As we reach the end of 2011, I keep stumbling across loads of important blog postings which deserve more attention. These pieces aren’t really concerned with the usual, “year in review”- type of subject matter. They are simply great items which could get overlooked by people who are too busy during this time of year to set aside the time to browse around for interesting reads. Accordingly, I’d like to bring a few of these to your attention.
The entire European economy is on its way to hell, thanks to an idiotic, widespread belief that economic austerity measures will serve as a panacea for the sovereign debt crisis. The increasing obviousness of the harm caused by austerity has motivated its proponents to crank-up the “John Maynard Keynes was wrong” propaganda machine. You don’t have to look very far to find examples of that stuff. On any given day, the Real Clear Politics (or Real Clear Markets) website is likely to be listing at least one link to such a piece. Those commentators are simply trying to take advantage of the fact that President Obama botched the 2009 economic stimulus effort. Many of us realized – a long time ago – that Obama’s stimulus measures would prove to be inadequate. In July of 2009, I wrote a piece entitled, “The Second Stimulus”, wherein I pointed out that another stimulus program would be necessary because the American Recovery and Reinvestment Act of 2009 was not going to accomplish its intended objective. Beyond that, it was already becoming apparent that the stimulus program would eventually be used to support the claim that Keynesian economics doesn’t work. Economist Stephanie Kelton anticipated that tactic in a piece she published at the New Economic Perspectives website:
Some of us saw this coming. For example, Jamie Galbraith and Robert Reich warned, on a panel I organized in January 2009, that the stimulus package needed to be at least $1.3 trillion in order to create the conditions for a sustainable recovery. Anything shy of that, they worried, would fail to sufficiently improve the economy, making Keynesian economics the subject of ridicule and scorn.
Despite the current “ridicule and scorn” campaign against Keynesian economics, a fantastic, unbiased analysis of the subject has been provided by Henry Blodget of The Business Insider. Blodget’s commentary was written in easy-to-read, layman’s terms and I can’t say enough good things about it. Here’s an example:
The reason austerity doesn’t work to quickly fix the problem is that, when the economy is already struggling, and you cut government spending, you also further damage the economy. And when you further damage the economy, you further reduce tax revenue, which has already been clobbered by the stumbling economy. And when you further reduce tax revenue, you increase the deficit and create the need for more austerity. And that even further clobbers the economy and tax revenue. And so on.
Another “must read” blog posting was provided by Mike Shedlock (a/k/a Mish). Mish directed our attention to a rather extensive list of “Things to Say Goodbye To”, which was written last year by Clark McClelland and appeared on Jeff Rense’s website. (Clark McClelland is a retired NASA aerospace engineer who has an interesting background. I encourage you to explore McClelland’s website.) Mish pared McClelland’s list down to nine items and included one of his own – loss of free speech:
A bill in Congress with an innocuous title – Stop Online Piracy Act (SOPA) – threatens to do much more.
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This bill’s real intent is not to stop piracy, but rather to hand over control of the internet to corporations.
At his Financial Armageddon blog, Michael Panzner took a similar approach toward slimming down a list of bullet points which reveal the disastrous state of our economy: “50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe,” from the Economic Collapse blog. Panzner’s list was narrowed down to ten items – plenty enough to undermine those “sunshine and rainbows” prognostications about what we can expect during 2012.
The final item on my list of “must read” essays is a rebuttal to that often-repeated big lie that “no laws were broken” by the banksters who caused the financial crisis. Bill Black is an Associate Professor of Economics and Law at the University of Missouri-Kansas City in the Department of Economics and the School of Law. Black directed litigation for the Federal Home Loan Bank Board (FHLBB) from 1984 to 1986 and served as deputy director of the Federal Savings and Loan Insurance Corporation (FSLIC) in 1987. Black’s refutation of the “no laws were broken by the financial crisis banksters” meme led up to a clever homage to Dante’s Divine Comedy describing the “ten circles of hell” based on “the scale of ethical depravity by the frauds that drove the ongoing crisis”. Here is Black’s retort to the big lie:
Sixty Minutes’ December 11, 2011 interview of President Obama included a claim by Obama that, unfortunately, did not lead the interviewer to ask the obvious, essential follow-up questions.
I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn’t illegal.
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I offer the following scale of unethical banker behavior related to fraudulent mortgages and mortgage paper (principally collateralized debt obligations (CDOs)) that is illegal and deserved punishment. I write to prompt the rigorous analytical discussion that is essential to expose and end Obama and Bush’s “Presidential Amnesty for Contributors” (PAC) doctrine. The financial industry is the leading campaign contributor to both parties and those contributions come overwhelmingly from the wealthiest officers – the one-tenth of one percent that thrives by being parasites on the 99 percent.
I have explained at length in my blogs and articles why:
• Only fraudulent home lenders made liar’s loans
• Liar’s loans were endemically fraudulent
• Lenders and their agents put the lies in liar’s loans
• Appraisal fraud was endemic and led by lenders and their agents
• Liar’s loans could only be sold through fraudulent reps and warranties
• CDOs “backed” by liar’s loans were inherently fraudulent
• CDOs backed by liar’s loans could only be sold through fraudulent reps and warranties
• Liar’s loans hyper-inflated the bubble
• Liar’s loans became roughly one-third of mortgage originations by 2006
Each of these frauds is a conventional fraud that could be prosecuted under existing laws.
It’s nice to see someone finally take a stand against the “Presidential Amnesty for Contributors” (PAC) doctrine. Every time Obama attempts to invoke that doctrine – he should be called on it. The Apologist-In-Chief needs to learn that the voters are not as stupid as he thinks they are.