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Are we beginning to destroy Capitalism?
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Message 1.Β
Posted by Tas (U11050591) on Wednesday, 8th October 2008
I think those people who know me on this board, know that I am an unrepentant 'Capitalist.' I think Capitalism is the best economic system ever invented. My only fear is that our 'democratic system' is in the process of destroying what has been built with so much trial and error, and such care.
I think WW1 was one of the biggest mistakes and because of that we not only lost about 10 million people in the prime of their youth, but also destroyed a whole system of living and the effects of WW1 lasted all the way to 1945.
Is that what we want to do to our present economic system and the great welfare states of Europe? Because if we have destroyed Capitalism, there will be no more engine to create the wealth on which our welfare system is based. We will be back in the 19th Century.
There are certain things we must understand: Capitalism is too important a System to left in the hands of Capitalists. In fact Capitalists do not really want a true Capitalist System, with free enterprise and free competition. Their only interest is to make more money, not so much for their stockholders, rather for themselves. As Kurt Bronson has said on this board during another discussion, their approach is when the sky starts falling, "I will be gone and you will be gone".
I was listening to a discussion on our National Public Radio on how our notorious energy firm ENRON, got our Senator Phil Gramm, to sneak into a bill the proviso that essentially negated the regulations on Energy and oil. ENRON proceeded to artificially create a shortage of electricity in California and managed to jack up the prices of Electricity, thus reaping a huge bonus from Californians.
Thus many Capitalists are extremely cleaver and know how to make our governments pay for their skulduggery and gross mismanagement of our savings, which are invested in their banks and Companies.
Unfortunately, our democracies are not really in our hands anymore. People like Gramm and many more like him are completely reliant on the campaign contributions from such as the directors of ENRON.
So it is our democracies that are themselves facilitating such actions that are responsible for the Savings and Loans debacle of yesteryear, for the ENRON scandal and the present credit bail out. We are all helplessly observing as the value of our holdings in our savings go down.
Unless we understand all this and create some strong regulatory oversight on Capitalists, we will always lose in bigger and bigger numbers.
How can we improve our democracy and how can we improve our oversight of our greedy Capitalists? Any thoughts?
Tas -
Message 2
Posted by Andrew Host (U1683626) on Wednesday, 8th October 2008
Hi Tas,
This type of question per se is better suited to the current affairs boards
...unless you want to put more of an historical spin on it - comparisons with the Great Depression, South Sea Bubble perhaps?
I think if we can look at present events through the prism of the past that that keep it within the remit of these History boards - and should provide some fascinating discussion to boot.
Otherwise we drift too far into the territory of the other boards dedicated to News - and also run the risk of attracting unwelcome attention from news Trolls too (and there are plenty!)
Cheers
Andrew -
Message 3
Posted by Tas (U11050591) on Wednesday, 8th October 2008
Perhaps the question to be pose is: what are similarities and the dissimilarities between the great depression of 1930 and the present economic meltdown?
I recall that the stock market crashed in 1929 and there were failures of several banks. That FDR eventually constructed a system of regulations and the US Securities and Exchange Commission was brought into being. Why and how were we talked into doing away with all the regulations necessary to guard against this meltdown of our credit institutions?
Tas -
Message 4
Posted by an ex-nordmann - it has ceased to exist (U3472955) on Thursday, 9th October 2008
On a brief contemporary note I don't think "meltdown" is quite the phrase for what is after all simply a rationalisation of the market - a process completely intrinsic to how capitalism tends to work in macro-economic terms.
On an historical note I would say that there is nothing useful to be learnt by comparing the present "slump" with previous occasions when over-confident speculation (as well as profit-motivated political chicanery) led to an inevitable collapse. Parallels abound, just as each occasion can also be rightly adjudged unique, but if history teaches us anything it is that the human propensity to ignore reality in the drive to accumulate individual wealth outstrips its ability to recognise, let alone heed the warning signs that things are leading to something which happened before (again and again and again).
Andrew's reference to the South Sea Bubble is indeed a good point of comparison. However I would be more inclined to favour a comparison between today's "crisis" with that of the Darien Scheme of the late 17th century, with the USA presently holding the unenviable role that Scotland played at the time - reckless and desperate speculator using revenue it didn't really have which triggered an economic collapse within the state that destroyed whatever remnants of political independence and indigenous power remained. In Scotland's case it ultimately drove it to union with its neighbour and its transformation to a puppet state. In the USA's case, well, listen closely for the sound of 1.3 billion Chinese rubbing their hands with expectant glee.
Book your Mandarin lessons, Tas. -
Message 5
Posted by Tas (U11050591) on Thursday, 9th October 2008
Hi Nordmann,
I recently heard and read the Chinese PM's interview with Fareed Zakaria of Newsweek Magazine. I thought instead of rubbing his hands in glee he was genuinely concerned and wanted to do everything to help the US and the International community. A few days later we see that China has reduced its interest rate in synchronition with Australia.
I think the fact of the matter is that we are all bound together and completely linked in money matters. Should there be a slump in the US economy for perhaps two years, it will have a very bad effect on the newly emerging economies of China and India as well of Europe.
By now it should be clear that this is not just a US crisis but an international one and a crisis of confidence in the World's monetary system.
It seems to me that one of the parallels we can draw is compare it in the way we marched into WW1, and ended up destroying so much that had been built, quite apart from the blood of 10 million young men in Flanders field.
I initiated this string to try to awaken people and hope they would discuss the crisis and give their thoughts.
It seems to me that this crisis could have been prevented if we had developed good regulatory oversight, which can only be done by the government, rather than buy the silly slogan "Government is not the solution; government is the problem."
By deregulating our banking industry and our futures markets, giving free reign to crooks like ENRON , we have brought this avoidable calamity on our selves.
Tas -
Message 6
Posted by an ex-nordmann - it has ceased to exist (U3472955) on Thursday, 9th October 2008
You would hardly expect Wen Jiabao to chuckle in public, would you.
Anyway, we'd better stick to history in this thread, don't you think? -
Message 7
Posted by highchurchman (U7711917) on Thursday, 9th October 2008
Are we beginning to destroy capitalism????
As an anarchist I would suggest not!
But capitalism is doing the job for us, quite possibly.
Luckyfredsdad. -
Message 8
Posted by Ros (U11141627) on Thursday, 9th October 2008
This thread may be of interest:
Wish I'd listened to myself back in February and sold my ISA things and opened a nice simple Post Office account again - the sort we had as kids. I'm a lousy capitalist. -
Message 9
Posted by PaulRyckier (U1753522) on Friday, 10th October 2008
Re: Message 5.
Dear Tas,
have no time to reply in full but nevertheless: well said about "all bound together and completely linked in money matters"...
But is that not only for the "capitalist regions" includng India? The People's Republic can change their policy when they think it's useful? In Russia too? Putin and his backers have still their intellectuals and a lot of gas to built up a new Russia semi-self-supporting?
I agree with Nordmann and Andrew better to return to history. Wanted to make a comparison between the 1929 New York crash and the nowadays crisis? But I have first of all no time and no competence I think. We need urgently our Dutch "Poldertijger" back on these boards.
POLDERTIJGER, WHERE ARE YOU?
Warm regards from your friend,
Paul. -
Message 10
Posted by Ros (U11141627) on Friday, 10th October 2008
The thread I mentioned above is called 'Stockmarkets 1929 and 2008'. I would quite like to resurrect it, but don't know if that is the 'done' thing or not. Perhaps we are all sick to death of the whole sorry mess and would prefer to watch 'Harry and Paul' and 'Little Britain'! That's what we are about to do!
R. -
Message 11
Posted by PaulRyckier (U1753522) on Friday, 10th October 2008
Addendum to message 9.
Dear Tas,
OOPS just read that I already contributed to thread about the comparison:
Since some months more than 65. I blame it on that...
Perhaps the thread "inflation in Weimar Rep and Weimar" has also some! thoughts from Poldertijger in relation with this thread too?
Had something about money too? and suddenly I remember it I think in the thread about "Vlamingen en Nederlanders". I will immediately have a look there. And in the "French and the British" thread about the Scottish John Law and the Louisiana bubble in Louis XV's France. But that about John Law I will aks to Nordmann.
Warm regards,
Paul. -
Message 12
Posted by PaulRyckier (U1753522) on Friday, 10th October 2008
Addendum to message 11.
The discussion about money isn't in "Vlamingen en Nederlanders" either. I remember it was a discussion with Poldertijger about market mechanisms and I think Nielsen was also in it...And it was around the time when Poldertijger arrived on these boards and the thread was initially not related to money and market mechanisms...
If someone younger than me remembers it
?
Warm regards,
Paul. -
Message 13
Posted by Ros (U11141627) on Friday, 10th October 2008
Did not realise there was a relevant thread just three weeks ago. Apologies. Back under my stone.
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Message 14
Posted by PaulRyckier (U1753522) on Friday, 10th October 2008
Re: message 4.
Nordmann,
about the "Darien Scheme" could you expand a bit more about that scheme and the comparison with the todays crisis?
What about the "John Law Louisiana" bubble?
The Βι¶ΉΤΌΕΔ message boards seems not to work with the word "(economist)" Lost ten minutes with trying to let it appear...
Instead: and click on "(economist)"
To be honest I don't see immediately a comparison with the nowadays crisis, but perhaps more erudite people than I can elaborate about it?
Warm regards and with esteem,
Paul. -
Message 15
Posted by keith_df (U8162464) on Friday, 10th October 2008
What about this:
Tas says Capitalism is the best economic system ever invented, but my understanding of history strongly suggests that it was never 'invented'. Instead, I believe the evidence shows that it has evolved throughout history. If so, then there is no reason to believe that it is not still evolving.
In the 18th century, great leaps were made in the formal understanding of the economy - classical economics. What many people today call capitalism, is in fact a set of doctrines (axioms to be more polite) that were first stated by classical economists. These together form a model (a mental simplification) which is useful for certain kinds of calculation. No more than that.
More recently, it has become fashionable to regard the economy as a 'complex adaptive system' this being an example of a kind of system for which models were first created in the last part of the 20th century (ecosystems give us another example). Complex adaptive systems constantly evolve - adapting to changing circumstances, but are reflexive - those circumstances are changed by the changing nature of the system that is adapting to them.
In this case, the rapid changes we see now are not the death of capitalism. Quite the reverse! The changes show how strongly it is adapting and therefore how alive it is. -
Message 16
Posted by U13629535 (U13629535) on Friday, 10th October 2008
Hi Tas,
My personal view is that capitalism is pretty much as old as human civilization itself. Therefore I'm pretty sure your overreacting. Well, just a tad
I mean surely over the centuries capitalism has become like a second nature to us, so that even when governments positively prohibit it, as they did under communism or in the Nazi concentration camps, it still flourished. (Be happy to supply you with plenty of examples.)Therefore, as far as capitalism is concerned, I for one don't feel any particular cause for concern.
I'll repeat what I suspect more than one poster has stated before me: this is just a very natural correction, a time for investors to get real rather than a full blown economic catastrophe. All the conventional definitions of capitalism have in one way or another associated it with production, though you might not have had that impression in the last couple of decades. That, I suspect, is exactly what the current correction is about: capitalism is getting real.
This is actually good for capitalism. Humans? Well, that's a different story -
Message 17
Posted by Tas (U11050591) on Saturday, 11th October 2008
Hi Keith, Hi Try,
You are correct in saying that Capitalism was not invented but just evolved. However, over the many years that we have had this system we have learnt a lot about it.
We nearly lost this system in the 1920s and the 930s for several reasons: on the one hand WW1 imposed such stringent economic condition on Germany that it created a period of hyperinflation on the one side and the onslaught of Communism from the other. Eventually those conditions lead to WW2, with again the loss of millions of our young; however, this time including millions of civilian casualties, the concentration camps and forced labor. WW2 was followed by many refugees and displaced persons all over Europe.
Also in the 1930s came the Great Depression in the entire World. It was not a pleasant time and we remained with the dangers of encroaching communism. The whole World could have gone communist except for Franklin Roosevelt and some other very thoughtful People of that era.
Have we learnt anything from our experience of the 1930s? Apparently very little. Franklin Roosevelt rescued Capitalism then, from itself and from the Comintern, and all the lessons he taught us were forgotten after the Reagan revolution, when our Mantra became "Government is not the solution; the Government is the Problem". Now all the famous Houses of Capitalism, Lehaman Brothers, Bear & Sterns, AIG want to run to that same government to bail them out. Is not that ironic?
President Roosevelt had created a system of Regulations and oversight of our Capitalist institutions to ensure fair play for the investor and to ensure that runaway greed would not wreck this system. Unfortunately we have been under the heady wine that "Dear Ronnie, the Great Communicator!" gave us, have been deregulating everything willy-nilly, disregarding every lesson that we so painfully learnt only 75 years ago. The binge of our prosperity lulled us into a kind of drunken stupor.
"Societies that do not learn from history are destined to repeat the same mistakes over and over."
Tas -
Message 18
Posted by Allan D (U1791739) on Saturday, 11th October 2008
Whilst I yield to noone in my admiration for the political skills and leadership of FDR there is a school of economic thought that considers that the New Deal actually prolonged the Depression and made recovery more, not less, difficult when it came.
Roosevelt's principal contribution was to put in place a social security system, both for the unemployed and the old, the US becoming the last industrialised country to do so (health insurance for the same groups had to wait another 30 years).
The cornerstone of the first New Deal was the National Indusrial Recovery Act of 1933 which set up the NRA (National Recovery Administration) and the PWA (Public Works Admministration) which were both set up to put the unemployed to work through a variety of federally-funded schemes.
From the outset, however, these attracted criticism as spendthrift, wasteful and buraucratic and a commission, headed by the famous lawyer, Clarence Darrow, who had a career of backing numerous liberal causes, determined that these were anti-competitive and they were eventuially shut down by a Supreme Court decision in 1935.
FDR responded by trying to alter the composition of the Supreme Court which ultimately failed and which proved to be very costly when it came to marshalling support both in Congress and with the wider public to amend the Neutrality Act (which he himself had signed into law) to deal with the growing menace of the dictators. Also, some on the left have seen his court-packing plan as a deliberate effort to divert attention away from more fundamental efforts to reform the economic system and a squandering of the mandate he had secured in the 1936 election (largely due to his social security reforms).
However he did embark on a second New Deal which concentrated more on improving the market and regulation such as the setting up of the Securities and Exchange Commission, which regulated the Stock Market, and the Wagner Act, which regulated collective bargaining between employers and unions.
The underlying causes of the Depression were however not addressed. At a worldwide level this was not due to the free market but to the interference in the market by national governments adopting protectionism. The US had been one of the worst offenders with the Smoot-Hawley tariff in 1930. Although Roosevelt modeified this policy with a series of reciprocal trade agreements especially with Latin America (curiously mirrored by the agreements negotiated by the German Government's Dr Hjalmar Schacht with Eastern European countries) they excluded as much trade as they promoted and so the policy of 'bilateralism' had the effect of exporting unemployment to countries not involved in the agreements.
Ironically, it was to be US insistence on Free Trade after WWII, backed by an internationally supported payments mechanism through the IMF and the World Bank set up at Bretton Woods in 1944 that was to lay the foundation for the prolonged period of growth and prosperity which the developed world, at least, has experienced since then.
Roosevelt also raised taxes which deflated both demand and investment and maintained an overly-tight monetary policy in support of maintaining the dollar on the Gold Standard (which Britain had abandoned in 1931). Most economists believe that this was almost certainly the cause of the "Roosevelt recession" of 1937-8 when unemployment returned, albeit briefly, to those which FDR had inherited from his predecessor, Herbert Hoover.
Had the Presidential, and not the mid-term, election taken place in 1938 Roosevelt would have had a tricky job in getting re-elected (assuming he'd run). In the event the elections turned out to be the most problematic of his entire period in office due to both the recession and the adverse public reaction to his court-packing plan.
Although the Democrats retained a nominal majority in both Houses of Congress many of the candidates whom Roosevelt had spoken in favour of were rejected in the primaries in preference to those with much more conservative, isolationist views. This was to hamper FDR's efforts in the following two years to materially aid both Britain and China against the dictatorships. It was not until his re-election for a third term in 1940 that this isolationist majority was overcome and he was able to get through the Lend-Lease Act through Congress the following March.
In fact it was the outbreak of war in Europe, not the New Deal, with the enormous increase in demand for the products of US heavy industry (under the Neutrality Act and until the passage of the Lend-Lease Act the Allied Governments were allowed to purchase material from the US on a 'cash-and-carry' basis i.e. they could buy as much as they wanted as long as they paid immediately and transported it themselves) that solved the Depression. The Depression was essentially about a failure of consumer demand which reinforced itself through increased unemployment and a fall in incomes not about a failure of the market.
As far as FDR's suceesors are concerned the biggest assault on his legacy was by Bill Clinton, not by Ronald Reagan, when he signed the Welfare Reform Act into law in 1996 which de-federalize many of the social security programmes originally introduced in the 1930s and gave the power back to the states to manage them. This had the effect of reducing the entitlement to benefits for many of the unemployed, particularly single parants.. The model of the 'imperial Presidency' created by FDR has also been cited as sharing the downsides of Vietnam and Watergate. -
Message 19
Posted by PaulRyckier (U1753522) on Saturday, 11th October 2008
Re: Messages 18,15 and 16.
Allan,
great post as usual. I learned a lot that I didn't know until now. Thanks also to Keith and Try for their thought-provoking posts.
Warm regards to the three of you,
Paul. -
Message 20
Posted by Tas (U11050591) on Saturday, 11th October 2008
Hi Allan,
Thank you for a detailed account of the 1930s. FDR was not infallible and he did make some mistakes. However, his thrust, and the promise of his times created a system on which we have been able to rely for the last 70 years or so.
We should have learnt from that period instead of deregulating every thing left, right and center. We have put as the Chairman of our SEC an individual who has done practically no oversight of our banking institutions, so that we are now in an International mess.
I do not regard President Clinton's welfare reforms as a hindrance, rather as something positive. Nothing is a surer way to lead to a society living on the shoulders of others than a society with just hand-outs for everyone. This creates a whole society of parasites living on the dole, content with doing very little constructive.
A society should have certain collective responsibilities; for example if some one has a catastrophic health problem we should take care of them. We should take as good care as we can of the primary health of our members. We should also take care of our elderly to the extent that they may need our help.
However, if an individual has, say 500,000 pounds in the bank then why should the hard-working tax payer have to cough up for that individual. Clinton tried to convert welfare to workfare.
Reagan was a nonentity, brought into arguably the most important office in the World, given written speeches and talking points, which, being an actor, he used well. He was given a set of slogans, that he was asked to enunciate. And it is all those slogans that have caused much of the damage.
His slogans unleashed his "small government" mantra, that lead to deregulation as a very desirable thing to do, and if there was a regulating body, to give it as its head, a real nonentity, with the express instructions to do as little as he could to obstruct the free market.
It is this lesson that we must really learn, that just as the police regulates society to prevent criminals taking over, we need some good regulators to do serious oversight of "the Market" as well as our banking and our futures exchanges.
We seem to think that it is "the American Way" to let Capitalism run wild. If we continue along this path we will surely "kill the goose that lays the golden eggs."
Tas -
Message 21
Posted by cmedog47 (U3614178) on Saturday, 11th October 2008
The eggs aren't golden--they are paper mache. Roosevelt confiscated all the gold.
It isn't capitalism that is at fault here. It is the fiat money system of paper, which depends on confidence that the paper mache eggs will continue to be accepted as golden ones. That paper isn't only printed currency, which is after all only an IOU issued by central banks that everyone aggrees will never come due, but also all the other forms of IOU's circulating in the financial marketplace. People aren't sure anymore which ones will be tradable as substitutes for gold, and which ones will be just considered so much paper good only for toilet duty. Capitalism will work just fine once the monetary system is restabilized such that people can again use the usual instruments of exchange with some confidence in consistency of their value.
I am not talking about currency--the collapse of that, if it comes, will be the time to really panic. The vast majority of the "money" that circulates and d are other forms of IOU"S. Remember that if you have a checking or savings account at the bank--that is not really cash in the strictest since. It is an IOU you hold against the bank. It is a system that runs on trust and the trust isn't there now. -
Message 22
Posted by cmedog47 (U3614178) on Saturday, 11th October 2008
The stock market itself goes up and down and is not an indictment of capitalism. In the last 80 years, there has been a bear market on average every 3 years, with an average decline of 35%. Those are averages--larger declines are common and each time part of what drives it is a panic that it is the end of the world.
It hasn't ended yet.
We have and will survive the stock market collapse and have and will be stronger for it.
We will and will survive recession, and have and will be stronger for it.
Freedom often has not survived wholesale panic however. People are not capable of rational thinking while in a panic and have often turned to a dictator to do their thinking for them.
I have often thought no nearly so much of Roosevelt has you have Tas, but I think we need his words now, not the panic mongering by out so called leaders that we currently have. Instead of calming the markets, they talk up the doom so that we will give them all of our treasure and unfettered power to dispose of it. We need a Roosevelt who will remind us that "There is nothing to fear than fear itself".
He understood that it is fear that is the enemy of democracy. -
Message 23
Posted by U13629535 (U13629535) on Saturday, 11th October 2008
Hi Tas,
If you were to say that "Reaganomics" was a no more than a political slogan spouted by people who knew more about PR than actual economics or the principles of capitalism (and I'm sure you would), I'd full heartedly agree. But the same would also be true with regard to any of FDR's New Deals. But this is not a criticism of the actual politicians, whose job it isn't so much formulate policies as to sell them convincingly to the punters. And in both cases some kind of economic policy change in the face of crises was, indeed, called for.
I'd save your criticism or praise of US presidents for matters of general leadership, especially in the realms of foreign policy and war.
For a critique of major economic blunders I'd focus more on the likes of the much revered Alan Greenspan -
Message 24
Posted by Allan D (U1791739) on Saturday, 11th October 2008
I'm not sure I agree with your views of Ronald Reagan who I think was a very significant figure inm both US and World history and had he lived in more challenging times might habve been the equal of FDR, who was his youthful hero and whom he always admired and, to some extent, modelled himself on as President(and who also used speechwriters).
The Welfare Reform Act was not Clinton's idea but that of the Republican Congress elected two years earlier on the basis of Newt Gingrich's "Contract with America" of which welfare reform was a significant part and which owed its genesis directly to the philosophy Reagan had espoused since the 1960s and your third paragrapgh seems to indicate that the "Great Communicator" seems to have been successful in incorporating at least some of his views into the political consensus.
Clinton temporised for a long time as to whether or not to sign the measure. Many on the left urged him to veto it on the grounds that it was chipping away at the edifice put in place by FDR but urged on by his then adviser, Dick Morris, who was extolling the virtues of "triangulation" where the President is seen to above the political fray and extracting ideas from both the political parties (again a reflection of FDR's pragmatism) Clinton signed the bill into law and his action is often credited with making a large contribution to his re-election later that year (after he had been seen as lame-duck one-term President a la Jimmy Carter following the Republican victory in the 1994 mid-term elections) although many have said at the cost not of those who had Β£500,000 or $500,000 in the bank but of many poor people, particularly single parents, whose payments were reduced or terminated.
The important factor about the Welfare Reform Act is not the philosophy underlying it but that the fact that it gave power back to the states and de-federalised the welfare programme. It is not true to say that government welfare programmes did not exist before the FDR but they were administered by the states not the federal goverment. New York, for example, provided both unemployment and sickness benefits (under a scheme which Roosevelt himself had administered as Governor).
What was significant about FDR's period in office was that, due to the twin crises of the Depression and, later, WWII, there was an enormous transference of power from the state government level to the federal level, hence the 'Imperial Presidency' and voters increasingly looked to Washington rather than to their state or local government to solve their problems.
Also, many of the public works schemes such as those which provided electricity to the rural South and West, for example, through the building of the Hoover (named after the President) and Boulder Dams and the later Tennessee Valley Authority were inherited from the previous Republican administration and would have taken place whoever had been in government. The electrification projects such as the TVA were essentially enormous PFI-schemes run by the private sector headed by businessmen such as Wendell Willkie, Roosevelt's opponent in 1940.
As far as regulation is concerned Roosevelt's appointment as the first head of the SEC in 1935 was a major campaign donor, Joseph P.Kennedy, who had a made fortune on Wall Street in the 1920s by insider trading before pulling out just before the Crash occurred and investing in the Hollywood film industry, one of the few dynamic growth points of the US economy in the 1930s.
Such an appointment would have caused howls of outrage had it been made by a Republican, or even a Democrat, President today and attracted considerable adverse criticism even then. FDR merely dismissed the attacks in his typical cavalier fashion by saying it was a good idea "to set a thief to catch a thief".
John F.Kennedy later told the historian, Arthur Schlesinger, that he never knew anything about the Great Depression until he read a book about it years after it had ended although he had grown from boyhood to manhood during that period. He could only recall it being a pleasant period because money seemed to go so much further due to the fact that everything, and everyone, was so cheap. -
Message 25
Posted by Tas (U11050591) on Saturday, 11th October 2008
Dear Kurt,
I was just old enough to remember the last days of Roosevelt and still remember the aura of that time when Americans and the entire World looked up to that great man. In the eyes of Americans he could do no wrong. He had brought the American ship of State through a World war victorious against two very tough enemies and had seen us through the Great Depression.
I still remember when he died, Americans felt not like they had lost a politician but rather a father figure. People were very moved!
People Blame him for creating the Imperial Presidency, but it was the genuine love and affection of the American people that made him appear Imperial. I think the American people loved him like the Romans must have loved Julius Caesar.
After him came other lesser figures, many of them fallible, but his Imperial aura continued right up Watergate. I honestly think he was our greatest president. At that time, not only we but the entire world, looked up to him and we remained basking in his glory for several decades after him.
We have had many presidents since, both Democrat and Republican; some were good some were good people but ineffective (Carter), some were actually bad people (Nixon) but good as presidents.
Clinton was better than average and could have been a great president. Right now we have the "gang that can not shoot straight."
Would it not be great if tomorrow brought us another man with a vision in the Whitehouse. However I am ready to be disillusioned one more time. I think JFK was my biggest disillusion. He did bring some of the top US intellectuals into government but that is all that can be said about him. LBJ could have been great if it had not been for his obsession with Vietnam. And do your remember Ike?
We will need some one with vision as well as understanding of the situation and some ideas, like FDR had; not identical ideas but new ideas, to bring us out of the present mess.
Tas -
Message 26
Posted by PaulRyckier (U1753522) on Saturday, 11th October 2008
Re: Message 25.
Dear Tas,
"In the eyes of Americans he could do no wrong"
I just prepared a reply to Kurt to agree about "There is nothing to fear than fear itself".
I wanted to give the example of France in the money crisis of 1926. And there you see if there is "trust" again the whole system is "working" again...
Warm regards,
Paul. -
Message 27
Posted by Tas (U11050591) on Saturday, 11th October 2008
Hi Paul,
The real problem is to restore trust in our Capitalists. Not all of them are crooks but a few create huge feelings of suspicion in all of us.
It seems every time they get into trouble by their greed the poor public is left "holding the baby."
Tas -
Message 28
Posted by Tas (U11050591) on Saturday, 11th October 2008
It is like taking one of or large cities and giving the police a holiday. Most citizens will behave as good neighbors but a few criminals will say, "Hey, what a great opportunity. Nobody is watching, let us go out and loot."
In the same way, you can not trust every Capitalists to follow the queensbury rules of conduct. In an unregulated free market, he will always want to make a quick buck or at least try to take a short cut to success. The only problem is that his success will be based on our hard-earned savings.
So perforce we must regulate to protect the many against the few predators out there.
Tas -
Message 29
Posted by PaulRyckier (U1753522) on Saturday, 11th October 2008
Re: Message 22.
Kurt,
I wanted to expand on your sentence from Roosevelt: "There is nothing to fear than fear itself"
I completely agree: I just reread the history of the Third French Republic: years 1924, 1925, 1926. Especially right wing and also left wing parties tried to impose fear among the population to ask for "dictators" as were many French industrials looking to the Fascist Italy started in 1922. The "200 wealthy families" who controled the banking system of France, didn't want to carry the burden of the government, which didn't receive money from Germany even after the occupation of the "Ruhrgebiet" in 1923. They wanted that the government collected money from all the other ones except from them and they had the power to "push" the government. They managed to jeopardize the left wing government, among others with capital flight to other countries till it finally collapsed. After a lot of struggle between the different parties and a lot of governments they finally called the moderate conservative PoincarΓ© back and confidence was restored from all sides. Money came back from abroad and the French Franc was saved and economy and government funds went well again. And in fact there was nothing changed except trust between the several parties and the will by this trust to work together again. French people speak still about the stable "PoincarΓ© Franc".
About the several crisisses I think however that we can see one common factor (but I can be wrong and I am open for every critique): People's greed is pushed by some "unscrupulous elements" who are mostly also "addicted" to greed, to make "dangerous" risks to obtain as soon as possible a lot of money. There were some "gangmakers", who let the Dutch merchants loose their normal precautions in the Tulip bubble, the same with John Law, who promised people wealth from the "money mine" Louisiana, the house market in the US boomed, and some clever publicists said to people, you are as much worth of every well-doing American, why don't you buy property to live in your own home. Take a mortgage with us. I saw the same in Belgium in the Eighties till now. "agences" (real estate agencies?) . A bunch of "Mafioso" (I found out) pushed the prices above the real value to please to the sellers and for their own "sack" and they mistifyed the buyers that they had done a good purchase. Then there were the lenders, who were lucky not so unscrupulous as in many other countries, who lend the stupid buyers above their capacity. And if in a two working people household one got redundant, they couldn't pay their mortgage anymore and they lost their house. Many times this was the cause of a divorce. A bit the same as the stupid advertisement, which pushes stupid people to buy stupid things , which mortgage is above their capacities. We had recently such one, who tried to hire with us, but lucky we found out (but still too late) that she was in "debt mediation" (I don't find the word in my dictionary) with a "social government service" and then our bailiff couldn't recuperate our money because she was above the law.
To come back on own experiences with the banks. Some 8 years ago I let me go together with a mate to buy the "Top 30 Best Equities of the World". Not a big amount some 2,000 $. They promised some tripling in some years. Now they are half of the value I bought them. In the bank they said you had to follow them an sell them at the apropriate time.
Even before 9/11 someone of my "close circle" played on the US market (I said to him that that was risky, while you have to be follow it in Europe during the night to interfere "online") He played for several from the family and his close circle (not me) and lost after prodigeous earnings in one month some 100,000 $. Because his greed was to high and he got too risky. There has to be some regulations to prevent those people from taking that risks? Or to forbid some firms that allow people to take such risks? The same as for those playing at the "casino"? To protect people against their own addiction? Regulations also for the banks, which risk too much? Forbidding the "shorters"? Someone said to me that there are even more risky "products" to "play" with than "shorters?
Some five years ago I took some equities from a "basket" guided by a well-known Belgian bank, which has now to be rescued by the government. I asked for a very "save" basket. The female branch-head proposed me some "very save fund". After she was fired by the bank it came out that she proposed some very risky funds as save ones, from which by selling them to the customers she had a "percent" in money. It was after several customer's complaints that she was fired for that. From my 10,000 $ I have nowaday's only half of the worth. But they can go higher again.
Past midnight in Belgium. Till tomorrow.
Warm regards,
Paul. -
Message 30
This posting has been hidden during moderation because it broke the in some way.
-
Message 31
Posted by Tas (U11050591) on Sunday, 12th October 2008
Dear Try,
You, in the words of John McCain, just do not understand. The love of the Peronista for Juan Peron and that of the Russian people for Uncle Joe was quite different from the love of the average American for FDR.
A personality cult is drummed up and people are asked to leave their intelligence at the door and just think of the personality as the great saviour, some one who can do no wrong. Anyone opposing him is evil personified.
Therefore the trials of all the Bolsheviks and the assassination of a few; Zinoviev, Kamenev, Bukharin among the former and Kirov and Trotsky among the latter. They were the same Bolsheviks who had worked so ardently with Lenin to bring about "the Great October Revolution." Now they were persona non Grata, evil men in cahoots with the Capitalists. Even their families were never heard from again.
No one was asking Americans to love FDR; there were no great pictures of FDR to greet you at Grand Central Station. The reason people loved him is because they trusted him completely. "Things were in good hands with FDR."
It was not only the masses that trusted FDR, all the intellectuals of that period, even abroad, people like George Bernard Shaw, had only nice things to say about him.
At the Tehran Conference he was very sick and Churchill had the premonition that he would soon pass away. He had by then had a long innings, longer than any other President: over 12 years.
When Roosevelt came on the Radio to deliver one of his fireside chats, all the members of the family drew closer to the radio to listen to his reassuring voice. Those chats meant a lot to the average American in a time of trouble, as people took any job that they could get. Painters doing house painting, writers waiting at tables, what ever you could get.
He introduced Social Security to America and for the first time elderly Americans, who had worked hard all their lives had a little income to rely on.
I think these days it is the fashion to scoff at the great achievements of that man for the American people, nay for all of us. Even in his heyday there were some vociferous opponents of FDR; there was the great story when some Right-winger said something nasty about FDR's dog, he said something to the effect, "Not satisfied with maligning me now they are after my dog. Well I don't mind but my dog does mind."
"Thus was our Caesar. Whence comes there such another!"
Tas -
Message 32
Posted by stanilic (U2347429) on Sunday, 12th October 2008
Adam Smith summed it up some 200 years ago when he suggested that businessmen would always enter into closet agreements with their fellows to try and rig the market.
Markets are means of exchange and have no moral value. Sadly, there have been those who have bestowed a moral value on markets and have used this to justify a perpetual supply of cash into those markets. This effectively created a Ponzi-scheme out of collaterised debt.
This will be a good one for future historians to unravel and apportion responsibility. I don't think this entire business has much to do with capitalism or socialism. It is, however, an excellent exercise in mass psychology and cultural self-delusion. I note a number of journalists have constructed parallels with the Tulip-Mania that gripped Holland in the seventeenth century. The parallel with the South Sea Bubble is valid. Furthermore Nordmann's argument about Darien is very instructive given the crumbling of HBOS & RBS and the SNP desire to create a Scottish economy along similar lines to that in Iceland! Ouch!
The most irritating thing at the moment is that I seem to have mislaid my copy of Galbraith's book on the Wall Street Crash. -
Message 33
Posted by Tas (U11050591) on Sunday, 12th October 2008
Stanilic
<<"Adam Smith summed it up some 200 years ago when he suggested that businessmen would always enter into closet agreements with their fellows to try and rig the market.">>
That is precisely my point and to keep vigilant about it is the way to preserve Capitalism. Capitalism has created enormous wealth; we can't let the the greed of the few destroy it, as they surely will if they are left unchecked.
Tas -
Message 34
Posted by White Camry (U2321601) on Tuesday, 14th October 2008
Paul,
Some five years ago I took some equities from a "basket" guided by a well-known Belgian bank, which has now to be rescued by the government. I asked for a very "save" basket. The female branch-head proposed me some "very save fund". After she was fired by the bank it came out that she proposed some very risky funds as save ones, from which by selling them to the customers she had a "percent" in money. It was after several customer's complaints that she was fired for that.Β
Did she go to jail for that? -
Message 35
Posted by PaulRyckier (U1753522) on Wednesday, 15th October 2008
Re: message 34.
White Camry,
"Did she get to jail for that?"
There is still an adendum to this story and you wouldn't perhaps believe it but it is the whole truth.
The lady in question has now a clothing business in town and when we passed outside I said to my wife that's the woman who sold me that shit from that bank "X" where I lost half of my money and she was fired for it, you remember. Don't enter this shop! A man also outside commented: those lousy banks especially bank "X" (it was before the crash of that bank), you can trust nobody nowadays. The man entered together with my lady the shop. Unbelievable but true (according to my wife) the man inside told the whole story to the woman and she said that it wasn't true and that she was not fired, that she asked herself to go out of service and she said I know this guy outside, he tells all such stories about me. The man said to the woman I wouldn't let it go as such I would start a legal action against him (that was then me) After my wife told the story some thoughts about the Nazi or East-bloc informers sprang to mind (3Γ©#Β§gr8). But it's a small world, it can be that personel from the local library is reading this. At least one female from the local library contributed over here, but she is a decent one, but there are perhaps other ones...no that's a bit too much conspiracy..and after all I am not afraid of anyone...at least we are a "free" society, where someone can still say what he thinks...but I can't prove that the bankwoman was fired...
Warm regards,
Paul.
PS. I still have a lot to say about the two Munich threads also to one of your replies to me, but now I a doing this. Yes, and I forgot my wife bought something in that shop from "that" woman. -
Message 36
Posted by Nik (U1777139) on Friday, 17th October 2008
If capitalism is the system where you have "a free market" and "continuous competition" then obviously USA was never capitalist, not even close to being it. The state of this country has interevened on a standard basis to protect and restore the whatever interests. And most certainly even if talking about half-hearted (i.e. only when it does good to us but not when it does good to others more than us) capitalism (that is really US) is no more better (nor worse) than whatever other system and cerainly it is not the most natural system or more fair.
Even a 1st year half-illiterate philosophy/sociology student knows that a pure capitalistic system ends briefly within a period of 2-3 generations in huge rigid monopolies that replace the state and actually lead towards a society that resembles in some sense more those communist ones.
In those questions there are no magic recipes. Each country, formation, entity does whatever seems to be working better for it. As simple as that. -
Message 37
Posted by Poldertijger (U11154078) on Thursday, 6th November 2008
Hello Paul, Tas,
I’ve just made good on my promise to explain the credit crunch. I agree with Caro on one point: the crisis cannot be understood by the current economic techniques, which mostly are linear dynamic models. So I have done my best to present a new economic technique that takes into account past year’s events. You may want to check
Regards,
Poldertijger -
Message 38
Posted by Tas (U11050591) on Thursday, 6th November 2008
Thank you Poldertijger for your very interesting article. I learnt a lot from it. Take care!
Tas -
Message 39
Posted by cmedog47 (U3614178) on Saturday, 8th November 2008
I have long been of the theory that our leaders and leading academics don't understand the current level of complexity nearly so much as they think, they rather understand what existed formerly. They are unable to fully appreciate the ramifications of more recent innovations until a disruptive crisis results. They will then usually respond ignorant of their degree of igorance with varying degrees of success dependent on luck as much as anything else, and eventually gain a retrospective appreciation of what really happened. By the time they do, the system has increased incomplexity and whatever they learned either no longer applies or is insufficient.
Which is why, for all the dramatic and sometimes painful disruptions of free markets, excessive control is no solution as the regulators are not endowed with supreme intelligience and don't know all the ramifications of what they do either--with equally painful results.
All the partisan bashing fails to appreciate the full role of the political establishment in Washington, and for that matter simultaneously around the western world both in the more tightly regulated and the less regulated markets. If one wanted to blame Reagan, then one can't honestly forget that it was Clinton who signed the bill that deregulated American banking.
But I don't really think that we can blame Reagan, Clinton, Greenspan, or leading American bankers as a sufficient scapegoat. The entire financial community, in the herd like thinking that even the brightest people sometimes engage, all went over the cliff together. Else how does account for the world wide nature of this. The entire world was ridding an unsustainable asset bubble of virtually all assets. Much of the "growth" that has occurred since the Berlin wall collapsed was, and largely still is, a house of cards resting on debt. The house had to fall eventually, and now that it is doing so, the market, if allowed to operate, will sort out what is solid and real underneath the rubble. A lot of what looks "worthless" now is not.
Securitized bonds undergirded by California real estate is not worthless--it is in fact worth something--bankers just don't feel that they have a handle to how much. Even now, prudent speculators are snapping up paper for pennies on the dollar that the market in it's panic has severely undervalued--the groundwork for great fortunes is being laid.
The market will, if allowed to work, do what capitalism based markets have always been painfully good at doing--transfer the ownership and control of assets from those who have proven themselves unworthy of managing them prudently to those with the wisdom and guts to make it work and grow.
Excessive regulation will put control of the wealth in the hands of bureaucrats who are neither motivated or temperamentally inclined to take the risks that one must make to use wealth to create wealth.
I would suggest that regulation, to do more harm than good, should be based on certain general principles:
1. They should protect essential systems as a system--never specific persons or institutions. This isn't what specific capitalists will write for themselves if allowed to write the rules. They are human and will write the rules to protect themselves if allowed. In short we should preserve a banking system while allowing bankers and banks (and that means you and me--their shareholders) go under.
2. They should bolster, not undermine the essential self-regulatory force of the free market--the fear of personal penury and humiliation. In other words, they should make sure that those who make the essential risk assessment decisions are the primary ones taking the risk. That wasn't followed when banks were allowed to make sloppy loans and then sell them to others to bear the risk. Remember "Greed is good." I always hated that phrase but there is an element of truth--just lots of unspoken caveats. It should always be coupled with "Fear is good". A fantasy of risk free markets was allowed to flourish with grim results.
3. They should enforce sound anti-trust principles and intervene to prevent any one financial institution getting "Too big to fail".
Capitalism is founded on ownership--not just nominal but substantive. That means that the owner gets to control how capital is put to use, owns the profits, and also owns the losses.
People began operating on multiple levels in the financial chain in the belief that they had found ways to reap the profits and offload the risks. -
Message 40
Posted by Tas (U11050591) on Sunday, 9th November 2008
Hi Kurt,
Having carefully read your message, I still think some basic rules are needed for the great game of Capitalism. There is a lot of truth in that the market has a self correcting mechanism, however only a true market.
Frequently the so-called capitalists attempt to distort the market in their favor and have the tax payer footing the bill. You say let the market instill fear in them for the excessive greed; however, by the day of recking they are long gone and left the taxpayer holding the baby. One reason they can do so is because it is not their own money that is involved; it is yours and mine, so the government has perforce to step in to protect the large number of innocent, but slightly thoughtless people whose life-savings are involved. Another problem is the huge amount of unemployment created by a bad economy that no elected government can allow to happen.
In the late 1920s people were buying stock at very little margin; they would buy $10,000 worth of stocks for as little for $1,000. As long as the stock went up at a much higher price, they could sell it and pocket the difference. However, if they consistently lost , then they had to pay the full 10,000.
In a similar manner the credit houses were providing mortgages to inexperienced first-time buyers for little or no 'collateral' or down payment. They were marketing these mortgages with low-interest-inducement offers. As long as people continued to buy homes all this worked. However, sooner or later the market is surfeited and there comes the collapse.
The type of regulations that we need are to keep Capitalists from taking people on a long limb, despite themselves. We cannot continue to make loans to people, hoping they will somehow pay them even if their jobs are lost and they have no good source of income.
I think this crisis has been a very important warning to all of us to get our house in order or the next one will be far worse.
It is indeed a house built on paper; paper created by Nixon, not Roosevelt, when he took the dollar off the gold standard instead of devaluing it, in 1971.
It is easy to find scape goats such as Bill Clinton, for this debacle. However, everyone knows that it was the Neo-con bubble that brought Reagan into power and then assiduosly created this entire philosophy of "any regulation is a bad regulation". Newt Gingrich , the right-wing think tanks, and the many right-wing enablers everywhere have wrought this. And now they are running like hell seeking scape goats.
Tas -
Message 41
Posted by stanilic (U2347429) on Sunday, 9th November 2008
Kurt & Tas have made some good points here.
One could put it all down to the spirit of the times.
The trouble with the prevailing conventional wisdom at any period in history is that it is just that: conventional. It needs to be challenged all the time and criticism taken as constructive rather then negative.
The common factor between the weeks just gone and the previous big crash in 1929 is that possible alternative outcomes other than perpetual growth were never considered by the participants. This is far more important than any regulation.
However, on both occasions those who said the market is unsustainable were jeered at and often abused by the participants in the madness.
The strange thing about 1929 that an odd-ball like Joe Kennedy can see the market crash coming and sell up when more respectable folk failed to see the obvious, just shows that intelligence is not measured by passing exams or getting letters after your name. -
Message 42
Posted by cmedog47 (U3614178) on Sunday, 9th November 2008
Tas,
I am not making Bill Clinton or anyone else the specific scapegoat here. I am mentioning his role as an example of how broad the participation was--that it wasn't just a "right wing" project. The agent of the crises is the fallibility of humans themselves in general--a fallibility that equally afflicts people whether businessman or regulator.
It looks like you are scapegoating. I don't ask why as I well know why we feel a need to apportion blame when things go badly. The problem is that it doesn't solve the problem when it is misplaced.
The cause of all this includes the "right wing" but is much broader. If you continue to blame the "right wing", then you need to explain how your explanation fits certain facts:
Bill Clinton signed the bill that deregulated banking. That is a fact to be accounted for in your theory or the theory is no good. Is he right wing?
Richard Baker, a Rebublican, warned for years of the out of control bad debt in the mortgage business and sought to stop it. One of his principle opponents in this endeavor was Barney Frank, a democrat usually considered pretty left wing. That record is well documented. That is a fact to be accounted for in your theory or the theory is no good. Is Barney Frank secretly right wing?
Bankers all over the world apparently made bad risk decisions during this period resulting in problems everywhere. The individual you cite didn't run those countries banking system. Each nation is sovereign and makes it's own rules. Has all of Europe been under the grip of "right wing" bankers and regulators? If the right wing in the US was the sole problem, wouldn't those outside the American system have seen the excessive risk and not participated in the market for those financial instruments?
I am afraid that the facts better support a different theory-- that herd thinking in the entire community of high finance led them to adopt as new conventional wisdom fallacious notions about a new era of risk management--and that the group think contagion spread irrespective of political affiliation, national boundaries, and to banker and regulator alike.
It did not spread everywhere however. Here in the backwater, our simple minded parochial bankers never participated in those games, didn't trust what they didn't understand, and even halted excessive home inflation 3 years ago by not approving loans when buyer and seller agreed on prices substantially above an appreciation rate of about 5-6% a year. Of the several that I know personally, some are "right wing", and others poltically liberal. What was different was that they lived their lives in a different social world, out of the Washington-New York-London-Brussels important people cocktail circuit and so kept enough objectivity about them to smell a rat. What was also different was that they has little simple state college educations and just never got that derivative thing-but had enough visceral common sense to know to not put the companies money in what they don't get.
It probably helps that most of them are true capitalists in that they run banks that they have major ownership stakes in --often that they helped found with their money and so were personally at risk. None of this running the company into the ground and looting it on the way out the door. -
Message 43
Posted by PaulRyckier (U1753522) on Sunday, 9th November 2008
Re: Message 42.
Wise words, Kurt. Wise words indeed.
Warm regards,
Paul. -
Message 44
Posted by Tas (U11050591) on Monday, 10th November 2008
Hi Kurt,
I am truly upset at our extreme Right. They have wrought all this on our heads and now they want some one else to take the blame for it.
Regarding Bill Clinton's so-called deregulation of banking one of our very good columnist of that period says the following: -
"An agreement between the Clinton administration and congressional Republicans, reached during all-night negotiations which concluded in the early hours of October 22, sets the stage for passage of the most sweeping banking deregulation bill in American history, lifting virtually all restraints on the operation of the giant monopolies which dominate the financial system.
The proposed Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal."
It was the resurgent Republicans, who had won the House on a platform of a "Contract with America" that Newt Gingrich, with his tail high, had negotiated all night with the administration and got what they wanted.
I do not understand why we do not take an idea or two from our dear friends and neighbors to the North, Canada?
The following about the Canadian banking system in today's Time:
"Why has Canada withstood the sub-prime tornado better than other countries, and should the Canadian banking system be a model for G7 and G20 leaders when they gather in Washington on Nov. 15? Consider that the Geneva-based World Economic Forum, an influential think tank whose annual conference attracts the likes of Bill Gates and Tony Blair, earlier this month ranked Canada's banking system as the soundest in the world. The U.S. came in at No. 40, Germany and Britain ranked 39 and 44 respectively. (Switzerland was No. 16 just ahead of Namibia.)
Says Canadian Finance Minister Flaherty, 'The credit crisis we're facing is the result of unbridled greed. We need to bridle greed.'
On Ronald Reagan the same magazine says:
"By decoupling conservatism in the 1980s from fiscal responsibility, he unwittingly sanctioned future deficits and helped usher in a consumerist society gaudily living beyond its means. The result: credit-card conservatism."
If we do not assign the correct blame we all never learn anything from this crisis and will be ourselves to blame for falling into the same trap again, once this crisis is over and we start hearing the siren songs of our extreme Right. Already Rush Limbaugh is calling this the "Obama Depression," even though that poor chap has yet to be inaugurated.
I say to both sides, the Left and the Right, just let the Supertanker called "America," that has held the World economy together since WW2, sail on its way without too much tinkering with its economy; do not, please, try out your experiments with it; it is too serious a matter. Play your games elsewhere, with the life of Terry Schiavo or Gay Marriage or what you will.
Tas -
Message 45
Posted by chefone (U14431437) on Tuesday, 28th June 2011
Spoken by Tas many yrs ago
Good luck old boy....[respect] -
Message 46
Posted by Tas (U11050591) on Saturday, 9th July 2011
Dear Paul,
I have just returned from seven weeks in Britain; a truly delightful visit.
I was in north England in Yorkshire where I discovered this lovely town of Harrogate and had in one of its CafΓ©s the best tea I have ever had. However, more on my trip later.
I was just re-reading this thread that some one has kindly brought forth, and it occurred to me that in talking about the global linkage of economies I had forgotten to clarify what I had expected was obvious: The US is the debtor of Chinese to the tune of over One trillion dollars. So the Chinese, if they are in their right mind, are very unlikely to wish ill to the US economy fearing that a weakening US economy would weaken the US dollar and significantly diminish the value of their holdings in US Dollars. In fact, most of the world's donor nations are continuing to purchase US dollars, thus keeping our interest rates relatively low.
People do no have similar confidence in the Greek or Portuguese or the Irish economy and our economy is at last showing signs of turning around.
So that shows how we are all linked together, when even the Chinese wish us well and not just as lip service either; because their interests are closely bound with ours. That is what Nordmann needs to understand.
Tas
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