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News & ArtsMonday, March 30, 2009
Economy Teddy Obama
Posted by Charles Mudede on Mon, Mar 30, 2009 at 1:24 PM
Granted, Simon Johnson, a professor at MIT’s Sloan School of Management, was the chief economist at the International Monetary Fund during the last years of the Bush period, 2007 and 2008, but his article in The Atlantic, "The Quiet Coup," makes several interesting points, the most interesting (and also central) of which is this:
Big banks [in the United States] , it seems, have only gained political strength since the crisis began. And this is not surprising. With the financial system so fragile, the damage that a major bank failure could cause—Lehman was small relative to Citigroup or Bank of America—is much greater than it would be during ordinary times. The banks have been exploiting this fear as they wring favorable deals out of Washington. Bank of America obtained its second bailout package (in January) after warning the government that it might not be able to go through with the acquisition of Merrill Lynch, a prospect that Treasury did not want to consider.The challenges the United States faces are familiar territory to the people at the IMF. If you hid the name of the country and just showed them the numbers, there is no doubt what old IMF hands would say: nationalize troubled banks and break them up as necessary.
Johnson's point is that the solution to the crisis in the United States (and "the U.S. economic and financial crisis is shockingly reminiscent of moments... in emerging markets [and only in emerging markets]: South Korea, Malaysia, Russia and Argentina") is exactly what it's now doing to GM—remove those in power and take control of the ailing companies. Obama is not doing this with the real source of the crisis, the banks. But if he hopes not to send the us down the path Japan took in the 90s, his administration needs to break up the banking oligarchy and bring to an end, with no hope of a future, the Wall Street/neoliberal era. Obama should be less like FDR and more like Teddy.
2
1. It's about time Slog commented on this. Been saying it for a long time: gotta nationalize. Krugman agrees. Even the lame defender of Obama last week said "well his plan is good because you know, it doesn't foreclose nationaliation later, and um, gee, after we prove nonnationalization doesn't work (wow let's see another 10000 folks lose their jobs beause Obama is afraid of the nationalization word) THEN we can go for nationalization).
2. the example you want is Sweden in the 1990s.
3. Teddy didn't nationalize shit. FDR in effect "nationalized" the banks by closing them all and reviewing them all and then giving some good marks, saying others were sick, and closing many.
btw this isn't real nationalization which would be forced ownership of means of production like permanently, dude, not temporarily just to clean up a sector.
we do the same thing when there is bovine disease in the herds....govt. has to MAKE ranchers take their losses....review all cows....toxic assets much like toxic cows, no one wants to buy any beef till we know which ones are okey dokey.
while i have called this nationalization, too, really it's not.
2. the example you want is Sweden in the 1990s.
3. Teddy didn't nationalize shit. FDR in effect "nationalized" the banks by closing them all and reviewing them all and then giving some good marks, saying others were sick, and closing many.
btw this isn't real nationalization which would be forced ownership of means of production like permanently, dude, not temporarily just to clean up a sector.
we do the same thing when there is bovine disease in the herds....govt. has to MAKE ranchers take their losses....review all cows....toxic assets much like toxic cows, no one wants to buy any beef till we know which ones are okey dokey.
while i have called this nationalization, too, really it's not.
3
PC's right - it's nationalization and then re-privatization that Johnson is advocating. Though, I'm sure that subtlety will be lost on the Fox News crowd, who will undoubtedly be screaming "Socialism!" at the top of their lungs...
5
Last night I watched a slick Japanese time travel comedy called "Bubble Fiction" in which the heroes use a time machine to travel back to 1990 to keep the Japanese finance minister from screwing up so much that banks eventually fail under the weight of their many bad loans 18 years later. It was a big hit in '07 when it opened. Funny as it was, it was also kinda depressing. You know, since we don't have a time machine, and we're stuck with this mess.
8
Where is Obama heading? Are we all socialists now? Activists and authors Guerry Hoddersen and Eric Chester will examine President Obama's election and policies from a leftwing perspective at a community forum on Friday, April 24, 7:30 pm at New Freeway Hall, 5018 Rainier Ave S., Seattle.
Eric Chester, the Socialist Party's U.S. vice-presidential candidate in1996, became radicalized as a member of Students for a Democratic Society (SDS) and went on to teach economics at the University of Massachusetts Boston and San Francisco State University. He has written extensively on third party politics and is currently taking part in efforts to stop anti-immigrant Border Patrol checkpoints on the peninsula.
Guerry Hoddersen worked for the Student Non-Violent Coordinating Committee in Mississippi in1964 and is a well-known feminist essayist. She is author of One Hemisphere Indivisible, an analysis of neoliberalism in the Americas, and has traveled widely in Latin America in her capacity as the Freedom Socialist Party's International Secretary.
The event is part of the Fourth Friday Forum Series held at New Freeway Hall, 5018 Rainier Ave. S., Seattle (the hall is wheelchair accessible). Doors open at 6:30pm. Door donation is $3.00 and snack plates will be available for a $6.00 donation (work exchanges are available for low-income and unemployed). The Freedom Socialist Party sponsors the event.
For information or childcare call 206-722-2453 or FSPseattle@mindspring.com.
Eric Chester, the Socialist Party's U.S. vice-presidential candidate in1996, became radicalized as a member of Students for a Democratic Society (SDS) and went on to teach economics at the University of Massachusetts Boston and San Francisco State University. He has written extensively on third party politics and is currently taking part in efforts to stop anti-immigrant Border Patrol checkpoints on the peninsula.
Guerry Hoddersen worked for the Student Non-Violent Coordinating Committee in Mississippi in1964 and is a well-known feminist essayist. She is author of One Hemisphere Indivisible, an analysis of neoliberalism in the Americas, and has traveled widely in Latin America in her capacity as the Freedom Socialist Party's International Secretary.
The event is part of the Fourth Friday Forum Series held at New Freeway Hall, 5018 Rainier Ave. S., Seattle (the hall is wheelchair accessible). Doors open at 6:30pm. Door donation is $3.00 and snack plates will be available for a $6.00 donation (work exchanges are available for low-income and unemployed). The Freedom Socialist Party sponsors the event.
For information or childcare call 206-722-2453 or FSPseattle@mindspring.com.
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