Charlie Rose

brynnwood  02/18/2009 09:56 PM Report

What's up? This is tagged as a conversation with Michael Kirk and tagged to be about the economic crisis. But the video is a discussion about Afghanistan.

tartufe  02/17/2009 11:48 PM Report

Well said REMant. I too was disappointed.

To prove the point it will be obvious from this diatribe that I am a very cynical and disbelieving individual when it comes to the credulity of the financial industry and the politicians they deal with. The resulting complicity / duplicity is an unfair, inequitable combination an ordinary citizen cannot function in.

To this end I’ll state up front what many will deem to be off-the-wall, to wit: Henry Paulson (complicit with others of course) pulled off the biggest heist in history and should be tried for fraud and even treason. He was more damaging than Osama bin Laden. Bernanke, Bush et al obviously are culpable along with so many other venal whores (political and private) that it’s banal to try to list them all. However, the CEOs of say the top say 50 banks would have to make the cut. Honorable mention has to go to Obama’s campaign contributors starting with Robert Rubin, Citigroup and his sidekick and Obama’s advisor Larry Summers.

Obama’s presidency will fail on two counts: his burdening us all (and our progeny) with bank bailouts and his-adopted-war, Pakistan-Afghanistan.

I dispute the basic premise of the Frontline 2/17/2009 “Inside the Meltdown.” My cynicism shouts at me that the real intent of the bill was the (me-thinks-they-protest-too-much) bailout of their lifetime banking cohorts, more than the easing of toxic mortgages. Complicit government-banking collusion too long established (a la predatory credit card legislation over the years) to believe that relationship had suddenly ceased.

Trying to override the laissez faire free-market capitalism rules is akin to trying to override the laws of nature. The dues must be paid. By whom is the question Bernanke, Paulson et al are trying to evade or rather subvert. Unfortunately from their predatory cohorts to our progeny.

Analogous to a body with gangrenous maggots on its rump that needs excising. Say an area covering one per cent of the body. The maggots devour each other (a la big banks) when not fed fresh blood from the host body. At 300 million population if one per cent is more than a fair allotment for the nations largest banks predators, that would put the number at an over generous 3.0 million. It’s a safe bet that the sub-prime predators are also big credit card exploiters. Hedge funds with their highly leveraged packaging of various junk and credit default swaps doubtless crow-barred the chaos even more.

The point seems to me that the 99 per cent of the population is being sacrificed for the sake of 1.0 per cent that caused the chaos to begin with. The tentative bailouts to date have failed. Test enough. Time to start at the other end. Besides, why save the maggots?

Percolate up, not trickle down. They’re blandly throwing around trillions now. Two trillion is nearly $7000 per capita, or nearly $20,000 per household. Home down payment? Car? Trinkets? Economy primers?

Granted letting the big banks fail would cause dislocations, but they look like they are due anyway. The natural laws of economics wants their pound of flesh from somewhere. It should come from where it’s most equitable redemption can be exacted - namely the big predatory and credit card banks. A new system will evolve. Excising the maggots will assure a healthier body free of moral hazards.

Debauching the currency with printing presses could ultimately reduce it to a new fiat altogether. Save your confederate currency. The next currency will have real idols this time. Personas we revere, like Madonna and Paris Hilton, to match our real values.

REMant  02/17/2009 10:49 PM Report

I thought I'd wait until I saw the show before commmenting, but it is as I feared, and I have to say that while it has done nothing for my edification - indeed I hope anyone else's - it has shaken my confidence in the creditworthiness of Frontline and I am forced to reassess the value of other Frontline products. I suppose they are so interconnected with other PBS productions that they will not be allowed to fail, creating a moral hazard of their own.

On the one hand it treats the situation like a thriller, and on the other it seems to offer the idea that Lehman's bankruptcy was avoidable, and that not bailing them out was the cause of all of this, which is extremely dumb. That's not far from saying that Madoff would be alright if he could have found a few more pigeons. You must distinguish between legitimate credit and credit to keep a bubble inflated. Bailing out the banks has not and will not "save the economy," nor would have letting more of them fail done any more appreciable damage. It is highly unlikely that any meltdown would have gone past a reasonable point, while their efforts are either propping the rotten mess up - if not making it worse by suggesting there is a reason to be unreasonable about revaluing the mortgages and other debts - or, hopefully, they are entirely nugatory. But I wouldn't hold out a lot of hope for the latter. Whatever they attempt to spend it will not be enough, because it can never be enough; it will just increase the debt and decrease the value of the dollar.

It's not that there shouldn't have been a moral hazard consideration applied, it is rather that there hasn't yet been anywhere near enough of one. Any time you see the price of things going up, you had better suspect a bubble, because high prices can ONLY mean a shortage of supply in relation to the amount of money. However Wall St and most of America is given to think they are wealthier. Now I hope they can see they are not, and will get with the real program. It also will not do to try to blame free-traders per se. The problem is, and always has been the combination of free-trade, hard money principles with the inherently inflationary principles of the banking system and paper money. They cannot BE combined. Friedman eventually came to see that, and it is time that any remaining monetarists and the Republicans realize that.