Category: Economy

Perhaps you’ve heard of the movie “The Money Masters” before by Bill Still. But regardless, it is well known that our U.S. Economy is not really getting better — nor will it ever get better.

How could it? That is, until and unless we solve our astronomical debt problem, and stop borrowing money at interest, just to pay off the never ending massive pile of interest from our old debts — all of which can never go away under our existing system because the very creation of money itself is also debt generating ( as the crooked Federal Reserve System was designed [Rothschilds, Rockefellers, Morgans]).

Some people, namely Ron Paul, have talked about a return to a Gold & Silver based monetary system.  But this solution, while constructive for discussion, would appear to be incomplete. For we see even today that the price of Gold and Silver are greatly manipulated in a corrupt manner by the various Central Banks, the IMF, and various Governments. Therefore, how could either Gold or Silver possibly offer any stability when it is itself under the domination and control of “The Money Masters“?  For example, given that size of the U.S. Money Supply has quadrupled in just the last few years alone, it would then logically follow that the correct price of Gold relative to the watered-down U.S. Dollar should already be in the vicinity of $5000/OZ.

As the old saying goes, “Read it and Weep!”

In Part 4 of his continuing series about the causes of and possible fixes for the ongoing economic and banking crisis with Paul Jay of The Real News, Dr. Robert Johnson, Director of Financial Reform for the Roosevelt Institute, and Executive Director of the Institute for New Economic Thinking (INET) discusses his ideas of the main principles for the kind of legislation needed to remedy the situation.

Johnson notes that without fundamental changes in the way the Obama Administration is dealing with, and a new regulatory framework governing, the actions of investment banks on Wall Street and the forms of financial instruments like derivatives that they can create and sell, that another very serious economic crash, almost certainly worse than what we’ve seen so far, is a virtually certainty to occur, probably sooner than later, and that firms that are “too big to fail” must be allowed to fail.

You can watch all four parts of this interview under the tag Robert Johnson.

Following Part 1 and Part 2, Dr. Robert Johnson, Director of Financial Reform for the Roosevelt Institute, and Executive Director of the Institute for New Economic Thinking (INET) (a project with George Soros), in this third part of a series of discussions with Paul Jay talks about the real choices that were ignored by the Obama White House for financial reform in dealing with the financial crisis rather than simply pumping money into the investment banks.

Also see (on the flip):

What Congress Did Not Want You to Read: Robert Johnson’s Testimony on OTC Derivative Market

Saturday, 11/7/2009, by Lynn Parramore at New Deal 2.0 (a project of the Roosevelt Institute)

   When you know you are about to do something unpopular you try to hide it. For instance, the public would never know that over 140 banks (not counting credit unions) have gone under this year because their announced failures only happen on Friday evenings.

  Another extremely unpopular event would be another round of bailouts for Wall Street banks. That’s why the provisions are hidden deep within the financial reform bill.

 For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system.

  Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.

 Believe it or not, this is not the most outrageous thing Washington has done in the last week.

xposted

As People are faced with more and more restrictions and invasions of privacy what about the funding of terrorism?

Why is it that the rights of People are so easily trampled upon and limited, while the rights of money and capital are completely liberated?

Yesterday in Crony Capitalism we heard Dr. Robert Johnson of the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz, and Executive Director of the Institute for New Economic Thinking (INET), talking with Real News CEO Paul Jay about the causes of the economic crisis and about some of his suggestions for banking and financial reform.

Today in Part 2 Johnson and Jay continue the discussion addressing the question of whether the White House governs Wall Street or whether it’s the other way around…

Dr. Robert A. Johnson currently serves on the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz. He is also the Director of Economic Policy for the Franklin and Eleanor Roosevelt Institute (FERI) in New York. Dr. Johnson was previously a managing director at Soros Fund Management where he managed a global currency, bond and equity portfolio specializing in emerging markets. Prior to that time, Dr. Johnson was a managing director of Bankers Trust Company managing a global currency fund. He also served as Chief Economist of the U.S. Senate Banking Committee under the leadership of Chairman William Proxmire (D. Wisconsin) and before that, he was Senior Economist of the U.S. Senate Budget Committee under the leadership of Chairman Pete Domenici (R. New Mexico).

Here Johnson talks with Paul Jay of The Real News about how we got into the current and continuing economic mess, and makes some suggestions for banking and financial reform and a way out of the mess.

  The underlying assumption that the current world monetary system is built upon is that America will always over-consume and the world will always accept our debt at face value. It’s a warped and unhealthy relationship, but its worked (sort of) for several decades. That’s why it was notable when a Chinese central banker spoke up last week.

 “The United States cannot force foreign governments to increase their holdings of Treasuries,” Zhu said, according to an audio recording of his remarks. “Double the holdings? It is definitely impossible.”

Impossible? That’s absurd. For decades foreigners have been more than willing to exchange their excess dollars from trade surpluses for our debt in order to keep their currencies at artificially low levels.

  It turns out that the problem isn’t foreigner’s willingness to lend to us.

“The US current account deficit is falling as residents’ savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world,” he added. “The world does not have so much money to buy more US Treasuries.”

 The problem is that the American middle class is broke and unable to continue to over-consume.

Increasing the Tax rates on the Wealthy — can it happen? should it happen?

Dare we let the fabled “Engine of the Economy” grind to a halt?

How about a little Historical Perspective — How does the “Upper Crust” ever manage their Tax Burden?

(Click for Larger Image)

(By the way, that red line is the “Historical Trend” for the Tax Percentage Rate, for the Top Tax Bracket in America.  It just keeps going down.)

How much do you have to make, before that burdensome Top Percentage Rate kicks in? — here are the Historic Thresholds:

(Click for Larger Image)

(That Super Wealthy threshold, has been creeping up since 1992.)

National Taxpayers Union

Pictured above: Tim Geithner on NPR with Michelle Norris.

NORRIS: You know that businesses are spending again. The administration has been asking the banks to try to free up more money for small business in particular. And I want you to help me understand something because on one hand the administration is telling the bankers that they need to take fewer risks, that they need to deleverage, that they need to have higher capital reserve. And at the same time you’re also telling them that they need to lend more money. Those two things don’t seem to square.

Sec. GEITHNER: It is very important that we work with Congress to pass legislation that can put in place financial reforms that can prevent the next crisis. So it’s pretty important in the future we build a more stable financial system. We constrain risk taking in the future. But right now the real risk we face is that banks are not lending enough and not going to provide the capital businesses need to grow for the economy to strengthen going forward.

NORRIS: So it’s okay for them to take risks right now?

Sec. GEITHNER: Absolutely. Right now the real risk is that the pendulum having been too soft and easy on the lending side. Right now the risk is that banks overcorrect or that supervisors overcorrect. And that’s something we need to work against, lean against, because, again, the strength in recovery will depend in part on credit being available to businesses across the county.

What a confidence booster.  Geithner doesn’t see any job growth until Spring–we just lost half a million more jobs last week.  His plan has been to take over toxic gambling losses in exchange for cash so the banks have no need to deleverage and can take more risks.