Naomi Klein on bailout

[Pete]

http://www.rollingstone.com/politics/story.../the_new_trough

[Pete]

any comments? I know this belongs on the political board- but I just wanted to hear other peoples opinions on this article. Naomi Klein's books are a must read IMO

[/dev/null]

Government solution to a problem is usually worse than the problem

[ACor58]

The deficit numbers, he declared, reinforce the need to "pursue policies that promote economic growth and fiscal responsibility, and address entitlement reform." He was referring to Americans who feel entitled to receive Social Security in their old age and Medicaid when they are sick. Those programs, Paulson implied, might not be able to survive the budget crisis he is currently creating for the next administration.

 

Funny that he considers Social Sercurity and Medicaid as entitlement. Call me crazy, but since I pay into it, I am quite sure that I am entitled to it.

[tennesseeboy]

Geez, don't post it on the nazi board. I think those folks are in the bunker after November 4! The bailout is the Republican version of wealth redistribution.

[Pete]

And the folks at Morgan Stanley? They're planning to pay themselves $10.7 billion this year, much of it in bonuses — almost exactly the amount they are receiving in the first phase of the bailout. "You can imagine the devilish grins on the faces of Morgan Stanley employees," writes Bloomberg columnist Jonathan Weil. "Not only did we, the taxpayers, save their company...we funded their 2008 bonus pool."

[EndZoneCrew]

And the folks at Morgan Stanley? They're planning to pay themselves $10.7 billion this year, much of it in bonuses — almost exactly the amount they are receiving in the first phase of the bailout. "You can imagine the devilish grins on the faces of Morgan Stanley employees," writes Bloomberg columnist Jonathan Weil. "Not only did we, the taxpayers, save their company...we funded their 2008 bonus pool."

 

[Andrew in CA]

I'm almost halfway through her book The Shock Doctrine, and am so far unconvinced by her thesis: that violence and torture is necessary to implement Friedman's economic plan. It may be sufficient, but it isn't necessary.

[Pete]

I'm almost halfway through her book The Shock Doctrine, and am so far unconvinced by her thesis: that violence and torture is necessary to implement Friedman's economic plan. It may be sufficient, but it isn't necessary.

Keep reading the book with an open mind and I would love to hear your opinion. I don't think violence and torture to implement Friedman's plans is her thesis at all. The thesis in The Shock Doctrine is that massive changes can be made when a "shock" happens. A shock could be Katrina or the Tsunami, or it could be 9/11, or a war. When people are under duress, it is much easier to make large scale economic changes. I admit it is somewhat of a stretch when she compares electro shock therapy to economic policies. But the second half of the book is much better. It is interesting to read about privatization, cronyism, Katrina and aftermath, the green zones in Iraq, etc. I look forward to reading your thoughts on the book

[Pete]

There is a better way to fix a broken financial system. Treasury's plan to buy up the toxic debts never made sense and should be immediately scrapped — a move that would also handily get rid of most of the crony contractors. As for purchasing equity in banks, the next round of deals — and there will be more — has to start from the premise that the banks are bankrupt and will therefore accept whatever terms we choose to impose, including real regulatory oversight. The possibilities of what could be done if a chunk of the banking system were genuinely under public control — from a moratorium on home foreclosures to mandatory investment in green community redevelopment — are limitless.

 

Because here is what George Bush and Henry Paulson are hoping we won't figure out: When a society no longer has enough money to pay for its most pressing needs, there are worse things than discovering you own the banks.

[Typical TBD Guy]

any comments? I know this belongs on the political board- but I just wanted to hear other peoples opinions on this article. Naomi Klein's books are a must read IMO

 

I prefer my critics of laissez-faire capitalism to at least have some rudimentary knowledge of micro/macro economic principles. And her blatant misrepresentation of Milton Friedman's views in her "Shock Doctrine" book was disgraceful. Anyone who so casually (and deliberately?) confuses many of Bush Jr. policies with free market policies is not worthy of any more of my time.

[Tux of Borg]

Funny that he considers Social Sercurity and Medicaid as entitlement. Call me crazy, but since I pay into it, I am quite sure that I am entitled to it.

 

We all pay an obscene amount of money into Roosevelt's public welfare system. I think it's only fair that we all get our share when it's our time.

[DC Tom]

There is a better way to fix a broken financial system. Treasury's plan to buy up the toxic debts never made sense and should be immediately scrapped — a move that would also handily get rid of most of the crony contractors. As for purchasing equity in banks, the next round of deals — and there will be more — has to start from the premise that the banks are bankrupt and will therefore accept whatever terms we choose to impose, including real regulatory oversight. The possibilities of what could be done if a chunk of the banking system were genuinely under public control — from a moratorium on home foreclosures to mandatory investment in green community redevelopment — are limitless.

 

Because here is what George Bush and Henry Paulson are hoping we won't figure out: When a society no longer has enough money to pay for its most pressing needs, there are worse things than discovering you own the banks.

 

The degree to which just that quote demonstrates a complete lack of understanding of damn near everything is astounding. When writing a treatise on the financial industry, one should at least make an effort to understand how it works.

[tennesseeboy]

I'm as liberal as the next guy, but the bailout made no sense to me. Merril Lynch and others got into the mortgage business not knowing what they were doing and clearly deserved bankruptcy. The federal government COULD have (I'm not sure that this is something they should have done) approached the crisis by cutting out the malignancy from the bailout by offering to purchase ALL mortgages (good and bad) from the financial firms at a drastic discount. At that point the mortgages (and only the mortgages) would have gone through a restructuring which would have involved converting the bizarre terms of the mortgages where practical to a fixed Long term (40 to 50 year) at a reduced fixed rate (hence the "discount" and limited federal funds being used.) Bankruptcy and foreclosure proceedings would be subject to a special master with great authority to fashion a workout.

 

As to the financial industry (welfare recipients Republican style.) I don't understand why in accepting any bailout funds they would not agree to a temporary seat on the board being given to the government (given the shoddy state of oversight their existing boards have exercised) and a moratorium on bonuses and "golden parachutes" pending review by the Justice department.

 

This bailout is a boondoggle and robbery of the public treasury. Wait a minute...Iraq, Katrina....hmmm.. more of the same.

[Andrew in CA]

Keep reading the book with an open mind and I would love to hear your opinion. I don't think violence and torture to implement Friedman's plans is her thesis at all. The thesis in The Shock Doctrine is that massive changes can be made when a "shock" happens. A shock could be Katrina or the Tsunami, or it could be 9/11, or a war. When people are under duress, it is much easier to make large scale economic changes. I admit it is somewhat of a stretch when she compares electro shock therapy to economic policies. But the second half of the book is much better. It is interesting to read about privatization, cronyism, Katrina and aftermath, the green zones in Iraq, etc. I look forward to reading your thoughts on the book

 

Pete- you're right, this ^ is the correct thesis. What I stated was a main point she made near the end of the Southern Cone section of the book that I found unconvincing. My mind is certainly open and the book does have it's good points as well. I'll wait until I'm finished to pass final judgment and I'll resurrect this thread when I do finish it.