[Democrat] Congressional leaders Dodd, Schumer and Frank all embraced the $700billion federal bailout from the beginning and remain its biggest champions. Alas, the only principled opposition to the federal bailout has come from the most crackpot wing of the Republican Party. As Jim Bunning, one of that wing’s spokesmen, protested, “This massive bailout is not the solution, it is financial socialism. It is un-American.” (These knee-jerk conservatives seem not to understand that the basic tenet of socialism requires the redistribution of wealth downward, not upward, as this bailout will accomplish)...

The proposals being floated by Democrats to soften the blow of the bailout will provide no relief from rising gas, food, housing and healthcare costs crippling those who rely on their own labor to earn tangible income — nor will it protect the thousands of workers who lose their jobs in the coming months. [More] . . read more

The current financial failures are systemic. The triumph of greed over discretion; of video games over symphonies. And the other failures are in allowing narrow worldviews to dominate the wonderful potential of the human spirit.

Women, asians, people of colour – stand up and unite! . . read more

But there's a simple and accurate answer: materialism and greed which has become a run-away epidemic in the contemporary capitalist world in general, and in the U.S. in particular, is the root of the problem. The oil crisis may be partly rooted in the desire of China and India to live a standard of material well-being comparable to that in the West, but it's mostly rooted in the speculative trading of oil futures that has artificially jacked up prices wildly. The collapse of the mortgage and banking industries has largely been a product of speculative investments as banks and mortgage companies sought to make super profits on their mortgage loans by turning them into monetary forms that could be traded and against which others could borrow money. It is this speculation, not solely the absence of the commodities, that has been a major source of the problem. . . read more

The good news is that, if the U.S. economy collapses, the Pashtun farmer in northeastern Pakistan, the Iraqi shopkeeper in Fallujah, the Iranian worker in Tehran, and the peasant in Venezuela, will no longer have to worry about being bombed or having their children mowed down by a U.S. helicopter gunship. The U.S. would no longer have the funds to pay for such foreign wars. And because a collapse of the U.S. consumer economy would also drag the rest of the world into a prolonged global slump, perhaps reminiscent of the 1930s, we might actually see a significant enough drop in carbon emissions from idled cars, factories and power plants that the global warming catastrophe that is threatening us all will be significantly delayed, giving humanity time to come up with a serious long-term response. [More] . . read more

In America, the bastion of free enterprise, the right wing U.S. government is paying $85 billion for 80% of the voting stock to keep the American Insurance Group operating. If AIG goes broke (as purists advocate) then (because re-insurance is global) a vast amount of mortgage insurance, business lending insurance and insurance covering risk in operations will collapse. No lender lends loan on a house that can’t be insured. Individuals & businesses risk bankruptcy with one uninsured accident. This ‘crisis’ is being manipulated but the U.S. has very little choice largely because its financial ‘powers that be’ brought this crisis on now while they have a president who is certain to do what they want. Why wait? They’re in control and they’ll never get a better puppet.  . . read more

In the 21st century, the US economy has been kept going by debt expansion, not by real income growth. Economists have hyped US productivity growth, but there is no sign that increased productivity has raised family incomes, an indication that there is a problem with the productivity statistics. With consumers overloaded with debt and the value of their most important asset--housing - falling, the American consumer will not be leading a recovery. A country that had intelligent leaders would recognize its dire straits, stop its gratuitous wars, and slash its massive military budget, which exceeds that of the rest of the world combined. But a country whose foreign policy goal is world hegemony will continue on the path to destruction until the rest of the world ceases to finance its existence.

Most Americans, including the presidential candidates and the media, are unaware that the US government today, now at this minute, is unable to finance its day-to-day operations and must rely on foreigners to purchase its bonds. The government pays the interest to foreigners by selling more bonds, and when the bonds come due, the government redeems the bonds by selling new bonds. The day the foreigners do not buy is the day the American people and their government are brought to reality. This is not the financial position of a superpower. Will what happened to Lehman Brothers today be America’s fate tomorrow? [More]  . . read more

We must be thankful for this sign that American democracy is not completely dead and supplanted by executive branch authority. However, whatever bailout package that emerges will fail unless it takes into account the following.

Any package that maintains the mark-to-market rule and permits the resumption of short-selling will undermine itself. In panic conditions without the existence of a market, the mark-to-market rule results in asset prices being driven below their values, thus eroding balance sheets and producing insolvencies. Short-selling permits short-sellers to profit by destroying the share prices of institutions suffering balance sheet problems, thus eliminating their ability to borrow and driving them into failure. A bailout, however large, that maintains the mark-to-market rule and permits short-selling will pour money into a black hole. [More] . . read more

The great, soon to be late, Gore Vidal said there was a moment at which the American century ended. Vidal said that when the US of A became the planet's greatest debtor client - I forget the number of trillions - the game was up. He appeared to take satisfaction from that.

I do not. A stock market "correction" implies a recession, over two quarters, from which comes a slump, from which comes a depression, from which comes mass unemployment, and lost homes, and blighted lives, and endemic misery. We left-wing extremists do not, in fact, take much pleasure in being right about capitalism. [More] . . read more

Does the banks' condition put the U.S. on the brink? What, because the banks won't lend without a bailout? I don't believe so. The banks remind me of the Sheriff in Blazing Saddles who takes himself hostage. The banks commit suicide by not lending. The banks won't lend without a bailout? Fine. Don't lend, banks. Don't lend starting now. You already have? Huh. Most banks in the DC area are advertising that they are not holding subprime mortgage-based assets and open for business to make loans.

If the banks won't lend and there is money to be made lending, someone else will lend, like the banks that are advertising. That's the free market, and the creative destruction should start now. If things are so bad that banks won't lend, the Taxpayers would be stupid to do so without the substantial potential for profit that the better plan provides. Paulson's plan provides only certainty, the certainty of losses. Why would anyone buy high for the certainty of selling low? [More] . . read more