Oh they signed multi-billion offshore outsourcing contracts as soon as they imploded. Citigroup signed over a $2 billion while receiving taxpayer money.
BoA is busy forcing Americans to train their replacements before being fired right now.
We are focused on "too big to fail", but how about "too immoral to succeed"?
I guess they're going to give first choice to a bunch of the people they've laid off over the last couple of years. And, the openings are not just in Reston, they're all over the country.
Although, I think this has something to do with Obama's budget plan, where the federal government would stop giving loans through Sallie Mae. Sallie Mae wants to make that as politically unpopular as possible.
It may not be too far in the future to have a 'surgeon' in Beijing performing a surgery using remote robotics on a patient in ...say Boston, for instance.
But only if we allow it.
What will local Boards of Health say about that mythical surgery?
Is this mythical surgery in a Boston hospital? Yes, and that would make it subject to the inspections of the operating room by the local Board of Health. But the highest paid person in the room, along with the fact that they have the most education, presumably, is not performing the surgery as they are now. He/she is thousands of miles away. That's where lobbying by insurance companies to allow this because it suits their bottom line would come in.
It isn't too far fetched to hear someone say: to save money on health costs doctors like this mythical surgeon would have an advocate in the form of lobbyists from the insurance companies and the US Doctor seeing his job outsourced sees his job and position in the same light as a Union auto worker and he too would need the services of a lobbyist to make his case to the politicians that will decide whether or not his job is outsourced or not.
That's where we are heading if you take it all to it's natural conclusion.
Politics matters because the political decisions have economic consequences.
Richard Campos
In order for real progress or evolution a system needs to follow a vision of optimization,if the system is leaded by the same wrong values it continually falls in the same cycles or mistakes and history continues repeating itself.
This debate seems to be highly unnecessary if we would simply apply the laws of supply and demand. The H1-B visa limits have been changed both up and down over the past ten years. Due to significant lobbying and coordinated efforts by the high-tech industry the limit were raised from 65,000 in 1998 and climbed to a high of 195,000 for 2001, 2002 and 2003. In 2004 the number returned to the current 65,000 as the high tech industry slowed down its meteoric growth.
Now let’s look at today’s situation. 8.5% unemployment nationally with many economists predicting 10% by the year end. New college graduate are especially being hit hard with little to no prospects of finding the jobs they had hoped for 4 years ago when they started on their journey. Simply said, the demand is gone. So the answer is not to keep importing more supply. We need to simply balance the supply with the demand. And once this US economy heats up and confidence is restored we will turn back on the importing of talent. Surely, amongst all those congressional leaders, there is a business person somewhere. This is neither protectionist nor xenophobic it is simply good business.
The losses in both textiles (-17%) and autos (-23%) are astounding for just a 12 month period. Similarly the drop in overall manufacturing employment of 9% in just 12 months is nothing short of devastating.
US Taxes doesn't work for International Trade
Before retiring, I did extensive international business and set up or expanded operations in US, Japan, Korea, Brazil, Germany, and France in large international companies and later in my own highly sussessful company. I even won an award in Japan - for succesfully exporting US products to Japan when Japan was taking heat for its trade barriers.
The other 39 of the top 40 economies make extensive use of taxes such as Value Added Taxes that remove the tax burden of their economy on their products when they export and tax imports with their burden of their government.
This gives other nations an overwhelming cost advantage over the US. When US manufactured products compete with imports in the US, the US manufactured products have the full burden of taxes on labor and capital of the US economy while the import has no burden of the US government and no or reduced burden of the foreign government.
The result is much lower wages and fewer jobs for American workers. I have calculated that for moderately capital intensive manufacturing - our bad tax policy cuts US wages in half - or just prices the US out of the running as a place for manufacturing. Investors don't suffer as much as total capital can be put to effective use in other countries, or manufacturing can be sourced from foreign contract manufacturers.
The US should reform our tax policies and bring back competitive capital intensive skilled manufacting as the core to restoring middle class incomes, our trade balance and national debt. Note than even after tax reform, manufacturing that is not cpital intensive will continue to have trouble competing against capital intensive manufacting.
Why is a demand for a level playing field greeted with cries of "protectionism"? Obama is selling us out to the banks and straddling us with debt we can't pay because he is also continuing to give away our jobs. I should have voted for Nader, and I won't make that mistake again.
They're asking for another four years -- in a just world, they'd get 10 to 20 ~~ Dennis Kucinich
Hope Obama gives her more responsibility. She is the only that seems to have some common sense. Obama should follow her recommendation to bring back the Bankruptcy Laws to Pre-2005.
Schumpeter initially postulated creative-destruction. But I think we've seen cost manipulations, especially in the forex since the end of Vietnam era. That's one reason why it has been so costly to manufacture in the U.S. Yes, unions and short-sighted managements are to blame, too, but something deeper has been going on in terms of the cost of money. One reason why a U.S. worker needs $15+ per hour has to do with the cost of housing and everything else, including medical and other insurances. Add education, etc. into it...the inflated costs have been the root cause of a perceived necessity to outsource (and import lower cost HB1 & illegal labor).
Market fundamentalism has proven itself to be a failure as has pure Ayn Rand/Adam Smith thought. Markets do not automatically self-correct, and for all its instinctive natural power, pure self-interest (and the invisible hand) ultimately lead to these imbalances. Hence, total de-regulation and/or laissez-faire are inept ideo-theorems. The conservative revisionists are now trying to explain away the fact that all the Reagan Revolution did was to get rid of "excessive" over-regulation. Yes, explain this to Phil Gramm & Co. that axed Glass-Steagall, among others.
Conservative revisionism is shallow at best and views economic history according to cycles rather than progression. Consider the fact that today there are fewer major global oil companies, not more. A cyclical validity would suggest a contrary to this progressive economic concentration.
You have to understand when I made this comment I was still angry from the night before when I spent most of the evening at a dinner party debating (more like arguing) with several market fundamentalists who expounded upon the greatness of capitalism. Funny though the capitalism they talked about was "American capitalism". Certainly not a classical form of capitalism. I believe there is a big difference especially considering current events.
After having the benefit of a day and two final four games to think about what I ranted about I believe it is still true. I don't disagree with your last statement. But what I am saying is to foster innovation to grow and to increase innovation to have new innovation on continuous basis- freedom and democracy play a much bigger role than "American capitalism".
I welcome the various examples that you offered and I admit I am not well versed about military systems. However, and correct me if I am wrong, the examples you cited with innovation in weapons systems were limited and still behind the U.S. Or maybe it was luck that Wernher von Braun came to U.S. instead of the Soviet Union. I don't know. Even with the concept of reverse engineering in East Germany maybe that was all they were capable of doing and not developing the initial technology or innovation.
I am going to examine my rant more closely and try and provide support from it. But, thank you for providing reason and rationality in my time of anger.
Systemic Failure
By Patrick J. Buchanan
March 20, 2009
As the U.S. financial crisis broadens and deepens, wiping out the wealth and savings of tens of millions, destroying hopes and dreams, it is hard not to see in all of this history's verdict upon this generation.
We have been weighed in the balance and found wanting.
For how did this befall us, save through decisions that brushed aside lessons that history and experience had taught our fathers?
It all began with the corruption called sub-prime mortgages.
The motivation was not wicked. Democrats wanted to raise home ownership among African-Americans from 50 percent to the 75 percent of white folks. Rove Republicans wanted to do the same for Hispanics.
Banks were morally pressured by politicians into making home loans to folks who could not remotely qualify under standards set by decades of experience with mortgage defaults.
Made by the millions, these loans were sold in vast quantities to Fannie Mae and Freddie Mac. There they were packaged, converted into mortgage-backed securities and sold to the big banks. The banks put scores of billions of dollars worth on their books and sold the rest to foreign banks anxious to acquire Triple-A securities, backed by real estate in America's ever-booming housing market.
Computer whizzes devised exotic instruments -- derivatives, which could soar in value, making instant multi-millionaires, but also plummet, based on rises and dips in the underlying value of the paper.
Came now young geniuses at AIG to insure the banks against
catastrophic losses, should the U.S. housing market crash. As the risk was minuscule, premiums were tiny. Payouts, however, should it come to that, were beyond AIG's capacity.
In AIG's Financial Products division, based in Connecticut and London, brainiacs were creating other exotic instru-ments, such as credit default swaps to guarantee against losses and insure profits. To keep these wunderkinds at AIG, they were promised million-dollar retention bonuses.
Who kept the game going?
The Federal Reserve, by keeping interest rates low and money
gushing into the economy, created the bubble that saw housing prices rise annually at 10, 15 and 20 percent.
As the economy grew, however, the Fed began to tighten, to raise interest rates. Mortgage terms became tougher. Housing prices stabilized. Homeowners with sub-prime mortgages now found they had to start paying down principal. People losing jobs began to walk away from their houses.
Belatedly, folks awoke to the reality that housing prices could go south as well as north, and all that paper spread all over the world was overvalued, and a good bit of it might be worthless.
And, so, the crash came and the panic ensued.
Who is to blame for the disaster that has befallen us?
Their name is legion.
There are the politicians who bullied banks into making loans the banks knew were bad to begin with and would never have made without threats or the promise of political favors.
There is that den of thieves at Fannie and Freddie who massaged the politicians with campaign contributions and walked away from the wreckage with tens of millions in salaries and bonuses.
There are the idiot bankers who bought up securities backed by sub-prime mortgages and were too indolent to inspect the rotten paper on their books. There are the ratings agencies, like Moody's and Standard & Poor's, who gazed at the paper and declared it to be Grade A prime.
In short, this generation of political and financial elites has proven itself unfit to govern a great nation. What we have is a system failure that is rooted in a societal failure. Behind our disaster lie the greed, stupidity and incompetence of the leadership of a generation.
Does Dr. Obama have the cure for the sickness that ails the republic?
He is going to borrow and spend trillions more to bring back the good old days, though it was the good old days that brought us to the edge of the abyss into which we have fallen. Then he is going to spend new trillions to give us benefits we do not now have, though the national debt is surging to 100 percent of the Gross National Product, and may reach there by 2011.
Is Obama willing to speak hard truths?
Is he willing to say that home ownership is for those with sound credit and solid jobs? Is he willing to say that credit, whether for auto loans, or student loans, or consumer purchases, should be restricted to those who have shown the maturity to manage debt--and no others need apply?
"Avarice, ambition," warned John Adams, "would break the strongest cords of our Constitution as a whale goes through a net. Our Constitution is made only for a moral and religious people. It is wholly inadequate to the government of any other."
In this deepening crisis, what is being tested is not simply the resilience of capitalism, but the character of a people."
You're right Robert, and Bill Black mentioned that very same thing in his discussion with Bill Moyers. The FBI pulled thousands of agents who had historically been assigned to track corporate fraud, and reassigned them to counter terrrorism in the wake of 9/11. My question (and I think Bill Black's as well) is, was this just coincidental or was it by design?
I'm not sure it can be characterized as a Jewish conspiracy. We're in a global multilateral interdependent system at this point. I agree with the policy critiques, but that's pretty much what our focus needs to be on, if we're to try to understand and maybe get to some workable policy recommendations.
This is old news. Just something I was reminded about when checking out reddit. I was submitting midtowng's latest blog post in reddit and noticed this was ranked "high up" as "new" news...
but it's very old news. the reason they are uprating this now 5 year old report is because so many are not claiming "no one could have foreseen this crisis" which is complete bullshit.
Not only did the FBI see it coming, they made as public as they could reports about it in trying to warn and do something....4 years before the fact.
"New" news of this magnitude would get an Instapopulist or a blog post.
Is this FBI warning intended as new news? Aren't we a little further along in this current crisis to be concerned about calling it the "next" S&L crisis? (Maybe they were referring to Saturday Night Live?);-)
Oh they signed multi-billion offshore outsourcing contracts as soon as they imploded. Citigroup signed over a $2 billion while receiving taxpayer money.
BoA is busy forcing Americans to train their replacements before being fired right now.
We are focused on "too big to fail", but how about "too immoral to succeed"?
I guess they're going to give first choice to a bunch of the people they've laid off over the last couple of years. And, the openings are not just in Reston, they're all over the country.
Although, I think this has something to do with Obama's budget plan, where the federal government would stop giving loans through Sallie Mae. Sallie Mae wants to make that as politically unpopular as possible.
About damn time, now how about those other financial companies?
will be next.
It may not be too far in the future to have a 'surgeon' in Beijing performing a surgery using remote robotics on a patient in ...say Boston, for instance.
But only if we allow it.
What will local Boards of Health say about that mythical surgery?
Is this mythical surgery in a Boston hospital? Yes, and that would make it subject to the inspections of the operating room by the local Board of Health. But the highest paid person in the room, along with the fact that they have the most education, presumably, is not performing the surgery as they are now. He/she is thousands of miles away. That's where lobbying by insurance companies to allow this because it suits their bottom line would come in.
It isn't too far fetched to hear someone say: to save money on health costs doctors like this mythical surgeon would have an advocate in the form of lobbyists from the insurance companies and the US Doctor seeing his job outsourced sees his job and position in the same light as a Union auto worker and he too would need the services of a lobbyist to make his case to the politicians that will decide whether or not his job is outsourced or not.
That's where we are heading if you take it all to it's natural conclusion.
Politics matters because the political decisions have economic consequences.
Richard Campos
In order for real progress or evolution a system needs to follow a vision of optimization,if the system is leaded by the same wrong values it continually falls in the same cycles or mistakes and history continues repeating itself.
This debate seems to be highly unnecessary if we would simply apply the laws of supply and demand. The H1-B visa limits have been changed both up and down over the past ten years. Due to significant lobbying and coordinated efforts by the high-tech industry the limit were raised from 65,000 in 1998 and climbed to a high of 195,000 for 2001, 2002 and 2003. In 2004 the number returned to the current 65,000 as the high tech industry slowed down its meteoric growth.
Now let’s look at today’s situation. 8.5% unemployment nationally with many economists predicting 10% by the year end. New college graduate are especially being hit hard with little to no prospects of finding the jobs they had hoped for 4 years ago when they started on their journey. Simply said, the demand is gone. So the answer is not to keep importing more supply. We need to simply balance the supply with the demand. And once this US economy heats up and confidence is restored we will turn back on the importing of talent. Surely, amongst all those congressional leaders, there is a business person somewhere. This is neither protectionist nor xenophobic it is simply good business.
Why is a demand for a level playing field greeted with cries of "protectionism"? Obama is selling us out to the banks and straddling us with debt we can't pay because he is also continuing to give away our jobs. I should have voted for Nader, and I won't make that mistake again.
They're asking for another four years -- in a just world, they'd get 10 to 20 ~~ Dennis Kucinich
Hope Obama gives her more responsibility. She is the only that seems to have some common sense. Obama should follow her recommendation to bring back the Bankruptcy Laws to Pre-2005.
India and China are not far behind. Price Purchase Power, i.e. what kind of quality of life one can get.
Schumpeter initially postulated creative-destruction. But I think we've seen cost manipulations, especially in the forex since the end of Vietnam era. That's one reason why it has been so costly to manufacture in the U.S. Yes, unions and short-sighted managements are to blame, too, but something deeper has been going on in terms of the cost of money. One reason why a U.S. worker needs $15+ per hour has to do with the cost of housing and everything else, including medical and other insurances. Add education, etc. into it...the inflated costs have been the root cause of a perceived necessity to outsource (and import lower cost HB1 & illegal labor).
Market fundamentalism has proven itself to be a failure as has pure Ayn Rand/Adam Smith thought. Markets do not automatically self-correct, and for all its instinctive natural power, pure self-interest (and the invisible hand) ultimately lead to these imbalances. Hence, total de-regulation and/or laissez-faire are inept ideo-theorems. The conservative revisionists are now trying to explain away the fact that all the Reagan Revolution did was to get rid of "excessive" over-regulation. Yes, explain this to Phil Gramm & Co. that axed Glass-Steagall, among others.
Conservative revisionism is shallow at best and views economic history according to cycles rather than progression. Consider the fact that today there are fewer major global oil companies, not more. A cyclical validity would suggest a contrary to this progressive economic concentration.
http://www.abanet.org/lpm/magazine/articles/v34/is5/pg47.shtml
The ABA is not against it:
http://www.abanet.org/abanet/media/release/news_release.cfm?releaseid=435
You have to understand when I made this comment I was still angry from the night before when I spent most of the evening at a dinner party debating (more like arguing) with several market fundamentalists who expounded upon the greatness of capitalism. Funny though the capitalism they talked about was "American capitalism". Certainly not a classical form of capitalism. I believe there is a big difference especially considering current events.
After having the benefit of a day and two final four games to think about what I ranted about I believe it is still true. I don't disagree with your last statement. But what I am saying is to foster innovation to grow and to increase innovation to have new innovation on continuous basis- freedom and democracy play a much bigger role than "American capitalism".
I welcome the various examples that you offered and I admit I am not well versed about military systems. However, and correct me if I am wrong, the examples you cited with innovation in weapons systems were limited and still behind the U.S. Or maybe it was luck that Wernher von Braun came to U.S. instead of the Soviet Union. I don't know. Even with the concept of reverse engineering in East Germany maybe that was all they were capable of doing and not developing the initial technology or innovation.
I am going to examine my rant more closely and try and provide support from it. But, thank you for providing reason and rationality in my time of anger.
Systemic Failure
By Patrick J. Buchanan
March 20, 2009
As the U.S. financial crisis broadens and deepens, wiping out the wealth and savings of tens of millions, destroying hopes and dreams, it is hard not to see in all of this history's verdict upon this generation.
We have been weighed in the balance and found wanting.
For how did this befall us, save through decisions that brushed aside lessons that history and experience had taught our fathers?
It all began with the corruption called sub-prime mortgages.
The motivation was not wicked. Democrats wanted to raise home ownership among African-Americans from 50 percent to the 75 percent of white folks. Rove Republicans wanted to do the same for Hispanics.
Banks were morally pressured by politicians into making home loans to folks who could not remotely qualify under standards set by decades of experience with mortgage defaults.
Made by the millions, these loans were sold in vast quantities to Fannie Mae and Freddie Mac. There they were packaged, converted into mortgage-backed securities and sold to the big banks. The banks put scores of billions of dollars worth on their books and sold the rest to foreign banks anxious to acquire Triple-A securities, backed by real estate in America's ever-booming housing market.
Computer whizzes devised exotic instruments -- derivatives, which could soar in value, making instant multi-millionaires, but also plummet, based on rises and dips in the underlying value of the paper.
Came now young geniuses at AIG to insure the banks against
catastrophic losses, should the U.S. housing market crash. As the risk was minuscule, premiums were tiny. Payouts, however, should it come to that, were beyond AIG's capacity.
In AIG's Financial Products division, based in Connecticut and London, brainiacs were creating other exotic instru-ments, such as credit default swaps to guarantee against losses and insure profits. To keep these wunderkinds at AIG, they were promised million-dollar retention bonuses.
Who kept the game going?
The Federal Reserve, by keeping interest rates low and money
gushing into the economy, created the bubble that saw housing prices rise annually at 10, 15 and 20 percent.
As the economy grew, however, the Fed began to tighten, to raise interest rates. Mortgage terms became tougher. Housing prices stabilized. Homeowners with sub-prime mortgages now found they had to start paying down principal. People losing jobs began to walk away from their houses.
Belatedly, folks awoke to the reality that housing prices could go south as well as north, and all that paper spread all over the world was overvalued, and a good bit of it might be worthless.
And, so, the crash came and the panic ensued.
Who is to blame for the disaster that has befallen us?
Their name is legion.
There are the politicians who bullied banks into making loans the banks knew were bad to begin with and would never have made without threats or the promise of political favors.
There is that den of thieves at Fannie and Freddie who massaged the politicians with campaign contributions and walked away from the wreckage with tens of millions in salaries and bonuses.
There are the idiot bankers who bought up securities backed by sub-prime mortgages and were too indolent to inspect the rotten paper on their books. There are the ratings agencies, like Moody's and Standard & Poor's, who gazed at the paper and declared it to be Grade A prime.
In short, this generation of political and financial elites has proven itself unfit to govern a great nation. What we have is a system failure that is rooted in a societal failure. Behind our disaster lie the greed, stupidity and incompetence of the leadership of a generation.
Does Dr. Obama have the cure for the sickness that ails the republic?
He is going to borrow and spend trillions more to bring back the good old days, though it was the good old days that brought us to the edge of the abyss into which we have fallen. Then he is going to spend new trillions to give us benefits we do not now have, though the national debt is surging to 100 percent of the Gross National Product, and may reach there by 2011.
Is Obama willing to speak hard truths?
Is he willing to say that home ownership is for those with sound credit and solid jobs? Is he willing to say that credit, whether for auto loans, or student loans, or consumer purchases, should be restricted to those who have shown the maturity to manage debt--and no others need apply?
"Avarice, ambition," warned John Adams, "would break the strongest cords of our Constitution as a whale goes through a net. Our Constitution is made only for a moral and religious people. It is wholly inadequate to the government of any other."
In this deepening crisis, what is being tested is not simply the resilience of capitalism, but the character of a people."
--Patrick Buchanan
You're right Robert, and Bill Black mentioned that very same thing in his discussion with Bill Moyers. The FBI pulled thousands of agents who had historically been assigned to track corporate fraud, and reassigned them to counter terrrorism in the wake of 9/11. My question (and I think Bill Black's as well) is, was this just coincidental or was it by design?
Crap. Thanks Gregman2 for catching the "Jewish" by all of the economic advisers in that comment.
We all know what that is to claim that "Jews control the banks" crapola.
Sorry folks for not deleting this comment earlier, it was late, the comment long and I missed it completely.
Normally anything racist etc. is just deleted.
I'm not sure it can be characterized as a Jewish conspiracy. We're in a global multilateral interdependent system at this point. I agree with the policy critiques, but that's pretty much what our focus needs to be on, if we're to try to understand and maybe get to some workable policy recommendations.
This is old news. Just something I was reminded about when checking out reddit. I was submitting midtowng's latest blog post in reddit and noticed this was ranked "high up" as "new" news...
but it's very old news. the reason they are uprating this now 5 year old report is because so many are not claiming "no one could have foreseen this crisis" which is complete bullshit.
Not only did the FBI see it coming, they made as public as they could reports about it in trying to warn and do something....4 years before the fact.
"New" news of this magnitude would get an Instapopulist or a blog post.
Is this FBI warning intended as new news? Aren't we a little further along in this current crisis to be concerned about calling it the "next" S&L crisis? (Maybe they were referring to Saturday Night Live?);-)
Once again, the handiwork of the trilateralists of the 1970s has come home to roost.
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