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San Diegans Arthur Lipper and Richard Russell on the current gloom
Should the feds have bailed out Wall Street?
From superior product engineering to reckless financial engineering: that’s how America has declined from a society that makes goods to one that shuffles money around — obsessively gambling with excessive debt. This is the gist of two new books that have recently been on the New York Times best-seller list: Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, by Kevin Phillips, and The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash, by Charles R. Morris.
Since last fall, the federal government and Federal Reserve have thrown hundreds of billions of dollars at the U.S. economy and the credit markets, largely to bail out financial institutions that are too deeply in debt. These two books will help you understand where your tax money is going and why you are suffering from an anemic dollar and high inflation.
I asked four San Diego market pros about the books’ gloomy conclusions and got some interesting opinions. They agree the authors make good points but disagree with some of the findings.
Phillips points out that in the last 30 years, the percentage of the U.S. economy devoted to finance has doubled to 20, while the percentage devoted to manufacturing has halved to 13. We now have “Wall Street socialism,” he says. The money changers say they love free markets, but actually, corporate giants, including those on Wall Street, work hand in glove with the federal government in a mercantilist arrangement to avoid the discipline of truly free markets. The Federal Reserve was bailing out Bear Stearns customers — other Wall Street firms — when it put up $29 billion so JPMorgan Chase could buy Bear hurriedly before Asian stock markets opened. Stocks have risen moderately since that March caper. Of course they have: the Federal Reserve has told Wall Street to continue gambling with borrowed money. If it stumbles, taxpayers will pick up the tab.
The Federal Reserve even has a Plunge Protection Team that arranges an artificial manipulation of stocks when they tumble hard, according to Phillips. Also, the government understates the inflation rate; this permits the Federal Reserve to print money at a prodigious pace, thus propping up stocks. Phillips notes that some call former Fed chairman Alan Greenspan a “serial bubbler” — when the stock market bubble burst in 2000–2002, Greenspan lowered short-term interest rates to 1 percent to get a housing bubble going. Now Ben Bernanke has pushed short-term rates down to 2 percent. Look out for another bubble.
In the mid-1980s, public and private debt was 135 percent of the total economy. Now it’s a record 335 percent. The major villains are bewilderingly complex derivatives — all $500 trillion-plus of them sloshing around the world. The derivatives are essentially unregulated — in fact, many go unrecorded. Indeed, the reckless financial engineering is based on the University of Chicago/Austrian School belief that government regulation inhibits the economy. In the 1980s, that laissez-faire mentality took over from the Keynesian, pro-oversight approach that had been dominant since the 1930s.
Morris believes the Chicago/Austrian School is in its last throes among economists; even financial executives are calling for reregulation. (When their own money is at stake, they want to know where it is.) Wall Street’s obsession with exotic mathematicized instruments is at the root of the turmoil. These derivatives could implode. Like Phillips, Morris heaps contumely on Greenspan’s attempts to prop up the stock market, the excessive money and credit creation since the mid-1980s, and the wealth and income imbalance (for example, the richest 1 percent control 51 percent of the money in the stock market).
“It’s hard to swallow when a guy makes 50 million bucks because he laid off 1000 employees and boosted profits by buying back his company’s stock,” says E. James Welsh of Welsh Money Management in Carlsbad. “That money should be used for research and development.” But boards of directors approve such shenanigans because of “the good old boy network. There is an old saying: ‘Don’t confuse brains with a bull market.’ ”
Welsh agrees with the authors that excessive debt creation will cause problems. Between 1975 and 2000, credit grew faster than the economy by 2.4 percent a year. Between 2000 and 2007, annual credit growth was 3.7 percent higher than economic growth. “I don’t think we can see that kind of debt creation in the next 10 to 15 years,” says Welsh. “The economy will grow more slowly. There is less cash flow to service that debt.”
The Chicago/Austrian free market approach may be sinking for now, says Bob Snigaroff, president and chief investment officer of Denali Advisors, money managers. “Somebody said that we are all Chicago School on the way up and Keynesians on the way down,” says Snigaroff. “We all get exuberant when times are good, and there is a tendency for institutions and individuals to stretch the limit. Then we do need the occasional recession to keep everybody honest. That is the period we are in now.”
Arthur Lipper III of Del Mar, a veteran of Wall Street and international investing, is a believer in the free market. If there is such a thing as a Plunge Protection Team, it only works on the short term. “Any government meddling is distorting and frequently only postpones the natural direction of the markets,” says Lipper. “Given a choice between government regulation and free markets, I’d opt for free markets, as they are inherently self-correcting.”
But that doesn’t mean Lipper is against government oversight. Financial institutions trading complex instruments, and “using money other than their own, should have minimum capital requirements,” he says. He finds it deplorable that big banks have hidden derivatives off balance sheet, thus having inadequate reserves. “Making financial institution directors and senior executives personally liable for losses would curb speculation,” he says. He also notes that investment banks have become far too deeply in debt. “Greed-based competitive pressures to report ever-increasing profits was seen as justification for increasing leverage. It is and was misguided.”
La Jolla–based Richard Russell, author of the newsletter Dow Theory Letters, has been writing his investment advisory since 1958, longer than anyone in the business. Russell is often a doom-and-gloomer who would agree with the findings of Phillips and Morris. In fact, he does agree on many points: “The government is lying. The inflation figure is probably 7 to 10 percent,” he says. On May 14, the government said annual inflation is running at 3.9 percent. Russell agrees that public and private debt are too high: “There is no question. The whole country is overleveraged.” However, he doesn’t think there is a Plunge Protection Team. “The Federal Reserve provides market protection, but there is no blatant manipulation.”
Russell believes this is a bull market. “Eventually the whole thing will topple over” because of the factors cited by Phillips and Morris. “But it’s a question of timing. These are bear arguments now, but they are bear arguments too soon.”
Here's something you might be interested in.
San Diegans Arthur Lipper and Richard Russell on the current gloom
Should the feds have bailed out Wall Street?
San Diegans Arthur Lipper and Richard Russell on the current gloom
Should the feds have bailed out Wall Street?
From superior product engineering to reckless financial engineering: that’s how America has declined from a society that makes goods to one that shuffles money around — obsessively gambling with excessive debt. This is the gist of two new books that have recently been on the New York Times best-seller list: Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, by Kevin Phillips, and The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash, by Charles R. Morris.
Since last fall, the federal government and Federal Reserve have thrown hundreds of billions of dollars at the U.S. economy and the credit markets, largely to bail out financial institutions that are too deeply in debt. These two books will help you understand where your tax money is going and why you are suffering from an anemic dollar and high inflation.
I asked four San Diego market pros about the books’ gloomy conclusions and got some interesting opinions. They agree the authors make good points but disagree with some of the findings.
Phillips points out that in the last 30 years, the percentage of the U.S. economy devoted to finance has doubled to 20, while the percentage devoted to manufacturing has halved to 13. We now have “Wall Street socialism,” he says. The money changers say they love free markets, but actually, corporate giants, including those on Wall Street, work hand in glove with the federal government in a mercantilist arrangement to avoid the discipline of truly free markets. The Federal Reserve was bailing out Bear Stearns customers — other Wall Street firms — when it put up $29 billion so JPMorgan Chase could buy Bear hurriedly before Asian stock markets opened. Stocks have risen moderately since that March caper. Of course they have: the Federal Reserve has told Wall Street to continue gambling with borrowed money. If it stumbles, taxpayers will pick up the tab.
The Federal Reserve even has a Plunge Protection Team that arranges an artificial manipulation of stocks when they tumble hard, according to Phillips. Also, the government understates the inflation rate; this permits the Federal Reserve to print money at a prodigious pace, thus propping up stocks. Phillips notes that some call former Fed chairman Alan Greenspan a “serial bubbler” — when the stock market bubble burst in 2000–2002, Greenspan lowered short-term interest rates to 1 percent to get a housing bubble going. Now Ben Bernanke has pushed short-term rates down to 2 percent. Look out for another bubble.
In the mid-1980s, public and private debt was 135 percent of the total economy. Now it’s a record 335 percent. The major villains are bewilderingly complex derivatives — all $500 trillion-plus of them sloshing around the world. The derivatives are essentially unregulated — in fact, many go unrecorded. Indeed, the reckless financial engineering is based on the University of Chicago/Austrian School belief that government regulation inhibits the economy. In the 1980s, that laissez-faire mentality took over from the Keynesian, pro-oversight approach that had been dominant since the 1930s.
Morris believes the Chicago/Austrian School is in its last throes among economists; even financial executives are calling for reregulation. (When their own money is at stake, they want to know where it is.) Wall Street’s obsession with exotic mathematicized instruments is at the root of the turmoil. These derivatives could implode. Like Phillips, Morris heaps contumely on Greenspan’s attempts to prop up the stock market, the excessive money and credit creation since the mid-1980s, and the wealth and income imbalance (for example, the richest 1 percent control 51 percent of the money in the stock market).
“It’s hard to swallow when a guy makes 50 million bucks because he laid off 1000 employees and boosted profits by buying back his company’s stock,” says E. James Welsh of Welsh Money Management in Carlsbad. “That money should be used for research and development.” But boards of directors approve such shenanigans because of “the good old boy network. There is an old saying: ‘Don’t confuse brains with a bull market.’ ”
Welsh agrees with the authors that excessive debt creation will cause problems. Between 1975 and 2000, credit grew faster than the economy by 2.4 percent a year. Between 2000 and 2007, annual credit growth was 3.7 percent higher than economic growth. “I don’t think we can see that kind of debt creation in the next 10 to 15 years,” says Welsh. “The economy will grow more slowly. There is less cash flow to service that debt.”
The Chicago/Austrian free market approach may be sinking for now, says Bob Snigaroff, president and chief investment officer of Denali Advisors, money managers. “Somebody said that we are all Chicago School on the way up and Keynesians on the way down,” says Snigaroff. “We all get exuberant when times are good, and there is a tendency for institutions and individuals to stretch the limit. Then we do need the occasional recession to keep everybody honest. That is the period we are in now.”
Arthur Lipper III of Del Mar, a veteran of Wall Street and international investing, is a believer in the free market. If there is such a thing as a Plunge Protection Team, it only works on the short term. “Any government meddling is distorting and frequently only postpones the natural direction of the markets,” says Lipper. “Given a choice between government regulation and free markets, I’d opt for free markets, as they are inherently self-correcting.”
But that doesn’t mean Lipper is against government oversight. Financial institutions trading complex instruments, and “using money other than their own, should have minimum capital requirements,” he says. He finds it deplorable that big banks have hidden derivatives off balance sheet, thus having inadequate reserves. “Making financial institution directors and senior executives personally liable for losses would curb speculation,” he says. He also notes that investment banks have become far too deeply in debt. “Greed-based competitive pressures to report ever-increasing profits was seen as justification for increasing leverage. It is and was misguided.”
La Jolla–based Richard Russell, author of the newsletter Dow Theory Letters, has been writing his investment advisory since 1958, longer than anyone in the business. Russell is often a doom-and-gloomer who would agree with the findings of Phillips and Morris. In fact, he does agree on many points: “The government is lying. The inflation figure is probably 7 to 10 percent,” he says. On May 14, the government said annual inflation is running at 3.9 percent. Russell agrees that public and private debt are too high: “There is no question. The whole country is overleveraged.” However, he doesn’t think there is a Plunge Protection Team. “The Federal Reserve provides market protection, but there is no blatant manipulation.”
Russell believes this is a bull market. “Eventually the whole thing will topple over” because of the factors cited by Phillips and Morris. “But it’s a question of timing. These are bear arguments now, but they are bear arguments too soon.”
Comments
The Chicago/Austrian School of Economics, the so-called Chicago Boys, got their chance for 16 years in Chile, under near-laboratory conditions. Between 1973 and 1989, a government team of economists trained at the University of Chicago dismantled or decentralized the Chilean state as far as was humanly possible. Their program included privatizing welfare and social programs, deregulating the market, liberalizing trade, rolling back trade unions, and rewriting its constitution and laws.
And what were the results? Despite some short-term 'successes', Chile's economy became more unstable than any other in Latin America, alternately experiencing deep plunges and soaring growth. Once all this erratic behavior was averaged out, however, Chile's growth during this 16-year period was one of the slowest of any Latin American country. Worse, income inequality grew severe. The majority of workers actually earned less in 1989 than in 1973 (after adjusting for inflation), while the incomes of the rich skyrocketed. In the absence of market regulations, Chile also became one of the most polluted countries in Latin America. And Chile's lack of democracy was only possible by suppressing political opposition and labor unions under a reign of terror and widespread human rights abuses.
Of course, Conservatives have developed an apologist literature defending Chile as a huge success story. In 1982, Milton Friedman enthusiastically praised General Pinochet (the Chilean dictator) as a hero because he "has supported a fully free-market economy as a matter of principle. Chile is an economic miracle." However, the statistics show this to be untrue. Chile is a tragic failure of right-wing economics, and its people are still paying the price for it today
So much for the Milton Friedman/Von Hayek/Von Mises school of economics.
-Jim Fawcett
Response to post #1: Holding this point of view, you will enjoy still another book, "The Shock Doctrine: The Rise of Disaster Capitalism," by Naomi Klein. I read six chapters of it and set it down to read the two books reviewed in this column. I thought she drove off the road several times. I used to be a Chicago/Austrian schooler myself, but gave up many of the tenets when I realized they were not accomplishing what they purported to accomplish -- producing economic stability and particularly, bringing a less inequitable distribution of wealth and income. It is a real dilemma. I think government regulation does not work well. But the unregulated derivatives, particularly the credit default swaps, almost did the whole world's system in, and still might. The Chicago/Austrian schoolers, along with Alan Greenspan, hold on to their anti-regulation point of view. But I feel that when something you believe in fails, abandon it. I believe that if the government is going to bail out investment banks, it has to regulate them -- particularly setting up rigid reserve requirements for them. The banks have reserve requirements but dodge them completely with offshore antics. Some of our best known bankers and investment bankers belong in prison. Still, I think Naomi Klein goes too far in several instances, but I intend to finish her book, and I recommend it to you. (Incidentally, I used to interview Milton Friedman frequently, and still consider him one of the great economists of the 20th century, even though I now believe many of his basic beliefs were not based on reality.) Best, Don Bauder
The Bank of Scotland issued dire warnings that the Western World is in for a bigger depression than America felt in the 1930s and cautioned investors from trusting the American banks. This report has me wondering what to believe in the dark horse days of the Bush Administration?
Response to post #3: I heard about that study from Scotland but have not had a chance to review it. There are others who feel that way, but not many. At any given time, there are a few that feel the world is headed off a cliff. Best, Don Bauder
With the recent run-up in oil by speculators who buy "paper" future contracts with credit is it time to regulate this market? I've recently heard of proposed regulations requiring speculators to take delivery on contracts. If this happens what effect would this have? Aren't this contracts just a form of gambling?
Response to post #5: First, I don't know how much of the oil price runup can be blamed on speculators. Remember, the speculators in the pits are both long and short -- some betting for prices to go up, others down. The companies that actually want delivery of a commodity -- say, General Mills, Hershey -- are a small part of the trading. The speculators wouldn't know what to do if somebody dumped a carload of grain on their front yards. If speculators were required to take delivery of a commodity, the entire modus operandi of commodities trading would be altered permanently. It might even lead to higher prices. But are these speculators gamblers? Of course they are. The same is true of stock speculators. I'll tell you a story I still remember: I was in first grade, walking home with the janitor of the school. I told him my father was a stockbroker. He said, "Oh, one of those gamblers." I cried all the way home and told my mother. She couldn't stop laughing. Incidentally, my father got a Master's in agricultural economics in about 1923 with the idea of going on the floor of the Chicago Board of Trade. When he got there, he saw it was a racket. That's how he ended up in stocks and bonds, although he was the first to admit there was a lot of racketeering in those areas, too. Best, Don Bauder
Response to post #4. We already have but we just haven't looked down yet!
Response to post #4. We already have but we just haven't looked down yet!
I agree, the standard of living for the poor and lower middle class has gone off a cliff.
But until it hits the rich, the Congress, and the 38,000 lobbiest lobbying the Congress nothing is going to change.
Response to post # 7: That's like the guy who jumps off the 40th story of a high-rise. As he passes the 10th story, somebody asks him how things are going. He replies, "Great, so far!" Best, Don Bauder
Response to post #8: Very good points. There has been no inflation-adjusted income growth for the middle class for years. Under Bush, the distribution of wealth and income has become obscenely skewed. Best, Don Bauder
The savings rate in 1980 was 10%. The savings rate today is minus 1.2%. The last time that happened was, guess when, the depression. Add to that the CMO/CDO fiasco, and we got problems. And we ain't learned nothing: we're still bailing out sharks and leeches. We need serious oversight on financial institutions, but this congress won't let that happen. And that's where the real shame lies.
Response to post #11: Yes, we're bailing out the sharks -- those making $100 million a year, and sometimes more than a billion a year, on Wall Street. And still some complain about the welfare burden -- that is, the burden of caring for the poor. The U.S. government and Federal Reserve combined have spent close to a trillion dollars on this credit crisis, which was caused greatly by a complete lack of regulation of derivatives, particularly credit default swaps, as well as permitting banks to evade regulation by going offshore. Best, Don Bauder
It’s time to stop whining about all the things that are going wrong, time to begin implementing solutions instead.
The fact is that it is up to Gen Y to save their own future because all generations before them have failed to do the right things to even protect our own present.
Gen Y has the advantage of being the first generation coming of age into the new world of emerging global conversation technologies such as podcasts, blogs, MySpace, etc. which enable them to discuss, participate, co-create and implement solutions to worldwide problems from alternative-energy to disaster recovery and beyond as citizens of the new global community.
Response to post #13: You make good points. Clearly, our youth are playing a major role in the current presidential election. The young people realize what their elders have done to society, and want to change things. I hope they succeed. Best, Don Bauder
Listening to Dubbya or slimey dick (as opposed to tricky dick) Ben-hanky panky or Paulsen is about as much sense as a Marx brothers movie.Actually I think the aforementioned would have the Marx brothers rolling in the aisles,as would the 2 candidates for office we have now.It is blatently obvious no one of character wants to be the next Wall Street puppet.We have one candidate who was raised a moslem,an old tired war hero,who has lived off the government all his life & his rich wife( he dumped the one that waited for him for years) but doesn,t want anyone to get any of the government freebies he has recieved all his adult life. Wasn,t he the one trying to switch sides a few years back ? Living the American dream , I must be dreaming,is this really happening,yes it is.The reason we have such a low per cent of people going to vote is because so many say nothing will change,as they have all sold us out.Of those that do vote,like a neighbour tells me ,I vote the party line every time,a republican who has worked in the fields all his life & gets a government disability check of $2,000 a month that was a scam.He does however think welfare should be abolished,defends the president by espousing that he cannot do anything about our current problems.I asked him if that is so ,why do we have a president,why buy a car if it will not run ? why a mortgage if you have no house ? I think we ave a stupid government,crooked,dishonest government,but they keep getting elected or re-elected, the voters get what they vote for.maybe looking back Perot was not so wrong.The big sucking sound of jobs leaving.I was once told,the day you see the big 3 automakers going,America is on the brink.To wit,every dog has it`s day.
Don, I hope I’m right also, but there is a reality check that really bothers me that turned up on the NYT Dot Earth blog this morning: “1988-2008: Climate Then and Now” http://dotearth.blogs.nytimes.com/2008/06/23/1988-2008-climate-then-and-now/?hp
This article proves the most disquieting point that we were warned, but we failed to listen, read, think and do anything about it in time. Worse yet we assumed “others” would take care of it. Unfortunately “others” are usually our elected representatives who have proven to be controlled by their own greed and that of the “special interests” who finance their campaigns.
Times have changed greatly since the 60s and 70s when our generation protested civil rights and The War forcing results in Washington on both issues, and we didn’t even have a WWW then.
Gen Y has a whole new technological arsenal to fight back with that allows them to communicate and force results, but will they fight back in time to save the planet and their future from the forces of greed any better than the generations that has failed for two decades to do anything since the early warnings in 1988?
Or will greed continue to rule humanity until we turn Earth into another Easter Island?
Evolutionary biologists have proven that the most unfortunate fact for humanity is that greed is wired into our DNA. Politicians in both political parties are the worst-case examples of the failure of democracy due to the forces of greed. Your reporting alone more than proves that point Don.
This makes it imperative that Gen Y fight back in a whole new way because the old news and communications technology ways, before the World Wide Web and hand held personal communications devices, have failed us completely to properly motivate previous generations (at least not since the civil rights and anti-Viet Nam war activists of the 60s and 70s) considering all the things that are going wrong today.
With the evolving worldwide community and global conversations Gen Y has the capability to overcome the “Us” vs. “Them” polarizations that have taken us down the paths of failure for far too long.
Gen Y must produce a whole new culture of leadership to meet the new challenges of change, and Gen Y can make that happen by participating more aggressively in the political process with the newest technologies that they were raised to use.
Response to post #15: If greed is wired into our DNA, how will today's youth fight back? Will they fight their own bodies? You were front row center for one of history's great flip-flops. The college generation of the 1960s, the hippies, morphed into the greed-obsessed yuppies of the 1980s, 1990s, 2000s. Are you suggesting it is hopeless? I always tell people that I have spent my life preaching against greed. And like the preacher who spends his life preaching against lust, I will never work myself out of a job. Does the bible say "Greed and lust ye shall always have with thee?" If it doesn't, it should. Best, Don Bauder
I take it that those are rhetorical questions Don, but to eliminate any misunderstanding: “Politicians in both political parties are the worst-case examples of the failure of democracy due to the forces of greed. Your reporting alone more than proves that point Don.”
And “--- Gen Y fight back in a whole new way --- the World Wide Web and hand held personal communications devices --- With the evolving worldwide community and global conversations ---.“
Most importantly: “Gen Y must produce a whole new culture of leadership to meet the new challenges of change, and Gen Y can make that happen by participating more aggressively in the political process with the newest technologies that they were raised to use.”
So the situation is far from “hopeless” since Gen Y has a whole new technological arsenal to fight back with to regain control of American Democracy and their future.
And I choose not to interpret the Bible since there are already far too many “Us” vs. “Them” versions to even try.
Response to post #17: I'll take your word for it; today's youth will overcome the sins of their forebears. Best, Don Bauder
Response to post #21: You make some good points. It is particularly discouraging to see how key Democratic finance figures, such as Sen. Chris Dodd, were cozying up for favors from Countrywide. The Senate banking committee is in Wall Street's pocket -- both Republicans and Democrats. Best, Don Bauder
When Bear Stearns was bailed out, my father, the same age as John McCain and George Carlin (and capable of appreciating both), thought first how sad it was that many workers would be let go. I countered, if you work in a virtual casino, this can't come as a surprise. He understood that point.
Response to post #19: Good points. Supposedly, by definition, the difference between gambling and speculation is that gambling is just gambling for gambling's sake. Speculation supposedly is a means to an economic purpose; speculation is supposed to grease the wheels of the capitalist system. Some of the $500-$600 trillion of derivatives serve an economic purpose. But others are pure crapshooting, and our biggest financial institutions are engaged in it. Best, Don Bauder
Response to post #23:
Don, America has a Capitalist Democracy with GREED as the paramount cultural value that makes everything happen, good and bad.
And that's why we have so incredibly many hellacious problems today, worse than anytime since WWII because greed rules federal, state and local governments, including the courts that guarantee that GREED RULES.
I learned all that from The Reader at least.
Response to post #24: Sometimes our society is able to hold greed down at least moderately well. The 1940s through 1970s come to mind (with the glaring exception of the conglomerate frauds of the 1960s). Since the 1980s, however, greed, recklessness, and uncontrolled indebtedness have increasingly been in control. This may be coming to an end. Best, Don Bauder
If greed was held down during those years, it may be related to fiscal and social policies that kept income and wealth disparities down and kept money circulating. "Tax and tax, spend and spend, elect and elect," said Harry Hopkins. It may work again, though recent excess may force allocation of income to debt reduction, a la 1993.
Response to post #26: There is much to what you say. After World War II, American corporations faced a labor shortage and also feared communism and socialism. That's when wages, pensions and other fringes ballooned -- too much, as we now know. But you are exactly right: wealth and income disparity was not ridiculous then as it is now. Today's disparities are a direct result of political and tax policies instituted in the 1980s, then later magnified, that were intended to accomplish exactly what they did: a return to the gilded age in wealth and income distribution. Best,, Don Bauder
Response to post #25:
“recklessness, and uncontrolled indebtedness” are both part of greed.
And both the republican and democratic party leaderships have enabled greed to overcome our economic system to the point where we are on the edge of an abyss today.
The biggest question is will we be able to keep from going over the edge?
Response to post #28: Both books mentioned in this column address that point. Best, Don Bauder
Response to post #29:
Don, I still remember Khrushchev predicting: "The United States will eventually fly the Communist red flag” and we thought he was deranged. The hideous irony is that it would be another “C” word that would bury the American Dream --- Congress is instead selling out the American Dream to Chinese Communism instead. How stupid can we be?
We'd better pray that Gen Y uses their new technological advantages to protect American Democracy and their future before Congress completes the great American sellout.
Response to post #30: Khrushchev said, "We will bury you," but it was the Soviet Union that died. As an economic system, communism simply did not work. Neither did democratic socialism. But unrestrained capitalism hasn't worked well either, as we have seen in the last 25 years. It's a tough dilemma: government regulation doesn't work well, but total lack of regulation is even worse, as the current credit crisis shows. The relationship with China poses a similar dilemma. Because it holds so much of our debt, we are beholden to the country. We consume their products and they provide us the money to do so. Best, Don Bauder
Response to post #31: God Help Gen Y because Washington, Sacramento and San Diego politicians and all the generations before them have sold them out to indentured servitude to pay off the debts to China.
Seems we have completed the evolutionary circle of Democracy from slavery produced by our Founding Fathers such as Washington and Jefferson to equality of indentured servitude for everyone, except those that Don Bauder exposes who get away with never-ending corruption because Congress and the Courts perpetuate greed as their supreme cultural value.
Response to #32, along those same lines, there is a fabulous satirical novel by Christopher Buckley (guy who wrote "Thank You For Smoking") called "Boomsday." Poignant, and hilarious. Because it's true. Best, Barbarella
Response to post #32: How do you like the so-called $300 bailout Congress is planning? The politicians say it is a bailout for the troubled homeowners facing foreclosure. Nonsense. It is a bailout for the banks, that actually wrote the legislation. So the corporate welfare in this credit crisis is approaching a trillion dollars. Best, Don Bauder
Response to post #33: Christopher Buckley is good. I'll have to read that one. Best, Don Bauder
Response to post #33:
Thanks for the interesting recommendation Barbarella.
Encouraging boomers to commit suicide at 75 to save Social Security should either stimulate real solutions or prove they really are Generation Whatever.
Response to post #34:
Don, once again, is American Democracy great or what? We are most definitely beyond declining and in the falling mode, devolving from the original concept of We The People with never-ending legislative and judicial betrayals that say loud and clear “To Hell With We The People.”
Hopefully Buckley’s book will motivate the voters like nothing else has yet to deal with what is becoming the most outrageously out of control, destructive greed and corruption in history.
However, the last election when the dominant San Diego U-T culture of greed and corruption re-elected Sanders, passed Prop. C and a corrupt judge got more votes than the Champion of the People proves that the San Diego electorate is a herd of lemmings going off the cliff.
Response to post #36: If the author said that, it would have been in a satirical sense. Best, Don Bauder
Response to post #37: Yes, the last election definitely demonstrated why con artists come to San Diego, take one look around, and settle down for a career. Best, Don Bauder
Re: #39
That would make a great campaign commercial...but only for the reformist candidates.
I can just see it: Crook gets out of car, looks at San Diego skyline, scans the UT, gets a big grin on his face and lights a cigar. "Boys, I think we have found ourselves a new home and a glorious future here in bee-yootiful San Diego."
Hee, hee. (Sorry, I only laugh so I won't cry.)
Fred
Response to post #40: That's great. Only you could have thought of that. It reminds me of the time, according to legend, that Lucky Luciano and his henchmen visited the New York Stock Exchange. His eyes widened as he saw all these people leaping up and down, giving hand signals, as the numbers denoting dollars kept rising and rising. Said an intrigued Lucky, "Fellas, we joined the wrong mob." Best, Don Bauder