Comments on: A long, shaky bridge to recovery

By: Jacob

Jacob — Wed, 04 Feb 2009 04:48:03 +0000

Well I’ll jump in here . The way out as I see it is for America to start playing hardball. Pull your money out of the banks with the exception of a monthly minimum, and smaller savings .Pay cash as best you can . Base housing costs on minimum wage , since now those are the strongest area of job growth , and have been for 8 years . We got screwed we know it and were still getting screwed, the educated and the uneducated alike . The Financial sector feels that it is their job to keep screwing us , along with the banks , and the insurance companies and the automakers . No one wants to see it, but do these things and within months hell weeks the ad campaigns will be open a checking account get a free house.

By: Angelica Treap

Angelica Treap — Mon, 17 Nov 2008 23:24:10 +0000

To turismo: Maybe the grass is greener seen from the other side. I am Canadian and things are pretty bad here too, but many are still in denial. In regards to the fact that Canada has a banking system that ranks #1 in the world, well, it’s really not that hard to be #1 when everybody else around you is in deep mess. As for the heavily advertised tax-free savings accounts – I’m afraid it’s a gift that is presented in a shiny, sparkly wrap but lacks substance. If you do a couple of simulations online, you quickly realise that the actual gain derived from these fiscal improvisations is practically insignificant.

By: Don

Don — Mon, 17 Nov 2008 13:01:08 +0000

Being Canadian, I am surprised that my commitment to the free market system seems much stronger than Americans - at least from what I can gather in these articles. (I am not talking about James Saft’s articles.) Bailouts reduce the reward for the risk of innovation. If you indeed want to drive away people with good ideas, take his market away by supporting companies with bad ideas.

If all of the big three car manufacturers go bankrupt, don’t you all think that somebody will come by to fill the void? Don’t seedlings have a better chance of taking root when the rotting trees in the same area are removed? Nature thinks so. Dead trees go up in flames and the nutrients are returned to the soil to feed the next generation. Free market capitalism is a totally green concept. It is the only approach that comes close to being sustainable.

From the standpoint of being a taxpayer, why in the world do I want to subsidize a company? I support companies by buying their products. We are not talking about a “government bailout” but a “taxpayer bailout” of companies. I would let the communists in the American manufacturing industry think a bit before they do yet another dumb thing.

By: Yiannis

Yiannis — Mon, 17 Nov 2008 12:52:44 +0000

How about revisiting the consumption portion of economic growth and reassess the balance of money spent versus money saved for each household, a ratio that has been hitting record lows for consecutive years?
Is this the kind of economic recovery that we want? It might be slower but this will bring stability back in the economy when we start reinforcing the foundations and not renovating the penthouse.
Deferring consumption does not mean necessarily reducing growth but more like taking insurance on future and sustained growth.
Like Jim says it is time for every household to take a good look at the balance sheets and the cash flows.
All of us if we were to be given a broker guidance we would be an ‘underperform’

By: Ashish Vora

Ashish Vora — Mon, 17 Nov 2008 12:47:04 +0000

Put aside interest rates, think about what can you do for your country, society and yourselves. Think about those things that can give you maximum value addition. One and most useful thing is farming. Yes, farming is a way to self-reliance economy. One can start it with your home, village or any free unused land. One can earn Carbon Credit also through reducing its energy usage. We hope, Mr. Obama can be prepared to reform the policy for the self reliability in energy resources and its efficient usages.

By: Vol

Vol — Mon, 17 Nov 2008 12:11:43 +0000

Contrary to economic dogma, our interest-bearing, debt-based economies are fundamentally unstable and prone to disequilibrium. Idealised models of economic equilibrium sound nice, and their portrayals of undistorted markets achieving optimal net benefit and harmony attract acceptance and acquiescence. But such models have more in common with the Dark Ages grip on European world-view held by Christian churches, than with an objective rendering of empirical data. Their absence of predictive capability, together with mainstream economic blindness to the long-visible warning signs of the current crisis, are ample demonstrations of this. The Dark Age churches peddled false salvation at the cost of subservience to church authority. The 20th and 21st century economic priesthood peddles false market equilibrium at the cost of subservience to exponential growth.

That 97% of the world’s money supply is generated as interest-bearing debt constitutes a classic positive feedback loop, fundamentally unstable (in the nature of positive feedback systems), and requiring exponential growth in both debt and credit (money) to meet compounding interest on money supply. While ever we rely for our money supply upon interest-bearing debt, we can resign ourselves to continuing boom/bust/bubble cycles.

That such a systemic, positive feedback system, with its inherent, fundamental disequilibrium, has been packaged and presented to collective humanity as a structural necessity, is a testament to the dogma and ideology of a powerful and often self interested finance sector.

Money is a human construct, designed by people, for the benefit of people, to enable the exchange of goods and services within and between the most productive economies in world history. To address an insufficient supply of money, we need to apply some critical thought to the effectiveness and wisdom of our basic money supply mechanism. We are too easily persuaded that this is neither possible nor negotiable.

By: JDC

JDC — Mon, 17 Nov 2008 12:11:06 +0000

“Nouriel Roubini, an economist and chairman of RGE Monitor, said he sees the dollar as sharply lower on a trade weighted basis in a year’s time, expecting a fall of at least ten percent, accompanied by a Fed Funds rate of 3 percent, “if not below,” as against 4.5 percent now.” This is a quote from an article by Mr. Saft a year ago. The fact of the matter is that all these gentlemen that are being paid quite a bit of money to provide their insights and forecasts have no better idea of what’s going to happen than any of us. The huge “investment” machine continuously needs feedstock. Whether they get it right or get it wrong is a matter of great indifference to them because they are never held accountable for their words.

By: turismo

turismo — Mon, 17 Nov 2008 05:30:32 +0000

Some interesting solutions are near by. Did you know our good neighbour Canada is rated #1 on the planet for bank security, even ahead of Switzerland, and there are zero mortgage bankrupts? Maybe its because Canadians have not strangled themselves with credit card debt, and always had to qualify for a mortgage based on documented fact (income, employment, etc.) How to keep the economy solid — well, instead of the government bankrupting itself like the USA with dead-end bailout packages, on January 1, 2009 the Canadian government is offering TAX FREE investment accounts up to $5,000 a year for every Canadian. This re-capitalizes the banks with zero government funding and life is beautiful. How come our USA politicians aren’t this smart???

By: ForeverSPb

ForeverSPb — Mon, 17 Nov 2008 03:13:06 +0000

Low interest rates and free money are what got us into this mess in the first place. First it was Y2K, and then 2001, and the government kept ‘infusing’ more and more money into the financial system, and it blew up.
So, now the gov is stuffing the financial system with even more un-earned money. It is easy to predict we are destined for the same bout of indigestion in about ten years.

By: Jonathan Cole

Jonathan Cole — Sun, 16 Nov 2008 17:23:35 +0000

Has anyone noticed that we are in the midst of the greatest wealth transfer in the history of the world from the ordinary citizen to the wealthiest? Economics is never a zero sum game. Whenever someone loses, someone else gains that amount. With such monumental losses, don’t we need to ask the question, who are the few that are gaining it all? It is those who are privy to the inside knowledge of the policy maker’s plans. Stock markets that bounce up and down 10% every couuple of days are being played by the big guns trying to extract every last dime out of the suckers. Prudent investors would never fall for it.

We are in an unprecedented era of piracy, with the pirates in charge of the world and nobody willing to face up to what is going on. Curious. So self-delusional. And we have not even hit bottom.