An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Very well stated mike. Its not going to come to an end until the mainstream in this country wakes up and starts paying more attention to politics at both the local and national level. When we stop watching sports, dancing with the stars, dumb-ass reality shows, and when instead of tabloids with pictures of cellulite-laden celebrities we see pictures of Tim Geithner, Bernanke, Paulson, in hand-cuffs. When people stop watching Fox News and MSNBC and demand an honest unbiased propaganda-less source of news, that is when we are going to see change. Its going to take a revolution.
RT is a good news organization from what I have seen. They delve much deeper than networks like CNBC with its endless panel discussions where nothing beyond the superficial usually gets heard. The interviewer did a good job with Mike.There will always be some disparity in incomes, but it would not be so large if not for government policies. Much of the increasing disparity in income has to be placed at the Fed's doorstep. Twenty years of cheap money has directed money and resources to the financial services sector to the point where it is 14% of the economy. Does any other country have a financial services sector that is as large as ours by percentage? Switzerland maybe? This is where much of the increasing disparity derives I believe. Tax policy is the other problem. We have a capital gains tax of 15% that the super wealthy largely pay instead of an income tax while we see many middle class Americans paying higher income tax rates than the far richer investor class. I don'think the solution is to raise the capital gains tax rate though but to lower the income tax rate with the goal of eventually eliminating it entirely.bubbleRefuge,We agree for a change. I would especially like to see that Goldman Sachs shill Paulson perp-walked by federal authorities. He purposefully mislead congress and Mr. Bush (not hard in the latter case admittedly).
Mike,You are literally the only person in the media lamenting these outcomes. Even the uber-left are not making this case. And you are doing it in a very professional, objective way...you are on high ground here.bR, we gotta keep plugging.Welfare,Paulson is detestable. I very much agree with you singling him out, he was the ringleader. And imo too he mislead congress in one of the worst examples of such in history.Also agree with your obs. wrt the RT. The gals that have interviewed Mike over the past months are very objective and open minded, let Mike finish his points, etc...they are some of the best out there as far as real TV journalism imo.Its ironic that the only place you can get that is on RT, I guess a century of 'pravda' will do that to you. Reagan is probably rolling over in his grave that RT is now the only place to go to avoid propaganda....Resp,
The various wars evened out wealth disparity by raising wages and taxes on the wealthy at the same time over the past couple hundred years. But not so much with the relatively small wars lately.
Welfare,What about a monetary standard instead of based on gold or silver or other non-domestically abundant commodity, we would use something domestically abundant? I just thought of a kilowatt-hour of electricity? Or a measure of natural gas? Both of these mucho abundant and standardized.this may be better than the system we currently are operating that is run by corrupt morons who cannot for some reason come to understand the particulars of the system they are in charge of. Under such a commodity type system, at least we in the non-govt sector could presently employ more people in the US to extract NG or increase electricity generation capacities to fund the economy...Resp,
Matt,Hayek actually proposed something similar to what you suggest though he didn't want government dictating to the people what money they should use. I don't want the government dictating to the people what currency they use either. I just want government to legalize the Constitution. Let people decide what money they prefer by choice. Competing currencies is my suggestion. I am not tied to gold or silver, but I do think these metals would probably end up being monies because they have all the properties one would want in a medium of exchange.While it is true that a money must meet a minimum threshold of supply to function as money, it is also true that a money supply beyond a minimum threshold is unnecessary. If we simply forced a gold or silver standard on people tommorrow it would create chaos because an ounce of gold or silver would have to be pegged at tens of thousands of dollars. This is why I favor a slow process that allows for competing currencies. This is worth considering because the dollar is likely to fall so greatly as to cause Americans to lose faith in it.
I was just about to write how I actually agreed with everything Mike said in the video up until I heard the last 10 seconds!For the first 5 minutes, Mike talks about how our government has chosen to support the financial system but in the last 10 seconds he then turns around and says that our problems are due to our "free market" and "hands-off" approach with the banks!It's got to be one or the other...The bail-outs of Wall Street were not a "free market" solution to the problem.Most if not all Austrian economics out there were (are) of the position that failed financial institutions should fail. If all the financial institutions that did stupid things in the last few years had been allowed to fail, the surviving ones would be a lot more conservative and prudent now. We would not be back to the "Wall street Casino" backed by the government in case of failure!How can anyone say we have a "free market" approach with respect to the banks!!! We have: privatized gains and socialized losses... I would not call that a "hands off approach", I would call it robbery...
Severus,Listen to it again, I dont see your point.Mike is saying that it is the BELIEF (ie religious zealousness) in the "free market" that is allowing the banks to get away with it. ie it is the US current general public opinion (not Mike's or our opinions here) that we cannot touch/mess with the banks that is providing them the political cover/support of 99% of policy actions throughout all of this. These other issues such as unemployment, jobs, etc are taking a back seat to the banks, so this is why we have such horrible results., etc..
severus,Go back and listen to the mp3 i posted a week ago or so...mike talks there a bit more about the "free market" and how it is a fallacy here in the US...ie we dont have one, never did.
Is usury necessary for a free market?Is investment preferable to spending?Is the free market a mechanism for generating enormous wealth for a few or a mechanism for the exchange of goods and services?It seems to me that the financial services sector is making a killing by inventing certain concepts, loading the answers to selected questions, and pretending they are indispensable to the functioning of free markets.
Normanread krugman's article today.could swear he is reading your blogwhether today or 2 years agothank you for your consistencythe bizradio libertarians are all flip-flops nowthe bizradio real-estaters are all vultures without road kill too
Most if not all Austrian economics out there were (are) of the position that failed financial institutions should fail. If all the financial institutions that did stupid things in the last few years had been allowed to fail, the surviving ones would be a lot more conservative and prudent now. We would not be back to the "Wall street Casino" backed by the government in case of failure! This is also the position of MMT'ers that I follow such as Warren Mosler. He said insure the depositors and let the banks fail. Take them over. Cut them into pieces and feed them to the wolves.
JC,Right if I recall WMs comments correctly, he often said something like "debt holders become equity holders" as normally the secured creditors take over the firms after a "debtor in possession" period... shareholders get wiped out both common and preferred...I think the scope of this possibility is what literally gave Paulson the 'dry heaves'...
I can't even fathom how banks can be considered "hands-off". What about FDIC, Freddie & Fannie, Too-big-to-fail, and the Fed? Is that your idea of "hands-off"?
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