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Quote Of The Week
Presented without commentary:
"The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending."
Larry Summers, source
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Congress and the administration are banging the war drums on Iran. Summers could have been sent out as advance prep. Obama wants the war spending because it's stimulative, the Republicans want the war spending ... because they're Republicans.
Summers is out planting the seed of what a "good" thing it would be. Don't know if it's true but I wouldn't put it past them.
The central irony of financial crisis is that while it is caused by too much drug, too much alcohol and food and too much indulgence, it can only be resolved with more drug, more alcohol and food, and more indulgence.
"The central truth of the financial crisis is that while it was caused by bankers looting the economy via debt, we must now preserve the value of this debt by loaning more money."
Every single action since '08 has been to preserve the value of debt paper on banks' books.
The only way to do it is lend more money to insolvent people and prevent the dreaded "D" word.
Default is a vulgar four-letter word to bankers. They avoid it like ghouls shying away from a cross. It's a wooden stake to vampire wealth-sucking bankers.
Default must be avoided at all cost. It's why bankers keep lending money to insolvent governments and everyone else.
Wana see bankers scramble? Threaten default. They'll bend over backwards to prevent it.
Want proof? They're forgiving 50% of Greek debt "voluntarily" so they don't have to call it default.
Yet default is exactly what needs to happen. Massive default. Starting at the sovereign government level, going all the way down to the individual level.
It's the only thing that makes bankers, perpetrators of the financial crisis, pay for their greed, fraud, and criminality.
Say what? Massive default will crash the economy?
Go ahead, let it crash. We're not buying your banker threats anymore. Yes, let the fucking economy crash. It's gonna crash one way or the other, so let's get on with it.
The central irony, by this central planner, is that none of his boorish utterrances have rever turned out to be true. He's really saying:
"Bullshit got us into this mess, so more bullshit will get us out of it." -- Larry Summers
the brilliant...
Aren't you a fucking doctor yet??
Nobodies ever a doctor. That's why they call it "practicing" medicine. They just throw out the doctor tag to not look amaturish. Medical practicioner is the goofy title.
People still listen to this guy?
Irony.
"Like rain on your wedding day" is weather, not irony. http://www.azlyrics.com/lyrics/alanismorissette/ironic.html
Impossibility.
Now that is the word he should have used.
What's the big deal? He was only quoting Joe Biden - in a bit more eloquent manner.
Yes, Mother "Central" Fugal!
This is how the crooks and incompetents bail out - being made whole and be allowed to retire with their riches, while the tax payers pick up the tab.
Spending? Call it what it is: STEALING. Again!
What an asshole.
Jabbaerwocky.
Summers got his degree from the university of Gilligan's Island! If that's Harvards finest, we're fucked......
...is he related to Snookie?
If I put that into Excel, it would spit out a "Cannot resolve circular reference..." error.
In a sense, summers is right: low quality economic activity must be replaced with high quality economic activity.
To be expected from the village idiot. In 10-15 years we'll look back on all these "leaders" and wonder at their stupidity. I mentioned two or three times here the last year about Jon Corzine's first words upon taking over MF Global in early 2010. "We have to get the risk level up around here." It appears he was successful as they now look ready to collapse in bankrupcy. All these clowns learned from the same failed textbooks.
Larry Summers believes that the economy is in bad shape because people don't want to buy stuff. "lack of demand"
He is just another idiot who believes that consumption comes before production. If you have nothing to exchange for what you want, you cannot get what you want. Produce first, consume next.
Credit is not wealth.
I'm likely to get skewered for saying this, but under current circumstances, higher taxes on the wealthy is the only way to produce growth. Our congressmen are much like sychophant Roman senators, and they would rather let their country crumble than stop serving their masters.
Added after someone gave me a +1 (BTW thanks for doing that whoever you are): It also wouldn't hurt to freeze government worker wages and reallocate that wealth to more productive endeavors (i.e. competitive contracts to private sector businesses, some of them newly formed). By law, many government organizations are not allowed to compete with private industry, so allocating money to government research is less efficient than allocating it to private corporations. Also, when the government wage freeze eventually matches private sector wages for comparable work, then you can start raising governement wages again. Government servants of the people should not be making more than private sector people in comparable positions.
"I'm likely to get skewered for saying this, but under current circumstances, higher taxes on the wealthy is the only way to produce growth."
Not skewering here...but I'd like to know the concept of how taxing anyone or anything in the private sector at a greater percentage rate increases growth in the private sector.
Taxation goes to government...which is at odds with what you added afterwards.
Just wondering...
Actually, the added text is critical to make the taxation worthwhile. Growth comes from risk on new ventures in a competitive environment. Assuming the governement were to tax wealth, and funnel that money into forming new businesses, it would lead to growth. Right now, there is a concentration of wealth leading to nothing but stagnation, partially because the way the wealth has grown lately is through the formation of new financial products sold to people who have no capacity to repay them. A more efficient allocation of wealth would be to convert it to capital. Some new businesses will fail, but others will be the foundation for growth, and for the creative destruction that is necessary to move forward.
The current concentration of wealth is causing nothing but stagnation, again, because the current wealth is being funneled into accelerated short term gains (financial products) rather than steady long term gains (capital). In summary, by taxing wealth we are acknowledging that the social contract to produce growth has been broken. We are no longer a society, but a dichotomy of haves and have-nots. A balanced society benefits all parties, not just the insecure among the wealthy and their sycophant congressional employees. We are not in Rome, we are in America, and we can stop the financial crisis if we stop governing like the Roman elites that drove their country into the ground. Short term pain through taxation is the only way to achieve long term gain. It will require the help of congress, possibly a new one, or possibly the current one if they are sent a strong message that we don't appreciate their cronyism.
PS I realize that increasing taxation will tank the markets. But the majority of the money that currently circulates in the market is not being used to form new business. It is being used to preserve stagnant centers of power. Also, I realize that it is a subset of the wealthy who are the bad seeds directing congress to pass non-productive laws. The majority of the wealthy understand that they live in a symbiotic economic environment that produces rewards only if everyone prospers. I'm hoping some of those wealthy will step up and voice their displeasure with the insecure among the wealthy who are corrupting the social contract and ultimately harming everyone, including themselves.
Also nmewn, someone gave you a -1, but I gave you a +1 . You gave me the opportunity to clarify my thoughts, whatever expense that may bring to my reputation through your rebuttal. :)
More info in today's news:
http://finance.yahoo.com/news/The-Shameless-Republican-Race-atlantic-899...
TAXES AND GROWTH: THE NON-RELATIONSHIP
There is no historical relationship between marginal income tax rates and economic growth. In the 40 years after World War II ended, the top rate ranged from 50 percent to 91 percent. Meanwhile, the economy averaged 3.5 percent growth. In the last 20 years, when the top rate ranged from 28 percent to 44 percent, GDP growth averaged 2.6 percent. Even after excluding the recent recession, growth averaged 3.0 percent.
Let me finish Summers quote for him. Fear of untimley death probably preventit.
"The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending." So the thieves that caused and profited get to keep it.
Thanks for stealing my childrens future.
FTB
Confidence is like sex appeal. Either you have it, or you don't. And all the makeup (or stimulus) on a fat pig of a person is wasted. Until this market is real and unmolested, all the stimulus is just like putting an expensive evening gown on a 400 lb trailer trash woman. A total waste. And sad.
OK , Uncle Lar. since it is more spending you want , more spending you will get . How about this idea: the federal government guarantees the price of every home for the price the owner paid for it or the its value in 2006, whichever is higher. If a person sells his house for less than that figure, the federal government send him or her a check for the difference. An instant reflation of the housing market and an end to foreclosures . Can't afford your house payments , sell it for what you can get and get a check. this would be spending on a scale not even Krugman could imagine.
I'm not sure that Larry Summers thinks he is fucking his country.
And that my friends is the mathematical definition of an unstable system. HUH, spot on it is ...
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The crazier thing is.. he is right. If we want to keep our current system, the way things are done now.; He is 100% correct. The system is broken and he is citing a way to continue the broken system. In order to change the borken system we need to do the opposite, however.