Yesterday, three economic individualists gathered at the Earth Institute at Columbia University to answer the question: Can We Save the World Economy?
It was no small task for a Monday afternoon.
The panel consisted of global financier George Soros (no friend of Thailand), economic professor Nouriel Roubini (foreshadower of the financial swirlie), and Earth Institute Director Jeffrey Sachs (CNN's favorite expert since the onset of this kerfuffle).
Throughout the next hour and 45 minutes, the gentlemen clearly outlined the origins and implications of the financial crisis, offering a listener a chance to get one's footing even if, say, one barely skated by in Introduction to Economics.
Each cited a systemic failure that led to the collapse of the financial system, pointing a collective finger (which one, you pick) at four mistakes made by Alan Greenspan's Fed: reckless deregulation, aggressive monetary policy, excessive risk taking, and reliance on internal risk-management structures.
One of the fundamental flaws in this system, they said, is its basis on market fundamentalism—a theory that, for varying reasons, each expert said is hooey. As Soros pointed out, the market has never saved itself from failing without the heavy hand of interfering authorities. (Examples he's fond of citing include: The international banking crisis in 1982, the failure of Long-Term Capital Management in 1998.)
A big part of the reason the Federal Reserve System was established was to prevent the kinds of problems they had during the Panic of 1907. Despite that, we had the Great Depression, and other crises, and now we have this mess.
In a market with only that regulation that is necessary and appropriate, people can make mistakes, but other people can do things correctly.
Excessive regulation, however, forces everyone down the same path, and when that path is in error, the whole system has problems.
On top of that, when the system is being manipulated by those in power -- be they government regulators, the elected officials who appointed them, or the billionaire-patrons of the politicians -- honest people have nowhere to run. The result is not just the greed that our elites decry, but a greed enforced by fascistic government regulation.
The antidote to that is freedom -- the freedom to educate yourself and your children on matters of importance, including the economy and finances (hint: your children will not learn critical thinking about the economy in our socialistic government-run school system), and the freedom to act in your own economic best interests.
Yes, you may make a mistake with your money, but the alternative is to have guys with guns and badges take your money from you, and give it to the foxes who are guarding your henhouse.
Our credit-and-loan culture is also to blame, they said, as is an investment-banking system in which passing the risk is the order of the day. Our asset bubble has burst, they say. As a result, we will see a profound change in the way America functions in relation to the rest of the world.
Soros warned that the impact on periphery countries has yet to be seen. Roubini followed up by recalling the phrase, "If the U.S. sneezes, the world gets a cold," and saying, "The U.S. is not just going to get a cold, it’s going to have a severe case of pneumonia." Sachs said the financial crisis would affect developing nations and harm the poor, and added that, if we don’t wake up to the "deep unreality" we've been living in, we will see similar crashes in the environmental and global-poverty spheres.
Sachs argued that nothing short of global macroeconomic coordination can save us from a dismal, long-term financial fate, yet warned that we’re hamstrung until a new president is elected. Who that is will be the deciding factor in how we'll weather the recession.
The gentlemen favor Obama.
They favor Obama.
No surprise there.
In my series Proxy Fight (Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8), I address the backing that Senator Obama receives from George Soros.
What I don't address a great deal at this blog is how George Soros' bet is hedged by backing of Senator McCain, as well.
Needless to say, they want the economy more regulated -- there is a call for "global macroeconomic coordination".
That means taking more freedom from you, and giving it to our Washington elite.
Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are inevitably ruined.
-- Patrick Henry
From Proxy Fight, Part 8:
There are many things at stake in any US Presidential election, and many issues that are influenced.
An Interview with Sibel Edmonds, Page Two by Chris Deliso, July 1, 2004CD: Such as?
SE: Everything -- from drugs to money laundering to arms sales. And yes, there are certain convergences with all these activities and international terrorism.
CD: So with these organizations we're talking about a lot of money --
SE: Huge, just massive. They don't deal with 1 million or 5 million dollars, but with hundreds of millions.
However, one important aspect of the 2008 elections...
An Interview with Sibel Edmonds, Page Two by Chris Deliso, July 1, 2004CD: But what do think, within departments such as the Pentagon and the State Department. Do you suspect certain high officials may be profiting from terrorist-linked organized crime?
SE: I can't say anything specific with regards to these departments, because I didn't work for them. But as for the politicians, what I can say is that when you start talking about huge amounts of money, certain elected officials become automatically involved. And there are different kinds of campaign contributions -- legal and illegal, declared and undeclared.
...is that the US Presidential race has become...
Cracking the Case: An Interview With Sibel Edmonds by Scott Horton, August 22, 2005SE: [snip] The American people have the right to know this. They are giving this grand illusion that there are some investigations, but there are none. You know, they are coming down on these charities as the finance of al-Qaeda. Well, if you were to talk about the financing of al-Qaeda, a very small percentage comes from these charity foundations. The vast majority of their financing comes from narcotics. Look, we had 4 to 6 percent of the narcotics coming from the East, coming from Pakistan, coming from Afghanistan via the Balkans to the United States. Today, three or four years after Sept. 11, that has reached over 15 percent. How is it getting here? Who are getting the proceedings from those big narcotics?
...a proxy fight...
'The Stakes Are Too High for Us to Stop Fighting Now' An interview with FBI whistleblower Sibel Edmonds by Christopher Deliso August 15, 2005CD: But you can start from anywhere --
SE: That's the beauty of it. You can start from the AIPAC angle. You can start from the Plame case. You can start from my case. They all end up going to the same place, and they revolve around the same nucleus of people. There may be a lot of them, but it is one group. And they are very dangerous for all of us.
...for control of the heroin trade.