Economics for Everyone, by Jim Stanford

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Tue, 2009-02-17 15:13

M. Spector M. Spector's picture

The first review I have seen of this book from a socialist perspective:

Quote:
Economics for Everyone is attracting a lot of attention in the labour movement in Canada for its popular exposé of many flaws in mainstream economic theory.

But what many people are looking for is a sound basis for understanding the rapidly developing economic crisis and what to do about it. Here the book fails. It betrays too much faith in capitalism….

[url=http://www.socialistvoice.ca/?p=367][color=mediumblue][u]Bill Burgess[/u][/color][/url]

Tue, 2009-02-17 16:04

NorthReport

couldn't this go here

http://www.rabble.ca/babble/international-news-and-politics/world-financial-crisis-deepens

to prevent thread proliferation

Tue, 2009-02-17 17:53

M. Spector M. Spector's picture

This is the Babble Book Lounge, where we discuss books.

Get with the f-ing program.

Fri, 2009-02-20 21:32

Babbling Jenn

I thought this book was very good. It reminded me a bit of economics class in high school, but that's honestly what I needed - but without the jargon and pro-free-market slant.

Fri, 2009-02-20 23:04

Fidel

According to another reviewer, Stanford does talk about the fact that economists tend to be self-absorbed and mystify the subject of economics with technical jargon. And they never talk seriously about alternatives to capitalism. Canadian William Krehm described the "Stalinization" of economic theory in Canadian universities and financial institutions since the 1980's. Apparently Stanford does talk about socialism as a valid alternative, but that it will only come about by struggle, hard work, and dedication to experimenting on a scale that hundreds of millions have endured through the capitalist experiments around the world since turn of the last century.

Mon, 2009-02-23 14:19

KeyStone

The job of the economist is to explain to the poor masses why it is necessary for them to be poor and others to be rich. Economics is not a science, it is the art of financial deceit.

The trickle down effect was the most succesful econmic theory even invented.

Tue, 2009-10-13 11:09

George Victor

In his Globe column this morning, "How to rein in the loonie",Jim Stanford suggests, tongue in cheek, "Appoint me as the next Bank of Canada governor. That'd knock 25 cents off the loonie overnight."

Tue, 2009-10-13 11:15

Michelle

Interesting, KeyStone. But isn't it possible for left-wing people to study economics in order to present an alternate viewpoint?

It's not "economics" that is right-wing. It's right-wing economics that's right-wing.

Any critique we do of right-wing economics is also "economics".

Tue, 2009-10-13 11:23

George Victor

In his criticism of right-wing economics, Galbraith's sardonic wit was best seen in his labeling of it as "conventional wisdom" . He remained a Keynesian who thought that social institutions had to be incorporated into economic thinking.

Tue, 2009-10-13 16:36

#10

Fidel

Michelle wrote:

Interesting, KeyStone. But isn't it possible for left-wing people to study economics in order to present an alternate viewpoint?

It's not "economics" that is right-wing. It's right-wing economics that's right-wing.

Any critique we do of right-wing economics is also "economics".

Yes! And we should nail this up in the famous babbler quotes thread. I have absolutely no problem with socialists calling for replacing the capitalist system. But at the same time, the capitalists need to be criticized for their awful capitalist theories for all the dedicated students of capitalism and part-time disciples to ponder. There is nothing wrong with calling for global financial disarmament and strengthening national economies. Right now the financial system is a parasite which lives at the expense of productive labour economies around the western world. Wall Street, London's financial elite and Toronto's bay Street are the real constituents of our phony leadership and not ordinary slobs like us. As former Wall Street economist Michael Hudson said in 2003, the parasites have convinced their hosts that the casino economy should be their priority number one. In fact, the parasites have taken over the brain of the host and have bought and paid for national powers of resource allocation normally associated with democratic control by elected governments.

Wed, 2009-10-14 08:55

#11

George Victor

But what are we to do about the problem that David Suzuki brings to the fore, that ALL economic theory depends on growth of the economy?

That difficulty was seen clearly in the early 1970s when Robert Heilbroner and some of the other "institutionalists" tried to formulate a zero growth approach - at the same time the Chicago School was rising to dominance and the demand for lower taxes, together with the search for lower wages elxewhere on the globe, gave us the current dilemma. (And if you are responding to the question of growth, Fidel, please try to solve it one institution at a time...labour, finance, social welfare, etc. :)

For instance, the initial posting says Stanford relies too heavily on a capitalist framework. That's not too surprising, given that he is employed by a union whose members want to remain employed FIRST. And they have always been less than receptive to the idea of environmental concessions. And when Stanford says that more controls of the exchange value of the loonie are needed(and let's face it, it's a "petrodollar", declining or rising with the price of fossil fuels) and suggests that reining in growth in the tar patch would help to accomplish that control, we have the beginnings of satisfying both labour and environmental goals.

But it's only a start. What else is needed, and where? And what international agencies are going to aid us in this?

Wed, 2009-10-14 09:52

#12

Angella

I think the book is pretty clear that its intention is to explain the capitalist system ... instead of vaguely railing against the failings of the system, Stanford clearly delineates its weaknesses. I guess it depends on your perspective. Do you think that change is a long time coming, and popular education can help? That seems to be Stanford's position.

Wed, 2009-10-14 09:53

#13

Angella

Oh, yeah, its subtitle is "A short guide to the economics of capitalism."

Wed, 2009-10-14 09:55

#14

remind

Jim was excellent on last night's CBC National news.

Moreover, he indicated that he was out-weighted 2-1, by right wing economists, thereby indicating what the bias is occuring in the media.

This was especially striking when Mansfield tried to chastize him for speaking so long, and he replid that as he was out numbered 2-1, he should get the extra time as there was no second voice for left economics.

Even more interesting, at least to me, was that his words were actually authentic and could be observed as such, while the other 2 were obviously spouting propaganda in almost every case and backing and agreeing with each other.

Wed, 2009-10-14 10:29

#15

Michelle

Did he specifically mention that? Excellent! Good for him.

Wed, 2009-10-14 10:56

#16

remind

Yep he did, and several times too..

It was good to see..and hear.

And considering he was the only one that sounded pratical and rational, and on side of regular Canadians, I believe it was especially hard hitting, or has the potential to be, if he keeps it up.

http://www.cbc.ca/national/

Wed, 2009-10-14 11:40

#17

M. Spector M. Spector's picture

Fidel wrote:

Right now the financial system is a parasite which lives at the expense of productive labour economies around the western world. Wall Street, London's financial elite and Toronto's bay Street are the real constituents of our phony leadership and not ordinary slobs like us. As former Wall Street economist Michael Hudson said in 2003, the parasites have convinced their hosts that the casino economy should be their priority number one. In fact, the parasites have taken over the brain of the host and have bought and paid for national powers of resource allocation normally associated with democratic control by elected governments.

The financial system is no mere "parasite" - it is a method of control that is integral to the very functioning of global capitalism.

And in what capitalist country has there ever been democratic control over resource allocation?

Wed, 2009-10-14 11:44

#18

Unionist

M. Spector wrote:

And in what capitalist country has there ever been democratic control over resource allocation?

And in what [s]capitalist[/s] country has there ever been democratic control over resource allocation?

Wed, 2009-10-14 11:58

#19

kropotkin1951

Unionist wrote:

M. Spector wrote:

And in what capitalist country has there ever been democratic control over resource allocation?

And in what [s]capitalist[/s] country has there ever been democratic control over resource allocation?

The Spanish Anarchist Workers Collectives

In a period of about six years after 1933, during a civil war, the anarchists got control of large areas of Spain, containing 8 million people. Possibly 1800 collectives were established. Often they were able to take over factories and estates abandoned when their owners fled the war. With remarkable speed collectives made up of workers in these firms formed and organized to continue production. Many very large ventures were quickly put back into operation. For instance three days after a battle in Barcelona the trams were running again.

Attention was focused on the most important needs, for instance the setting up of communal dining halls. The collectives plunged into the reorganization and improvement of industries, for instance combining many previously struggling small firms, coordinating and integrating. In some regions they ran the fishing industry, from the boats to the canning factories and the distribution networks. They actually organized and ran whole regional economies, including public services such as policing, road construction, flood control, water supply, transport, maintenance of parks. They set up banks, flour mills, theatres an aluminium industry, organized international importing, printed their own money, abolished interest payments, and ran railways and telecommunications systems. Entire health systems were established, including medical centres, hospitals and sanitoria. In Barcelona six hospitals and eight sanitoria were built. Dental services and surgery was free, provided by doctors receiving set payments. Schools were free. Ordinary people gained access to medical services they previously could not afford when doctors only served the rich. They even established engineering and optical training institutes, and a university. The city of Barcelona with a population of 1.2 million was run in these ways.

Towns exchanged surpluses. Some towns and collectives abolished money, arranging all production and distribution in terms of needs and vouchers. Abundant things, such as fruit in season, were free, but scarce things were rationed.

The basic format for this “governing” was the weekly assembly of all workers in the factory, reviewing all operations, planning, electing managers, making decisions. Factories would send delegates to meetings handling issues involving several factories, and similar delegations up to larger and more centralized assemblies would deal with wider regional issues. These latter gatherings had little or no power because recommendations would be taken back down to the factory assemblies where everyone had a vote. That’s the essential Anarchist principle; all power is held by citizens and any centralized issues are thought out by delegates but the recommendations are taken back to the citizen assemblies for approval. They refused to resort to bureaucrats, let alone paid or professional officials, managers or politicians. Managers were just more experienced workers elected by the assemblies, recallable at any time. Committees mostly met after work hours or on the weekend. In other words the government of factories, farms, industries and entire regions was actually carried out by ordinary people deliberating in citizen assemblies. Of course in all these domains more experienced people had key roles but were not bosses or privilelged.

http://candobetter.org/node/1438

Syndicalism has always been the democratic answer to capitalism.

___________________________________________

Soothsayers had a better record of prediction than economists

Wed, 2009-10-14 14:35

#20

George Victor

Okay, but the Canadian situation in 2009, with distinct differences in position between East and West (they are two economies in conflict with one another, the Tar Patch benefits from a loonie on par with the greenback, the industrial exporting sectors require a loonie at about .85 cents to the greenback) , is not to be settled immediately by replicating 1930s Spain.

This observer is ready to say to hell with the Tar Patch (knowing full well the political implications of that postion) because of its complete lack of concern for anything or anyone out of the fossil fuel loop. Surely the rest of Canada could be brought to understand the need to get serious with them, for environmental reasons, the fate of the grandkids, weighing more importantly than the harm being done to the domestic economy.

Wed, 2009-10-14 15:30

#21

Fidel

M. Spector wrote:

The financial system is no mere "parasite" - it is a method of control that is integral to the very functioning of global capitalism.

But it's not the same capitalism that existed in Lenin's day, or even in Tommy Douglas' time. Today's capitalism more resembles that system which Friedman and los Chicago boys tried to create in Pinochet's Chile. Or iow's, an economic system based on banking and financial services. It lasted about 15 years in Chile before collapsing. And this experiment in laissez-faire capitalism made new again lasted about as long it did the first time, which was from 1900 to 1929, but in modern times from 1980 to 2008. Today's capitalists don't make money by pouring concreate foundations for new factories for manufacturing widgets.

Quote:
And in what capitalist country has there ever been democratic control over resource allocation?

Well there is Venezuela and Bolivia trying to rest control of natural resource wealth from the oligarchies in those countries. And socialist Norway has salted away a Petroleum Fund worth more than CPP and Alberta's piddling Heritage Fund combined. Even Russia's sovereign wealth fund created in just 2004 is worth more than CPP-Heritage Fund combined, and that country has experienced a wave of corruption since 1991. Michael Hudson said recently in an interview with a London reporter that this is what will happen in the US over the duration of Obama's regime. That the people in his administration are leftovers from crazy Bill's and crazy George's governments - the same ones who had a free hand in Russia during the 90's and raped that country's resources in helping to create vast inequalities and grinding poverty in that country. They will do to America what the oligarchs did to Russians with European and American help in the 90's.

Wed, 2009-10-14 16:04

#22

George Victor

Okay, but the CAnadian situation in 2009 is....

Wed, 2009-10-14 16:22

#23

quantum

Government interference in the housing market (sub prime mortgages) from both the Clinton and Bush admins caused the economic collapse and massive unemployment and hardship. The collapse had nothing to do with a lack of "regulation". The collapse had everything to do with government brow beating banks into issuing mortgages to people that couldn't afford them.

Wed, 2009-10-14 17:35

#24

kropotkin1951

George Victor wrote:

Okay, but the CAnadian situation in 2009 is....

http://www.greatwesternbrewing.com/brewery/brewery-history

The employees pooled their resources and in 1989 formed the Great Western Brewing Company. Now with a management-led employee group, the Great Western Brewing Company is one of Canada’s most successful regional brewers and an internationally recognized producer of world-class beer.

http://www.chtv.com/ch/cheknews/index.html

http://www.heriotbayinn.com/

Admittedly not owned by committed anarchists but these are good examples of worker owned businesses. Yes worker ownership of the means of production is the answer.

___________________________________________

Soothsayers had a better record of prediction than economists

Wed, 2009-10-14 17:40

#25

kropotkin1951

quantum wrote:

Government interference in the housing market (sub prime mortgages) from both the Clinton and Bush admins caused the economic collapse and massive unemployment and hardship. The collapse had nothing to do with a lack of "regulation". The collapse had everything to do with government brow beating banks into issuing mortgages to people that couldn't afford them.

This is so absurd it is funny. A friend of mine from the states was lucky because she sold her home before the collapse. she found out then her mortgage had been sold and resold 19 times in a couple of years and was bundled with other properties that were high risk. No government forced those corrupt investment people to develop these toxic pools of assets greed did. Now it is true that their friends in government that received large campaign donations did in fact deregulate so that they could play casino with peoples homes but that is corruption not governance.

___________________________________________

Soothsayers had a better record of prediction than economists

Wed, 2009-10-14 17:40

#26

Fidel

George Victor wrote:

Okay, but the CAnadian situation in 2009 is....

...continue siphoning off our precious fossil fuel reserves to corporate America 24-7/365 until we run out. Then we can import more expensive energy and continuing to supply corporate America with 60% of that total as per the Liberals NAFTA deal with Washington. And as long as the two stoogeocratic parties are in power or sharing power in Ottawa, they will continue to honor that crooked trade deal until we're all paying through the nose for home heating and other fuels. It's slow Puerto Ricanization of Canada, but they'll step it up until Canada's national debt is so large that we'll all be renters in our own country in not too many years and even more than we are now.

Michael Hudson says the new business plan emanating from the US is that debt is wealth. Productive labour economies and workers are not the constituents bending the ears of our politicos and corporate hirelings in Ottawa and Washington. They don't care about physical economies anymore. The idea is to continue throwing whole countries down debt holes from which we can never climb out of. Or at least, not until such time as financial capitalists end up owning everything worth owning. For Canada, there isn't much left that hasn't already been pawned off to foreign ownership and mostly to superrich Americans. Our banks will continue financing the American takeover of what's left and using Canadians' savings to achieve that end. We'll continue propping up US car companies and whatever else with taxpayers money while the feds allow Canadian flagship companies for innovation and new economy, like Nortel, to be dismantled and given away at firesale prices.

Wed, 2009-10-14 20:03

#27

George Victor

Yes, deregulation led to a runaway financial sector, but not in Canada. The collapse was imported - but the runaway loonie was a condition that developed prior to the sub-prime housing collapse and was a result of a petrodallar currency that was partly caused by international currency speculators driving it up. Most economists say the loonie should be 85 cents to the greenback.

And yes, Fidel, Canada's industry has been hollowed out by sales abroad, as Caldwell Associates said in a fullo-page Globe ad a couple of years ago. Some on Bay St. are Canucks in that way. But again, how do we overcome this in the age of a carbonizing process that is making this economic chatter about "our precious fossil fuel reserves" redundant? The question was:

"But what are we to do about the problem that David Suzuki brings to the fore, that ALL economic theory depends on growth of the economy?"

Wed, 2009-10-14 21:44

#28

Fidel

George Victor wrote:
The question was:

"But what are we to do about the problem that David Suzuki brings to the fore, that ALL economic theory depends on growth of the economy?"

I don't know that this has to be true of all economic theory. It certainly is true of the new liberal capitalism based on bubble economics and debt-based monetary system. If economies don't grow, governments and people fall into the debt trap, and we end up with market forces punishing everyone for not worshipping its diktats for growth. Keynesians say it plainly that we must elect governments who will not play by the rules of what Canadian William Krehm describes as the mathematics of the atomic bomb. And he's talking about compounding interest owed on debt to banks and money speculators here and abroad and not population growth. Keynesians demanded financial disarmament in the 1940's and 50's and still today. Linda McQuaig's discussion with Pierre Fortin is recounted in the last pages of Cult of Impotence. Apparently our governments are not as powerless as they let on.

[edited for readability]

[url=http://breakthroughgen.org/2009/06/09/jeffrey-sachs-calls-for-focus-on-c... economist Jeffrey Sachs[/url] is not high on CO2 emissions reduction targets. He says carbon trading is not the answer nor is depending on CO2 taxation to save the world. The answer is to move forward with massive investments in the future.

[url=http://www.kurzweilai.net/articles/art0613.html?printable=1]Open-Source Biology And Its Impact on Industry[/url] Future economy

The answers to real world problems lie with the future, and with people today taking the initiative to connect it with the present. I think the new economy is waiting for science and technology to catch up. There has been far too much time and money wasted on cold war, and what Marx described as primitive accumulation, especially over the last 30 years. Contrary to what Michael Douglas' character said in the movie Wall Street, "Greed is good", I think people are realizing today that greed is destroying the future before the next generation is able to live it. I liken greed-based economic theory to Stephen King's fictional Langoliers, chewing up and consuming everything in sight. The next one-hundred years will be the most crucial period in human history for survival of future generations if they hope to have a decent standard of living within their means. But this, what we have and are striving for today, is a cold war era lie and pure fiction as a globalized way of life for all. It will never happen and is not in the cards for humanity. At least not with today's technology and resource limits.

Wed, 2009-10-14 22:50

#29

George Victor

The economic theory we are concerned with, Fidel, does depend on growth - and we depend on growth. And if you look around, we don't have 100 years to kick around a solution. I understand Jim Stanford's silence on this, he has to stay with a modified idea of "sustainable" growth that incorporates the car culture. That's his job. But I don't understand the big silence on this question by the scientific community of academe. And Jeffrey Sachs is a supply sider gone over to altruism, and I guess he is entirely devoted to solutions for the undeveloped world.

But Canada is really something else, and we don't have to be a Geko (Gecko?) to be complicit. Just want a need-free retirement...on a tropical island. :)

Wed, 2009-10-14 23:37

#30

Fidel

Sachs is pro capitalist and Harvard trained economist, but I wouldnt say he is a staunch ally of the neoliberalers today. I think he did cash-in on the corruption in Russia during the 90's, but just two years ago he was praising the Nordic countries for proving that there is a valid alternative to the new liberal capitalism based on leave it to the market ideology. Sachs says that flexible labour markets are not necessary, and that the "creative destruction"(bubble economies) of the new liberal capitalism is actually counterproductive for society and country as a whole.

Anyway, I think there is room for "the struggle" in the next one-hundred years. Part of the left's role now and in future will be to democratize society, political economy, as well as the financial system. Nobody votes for BIS central bankers or even Canada's central banker. Nopbody votes for the superrich and powerful people, who in turn buy our governments. Nobody votes for king-maker, but some phony majority of us do vote for and elect their pre-selected kings. need planned economies, imo. And technological innovation and advancement is innevitable. Democracy will be ever more important in future. Because I think that tech innovation will make owning the means of production even more possible for workers and communities. As Sachs says, the future is in sustainable economies based on information, and living where natural resources permit not piled higher and deeper in large cities.

Wed, 2009-10-14 23:43

#31

George Victor

"Sustainable economies" that are closer to nature, like the people he's helping out there. Get out of the cities and take your laptop and shovel. Right.

Thu, 2009-10-15 01:07

#32

Fidel

So, what did you have in mind, George? What's the answer? How do we democratize the system without resorting to rebellion in the streets? Is it possible to move the country from stoogeocratic capitalism to full-blown socialism in one step? Or are we looking at some kind of transition period with maybe say the NDP as federal government for a change, the first real change since Confederation? Some babblers seemed to think a few months ago that carbon taxes would save the world from dangerous climate change. I think it's retreating into fantasy myself. But then again, who knows? Stranger things have happened.

Thu, 2009-10-15 01:08

#33

RosaL

Fidel wrote:

So, what did you have in mind, George? What's the answer? How do we democratize the system without resorting to rebellion in the streets? Is it possible to move the country from stoogeocratic capitalism to full-blown socialism in one step? Or are we looking at some kind of transition period with maybe say the NDP as federal government for a change, the first real change since Confederation?

heh. when has social democracy been a step in the direction of socialism? It always seems to go in the other direction!

I'd be all for rebellion in the streets

Thu, 2009-10-15 04:17

#34

Fidel

RosaL wrote:

Fidel wrote:

So, what did you have in mind, George? What's the answer? How do we democratize the system without resorting to rebellion in the streets? Is it possible to move the country from stoogeocratic capitalism to full-blown socialism in one step? Or are we looking at some kind of transition period with maybe say the NDP as federal government for a change, the first real change since Confederation?

heh. when has social democracy been a step in the direction of socialism? It always seems to go in the other direction!

I'd be all for rebellion in the streets

I get the feeling that many Canadians think this same way - that there is no social or economic justice in Canada. Mexicans and Hondurans might disagree with us and suggest that Canada is a wonderful country by comparison. Swedes and Norwegians and Danes might, otoh, think that Canada has room for improvement. Someone wrote some months ago about their visit to Sweden. And they said that if anyone has never been to Sweden before and would like to, that now is the time to see it. They said the Swedes have social democracy down to a tee.

An excerpt from [url=http://www.economicsforeveryone.ca/files/uploads/Economics_For_Everyone_... for Everyone[/url] Ch. 27 Replacing Capitalism?

Quote:
The key decisions in capitalism are made by private investors who try to maximize the profi tability of their businesses. In this regard, the whole system is driven by private greed. Good things can happen in the course of that pursuit – sometimes by design, sometimes by accident, sometimes through political pressure. But the core motive force driving the system is not a desire to improve the human condition. It is a desire to fatten someone’s pocketbook. Yet just a cursory look at the often-sorry state of our planet indicates
vast unmet needs crying out for attention: the desperate plight of billions of people in the global South, the needless deprivation of
hundreds of millions more in the North, and the ongoing degradation of the environment everywhere. Surely it is possible to devote economic resources directly to tackling those crises – rather than crossing our fingers that all will be solved through the trickle-down effects of business-led growth. . .

Karl Marx predicted that socialism would inevitably arise due to endless class conflict between workers and capitalists, and perhaps also because of technological changes. John Maynard Keynes argued that socialism would eventually be required in order to ensure that the economy generated enough investment to keep everyone employed. His contemporary, Michal Kalecki, argued that only under socialism could full employment be combined with efficient work effort and discipline.

I think socialism will ultimately emerge as dominant economic theory due to, as Marx said, technological changes. The future is wrought with uncertainty and possibly chaotic world events. But eventually, and if there is a future worth building, there will be no such thing as class conflict. Technological advancements will some day eliminate poverty and comparative wealth based on material acquisitions. Technology will make it increasingly possible for communities and workers to own the means of production. At some point, technological imperialism and hoarding of information by one or two countries will be impossible. It's a very optimistic view of the future, but I also believe that socialism is also about hope and optimism and promise of a brighter future for mankind. There are some very large technological hurdles facing the world, and it's getting to be quite late in the game.

Thu, 2009-10-15 06:33

#35

George Victor

If we're really, really lucky, the kids will get to live it.

Thu, 2009-10-15 07:29

#36

Fidel

I believe they will, George. Children are the future. Right now the kids on average are too heavy and not expected to live as long as their parents. At the same time I think the future is brighter than we can imagine, Someday kids will grow up and live five or ten of our life times. Health care costs will be reduced to pennies per capita, and the power of our life-giving sun will be harnessed and looming energy crisis solved. And all that today's generation of old world thinkers has to do is get out of the way and let it happen.

Thu, 2009-10-15 08:14

#37

George Victor

That has not been my experience, Fidel, but your faith is needed.

Now, back to the drawing board. How do we help youth to head off the horde of anti-intellectual, unread, entrepreneurial Chiristians with their corporate affiliations who are aiming to take and remain in power? They offer life as usual. What can we offer by way of believable economic policy, keeping jobs and pensions in mind, that will also help Europe to head off environmental disaster?

Really focus on policy proposals, set aside history and the status quo for a moment. You ask "how do we democratize the system" first. How about first proposing meaningful and believable government intervention.

Fri, 2009-10-16 17:04

#38

quantum

kropotkin1951 wrote:

quantum wrote:

Government interference in the housing market (sub prime mortgages) from both the Clinton and Bush admins caused the economic collapse and massive unemployment and hardship. The collapse had nothing to do with a lack of "regulation". The collapse had everything to do with government brow beating banks into issuing mortgages to people that couldn't afford them.

This is so absurd it is funny. A friend of mine from the states was lucky because she sold her home before the collapse. she found out then her mortgage had been sold and resold 19 times in a couple of years and was bundled with other properties that were high risk. No government forced those corrupt investment people to develop these toxic pools of assets greed did. Now it is true that their friends in government that received large campaign donations did in fact deregulate so that they could play casino with peoples homes but that is corruption not governance.

There is nothing absurd. The subprime mortgage crisis is what caused the economic downturn. Mortgage lending standards were lowered, in order to raise the magic number of home ownership. But with lower lending standards, there were more mortgage payment delinquencies, defaults and foreclosures. This was a problem not only for banks and other lenders but also for those in the business of buying mortgages from the original lenders. These included semi-government enterprises such as Fanny Mae and Freddie Mac, as well as Wall Street firms that bought mortgages. bundled them together and issued securities on the anticipated income from these mortgages. All these economic transactions were interconnected. And when the people who owed money on their mortgages stopped paying, the whole house of cards began to fall.

The reality is that government regulators forced banks to lower lending standards and the global economy paid the price. Government got sucked in by the housing bubble. They figured housing prices would continue to rise, thus protecting the risky sub prime mortgages. Government ignored mortgage lending standards that had been in place for decades and both the Clinton and Bush admins are to be blamed for this insane policy that ultimately resulted in widespread economic hardship for regular working people. Government should have kept its incompentent nose out of the houseing market.

Fri, 2009-10-16 18:14

#39

kropotkin1951

You seem to have confused the cart with the horse. The big investors paid (in campaign donations) to have the US government remove the regulations on them so they could play get rich casino with other peoples houses. It is really a bad joke to say that the government forced the American financial sector to do anything they didn't want to do.

Evil government, forcing those altruistic capitalists to invent hedge funds and merge their insurance and mortgage funds in strange and wondrous ways that no one could understand. The same government people that forced Enron into their problems as well?

Fri, 2009-10-16 18:23

#40

Fidel

quantum wrote:

The reality is that government regulators forced banks to lower lending standards and the global economy paid the price. Government got sucked in by the housing bubble. They figured housing prices would continue to rise, thus protecting the risky sub prime mortgages. Government ignored mortgage lending standards that had been in place for decades and both the Clinton and Bush admins are to be blamed for this insane policy that ultimately resulted in widespread economic hardship for regular working people. Government should have kept its incompentent nose out of the houseing market.

Who coerced government into scrapping Glass-Steagal and other regulations in place since FDR's administration of the 1930's? Did Clinton and crazy George's people tell Wall Street that they weren't making enough money or gambling quite enough with people's savings, and leveraging loans and credit with what amounted to worthless iou's and "near" money to back it all up?

It was New Deal socialists, or at least they were considered socialists by right-rightists in the US then, who legislated firewall regulations for separating pillars of finance, insurance and real estate sectors of the economy in the 1930's. Laissez-faire capitalism didn't work then, and it doesn't work any better today. Conservative politician and previous EU leader Nicholas Sarkozy declared, "Le laissez-faire? C'est fini" And the US has abandoned laissez-faire capitalism once again. Disgraced former Fed Reserve Chariman Alan Greenspan admitted to Carl Levin and a senate committee on the financial collapse that his neoliberal views of the way the world works was deeply flawed all along leading up to the end of the most recent failed experiment in laissez-faire capitalism. Theyve been using socialism to bail out capitalism in the USsA for a long time. It's high time they simply abandoned laissez-faire part of the ideology altogether and went with socialism for all Americans not just the superrich few percent dragging the rest of the country down with them.

Fri, 2009-10-16 18:40

#41

remind

kropotkin1951 wrote:
You seem to have confused the cart with the horse. The big investors paid (in campaign donations) to have the US government remove the regulations on them so they could play get rich casino with other peoples houses. It is really a bad joke to say that the government forced the American financial sector to do anything they didn't want to do.

Evil government, forcing those altruistic capitalists to invent hedge funds and merge their insurance and mortgage funds in strange and wondrous ways that no one could understand. The same government people that forced Enron into their problems as well?

Seems the law of entropy was at work in quatum's post, and indeed his post indicates a hatred of the poor people who took out morgages they could not afford and thereby ruined the world.

We need to be aware that meme being spread, it is just another division attempt being played upon society.

Sat, 2009-10-17 00:13

#42

siamdave

It does well to remember - or consider if you never did before - that both Keynes and Stanford are capitalists - they both support capitalism, but they are ('were' for Keynes of course) 'good cop' capitalists, speaking for some kind of 'benign dictatorship' (not by so true an appellation, of course) by the capitalist ruling class, with some consideration for the peasants such as lip-service to 'democracy', a bit of extra income for fun, etc, rather than the dog-eat-dog capitalism of the 'laissez-faire' breed of capitalists of the Friedman - Hayek 'school' currently running our world.

We need to also never forget the great insight of McLuhan - the media IS the message - Stanford was allowed to speak in the Globe and on the CBC (and gets such spots regularly) - if he had anything actually useful to say about the evils of capitalism or putting some (effective) reins on their power, this would not be allowed. By being identified as a 'progressive', and then getting on the CBC etc, other 'progressives' get the message that 'our' concerns are at least being heard, and articulated in their fullness by one of our own 'experts', and go back to passive grumbling about how things just never seem to improve, rather than getting involved in less passive activities that might actually threaten the rulers and lead to useful (for 'us') change. You NEVER hear anyone who is allowed near the MSM talking about bank-created debt-money and how it is fundamental to every problem we have - this is not rocket science, and is quite easy to understand once exposed to, and if enough people started realising this reality, and understanding it, and how it has been used to steal trillions from us and keep us in perpetual debt-wage-slavery, and how it is the very heart of capitalism that needs to be mercilessly excised before we can even consider a true democracy for 'our' benefit, there might actually be some danger of an effective movement to get this cancer out of our system, which is, of course, not to be even remotely breached in our capitalist media. Stanford and others like him, though perhaps honest and well-meaning, are actually doing more harm than good to progressive causes, by essentially creating diversions, validating limited-hangout 'solutions' that are no real danger to the power structure, throwing oil on troubled waters with their limited criticism - as this thread and others show. The masters have been perfecting their control for at least the last 100 years with modern propaganda and psychological tools and ever-increasing control of the means of communication - the deep, deep indoctrination of most people in things such as the refusal of most people, even (perhaps especially) 'progressives', to be able to dig a bit deeper into economics and understand what is essentially a fairly simple fraud is proof positive.

Sat, 2009-10-17 00:30

#43

Fidel

Keynes also said that socialism would eventually be necessary to provide full employment.

Sat, 2009-10-17 08:30

#44

George Victor

Dave, now that you've broached the problem - our existential dilemma has far more implications for economics than you list. We understand that we have to curb growth, which no system of economics (or social system for that matter) is really capable of - with the possible exception of Cuba, which, as David Suzuki showed us in a two-part series a year or two back, has "adjusted" to a very low fossil-fuel input. The climate and Canadian tourists help, of course.

But then there is also the necessity of adjusting by democratic means - the blessed ballot box. And of course the paucity of knowledge about things economic "out there" among the Great Misled makes our own struggles to understand pale by compariison.

Any thoughts on the complete problem. I've tried to get replies along those specific lines...what can a social democratic party (for instance) go to the electorate with that will save jobs and the environment and pensions. Right now, that's the only formula that would "sell".

Sat, 2009-10-17 10:59

#45

M. Spector M. Spector's picture

George Victor wrote:

But then there is also the necessity of adjusting by democratic means - the blessed ballot box.

The first problem is to get over the idea that democracy = ballot box.

Sat, 2009-10-17 13:29

#46

siamdave

George, it's not 'now' that I've breached something, I've been talking about this for a long time - and together with your 'any thoughts on the complete problem' question - the answer is here - They're Building a Box - and You're In It - http://www.rudemacedon.ca/dlp/box/box-intro.html . I have advanced my thinking somewhat in the couple of years since I finished that book, but none of the fundamentals have changed. THere is a more complete examination of the money situation in a more recent essay - Global Financial Meltdown: Forces beyond our control, or the greatest scam ever?
http://www.rudemacedon.ca/greatest-sting-ever.html - but aside from that, the basic ideas of what has happened, and what we need to do to get out of the box, remain the same. Unfortunately, I have not yet come to any better ideas about how to wake the indoctrinated masses up - the indoctrination is very, very deep, and very, very effective.

Sun, 2009-10-18 06:49

#47

George Victor

Both damned boxes are more complex than you both make out. Human.

Sun, 2009-10-18 07:09

#48

Fidel

siamdave wrote:

George, it's not 'now' that I've breached something, I've been talking about this for a long time - and together with your 'any thoughts on the complete problem' question - the answer is here - They're Building a Box - and You're In It - http://www.rudemacedon.ca/dlp/box/box-intro.html . I have advanced my thinking somewhat in the couple of years since I finished that book, but none of the fundamentals have changed. THere is a more complete examination of the money situation in a more recent essay - Global Financial Meltdown: Forces beyond our control, or the greatest scam ever?
http://www.rudemacedon.ca/greatest-sting-ever.html - but aside from that, the basic ideas of what has happened, and what we need to do to get out of the box, remain the same. Unfortunately, I have not yet come to any better ideas about how to wake the indoctrinated masses up - the indoctrination is very, very deep, and very, very effective.

SiamDave, what if someone said that other western countries privatized their money supplies all around the same general timeframe according to the neoliberal agenda wafting through the western world in the 80's and 90's? Then realize that not all countries' national debts soared from $37 billion in 1975 to $580 billion by the time our fiscal Frankenstein Liberals were on a roll by 2000. As you know the Liberals used that debt which they helped accrue as an excuse to feed the banks massive taxpayer handouts in the form of debt service payments while they strangled the life out of the Canadian economy for ten years with oppressive central bank rates that were further to the neoliberal right than even Reaganauts pursued in 1980s USA.

Then imagine that certain other countries crawled out of the neoliberalorama and developed their own solutions for maintaining and paying for social democracy, and they continued to soar above Tory-Liberal Bananada with respect to economic equality for all as well as increasing economic competitiveness. It happened. They are the Nordic countries governed by social democrats in federal power for decades at a time.

Sun, 2009-10-18 09:25

#49

siamdave

Fidel, I would have various things to say.
1. First, about the Libs building the debt and using it - this goes back to other things I have written about the unity of the Big Business Party - somehow the Libs sold out under our god Trudeau in the 70s and let things get underway, and then Mulroney-Wilson goosed the deficit-debt big time during their years (it was their selling of the debt with the 'ball and chains around your grandchildrens' legs, you greedy, irresponsible damned Canadians!!!!!' crap that got me first interested in figuring all this out) - and then after they went way too far and got the big boot, Martin indeed "doing things I would never have dreamed of!!!' - said Mulroney afterwards. It's not any particular political party doing this - it's all of them, under the Bay St Masters.
2. About the Nordic countries - I cannot comment much, as I have not studied them. It seems to be that they are considerably more democratically controlled than we are in Canada, though, which may explain some of it - they were/are probably less under neocon control than we are here in Canada and the US, and GB. They also probably have a better media, thus more educated citizens who cannot be gulled as easily as Canadians apparently can. And then there is Iceland - are the Nordics all *really* doing that much better, or are they like the US was a few short months ago, everybody saying things were WONDERFULL!!!! - until one day we will read about one of them coming to the same end as Iceland? I don't know -
Whatever, I concentrate on Canada, informed as I can by things from other places, where as a citizen I feel I have the right, perhaps even the duty, to watch what is going on, and try to correct things that are going wrong as I can. (tis indeed a thankless freaking job..)

Sun, 2009-10-18 14:39

#50

Fidel

Yes, Canada is a unique country for sure. And so is Iceland. Milton Friedman made a special point to travel there and debate the left in the 1990's. The result was that Iceland became a poster child country for neoliberal style economics, banking and financial services etc.

And I must say that this is the single most important issue I wish the NDP would take a stronger stand on in their platform. The NDP did express much concern about marauding international capital and its detrimental effects on our economies as well as the very undemocratic effect it was having on Canada's sovereign economic decision making in general in the 1990's. People like Lorne Nystrom and Jim Stanford, Henri Sadr etc warned us about it numerous times. But those were the glorious roaring 90's, a time when capitalists everywhere were declaring their ideology for new liberalised capitalism triumphant around the world. Jim Stanford was warning us about "hot money" and the price of capital in a time when it wasn't popular among economists to do so. And the NDP stood opposed to the privatisation of money creation in 1991, a time when Parliamentary debate about the issue was declared off limits by Mulroney's Tories.

Sun, 2009-10-18 23:47

#51

siamdave

The NDP's complete failure to engage with issues like who creates our money is, to me, somewhat suspicious (along with their refusal to engage seriously (beyond lip service) with the FPTP electoral system - but that's for another post). I can only suspect that the reason is they know they would immediately garner the great rage of the rulers here were they to try something like that, and thus face media obliteration one way or another, or something. Or perhaps there are deeper reasons - if indeed the whole system is rigged, as I believe it is, then the NDP top leadership actually do understand who runs the country, and the way that privately-controlled money supply is central to that control, and have made some kind of agreement to not talk about this - in return, they are allowed to play with the big kids, and get some members in parliament with the attendent perks and nice lifestyles, etc - whilst providing an outlet for 'progressives' who dislike both mainstream Bay St parties. That's not particularly 'conspiracy' talk - just Machiavellian. If you wanted to control the people, without their really being aware of it, things like this would be done. The people are effectively controlled - ergo something is being done to prevent any kind of real democracy from breaking out. A 'limited hangout' NDP would quite naturally fit into this picture. Stanford and others being allowed to complain about too much freedom for international capital fits this picture - if they started to talk about commercial banks creating our money supply, I suspect they would find much less friendliness from 'our' media. (and just PS - the 'privitisation of money' did not start with Mulroney in 1991 - there has always been a certain anount of money created by banks in Canada - but prior to the mid-70s, the gov also used the Bank of Canada for some money creation of its own - but after the neocon takeover during that period, the gov started going to commercial banks for all of their needs - and by 1985 we had the half-trillion dollar national debt, which has been used to hand 30-40-50 or more billion of tax money straight over to the banking cartel each and every year since. And used as an excuse to cut social programs, etc. As I said before, this great fraud is not attached directly to either party, they are both in on it (and the NDP, to a large extent, as 'accessory' - I can believe not all low-level MPs understand this scam, but the higher levels certainly have to..)

The complete refusal of the media to talk about parties that want to talk about the money system - such as CAP - is instructive - as is the recent media fawning the Alberta Wild Rose party and the leadership 'race' etc - we always have time (says the media) to give lots of free PR to right wing movements in the country - but anything seriously interested in challenging the behind-the-scenes power structure can look elsewhere.

Life in Capitalistland.

Economics for Everyone, by Jim Stanford

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