His economic plan is too conventional

Published 15 January 2009

Obama and the world economy

For a generation, we have been living with the fiction that the world does not need governing. An orthodoxy has prevailed that states and nations should become creatures of globalisation - in other words, "market states". The job of the US, as the world's hegemonic power, has therefore been to promote ungoverned globalisation by promoting free finance and open markets with minimal rules - along with a global network of military bases to prevent any armed challenges to this notion.

It falls to Barack Obama to change this orthodoxy, and to introduce new systems of global regulation and governance. He has to combine Rooseveltian reformism at home with the international activism of Harry Truman. Whether the issue is climate change, the international financial system or the clash between Islamic fundamentalism and the rest, Obama cannot fall back on the doctrine that some combination of markets and brute force will fix matters. They haven't, and they won't. The US needs to construct nothing less than a new multilateralist international order.

The challenge is immense. Some of the problems would still be close to intractable even if there were more of a consensus on the approach - which there is not. For example, it is obvious that the entire fabric of the financial system - from floating exchange rates through to tax havens and the bloated $360trn derivatives markets - needs to be brought back onshore and managed so that its capacity for economic destabilisation can be constrained.

But are the great powers ready to accept the disciplines of managing a stabler international currency regime, by setting monetary and fiscal policy at home in such a way that the international system can function better? How would such a system work? Who, after a generation in which the only thinking permitted has been that which promotes markets, has even a semi-workable scheme to propose on currencies and banks?

So it is in issue after issue. By 2010 a quarter of global carbon dioxide emissions will come from China. The Chinese resist any deal that constrains this growth, insisting that the west must shoulder the burden of climate change adjustment and pay for the entire cost of improving China's energy efficiency. But an asymmetric deal of this type is not sellable in the US. In the Middle East, success requires Obama to take on the Israeli lobby at home to put pressure on Israel and build a coalition of pragmatic Islamic states abroad. Not impossible, but it has eluded every other US president.

All this has to be delivered while retaining what is good about globalisation - free trade. Economic growth, prosperity and employment generation have gone hand in hand with trade since the beginning of time. Globalisation has offered countries as disparate as Vietnam, Singapore, India and Brazil a way of bootstrapping themselves out of poverty. We need stronger rules about the organisation of trade - especially on labour standards and the environment - but the principle that borders should remain open to the movement of goods and services is a cornerstone of prosperity. Obama has a powerfully protectionist Democrat party to handle; the temptation to give in will be overwhelming.

Obama knows all this - but he is allowing himself to be too constrained by unnecessary genuflections to the mainstream thinking that has so let the US down. His economic recovery plan is too conventional. The US needs a huge fiscal boost; but it also needs the financial system reformed at home and abroad, about which Obama has said too little. So it is across the board. But he is his own man, and he thinks deeply. And if he can't do it, there are no other contenders. To coin a phrase, we must have the audacity of hope.

Will Hutton is executive vice-chair of the Work Foundation

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72 comments from readers

Carl Jones
15 January 2009 at 11:17

Oh dear Will, you`ve been pontificating in the MSM quiet a bit lately and to be honest, you do sound like a PR man for the establishment. This article is sadly, no different.

"For a generation, we have been living with the fiction that the world does not need governing". This is utter twaddle. In general terms, the world has never been more regulated, just look at trade agreements, they take years and years with ten`s of thousands of people working on them....all at the behest of the NWO!lol

What you are REALLY trying to hide Will, is the alarming fact that the financial crisis is a vast conspiracy, and please may I clarify, this is not a "theory".

The Clinton/Bush dynasties might as well be inter-married...why did the Clinton administration repeal the "Glass-Steagal" Act on the 12th November 1999, just eight days after Bush technically won the election??

The list of "deregulation" is shocking, the systimatic relaxation of lending, in conjunction with the Federal Reserve printing vast amounts of MONOPOLY money, which the global economy is forced to use, under penalty of being beaten up by the global bully and its thug governments.

"But he is his own man, and he thinks deeply". Obama is just another NWO puppet, he`s as hollow as an empty barrel of oil. The BRIC countries (alledgedly once claimed to be detatched from the West) are losing economic ground, much faster than the West and they started from a lower level...this is the NEW NWO and the last time we were in this position, the world was at war within ten years..of course, things happen much faster today.

THEY do want a new system, they want it global and this is the central NWO/Bilderberg objective, "CRISIS, REACTION, SOLUTION... de facto one world government, might become a publically know reality.

writeon
15 January 2009 at 19:36

Will,

I honestly don't mean to sound patronising. Your analysis of the immense scale of the economic, social, security and environmental challenges we face is good, as far as it goes. Maybe it's about temperament, but I think the economic situation is far, far, worse than you outline and I'll skip the rest.

The west's financial system is buggered. The banks are busy saving themselves and battening down the hatches, hoping they'll still be here when the storm blows over. They are also hiding the scale of their losses. Keep an eye on Barclays, that's a tip from the inside.

We have temporarilly 'stabilised' the banks, but at enormous cost and it isn't over yet. The reason the banks aren't lending now is because they know which way the economy is going and that is down. This isn't a 'credit crunch' it's not a 'downturn' it's a slump. The only question is will it be as bad, or worse than the Great Depression?

The UK and the USA are especially vulnerable because of the fundamental, structural, weaknesses of their economies. It's simply wrong when our leaders say our economies are, at heart, 'sound', they aren't, far from it.

In a whole range of areas the United States is radically weaker than it was when it entered the Great Depression, so getting out will be very difficult for the USA. Importer of energy, importer of manufactures, massive levels of state and personal debt, weak dollar, smashed education system, too many wars, costly empire, get the idea?

Ideally we should never have got into this slump, as getting out is always very costly, and there is no gaurantee that one always get's out in one piece.

I think the rest of the world, or at least China, Russia and India may recover after a few years, but with substantially lower rates of growth. But the USA and the UK are in for a long and deep depression, which'll probably take a decade or more to get out of, if we're lucky.

writeon
16 January 2009 at 20:09

Another problem I have with our conservative political and economic elite, on both sides of the atlantic, and pretty everywhere else in the ''West" ,is that these are really, if we are honest, the same people, with more or less the same policies and general outlook, who got us into this mess in the first place. Why on earth would we imagine that these same people have the sense or ability to lead us out of what they lead us into?

Not only is Obama not particularly interested in economics, all his top people have a very conservative perspective on economics and the way the economy functions. The aren't radicals or dissidents, they aren't questioners. They just think Bush was somehow an incompetent bumbler and once 'competent' people take over the US will be back on track after a few lean years. But the crisis is structural and far more serious than they realise. What's needed is structural change, which doesn't really require 'competence' so much as root 'n' branch reform of society and not just the financial system.

Talking about the banks, why aren't they lending exactly? What do they know that the rest of us don't? I mean they are awash with state money aren't they? So what exactly is the problem? Is it because they, and they are supposed to be experts, have looked around and think we are heading for one hell of a slump, so lending in such an environment would be imprudent and irresponsible, is that really it? They knw the wheels are coming off the wagon and soon it'll be every man for himself. So who in their right mind would lend to anyone?

Yes, it is, according to my 'mole' in Barclays.

Nilsey105
16 January 2009 at 20:24

writeon

Your point regarding Barclays. Today is the first day that short trading in the Banking and some other financial and Insurance companies has been allowed for a period of Six months. Does that tell you anything ?

Nilsey105
16 January 2009 at 20:30

What it says to me is that the FSA have made yet another massive balls up by allowing short trading.

I had sent my opinion to the treasury committee stating this very thing would happen as soon as the ban was lifted.

John McFall the Chairman of the Treasury Committee has campaigned for short selling to be banned without any support.

Nilsey105
16 January 2009 at 20:59

Today we have seen the Anglo Irish Bank become nationalised.

Barclays has lost near 25 % in the last hour of trading on the London stock market.

In the USA ;

""....in the case of Citigroup, the losses have become so large that they make it almost mathematically impossible for the government to inject enough capital without taking a majority stake or at least squeezing out existing shareholders."

http://www.iht.com/articles/2009/01/16/business/16banking.ph...

Similar problematic situations are arising in the German and Spanish banking sectors.

The other British Banks are also looking for more funds to help them ride the next wave in the downturn.

Where are these new funds going to come from?

In the case of Barclays they wont get much from their shareholders after they way the majority of them were let down over the last time an injection of capital was required and was given preference to new investors.

looks like it will be the good old, never let you down, reliable tax payer yet again. If this is to be the way forward then nothing but full nationalisation has to be the outcome.

However there is still very little being said about the amount of debt involved in the toxic debt.

Figures on the amount vary from $56 trillion to near 10 times that amount $576 trillion. Absolute mind blowing amounts of any thing let alone money.

Who is going to be the first to open Pandora's box and see whats inside?

Maybe its the UK government. Hints have been dropped that Darling is considering introducing a "Bad Bank" to buy up all the toxic debt in British Banks.

Someone better nip over to Heidleberg and pick up some machines before there all sold.

writeon
17 January 2009 at 08:46

Nilsey105,

What you write is interesting, thanks.

The entire financial system seem to be in state of flux. As we move from one era into another. An era of very tight credit and overall scarcity, at least compared to profligacy and rampant consumerism finnaced by debt. I see the economy shrinking back to where it should have been minus the stimulus of the credit bubble. If this happens it's going to have profound implications for the UK, as Britain's manufacturing base is so small, having been replaced by the shiny 'new economy.'

Another fundamental and 'structural' problem with the whole philosophy behind these massive stimulus packages is their collosal inflationary potential. OK one can argue that what we're seeing now is prices falling and deflation so we don't have to worry about inflation, what we're trying to do is stop everything grinding to a halt, once we get the economy moving again that'll be the time to worry about inflation. Only we could have the worst of both worlds. Inflation and deflation at the same time, what some people call stagflation.

The American economy is arguably in almost as bad a state as the UK's. They are going to have to borrow massively to finance these enormous stimulus packages, which at present, supposedly ammount to almost a 1000 billion dollars. Some people think another 1000 billion on top is necessary. That's an awful lot of borrowing, or they could just print the money!

But this level of borrowing is bound to have an impact on the value of the dollar and US treasury bonds. Will the rest of the world keep financing US debt at these unsustainable levels, especially when it appears that they will never really be able to pay back their debts, not without restructuring the US economy?

The dollars is going to come under enormous strain as the debt mountain expands like dough, yet another credit bubble growing and growing. With the dollar losing its value why would anyone lend to them?

writeon
17 January 2009 at 08:57

Is the American economy just too big to fail? Is this what the Americans are relying on? This seems like gambling. Gambling that the rest of the world will be prepared to pay 'tribute' to the US forever, no matter how crazy their economic policies are! And it's not as if they seem to understand how precarious their position is. Wasting $150 million on Obama's party is an incredible insult to ordinary Americans, having a lavish party while Rome burns.

What happens when reality strikes the US? They cannot continue with these massive deficits for ever. Two trillion deficits are impossible to maintain. What other country has ever had such large deficits and survived unscathed? They are going to destroy the value of the dollar and probably far quicker than they imagine.

How, traditionally have countries dealt with these kinds of problems? Obviously the ruling elite can't allow people to point the finger at them, that would be very dangerous. War seems to be the 'answer.' War not only functions like monumental 'fire sale' clearing the shelves so one can 'restock', it is also a marvelous way of distracting and diverting the attention of ordinary people from the real causes of the crisis and those responisble for it.

writeon
17 January 2009 at 11:29

'Say something!' Why aren't the banks lending, but hoarding the money they've been given by the state? Simply beause they don't believe in a recovery any time soon. They believe we're only at the start of the crisis and the only way is down for the forseeable future. This is probbaly the 'truth' of the situation. The speed of the decline is increassing and we aren't even successfully stabilising the system. We're going down. It's the how deep and for how long that's the big question, and nobody knows, and the computer models weren't programmed to extrapolate data this bad, according to my very pretty, mole friend, inside Barclays, it's gratifying what flowers, little gifts and a few expensive lunches can accomplish these days. Soon we'll all be meeting down at the soup kitchen, but we'll have our memories.

Nilsey105
17 January 2009 at 11:50

"once we get the economy moving again that'll be the time to worry about inflation."

Yes indeed this is what CJ was referring to when he has been going on about hyperinflation

Carl Jones
17 January 2009 at 12:05

As we are debating the future of mankind and IT really is that serious, below is a very interesting link which explains the Hudson plane ditching and the very senior Bank of America executives who were on the plane.

http://www.rumormillnews.com/cgi-bin/forum.cgi?read=139462

Nilsey105
17 January 2009 at 12:29

Today the Prime Minister, as reported by the BBC World News, has called on the British Banks to come clean and tell the British public the number of toxic debts they have on their balance sheets.

I have two points to make on this;

(1) the actual amount in terms of numbers is not the important factor in all of this. What we all need to know is the amount in terms of hard cash.

What quantity in terms of trillions of £ or $ does each bank hold in toxic credit?

(2) Why has the prime minister stated "on balance sheet"?

The Basle Accord,Basle 1, proposed a form of "regulatory arbitrage" that allowed parellel accounting systems to run "off balance sheet accounts", along side the official balance sheet accounts. These "off balance sheet accounts" are where the toxic credit is hidden. And not on open display to the prying eyes of accountants and actuaries.

If the Prime Minister is realy serious and wants the truth out then he has to tell the banks we need to have all "off balance sheet" and on balance sheet figures.

Or is he attempting one of his smoke and mirror tricks, trying to convince everyone he is the saviour?

Nilsey105
17 January 2009 at 14:37

At 1-30 this afternoon

£200bn to save banks from bad debt

The taxpayer will be forced to underwrite up to £200 billion of bad banking debt under a government plan to take control of assets belonging to Britain's major high street lenders, The Daily Telegraph can disclose.

writeon
17 January 2009 at 14:38

Why aren't the banks coming clean? Why on earth does the Prime Minister have to ask the banks for anything? Surely after all the billions that's been pumped into banks we shouldn' have to ask? Surely, before we gave the banks so much money, we should have checked their books first and found out how big the loses were, and where they were, and if it was sensible and prudent to hand over vast fortunes to them blind? Surely our political leadership isn't as incompetent as that?

What if the problems aren't one of liquidity in the financial system, but that the banks are insolvent? Should one provide insolvent financial institutions with taxpayer money so readily? How thick is Gordon Brown? How gullible really?

Nilsey105
17 January 2009 at 14:39

toxic credit

Oh dear how remis of me. TOXIC DEBT

Nilsey105
17 January 2009 at 14:40

writeon

The banks and government are this afternoon locked in discussions as to the next step for bail out funds.

Nilsey105
17 January 2009 at 14:44

I think the amount of toxic debt is so big its far too big for the government to handle.

The time lapse from the implementation of the original bailout funds till today has been used to find a solution.

All to no avail i am afraid.

writeon
17 January 2009 at 14:46

What happens if the banks on and off balance-sheet losses, the debt black-hole, is bigger than the ability of the United States, or any state, to plug it?

It seems, from what one can gather, from what one hears, if one talks to the right people, that it is. The 'credit crunch' we hear so much about is only a minor symptom of a far bigger and deeper crisis. A crisis of solvency. A structural crisis of the economy and capitalism.

If, and this seems more likely every day, according to what a little bird told me, we are heading for the mother of all slumps, and everyone knows this, but saying it openly is dangerous, so the news has to be let out in dribs and drabs, lest the natives get restless.

Nilsey105
17 January 2009 at 14:53

CJs shipping rates have hit rock bottom. They are operating at below cost.

Business for container movement is stagnant.

Nilsey105
17 January 2009 at 14:57

True writeon and then we have a little matter of wars to deflect our attention from the economic crisis.

Social unrest i am sure has been closely considered and precautions are inplace to placate the masses.

Carl Jones
17 January 2009 at 15:37

I see that no one has commented on the link above. :(

The reason why the banks won`t come clean, is that the situation is much worse than the government[s] are letting on.

If you cast your mind back to previous comment by me, I did say that there would be bailout, after bailout, after bailout...the cost of this crisis so far, is around $9 trillion...the entire global economy (prior to crisis) was worth around $45 trillion...but of course, its all in the design.

Remember the BBC trilogy "The Power of Nighmares"? The NWO created/manufactured fear, so that the public, 1. needed looking after and 2. allowed them to persue their agenda of war and one world government. This is why we have the UK/US/Israeli constructed war on terror..

...but THEY aren`t stupid, THEY know that a high proportion of the public don`t believe the terror construct and its the same with the global warming construct...

...and while a few people like ME, understands the financial construct, everyone has been touched by IT and many people are going to be relient on the state...once again, the NWO are using this financial plot, to put FEAR into the public, not only that, the people are being robbed, this is the greatest crime ever committed.

Are billionaires really committing suicide, are bankers being suicided because of what they know? Was the Hudson ditching really an attempt to murder senior Bank of America executives?

The government[s] are complict, but don`t worry, Jacqui Smith has ordered 10,000 taser guns. I can see the rushing through of mandortary ID cards and when hyperinflation strikes, food rationing, power rationing and curfews...the power of fear.LOL

Nilsey105
17 January 2009 at 16:07

North Korea has a nuke fully armed and capable of immense damage. South Korea is reinforcing its border with the North.

looks like theres no need for another round of bailout money required for our banks. lol

writeon
17 January 2009 at 16:46

There comes a point, which might be coming closer than most people care or can imagine, when the enormous cost of bailing-out the United States and its proflgacy, simply becomes too big too sustain. It's not that people want to see the United States collapse or default on its debts, unable to service its enormous debts payments, import goods, the dollar collapses along with the value of treasury bonds, dragging the world's economy down with it; but it 'just' that the rest of the world simply is rapidly reaching the stage where one simply can't lend more money to the Americans, because it isn't around, and one needs it onself. That point is moving closer.

The Americans have got into the dangerous habit of thinking that they are somehow special, the indespensible nation, that can effectively demand 'tribute' from the rest of the world, like the Roman Empire. The era of 'tribute' is rapidly coming to and end, but faster than the Americans realise and more importantly faster than they can adjust to the new realities around them.

This sounds terrible, but the usual way out of such a position, if one examines history carefully, is war. What is war anyway? Isn't it an attempt to gain advantage that one can't gain in some other peaceful way? What does 'advantage' mean when we talk about nations? Advantage means economic success. Nations, like rival Mafia gangs, either sell, buy or steal. Violence means not having to buy or sell, one gets what one wants buy stealing. War is a racket, but on a massive scale. It creates a 'level playing field' once more, clears the shelves and provides the means by which we fill them up again, at least in theory, if one 'wins', though in modern, industrial warfare who really wins?

Carl believes this is all planned, I'm not so sure about this. I think there are mechanisms at work that 'propell' us towards conflict, war, that are not fully or adequately understood.

Nilsey105
17 January 2009 at 17:03

As an aside i have just come across this very enlightening piece

http://www.gregpalast.com/tony-blair-and-the-sale-of-britain...

writeon
17 January 2009 at 17:08

On the other hand I believe one can make a strong argument for the idea that this crisis isn't as innocent, like a bolt from the blue, as it's portrayed. It's not as if there haven't been warnings, why were they ignored for so long?

It's interesting that the collapse in oil prices is hitting certain nations extremely hard. Venezuela, Russia, Iran, nations outside the US orbit, so that's a plus.

Then we have the environmental conundrum. It's not exactly a secret that we are in deep s**t is it? How then does one radically reduce consumption and energy use quickly? And at the same time secure ones standard of living, if one is inside the golden circle of the world's elite, that is, and without causing a revolution when people realise they've been had?

One could, if one was mad, go out and tell everyone that the world is f***ked and sorry, but it was our fault! I wouldn't do it if I was king. I'd think of an excuse, find good story and stick to it, or I'd grab as much as I could for as long as I could and when the s**t hit the fan I'd hope that I'd stolen enough for my retirement! This last scenario seems to be the model adopted in the United States. Only with the added spice of robbing the treasury of everything one can through the magic 'bail-out.'

When the 'truth' goes up for ordinary people it'll be too late. I'll be long gone. It's like the US ruling elite is picking the last pieces of meat off the carcass.

This is of course a deeply, deeply, immoral, criminal and criminal strategy, yet this is how uncontrolled elites have always functioned throughout history. They look after themselves at the expense of everyone else for as long as possible and then they leave the rest to pick up the pieces and pick up the tab. Sad, but true, and unremebered.

What makes this theory more likely is that the ruling elite don't give a danm about any but themselves and have always been ready to sacrifice ordinary people in their own interests, so why should anything b

Nilsey105
17 January 2009 at 17:15

From the above link comes this quote;

"Today, markets lead. Industry CEOs lead. In the Emerging World, prime ministers and presidents merely “listen.” ".

Not in the emerging world alone it seems.

Nilsey105
17 January 2009 at 17:18

"the collapse in oil prices is hitting certain nations extremely hard. Venezuela, Russia, Iran, ..."

The collapse in oil prices is affecting those who need oil income the most. Its as if there is a conspiracy to push the price lower so as to weaken those country's their leaders and people.

Carl Jones
17 January 2009 at 17:57

writeon, I can understand a reluctance to believe the financial crisis is a conspiracy. "Americans" simply don`t undersand what is going and for that matter, nor do the British for that matter.

This is the heard instinict and it matters not, which heard you are in, they believe their local mantra, but fewer people are believing these mantras...its a bit like going to war, you get more soldiers going AWOL.

The link below is interesting. I don`t agree with all the points, but the gist is true, such as busting the verious national economies.

http://www.thetruthseeker.co.uk/article.asp?ID=10036

Carl Jones
17 January 2009 at 19:39

BBC News makes a meal out of Obama assassination threat....do they know something we don`t?

writeon
18 January 2009 at 11:04

Reviving the US economy will require a reversal of the last thirty years of extreme, right-wing, economic and social policies, which are basically the root cause of the current economic collapse. Of course I'm simplifying here.

Then add on cutting the vastely bloated military/industrial budget, which swallows around 1.5 trillion a year, when everything is included. These resource could be utilised, massively, more effectively in other sectors of the economy. Ditch the empire in other words.

But primarily one needs to tackle the supremacy and rule of the financial aristocracy. This relatively narrow and small social group, control the United States like they own it, like it's their private property, which in a sense it is. Not only that this 'ruling class' thinks and acts like they own the world too.

Because they could make massively more profits from creating and selling money and debt, comared to producing real things, they have sacrificed American industry and manufacturing. Pretty much the same happened in the UK.

Reorientating the United Sates again, means confronting the vested interests of the 'class' that have profitted so incredibly from the last thirty years, at the cost of ruining the US economy. This won't be easy! Because they, though a tiny minority, are the most powerful and richest segment of US society, but never-the-less, this is what's required in there's to be a snowball's chance in hell of getting out of the coming depression.

Hopeless? Or is there hope? Change, real change, one can believe in? That's the real challenge we face.

emn4cw
18 January 2009 at 15:02

@ writeon 18th Jan @ 11:04

I agree but it will never happen. They are too powerful-tenaciously so and they loath to not only share this power but loose it. At all costs. I mean we are inherrently dealing with sociopaths here.

I'm not sure if you've been following Cheney and Rumsfeld's comments these past months but they show no sympathy. And esp Rumsfeld who felt Friedman was a "genius", you know he genuinely feels that the 'free market' can still work.

The problem is with us, the 75% of society who lets these arseholes get away with this. Who bury our heads in the sand buying into the schizo media groups...

We need to socially sort out our thinking. I don't know about you but I'm surrounded socially and at work that still think their must have been a reason for us to have gone into Iraq, i.e they still believe in weapons of mass destruction and think I'm a conspiricist because I factually told them that the UK and US were the ones that put Saddam Hussien in power all those years ago.

I know it's not measurable and too 'out there' but we need to actually research and understand a mindset that inherently chooses to be spoon fed information with more holes then a cylinder....

writeon
18 January 2009 at 16:19

Bush, Cheney, Rumsfeld, the entire Cabal, sincerely believe they are members of a ruling elite, destined and derserving to rule over the rest of us and the world, which is their plaything.

They are incredibly ruthless individuals, though at the same time they act like members of cult, a death cult. Let's call them neo-conservatives. They've taken many of the stupidest, vulgar and nonsensical attitudes of the cut-throat world of American business capitalism, and have applied them to running the state, running it into the ground. Just like in business they worship the God, Growth, serve him and pay blood sacrifice to him on a massive scale. One could see Iraq as a giant, hostile take-over of a territory with huge untapped market potential, only one didn't just need dollars, one needed an army to succeed this time.

Explaining banditry, or piracy, on this scale to people is, hard work. It requires people to question almost everything they've been taught and learned throughout their entire lives. One is aksing them to reject it all. Turn the world upside down. See and understand it as it really is.

I don't have a proper career. I have an improper one. I am self-employed so I don't really fit in anywhere, and I never have. I sometimes move from the bottom to the top in a single day, from the gutter to the palace so to speak. Personally I don't feel comfortable surrounded by the peak of luxury and opulence, even though I sort of come from that world.

What makes us human? What makes us whole? What makes us tick? I think love makes us human, gives meaning to our lives. The more love we give, share and receive, the more human we become.

Strangely, when I was moving around England, I found everyone I met was agaisnt the attack on Iraq and didn't really believe a word they were told. They despised all politicians, all the parties. I think it's close to 1789 again.

Carl Jones
18 January 2009 at 16:38

writeon...you are doing it again...we don`t to get into a guessing game. In that last comment, you far too much away. :)

I know this thread is a about Obama and the USoA, but this should interest you, if you`ve not seen it.

http://www.guardian.co.uk/business/2009/jan/18/recession-bud...

"Real" US unemployment is around 17.5%!!

Lets keep something in mind, as I understand it, this US depression is moving at twice the pace of the 1930 depression?

writeon
18 January 2009 at 16:41

The problem with Obama and the people around him is that they too think they are members of a special elite who were meant to rule, that it is there due and destiny, there right. It's a tremendous mistake to think that they are fundamentally different from Bush and his court. They aren't. They are only representative of a different faction that have gained power in the imperial city. They don't intend to dismantle the empire or change the basic character or goals of the emerial project, remember what happened over the last eight years wasn't a crime, it was just a mistake. Bush and his court weren't criminals, they were incompetents. This is what Obama and his people have said and this is what they think.

This lack of morality and the desire to hold the criminals accountable to the law, faced with warcrimes, slaughter and destruction on vast scale, is called 'pragmatism.' Change in America, if it isn't just an empty word, means pursuing the criminals for their crimes. Only Obama and his people don't believe any warcrimes were committed in Iraq, just like they refuse to accept that Israel is guilty of warcrimes.

We in the West, democractically lead; per definition, cannot commit warcrimes. It is not possible. We make mistakes, but without malice. Sure there are, unfortunately, a few rotten apples in the barrel, but the barrel itself is not rotten. There is no pattern to our mistakes, they just happen... over and over again... decade after decade. And because we don't commit warcrimes or are agressive, we only defend ourselves, and there are no trials for us, no accountability, no responsibility, only impunity; we are learning to kill without regret, concience and with increasing ease. It's easy to kill and destroy when there are never any consequences. We start with Saddam, move on to the terrorists, then we start on the helpless civilians. It starts to get easier and easier. Soon we're slaughtering women and children, waste deep in innocent blood.

writeon
18 January 2009 at 17:00

Carl,

I'm starting to come round to your way of thinking, only having met some of these people socially, I just didn't recognise them as conspirators controlling the world in the way you imply or seem to mean. I didn't think they had the smarts to tie their own shoelaces, let alone run the world! But maybe they are trained to dissemble? Or maybe I don't appreciate the role of the individual enough?

On the other hand, they do seem to rule, they have power, but control in detail, that's surely another thing? Obviously the banks have enormous power. They can apparently defy the government and go on strike, with impunity. Who else has the ability to demand hundreds of billions and get it? Are these people really so indispensible? Should this be possible in a democracy, that the government jumps to their tune?

Anybody who isn't lobotomised can see that the City is more powerful than Parliament and with far more influence on legislation. Parliamentary democracy is dead. We don't even really have Cabinet democracy anymore. The Prime Minister is consolidating his position as a de facto Monarch, in a debased and corrupt system, which is rapidly moving towards something that resembles a dictatorship.

Carl Jones
18 January 2009 at 17:09

"I couldn`t possible comment" from "To Play the King", "House of Cards"....you are baiting me.LOL

Carl Jones
18 January 2009 at 17:17

Here we are debating Obama and the economy, yet the last NS article on specifically the economy, was on the 18th December 2008...is there a political reason for this???

Nilsey105
18 January 2009 at 17:38

Bailout number two pokes up over the horizon.

The amount this time is more than FIVE times the last amount we the taxpayer had tocontribute.

Were we asked to make this donation? No not at all.

The government acting inline with democratic principles arranged it all on our behalf.

But where is our democracy?

Can we discover where the first bailout funding £37billion has gone to or what the banks have done with it?

NO.

We just have to hope someone will slip us the news one day. Or indeed wait for the period to elapse when it comes into the public domain under the freedom of information act.

Until then we are left to guess.

So here is my guess for starters lets have yours .lol

First its not gone to lend people the loans they require to keep businesses alive, expand or use for R&D.

Secondly its not gone to people seeking a mortgage or very little of it has.

Thirdly its not gone to people or company's wishing to purchase new vehicles. As we are all well aware the motor industry world wide is on its arse.

£37 billion has been creamed off from the british public by the government and given to the RBS, LLoyds Nat West TSB, HBOS. Individually; HBOS got £11.5 billion. RBS received £20 billion and the residue of £5.5 went to Lloyds Tsb Nat West.

I have not heard or seen any of these banks involved in any purchaseing activities of other companys.

So i can only see the Taxpayers money is laying dormant in the vaults of the respective banks,(figureatively that is), or it has been used to wtite down some of the toxic debts they have on their books.

So what is the next amount of £200 billion, as i say thats five times the original amount,going to come in handy for the banks to play about with?

Yout guess is as good as mine.

writeon
18 January 2009 at 17:49

Nilsey,

Without democratic control, accountability and the rule of law, we don't so much have anarchy so much as brutality and gang rule. That appears to be what we've got now, gangster rule. Robbery with violence is recognised as a crime. Wasn't that what Iraq was, but on massive scale? Now, having successfully got away with it in Iraq, the gangsters have begun to utilise the same methods at home, or at least that what it looks like. The treasury is now being robbed of whatever's left after they've emptied the banks. And they call it democracy.

Nilsey105
18 January 2009 at 17:49

I have just re-read the first paragraph of Will Huttons piece. It sounds very much like one of your conspiracy theories. I was thinking maybe you had got to him al last and we are now witnessing the fruits of your labours. Lol

Nilsey105
18 January 2009 at 18:03

writeon

i know what your getting at. But they are all the same but to a lesser degree or maybe to a greater extent depening.

The coruption of the financial sector is only a reflection of the corruption that pervades the parliamentary lobby system. And that in itself is another reflection of the depths big business will go to emhance its own position in seeking power and wealth.

The fuss that was emerging about the John Lewis Partnership catalogue and the MPs who abused it has been very cleverly swept under the carpet.

But none of it has been forgotten, the criminal elements will get whats due to them.

The Enron thieves never thought they would end up they way they did. And i bet Maddoff didnt either.

What goes around comes around.

writeon
18 January 2009 at 19:01

Nilsey,

Thing is, pumping massive quantities of 'magic money' into the system will arguably make things worse, not better, because one is undermining the value of money even more. Of course banks create money out of thin air all the time, and we can all see where that's got us, but it's the size of the current magic trick that's so worrying.

What the UK government is doing is sacrificing Britain's future welfare; pensions, social-security, jobs, education... in a desparate gamble, in desparate attempt to save the collapse of the financial sector, but at the cost of endangering everything else.

It isn't a liquidity crisis, it's a solvency crisis. And the plug isn't big enough for the hole. What's also shocking is this purile idea that Obama is going to save us all. It doesn't work that way. A lot of people are going to be profoundly disappointed.

Carl Jones
18 January 2009 at 19:35

Nilsey105, stop poking fun.

I quoted Hutton`s openning sentence, but I could have used.....

...."the job of the US, as the world's hegemonic power, has therefore been to promote ungoverned globalisation by promoting free finance and open markets with minimal rules - along with a global network of military bases to prevent any armed challenges to this notion".

Yes, Hutton is VERY conspiritorial, but he can`t get away with "ungoverned globalisation", this simply isn`t true. All Hutton is doing, is mixing the medication into my vanilla milkshake, the claim of no/little regulation is untrue, UN, WTO, IMF and WB, not to forget the hidden hands.

Hutton is right about US military bases, well over 600 (the ones we know about) outside the US and this really does justify the NWO tag.

Carl Jones
18 January 2009 at 19:43

writeon, they need "HYPERINFLATION", it wipes out, or should I say, enables them to clear their debts...of course, we could just end up with BIG war. I thinks its safe to say, THEY are going for hyperinflation, something I warned about years ago on the BBC Today forums.

Carl Jones
18 January 2009 at 20:00

It has taken a while, but folk are waking up and its going to be worse than the 30`s, 2009 has barely statred, maybe the US will breakup in 2010.

http://scotlandonsunday.scotsman.com/latestnews/Scottish-job...

http://www.telegraph.co.uk/finance/comment/ambroseevans_prit...

Carl Jones
18 January 2009 at 20:03

Sorry, I forgot this one.LOL

http://www.independent.co.uk/news/uk/home-news/the-recession...

writeon
18 January 2009 at 21:57

Carl,

Maybe this economic collapse is 'planned', planned in the sense of creating, or allowing a situation to develope which would lead towards a chaotic collapse and then 'they' would be able, during this period of fear to apply economic shock treatment and radically alter the rules of the game in their favour. This is like Naomi Klein's 'The Shock Doctrine', only not applied to single countries, but to entire continents.

A crisis like this one has never been seen before. It's all collapsing so quickly and all over the world at the same time. In many areas of the economy the collapse is more violent than during the Great Depression.

I think one can make a good case that a collapse like this one is also a golden opportunity to 're-configure' whole areas of the economy and the social system, cutting away whole swathes government expenditure and clearing the decks for the 'post consumer society.' A society were scarcity will return will a vengence, but paradoxically a society and economic model which is more sustainable, smaller, but which still guarantees the power, wealth and position of the ruling elite.

Carl Jones
19 January 2009 at 03:46

A fascist police state, with food/fuel rationing, apply to travel...can I see your papers, er, sorry, I can I scan your NWO implanted micro chip.

writeon
19 January 2009 at 08:26

I'm highly doubtful that any of these increasingly expensive bailouts will have the desired effect. The latest £200 billion plan to by toxic debt, is apparently going to expand to £600 or even £800, which is what some peole estimate is the true figure for UK banks losses.

These are collosal figures, especially as one enters a depression the like of which one hasn't seen for generations. Is the government's strategy sensible or prudent? Can the government really step in, print money and simply replace the role of the free-market and the entire financial system, so easily? And crucially taking over vast responsibilities for a collapsing system, but without excercising real power and control over the system they are financing?

Either we have Capitalism or we don't. In a situation like the one we're in, isn't trying to ride two horses at once dangerous? Doesn't one risk being torn apart?

Arguably, one cannot do nothing. We have to do something, we can't let the finacial system collapse and take the rest of the economy down with it along with the rest of the country. I heard a Labour financial minister virtually say these words last night. So it come to that? We're on the verge of collapse!

Perhaps it would be better, cleaner and more efficient, to cut off the lifeline to the banks, let them collapse and start again. Find out where the losses really are and right them off. Re-Start with one state financed and controlled financial system. However, this would entail the end of capitalism as we know it and break the power of the City over the economy. So Labour prefers to sacrifice the entire economy in vain attempt to save the City, where arguably it's the opposite strategy that should be adopted.

Nilsey105
19 January 2009 at 13:39

As an indication of what traders think of the latest bailout of the banks take a look at the latest share prices of the UK banks.

http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_da...

More than a little grim i think. Maybe they are thinking as some of us do and beleive this is the second bailout but certainly not the final one.

emn4cw
19 January 2009 at 14:13

@ writeon 18th January 16:19

"Explaining banditry, or piracy, on this scale to people is, hard work. It requires people to question almost everything they've been taught and learned throughout their entire lives. One is aksing them to reject it all. Turn the world upside down. See and understand it as it really is. "

Of course, you've hit the nail on the head.

Very true.

emn4cw
19 January 2009 at 14:31

@ writeon 18 January 2009 at 21:57

Just reading 'Shock Doctrine'.

I'm not sure if it would be so bad to wipe out and start again but ONLY if we go more left this time, with less privatisation and state power..

emn4cw
19 January 2009 at 14:33

writeon

Didn't see your last post..

Carl Jones
19 January 2009 at 15:51

Tried to post six times this morning and was blocked.

"Shock Doctrine", not so sure about that, this is more like a speices u-turn...remember the speed at which AIG and others were nationalised? Everyone agrees Parliament is a waste of space and the US government like-wise.

Only now as the roof caves in, is there a glimmer of reality from the MSM, even Will poped his head up and quoted $10 trillion...thats 66% of US GDP (pre-crisis)

http://online.wsj.com/article/SB123051100709638419.html

It could happen and we could end up with a feudal system...of course, as we make this transition, most of the population will die off. I suspect NWO H5N1 will mutate.

As for tomorrow, I think our prayers and thoughts should be with Mr Obama. :)

Carl Jones
19 January 2009 at 20:43

I think this is "ironic", Buffet says "US in economic Pearl Harbour".LOL

http://www.usatoday.com/money/economy/2009-01-18-buffett-eco...

Pearl Harbour is widely believed to be a US construct to drag Japan into war....so we have an economic construct in the financial crisis. Looks like the ride will be fun.LOL

Carl Jones
19 January 2009 at 22:04

MUST READ ARTICLE, long but good.

http://www.marketskeptics.com/2009/01/hyperinflation-will-be...

Carl Jones
19 January 2009 at 22:59

We should all be VERY worried.

http://uk.youtube.com/watch?v=MyW9e5QdWxk

Carl Jones
20 January 2009 at 20:05

As per youtube link in the last comment, Obama`s oral skills are as bad as his predecessor...doesn`t listen, has bad timing and can only perform with autocue....."America`s decline is not inevitable"LOL

Nilsey105
20 January 2009 at 21:28

I need help in coming to terms with how the FSA can lift the ban on short selling when;

(1) it knows there is about to be a statement regarding phase two of the bank bailouts.

(2) some of the banks are on the verge of falling over the cliffs edge and they will be in open season.

(3) the very people who are to blame for creating some of the crisis with the banks shares are still "out there", waiting like the vultures they are, to create more havoc on the system. This was evidence by the last hours trading when Barclays lost almost half its value.

I want to know do the Treasury, Bank of England and the FSA communicate with each other on these matters. Or as i suspect each does their own thing in a random sort of way.

Carl Jones
20 January 2009 at 22:10

Nilsey105....do you remember some of my previous pontifications on the financial crisis??

Bringing back short selling has one objective, they need to get the bad debt out of the system, so YOU BRING AS MANY BANKS TO THEIR KNEES, they become almost worthless. Everyone gets RIPPED OFF and then the government takes it over, and WE pay again. Of course, the government will be holding "A LOT of ASSETS"....one day when things improve, the SUPER BANKS which survived, will snap them up for a song.

We have a notional loss of asset value and a contraction of the finance base...its like the finance coach is trundling along, but some of the passengers get SICK and Fat, the coach slows down, the driver decides to off load his sick and fat passengers, they now get on the local state bus, some of the sick and fat die off, the survivors get better and fitter...just before the final destination, the finance coach meets the STATE BUS and collects a bunch of fit passengers....mean while, the state (WE) have to pay for some expensive funerals.....while this is going on, no one gets picked up and it could take 10 years, maybe 20, before its all over! LOL

Nilsey105
20 January 2009 at 23:49

yeh i understand what you say

but i ask about the communication point in order to track what people are doing and saying to each other. I want to know if there is a conspiracy going on between the 3 organisations .

Carl Jones
21 January 2009 at 04:08

Nilsey105

"I want to know if there is a conspiracy going on between the 3 organisations", for sure, there is a conspiracy going on. In a nutshell, democracy and its institutions have have FAILED the entire world, but I still maintain this crisis was planned by the elite.

Nilsey105
21 January 2009 at 11:23

This looks like the way to go.

http://www.guardian.co.uk/business/2009/jan/21/britannia-coo...

I have tried to find material on how the Mutuals in the UK are doing in the present crisis but not much luck.

Carl Jones
21 January 2009 at 17:07

Desperation in the ranks. The problem is this, we are only at the beginning of this process. Here is comment from The Telegraph.

http://www.telegraph.co.uk/comment/columnists/iainmartin/429...

As I stated when the bailouts/nationalisations were first mooted, they were a criminal waste of money (debt), the banks should have been allowed to go bust as and when. The government should have aquired the inferstructure of several bust High Street banks and used the "liquidity/bailout money to maintain a reasonable level of credit to business and public.

Of course, this would establish a new clean foundation on which to build NEW clean banks which would be FREE from rocket scientist devised financial products. This could have been setup in two months, so would now be up and running and we might not now be facing this current crisis of confidence.

http://georgewashington2.blogspot.com/2009/01/roubini-bankin...

As I have said before, this crisis was designed and so far, the elite bankers have got it all their own way. Brown and Darling got sucked into the scam, by believing they actually had some POWER.LOL

The FACT that all the worlds politicians followed the same daft policies, is an illustration of NWO power....the elite are becoming much more powerful, while the rest of us remain surfs.

Since the NWO sham war on terror started, we have lost a lot of our civil liberties, we are spied on constantly and now WE are being robbed blind....what will come from all this? In my opinion, we`ll end up with global financial regulation and de facto world government and as yet unseen social change.

writeon
21 January 2009 at 19:25

I think Britain's on the route towards national insolvancy, the banks are going to drag us all down with them, especially if we keep pouring billions, moving close to trillions into a bottomless debthole. Soon borrowing will become impossible and then the government will simply begin to print money. Only this will undermine confidence in Sterling and the economy and only make things worse, a spiralling, vortex of collapsing confidence and vast losses. This is the terrible and ghastly climax of Thatcherism, the virtual destruction and ruin of the British economy.

Carl Jones
21 January 2009 at 19:59

writeon, I wish you hadn`t used "climax and Thatcherism" in the same sentence.....where the valium?? :(

Nilsey105
21 January 2009 at 20:45

OMG CJ

how could you have such thoughts at a time like this. LMAO.

Oh VALIUM your after and not the VIAGRA lol

Nilsey105
21 January 2009 at 21:02

How significant is the decision to allow Northern Rock to restart providing mortgages?

Is NR, now the prefered vehicle for a nationalised bank?

Are we going to see RBS and Lloyds and their offshoots go to the wall with their deposit accounts being moved to NR.

Superficially it looks a good proposition. It will save the taxpayer hundreds of billions. The toxic debts, held by those banks who fail, will be wiped out. Savers money will be safe in the nationalised NR.

Carl Jones
21 January 2009 at 22:12

Nilsey105, this is possible, but RBS (and others) pay the treasury a huge wack, but then again, "austerity and social change" are important cornerstones when large constructs like this financial crisis, are played out.

It is hard to workout which way things will swing, but the election of Obama indicates a move to the right. Blair was supposed to offer "hope" (LOL) after the Thatcher construct, but Blair was more rightwing than even Thatcher could ever dare, so Obama will likely make things much tougher for Amerikans.

Here in the UK, Brown and his NWO handlers have shown no "goodwill" towards the tax paying public. Only a minor delay with the super-carriers, Trident hasn`t been cut (US benefits) and pointless...utterly USELESS ID CARDS...all this with the MSM openly crying "bankruptcy".LOL

BTW, NR needs a sack of cash if its going to play a significant role...maybe there should be a Southern Rock?LOL

Nilsey105
22 January 2009 at 11:39