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Banned
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http://query.nytimes.com/gst/fullpag...gewanted=print
April 15, 2001
Berlusconi, The Rerun
By ALESSANDRA STANLEY
....Berlusconi ignored these complications, instead expressing his admiration for the antifascist writer Gaetano Salvemini, whose followers founded L'Attualità. He then cited a Salvemini bon mot, mocking the mentality of Italian industrialists: ''Profits are for us alone, but losses are shared by all.'' Berlusconi paused and then uttered grandly, ''When we are in power, these things will not happen.'' ....
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Originally Posted by loquitur
Host, I do more than enough research, thank you. And I have my feet on the ground and I deal in the real world. I don't have to obsess about the things I'd like to be true but aren't.
Bottom line: if you think the economy, including asset distribution, is the same today as it was in the 1930s, you go right ahead.
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ya know, loquitur, one of us is posting in an arrogant manner in these exchanges, and one in an ignorant manner. Which is which? Hint....only one party is doing all of the work to make this into the form of a continuing "discussion":
Is the distribution of debt currently, less equitable than it was in the 30s?
Quote:
http://www.nytimes.com/2008/03/22/bu...yt&oref=slogin
Debt-Gorged British Start to Worry That the Party Is Ending
By JULIA WERDIGIER
Published: March 22, 2008
.....As the United States economy weakens, many Americans are being overwhelmed by personal debt, but Britons are even more profligate. For most of the last decade, consumers here went on a debt-financed spending spree that made them the most indebted rich nation in the world, racking up a record £1.4 trillion in debt ($2.8 trillion) — more than the country’s gross domestic product.
By comparison, personal debt in the United States is $13.8 trillion, including mortgage debt, slightly less than the country’s $14 trillion G.D.P......
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How about in the distribution of the profits and the losses?
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http://www.nytimes.com/2008/03/19/bu...&ex=1206331200
Economic Scene
Can’t Grasp Credit Crisis? Join the Club
By DAVID LEONHARDT
Published: March 19, 2008
.....This toxic combination — the ubiquity of bad investments and their potential to mushroom — has shocked Wall Street into a state of deep conservatism. The soundness of any investment firm depends largely on other firms having confidence that it has real assets standing behind its bets. So firms are now hoarding cash instead of lending it, until they understand how bad the housing crash will become and how exposed to it they are. Any institution that seems to have a high-risk portfolio, regardless of whether it has enough assets to support the portfolio, faces the double whammy of investors demanding their money back and lenders shutting the door in their face. Goodbye, Bear Stearns.
The conservatism has gone so far that it’s affecting many solid would-be borrowers, which, in turn, is hurting the broader economy and aggravating Wall Streets fears. A recession could cause credit card loans and other forms of debt, some of which were also based on overexuberance, to start going bad as well.
Many economists, on the right and the left, now argue that the only solution is for the federal government to step in and buy some of the unwanted debt, as the Fed began doing last weekend. <h2>This is called a bailout, and there is no doubt that giving a handout to Wall Street lenders or foolish home buyers — as opposed to, say, laid-off factory workers</h2> — is deeply distasteful. At this point, though, the alternative may be worse.
Bubbles lead to busts. Busts lead to panics. And panics can lead to long, deep economic downturns, which is why the Fed has been taking unprecedented actions to restore confidence.
“You say, my goodness, how could subprime mortgage loans take out the whole global financial system?” Mr. Zandi said. “That’s how.”
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loquitur, CONSIDER THAT THERE WAS NO TALK OF "CAPPING", or EVEN TAXING EXCESSIVE PROFITS DURING THE GROWTH PHASE OF THE MOST RECENT SPECULATIVE BUBBLE IN REAL ESTATE AND IN THE ISSUANCE OF THE PAPER THAT FINANCED IT:
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[12] For examples of the attractions of Fascist and right-wing collectivist ideas and plans for American big businessmen in this era, see Murray N. Rothbard, America's Great Depression (Princeton: Van Nostrand, 1963). Also cf. Gaetano Salvemini and George LaPiana, What To Do With Italy (New York: Duell, Sloan, and Pearce, 1943), pp. 65ff.
Of the Fascist economy, Salvemini perceptively wrote: "In actual fact, it is the State, i.e., the taxpayer who has become responsible to private enterprise. <h3>In Fascist Italy the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social." Gaetano Salvemini, Under the Axe of Fascism (London: Victor Gollancz, 1936), p. 416.
</h3>
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Footnote [12], above is referenced in the highlighted area in the excerpts of the following article. Can anyone argue that the highlighted area in the 2nd NY Times article excerpt above, does not mesh well with:
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In Fascist Italy <h3>(and in the contemporary United States)</h3> the State pays for the blunders of private enterprise... Profit is private and individual. Loss is public and social." Gaetano Salvemini, Under the Axe of Fascism
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Quote:
http://www.mises.org/story/910
Left and Right: The Prospects for Liberty
By Murray N. Rothbard
Posted on 3/11/2002
[Originally appeared in Left and Right, Spring 1965, pp. 4-22. The reprint of this article is occasioned by the startlingly uncritical attitude American conservatives have shown toward the consolidation of state power that has been unleashed since the atrocities of September 11.]
....For Conservatism, too, had re-formed and regrouped to try to cope with a modern industrial system, and had become a refurbished mercantilism, a regime of statism marked by State monopoly privilege, in direct and indirect forms, to favored capitalists and to quasi-feudal landlords. The affinity between Right Socialism and the new Conservatism became very close, the former advocating similar policies but with a demagogic populist veneer: thus, the other side of the coin of imperialism was "social imperialism," which Joseph Schumpeter trenchantly defined as "an imperialism in which the entrepreneurs and other elements woo the workers by means of social welfare concessions which appear to depend on the success of export monopolism..." [5]
Historians have long recognized the affinity, and the welding together, of Right-wing socialism with Conservatism in Italy and Germany, where the fusion was embodied first in Bismarckism and then in Fascism and National Socialism: the latter fulfilling the Conservative program of nationalism, imperialism, militarism, theocracy, and a right-wing collectivism that retained and even cemented the rule of the old privileged classes. But only recently have historians begun to realize that a similar pattern occurred in England and the United States. Thus, Bernard Semmel, in his brilliant history of the social-imperialist movement in England at the turn of the twentieth century, shows how the Fabian Society welcomed the rise of the Imperialists in England.....
.....Fascism and Nazism were the logical culmination in domestic affairs of the modern drift toward right-wing collectivism. It has become customary among libertarians, as indeed among the Establishment of the West, to regard Fascism and Communism as fundamentally identical. But while both systems were indubitably collectivist, they differed greatly in their socio-economic content. <h3>For Communism was a genuine revolutionary movement that ruthlessly displaced and overthrew the old ruling élites; while Fascism, on the contrary, cemented into power the old ruling classes. Hence, Fascism was a counter-revolutionary movement that froze a set of monopoly privileges upon society; in short, Fascism was the apotheosis of modern State monopoly capitalism. [11] Here was the reason that Fascism proved so attractive (which Communism, of course, never did) to big business interests in the West--openly and unabashedly so in the 1920's and early 1930's. [12]</h3>
We are now in a position to apply our analysis to the American scene. Here we encounter a contrasting myth about recent American history which has been propagated by current conservatives and adopted by most American libertarians. The myth goes approximately as follows: America was, more or less, a haven of laissez-faire until the New Deal; then Roosevelt, influenced by Felix Frankfurter, the Intercollegiate Socialist Society, and other "Fabian" and Communist "conspirators," engineered a revolution which set America on the path to Socialism, and, further on, beyond the horizon, to Communism. The present-day libertarian who adopts this or a similar view of the American experience, tends to think of himself as an "extreme right-winger"; slightly to the left of him, then, lies the Conservative, to the left of that the middle-of-the road, and then leftward to Socialism and Communism. Hence, the enormous temptation for some libertarians to red-bait; for, since they see America as drifting inexorably leftward to Socialism and therefore to Communism, the great temptation is for them to overlook the intermediary stages and tar all of their opposition with the hated Red brush.
One would think that the "right-wing libertarian" would quickly be able to see some drastic flaws in this conception. For one thing, the income tax amendment, which he deplores as the beginning of socialism in America, was put through Congress in 1909 by an overwhelming majority of both parties. To look at this event as a sharp leftward move toward socialism would require treating president William Howard Taft, who put through the 16th Amendment, as a Leftist, and surely few would have the temerity to do that. Indeed, the New Deal was not a revolution in any sense; its entire collectivist program was anticipated: proximately by Herbert Hoover during the depression, and, beyond that, by the war-collectivism and central planning that governed America during the First World War. Every element in the New Deal program: central planning, creation of a network of compulsory cartels for industry and agriculture, inflation and credit expansion, artificial raising of wage rates and promotion of unions within the overall monopoly structure, government regulation and ownership, all this had been anticipated and adumbrated during the previous two decades. [13] And this program, with its privileging of various big business interests at the top of the collectivist heap, was in no sense reminiscent of socialism or leftism; there was nothing smacking of the egalitarian or the proletarian here. No, the kinship of this burgeoning collectivism was not at all with Socialism-Communism but with Fascism, or Socialism-of-the-Right, a kinship which many big businessmen of the 'twenties expressed openly in their yearning for abandonment of a quasi-laissez-faire system for a collectivism which they could control. And, surely, William Howard Taft, Woodrow Wilson, and Herbert Clark Hoover make far more recognizable figures as proto-Fascists than they do as crypto-Communists.
The essence of the New Deal was seen, far more clearly than in the conservative mythology, by the Leninist movement in the early 1930's--that is, until the mid-thirties, when the exigencies of Soviet foreign relations caused a sharp shift of the world Communist line to "Popular Front" approval of the New Deal. Thus, in 1934, the British Leninist theoretician R. Palme Dutt published a brief but scathing analysis of the New Deal as "social fascism"--as the reality of Fascism cloaked with a thin veneer of populist demagogy. No conservative opponent has ever delivered a more vigorous or trenchant denunciation of the New Deal. The Roosevelt policy, wrote Dutt, was to "move to a form of dictatorship of a war-type"; the essential policies were to impose a State monopoly capitalism through the NRA, to subsidize business, banking, and agriculture through inflation and the partial expropriation of the mass of the people through lower real wage rates, and to the regulation and exploitation of labor by means of government-fixed wages and compulsory arbitration. When the New Deal, wrote Dutt, is stripped of its "social-reformist 'progressive' camouflage," "the reality of the new Fascist type of system of concentrated state capitalism and industrial servitude remains, " including an implicit "advance to war." Dutt effectively concluded with a quote from an editor of the highly respected Current History Magazine: "The new America (the editor had written in mid-1933) will not be capitalist in the old sense, nor will it be Socialist. If at the moment the trend is towards Fascism, it will be an American Fascism, embodying the experience, the traditions and the hopes of a great middle-class nation." [14]
Thus, the New Deal was not a qualitative break from the American past; on the contrary, it was merely a quantitative extension of the web of State privilege that had been proposed and acted upon before: in Hoover's Administration, in the war collectivism of World War I, and in the Progressive Era. The most thorough exposition of the origins of State monopoly capitalism, or what he calls "political capitalism," in the U.S. is found in the brilliant work of Dr. Gabriel Kolko. In his Triumph of Conservatism, Kolko traces the origins of political capitalism in the "reforms" of the Progressive Era. Orthodox historians have always treated the Progressive period (roughly 1900-1916) as a time when free-market capitalism was becoming increasingly "monopolistic"; in reaction to this reign of monopoly and big business, so the story runs, altruistic intellectuals and far-seeing politicians turned to intervention by the government to reform and regulate these evils. Kolko's great work demonstrates that the reality was almost precisely the opposite of this myth. Despite the wave of mergers and trusts formed around the turn of the century, Kolko reveals, the forces of competition on the free market rapidly vitiated and dissolved these attempts at stabilizing and perpetuating the economic power of big business interests. It was precisely in reaction to their impending defeat at the hands of the competitive storms of the market that business turned, increasingly after the 1900's, to the federal government for aid and protection. In short, the intervention by the federal government was designed, not to curb big business monopoly for the sake of the public weal, but to create monopolies that big business (as well as trade associations smaller business) had not been able to establish amidst the competitive gales of the free market. Both Left and Right have been persistently misled by the notion that intervention by the government is ipso facto leftish and anti-business. Hence the mythology of the New-Fair Deal-as-Red that is endemic on the Right. Both the big businessmen, led by the Morgan interests, and Professor Kolko almost uniquely in the academic world, have realized that monopoly privilege can only be created by the State and not as a result of free market operations.
Thus, Kolko shows that, beginning with Theodore Roosevelt's New Nationalism and culminating in Wilson's New Freedom, in industry after industry, e.g., insurance, banking, meat, exports, and business generally, regulations that present-day Rightists think of as "socialistic" were not only uniformly hailed, but conceived and brought about by big businessmen. This was a conscious effort to fasten upon the economy a cement of subsidy, stabilization, and monopoly privilege. A typical view was that of Andrew Carnegie; deeply concerned about competition in the steel industry, which neither the formation of U. S. Steel nor the famous "Gary Dinners" sponsored by that Morgan company could dampen, Carnegie declared in 1908 that "it always comes back to me that Government control, and that alone, will properly solve the problem." There is nothing alarming about government regulation per se, announced Carnegie, "capital is perfectly safe in the gas company, although it is under court control. So will all capital be, although under Government control..." [15]
The Progressive Party, Kolko shows, was basically a Morgan-created party to re-elect Roosevelt and punish President Taft, who had been over-zealous in prosecuting Morgan enterprises; the leftish social workers often unwittingly provided a demagogic veneer for a conservative-statist movement. Wilson's New Freedom, culminating in the creation of the Federal Trade Commission, far from being considered dangerously socialistic by big business, was welcomed enthusiastically as putting their long-cherished program of support, privilege, and regulation of competition into effect (and Wilson's war collectivism was welcomed even more exuberantly.) Edward N. Hurley, Chairman of the Federal Trade Commission and formerly President of the Illinois Manufacturers Association, happily announced, in late 1915, that the Federal Trade Commission was designed "to do for general business" what the ICC had been eagerly doing for the railroads and shippers, what the Federal Reserve was doing for the nation's bankers, and what the Department of Agriculture was accomplishing for the farmers. [16] As would happen more dramatically in European Fascism, each economic interest group was being cartellized and monopolized and fitted into its privileged niche in a hierarchically-ordered socio-economic structure. Particularly influential were the views of Arthur Jerome Eddy, an eminent corporation lawyer who specialized in forming trade associations and who helped to father the Federal Trade Commission. In his magnum opus fiercely denouncing competition in business and calling for governmentally controlled and protected industrial "cooperation," Eddy trumpeted that "Competition is War, and 'War is Hell.'" [17]
What of the intellectuals of the Progressive period, damned by the present-day Right as "socialistic"? Socialistic in a sense they were, but what kind of "socialism"? The conservative State Socialism of Bismarck's Germany, the prototype for so much of modern European--and American--political forms, and under which the bulk of American intellectuals of the late nineteenth century received their higher education. As Kolko puts it:
The conservatism of the contemporary intellectuals,... the idealization of the state by Lester Ward, Richard T. Ely, or Simon N. Patten...was also the result of the peculiar training of many of the American academics of this period. At the end of the nineteenth century the primary influence in American academic social and economic theory was exerted by the universities. The Bismarckian idealization of the state, with its centralized welfare functions... was suitably revised by the thousands of key academics who studied in German universities in the 1880's and 1890's...[18]
The ideal of the leading ultra-conservative German professors, moreover, who were also called "socialists of the chair," was consciously to form themselves into the "intellectual bodyguard of the House of Hohenzollern"-- and that they surely were.
As an exemplar of the Progressive intellectual, Kolko aptly cites Herbert Croly, editor of the Morgan-financed New Republic. Systematizing Theodore Roosevelt's New Nationalism, Croly hailed this new Hamiltonianism as a system for collectivist federal control and integration of society into a hierarchical structure.
Looking forward from the Progressive Era, Gabriel Kolko concludes that
a synthesis of business and politics on the federal level was created during the war, in various administrative and emergency agencies, that continued throughout the following decade. Indeed, the war period represents the triumph of business in the most emphatic manner possible... big business gained total support from the various regulatory agencies and the Executive. It was during the war that effective, working oligopoly and price and market agreements became operational in the dominant sectors of the American economy. The rapid diffusion of power in the economy and relatively easy entry virtually ceased. Despite the cessation of important new legislative enactments, the unity of business and the federal government continued throughout the 1920's and thereafter, using the foundations laid in the Progressive Era to stabilize and consolidate conditions within various industries ...The principle of utilizing the federal government to stabilize the economy, established in the context of modern industrialism during the Progressive Era, became the basis of political capitalism in its many later ramifications.
In this sense progressivism did not die in the 1920's, but became a part of the basic fabric of American society. [19]
Thus the New Deal. After a bit of leftish wavering in the middle and late 'thirties, the Roosevelt Administration re-cemented its alliance with big business in the national defense and war contract economy that began in 1940. This was an economy and a polity that has been ruling America ever since, embodied in the permanent war economy, the full-fledged State monopoly capitalism and neo-mercantilism, the military-industrial complex of the present era. The essential features of American society have not changed since it was thoroughly militarized and politicized in World War II--except that the trends intensify, and even in everyday life men have been increasingly moulded into conforming Organization Men serving the State and its military-industrial complex. William H. Whyte, Jr., in his justly famous book, The Organization Man, made clear that this moulding took place amidst the adoption by business of the collectivist views of "enlightened" sociologists and other social engineers. It is also clear that this harmony of views is not simply the result of naiveté by big businessmen--not when such "naiveté" coincides with the requirements of compressing the worker and manager into the mould of willing servitor in the great bureaucracy of the military-industrial machine. And, under the guise of "democracy," education has become mere mass drilling in the techniques of adjustment to the task of becoming a cog in the vast bureaucratic machine.
Meanwhile, the Republicans and Democrats remain as bipartisan in forming and supporting this Establishment as they were in the first two decades of the twentieth century. "Me-tooism"--bipartisan support of the status quo that underlies the superficial differences between the parties--did not begin in 1940.....
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<h3>What would have happened if the Fed and Treasury had not nationalized Bear Stearns, beginning on March 14, and instead stood by and watched insolvent Bear pull down it's closest counterparties,</h3> JP Morgan Chase, Lehman Bros., Merrill Lynch, and possibly Citi Group and maybe another "big four" bank?
Would the ensuing losses and liquidation auctions have been the natural reaction to the excesses that fueled the Real Estate and CDO markets? What did we get, instead, because of the Fed "prop job"?
What are the negative consequences of a period of unavailability of mortgage lending, or of the "hit" to the portfolios of the wealthy clients of the firms named above? They made obscene amounts of money as the bubble inflated, even as their income tax and inheritance tax obligations were being slashed by the conservative politicians that they financed into office.
Does it do anyone any good to be able to borrow easily now, to finance a home property purchase that will decline appreciably in value over the next several years? Will we experience 18 years of SLOW unwinding and decline, as Japan has, directly as a consequence of government interference, bailouts, and official protection of insolvent banks, disguised as "going concerns"? Isn't borrowing too much, and overleveraging, the two abuses that caused the current instability?
Isn't the cost of the government attempting to prop this mess up, too great a price for taxpayers to bear in exchange for their continued ability to borrow to buy or refinance still gorssly overpriced assets?
Isn't what happened with Bear Stearns, really about the influence of a bunch of rich pigs and their revolving door realtionships, Ruben was Treasury Sect'y and is now Citi's CEO, and Paulson was Goldman's CEO and is now Treasury Sect'y. Aren't the financial health of their wealthy friends, their actual top priority? What the fuck are they doing using OUR taxes and future debt obligations, to shore up these other corrupt Wall Street pigs?
Last edited by host; 03-22-2008 at 09:42 PM..
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