Capitalist Fools

As usual, Nobel-winning economist, Joseph Stiglitz, lays it down on the economy.  "Behind the debate over remaking US financial policy will be a debate over who's to blame. It's crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes - under Reagan, Clinton and Bush II - and one national delusion." This is must-reading. Check it out. Spread the word.

Living History

Fareed Zakaria: "Some of us--especially those under 60--have always wondered what it would be like to live through the kind of epochal event one reads about in books. Well, this is it. We're now living history, suffering one of the greatest financial panics of all time. It compares with the big ones--1907, 1929--and we cannot yet know its full consequences for the financial system, the economy or society as a whole."

Economic Collapse and the Proposed Bail-Out

Wondering about the ongoing economic collapse in the U.S.? Not sure what to make of the proposed massive, trillion dollar bailout? Here are a few good resources from progressive points of view:

- Here is a great overview of how we got into this mess...

- Economist Robert Kuttner suggests that New Deal-style action is necessary to avert a full-scale Depression-sized economic meltdown in the U.S., but he is no fan of Sec. Paulson's proposal, which he thinks is a handout to Wall Street fat-cats.

- Similarly, economist and NYTimes opinion page regular, Paul Krugman, who called the collapse last Wednesday, "the worst thing I've ever seen," argues that the meltdown is the result of several decades of an unrestrained free-market capitalism, essentially the failure of conservative economic policy. He believes that this crisis could be as bad as 1931 - total collapse of the system - if bold action is not taken. But, Krugman thinks we need to think it through before acting. And, like Kuttner, he is not sold on Paulson's plan. In fact, in today's column he called Paulson's plan, "cash for trash." Ouch.

- At Truthout.org,, conomics journalist William Greider, never one to pull punches, calls Paulson's plan a 'historic swindle" Richard Behan agrees, suggesting that the bailout plan is simply "one more weapon of mass deception." Jack Balkin completes the trio of dissent.

- John Nichols, over at The Nation, shows how the insurance industry is attempting to capitalize on this disaster to LOOSEN REGULATIONS further!

- Josh Holland nicely explains why our economic system is on the verge of total collapse.

- Mark Sumner discusses the way John McCain and other deregulators are on the hook for this economic meltdown.

- Robert Borosage suggests the need for a "citizens' plan" to address the financial collapse. Senator Bernie Sanders of Vermont agrees.

- Activist/economic critic, Naomi Klein, sees the financial crisis as another part of the Bush Administration's use of the "shock doctrine." She also suggests this is a good time to argue for more cooperative economic policies.

- Chris Hedges doesn't like what he is seeing, either: "The lobbyists and corporate lawyers, the heads of financial firms and the crooks who control Wall Street, all those who spent the last three decades assuring us that government was part of the problem and should get out of the way, are now busy looting the U.S. treasury."

- Paul Rosenberge suggests we need to get at "root problems" in solving this crisis.

- Here is Amy Goodman, of Democracy Now!, criticizing "Wall Street Socialists."

- Chuck Collins suggests we "tax the speculators" as a fair way to bail out of this mess.

- And here and here, writers try to explain how unrestrained free-market ideology is to blame for this debacle. Similarly, over at the Financial TImes, David Blake argues that this crisis is "Greenspan's sins return to haunt us." And, hell, even the Europeans, Left and Right, are mocking the U.S. financial flame-out. And Chinese officials have called for a new global economic order after the American "economic tsunami."

- For good measure, this post features a whole slew of economists, from the Right to the Left, who think the Paulson plan is bad news.

- And, yesterday, Obama himself critiqued the Paulson plan, stating that there should be "no blank check" for Wall Street without help for Main Street. He went on to outline his own 7-point plan.

- Jacob Weisberg likes Obama's economic plans, but thinks he needs to do a better job selling it by coming up with a memorable slogan.

For myself, I'll simply add this: Why is it that the government can find $3 trillion to fight unpopular, illegal wars abroad, or $1 trillion to bail out failed, greedy and corrupt Wall Street fat cats, but it can never seem to find the billions necessary to provide all citizens with adequate health care, or all children with excellent public schools, all help homeowners who were the victims of sleazy, greedy financial schemes?

The "War on Greed"

The folks at Brave New Films have launched what they call, a "War on Greed." Check it out:

Here is the original film by Robert Greenwald:


Here is a cartoon - "Larry the Loophole" - that breaks down the basics:



Any thoughts on this topic?

"The Economic Rape of Cleveland"

If you aren't aware, there is an economic meltdown underway in America, particularly in our urban centers. There is a rot at the core of the system that preys upon poor neighborhoods and communities of color. The most recent sign of this meltdown is the sub-prime mortgage fiasco. Sadly, my hometown, Cleveland, Ohio, is being ravaged more than any other in the nation.

Harry C. Alford from the Washington Informer recently wrote an interesting essay on the impact of this economic crisis in Cleveland. The article, "The Economic Rape of Cleveland," briefly explains how the sub-prime scheme worked:

This game broke all of the rules. It exaggerated housing appraisals to boost lending amounts. It eased credit rules to allow people who did not qualify for mortgages to get them anyway and pay the consequences later. Hedge fund investors fell into the same trick that made Enron famous. They fronted asset investments that were really poorly collateralized loans that would soon default and leave the investors holding the “bag.” Middle men brokers and package dealers ran these schemes for quick fees and cash. In the end, the investors and new mortgage owners would take the big hit.

He goes on to look at Cleveland as

a typical Chocolate City in regards to this matter. Cleveland, Ohio seems to be a perfect example. It’s a hardworking town with a strong history of neighborhoods producing some of the greatest American citizens. A black middle class was formed decades ago and is indeed an institution in this population center. Maybe this is why the subprime hustlers targeted Cleveland. It had plenty of established black property owners who could be exploited while the activity remained under the “radar” for a while.

In a devastating conclusion that should outrage us all, Alford writes:

There is one particular zip code in Cleveland that has over 1,000 present foreclosures. The neighborhoods in this part of Cleveland have become slums overnight and the blacks living there didn’t see it coming. It was fast and there appears nothing they can do. This city has been violated in every economic sense of the term. Their virtue has been quite lessened and the repair is not even imaginable. The elected officials, community leaders, chambers of commerce, etc. are lost in trying to find a solution to this devastation. All they can do now is stop the hustlers so that the present state can be termed the “bottom." But even doing this doesn’t mean that “which way is up” can be visualized anytime soon.

And then, plaintively:

Yes, the lovely city of Cleveland has been ripped off. There are other cities, counties and rural communities around the nation facing the same crisis. Greed and hustle coupled with bad policy and weak laws have hurt us miserably. Our children will pay the price and all we can do is start over once again. It hurts. t hurts real bad and will have a very long-term effect. Cleveland was raped. She was not alone. Lord, help us please!

This is the cost of conservative economics, people! These are real live human beings, devoured by large economic interests and then cast off in a seedy profit scheme that counted on their vulnerability... and relative invisibility to the rest of the nation. These white-collar criminals assumed no one would care in the end about these poor neighborhoods, about these communities of color. They believed no one would raise alarm or protest.

Well, now is the opportunity to prove them wrong... or right.

Is this the world you want to live in?
Is this the kind of economy we should countenance?

What will you do?
What will we, as a society, do?

Solutions: "Natural Capitalism"?

At the outset of this blog, I wrote that we not only need to name the problems in our society and world, but we need to offer visionary solutions that are proactive and concrete. One of the massive problems we face today is a global economic system that produces vast inequalities and destroys the environment. My good friend Justin Kemerling is a big fan of "natural capitalism," a set of ideas put forth by Paul Hawken, Amory Lovins, and L. Hunter Lovins. At their website, they write:

Most businesses still operate according to a world view that hasn't changed since the start of the Industrial Revolution. Then, natural resources were abundant and labor was the limiting factor of production. But now, there's a surplus of labor, while natural capital - natural resources and the ecological systems that provide the vital life-support services - is in decline and relatively expensive. The next Industrial Revolution, like the first one, will be a repsonse to changing patterns of scarcity. it will create upheaval, but more importantly, it will create opportunities. Business must adjust to these new realities. Innovative companies are already doing just that. They're profiting and gaining decisive competitive advantage - and their leaders and employees are feeling better about what they do, too. They're the vanguard of a new business model: "natural capitalism"

Here is their website:
Natural Capitalism

Here is an article from Mother Jones:
Mother Jones article

A more comprehensive report on "natural capitalism" from the Harvard Business Review can be found in pdf format at the Wikipedia site on the subject:
Harvard Business Review article

Natural capitalism has its critics, particularly among progressives and environmentalists. For example, a reviewer in FEASTA Review, a journal of economic sustainability, writes,

Perhaps the most widely discussed recent book on the transition from a wasteful, unsustainable economic system to a more sustainable one is Natural Capitalism.. Unfortunately, the book is deeply flawed because, like most US books of its type, it pretends that the transition will be so highly profitable that the market alone will bring it about and that government regulation and legislation are unnecessary. Surprisingly, it maintains this position despite an excellent chapter on the ways in which markets can fail.

Here is the whole review:
FEASTA Review review

Here is another review by William Greider, a brilliant progressive economic journalist:
Greider review

Can, as the authors of Natural Capitalism claim, "business strategies built around the radically more productive use of natural resources... solve many environmental problems at a profit"? Or, is this wishful thinking, having our cake and eating it, too?

What do you think? Is this the best viable alternative to the current version of global capitalism? Or, is it a utopian pipe dream as some critics suggest?