Articles/News

The state's role in economic recovery Michael Meacher guardian.co.uk, March 2nd, 2010

Public sector reflation is needed to revive the economy but narrow neoliberalism won't recognise this obvious truth. This is a funny old election. Both the main political parties are focusing on one central issue (how far and how fast the budget deficit should be cut) when that is the wrong policy and the right policy is being rejected out of hand. At the same time, what should clearly be the central focus of this election doesn't even get a serious mention.

Credit Default Swaps as Insider Trading Violation by livinglies (Garfield) March 2, 2010

“Yet on a wholesale basis, Goldman Sachs and others not only had the inside information, they had created it. That is why Goldman started trading against the the interests of its clients to whom it was selling mortgage backed securities that were designed to fail”

“Both the investor and the borrower would have understood that sometimes very little of the investors’ money was actually being used to fund mortgages, with the rest being sued to buy insurance, credit default swaps, pay fees, profits, kickbacks and commissions.”

Credit Default Swaps Defined and Explained by livinglies (Garfield) March 3, 2010

Comments: Everyone now has heard of credit default swaps but very few people understand what they mean and fewer still understand their importance in connection with the securitization of residential mortgage loans and other types of loans.The importance of understanding the operation of a CDS contract in the context of foreclosure defense cannot be understated.

Prospects for Financial Reform by Simon Johnson Feb 23, 2010

The best opportunity for immediate reform of our financial sector was missed at the start of the Obama administration. As Larry Summers and Tim Geithner know very well -- e.g., from their extensive experience around the world during the 1990s (see Summers's 2000 Ely lecture) -- when a financial system is in deep crisis, you have an opportunity to fix the most egregious problems. Major financial sector players are always good at blocking reform -- except when they are on the ropes.

Quotes From Mary Parker Follett (1868 to 1933)

I am convinced that any feeling of exaltation because we have people under us should be conquered, for I am sure that if we enjoy being over people, there will be something in our manner which will make them dislike being under us.

The manager cannot share his(/her) power with division superintendent or foreman or workman, but he(she) can give them opportunities for developing their power.

Unity, not uniformity, must be our aim. We attain unity only through variety. Differences must be integrated, not annihilated, not absorbed.

We must arm ourselves for a class war and George Osborne does not seem serious about tackling it By Edmund Conway

The recession has increased the wealth gap to dangerous levels(from the U.K. Telegraph

http://www.telegraph.co.uk/finance/comment/edmundconway/7312625/We-must-...

If you don't work in the City or in economics, you may not have heard of the annual Mais lecture, which was delivered last night by George Osborne. But it's a big deal, arguably the most important set-piece speech in the Square Mile calendar. And only once before has City University, the host, deigned to invite an opposition politician primed for election to deliver it.

Wall Street Oligarchy and American Empire By Damon Vrabel, Feb. 24, 2010

Hidden Fascism and the Fake Politics of Left vs. Right

http://canadafreepress.com/index.php/article/20368

Citibank’s recent announcement that it may require seven days notice prior to honoring withdrawals is just the latest small brushstroke on a much larger canvas being painted by the banking system and the US government. The broader picture is shocking for those watching as it comes into view. Americans must heed Martin Luther King’s warning, “today our very survival depends on our ability to stay awake.”

"Understanding Chartalism and Economics in the Public Interest" By Tadit Anderson

This is a review of Understanding Modern Money by L. Randall Wray copyright 1998, as published by Edward Elgar Limited. The intent of this review is to add to the reviews of books available which cover monetary reform and related topics. As a side benefit, the people who read these reviews may be less confused and more informed about the potentials of monetary reform.

Understanding the Nature of the Global Economic Crisis: Assessing the Illusion of Recovery by Andrew Gavin Marshall

Readers, this a very long article, it is also very comprehensive. However, I see at least two flaws one minor and one very major. First the author doesn't seem to understand the variety of derivative financial instruments and describes all derivatives as "insurance policies." The Credit Default Swaps were clearly a deregulated variety of insurance. The rest of the derivatives provided a false sense of reduced risk by the pooling of different specific assets, and by the fraud of the ratings agencies choosing to fraudulently rate the tranched products.

Address jobs now and deficits later By LAWRENCE MISHEL & DAVID M. WALKER

President Barack Obama is in a difficult position when it comes to deficits. Today's high deficits will have to go even higher to help address unemployment. At the same time, many Americans are increasingly concerned about escalating deficits and debt. What's a president to do?

The answer, from a policy perspective, is not that hard: A focus on jobs now is consistent with addressing our deficit problems ahead.

The difficulty is that many politicians and news organizations often cast deficit debates as a dichotomy: You either care about them or you don’t.

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