Oh Boy, tax exempt status for newspapers. That should go over like a fart in church.

The politicans didn’t try to regulate the system and instead they tried to create their own reality.

It started with trying to get the poor homes. Stuff like HUD, Freddie Mac, Fannie Mae and sub primeloans were created by Democrats which went against the way free markets work. Both drive up the price of real estate by creating an artifical market using taxpayer money. Now there are lobbyists such as the NAACP and ACORN which kept and tried to expand the subprime market. They even got states to dump any foreclosure penalty so people could just walk away when things went south. Fannie Mae and Freddie Mac were forced to buy 42% of the sub prime mortagages under Clinton.

Bush’s response to the Clinton recession was to lower interest rates and cut taxes. This made sub prime loans cheap and a target for investors which were flipping houses left and right causing the price of homes to go up. I read 30% of those that foreclosed were flippers and they just walked away with very little put into their investments (and no penalty for walking away). Soon people were taking out subprime loans on property they owned outright. Credit was praised by the Democrats and Republicans. Even the poorest people that owned homes had all this credit as their property rose. As the price of their homes rose artifically through auditors.

Nobody was watching companies AIG, because the borrowers and the politicans were worshipping credit and the belief that even the poor were getting rich. People had jobs, the taxes were rolling in and the doomsayers were labled as loons. The government did the same thing during the Savings and Loans scandal in the 80s, and the cooked books scandal/Enron from the 1990s. Obama and the Democrats aren’t going to fix the subprime concept and the states are probably not going to add penalties to foreclosures. Government officals don’t care where the money and the jobs come from and only react when things go bad and even then they are only concerned with their pocket books and poll ratings. The flippers will be back and we’ll end up with another credit crunch.

“the Clinton recession”

posted by Greg_D ROVE

LOL

i guess i missed that cause i was AT WORK.

if you would take the time to educate yourself, read the story, you would learn the true reality not the rove rush fox revision.

You bought the sucker pitch, Matt. Our corrupt Congress, FED and Treasury created a new resource. They used policy and legislation to turn cash flow and transaction volumes from business metrics into marketable assets. Then you fault companies who found a way to generate profits from those government created assets suddenly in their pocket.

Its a BIG PICTURE dude, don’t get so bogged down on one brush-stroke.

Greg-
Good point. Credit has been worshiped. Simply put, inflation and bubbles are inevitable when credit gets between each citizen and the attainment of his every need and desire. There are deep cause and effect cycles at work which seem to correspond to the opposition of collectivist versus individualist paradigms. The collectivists pool society’s resources and spend it in hope of attaining the eternally elusive common good until a depressing exhaustion is reached, the individualists turn loose the economy like a top and let it spin until it comes crashing down. Each paradigm contains the seed of its own destruction. The unleashing of credit is just another innovation in this interplay. Not surprisingly, in the wake of the credit catastrophe, we find the collectivists piecing together the wreckage and trying to assemble a common good machine from the discarded debris. The collectivists have discovered credit and are on a terrifying binge. Beware the come-down.

Everywhere you go now it seems you hear, the F to the R to the triple EEE, that’s FREE Credit Report. Not long ago, it was your musical taste, or the eye candy hanging on your arm, maybe even an extravagent taste in foreign films that defined you. Not any longer. Now, employers who conduct rather superficial interviews, rely on the prospective candidate’s Credit Score — the sine qua non of the modern world. Oooopss, Joe’s below 600, tough luck man, maybe you’re destined to flip burgers.

At the same time, however, the MBAs who have hijacked America’s fate, ranging from movie studios to record producers, from account departments running roughshod over creatives at ad agencies, to those clever snake oil salesmen peddling new fangled “vehicles” at investmnent firms, have stellar Credit Scores. Odd, yes, even ironic, these pillars of capitalist industry have bankrupted the country while enjoying its sweetest fruit. Meanwhile, Joe Sixpack, struggling with a subpar Credit Score, is forced to work two jobs at places that don’t rely on Credit Scores as hiring standards.

Just how far does the broom have to be shoved up our rear ends before deep frustration, anguish, depression, self-abnegation fulminate into rage? How much longer are the sleeping masses going to tolerate the infotainment that passes as “nightly news”? How far is the old saw, “conservative” versus “liberal” going to be shoved down our throats as a guiding dynamic that keeps us artificially segregated? How long will the home of the brave keep lining up like sheep waiting for a trim?

One of the main problems is knowing who to blame as opposed to simply spotting a scapegoat, like the AIG bonus recipients. First, let’s point to the general public, who never questioned Bill Clinton’s Third Way politics of embracing the slippery ways and means of predatory capitalists. “Hey,” Joe Sixpack screamed, “he’s good for the economy.” Really? Jobs shipped overseas? A domestic haven for deregulation? A springboard for Ayn Rand, Austrian school economics? Rampant political corruption? Corporate control over the public sphere? That was “All Good,” as they said? “Yeah, but Clinton left a bundle in the Treasury.” Which W couldn’t wait to deplete. Think of it as the kitty that enabled the Neocons to do what they said they’d do in the PNAC pact.

Then there was the gravely deficient media, especially the NY Times, who approved the “War on Terror.” Despite all those reporters with fabulous credentials and respectable Credit Scores, the “paper of record” couldn’t discern the significance of nationawide, overblown construction, oversold loans, arcane “assets” equivalent to back alley gambling, enormous abuses stemming from deregulation, and the dramatically stratified polity of those few with the knowledge to exploit the rest of us. It’s fitting that newspapers are dying for most of them were on vacation the past 10 years when they were needed more than ever. Now, there’s little they can do to reverse all the bad moves they ignored along the way.

And then there’s DC, home of the K Street raiders who worm their way into the sacred halls where they dispense pills no one needs, drum up interest in weapons that fail, sell smarmy politicians on the efficacy of polluting the byways and highways of America, and bend the souls of relatively decent people who just can’t say no to a luxurious golf trip in the South Pacific. Let’s not forget the candidates who offer up the sort of seductive claptrap — clean coal, green cars, better schools — that could never be made real without revolution. And throw in the non-whistle blowers who sit everday, covering their ass as they watch department heads ruin the world with their insidious administration.

It’s not AIG, or the physicists who wrote the algorithms for Credit Default Swaps, or the Darien bankers who summer in the Hamptons, or the Moody’s “regulators,” or the Republicans, or the evangelicals. It’s not Gramm, Kristol, AEI, W, or Cheney. It’s not the Military Industrial Complex, or the Bilderbergers, or the Elders of Zion. It’s the simple fact that this strange species hasn’t had enough time to mature into a self-regulating, self-reliant, and reasonably ethical animal. It’s the fact that greed seems viable because another game plan hasn’t yet been agreed upon. It’s because Americans still somehow believe in the mythical Invisble Hand when in fact, most of humankind, as Plato insisted, harbors a beastly component. And finally, it’s the lack of philosophy — the art of inquiry — that’s the most alarming since the solutions to today’s problems will only be attained through wiser understanding not just of the prevailing circumstances but of the nature of human beings.

Why is Taibbi posting on his own thread? This is a curious development that deserves some serious inquiry. I will cogitate on it during my afternoon toilet.

Jed Clampett

Excellent piece Matt, pretty much validates what I’ve been trying to tell people all along. This whole economic collapse thing was staged by the plutocracy in order to grab more power for themselves and make the American people even more indebted to the powerful and well connected. Nothing more than slaves.
What a wonderful country Americans have created… what else could you expect from a society that finds it acceptable to commit genocide on it’s native peoples; destroy the number one food source in the plains, the buffalo; enslave an entire race in order to profit from their labor; give away the proceeds of their hydrocarbon resources to pigs in control of the industry; allows their military to disrupt the political process of other countries for selfish reasons… guess what, now your nonexistent freedoms are being eroded at such a rate that no one is even capable of recognizing what is happening, even when your children are turned into lesser citizens via daytime curfew laws that discriminate on the basis of age Americans refuse to recognize they are no longer free. How long do you think it will take for them to completely erode your precious ‘rights’ now that you’ve signaled that they aren’t necessary in some instances?

Jed & Matt

Now THAT’S a pair to draw to.

++++++++++++++++++++ +++++ ++++

While I’m not a big fan of this country’s history, I think it might be a teensy-weensy bit disingenuous to snatch at a few of the uglier moments of our past and conclude, ergo, that we are a people of lemmings bent on self-destruction. We may, in fact, be just that, but your argument is one-dimensional and inconclusive.

I have to guess that your, “Curse you, Red Baron!!” tactics might be about as effective as those of dear, departed Snoopy.

Just happened to thumb through some back issues of RS and ran across issue 1014, Nov.30, 2006. Peter Travers penned a statement in his review of a movie “Fast Food Nation” which went “And so it goes, as the fabric of an entire society is corrupted by the collusion of unchecked capitalism and government”. Never did he know that his seemingly flippant observation was the embodyment of the systemic failure staring us in the face today. This was right at the time this economy was headed into a festering boil fueled by Wall Street greed and enabled by the Bush administration. I’m sure we can comb through the annuals of that time and find those that were the voice of reason but too little in the minority. Peter Travers wrote it but he had no way to know it was going to culminate like this. Few of us did.

Matt Taibbi is to journalism as Louis Black is to comedy, and I mean that as a coupliment to both.

I wish that I could write as well as ArtyCraft. He or she has hit the proverbial nail square on the head. On thing: there is in fact a solution to all this chaos. A Scotsman named Clifford Hughes Douglas, back in 1924, took a good hard look at how everything works and realized that the problem with capitalism is much simpler than it would appear. He built a new system called Social Credit. It ends poverty permanently and, at the same time, does a better job of encouraging private enterprise. To get an ides of what life would be like under a Social Credit government read Heinlein’s book For Us the Living, A Comedy of Custom.

We could do this!

Clifford Hughes Douglas was a fool. The notion that a system that prevents profit can bring about economic freedom is absurd. Subordinating the individual’s ability to create and capture wealth to a societal goal of equalizing purchasing power amounts to a strong disincentive for increaseing productive efficiency and exploitation of new opportunities. The flow of resources to new technologies would become a matter of public consensus. In the allocation of resources, the ability to influence public opinion would quickly eclipse an individual’s or organizations ability to demonstrate capability.

I wish Taibbi could write as well as ArtyKraft.

Jed Clampett

Thanks bloody, your utter disdain for the policies of CH Douglas without much supporting evidence led me to research the guy. In all my readings I was unable to find where it says the policy is against profit? Perhaps you can point where in the ideology of Soci@l Credit it says there can be no profit.
I admit I haven’t gone to the library to try and find a copy of his book yet, but what I’ve found seems to be right on the money as far as socioeconomic policy goes.
I find this line particularly interesting and fitting our current situation…
“The economic effect of charging all the waste in industry to the consumer so curtails his purchasing power that an increasing percentage of the product of industry must be exported. The effect of this on the worker is that he has to do many times the amount of work which should be necessary to keep him in the highest standard of living, as a result of an artificial inducement to produce things he does not want, which he cannot b.uy, and which are of no use to the attainment of his internal standard of well-being.” (I consider the insane salaries paid to executives part of that waste passed on to consumers, anyone else?)

Also this one, in describing the fallacy of the current paradigm of assessing the industrial system.

“1. The first of these is that it is a disguised Government, of which the primary, though admittedly not the only, object is to impose upon the world a system of thought and action. 2. The second alternative has a certain similarity to the first, but is simpler. It assumes that the primary objective of the industrial system is the provision of employment. 3. And the third, which is essentially simpler still, in fact, so simple that it appears entirely unintelligible to the majority, is that the object of the industrial system is merely to provide goods and services.”
Douglas believed that it was the third policy alternative upon which an industrial system should be based, but confusion of thought has allowed the industrial system to be governed by the first two objectives.

Considering he formulated his theories in the 1920’s and are still applicable today is a testament of our species stagnation, ‘conservatism’ if you will, rather than progress.

Jed-
Those quotations are superb examples of the communist drivel Douglas promulgated. My criticism is that underlying all of his supposed theory is an ill-conceived notion concerning the valuation of labor, goods and services. Douglas repeatedly argues against a system that allows the marketplace to set prices. Rather, his preference is for a system which determines fair value and intervenes, ostensibly on behalf of the public, to maintain fair value. While it may seem appropriate and achievable to assign value through some alternative means, it has been this particular challenge which has undermined all economic systems that have have failed to adopt market-based policies. The nature of this challenge is that ultimately valuation by decree becomes a matter of politics which is so removed from the process it aims to govern that inefficiency becomes inevitable. The incalculable interactions that occur in an economy of even moderate scale, let alone global scale, escape the ability of human reason to characterize a priori. Therefore, we must rely on the feedback mechanism of the marketplace to provide any meaningful assessment of what constitutes fair value. Indeed such a system is not perfect. Businesses which consistently and accurately measure what the marketplace dictates, which allows them to more efficiently set price, stay in business, while others who do not fail. Outsourcing price-setting to political leadership would lead to inefficiency, stagnation and ultimately gross corruption. The ability for individuals and bodies of individuals to come together to offer goods and services that are desired by the public would be stymied by a bureaucratic process which could never be depended upon to anticipate how innovation might lead to new ways of solving everyday problems. Douglas assumes that industry has a larger overarching social purpose that transcends the interaction of the consumer and producer. This is the central flaw of his argument. Industry is simply a system that has evolved over time. It has no intended purpose outside of the intent of its ownership. Douglas and other Marxists refuse to acknowledge the rights of ownership and thereby undermine any system that seeks to protect the ability to create and capture wealth by their flawed interpretations of fair value. While at times, the prevailing opinion may be that certain individuals have unduly benefited from such a system, the freedom to create and capture wealth remains. In a system that denies this freedom, the individual is left with only the mercy of the bureaucracy or the whim of a ruling elite to depend on for the betterment of his existence.

Dear Blood, That is not what he envisioned at all. If you want an easy explanation of his theory, read Heinein’s book For Us the Living. Bad novel. Really bad. But an excellent dramatization of a society under a social credit economy. Nothing is “controlled” by the government. Businesses enter into a voluntary agreement to keep prices at the same level with a yearly bonus as their reward for keeping the promise. The only thing prohibited is fractional reserve banking. By doing so, that makes it so no other regulations are needed. Banks are free to do whatever they want. If they fail it is not anybody’s problem except the stockholders of that bank.

Quite a contrast to our current pickle, eh?

Nobody needs to go to the library. Clifford Hugh Douglas’ book Social Credit is freely available here:
tinyurl [dot] com [slash] soc-credit-chd

(I had to obfuscate to get this published.)