PBS’ Frontline recently ran a story on the former head of the CFTC, Brooksley Born, and how she sounded an alarm about the then yet to happen meltdown in derivatives. Because her call for tighter reform flew in the face of Greenspan’s Ayn Rand-dominated philosophy of complete separation of markets and state, Greenspan and Clinton’s Treasury people shut her up and sidelined her comments.

This is why I say economics cannot ever become a belief system. It’s imperfect as it is and can’t be used as the basis for an ideological guide for policy. Actually, I’m not so thrilled with hidebound ideologies in politics. Those always lead to tears and suffering whenever the followers of an ideology try to bend reality to fit their view of the world.

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According to a recent article in The Economist, not only are the big banks paying out huge bonuses once again, the owners of the banks are just letting it slide without argument.

I thought one of the Hallmarks of Capitalism™ was that if one owns a share of a company, one directs said company. These banks lost billions of dollars for their owners, and yet these same owners are letting these record bonuses go out without argument. Are the owners of corporations sheep to the slaughter?

Some say they were legally obligated to pay them out. You know what? Corporations are legally obligated to not dump nuclear waste in drinking water, but they do it anyway. How about not paying out a nickel and letting their lawyers take on the corporate lawyers? Certainly, the corporation’s got a case with “they lost billions of dollars doing possibly illegal things.” Even if it’s not true, it sure sounds good and could save a few bucks in bonuses.

Sorry, but the Free Market isn’t. It’s a great idea, but it’s been heavily compromised by huge corporations that are now so powerful, they can shake down the government of the United States of America. The USA is hostage as a collective whole to the captains of industry we love to laud in our mythology and propaganda. We need laws to keep stuff like what just happened from happening, and we need laws to keep those laws in place. We used to have them and stuff like the Panic of 2008 didn’t happen… until they were repealed, which led up to the Panic of 2008.

The question is how to go about getting the megacorporations out of government. It’s still “We the people,” right?

Or was Abbie Hoffman right when he said, “It’s too late. We can’t win. They’ve gotten too powerful.”?

OK, all my students: quit gravedigging old threads and read this one, mmmkay?

Debt and Deficit

I saw a version of that chart in this article by John Mauldin. I strongly recommend you read it. He takes Macroeconomics 101 and uses it to examine our current situation. His conclusion: even the Obama projections of future deficits are not a good thing.

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