Archive for the ‘Socialism’ Category

What’s Wrong with Government in America? The Basics!

December 2, 2008

Tickle down and charity doesn’t work to meet the needs of the people who can’t care for themselves. If it did then why do we have increasing problems with elderly, ill, disabled, abandoned children?

We have a huge problem with government corruption and waste of resources and money. In Illinois and C[r]ook County most contracts require a 10% kick-back (bribe)that goes into the political coffers of corrupt politicians. We have more politicians per capita than any other state.

We need small efficient and honest government. That would save probably 20% or more of the budget!

When we elect people who pledge to get rid of redundant government like many townships in Illinois, who stop the unmonitored hemorrhage of funds through schemes like purchasing cards, who tear down patronage hiring of incompetents and rip off artists, who consolidate redundant government agencies,and when we bring true compassion and sacrifice into our government offices, then we will have an advanced, small, efficient, honest, and truly compassionate government run by professionals and their elected leaders that meets the needs of its people without exploiting them as slaves.

Our Economic Crisis – Causes and Fixes

November 16, 2008

I believe the best analysis of the situation is by George Soros on Bill Moyers Journal on October 9, 2008.

 

http://www.pbs.org/moyers/journal/10102008/transcript1.html

 

Three of the things he says are very important:

 

The first has to do with the fact that for 25 years we have been consuming more than we were producing and living more and more on credit that evolved into virtual credit and then into noxious instruments that no longer reflected the true value of the items for which credit was given (houses etc).

 

1) “You see, for the last 25 years the world economy, the motor of the world economy that has been driving it was consumption by the American consumer who has been spending more than he has been saving, all right? Than he’s been producing. So that motor is now switched off. It’s finished. It’s run out of — can’t continue. You need a new motor. And we have a big problem. Global warming. It requires big investment. And that could be the motor of the world economy in the years to come. “

 

The second thing he points out is that the free market does not work without the invisible hand described by Adam Smith. You can’t let the fox (banks and wall street) watch the hen house (noxious instruments). Credit has had a disconnect with the true economy (actual goods and services) growing twice to three times as fast. All of a sudden (actually over time but quickly) the world has realized that their virtual money (credit and noxious instruments) have no clear relationship with actual goods (houses etc) and services in terms of value, and that the agencies evaluating the risk (whether the instruments are good or not) has made totally bogus judgments based on faulty assumptions (credit ratings like AAA).

 

2) “There was a failure of regulations because they couldn’t understand these new instruments. But they said, “Oh, well, the banks have very good risk management techniques. So we leave it to them to calculate their own risks.

And, you see, it wasn’t only in the housing market. There were all kinds of other financial instruments. So there was not just one bubble. I describe in my book there is the housing bubble. But this housing bubble, when that burst, it was only the detonator that exploded the bigger bubble, the super bubble.

 

Which is this 25 years of constant credit expansion using greater and greater leverage. The amount of credit in the economy has been growing at, I don’t know, I don’t know the exact figure, but maybe at least twice as fast as the economy itself. I think it’s more like three.

 

And now, suddenly, you have a contraction of credit. And it’s a sudden thing. And it’s a period of great wealth destruction. And that’s how these poor people in Texas suddenly find that their 401(k) is worthless. “

Finally he essentially says that unbridled greed which is fueled when there is a disconnect between actual value and virtual value (credit) ignores the interests of society and replaces self-interest must be controlled by the invisible hand.

 

3) “Actually, these market fundamentalists are making the same mistake as Marx did. You see, socialism would have worked very well if the rulers had the interests of the people really at heart. But they were pursuing their self-interests. Now, in the housing market, the people who originated the houses earned the fee.

 

And the people who then owned the mortgages their interests were not actually looked after by the agents that were selling them the mortgages. So you have a, what is called an agent principle problem in socialism. And you have the same agent principle problem in this free market fundamentalism. “

 

He also states something very disturbing – that Paulson doesn’t know what he is doing and it was obvious that the 700 billion bailout was useless at that time. He suggests that the first step is buying equity shares in banks – injecting capital at that point. Read the whole transcript and it makes a lot of sense. He should be Secretary of the Treasury.


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