It’s the real thing
From Paul Krugman's blog we see:
This chart comes from Calculated Risk, still my favorite housing-and-credit-bust site. It shows nominal and real retail sales, and shows that consumer spending is now plunging at serious-recession rates.
This reinforces a point I’ve been trying to make: even if the rescue now in train succeeds in unfreezing credit markets, the real economy has immense downward momentum. In addition to financial rescues, we need major stimulus programs.
The chart (to the left) shows the rate of growth of industrial production over the previous year — and it doesn’t even fully reflect the credit crunch yet. I confidently predict that this slump will be nasty, brutish, and long.
Yes, Krugman is my favorite (but you knew that already). Did you catch his riff on Thomas Hobbes' (modern founder of the social contract tradition) Leviathan critique that the life of man in his natural state before a central government was formed is "solitary, poor, nasty, brutish, and short?"
And if you're really fond of inside hype.
Bill Maher Quizzes David Walker (yes, that David Walker!)
Bill Maher, interviewing former U.S. Comptroller General David Walker, extracts from him that the U.S. currently has a debt of over 55 Trillion (meaning over $480,000 per household), and that no one (anywhere - certainly not anyone running for President of the U.S.) has provided the leadership necessary to confront this situation and offer a plan for addressing it rationally. (And yes, they took down the debt clock in NYC this week because it didn't have enough digits to show the true figure, which General Walker says has not been correct in a long time - not even close (it was over 40 Trillion dollars wrong).)
Even better Paul the K info on our current financial mayhem causers:
There are all sorts of connections between the Nixon administration and the Bush administration. But here’s one I didn’t know about: Hank Paulson was John Ehrlichman’s assistant in 1972 and 1973.
Maybe you have to have lived through Watergate to know what that means. Ever since I got my first look at "Hank" Paulson I've thought "something wicked this was comes." I was a member of Nature Conservancy before it was taken over by the corporate interests, so I know first hand a little bit about the effects of a corporate "green" strategy. Imagine my surprise to see what's on Paulson's bio:
Henry M. Paulson is the United States Treasury Secretary and member of the International Monetary Fund Board of Governors. He previously served as the Chairman and Chief Executive Officer of Goldman Sachs, one of the world's largest and most successful investment banks.
Paulson was Staff Assistant to the Assistant Secretary of Defense at The Pentagon from 1970 to 1972. He then worked for the administration of U.S. President Richard Nixon, serving as assistant to John Ehrlichman from 1972 to 1973. He was nominated by U.S. President George W. Bush to succeed John Snow as the Treasury Secretary on May 30, 2006. On June 28, 2006, he was confirmed by the United States Senate to serve in the position.
Paulson has been described as an avid nature lover. He has been a member of the Nature Conservancy for decades and is the organization's Board chairman and co-chair of its Asia-Pacific Council. In that capacity, Paulson worked with former President of the People's Republic of China Jiang Zemin to preserve the Tiger Leaping Gorge in Yunnan province. He donated $100 million worth of his Goldman Sachs stock to a family foundation dedicated to conservation and environmental education. Notable among the members of President Bush's cabinet, Paulson is a strong believer in the effect of human activity on global warming and advocates immediate action to decrease this effect.And then, to further lighten your load today, there's always Paul Craig Roberts' happy-go-lucky take on everything in general: Does the Bailout Pass the Smell Test?
The explanation that has been given for the financial crisis does not match up with the solution that has been devised. Moreover, the windows into the crisis offered by the authorities are opaque rather than transparent.
The only clarity we have is that the crisis is resulting in financial concentration and that the bailout constitutes a massive raid by financial crooks on both taxpayers and central bank reserves in the US and Europe.
The public monies that are being directed to private financial institutions are huge. . . .
The US now has four separate bailouts underway, $800 billion for banks, $200 billion for Fannie Mae and Freddie Mac, $85 billion for the insurer AIG, and $25 billion for the US auto industry. These figures add to more than $2.1 trillion.
Some of these public monies are for purchasing troubled paper assets. Others are to be directly injected into the banks as public supplied capital for private financial institutions, an ironic outcome for the free market ideology that resulted in the deregulation of the US financial system. . . .
How is it possible that a financial crisis of such magnitude hit with such suddenness and urgency, catching finance ministries and central banks unaware?
The popping of the US real estate bubble could not produce worldwide systemic financial crisis without the mark-to-market rule, short-sellers, and a great deal of hype and orchestration. . . .
The US Congress held no hearings on the crisis and consulted no independent experts. Congress responded dumbly to the financial crisis, just as it did following 9/11 when the Bush regime handed it the PATRIOT Act and the Afghan invasion. To secure Congress’ acquiescence to the Paulson bailout, the Bush regime used threats of meltdown and martial law to panic Congress into turning over vast amounts of money for which accountability is lacking. The hype behind the Paulson bailout is the financial version of the mushroom cloud evocation used by the Bush regime to panic Congress into accepting the US invasion of Iraq. Is yet another hidden agenda at work?
The authorities have blamed subprime mortgages for the crisis. Why then does their solution fail to address the problem of the mortgages? Instead, the solution directs public money into an increasingly concentrated private financial sector, the management of which is not only vastly overpaid, but also has escaped accountability for the financial chicanery that, allegedly, threatens systemic financial meltdown unless bailed out by the taxpayers.Read on (brave sailor)!
And, whoops! Joe-the-Plumber turns out not to have a license, and although he owes $1200 in back taxes, he thinks McCain is the candidate with his best interests in mind. Par for the course? Fore!!!!!
Thursday, October 16, 2008
It’s the real thing
From Paul Krugman's blog we see: