It is not often that the world wakes up to the same headlines right around the globe. But that is what happened last week when the news media told the story of the international economic system going into a tailspin.
The collapse of investment banks and a huge global insurance company had media outlets using terms like “Wall Street meltdown”, “an economic 9/11″, even the “end of capitalism”…
To hear much of the global media tell it the economic crash blindsided the world, including banks, regulators and even those who had been reporting the financial world to the public.
“I don’t think anyone saw this coming, least of all the financial press,” Ryan Chittum from the Columbia Journalism Review, says. “Should financial journalists be fortune tellers? No. But should they have done a better job of reporting that the structure of Wall Street was such that something like could have happened and clearly the answer is yes…”
What the media seem to have been doing wrong according to Andrew Palmer, the Economist’s banking correspondent, is not being sceptical enough during the period of sustained economic growth…The media’s obsession with business also plays a part. Reporting on the triumphs of the so-called the titans of Wall Street sells more papers and attracts more viewers than stories of ordinary people having their homes repossessed.
“With business magazines such as Fortunes, Forbes, there is a kind of cult of the CEO I think,” Chittum says. “It sells magazines when you have the triumphant titan of business on the cover with his latest plan to conquer industry.
Lousy journalism doesn’t make for a Free Press or an informed populace.
Our American presses (made in China) print the finest greenbacks there ever was.
Look at all them pretty dollarz whizzing by—not one worth a grain of sand.
Robert Reich on This Week this morning on the need for MORE REGULATION: “Take the greed out of Wall Street and what you have is pavement.” Classic.
#21 – They also had been conducting exercises for a hundred other things that never happened. Did you ever hear about those on MSM?
Your point being what? My point was that the statement, a quote of Bush, Rice and Rumsfeld during the 9/11 aftermath, was an utter lie. That is what was never mentioned in the MSM because it would have been counter to the interests of the elite.
#33 “Your point being what?”
That putting that listing that data by itself is irrelevant. What’s does doing an exercise have to do with the 911 attack?
Ron Paul warned of this, in detail, five years ago (practically to the day, AIG failed). But I take it R.P. is the Cassandra of Congress. He often right, but no one will believe him.
Somebody saw this coming. Those responsible for planning all this will be those who best benefit from the situation this creates, and the new conditions resulting from changes in legislation. Do you really think that those responsible for billions of dollars spend all their time at the golf course? They knew, of course they did, they knew the situation was becoming untenable and prepared the change that best suited them. Unfortunately, somebody’s going to have to foot the bill. The american taxpayer. The rich get richer the poor get poorer and the once mighty middle class of america dwindled away like the buffalo that once roamed the plains. Shot down for the convenience of others.
#35, you’re a complete and utter moron.
The same people who are telling us that this bailout will work are the people that didn’t see this coming.
Those people who accurately predicted that this mess was coming are also saying the bailout ain’t gonna work. I believe them.
Certainly some things are going to happen:
Big time inflation. It’s kind of fun if you are an impulse shopper.
also wars.
Do you expect REAL math from an IDEA of ECONOMIC MATH??
It does work IF’
YOU DO THE MATH.
DONT believe “What OTHERS say”
#38 You should have said is: If the real property was such a good deal for the taxpayer, then some other investment group would be clamoring to buy it at the sale price.
The question of the bubble bursting being unfortold is stupid. There was a Tulip Bubble in Holland, several recent stock market bubbles (including the Tech Bubbles), and will be another post-bailout bubble, one after the other.
All exponential growth is unsustainable. The only sustainable growth is ZERO growth. However the economy depends on inflation (the younger sibling of growth) to make present purchases affordable in the future. Until the fucktards accept that our entire system is unsustainable, we will continue to have booms and busts that build and equally destroy.
If you think growth is sustainable, then take any growth to its logical limit… Eventually you run out of ground and energy to place and feed people and agriculture. Unless you are expecting to put people on other planets.
Sine the topic is if the financial press saw this coming, let’s look at that. If any journalist working the past five years claimed this is a surprise, they are either lying, beyond oblivious, or both. Remember, they (including the NYTimes and LATimes) reported on attempts at re-regulation of Fannie and Freddie by the Bush administration which were shut down by Chris Dodd and Barney Frank.
They sure as Hell new somebody thought there was a problem, even if Congressman FGrank, “couldn’t see it.”
The press is more interested in the flavor of the month stock pick than any real reporting.
It bears repeating:
All growth is unsustainable.
#41, Bring,
All exponential growth is unsustainable. The only sustainable growth is ZERO growth. However the economy depends on inflation (the younger sibling of growth) to make present purchases affordable in the future. Until the fucktards accept that our entire system is unsustainable, we will continue to have booms and busts that build and equally destroy
Very wrong. The one economy that will increase wealth without inflation is the manufacturing economy. America used to have one, until the owners moved it overseas looking for a bigger profit.
When we mine an ore and turn it into a useful product, we have created a durable wealth. Selling that product overseas only increases our wealth. That is sustainable to a high degree.
Continually buying products from another country and depending upon non-wealth creating service jobs will create inflation. That part is unsustainable.
The strength of our economy is totally dependent upon how much wealth we can create, not the distribution of wealth. Not one recession or depression we have ever had has been caused by the manufacturing sector. Not one! Every one has been caused by the service sectors, especially the financial sector, putting artificial values on artificial creations until the bubble bursts.
It bears repeating. For growth to be sustaining, it must be durable.
#42, goofgibson,
Remember, they (including the NYTimes and LATimes) reported on attempts at re-regulation of Fannie and Freddie by the Bush administration which were shut down by Chris Dodd and Barney Frank.
Keep drinking the kool-aid. The Bush Administration and Republicans wanted to water down regulation even further. They controlled the White House, Congress, AND the Supreme Court and you want to blame Barney Frank?
That thinking is why the Republicans are headed for a big fall come November.
#3, Jag,
These entertainment journalists have marginalized the old investigative journalists.
I disagree. While you have a good point about “entertainment journalists”, there never were that many investigative journalists. Journalism was always very biased right up until after WWII. Hearst and Pulitzer made their fortunes peddling trumped up stories and outright lies. As an example, the National Enquirer was not born in a vacuum. A neutral, honest press is a relatively recent phenomena.
Outside of Upton Sinclair (1900s), Hunter Thompson(1960s), Woodward & Bernstein(1970s), and Seymour Hirsh (2000s), I can’t name you any other true, undercover, investigative journalists. I am quite sure that there are a few. Most news outlets are not interested in funding someone that might write something that might be interesting in maybe a few weeks that could have a massive lawsuit or legal investigation attached.
NOTE: Chris Hansen is not an investigative journalist in my opinion.
/random google-blurb act of 2008
great article. -of course, its from a foreign source.
patriots and “patriot websites” have been saying this for almost a decade. -some longer.
since ’92 when affirmative action style rules and laws replaced the “laws of loaning” )let alone just about every other law, written or otherwise…apon the banks, the banks.. apparently smiled with glee behind closed doors.. (although further inspections seems to indicate this ball was rolling as early as ’87
-everyone who wasn’t in someone else’s pocket knew and spoke about this.
our media is owned by the perps(on all sides), so no surprise they only reported the what was needed to further good times. -why else do they not simply follow the money and report on
the root cause and players in this matter?
bah.. whats the point..
you can go to half a dozen reputable, (and even non-reputable) independent market analyst websites and see talk of how checks and balances enacted in 1933 in response to the 1929 crash, were slowly removed in the the late ’80s and early ’90’s with the icing on the cake seemingly done in 2005…
of all my googling..seems Citibank was the bank that poured the most money into getting the ’33 glass act reversed..apparently the formation of Citigroup was initially somewhat illegal.
i stand by my DU Rant-O-Mania’s of late, -that its the banks that have been unilaterally been behind all the shadiness and downfalls. they just handpicked and payed off the easiest, most believable hacks they could find, got them into office, hit the “print” button on the presses and bought all the green lights they needed to position themselves were needed.
i’m still beside myself that congress is about to pass *any version* of a mass bailout bill. -they should let the banks rot…and if we have to rot with’em, so be it.
-we are going to pay heavily with or without the bill. they just want one last honey-pot to raid before the axe falls.
case in point: –
here is a section of the bill that was just CUT. -i heard on the radio (around 9pm EST) that it was *removed* from the bill.
(opponents called it a slush fund replacement
because its original source was from fanny mae
–snip–
TRANSFER OF A PERCENTAGE OF PROFITS.
1. DEPOSITS.Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).
2. USE OF DEPOSITS.Of the amount referred to in paragraph (1)
1. 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and
2. 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).
REMAINDER DEPOSITED IN THE TREASURY.All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.
–snip–
so -even in the final hours of the so called Bill that will make an economic “life or death” of America and possibly the world, -someone (Dodd, whichever side he’s on) thought it would be prudent to take a portion of any so theoretical profits and dump them back into part of the system that caused the mess in the first place..
-yeah, these guys can be trusted.
i still think they will do anything to get this signed before the 4th quarter report..
let the chips fall were they may. -at least in that case, some of us will sleep easier knowing the fat cats did not get double-payed for their corruption.
(yes, i know i should stay out of political talk..)
-s
#41 The term durable wealth appears to have no consistent definition. Please provide one as my google searches yielded garbage.
Growth has a simple definition. I intend it to mean the increase in economic activity above (or adjusted for) inflation.
Growth is unsustainable because we have a finite Earth, and because the cost of developing and extracting resources increases as those resources become more scarce or difficult to extract.
That is, the cost of doing business increases as a greater percentage of available resources are consumed in the process of doing business.
Therefore, growth is unsustainable. Eventually, the cost of doing business crosses over from generating (diminishing) profits to generating losses. We are talking a hundred, or more, years into the future.
Using your example: Selling something scarce in country X by country Y; is called “trade” and not “growth”. That is, country X would give country Y a “good” in trade for the scarce item country Y is willing to provide. The “good” could be a currency that is accepted by a 3rd country. However, I see no growth in this scenario. Merely trade. I define trade as the exchange of one thing for another of equivalent value. Now suppose country Y wanted to sell something on the open market, but the market was not willing to offer as much as country Y was willing to take. Country Y then has the choice of either selling the item at market value (below expectations) or hold on to the item of an expected increase in price. Again, trade either happens or not, but growth occurs in neither situations. If a higher price in offered at a future date, then inflation has occurred. Again, no growth has occurred.
And you are forgetting that the current slow-down in the economy was helped along by the theory of Supply-Side Economics (SSE); that is, manufacturing for the sake of creating a market for goods that had not been in demand (presumably by driving down prices through excess supply). The stimulus of SSE was to be lower taxes, but regardless of the stimulus, the effect is to flood the market.
So, it again bears repeating:
All growth is unsustainable (on a finite Earth).
I have nothing more to say on this topic.
41..
WOW, you got the IDEA…
BUSINESS can only go up, and Plateau..
It must be FORCED up beyond that point..
Diversification
FIRING
Less workers
Fewer workers doing MORE WORK.
Less benefits, WITH less workers(weird)
Cutting costs..
Cutting TAX
Farm the work to OTHER countries..
CHEAPER goods with HIGHER markup
AND NOTHING here is said about COMPETITION, or lowering prices to make MORE sales..
But, EVEn after all of this, there is the PLATEAU..
THEN you go to OTHER countries and markets, and 1 company owns 2-3-4-5-6-7, all doing the same thing…
THEN it plateaus again..And you buy into OTHER venues, and start GAthering THOSE markets..1-2-3-4-5
BUT, you must leave a few, OR, BACK THEM and not be seen..to SHOw you have competition..Have them OVER PRICE their OWN GOODS, which force the consumer to PURCHASE YOURS(same goods, different name)(the label has been changed to CONFUSE you).
EVEn if you BUY the inflated Price of the OTHER company, PROFIT still gets back to the ORIGINAL persons/group and MORE OF IT..
Paranoid??
LOOK UP MA-BELL.
TRY to find WESTINGHOUSE..(LG owns them)
PHILIPS?? NOT in the USA anymore..EUROPE IMPORTED, MADE in CHINA, sold in the USA.
Most of the problem, comes from those JUST starting to see the game, FROM THE MIDDLE. They havent seen the Hands played BEFORE this point, and dont understand what has Already happened..
#48–Bring it on==Lets use oil. Country X grows its economy by drill, drill, drilling and trading this oil for high rise hotels. You say this growth is unsustanable because the cost of extraction will go up. I agree.
Now, what do we call it when the cost of oil extraction becomes so high that it is cheaper to grow hydrocarbon chains in petro-chemical plants that take waste CO2 from the air or from burning coal and all the oil products are made from this==an ever sustainable process?
Your conclusion is only valid when you limit the discussion to known current proceses==but those change over time.
When one of the required resources is arable land or coal fields, then yes, growth is not sustainable. I’m talking long term. Dvorak says the coal fields will last 350 years.
#51==Bring it on==very lazy. More mantra rather than analysis.
I knew I should have struck coal from the example but I gave you more credit. Nevermind.
Your response offered no counter analysis.
My analysis appears above, if you depend on growth to pay for today’s expenses tomorrow, then you eventually will run out of resources to exploit for that growth. Growth is often misclassified inflation.
If you can’t provide well reasoned arguments, then I have to assume you are only talking in order to gain attention. That is called Attention Whoring on another website.
petro-chemical plants that take waste CO2 from the air and all the oil products are made from this==an ever sustainable process?
Your conclusion is only valid when you limit the discussion to known current proceses==but those change over time.
And building hydrocarbons from airborne CO2 sounds like an investment-driven hoax. Perhpas I am wrong?
That process would obviously take a lot of energy, from nuclear power I presume… what is its expected Energy Return on Energy Invested (EROEI) vis-a-vis water electrolysis?
Now I am out of sync with the post cycle. I’ll have to research your suggestion.
#56–Bring==as a side but related issue, while recognizing limitations in any system is valuable, is there any practical reason to alter todays behavior for what WILL happen 350 years from now, and if so, then how about it only might happen 350 years from now?
Seems to me that most issues are “solved” by having energy to do so. Burning wood or peat moss or whale oil has been changed to oil and that will be changed fairly soon to renewables. Seems to me that physical things can be salvaged, reclaimed, substituted.
In a practical effect, I don’t see limits to growth other than imagination. Changes in how things are done==unavoidable. No calamity, just change.
#53, Bring,
… if you depend on growth to pay for today’s expenses tomorrow, then you eventually will run out of resources to exploit for that growth
That is speculation and is an unsustainable growth. As I pointed out in #44, growth based upon manufacturing IS sustainable and non-inflationary growth.
Your argument was that any growth is unsustainable. Oh here it is, in Post # 41:
Now you seem to be attaching all these conditions on it that weren’t there earlier.
Growth is often misclassified inflation.
If it is then it is done so by those who don’t understand economics. Such as yourself and some right wing nuts.
If you can’t provide well reasoned arguments, then I have to assume you are only talking in order to gain attention. That is called Attention Whoring on another website.
Welcome to DU, moran. Self aggrandizing seldom wins many over here. I will give you credit for a good argument. Accusing others of “attention whoring” though is bad form, especially when you don’t back it up.
#55
And building hydrocarbons from airborne CO2 sounds like an investment-driven hoax. Perhpas I am wrong?
Yes, you are.
That process would obviously take a lot of energy, from nuclear power I presume
Ignorance from an “attention whore” always makes me laugh. For an example, where the hell do you think vegetable oils come from? Now, think Algae.
… what is its expected Energy Return on Energy Invested (EROEI) …
That is the kind of thinking that has led the financial markets to a meltdown. The very first heavier than air flight was shorter than a modern airliner’s wingspan. Your question should have read “How efficient are the various methods currently being studied?”
On a related issue, I highly recommend “The Dark Secret of Hendrik Schon” currently playing on the Science Channel on Cable. The first 30 minutes is excellent talking about limits to growth.
Seems we are currently against the limit of our growth RIGHT NOW and it involves how small silicon electrical circuits can get before they can no longer transmit electrical current before blowing up. This physical limit will bring Moore’s Law to a halt which is what our current economic growth is based on. ((Seems there are many limits to our growth.))
For our society to continue to grow we need to change from silicon to carbon or some other atom sized transistor like material.
A limit to growth in the old model way of doing things driving the change to a new model so growth can continue. Just as it has always been.
Good Stuff.
I’m not a financial journalist, just a computer jockey. Maybe that’s why I saw it coming for almost a decade. My specific prescience was yelling about a recession and, if policy didn’t change, a depression, for about 2 years now. I’m no investor to pin your money on or a financial wizard but this one was F_IN’ OBVIOUS to anyone who cared to look at history.
Oh, that explains it. History. This is history repeating itself. With my degree in history, that’s why I saw it coming.
One of the things we need now is a Roosevelt type leader to quote him saying “We have nothing to fear but fear itself.”
#44 Mr. Fusion
Thank you for a well thought out post.
When you think about it, it’s as plain as day.
No economy can be sustained by McDonalds employees and Walmart employees shopping at each others stores. We have to manufacture things.