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The Forum > Article Comments > Hello to the new interventionism > Comments

Hello to the new interventionism : Comments

By Richard Hil and Lester Thompson, published 9/12/2008

After all of the ideological failures and corporate shenanigans of the last decade, Obama (and Rudd) are expected to fix an economy built on massive private debt.

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The writers should reappraise their perspective and get a proper grip on this situation's facts and geometry. There is collective, tragic self-deception at work in much commentary on this disintegrating monetarist system; this article offers it little challenge. Obvious errors:

1. The DERIVATIVES word isn't even mentioned, a major error of omission given that the derivatives bubble's crushing weight is the long-term origin of this systemic catastrophe.

2. “likely effects...declining economic growth”. A big part of the neolibs' smoke and mirrors is their ongoing fraud with statistics, whether on what constitutes “unemployment” or “economic growth”. When bankers themselves openly admit that consumer spending is factored into “growth” calculations, we can be pretty sure that the term itself is a stinker!

3. “unregulated financial capital can lead to catastrophe”. Again, the derivatives bubble of funny money is itself a catastrophe. If it had been regulated, maybe we could have had a more regulated catastrophe?

4. Naomi Wolf, “disaster capitalism” - tres chic. Try some basic history instead. Again, the derivatives bubble, the supporting bail-outs, underwriting and money-printing all spell hyperinflation ready to blow up (I'm expecting the big one by Feb 09). These dynamics all have clear historical parallels with the free-trade imperialists' treatment of Weimar Germany. Therefore, “further erosions of civil liberties” seems a rather cute concern in these circumstances.

5. “ industry...facing bankruptcy caused by managerial ineptitude and stratospheric overheads”. No, US auto sector already smashed thoroghly by 2006, most of its original jobs exported to developing world. The cause of their bosses' despair (and their unstated justification for bail-out demands) is because that notional manufacturing sector actually joined the finance sector and its derivatives-based usury (like General Electric).

6. Greenspan “locked in an underground bunker...or...simply chooses to see longstanding US traditions of corporate fraud and corruption as unfortunate market distortions”. No, Greenspan is a practised sophist, otherwise known as a bare-@$5ed liar. Greenspan himself created the derivatives bubble to keep the free-trade lies going after the '87 crash.

I'll work the red pen further in another post.
Posted by mil-observer, Tuesday, 9 December 2008 12:18:56 PM
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millobserver makes some good points

but i dont feel the error was in leaving them out,never the less both via different words are saying[exposing]much the same problem,its not a debate about what was left out[but who left what out or the changed rules and who created the beautifull'numbers']

my point being the same who got the bailout cash caused the problem[even obama picked the very fools who deregulated the industry[so thus THEY are part of the problem[as well is govt keeping secret the fine details]but let talk about cures

this is a failure of fiat currency to control its own excess[lets face it if you have the money-machine[and can print as much money with it as you chose[and then have the franchise on it[and then have the right alone to lend it back to govt[at intrest]

when they didnt print the money to cover the intrest]sure is a great pyramid sceme[they limit their excess by stopping lending to us[not themselves]then as the market collapses the buy it all up[for themselves]while we bail them out because the scam has become'too big to fail'


the result is hyper inflation[how the system protects itself is having a floating exchange[ie if nigeria[or germany]or argentina is going to fail[put your debt in those currencies[at fixed rate intrest]then pay it off when a billion[marks]barely buy a loaf of bread

[the debt is paid[but who paid for it was those who's'money'was devaluated and who's assets are now owned by the banking cartel[conrolled by three multinaTIONALS]inflation is a tax-con

justy as carbon tax is a tax[its all about stealing OUR money]
but its fiat money[we just print more,then the tax payers pay again via the hidden under-LIE-ing]inflation TAX,

rudds cure at least gives it from the people[taxpayer]to pay into the money game PLAYERS reaping in the spoils[they despoiled]top down cures dont work[gifting lent money to the banks didnt work[DUH][lol]

[borrowed from the privatly owned fed reserve]it all is just debt plus the intrest[put upon the people]as the boom and bust bus fires up its annuel cycle
Posted by one under god, Tuesday, 9 December 2008 1:03:49 PM
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This is another article by authors displaying a failure to understand what they are talking about, instead casting their argument in terms of name-calling, slogans of left and right, and ideology.

Casting the issues as ideological runs into insuperable problems in economic theory. Whether we can make wealth out of thin air, make bread out of stones, is not something that depends on ideology. The scarcity of resources, such as those required for housing, cannot be conjured away by governments passing a law, no matter what their ideology. Yet this is the fundamental economic fallacy that underlies the entire crisis.

The government tried, for socialist reasons, to make housing more ‘affordable’ (sound familiar?) by manipulating the money supply and passing laws requiring banks to lend to people who otherwise wouldn’t qualify for the loans because they are a credit risk.

The chickens have now come home to roost. (Having vilified lenders for being ‘racist’ for not lending the money, the government has now turned to vilifying them for being ‘predatory’ for lending it!)
Posted by Diocletian, Tuesday, 9 December 2008 4:44:37 PM
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To say the markets were ‘unregulated’ is simple ignorance. Prices are the steering mechanism of any market. By lowering interest rates, government was regulating the markets in their quintessential steering mechanism the whole time. The hundreds of billions of dollars of housing costs that government was trying to conjure away don’t just disappear: that’s the whole point. Government does not have the knowledge or capacity to centrally plan the economy, and the belief that they can has been refuted over and over again both in theory and practice.

Yes politicians can play at Santa Claus. Yes the populace can believe them. No they can’t change the structure of reality so as to create real wealth just by passing laws; nor so as to mould and manipulate human action or society into any shape they want it to assume.

The point is this: it doesn’t matter if you would like to create housing out of nothing; it doesn’t matter if you think people should have real wealth at no cost; it doesn’t matter if a majority would like to vote themselves benefits created out of thin air.

What we are witnessing is yet another failure of interventionist central planning, based on exactly the same kind of deluded and destructive socialist fables as the authors display.

If you want to understand what you are talking about, you can learn about it here:

But if you don’t, “less said the better” eh
Posted by Diocletian, Tuesday, 9 December 2008 4:48:28 PM
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I'm a bit put off by the clause "If Naomi Klein's right". She's never been right about anything. She knows as much about economics as she knows about nuclear physics, or about how real people think. What planet are you people on?
Posted by Parser, Tuesday, 9 December 2008 9:27:43 PM
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Thanks for the reminder Parser. I'll first put the red pen back onto my own call, Naomi Campbell? Naomi Watts? Naomi Robson? Shudder!
Posted by mil-observer, Wednesday, 10 December 2008 8:53:27 AM
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