Bush signs bailout bill

[bascule]

ecoli, ParanoiA:

 

Do you honestly think something the size of the US economy can operate on anything besides a fiat currency?

 

It's not 1950 anymore, folks...

[Realitycheck]

I still say that he is a loonie, just way too far out in right field to be taken seriously. These ideas of his are just too unreasonable and dreamlike, like saying, "Poof!"

 

What I have not seen is how 2 mortgage companies' balance sheets have such an effect on the entire mortgage market. That is the outrage. How can this be? What does righting these ships have to do with the mortgage market at my local Century 21? What does the price of interest and funds available to secondary credit have to do with the 95% of people with good credit in line for the many trillions of dollars available for everybody else? It doesn't add up.

 

What it seems like is not a band-aid, but a complete skin graft transplant to fix a paper cut. WTF?

[iNow]

Do you honestly think something the size of the US economy can operate on anything besides a fiat currency?

 

It's not 1950 anymore, folks...

 

I keep thinking this same thing every time people bring up Dr. Paul, and his ideas. While they all work great on paper, those idealized situations are not reality.

 

It's a bit like when mathematicians describe a cow as a circle. It makes the calculations cleaner and the descriptions much more straight forward, but clearly circles are not cows. The same goes for the economy. While these ideas are much more than nifty in theory, they fail to account for the very real dynamics of the densely interconnected world in which we presently find ourselves.

[Sisyphus]

 

The government and FDR tried to do the same thing during the 30s and all we got were 10 years of great depression with massive inflation and unemployment, which only the production stimulated by WWII was able to help cure.

 

If that's an accurate narrative, then what it tells us is that massive spending (the New Deal) doesn't work, but even more massive spending (WW2) does.

[ParanoiA]

ecoli, ParanoiA:

 

Do you honestly think something the size of the US economy can operate on anything besides a fiat currency?

 

It's not 1950 anymore, folks...

 

Not if you insist on a corporatized system that capitulates the people to the government rather than the other way around. Private bankers run our money. Period. Those who control the money, control the country, the world, the people. There is no excuse for fiat currency.

 

It's exactly like George Bush saying the Patriot Act is necessary to protect our freedom, to protect us from terrorism. That's the federal reserve - an act supposedly necessary to protect us from financial insecurity; private bankers capitalizing on our fears to secure their control of currency and distribution of wealth. And just like with Bush, I'm sure it was done with the best of intentions.

 

You all are forgetting the fundamentals of legitimate power structure. Nature will not let us forget, we will pay for it. We, the people, no longer reserve the power to create currency - it has been given to a quasi private-government structure that has assumed power over the people.

 

Do you honestly think something the size of the US economy has to operate on fiat currency? Tell me why. Tell me why credit hacking and giving the power to create money to the private sector is necessary.

 

I still say that he is a loonie, just way too far out in right field to be taken seriously. These ideas of his are just too unreasonable and dreamlike, like saying, "Poof!"

 

I keep thinking this same thing every time people bring up Dr. Paul, and his ideas. While they all work great on paper, those idealized situations are not reality.

 

This is a misinterpretation of Paul's views. Paul is not advocating a magical fix on anything, nor is he implying his views will make a perfect, smooth running economy - he has never said so. Listen carefully, he never claims such things at all. His views are about economic structure that returns power to the people, which will still have problems, just like there has always been, but problems that are dwarfed by the insane problems being dealt with today.

 

Paul recognizes an imbalance of power, that no one wants to really deal with because they rationalize the necessity of such imbalance using the excuse that the global economy is huge and complex and couldn't work otherwise.

 

This is a crucial transfer of power through ignorance and lack of give-a-shit by the people - you. The global economy should be shaped and built around the proper power structures of the world. Instead, we are changing and shaping our power structures to match the global economy - the tail wagging the dog.

 

We are in the complex mess we're in because no one challenged the necessity of the federal reserve and the power it assumed, and now it has had almost a hundred years to soak in and network into every facet of our lives. So yeah, I certainly understand why you wouldn't want to shake that up, and why guys like me, ecoli, or Dr Paul are considered nutcases. We don't respect this imbalance of power, credit system worship, fiat runaway currency - none of it.

 

The global economy and the US economy would run just fine without fiat currency and a central bank run by private bankers; it would be entirely different, it would evolve differently. It would still have problems, just like we'll always have problems under ANY system, you name it. The difference is, which system gives us the BEST SET of problems to deal with.

 

I think the existence of the Federal Reserve and its obvious oligarchical design and nature gives us a worse set of problems than what we had before. For it's problems threaten the sovereignty of the people, it challenges the checks and balances of power built into the republic, as well as the business cycles and economic crises - the problems we had before were limited to economic crises only.

Edited October 9, 2008 by ParanoiA
multiple post merged

[john5746]

short history lesson

 

Of course, we will probably learn more lessons this time around. Maybe the lesson will be: moderation is key.

[Realitycheck]

I'll take Bernanke (expert on the Great Depression) over Paul (expert on the self) any day.

 

Stepping back to look at the gravity of the situation, it's a bit more eye-openning than what had been gradually working on me. The stock market has actually dropped from 14,000 to 9,000, compared to an 80% drop in the Great Depression. Losing 3/4 million jobs in less than a year is not something to take lightly, compared to the 25% unemployment in the Great Depression. The number of bank failings does not quite compare because these days, megabanks are the rule, primarily due to new regulation. There are even plenty of parallels in the housing bubble/bust. All of this is detailed in john's link. (Thanks for the insight.)

 

In light of all of these parallels, I would say, screw Ron Paul, intervention is needed. Nobody wants another actual Great Depression.

Edited October 9, 2008 by agentchange

[iNow]

This is a misinterpretation of Paul's views. Paul is not advocating a magical fix on anything, nor is he implying his views will make a perfect, smooth running economy - he has never said so. Listen carefully, he never claims such things at all.

It was not my intent to suggest that he's living in a dream world of unicorns and thinks only his ideas will result in uptopia. That wasn't my point. I was trying to show how his ideas are, in fact, good ones, but that for them to work we would need to live in an idealized society (it was not my point to suggest that his ideas were to achieve that idealized society, just that they would only work in the way he intends within that idealization).

 

I think part of the confusion may be because I said "represent a cow as a circle." The analogy I was going for is actually the "spherical cow." I was tired last night, and mistated.

 

I may be wrong, but IMO the ideas espoused by Dr. Paul apply more to "spherical cows" than they do to the "actual cows" of our 21st century interconnected global economy.

 

His views on how we should all participate (or, more appros pos... not participate) in "global" issues are also feeding my perception of his plans here. In theory, it would be helpful not to engage or intervene in the issues of other countries, but with the internet and the environment and everything else we are truly one planet, and 19th century approaches are not what we need to transcend the 21st century issues humanity faces collectively.

[ParanoiA]

Interesting. The federal reserve was in business over a decade before the depression. Any ideas why a depression like this occured after the Federal Reserve act, but not before?

 

Oh that's right, you're all going to say that sliced bread was our most outstanding achievement, as proof capitulating the american dollar to private business was the key to the industrial revolution? Something along those lines?

 

Well I'll tell ya'. If you all will give up more of your liberties I can gaurantee all kinds of economic security. I can guarantee a decrease in crime. I can gaurantee an end to practicing bigotry. I can gaurantee an end to war - just prostrate yourselves before me, like you did with the federal reserve act. Give me more and more of your sovereignty. Don't pay attention to my left hand, just watch me wave my right, err, uh your rights that is...

 

If you all are more interested in system performance and efficiency than the balance of power, then you've already been conditioned properly for the machine. Nothing I say will sway you. They dangled something shiney and you're running over each other chasing it.

[Realitycheck]

10 years after they formed the Fed, do you honestly think that they were any good at it? I agree that it doesn't count for much in light of what is happening now, but 700 billion dollars is not that much more. Things MUST change though. I think I have already made my point as to which party is more responsible for all of this "off-balance sheet spending". Do two parties decide where spending comes from? Is that executive privilege? Is that appropriations, as opposed to budget? Decided by some select few in a Senate committee??? Don't have time to look it up.

[ParanoiA]

It was not my intent to suggest that he's living in a dream world of unicorns and thinks only his ideas will result in uptopia. That wasn't my point. I was trying to show how his ideas are, in fact, good ones, but that for them to work we would need to live in an idealized society[/b'] (it was not my point to suggest that his ideas were to achieve that idealized society, just that they would only work in the way he intends within that idealization).

 

But that's not true. We lived in that particular balance of power prior to the existence of the federal reserve. It was hardly ideal. It was convoluted, unpredictable - uncontrollable and unable to be directed. It was the harsh reality of individual choice played out in dollars and cents - bank runs due to a rumor, calamities of currency. Lots of undesirable effects. But we were in charge. The people retained the power that they must have.

 

To complain and change that fundamental structure, like we did, is akin to admitting that democracy doesn't work, and so we're going to a feudal system.

 

We didn't choose a republican government because it was the most efficient form of governing. We didn't choose it because it outperforms other governments. We chose it because it established a foundation of principles that forced a balance of power that would prevent the consolidation of power to an oligarchy, or even a single man - the catastrophic consequences our history books outline.

 

Same with the economy and central banking. Yes, establishing the federal reserve gave us unprecedented control over the economy making it peform more smoothly, consistently - and it came at the price of allowing unelected businessmen to create currency and at-will access to the people's revenues - our taxes. Our property. Our money. That goes against the whole point of being a republic. That goes against our initial intent to give reverence to balance of power OVER efficiency and performance .

 

Private industry controls our dollar. Think about that. That is a fundamental problem that shakes the foundation of sovereignty. Think about how we the people were POWERLESS to stop the bailout, how we were ignored by our legislators. They are in servitude - prostrated to the Federal Reserve. It is not our government. I fear we are no longer a republic. I don't think we could take it back if we tried, and I don't think they fear us in the least.

[npts2020]

I'll take Bernanke (expert on the Great Depression) over Paul (expert on the self) any day.

 

Stepping back to look at the gravity of the situation, it's a bit more eye-openning than what had been gradually working on me. The stock market has actually dropped from 14,000 to 9,000, compared to an 80% drop in the Great Depression. Losing 3/4 million jobs in less than a year is not something to take lightly, compared to the 25% unemployment in the Great Depression. The number of bank failings does not quite compare because these days, megabanks are the rule, primarily due to new regulation. There are even plenty of parallels in the housing bubble/bust. All of this is detailed in john's link. (Thanks for the insight.)

 

In light of all of these parallels, I would say, screw Ron Paul, intervention is needed. Nobody wants another actual Great Depression.

 

The market was not nearly as diversified in 1929 so I would think the same shock now would not be as noticible or sudden.

[john5746]

They dangled something shiney and you're running over each other chasing it.

 

Aren't you the one that wants the shiny gold standard?

[ParanoiA]

Aren't you the one that wants the shiny gold standard?

 

Ugh..worse than that, I even threw shiny silver out there too.

[Realitycheck]

Republicanism is just a word for elitist, self-serving, apathetic bs. I would know. I lived under that for too long. In case none of you all noticed, the New Deal was a success. I'm not in any hurry to form a thesis on what happened between then and now. The problem with sharing the wealth is that so many worthless, tight-ass people view just a bit of it as dreadful communism, and anything close to it as un-American, unconstitutional, and evil. How much resources did we spend on fighting the ideology of communism instead of trying to shake hands across the aisle with them. That's probably another thesis. I've always been the anti-war type, but when you get to the details of why wars happen, I guess that gets pretty complicated.

 

Stay tuned. Next up: compare the financials of other nations with nationalized healthcare to ours, but probably in another thread. Last I heard, the British, the French, and who knows who else were not being ostracized as Communists.

Edited October 9, 2008 by agentchange

[Pangloss]

Republicanism is just a word for elitist, self-serving, apathetic bs.

 

This is what I love about discussing politics on a science forum. All that logical reasoning and demand for evidence and careful, independent thinking goes right out the window.

[Realitycheck]

This is what I love about discussing politics on a science forum. All that logical reasoning and demand for evidence and careful, independent thinking goes right out the window.

 

I'm just detailing the unspoken definition outlined in any common dictionary, nothing more. I would really love to see a Republican perform a complete engine overhaul, or even just change a simple wheel bearing, but I don't see it happening.

[iNow]

But that's not true. We lived in that particular balance of power prior to the existence of the federal reserve. It was hardly ideal. It was convoluted, unpredictable - uncontrollable and unable to be directed. It was the harsh reality of individual choice played out in dollars and cents - bank runs due to a rumor, calamities of currency. Lots of undesirable effects. But we were in charge.

 

Which brings us full circle, right back the point Bascule made that started this tangent:

 

 

It's not 1950 anymore, folks...

 

That's the point I was agreeing with. You're comparing apples and oranges. It's not a 1 to 1 comparison between the pre-Fed-Reserve economy and the present day economy, hence my comments implying that you're using spherical cows. The profound interconnectedness of present day global markets means that despite what we do internal to the country, we are very much NOT in charge when viewed from a broader perspective.

 

 

 

As for the rest, I quite commiserate and share your frustration about our lack of power as the populace, and how we're no longer actually being represented by our representatives. As usual, we agree on much more than we disagree.

[ecoli]

ecoli, ParanoiA:

 

Do you honestly think something the size of the US economy can operate on anything besides a fiat currency?

 

It's not 1950 anymore, folks...

You have to understand the position if you're going to attack it.

 

We wouldn't be returning to a 19th century gold standard here. The price wouldn't be fixed and would be introduced in parallel to the federal reserve note, in terms of a paper note and "digital gold." Thus you would get competing currencies. If the fed tried to inflate the value of their note, people could choose to trade with the gold/silver note.

 

We wouldn't be replacing every $1000 dollars with an ounce of gold. Obviously that wouldn't work. But by starting a competing currency from scratch, in essence, the relative value of the reserves would be "deflated" to the right size of the market (in essence).

[ParanoiA]

Republicanism is just a word for elitist, self-serving, apathetic bs.

 

Republicanism is the advocation of a republic. Do you think a republic is an elitist, self-serving, apathetic system of bullshit? Or are you referring to the cartel..err, I mean party?

 

That's the point I was agreeing with. You're comparing apples and oranges. It's not a 1 to 1 comparison between the pre-Fed-Reserve economy and the present day economy, hence my comments implying that you're using spherical cows. The profound interconnectedness of present day global markets means that despite what we do internal to the country, we are very much NOT in charge when viewed from a broader perspective.

 

Right, and that's not myopic. In case you haven't noticed, I'm defending my guy here. He's accusing Dr Paul of being shallow minded, and I'm retorting that he is not and providing some reasoning to support that conclusion. Sure, we're very much NOT in charge, like you say, but that's his chant: get in charge people, screw the bailout, screw all the politics as usual, let's take our country back...yadda yadda yadda. And it's a thoughtful position, even if you don't agree.

 

People presume it's based on idealism, ivory tower rationale - pick your favorite pejorative to dismiss the threat of those who take the constitution seriously and put more stock behind the balance of power that each generation is giving away, incrementally. Bascule and others lose it when Georgie passes the patriot act, but they don't care how many shiny shoes and suits transfer wealth to their pockets and control our money, which effects our policy, war, our whole "empire" - something Jefferson warned about specifically.

 

Instead, we must realize there's nothing ideal about retaining that power, it has problems and we've read all about them - but privatizing the creation of money and going to a fiat currency is not the answer to those problems. If we had retained that power, our economy and our global interface to that economy would have evolved, just as it has evolved with the Federal Reserve cartel.

 

In other words, it wouldn't look like 1950, it would look like 2008, and it also wouldn't look like it does today.

 

So, I appreciate your point on dealing with the reality today, and we're not in charge today, and I want to change that. You can talk about details of the bailout, and talk with the academics on how that effects the economy as it is built today, and I'm sure I'll play along from time to time, but my long term position, as is Paul's, and hopefully more and more people's is to restore our sole power to create currency and back it up with real assets.

[bascule]

Well, all that said... the Dow closed down 7% today, dropping 679 points to 8579

 

Wells Fargo closed down 14.6%, and Bank of America closed down 11.2%

 

The situation certainly doesn't seem to be stabilizing... can't say I'm surprised

[Pangloss]

Yup. We threw money at the problem, which turned out to be an insult to both money and the problem.

[iNow]

While I appreciate the sentiment, I think it's important to note that the money hasn't yet reached the problem, so it's far too soon to dismiss its impact.

 

What we are seeing now is more the result of the psychology of the populace, removing their money from the system and exasserbating the problem.

 

Also, European and Asian markets have been experiencing a down turn, one they did not really expect. This further makes the situation here worse.

 

The markets are dropping, but the bailout has not yet reached them. We will see continued drops, but the action of the bailout will take more time to come to fruition.

 

In sum, while many of us are frustrated the action was taken at all, it's far too early to dismiss that action as a failure, and without it matters could, in fact, be far worse than they presently are.

 

 

 

 

 

 

 

 

 

 

 

It looks like the financial news out of Detroit played a large role in today's drop.

 

http://www.marketwatch.com/news/story/us-stock-indexes-add-losses/story.aspx?guid=%7B2067E099-1A1C-4B3B-B193-D2B70F65B7D4%7D&dist=msr_1

 

U.S. stocks on Thursday sprinted to fresh five-year lows, with the major indexes slammed for a seventh straight session as financial shares and General Motors Corp. tanked and global credit woes spurred panic-stricken investors to flee equities.

 

"There are only two things that will turn this market around: One is any sign that the credit markets are thawing out, and the second is we finally find a level at which stocks have finally become too cheap," said Art Hogan, chief market strategist at Jefferies & Co.

 

One year to the day after climbing to its peak of 14,164.53, the Dow Jones Industrial Average ($INDU: Dow Jones Industrial Average $INDU 8,579.19, -678.91, -7.3%) sank 678.91 points, its third-largest point loss on record, to finish at 8,579.19, pushing the blue-chip index under the 9,000 level for the first time since August 2003.

 

The Dow's close leaves it 5,585.34 points, or 39.4%, under its year-ago high.

Edited October 10, 2008 by iNow
multiple post merged

[ecoli]

While I appreciate the sentiment, I think it's important to note that the money hasn't yet reached the problem, so it's far too soon to dismiss its impact.

 

What we are seeing now is more the result of the psychology of the populace, removing their money from the system and exasserbating the problem.

 

Also, European and Asian markets have been experiencing a down turn, one they did not really expect. This further makes the situation here worse.

 

The markets are dropping, but the bailout has not yet reached them. We will see continued drops, but the action of the bailout will take more time to come to fruition.

 

In sum, while many of us are frustrated the action was taken at all, it's far too early to dismiss that action as a failure, and without it matters could, in fact, be far worse than they presently are.

 

I think that shows a couple of things. Foreign economies, which have a similar currency planning from a central bank like we do, are experiencing the similar problems as us.

 

This is obviously part of the fact that our economy is tied into a global economy and so obviously you're going to see a downstream effect.

But, I think that its important to note that, when you have a central bank that expands credit freely to promote investment, it contributes to the business cycle no matter where in the world you are. So even in markets which were more highly regulated than ours was, you're going to get bubbles. This is simply the result of having a planned monetary policy and a fiat currency.

 

If that's an accurate narrative, then what it tells us is that massive spending (the New Deal) doesn't work, but even more massive spending (WW2) does.

 

Except that you're distorting the narrative. Expanding the credit caused massive inflation and prolonged the depression, but when Europe was dragged into WWII, and the allies bought most of their war gear from the United States, that spurred production. Of course, you still get inflation but we didn't have to devalue the dollar anymore in order to get people to start investing again.

[Realitycheck]

I don't understand why they are not all buying gold. It's the perfect plan. It's tried and true. It's textbook stuff. What is the matter with these people? They're too focused on their failed derivatives and interest rate swaps and options. Nobody remembers the basics or else they were too stoned in that class.