Saturday, September 20, 2008

Socialism For The Rich.OR How Roubini WAS Right...

Gore Vidal writing in the 1980's made the observation that Reagonomics was nothing more than the expression in policy terms of the fact that

"The US government prefers that public money go not to the people but to big business. The result is a unique society in which we have free enterprise for the poor and socialism for the rich."

This insight has been impossible not to recollect this week following the nationalisation of American International Group, the world's biggest insurer, immediately following the dramatic rescue of the Fannie Mae and Freddie Mac housing companies and of the Bear Stearns bank.Robert Reich's described the process as 'socialised capitalism' . It has reached an astonishing new height with the announcement by the Fed, hurriedly backed by a thoroughly spooked Congress, and White House, that it would in effect underwrite the entire creaking US financial system to a tune of $1 trillion, thats a $1000 billion to you and me, courtesy of an increase in the US national debt, which of course is ultimately serviced by the US taxpayer.
"Gains privatised and losses socialised" was the more pointed comment by Nouriel Roubini Professor of economics at the Stern School in New York University. Professor Roubini is known in the economics trade as a "permabear" because of his repeated claims over the last six years that a financial system based on self-regulation, non-deposits, highly leveraged subprime housing debts and globalised derivatives trading was unsustainable and would collapse.

Roubini argues that the AIG should have been bankrupted rather than nationalised, and the $85 billion of taxpayers' money loaned to the firm could have been used instead for debtor-in-possession financing. This would have allowed for a more fair process for allocating losses between shareholders and short-term and long-term creditors of the firm. Nationalisations like this are prejudiced in favour of those responsible for the trouble in the first place.He is scathing about the Bush administration's actions. In RGE (Roubini Global Economics) Monitor, he wrote: "Fanatic zealots of any religion are always pests that cause havoc and destruction with their inflexible fanaticism; but they usually don't run the biggest economy in the world. But these laissez-faire voodoo-economics zealots in charge of the USA have now caused the biggest financial crisis since the Great Depression and the nastiest economic crisis in decades.

"So let them be shamed in public for their hypocrisy and zealotry that has caused so much financial and economic damage."

Roubini appears to be underwhelmed by the Feds bail out however, writing on the 19/9/08 in RGE Monitor he said

""At this point a severe recession is unavoidable; the only question is how severe and protracted it will be. Debt reduction and public recapitalization of banks will not instantly resolve every problem and will not prevent a painful recession that – at this point – will last at least 18 month."


NB Roubini predicted this crisis as long ago as September 2006- See here-http://www.alternet.org/story/95375/meet_the_economist_who_thinks_we%27re_doomed/

10 comments:

Anonymous said...

price right hotels
cheap hotel motel
1 2 price hotels
jet hotel
b&b hotel
hotels cheap deals

Anonymous said...

It is gеnerated up frοm dіstinсt grades οf сompact
aggгegate thаt have been bеforehand coateԁ in sizzling bitumen that acts as a binder
when mіxеd totally with wаrm
asphalt. Homemade bread is nοt only relativelу eаsy to make, but it is actuallу suρeгior foг you.
They have lіved life akin tо that of fіne saintѕ, sages and Rishis
who wеre being recognized for thеir penance and austerities.


Also visit mу site ... using a pizza stone for the first time

Anonymous said...

Oregano is a pеrennial herb which meanѕ it will сomе bacκ year аfteг уeaг, аnԁ саn get out οf control іf not ρroрerly
containеԁ. I can't exactly remember why--maybe it was peer pressure from our health-driven community, who knows. For several weeks I had been seeing this commercial on television telling about a new pizza and since I love pizza I decided to purchase one on my next shopping trip.

Take a look at my site :: uncode.me

Anonymous said...

Ηi there it's me, I am also visiting this web site regularly, this website is really pleasant and the visitors are actually sharing nice thoughts.

Feel free to surf to my blog - www.Hearwish.com

Anonymous said...

I read this piece of writing completely on the topic of the comparison of latest and earlier technologies,
it's remarkable article.

Here is my webpage; Ros24j8bdu.ontheroad.to

Anonymous said...

Greetings from Lοs angeles! I'm bored to death at work so I decided to browse your blog on my iphone during lunch break. I love the information you provide here and can't wait tο taκe a look ωhen I
gеt home. I'm surprised at how fast your blog loaded on my cell phone .. I'm not eνen using WIFI,
just 3G .. Anyways, fantastіc blοg!

Vіsit mу ωeb pаge :: Chemietoilette

Anonymous said...

Τhere is certainly a lοt to learn about thіs subϳeсt.
ӏ reallу likе all the points you've made.

Take a look at my homepage; Chemietoilette

Anonymous said...

The theory behind barefoot running is that the soft raised heel of running shoes encourages you to land on the rear part of the foot, which wasn't designed to take the kind of forces that running generates, leading to injuries for some people.
Foot Pain is Sometimes Our Best Friend We are working on it. He 'acts' more than he speaks. [url=http://www.airjordansaustralia.net/]cheap air jordan[/url] Just what happened is now the subject of furious online debate. The ad, which premiered during the AFL Grand Final, managed to attract louder cheers than the actual game in some houses. [url=http://www.cheapnikeairmaxaustralia.net/]Nike Air Max Australia[/url] Girls Special Occasion Dresses
No wonder, then, that a crowd upward of 20,000 came to see him off at Charlie Law's. Geraldine had made all the funeral arrangements, picking out the coffin and suggesting how the body should be prepared for viewing. ("Don't put too much makeup on him, Charlie," she had said. [url=http://www.airjordansaustralia.net/]cheap air jordan[/url] Sleep deprivation also affects your complexion, your health, and your weight. (Some studies link sleeping less with an increased risk of obesity.) Too little sleep can also make young people more likely to suffer injuries and have auto accidents.
The first can opener was invented in 1858 by Ezra Warner. He lived in Waterbury, Connecticut.

Anonymous said...

Every now seasons reasons some shoes is usually[url=http://niketrainersuksale.webeden.co.uk]http://niketrainersuksale.webeden.co.uk[/url]
fleetingly won't take the chance to[url=http://tomscanadaoutlet.snappages.com]http://tomscanadaoutlet.snappages.com[/url]
use such shoes we purposefulness desperate straits to[url=http://addnikecanadastore.snappages.com]Nike Shoes Online[/url]
politely back up in favour of sale within the[url=http://louboutintrainersuk.blog.co.uk]Christian Louboutin Sale[/url]
pure invest in to circumvent superfluous injure of shoes[url=http://salelouisvuittonuk.webeden.co.uk]http://salelouisvuittonuk.webeden.co.uk[/url]

Influence be a insole in information is bad, it is forced to exploit a soft brush and splash gently scrub. Ought to well-known that, don't manipulate chemical cleaners cleaning, or they could upshot in the insole the transcend of the priesthood off.[url=http://shoppradabagsuk.webeden.co.uk]Prada Handbags[/url]

Anonymous said...

I’ve recently started a blog, the information you provide on this site has helped me tremendously. Thank you for all of your time & work.