"Greed" and "extreme capitalism" without a political economy context have no explanatory use. Focussing on ethical flaws diverts analysis away from the essential characteristics of capitalism. Capital produces needs in workers in order to realise profits from the sale of the products embodying their labour power. That drive to satisfy the needs of capital by stimulating debt is at the heart of the current crisis.
Leslie

mil-observer.

We don't agree at all. I am seeking truth and you are seeking blame. I am seeking to ensure a repetition won't occur and ... well I can't figure out what it is you want.
I see the crisis caused by a combination of factors you see it as caused only by people who share some of my views.

You've not really addressed the Community Rinvestment Act or the actions of Clinton.
'Now the poor can enter the property market – everyone will be middle class”, patting the woolly-headed token “lefty”.'
It wasn't one woolly-headed token 'lefty' who proposed this it was the whole bloody democrat party in the US Congress and if you really have a good look at them they are typical rich elitist dogooders., and you've excused them. Like every socialist I know you can never ever be wrong nor accept socialist ideas can cause crap. Socialists are like that because there is only one shade of socialist.

You see on my side of the ledger there are all shades of capitalists. From extremes to moderates. The difference between socialists and capitalist is that capitalists face realities and have to present logical points of view to gain support for their ideas. Responsibility and reasonableness are priorities. We accept mistakes and can alter the way we do things.
All Socialists adhere to dogma. Hence to admit to any sort of error totally challenges their whole world view.

Look I'll give you a little personal advice. Twenty years ago I was a broke single custodial father of a 2 year old and a 4 year old. I've seen and heard of more difficult circumstances.
Get over it.

Good grief people! Talk about shooting the messenger, and then shooting the shooter of the messenger!

I thought this was supposed to be where people comment on an article that other people have gone to the effort of preparing and publishing.

After reading this back-and-forward slanging match I have almost forgotten about the article. But I think you comment-posters would find you have much more in common than you make out, and have a lot more to offer than demeaning yourselves with cheap name-calling. At least both 'sides' have admitted that they don't have a monopoly on the truth, that is a start.

Now, as I understand it, a perculiar convention has been adopted in most places, whereby banks (the banking system) create most (these days 97-98%) of what functions as money. This has not always been the case, and it certainly need not be the case, but that is the mechanism being used at the moment. I do not think there would be anyone who had a good understanding of the present monetary system who would, or could, refute that.

There are many things that could be said about this situation, but there is one thing that I think pertains to the article about the current events (supposedly) under discussion here:

When we read or hear in the media that "taxpayer's money is being used to bail-out the banks", what that really means is "the banking system's credit is being used to bail-out the banking system, through the agency of the government agreeing to go into debt to the banking system by borrowing the new credit from it as a new debt, and then using the new 'money' to purchase bad loans from the banks and/or purchase new shares in the banks." The only role the taxpayer plays in any of this is to 'service' the new debt by paying taxes to the government to pay the compounding interest charges.

[Volatility! I just made some caustic criticisms of self-proclaimed “socialists”, but got the pejoratively used “socialist” tag anyway. Things seem very touchy during this crash]

Thanks Leslie. However, I think most of us are now beyond the Great Smurf's recent token, faux-biblical/-koranic utterances about filthy richness as made impotently and insincerely about his oligarchic bosses and minders. Would he include his wife too? Probably should, and we should also expect him to appear at the next doorstop in a hairshirt. While he's at it, he can try getting state money back from the massive bail outs himself, that dullard Swan, and spiv-psychopath Turnbull of Goldman Sachs have all been telling us “had to be done”.

Yes, the problem is obviously with capitalism – even the most deluded and mystical of capitalists must agree on that point! We could add that similar mechanics of capital, debt and profit underlay the collapse of the avowedly “socialist” Warsaw Pact states after they had hocked onto western debt. I guess you would agree that end of the Cold War was a case of “state capitalism” imploding from debt.

However, do you say anything specific about Sir Greenspan's derivatives bubble, and the enormous debt packages traded between ultra-capitalists? Part of me would enjoy the ideological certainties implicit in your diagnosis, but they suggests no solution.

A stark historical comparison compels a question. Why was FDR's presidency able to construct a massive industrial power out of the Great Depression, enough to defeat fascism and make America the richest and most powerful ever?

As you may discern from my side discussion with keith, I think it important to remember that FDR actually constrained quite severely that capitalistic tendency towards debt. And to link with my retort to Col, FDR reorganized the US system via bankruptcies, genuine international exchange controls, and direction over the US banking system (not the neolib cloud cuckoo land reigning free in recent decades).

All key dynamics behind this ubercrash result from decisions and processes contrary to FDR's precedent, just as the cowardly and corrupt political leadership ignores FDR's example.

Mil Observer

what about addressing the Community Re investment act.

Debt Free or 'Brother"

You are spot on. In the US it is the Federal Reserve that 'creates' money. That role was given to Congress by the US Constitution. That process should be returned to Congress and it's importance codified.

The corruption of this process begn with Nixon when he sbolished the Gold Standard and has been a gradual process. I don't know that we should return to that but I do know the Banks (Through their influence in the US Federal Reserve) shouldn't have control of that process.

As regard taxpayers money and the bailout. The Fed Res will fund the bailout by printing money. Not only will we service the debt but we'll also pay via a massive future increased inflation, increased interest rates, increased unemployment and falling asset values. ie a depression.

Let's hope a loaf of bread won't cost $1million dollars.

keith - How and why must I address the Community Reinvestment Act in the context of this long-term global atrocity, arisen as it has from the massive debt bubbles of too-clever-by-half neolib economists (including Greenspan as their Maharishi)? OK, fine, I'll do it anyway.

After your prompt, keith, I now understand that minor, and therefore largely irrelevant, detail has brought much belated partisan chest-poking in the US itself. But emphasis on the Carter-era (1977) CRA amounts to just another wasteful distraction via weak, prima facie analysis of legislative mechanisms behind the sub-prime market. It would be as useful as investigating the construction and routing of Polish railways when discussing the causality and responsibility behind Auschwitz-Birkenau, for example.

That leads into my next point about "seeking blame", which is unclear English suggesting also that I might be trying to take the blame myself! If you mean "assigning blame", then sure I am: to all the neolibs, funny-money debt farmers, and corrupt, cowardly party apparatchiks who facilitated even encouraged such lunatic degeneracy. Of course, I count corrupt and gutless US dems among that lot: Gore, Pelosi and Obama are just some of the more obvious and prominent of such courtesans of free-trade idiocy (beside republicans), but that limited focus would be too narrow when we consider the problem's international scope, and the many players among financiers and politicians who have prevailed since at least Nixon's criminal reign, if not earlier when genuine American leadership, black and white, was assassinated - repeatedly.

That above reference to Nixon prompts me to address your mention of the “gold standard”. I think you will find that Nixon's mischief there covered the US “gold RESERVE standard”, which is a quite different entity to the British imperial “gold standard” that waned by the 1930s.

But look at the hypocrisy: you accuse me of only "seeking blame", whereas you assign blame to some loosely defined even caricatured "socialists" somehow synonymous with the US Democratic Party! You claim to seek "no repetition", as if you hold some moral high ground of responsibility.