Matt Davies for July 01, 2010

No, capitalism. When banks tighten credit, they reduce the amount of available money in the economy. Banks usually want looser controls because it effectively increases their net worth by adding credit on top of actual money in the bank. The purpose of the TARP was precisely to help banks provide more money so that more credit existed and people and businesses could obtain loans. Apple, for example, buys its chips on credit; most businesses do something similar. Credit is a means to keep the economy lubricated and running without having to have cash on the barrelhead. But in fact banks sat on that money in order to pay themselves off at taxpayer expense rather than using it to stimulate more growth, as it was intended. This is because the Bush Administration put no constraints or even oversight on this. Socialists would simply nationalize the banks and provide money or resources directly to home buyers. Instead, banks get a chance to make money off loans. Thus: capitalism.

^^Ah yes, random ramblings and buzzwords instead of responding. So you’d date the end of capitalism to 1910, ANandy? Interesting, if surreal. Do you propose a totally free market? Even the conservative economists have realized that it is not “self-correcting.”

^ Oh don’t waste your time, she’ll just go back and delete her comments. I think she must be a right-wing teenager.

But there may be a worthwhile discussion hiding here somewhere. Is the current corporate system what Adam Smith had in mind? Is it right to say that this is Capitalism? Of course it’s not sociaism – that’s just a joke – but shouldn’t there be a different name to distinguish this system from what Capitalism used to be (or used to be thought to be)? I’m sure this is all very naive – I’m certainly no economist – but the word “capitalism” seems to be used to cover a wide variety of systems, and maybe some distinctions are called for.

Our private banking sector is essentially creating new money in the system when it issues loans. Investment banks are essentially creating new money in the system when they place bets on the margin, or ‘naked.’ The biblical flood of money in the system is not from government debt, it is from all the debt and leverage in the banking sector which is probably at least 1000 times the government debt.

The FED, privately owned by the banks that are members of the Federal Reserve System, creates new money when it makes loans to the U.S. Government.

Government IOUs are the ‘gold standard,’ AAA debt on the balance sheets of the private banks, who can have ‘assets’ (or loans out to people) that are up to 30 times their own equity (or hard cash).

Many of the investment houses needed the cash infusion from the federal government to get back within the reserve requirements, because most of the other ‘assets’ on their books had to be devalued to their real market value. That’s why the program was called, “Toxic Asset Relief.”

The banks predictably used the infusion from the government to write down other assets to a more realistic assessment, giving the banks a healthy balance sheet. TARP couldn’t predictably have been used to make additional loans available to the public, and it hasn’t.

There IS a difference between credit and debt. THE PROBLEM was 25 years of using BAD credit to run up the debt. Doing away with Glas -Spiegal was the stupidest of many idiot moves.

“I sincerely believe … that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”

Thomas Jefferson to John Taylor, 1816

Do away with Fannie and Freddie and the fed. Indicte Dodd and Frank and ALL of their cronies. Including the chief community organizer.

ANDY – Well for once you said something that was true – America has not had a TRUE/REAL capitalist state in a century – you know why?

Because true capitalism made a few people incredibly rich, million incredibly poor, and eliminated the middle class, but, since this was a Demoncracy the people, working thru their government, were able to take back control of their country and their economy from the really, really rich.

I don’t think you like history, but you should take time to read a few books about the robber-barons of the 1880’s and you see that Liberials saved America.

There’s something in the current system that creeps me out, that “Buy no matter what” attitude.

Trade made civilisation possible. People would sell their extras. People would need or want stuff, other people would make it and sell it to the guys who wanted it. A supply is created to meet a preexisting demand.

But now, the demand is low. Maybe we start to feel we have enough junk for our money. So the governments coax people to buy stuff, no matter what (“go shop”) to keep the economy rolling.

instead of ajusting supply to demand, we should adjust demand to supply. Whatever “-ism” it is, that doesn’t seem right.

If the free market really did all the job, without any form of human intervention, nobody would need to do that.

No matter how our ressources deplete, no matter how we get in dept to buy stuff we don’t need that much, we must buy. Human has become a buying and consuming machine, and exists for the system more than the system exists for human.

Someday, people won’t want or won’t have the money to “go shop”…

Can that go on for long? I don’t know, but I don’t like that.

doesn’t anybody proofread

You should have capitalized the “d’ in “doesn’t”, and ended your sentence with a question mark.

You’re welcome.

but there’s no typos thanks

Score one for Anthony!

Tony is English Teacher!

What happened to R.V.? Haven’t seen him in a while.

as long as all the letters are where when and how i want them to be i declare success

I, on the other hand, will continue to use English.

Ever heard of E. E. Cummings?

e. e. cummings didn’t use capitals in e. e. cummings

“we are the hollow men we are the stuffed men …”

Sometimes he did, and not all his poetry was done sans capitals.

But I was referring to him in English, not in his style.

anthony the internets the best thing that ever happened to prose communication theres no need for punctuation or capital letters its all there the way i want it if you dont like it get with the 21st century grampa less is more lols

^^ thats all i can make my memory dredge up, will appreciate a continuation if you provide it

http://www.google.com/search?q=we+are+the+hollow+men+we+are+the+stuffed+men

much grass