economic strategy prioritizing the interests of workers and citizens.

The immediate prospects are not promising. The Supreme Court decision will help elect Republicans, whose policies of less regulation, less taxes on the wealthy, and less help for those in need will profoundly deepen the economic and social crisis. Voters and tea partyers mistakenly supporting demagogic Republicans who most threaten their incomes and jobs will grow even angrier, as will workers throughout the economy as their suffering becomes increasingly intolerable, leading to ugly class division, and possible violence and police measures to counter them.

The key question, however, is what will happen over the longer run. As even the most obtuse are finally forced to realize we can no longer rely on a failed private sector, there will be mass support for new approaches. America’s last private sector failure ushered in an era of government intervention, featuring job-creation and safety net programs financed by taxing the rich, and strict private sector regulation. Today’s economic stagnation could create mass support for an even more radical “New Deal,” especially since it will be exacerbated by the aging of the giant baby boom generation. As 77 million boomers—and their low-earning children who be unable to support them—find U.S. economic decline affecting not only their quality of life but how long they get to live, there will be unprecedented demands for an expanding safety net.

As discussed in Theodore Roszak’s “The Making of an Elder Culture,” [To see Fred Branfman’s Truthdig review of the Roszak book, click here] a baby-boom generation fighting not only for its own survival but a wider safety net for all those threatened by economic decline could create the only rational and humane alternative to today’s mess: European-style welfare-state policies ensuring that the pain of America’s inevitable decline is shared equally, so as to maintain social cohesion and avoid disintegration into warring camps.

Whatever happens, however, one thing is sure. Cardiologists—and overpaid Wall Street bankers and CEOs, and the politicians who do their bidding—can maintain their present way of life only at the expense of everyone else. How soon the public wakes up not only to what Eisman calls the “rape” of the American economy by Wall Street, but the gang rape perpetrated by so many more of our economic and political leaders, will determine not only Americans’ economic well-being but the future of democracy.

Fred Branfman, the author of a number of books and the editor of “Voices From the Plain of Jars: Life Under an Air War,” exposed the U.S. secret air war in Laos while living there from 1967 to 1971 and went on to develop solar, educational and Information Age initiatives for California Gov. Jerry Brown and national policymakers.


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By Glen Wayne, May 11, 2010 at 11:26 am Link to this comment

Pass the Turkey Pray for War 1.1   empirePie May 7, 2010

The business of war is booming
brave buttered futures are looming

The market’s self corrective hand
knows war’s bread is spread hand to hand
to the greed is God gangsters who own the land
the plutocrat pushers our mushroom masters of small change
as might gangs up on right
and negative equity rains down on the needy
while the gobble up creed and the gusher of plunder
collapses the umbrella of red ink
a subsidiary of nuclear Inc.
who play “America the Beautiful”
for preemptive peace and good will to jaundiced joy in the Zion world

So say grace and pass the bird of prey
in a non kosher way to pork the day
for…..
the business of war is booming
brave buttered futures are looming
for….
greed is good… fraud is better… and war is best
to grease our master’s hands
those of the meltdown plutocrats and their puppets
like goofy cartoon dogs and demoted planets
but mostly…. demented dogma
like market rule
while the hand dives into the public purse
for a billion grand
hush… that’s the market corrective hand!

Did we say grace?
Pass the turkey and pray for war.

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By Night-Gaunt, May 10, 2010 at 4:49 pm Link to this comment

As I have iterated before Capitalism is a force that must be under control or like fire, electricity and cell division it can destroy us. Just as being burned down, electrocuted and cancer would be the outcome if all those forces are unbridled and free to go where ever they want. When Capitalism is on a tear gov’ts and economies fall and only a few have grotesquely huge amounts of wealth. Much like today. Control will make it a servant of ours instead of us being its servant of the owners of them.

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By Anarcissie, May 9, 2010 at 4:42 pm Link to this comment

gerard, May 7 at 3:04 pm:
’... Perhaps this is a key paragraph:  “And as for the financiers, so too for much of the rest of the top tiers of the American economy. The key question now is how long it will take the general public to realize that most of the entire private sector has failed, and that entirely new arrangements are needed—featuring strict regulation, bank nationalization where appropriate, greater worker control, public members on corporate boards and a national economic strategy prioritizing the interests of workers and citizens.”

But what’s missing—as usual?  Where is the admission that the entire economy is war-based, millions of jobs depend upon constant war, and apparently the boobs at the top of this pile of dead bodies have no idea how to get off the war-drug. ...’

You’re right, that essential element is missing.  Now, the business about ‘new arrangements’ in the paragraph you quote is, by and large, a good description of fascism, as fascists would describe it.  However, historically, fascism was also strongly connected with war and imperialism.  “We” already have the war and imperialism, but “we” don’t want to pay for them.  Therefore, our great leaders will have to impose discipline domestically—a discipline whose contours are already visible in the theory of the Unitary Executive, unlimited surveillance, concentration camps, extreme rendition, the nullification of the Fourth Amendment (already accomplished by the Drug War), and most lately the abominable Lieberman’s suggestion that some people be punished on the say-so of the Administration.

It’s not just people at the top of the economy who are doing this, however.  I am wondering how long those who call themselves “progressives” are going to persist in the delusion that regulation will enable the country to spend more than it earns, because that it was brought on the recent financial crash and what will bring on the next one, too—probably not very far off.

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By Night-Gaunt, May 9, 2010 at 4:22 pm Link to this comment

Now a peddler of nonsense in our ranks. Go somewhere else where you will be appreciated instead of reported. On topic? I don’t see it. Your point? To waste our time. This is a troll.

The “Big Short” is the kind of danger to a republic that doesn’t look like it can cripple. The worse kind of warfare is the one that isn’t recognized as one until it is unleashed. It won’t even be called terrorism.

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By grandpaw, May 8, 2010 at 2:01 pm Link to this comment

JimBob:  ” And we do have “the public” more or less on the boards of the big companies—they’re called shareholders and if they take their status seriously and get off their asses shareholders can directly influence the behavior of companies like GS and all the rest of them.”

They do influence the behavior of companies, that is, if they are very rich and control a very large number of shares.

But the average shareholder is a mosquito who can scarcely make enough noise to reach the ears of the high and mighty.  That is why we have a government the rest of us a voice.

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By Night-Gaunt, May 8, 2010 at 12:53 pm Link to this comment

The only way to cure the greed heads is to keep them out of financial actions larger than themselves. They can only act on a personal level and live or die on that. Right now Wall St. and the banksters are having a free-for-all at our expense while they walk away with billions. Talk about income redistribution, something the sobbing Glenn Beck is silent on. That has to end now and forever! Even the casinos in Las Vegas don’t operate that way. Or else our economy will fall and we may not like what rises from those ruins. Disaster capitalism at home, like placing a bomb in our body and setting the timer while the banks and Wall street bet on the outcome. They are betting it explodes in us. Tick-tick-tick…

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By Eric L. Prentis, May 8, 2010 at 11:33 am Link to this comment

Michael Lewis’ “The Big Short: Inside the Doomsday Machine”—is a comic book version of good vs. evil and is the way the financial elite want the story of Wall Street’s systemic extortion, fraud and corruption explained to the masses—instead, to fully comprehend the credit crisis, read Yves Smith’s “Econned: How Unenlightened Self Interest Undermined Democracy And Corrupted Capitalism.”

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By Jack, May 8, 2010 at 8:09 am Link to this comment
(Unregistered commenter)

Turning again to the cardiologist, one of the comments above pointed to a major failing of our system. The difference in compensation between family practice doctors who work to actually improve health and hold down costs and the specialists who rely on bad health to overcharge people and get rich. I know, they spent extra years in school and residencies and fellowships and that it all cost a lot of money. But they never tell you how quickly they pay it all off once they get on the specialist gravy train. The only real health care reform that will not only help the public but actually reduce the bloated health care costs is single payer. And that is precisely why it is supported by a majority of family practice doctors and nurses who actually care for patients and doggedly opposed by the fat-cat specialists and their enablers in the health insurance industry. Health care disfunction is but one corner of our totally disfunctional economic system.

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By Big B, May 8, 2010 at 7:50 am Link to this comment

Dave

“neither a borrower nor a lender be..” is from “Romeo and Juliet” (the priest gives Romeo a long list of sage advice as he prepares him to run away with juliet, and this was one such piece of advice)

Too bad it seems that almost none of us took this advice to heart.

But then again, there is a HUGE upside to being a lender.

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By FiftyGigs, May 8, 2010 at 7:12 am Link to this comment

For what it’s worth—get it?—I’m tired of these
trite casino metaphors for Wall Street (and politics)
that are supposed to educate or enlighten me about
something. Odds, betting, doubling down. News
agencies, please. You’re not informing, you’re not
clarifying, you’re not helping.

Yeah, sales is a game, I get it. I did it, although
when I did it the metaphor was sex. Believe me,
talking about business was a lot more fun then.

Anyway.

So, some trader dude goes to his computer, takes a
sip of coffee, then—oops— types a “b” instead
of an “m” and the savings of 300 million people and
billions in corporate value are wiped out in minutes?
And it got “fixed” because the wheeler-dealers
stepped into the void and traded values back up?

That’s the line you’re selling?

There is one fact of Wall Street that is true for all
eternity: money is somewhere.

That wasn’t a game. That was a message.

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By JimBob, May 8, 2010 at 6:29 am Link to this comment

Much in this article is true, but much is left out.  Wall Street does an amazing job of allocating the financial capital of the country to its highest and best use.  We are the country that developed high-tech not just because we have the best nerds but because we fund entrepreneurs through our capital markets.  And we do have “the public” more or less on the boards of the big companies—they’re called shareholders and if they take their status seriously and get off their asses shareholders can directly influence the behavior of companies like GS and all the rest of them.  So yes, we’re in some trouble, trouble we weren’t in when Glass-Steagall was repealed.  Let’s not wring our hands toooooo much, though.  There’s no need for us to go down the drain.

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By bogi666, May 8, 2010 at 3:05 am Link to this comment
(Unregistered commenter)

DaveZ3, your comments read true and I’d like elaborate on the Treasury bond proceeds recieved from China. They aren’t for the purpose of using for day to day expenses. It is used to be doled out to the CORPORATE WELFARE KINGS WITH THE INTEREST AND PRINCIPLE paid by individual taxpayers. It is fiat money used for the purpose of creating fiat money claimed to be profits, all intangible. No value added, just used by the MONEY CHANGERS for usury. Christ’s only violent out rage was when he trashed the money changers and chased them out of the temple. They, in turn, created Wall St.It’s lazy and obviously such a system won’t continue perpetually, so it won’t. The collapse will and should be ugly.

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By bogi666, May 8, 2010 at 2:46 am Link to this comment
(Unregistered commenter)

FYI, the Wall St., Wash, DC is the Axis of evil as they collude to create intangible wealth, mnufacturing paper, intangible, products. The manufacturers realized that they could make more money by financing their products, cars, than by making them. Usury laws were discarded and the financial institutions became loan sharks. The elites are lazy and manufacturing is hard work.The Federal reserve creates fiat, intangible, paper money by using the Federal deficit. The Treasury bond proceeds are then doled out to the CORPORATE WELFARE KINGS with the interest and principle paid by individual taxpayers. Huge Federal deficits started with Raygun and the number of lobbyist went from 400 in 1980 to 45,000 today, all creating and chasing the deficit proceeds.It is the WELFARE KINGS that initiated and continue to increase the deficit. A simple porverb, FOLLOW THE MONEY, who benefits. The WELFARE KINGS. The fiat money is sent to Wall St. with virutally interest free loans and then Wall St. creates intangible paper products to fleece their customers and/or just make interest, fiat interest, with fiat money and then Wall St. grant themselves obscene bonuses, created by fiat money, meanwhile thumping their chests how brilliant they are,which is just money changers. The fiat money is then doled out to the politicians by legalizing graft and corruption as campaign contributions.This system cannot continue in perpetuity so it won’t and the collapse will be ugly.

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By DaveZx3, May 8, 2010 at 2:25 am Link to this comment

By mrfreeze, May 8 at 3:45 am #

“I have a sincere question. Perhaps someone here might be kind enough to answer it:

“How, exactly, do all of the Goldman Sacs (and other investment banks) create “tangible” wealth….”

I don’t mind throwing my two cents in on this very valid question.

Some describe it as the “American Dream”.  You can see it being shilled on so many infomercials in the middle of the night. 

It is this idea that:  “I can become very, very wealthy without ever having to actually work and save, and if I am already filthy rich, I can become ten times richer, without raising a sweat”

Think of all the venues and operations that are fueled by this near-universal dream of getting rich with little, if any work:  State Lotteries, Stock Markets, Las Vegas, Game Shows, Futures trading, bank robberies, and literally hundreds of other schemes where you can reputedly make a lot of money without having to work for it.

Goldman Sachs, like Las Vegas and the rest, create opportunities for the get-rich-quick dreamers to live out their dreams.  They are all scammers, not completely unlike Bernie Madoff, whose schemes mostly enrich themselves and rarely the “client”.  Like Las Vegas, the odds are skewed towards the house, but you can still get lucky and hit the big one, which is everyone’s dream.

In some cases, it is flat out gambling, but in the Goldman Sachs realm, it is called “investment” giving it an aura of respectability. 

They can say they create wealth because a client can potentially divest at a significantly higher level than they invested.  But in fact, that wealth is not created, but rather stolen from another who was somehow, ill-informed or ill-prepared to reap it.

It is like the futures buyer, who knows the price of heating oil will rise drastically in the winter.  He is prepared to spend millions to buy now, at summer prices, and then sell much higher in the winter, when people must have the product.  He apparently creates wealth for himself when he sells at 30% to 40% higher than he bought only 4 months ago.  But in reality, all he did was force the consumer to pay 30% to 40% more when they really need the product, because the end consumer is not prepared very often to pay large sums far ahead of time.

When I think it out, I find that I could easily hate the concept of “investment,” and state that the only legitimate means of acquiring wealth should be to build it or earn it yourself through the work of your own hands.  Doing otherwise always involves theivery at some level. 

As I do believe in God and his word, I learned the manna lesson.  Don’t pick up any more than you will use in one day, because that which you will try to save for tomorrow will be rotten.  Also, “take no thought for the morrow”  Also, “neither a borrower nor a lender be”  (don’t remember the source for that one)

So, really, I would have a hard time justifying any investment.  I would have to give the advice to work your ass off every week, take what you earned and feed your family, pay the rent and car payment, etc, and whatever is left over after legitimate expenses, give to charity.  I would certainly have a hard time living up to my own advice, but that is the reality of it, in my opinion. 

I would have to say that investment is bullshit, and is only a mechanism to transfer wealth away from the lower classes up to the elitist classes.  Banking is bullshit.  Your 401K is bullshit.  Credit cards are bullshit. 

But borrowing from China to pay our day to day expenses is ultra bullshit, and needs to be stopped immediately, because the billions and billions of interest payed is literally stealing food from the mouths of our hungry and jobs away from our citizens.  It is equal to the evil of war, which also steals unequally the lives and property of the lowest classes.

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By teri schooley, May 8, 2010 at 2:23 am Link to this comment
(Unregistered commenter)

“As director of Rebuild America I wrote in November 2008—in collaboration with Summers, Solow, Krugman, Reich, Tyson, Hatsopoulos, Lester Thurow, Pat Choate and Lawrence Chimerine—a white paper entitled “An `Investment Economics’ for the Year 2000.” We called for setting specific targets for investment in education, training, R&D, infrastructure and plant and equipment, e.g. that gross nonresidential fixed capital formation be 23 percent of GNP by the year 2000. Such thinking, however, was entirely ignored during the Clinton years.”
Is there a typo?  Why would you write a paper “for the year 2000” in 2008?

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By U. Missed-It, May 8, 2010 at 1:22 am Link to this comment
(Unregistered commenter)

Article totally ignores the explosive growth in wasteful gov’t spending, including the spending on sport-wars.  Also ignores the fact that America is basically made up of a bunch of lazy pensioners looking for the next handout.  Not enough young, well-trained horses to pull the wagon.  The article did a good job of explaining how the Wall Street rats looted the wagon, that’s all.

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By mrfreeze, May 7, 2010 at 11:45 pm Link to this comment

One of the best reads on TD in a while.

I have a sincere question. Perhaps someone here might be kind enough to answer it:

How, exactly, do all of the Goldman Sacs (and other investment banks) create “tangible” wealth as the author points out was the case with the Robber Barons? I’m still waiting for someone to tell me what function do these financial institutions perform? I’ve heard them described as “market creators” but WTF does that mean? When someone sits before Congress and defiantly defends his (almost always a him) industry by saying that he merely created opportunities and if someone took a risk and lost, well then too fing bad. It all seems rotten to the core. Is it?

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By LocalHero, May 7, 2010 at 10:27 pm Link to this comment

The system cannot be fixed by re-regulating it. The system of capitalism is evil and the only sensible first step to something entirely different is the wholesale abolishment of corporations entirely. Only then will we be able to clearly see what must be done.

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By GaryA, May 7, 2010 at 6:29 pm Link to this comment
(Unregistered commenter)

Young doctors finishing medical school often carry debts of over $200,000.oo, and some as much as $400,000.oo. They start their careers no earlier than age 31 and pay ~8% interest on these school loans. That means that they’re indentured servants of the banking industry for often as many as 10 years after they earn their MD.

This is not a bad thing; it’s a good thing!

For doctors should in no way feel special - that they shouldn’t support the financial industry as lavishly as any other dutiful citizen does. In fact, because they were so bright and hard-working, they should feel honored that they will also work very hard to support the financial-banking industry repaying school loans often into their 40s. Working so hard for the banking industry is the real noble work they do, and they should feel proud.

This is quite an improvement over the socialistic days of old in America when even people with little/no family money could afford to go through med school and come out owing relatively little. Private bankers didn’t earn much from those guys.

In the 1960’s, for example, room, board and tuition to go to UCLA Medical School was about $1500.oo/yr. Now, with educational subsidies greatly reduced, the yearly cost of UCLA Med School is ~ $40,000.oo/yr, and perhaps $20,000.oo+ more for a private school such as Stanford. [No other First World country does this. In all other commie/socialistic countries in the First World, no banker gets rich off students. This is another way in which America leads the world.]

The right thing to do for America today is to boost the already high salaries of bankers and cut current physician salaries. That way, the stoopid docs will fully realize the folly of their error - believing that if they were really smart and they worked hard they’d be able to do good and have financial security, too.

What chumps!

If that’s what they really wanted, hell, they should not have studied so hard. They should have gotten MBAs by the time they were 25-yrs old instead, and gone into the banking business!

When we need docs, we can import them from the Third World. That way, we can save on educating them here, and they won’t sqwawk when we cut their reimbursements.

Win, win!

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By D.R. Zing, May 7, 2010 at 5:19 pm Link to this comment

“...entirely new arrangements are needed—featuring strict regulation, bank nationalization where appropriate, greater worker control, public members on corporate boards and a national economic strategy prioritizing the interests of workers and citizens.”

Two more things need to happen: Severely restrict corporate mergers.  Too many CEO don’t know shit about running a company. They only know how to sell it.  Companies are bought and sold bought and sold bought and sold till they are completely and totally inefficient.  Consumers and workers get the shaft at every buy and every sale.

Regulate computer trading on the stock market. It’s now clear that when traders get pissed off at a politician or a country, they sell the shit out of stocks out of sheer mendacity.  We can’t have that. We can’t have some idiot with an MBA from Moron Online University with the power to destabilize entire countries just because he’s pissed off by what he sees on Fox News.

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By jean gerard, May 7, 2010 at 4:29 pm Link to this comment
(Unregistered commenter)

One problem about being “exceptional,” “the greatest,” ““the best country in the world,” etc. is that we can never admit to being wrong.  So we Americans have no way to correct our errors because we cut ourselves off from advice.  The only thing we see ahead so far is to bull our way forward, no matter what.
  According to this article, there are places we might go for help, people we might find who could contribute ideas to give us the courage to change, to modify, to get rid of our addiction to the “supremacy” of unregulated capitalism and “privatization” based on wars and on systems of punishing debt and social disintegration.
  The author names Canada, Finland, Denmark.  Australia, Germany, Sweden. Norway might also have some suggestions.  Japan, maybe.  Countries where certain kinds of limits have been successful in steering the economy away
from self-destruction.  Not that they are perfect, but that we share a mutual interest in maintaining a viable “market system”—whether “right” or “wrong” not being the main point—at least not yet.  Alternatives short of revolutionary change might serve as a bridge back to sanity.
  One of the main problems is that, having established ourselves to be, as we professed, the “top dog,” admission of failure seems out of the question.  Too humbling, to obsequious.  However,
we may not be able to get out of our economic funk without the kind of advice our own “economists” and “financiers” have proven is reckless and destructive.
  It is also high time to take a comprehensive look at the impact of our wasteful economy on the entire world, and figure out a less “supremacist” way of operating.  Any of the many less fortunate countries whom we have been abusing in the past would doubtless be glad to give us a piece of their minds!
  It is not that we have nowhere to go for help—it’s that we don’t want to humble ourselves to accept it.

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By marcus medler, May 7, 2010 at 1:10 pm Link to this comment

A visual truth if one is not blinded by greed is
observing the farmer cut his tree to get to its
fruit while a ladder is next to him on the
ground.

You fool say the observers you will have no tree
nor fruit next year.

Well, true he says but who cares it is not MY
tree. My minders(shareholders) look at the
basket, they never count trees.

In a nutshell that is how most of the leaders
both political and institutional, acted in the last
thirty years. Why use a ladder when you just cut
the tree and pick up the fruit.

What is needed is leadership and reward
structures that look after and plant trees.

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By BobZ, May 7, 2010 at 11:27 am Link to this comment

When I talk to my conservative friends about the financial excesses on Wall
Street, they become very silent or try and reposition the issue as being a
government problem and blaming everything on Barney Frank and
Freddie/Fannie Mae. It is a form of cognitive dissonance. They just can’t
envision our free market capitalist system not working to perfection or that
Wall Street whom they tend to worship is doing bad things to our country as a
whole. They instinctively fight financial reform even though it is the reforms
that just may entice average investors to once again trust Wall Street with their
money. Financial markets comprised almost entirely of traders are going to be
inherently volitile, and create an even bigger credibility gap. Notice how the tea
bag movement has so little criticism of the big bankers and Wall Street. Almost
100% of their anger is focused on Washington D.C. and for the wrong reasons,
which is even more ironic. The tea baggers are also upset about illegal
immigration, not realizing the influx of Mexican’s into the United States over
the last decade was caused by the unintended consequences of NAFTA which
allowed dumping of American agricultural products at subsidized prices into
the Mexican marketplace thus driving Mexican farmers out of business. Mexico
also reneged on setting higher minimum wages for their workers in order to
create a level playing field with American workers. And the ugly secret about
shipping jobs overseas in the name of lower wages is instinctlively realized by
consumers who have seen little benefit from millions of American jobs being
shopped overseas yet still being charged outrageous prices for a pair of
designer jeans that could just as easily have been made in the U.S. When
technical jobs were shipped overseas there was no resultant decrease in prices
charged to American corporations that bought technical services. Most of the
cost savings went directly into the pockets of senior managers whose pay went
up by 1000%. Many American’s of course still believe in the American dream
equivalent of winning the lottery and that they will soon be one of those
overpaid CEO’s or Wall Street analysts living in a mega mansion. Greed, greed,
and more greed have made the rich much richer while the rest of us learned
how to juggle maxing out our credit cards and rolling over mortgage loans
until even that was no longer possible. President Obama must be wondering
when he will start getting the thanks for finally getting the U.S. out of this
latest bad recession. That won’t happen. The stimulus package which did the
pump priming to the economy will continue to be ridiculed by the tea baggers
even as they start to get their jobs back. FDR never got much respect either.
Republican’s hate him to this day, refusing to acknowledge he saved capitalism.
A small dose of socialism from time to time has helped all of us, even Wall
Street. The golden age of America was when the income gap was at its
narrowest. The CEO lived in a nice house back then too but it wasn’t 50,000
square feet on 20 acres. The Founding Fathers would be somewhat nonplussed
if they visited us today and see a new royalty class in the United States.

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By zaphodity, May 7, 2010 at 11:21 am Link to this comment
(Unregistered commenter)

Great read.

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By gerard, May 7, 2010 at 11:04 am Link to this comment

Perhaps this is a key paragraph:  “And as for the financiers, so too for much of the rest of the top tiers of the American economy. The key question now is how long it will take the general public to realize that most of the entire private sector has failed, and that entirely new arrangements are needed—featuring strict regulation, bank nationalization where appropriate, greater worker control, public members on corporate boards and a national economic strategy prioritizing the interests of workers and citizens.”
  But what’s missing—as usual?  Where is the admission that the entire economy is war-based, millions of jobs depend upon constant war, and apparently the boobs at the top of this pile of dead bodies have no idea how to get off the war-drug.
  Furthermore, like any other addicts, they need help but they don’t want any help!  It’s not their problem!  It’s your problem! 
  And further furthermore, we all share to some extent in this addiction to the degree that we love shopping, consume regardless of pollution and exploitatioin, despise poor people to the extent that we want to keep them out of our backyards by sending occasional charity overseas, etc. etc. 
  If this economic escapade is to get fixed, it will be because we are finally willing to see it for what it is—a national greed for material things, a selfish belief that we deserve more, more, more.
  (We means you and me, middle class softies.) But I rant!

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By Zephram Cochrane, May 7, 2010 at 9:20 am Link to this comment

Though it’s not the main point of the article, I might point out that the doctor being criticized is a specialist.

When adjusted for inflation, family practice docs haven’t seen a real increase in income throughout the “aughts.” My spouse is a family practice doc. We live in a mediocre neighborhood, and we’re still chipping away at medical school loans in the neighborhood of $200,000. As for big houses and Beemers, forget it.

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By RaySunshine, May 7, 2010 at 8:03 am Link to this comment

We don’t need another round of “innovation” in the capital markets.  We need to return to the 1970’s when small companies could raise money via small brokers.  This will require reinstatement of Glass-Steagall, the SEC to again regulate small brokers rather than leave them to the whims of Big Brokers in control of FINRA, and elimination of “naked short-selling” which made it impossible for smaller brokers to maintain orderly markets.  The SEC should be denied the ability to levy & collect fines as it has become a “self-interested” party rather than an enlightened regulator.  It needs to refocus on registration of securities and full disclosure to investors.  Small business, the job creator, has one hand tied in trying to compete, i.e. the inability to raise equity capital.  And small investors are relegated to bank deposits and retail investments in the stock market while VC’s and “accredited investors” get 40% IRR returns from “wholesale” opportunities.  CLASS WARFARE LIVES AND WAS DECLARED BY THE WEALTY!  We who work & live in the trenches need a voice in government.

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By frank1569, May 7, 2010 at 6:16 am Link to this comment
(Unregistered commenter)

Two quick points:

Mr. Lewis overlooks the fact that Greedaholics are no different than drug addicts - it’s a mental disorder than cannot be ‘solved’ with laws and regulations or even shame. The money-mongers literally get ‘high’ from the big score, and the more they get high, the harder it is to get high, forcing them to go for bigger and bigger scores. Until we recognize Greedaholism for what it is and find a way to treat it, the addicts will rule.

2nd, I would suggest that, contrary to ML’s take, Capitalism has unexpectedly succeeded - and that’s the other problem. Basically, we all have plenty of food, clothing, shelter, and material goods out the ying-yang. Our economy is 70% consumer-driven - but what happens when the consumer simply can’t consume anymore - and has even lost the desire to consume more?

Well, if I were a Greedaholic, there’s only one choice: strip as many as possible of their material possessions, and then sell it all back to them. And that’s exactly what’s happening - they’ve taken our houses and cars and credit and money and jobs, pushing millions into such a state of despair, they’re lining up for min wage jobs at McD’s, so broke and desperate that they never even consider seriously fighting back, while being bombarded with one singular message: if you don’t work your balls off and buy lots of cheap crap you don’t need or even want, you’re a bum, a waste, a drag on society.

There is only one answer: massive, prolonged protests aimed at shutting down the entire system.

Sadly, we don’t do that here. That’s for crazy countries like Thailand and Greece. We prefer to wait for Superman to save us…

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