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Government Economic Leaders Surprised that Real World Isn't Responding to their Magic Pixie Dust

George Washington's picture





 

Washington’s Blog

Fed chief Ben Bernanke told the financial crisis inquiry commission today:

If the crisis has a single lesson, it is that the too-big-to-fail problem must be solved

 

***

 

Too-big-to-fail
financial institutions were both a source ... of the crisis and among
the primary impediments to policymakers' efforts to contain it ....

That's funny, given that Bernanke has been one of the biggest defenders of the too big to fail banks, arguing strenuously against breaking them up, throwing trillions of dollars their way, and begging the banks to play nice with one hand, while patting them on the back with the other hand and giving them a big wink.

And Christina Romer - Obama's outgoing chief economist and Chair of the Council of Economic Advisers - said in her outgoing speech yesterday, as summarized by Dana Milbank at the Washington Post:

She
had no idea how bad the economic collapse would be. She still doesn't
understand exactly why it was so bad. The response to the collapse was
inadequate. And she doesn't have much of an idea about how to fix
things.

Many have tried to explain
to the neoclassical economists running the show exactly how bad the
economic collapse would be, why it was so bad, and how to mount an
adequate response to fix things. But Bernanke, Romer and the rest of
the gang ignored them.

Who Knew?

 

ATT952177.gif

As I pointed out in March:

 

Greenspan's big defense is that the financial crisis was caused by a "once-in-a-century" event.

 

 

Forget about the fact that the "once-in-a-century event" couldn't have happened if Greenspan's Fed hadn't:

  • Acted as cheerleader in chief for unregulated use of derivatives at least as far back as 1999 (see this and this)
  • Allowed
    the giant banks to grow into mega-banks. For example, Citigroup's
    former chief executive says that when Citigroup was formed in 1998
    out of the merger of banking and insurance giants, Greenspan told him, “I have nothing against size. It doesn’t bother me at all”
  • Preached that a new bubble be blown every time the last one bursts
  • Kept interest rates too low
  • And did alot of other hinky things

More importantly, as Nassim Taleb repeatedly points out, financial experts who don't plan for rare events are like pilots who don't know about storms.

 

There are storms out there, Taleb says, and any pilot who doesn't know how to deal with storms shouldn't be flying. Similarly, no one should be in a position of financial leadership if they don't know about - and plan for - the infrequent event:

 

 

High Priests Shake their Magic Wands Even Harder

As Australian economist Steve Keen wrote last week, mainstream economists have been acting like religious fundamentalists, rather than scientists:

Bernanke’s
failure to realize this: it’s a failing that he shares in common
with the vast majority of economists. His problem is the theory he
learnt in high school and university that he thought was simply
“economics”—as if it was the only way one could think about how the
economy operated. In reality, it was “Neoclassical economics”, which is
just one of the many schools of thought within economics. In the
same way that Christianity is not the only religion in the world,
there are other schools of thought in economics. And just as
different religions have different beliefs, so too do schools of
thought within economics—only economists tend to call their beliefs
“assumptions” because this sounds more scientific than “beliefs”.

 

Let’s call a spade a spade: two of the key beliefs of
the Neoclassical school of thought are now coming to haunt
Bernanke—because they are false. These are that the economy is (almost)
always in equilibrium, and that private debt doesn’t matter.

Indeed, as I wrote in June:

Most economists don't exercise any independent thinking because economists are trained to ignore reality:

As
I have repeatedly noted, mainstream economists and financial
advisors have been using faulty and unrealistic models for years. See
this, this, this, this, this and this.

And I have pointed out numerous times that economists and advisors have a financial incentive to use faulty models. For example, I pointed out last month:

The decision to use faulty models was an economic and political choice, because it benefited the economists and those who hired them.

For
example, the elites get wealthy during booms and they get wealthy
during busts. Therefore, the boom-and-bust cycle benefits them
enormously, as they can trade both ways.

Specifically, as Simon Johnson, William K. Black and others point out,
the big boys make bucketloads of money during the booms using
fraudulent schemes and knowing that many borrowers will default. Then,
during the bust, they know the government will bail them out, and they will be able to buy up competitors for cheap and consolidate power. They may also bet against the same products they are selling during the boom (more here), knowing that they'll make a killing when it busts.

But economists have pretended there is no such thing as a bubble. Indeed, BIS slammed the Fed and other central banks for blowing bubbles and then using "gimmicks and palliatives" afterwards.

It
is not like economists weren't warning about booms and busts.
Nobel prize winner Hayek and others were, but were ignored because
it was "inconvenient" to discuss this "impolite" issue.

Likewise, the entire Federal Reserve model is faulty, benefiting the banks themselves but not the public.

However, as Huffington Post notes:

The
Federal Reserve, through its extensive network of consultants,
visiting scholars, alumni and staff economists, so thoroughly
dominates the field of economics that real criticism of the central
bank has become a career liability for members of the profession,
an investigation by the Huffington Post has found.

 

This
dominance helps explain how, even after the Fed failed to foresee
the greatest economic collapse since the Great Depression, the
central bank has largely escaped criticism from academic
economists. In the Fed's thrall, the economists missed it, too.

 

"The
Fed has a lock on the economics world," says Joshua Rosner, a Wall
Street analyst who correctly called the meltdown. "There is no
room for other views, which I guess is why economists got it so
wrong."

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Read more at: http://www.huffingtonpost.com/2009/09/07/priceless-how-the-federal_n_278805.html

The
problems of a massive debt overhang were also thoroughly
documented by Minsky, but mainstream economists pretended that debt
doesn't matter.

And - even now - mainstream economists are STILL willfully ignoring things like massive leverage, hoping that the economy can be pumped back up to super-leveraged house-of-cards levels.

As the Wall Street Journal article notes:

As they did in the two revolutions in economic thought of the past century, economists are rediscovering relevant work.

It
is only "rediscovered" because it was out of favor, and it was
only out of favor because it was seen as unnecessarily crimping
profits by, for example, arguing for more moderation during boom
times.

The powers-that-be do not like economists
who say "Boys, if you don't slow down, that bubble is going to get
too big and pop right in your face". They don't want to
hear that they can't make endless money using crazy levels of
leverage and 30-to-1 levels of fractional reserve banking, and credit
derivatives. And of course, they don't want to hear that the Federal Reserve is a big part of the problem.

Indeed, the Journal and the economists it quotes seem to be in no hurry whatsoever to change things:

The
quest is bringing financial economists -- long viewed by some as a
curiosity mostly relevant to Wall Street -- together with
macroeconomists. Some believe a viable solution will emerge within a
couple of years; others say it could take decades.

Saturday, PhD economist Michael Hudson made the same point:

I
think that the question that needs to be asked is how the
discipline was untracked and trivialized from its classical
flowering? How did it become marginalized and trivialized, taking
for granted the social structures and dynamics that should be the
substance and focal point of its analysis?...

To
answer this question, my book describes the "intellectual
engineering" that has turned the economics discipline into a public
relations exercise for the rentier classes criticized by the
classical economists: landlords, bankers and monopolists. It was
largely to counter criticisms of their unearned income and wealth,
after all, that the post-classical reaction aimed to limit the
conceptual "toolbox" of economists to become so unrealistic,
narrow-minded and self-serving to the status quo. It has ended up as
an intellectual ploy to distract attention away from the financial
and property dynamics that are polarizing our world between debtors
and creditors, property owners and renters, while steering
politics from democracy to oligarchy...

[As one Nobel
prize winning economist stated,] "In pointing out the consequences
of a set of abstract assumptions, one need not be committed unduly
as to the relation between reality and these assumptions."

This
attitude did not deter him from drawing policy conclusions
affecting the material world in which real people live. These
conclusions are diametrically opposed to the empirically successful
protectionism by which Britain, the United States and Germany rose
to industrial supremacy.

Typical of this now
widespread attitude is the textbook Microeconomics by William
Vickery, winner of the 1997 Nobel Economics Prize:

"Economic
theory proper, indeed, is nothing more than a system of logical
relations between certain sets of assumptions and the conclusions
derived from them... The validity of a theory proper does not depend
on the correspondence or lack of it between the assumptions of the
theory or its conclusions and observations in the real world. A
theory as an internally consistent system is valid if the
conclusions follow logically from its premises, and the fact that
neither the premises nor the conclusions correspond to reality may
show that the theory is not very useful, but does not invalidate
it. In any pure theory, all propositions are essentially
tautological, in the sense that the results are implicit in the
assumptions made."

Such
disdain for empirical verification is not found in the physical
sciences. Its popularity in the social sciences is sponsored by vested
interests. There is always self-interest behind methodological
madness. That is because success requires heavy subsidies from special
interests, who benefit from an erroneous, misleading or deceptive
economic logic. Why promote unrealistic abstractions, after all, if
not to distract attention from reforms aimed at creating rules
that oblige people actually to earn their income rather than simply
extracting it from the rest of the economy?

***

Michael Rivero may have the hardest-hitting critique of all:

This
seems to be a return to the mindset of the middle ages where only
the clergy were allowed to read and interpret the bible and the
laity were presumed incapable of comprehending the intricacies and
subtle nuances of the faith.

 

And indeed there is a great deal of
similarity between economics and [fundamentalist version of]
religion in that both depend on the unquestioning faith of the
masses that those pretty printed pieces of paper represent
something real, albeit invisible.

 

But the advent of the
printing press led people to take a closer look at the actual
content of [fundamentalist version of] religion and it has been
revealed not as a complex and sophisticated system but as a
mish-mash of half-baked myths and legends often in contradiction with
itself and used to enrich the church ....

 

The same is true of
economics. the advent of the blog has led people to take a closer
look at the actual content of economics and it has been revealed
not as a complex and sophisticated system but as a mish-mash of
half-baked theories and math often in contradiction with itself and
used to enrich the bankers and conceal their fraud against the
public. Athreya is reacting to the blogs the way [fundamentalist]
priests reacted to Gutenberg's Printing Press.

 

The fraud
and danger of the Federal Reserve system of banking stands exposed
to the public eye, sans the "benefit" of correct interpretation by
the self-appointed priests of Mammon. The public now understands
that when a private bank issues the public currency at interest,
debt will always exceed the available money supply. The public now
understands that the Federal Reserve is no more Federal than
Federal Express. The public now understands that the Federal
Reserve is a legalized counterfeiting operation, that creates the
money they loan out out of thin air! The public now understands that
the Federal Reserve system of banking, since its creation in 1913,
has reduced the value of a dollar down to about four cents! The
public now understands that the Federal Reserve system is a pyramid
scam that only works when ever larger populations of borrowers can
be found, and that once an entire nation or planet has borrowed to
the max, the system must crash (which is what is happening now).

 

Just as the [fundamentalist] priests, stripped of the arcane
scriptures and rituals, stand exposed ... so too the economists,
stripped of their arcane equations and theories, stand exposed ....

Karthik Athreya doesn't like that fact that the public sees the Federal Reserve for what it really is.

What Could Possibly Go Wrong?

Not
only have our government "leaders" in the Fed, Treasury, Congress and
White House ignored the real world, they have taunted it - like
monkeys who pull the tail of the lion and then are surprised when the
lion attacks:

They have:
  • Given trillions in bailout or other emergency funds to private companies, but then refusing to disclose to either the media, the American people or even Congress where the money went
  • Failed to take any meaningful steps to stabilize - let alone fix - the economy (see this and this)

Under these conditions, it is impossible to have a decent economy. After pulling these kind of shenanigans, of course the lion of debt and depression is going to eat us alive.

 


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Sun, 09/05/2010 - 00:40 | Link to Comment proLiberty
proLiberty's picture

Just a few days ago, CNBC carried an extensive live interview with a Federal Reserve high priest.  He stated proudly that the Fed must obey its "legislative mandate" of full employment and preserving the value of the dollar.  These two lies along with the third lie that it is in the public interest to have a positive rate of inflation should be enough to convict the Fed under RICO.  This is the grandest scheme of theft in the history of humanity, especially when coupled with a tax in nominal "income" however derived, by which I mean that the Fed, in collusion with government causes assets to rise in terms of inflated dollars, and then government gives itself the power to tax that as if it was "income", thus creating a "taking" entirely outside of Constitutional authority.

 

Speaking of preserving the value of the US Dollar.  in 1932, the gold was $20/ounce.  Today it is north of $1,200, a 60x change.  I think the Fed has disqualified itself.   This is like a the long line of proud hyprocricies, like being for inflation after being against it, or is it being against inflation after being for it.

 

Sun, 09/05/2010 - 00:27 | Link to Comment proLiberty
proLiberty's picture

" A theory as an internally consistent system is valid if the conclusions follow logically from its premises, and the fact that neither the premises nor the conclusions correspond to reality may show that the theory is not very useful, but does not invalidate it. In any pure theory, all propositions are essentially tautological, in the sense that the results are implicit in the assumptions made."

 

Which is exactly why I found Keynes to be so disturbingly wrong and von Mises to be so satisfying.  The first few chapters of his Human Action are amazing.

 

Fri, 09/03/2010 - 10:15 | Link to Comment blindman
blindman's picture

BettySoo "Things are Going to Get Worse"

http://www.youtube.com/watch?v=dElLEhHoESc

.

http://maxkeiser.com/

.

KR74] Keiser Report – Markets! Finance! Soupy Sales!

September 2nd, 2010 by
Fri, 09/03/2010 - 02:29 | Link to Comment Coldfire
Coldfire's picture

Government "leaders" surprised? Even non-PhD holder Madoff understood perfectly well when the jig was up.

Thu, 09/02/2010 - 22:25 | Link to Comment Bartanist
Bartanist's picture

Wow, I never realized how completely full of shit Greenspan is. He just seems to like hearing his own voice.

Also, one has to wonder on what planet (or under what mindset) the decisions that have been made can be considered rational. Is there some diabolical agenda that makes it all rational?

Fri, 09/03/2010 - 00:09 | Link to Comment Seer
Seer's picture

The Big Lie, classic execution!

Thu, 09/02/2010 - 21:10 | Link to Comment Silversinner
Silversinner's picture

Keep on telling the truth.

Tnx for this one,great article

Thu, 09/02/2010 - 21:00 | Link to Comment web bot
web bot's picture

I wonder down the road what the conclusions will be from subsequent Fed overlords when speaking about the 2010 Depression. Will they focus on what triggers led to hyperinflation, or factors that got out of hand regarding the monetization of the debt, or perhaps the tipping point at which the ratio of interest payments/GDP led to the USD default.

 

Fri, 09/03/2010 - 00:05 | Link to Comment Seer
Seer's picture

And they'll be sure to miss THE fundamental trigger- a system completley dependent upon growth, on a freaking finite planet!  Like no one could have seen this coming?

Thu, 09/02/2010 - 19:25 | Link to Comment tony bonn
tony bonn's picture

george washington for a 3d term i say

Thu, 09/02/2010 - 19:16 | Link to Comment Goldenballs
Goldenballs's picture

To me wages seem to be a very key point in all this mess.For most people wages have gone up by a small amount in maybe the last 20 years,if you put real inflation in the mix they have probably gone down,debt on the other hand has gone up,mainly due to living and speculation in the necessities of life.Corporations and banks have made huge profits over this time,25,30 & 40% not being uncommon,money has to come from somewhere but it also has to be returned to the economy in such amounts as to make debt repayable and keep the ponzi scheme going,in short it hasn,t been returning in sufficient amounts and we now look at the result.

Thu, 09/02/2010 - 19:07 | Link to Comment NotApplicable
NotApplicable's picture

I just read Hayek's 1944 speech "On being an Economist" this morning. It could not be more fitting today.

Here's an excerpt from Mises.org.

Thu, 09/02/2010 - 18:56 | Link to Comment lindaamick
lindaamick's picture

It feels to me like there is a silent revolution unfolding the US.  There are not too many amerikans that are not at least aware now that the financial class and coopted government live by a set of "no rules" where fraud is acceptable behavior whereas mainstream amerikans are expected to follow and obey all laws related to finances.   This awakening has brought about several occurrances: 1) people do not feel morally obligated to repay their debts.  They are following the lead of the elite class now. 2) people can not trust institutions, corporations nor government.  Therefore, people are reluctant to take chances and start/expand businesses or their holdings. 3) people are doing more and more financial transactions "under the table" using cash. 

I agree that the amerikan people by and large have a herd mentality but they are human and humans ALL have intuition which operates subconsciously and affects behaviors and choices. 

The system is rotten to the core.  It can not be fixed easily.  It is like a marriage when a spouse has an affair.  How long does it take for that relationship to "return" to normal?

Thu, 09/02/2010 - 18:53 | Link to Comment lindaamick
lindaamick's picture

It feels to me like there is a silent revolution unfolding the US.  There are not too many amerikans that are not at least aware now that the financial class and coopted government live by a set of "no rules" where fraud is acceptable behavior whereas mainstream amerikans are expected to follow and obey all laws related to finances.   This awakening has brought about several occurrances: 1) people do not feel morally obligated to repay their debts.  They are following the lead of the elite class now. 2) people can not trust institutions, corporations nor government.  Therefore, people are reluctant to take chances and start/expand businesses or their holdings. 3) people are doing more and more financial transactions "under the table" using cash. 

I agree that the amerikan people by and large have a herd mentality but they are human and humans ALL have intuition which operates subconsciously and affects behaviors and choices. 

The system is rotten to the core.  It can not be fixed easily.  It is like a marriage when a spouse has an affair.  How long does it take for that relationship to "return" to normal?

Thu, 09/02/2010 - 22:12 | Link to Comment Hang The Fed
Hang The Fed's picture

In the context of how badly rotten the system is right now, I'd wager that it won't renormalize until it's completely dead and replaced by something built anew by the people who fuel it, and therefore the rightful beneficiaries of it.  In the context of America, we should probably demolish the Fed, the electoral college, and every piece of legislation written since the Constitution and the Bill of Rights.

Since that probably won't happen, I'm going to guess that the more likely avenue of change will be via the emergence of local black markets in the face of ever-greater corruption in our current markets.

Thu, 09/02/2010 - 18:32 | Link to Comment DosZap
DosZap's picture

Put this in the GF, but most won't see it there.

Worth a read, and pay esp attention to the ending.

http://www.24hgold.com/english/news-gold-silver-winter-is-here.aspx?article=3097530056G10020&redirect=false&contributor=Nathan+Lewis

Thu, 09/02/2010 - 18:31 | Link to Comment whwood75
whwood75's picture

"More importantly, as Nassim Taleb repeatedly points out, financial experts who don't plan for rare events are like pilots who don't know about storms."

Yeh, well maybe. Or maybe airline pilots don't have a friend in the skies as loyal and protective as either Alan Greenspan or Helicopter Ben.

Thu, 09/02/2010 - 18:24 | Link to Comment Rotwang
Rotwang's picture

Non-redeemable tickets work just fine. As long as there is another seat left open on the train. Standing room only is what crashes it.

The illusion/delusion that you could somehow stockpile these tickets in your own private matress (the housing or SM), to keep for a rainy day, is what is truly breaking down. Break that illusion, and have it propagate towards the day-to-day transactional environment, and the problems show in spades.

(sarcasm on/off)

 

Thu, 09/02/2010 - 18:12 | Link to Comment Frank Owen
Frank Owen's picture

Keens is keen and so are you GW.

Thu, 09/02/2010 - 18:11 | Link to Comment mrhonkytonk1948
mrhonkytonk1948's picture

I will know that our economic problems are being solved when Economics is moved under the Psychology Department, zero graduating class of the Harvard Business School go to Wall Street because it is "so boring", all IBs convert back to partnerships, and white shoes return to style.

Thu, 09/02/2010 - 17:16 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

Interesting.

Infinite creation of non-redeemable paper ticket currency doesn't work out in the long run.

 

Hmmm.

Who wouldda' thunk it?

Fri, 09/03/2010 - 00:00 | Link to Comment Seer
Seer's picture

LMAO!

Thu, 09/02/2010 - 16:58 | Link to Comment william the bastard
william the bastard's picture

One of the conditions of a asset bubble is easy credit. The housing bubble was the MacDaddy, uber-democratic, i.e., open-to-all mega-scale bubble that can't be exceeded. What asset could supersede housing as housing supplanted tech stocks? Where is today's bubble? Tommorrow's? If no new bubble can be formed then we enter fail conditions according to the theory.

Thu, 09/02/2010 - 17:11 | Link to Comment william the bastard
william the bastard's picture

One of the conditions of social revolution is a strong perception of irreparable income/wealth disparity. Better gin up a distractive bubble pretty fast or we'll be living in the Republic of South Florida or somesuch thing.

Fri, 09/03/2010 - 00:00 | Link to Comment Seer
Seer's picture

Yeah, and someday we'll all be [Glenn] Beck-ians!  About as bleak a picture as I could possibly foresee.

Thu, 09/02/2010 - 16:58 | Link to Comment Sudden Debt
Sudden Debt's picture

Pixie dust is useless without the sorcerers book of spells. Everybody knows that.

Politics: The reason why banks are still doing whatever they want in Europe is because of the political instability in almost every European country.

England: right wing

Netherlands: extreme right wing

Belgium: separatist government (Keep a close eye on this one, it might split up in the next 24 months, capital of Europe remember)

France:extreme right movement coming up

Germany: separatist movement towards Europe

Italy: extreme right wing

...

Remember when the Germans became nazi's in WO2? Now half of Europe is on the verge of becoming like it.

I'm from Belgium myself, and what I've seen these last 2 years is terrible.

Most people I know always used to be Liberal or left wing. Now everybody is turning Right wing and very separatist. East and West want to split up and most people I know have turned into... racists. And it's not like they are keeping it to themselves. Most are proud to say they are racist.

And this is all upper class! Not the kind of people you'd suspect it from.

And you see this all over Europe. NOBODY wants the other ones mess!

 

 

Fri, 09/03/2010 - 11:24 | Link to Comment Ripped Chunk
Ripped Chunk's picture

I like your post Sudden. Whoever junked you is a coward and a tool.

But the post below it referencing Fascism is really part of the evolution you describe. When the chips are down, Fascism and totalitarianism will creep in. When you see an engineered "chips are down" situation like we currently are experiencing, you know the engineers are Fascists.

Mussolini was hung up side down and shot several times. Our engineers should keep that in mind.

Thu, 09/02/2010 - 21:50 | Link to Comment Hang The Fed
Hang The Fed's picture

What I personally find amazing is that, in light of everything that we know about how we're being screwed by the usury of a small bunch of assholes that employ a somewhat larger pool of assholes to extort every piece of value from the lives of the rest of the population at large, the automatic solution is to revert to divisions in political ideology (irrelevant...mainstream liberal and conservative are two sides of the same dildo that's lodged firmly in your ass), racism (also totally irrelevant...I think we're all bleeding the same colors as we're gradually crushed into the lube that keeps the gears running), and about a thousand other trite and meaningless distinctions and distractions that only allow the thieves to keep plundering.  What's even more horrifying is that there would appear to be a fair number of people who are more than happy (grateful, even) to wallow in the ideas that replacing a democrat with a republican, or that ejecting or "getting rid of all of those goddamn (insert skin color or nationality of choice here)" will fix a fucking thing.

On that note, I think I might just move to a nice, quiet cave somewhere and let this foolishness die of the cancer with which it's apparently infected.  Either that, or just bash my head against a wall until the deepest thought that I can contemplate is whether or not I "want fries with that."

Thu, 09/02/2010 - 23:51 | Link to Comment Seer
Seer's picture

I look at the likes of Glenn Beck and I feel like bashing my head in!  We really ARE going backwards!  Amazing how well the masses are programmed by the elites to turn on themselves (thanks Edward Bernays!).

Thu, 09/02/2010 - 20:42 | Link to Comment ExistentialSkeptic
ExistentialSkeptic's picture

Fascism is not "right-wing" -- that is a lie promulgated by leftists.  Anarchism is "right wing."

Thu, 09/02/2010 - 23:48 | Link to Comment Seer
Seer's picture

Yeah, Chomsky is a right-winger, I forgot!  Dumbass!

Thu, 09/02/2010 - 16:45 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Where's Augie?  I wanted to ask him to be my date at the opening of "inside Job" next month.

http://www.youtube.com/watch?v=HRYhXE6aPmA&feature=player_embedded

Thu, 09/02/2010 - 16:50 | Link to Comment Edmon Plume
Edmon Plume's picture

Is Rivero right?  I would wager that the public understands little about money.  And unlike the middle ages where knowledge was hidden, there is no excuse.  Plenty of material has been written over the decades on how the ponzi works, and they haven't exactly dented the opinions of the sheeple.  I think the pixie dust has worked very well.  It may have lost its edge, but not its effect.

Sadly, I don't see any great awakening going on in the USA.  Conditions will need to get much worse, and be coupled with a distinct aversion to dependence on government + pravda for their nightly installment of turkish delight.  Otherwise the sheeple will seek a[nother] shepherd in a political idol, instead of turning to the self-determination that built the USA.

Thu, 09/02/2010 - 19:35 | Link to Comment dcb
dcb's picture

George,

I think you are being too kind. I think they know exactly what they are doing,

Now imagineyou are the head of a criminal organization that has managed to make the rules and the laws such that the system is rigged to your favor. ylou have the strings of power. economic political. Do you really think it is going to be given up or changed. No the system has to collapse before it can change. this has happened through all time and history.

we pretend we have a democracy, but we don't ragardless of whome we elect the policy options always benefit the same people (see Obama). It doesn't matter what they say while runnig.

We choose between two parties that are where the same group of people choose whom we can vote for in each party.

Obama reappoints Bernanke and appoints Geithner. That can't happen in an honest system. These people would be in Jail. hell even under communism such masssive failures had to be dealt with.  But not in the United states

 

There was overhwhelming popular support for an audit the fed. It didn't happen. Why. How do we manage to elect people over ande over who can ignore the very people who voted for them.

 

Look what happens when you try to disrupt the power structure. Blanche Lincoln. The Oligarchy had to have their chosen candidate. Progressive who buck the white house. Look at what Gibbs said about the "professional left"

Look how both sides use social issues to divide up the very people who should be voting for similar economic issues. These are carefully constructed methods of divide and control. The entire structure of our sysrem is nothing more than theater.

Thu, 09/02/2010 - 20:16 | Link to Comment dcb
dcb's picture

this article abut making sure it is the person  oligarchy's choice:

http://www.huffingtonpost.com/2010/09/02/christine-odonnell-hammered-by-republicans_n_704128.htmle

Thu, 09/02/2010 - 18:49 | Link to Comment traderjoe
traderjoe's picture

I was in a meeting recently with an accountant. I discussed the fundamental issue of fractional reserve credit creation (not enough money is created to cover both interest and principal). He asked what fractional reserve banking was...

Fri, 09/03/2010 - 11:16 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Did that accountant go to U Chicago by any chance?

Thu, 09/02/2010 - 17:18 | Link to Comment Rasna
Rasna's picture

Edmon,

I used to believe that there would be an awakening to begin the process of righting the ship, but over the years it seems to me that the US population has become so lazy and complacent that the corporate plutocracy now acts with impunity and without regard for what is good or right for the country with the banksters being the most egregious example.  Our Congress, President and Supreme Court are bought and paid for by the corporatocracy...

As an example, how could any sane voter take Sarah Palin seriously and a potential presidential candidate... How could any voter be so naive as to believe that Obama was really going to change the way our government operates... People get sidetracked  by meaningless bullshit and are either to lazy or dumb to seek out the facts of a situation and hold people accountable...

The only possible salvation is to continually vote out incumbents and reform our political systems and force the politicians to reform the financial systems... If the don't deliver, vote them out again...  It will take generations... If indeed the financial system is so corrupt that it will fail because of its hubris, and this is the only way to excise the cancer, then so be it...I'm not optimistic though.  The Financial and Political cancer goes to deep and has metastisized.

Fri, 09/03/2010 - 11:15 | Link to Comment Ripped Chunk
Ripped Chunk's picture

+ 10,000  Excellent comment.

People have ridiculed me on ZH for stating that we should vote out all incumbents.

That is just step #1 to take back our country. It will take 3 or 4 general election cycles to get rid of the shit bags and make our point.

Along with this voter action needs to be new vigilance amongst all of us to watch and monitor what our legislators do and that means thousands of letters, e-mails and physical activism to get our point across and make "real" change happen. Not "slogan change" which is a hollow joke. Real change.

There are 2 other alternatives to the actions I describe above and neither is very attractive.

 

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