Sunday, September 21, 2008

america in decline

Video: Kevin Phillips interview

Kevin Phillips seems to know something about the collapsing US economy:
  • author of Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism
  • Financial sector has been privileged over manufacturing for 25 years
  • Bailouts since the 1980s
  • Bad money drives out good money
  • The financial sector has never been graded in any serious way
  • Wealth disparity between rich and poor has never been greater
  • Consumerism, reckless borrowing
  • Rising Financial sector means the rise of Debt industry (mortgage, credit cards etc.)
  • During Greenspan's tenure (1987-2006) the total credit market quadrupled from 11 trillion to 44 trillion
  • Alan Greenspan never punctured a bubble or cracked down on exotic mortages
  • Bipartisan problem: Clinton and Carter aided and abetted the favouring of the financial sector
  • Only half way through the problem
  • Consistent official understatement and misstatement
Seven sharks in the mix:
  1. Financialisation: dependence on the financial sector
  2. Huge, unprecedented buildup of debt
  3. Home prices collapsing
  4. Global commodity inflation
  5. Fraud and deceptive government economic statistics
  6. Peak oil or shortage of oil
  7. Collapsing dollar
  • McCain doesn't understand economics and has terrible advisers
  • Obama is not specific when talking about the economy and also has terrible advisers
  • The Democrats are the Party getting most of the financial money
  • Unlikely that the Democrats will make the tough decisions required (they carry a lunchbox but wear a pinstripe suit)
  • America is now declining just as Britain declined between 1914 and 1945 (it might take a couple of decades)
  • the big donors of both parties support the financial bailouts
article by Kevin Phillips: Bubble and Bail
(thanks Doug)


Mark Miller said...

Saturday Night Live did a good comedy skit on this. It was a little funny to me, but mostly I found it to be truthful, with a little "dramatic license". It has a rather creepy ending, with international billionaire and hedge fund guy George Soros declared "owner, Democratic Party", with Speaker Pelosi, and House Banking and Finance Committee Chair Barney Frank closing ranks with him. It turns out this is not far from the truth. There is no official owner of the party, but the Soros-backed organization declared some years ago about the Democratic Party, "We bought it. We own it." MoveOn is a major backer of Obama. They are a major interest group that the Democratic Party, along with its candidates, feels it MUST cater to in order to win elections, because it's their major source of funding.

Supporters of Hillary Clinton know first hand what this "ownership" feels like. I've heard first-hand stories of caucuses being rigged, and caucus-goers being intimidated into voting for Obama during the delegate selection process. This has caused some Clinton backers to get so disgusted that they're now supporting McCain. Apparently they're in the minority, because McCain is behind now. His slide began when the economic crisis erupted. It's not clear why. Perhaps he appeared ineffective when the rescue package/bailout was being considered.

Like with Obama's funding organization, was started by successful Silicon Valley entrepreneurs, but years earlier back when President Clinton was facing impeachment. The name came from the group's motto during the impeachment process, "Move on!"

Mark Miller said...

On the comedy skit...umm, it's gone. It was there on Sunday. I referenced the video from their own site, so it wasn't violating copyright. It vanished on Monday. It was either a glitch or the skit stepped on the wrong toes, if you get what I mean. It's hard to say. This is not unprecedented. Some years back someone produced a cartoon on SNL that lampooned the corporate influence over the small number of media outlets that existed then, naming the corporations that had ownership, portraying them as octopuses with their arms holding on to well known media brands. It ran once and has never been seen again on TV, though I've seen it on YouTube.

Anyway, I found this other version of the video, though it requires Windows Media Player. I don't know how long this will last. The networks are pretty savvy now about pulling down bootlegged videos.

I guess I could give a description. This is just from my fuzzy memory, and I'm sure I'll skip some stuff or get some things wrong. The skit starts with President Bush, Speaker Pelosi, and Rep. Frank (all played by actors of course) standing before a microphone. Bush thanks the others for passing the bailout bill, and promptly steps aside. Pelosi comes forward and proceeds to blame Bush for the whole mess, though she does it politely. She thanks him for doing something right "for once". Frank thanks him for "for once" showing human decency. Pelosi goes on to say that it was the Democrats who tried to stop the mess before it happened, and it was the Republicans who blocked reform. Bush pipes up saying, "Wait a minute. Didn't my administration try to stop this six years ago? And it was the Democrats who stopped it?" Pelosi acts flustered, turning to him, saying, "Of course not. Don't do that. It was the other way around." Barney Frank whispers to Pelosi, "Actually, I think he's right this time." Pelosi quickly shushes him, saying, "He doesn't know that." Bush appears none the wiser. Pelosi then invites Bush to stay as other guests are brought forward. He wants to stay near the mic, but Pelosi courteously but disrespectfully asks Bush to move towards the back of the throng, like he's some sort of ingrate. He complies.

She then brings forward a couple of economically poor guys who received "balloon mortgages", one white, one black. The white guy basically acts like he doesn't know what went wrong. He says, "I met all of the criteria" for a subprime mortgage. He goes through the list, with the black guy agreeing with just about everything, "No job, no credit history, drug problem, alcohol problem, dishonorable discharge from the Army, two pregnant girlfriends." As they're telling their stories, the white guy is described as "deadbeat". The black guy is described as "non-credit-worthy home buyer". They seem mystified by the terms of the mortgage, "They allow you to move into the house, but you don't pay any money to the bank. But you do later..." He says, "I guess I'm a double victim, because now I not only don't have a job, I don't have a home either." The black guy says, "I'm a triple victim", because he's also charged with arson for allegedly burning down the house he was evicted from. Pelosi thanks them and says, "You're in our thoughts." She hugs the white guy. The black guy opens his arms for a hug, but Pelosi coldly invites a couple forward instead.

The tagline for the couple is "yuppie acquirers". They're dressed nicely. The husband says they bought two dozen time-shares in the hopes of selling them for triple the purchase price, "But then the housing market tanked," he says. Pelosi apologizes. She asks, "Will you able to sell them?" The wife says ironically, "Only for 10% above the purchase price," and she hides her sadness. Pelosi asks, "Will you be able to pay off your mortgage?" The husband says, "Only if we sell our boat." Then a short, dumpy-looking woman with a big belly saunters up. Pelosi asks, "Who's that?" The short woman yells, "Whassuuup!" to the audience. The wife says, "This is our surrogate mother." She says with a little sadness, "I can't bear children without getting ugly stretch marks." Pelosi thanks them for their story, and the couple moves off to the side together.

Another couple is brought forward. The husband says that he and his wife used to run a business aggressively marketing subprime mortgages, "and selling them to Wachovia" (a U.S. bank now in financial trouble, and is now being fought over by Citigroup and Wells Fargo). He seems happy about it. The tagline under their names says, "People who should be shot". He says, "We had a business worth $19 billion. Now our portfolio is worth nothing." Pelosi says something like, "I'm sorry. Did you lose everything?" The husband smiles saying, "No. We sold the business." Pelosi asks, "For how much?" The husband says, "$24 billion." Pelosi looks a bit stunned. She says, "So...then you're not victims, so to speak." The husband chuckles and says, "No." The wife says, "No. We're quite happy." The husband adds, "Actually we were wondering why you invited us up here." Pelosi asks, "Who is the victim then?" The husband says with a chuckle, "Wachovia bank." The wife says, "It was so nice to see you, Nancy," and gives her a peck on the cheek. Before they leave, the husband reaches over to Rep. Frank and says, "I'd just like to thank all the Democrats and Republicans who blocked legislation to regulate our corrupt activities." Frank says, "Oh, no problem." The couple steps into the background.

Frank comes towards the mic and says, "Now some of you may be wondering, what happened to the money that's missing from the economy? Here to explain that is hedge fund manager George Soros."

An actor playing Soros steps forward and says, "So what happened to the $700 billion? Well it all belongs to me now. Actually it's no longer dollars, because I converted it all to Swiss Francs, and I have taken a short position against the dollar. The dollar will have to be devalued sometime next week, either on Tuesday or Wednesday, depending on how I feel." The tagline for him reads, "owner, Democratic Party". He continues, telling the audience, "Even though you know what is going to happen, there is nothing you can do about it." Pelosi looks at him admiringly saying, "You are a wise and powerful man." Frank chimes in, "You are better than us!" Soros looks over to the "yuppie acquirers" couple. He says, "Your wife is physically attractive. Sell her to me, please." The couple is agreeable. They say, "Okay," with a smile.

Mark Miller said...

I found out a little more about the skit. This isn't from official sources, but apparently the reason the skit was pulled was because one part of it portrayed a real couple who had aggressively marketed subprime mortgages, even using their real names. They were the ones with the tagline "People who should be shot". Apparently NBC felt this opened them up to liability should anyone take the joke seriously, given the times we're in now. It's too bad. It was a great piece of satire.

Mark Miller said...

I'm happy to say the video for the skit is back. It's been edited to take out the material NBC felt would get them into legal trouble. The tagline saying the couple who marketed subprime mortgages "should be shot" was edited out, as well as the line the husband delivered thanking the Democrats and Republicans for blocking legislation which would have regulated their corrupt activities. Well, at least it's back online so that others can enjoy the other parts of it. It's still really good.