Re nrobi:

I agree very much so on the Bair selection for Secretary of Treasury. She was one of the few that had the foresight to predict the current crisis. Hopefully once Bernake’s initial term is up he will be jettisoned… If only Michael Woodford could take his place as Chairman… Let’s just keep our fingers crossed for the appointment of Bair. To answer your initial question, I have some training in macroeconomic studies. Although specifically the graduate work I’m involved in deals with Political Economy and IPE as it ties in with my core studies….My main focuses are in Political Theory, and International Relations (as applied to collective security, and international law)..

Re: Afrothunder225x,  you seem to have an excellent grasp of the macro-economic problems that face America and the global economy today.
Query? Where did you receive your training, or are you auto-didactic in the area of economics?
I have not made the same studies that you have, but one thing that seems to bother me about the idea of a laissez-faire economy is the fact that there seems to be a bottleneck of resources at the top of the “food-chain,” and nothing at the bottom to supply the needs of the poor and working poor.
Deregulation, truly began under Ronald Reagan, and continued throughout all the presidents including William Jefferson Blythe Clinton. He more than made up for the fact that he was a Democratic president, by giving the post of Treasury Secretary, to one Robert Rubin, then following in the same ideological footsteps, Lawrence Summers.
These regulations which began after the Great Depression of the 1930’s, and the inauguration of Franklin Delano Roosevelt, had worked for almost 60 years and protected the consumer from the schemes and scams of the Wall Street Thugs.
Under the administration of Ronald Reagan, the breaker of unions and the consumers worst nightmare, deregulation was started and continued under the successive administrations up to the shrub’s.
We are now faced with the worst economic disaster in the history of mankind, one figure that has been floated about, regarding the derivative markets, is $485 Trillion Dollars, these exotic and obscure pieces of paper, which are fast becoming worthless, will bankrupt every nation on the planet. For no country in the world, has the resources to cover the losses that will be incurred by the people who have invested in these scams.
I am appalled at the lack of oversight that has occurred since Ronald Reagan and now we are facing global economic disaster. One person who can help, who understands something regarding the current economic disaster is Sheila Bair, the Chairwoman of the FDIC.
When questioned by the House Banking Committee, Ms. Bair, warned of the impending disaster, rather than listen the ol’ boys network of Henry(I’ve got a gun in my hand, Hank) Paulson, and Benjamin Bernanke, pooh-poohed the idea that this was going to happen. According to Congressional records of the proceedings, Ms. Bair, was denigrated because of her “doomsday” outlook regarding the economy, when the ol’ boys network then testified.
If anyone should become the next Secretary of the Treasury, it should be Ms. Bair. I have every confidence in her ability to see this country through the rockiest economic disaster in the history of the world. Maybe just maybe, President-elect Barack Obama, will heed the people and enlist Ms. Bair for that position.
Should he do so, then I would have every confidence in his administration, if not, then we, the people will be faced with shortages, record unemployment, high rates of homelessness and other economic disasters the likes of which we have never seen.

Paul F..

thanks for your input, sorry if I came across as snarky..This issue has had me riled up lately. I do agree that something must be done about government spending. Although at this exact point trying to reduce spending to balance the budget would be disastrous..As sucking more liquidity out of the market would only send the economy further down the rabbit hole. The printing of the money issue I think sometimes is used as a device to cause hysteria, as if the Fed were simply flooding the market with dollars unnecessarily we would see the value of the dollar plummet to the ground, while watching inflation hit numbers similar to Zimbabwe (okay well not THAT bad)..If the dollar was as worthless and unstable as Paul proposes, nations wouldst be flocking to it in times of crisis. Which is exactly what they are doing now…I also think we must be careful about what we label as “Socialist”..Politicians have the inclination to label anything that involves any regulation of any kind as “Socialist”...when in fact its those exact instruments we have currently that have kept us from spiraling into a 2nd Great Depression. If the FDIC disappeared tomorrow you’d be seeing another bank run, and the systematic collapse of our financial system 100x worse than what we’re seeing now.

Paul—so the elderly, children and the disabled should all provide for themselves.(oh, I forgot “charity care”—which, is unreliable and inhumane, as New Orleans showed us)Sorry—too Social Darwinian for me. Paul is a racist, and wants a yoyo govt. I do not. As this election showed, neither do the USA citizens. I am just afraid Obama will bend to pressure and not do enough.Of course, he has been pretty plain, that he does NOT want a Social Democracy—so you have nothing to worry about.

I have spent time in Western Europe—-maybe you have. What was it about their superior standard of living, for MORE of their citizens, that you did not like? Freedom to what—die with your rights on? Choose it for yourself perhaps, but, do not presume to choose it for those who cannot.

Paul’s ideas are selfish, greedy and dog-eat-dog to the extreme. He just acts “nice”—he is a predator masquerading as a house pet.

Haha, I always love the arguments of “false value”, given that in order to return to the precious gold standard that Paul worshipers fawn over, you would have to consistently revalue the price of gold relative to the global economy. Which would result in the same scenarios that they’ve been decrying. Not to mention I’ve yet to see someone readily explain to me how exactly scrapping 3/4 of the total domestic economic base would be a good thing. And yes, I mean real tangible economic factors (infrastructure, real wages, etc.) And please, spare me with your talk of the domestic base being invisible without providing some tangible evidence.

Butter these Two Up and stick an apple in their mouths we intend to not just ‘Grill’ them, but also Deep FRY them! Along with their Mentors and Co conspirators like Greenspan and Phil Gramm.
I was appaulded When ‘Trickle Down’ was first put forth as an Economic stratedgy…Feudalism, Anyone? American Revolution, anyone? How could you miss the direct correlation between the old English Monarchies economic System and this Updated version. hell I’ve been screaming about Trickle down for nearly 3 decades. This Treasonous Act was Soooo Obvious. Hell we even got a reality check at the end of the ‘80’s that this systems destroys national economies and security. Shit Open a damn book on the Fall of Rome!
How can a market be ‘Free’ is all Resources are Hoarded at the Top and access is limited to a ‘Trickle’???
This was not a ‘Flaw’ in Logic…It was Treason with Forethought and Malice…Not a Damn ‘oops’!
‘Revenge is a Dish Best served Cold’ so perhaps putting them in cold Storage for several years in Gitmo is in order before we finally ROAST their ASSES!Reminder..always ‘Rinse’ before Preparing,so submerging in to a deep water basin is highly advised!

Not enough gold to keep growing forever? That is an interesting constraint. There is also not enough oil, or gas, or coal, or breathable air, or forests, or fish, or copper, or lithium, or drinking water or any of the things nature provides us if we intend to grow forever like a malignant tumor sucking the life out of the planet.

A debt based society has no choice but to continue “growing”, even if that growth is ultimately suicidal to all. Go get another planet if you don’t like the fact that this one has it’s limitations. But don’t blame Ron Paul for earth’s limitations.

Guys like Hank Paulson will tell you the system can grow forever with the rich getting richer all the way, but having both his hands deep in your pockets will make it hard to walk.

In response to Paul F..

So If I understand correctly, you’re claiming that the Western European welfare states do not make for a stable location for investment..Really now? Well then I guess all those capital flows and FDI going from the US into Europe by the private sector was just make believe. Secondly, I always love these cries of “false value” when talking about currency values, when the Austrian school advocates totally overlook the fact that the idea they are proposing is the epitome of false value. How exactly are you going to implement the gold standard when the world economy grows at a rate that far outstrips the supply of gold relative to price? This is not “fake” growth, but real infrastructure building that would have to be totally abandoned if this idea were carried out…Now if you have a better explanation as to why these private sector investors are choosing welfare European states as locations for infrastructure investment and building, I would love to hear it.

WTO trade statistics

UNCTAD’s statistics on FDI

AfroThunder—Yes, I have gotten into discussions with Paul-tards online—-they kept sending me to the “Austrian models”—you are correct—they do not work, and, even the sites have scary overtones of pre-WWII fascism in them. Yes, the W EU markets are much more stable. People dont have to constantly worry about the necessities of life. And there is REGULATION! We were supposed to get some of that—anybody know when?

lefty and Louise—aw cmon—youre not really surprised—lol. Messing around with you…

; )

I watched today as the Dems let GOP hammer away at the “union benefits” as the cause for the Big Three’s bankruptcy—ever stop to think, dumbass dems, that , if the uS citizenry had universal health care, public pensions (fund Social Security) and a safety net for unemployed, child care, free college—that they might not be going bankrupt? How much do they spend on these?>

Our Unions are so lame as to be useless, but not as useless as our duopoly.

Hey, if capitalism (moneyism) works—let it…

All of my life, I have watched Democratic politicians resetting the bowling pins for the rightwing to knock down again. The same thing is happening today. Henry Paulson has never had to sit through a major league excoriation. This whole deal with financial derivatives was so irresponsible as to be repulsive. America still has no idea as to how reckless and how objectively criminal it all really was.
We congratulate ourselves that we elected Barack Obama, and I applaud that. We need a victory every now and then. But, in so many areas thus far, we are hearing all about an unwillingness to hold rich financial criminals responsible for their misdeeds. In fact, one of the main colluders administers the bailout fund—for his friends. Aside from two brilliant Steve Kroft pieces that appeared on Sixty Minutes, few serious attempts have been made to educate the American people as to just how egregiously they have been abused.
Do you, for one minute, seriously believe that we have eradicated the likelihood of a fascist reaction in this country?
How about some change that I can fucking well believe in?

afrothunder225x,

Thanks for your insightful observations!

My understanding of finance and finance models is limited to knowing when I don’t have enough income to pay my bills, I cant pay them. Maybe that’s the model we need to inject into the folks sitting through this hearing. Cant resist making the observation. Even though Paulson was given a clear and concise mandate to address the housing foreclosure crisis, in the “bail-out” bill, he has chosen to not address the housing foreclosure crisis. And even worse, he pretty much refuses to identify why! Saying only, “... for very good reasons.”

Now I have a question for the congressaurs. How come you were so willing to hand Paulson almost a trillion dollars to save the banks and wall street, but you don’t want to give a sniggling penny to the automobile manufacturers? Is it because the big guys that sit on the big boards of those banks and investment firms might lose a toy or two, or worse still ... not like you anymore? How about the multi-million plain old ordinary workers who will lose everything if the automobile manufacturers fold?

Oh, that’s different.

Well you can just bet, if one of the few manufacturing bases we have left in this country folds, nobody’s going to like you anymore!

The more I hear Ron Paul speak about economic matters, the more disappointing I become. In almost every Congressional session, he bemoans the fact that no one takes credence in the Austrian model of economics. There is a very good reason for this…It doesn’t work!!! Almost every market fundamentalist assumption about the nature of markets has been proven wrong. If you need a clear cut example, look at the FDI flows from the US…According to the wonderful Austrian schoolers, US capital flows should be going primarily to developing nations that utilize a totally deregulated financial sector. However, *gasp* the overwhelmingly large amount of US FDI is going into the welfare states of Western Europe. This is because welfare states such as this one and those in Europe provide for more stable investment. Unlike deregulated markets that are subject to drastic boom bust cycles. But back to Paul, he constantly is complaining about injection of “invisible currency” into the market. How exactly is it invisible? The value of the currency is a reflection of the purchasing power of the economy, and its domestic growth. But because we don’t bow down the the lovely gold standard, people like him throw fits about how currency isn’t worth anything…However, what people like him will never own up to is the fact that if we were to try to move back to the gold standard, we would have to forcibly jettison 3/4 of our entire economic base to meet a proper equilibrium with the supply of gold..I’ve lost all respect for politicians such as Paul, who are well aware of the potential ramifications of their drastic proposals, but capitalize on crisis’s to try to implement their flawed economic views…Even Greenspan has gotten it through his thick skull