Economy
Related: About this forumAre the Banks Already Orchestrating Another Meltdown?
http://www.alternet.org/economy/are-banks-already-orchestrating-another-meltdownOn Friday, the New York Times reported that banks are continuing to practice risky behavior as the economy improves. While the mainstream media has been quick to discuss the improving economy, not much conversation has been situated around whom exactly the economy is improving for and how millions of Americans still struggle financially. Just one example, for instance, is that 11 million renters currently pay more than 50 percent of their incomes on housing.
But Wall Street is making more investments, known as structured financial products, and escaping new financial regulations, such as the Dodd-Frank bill that did not change the structure of how loans are bundled which, when done riskily, causes crisis. Tad Phillips, a commercial real estate analyst at Moodys rating agency, told the Times: The players in the business are generally the same as they were before. Because its the old players, they know how to push the boundaries.
snot
(10,524 posts)Eleanors38
(18,318 posts)snappyturtle
(14,656 posts)say exactly this. Scary.
JDPriestly
(57,936 posts)disparity in income between the rich and the rest of us. We are the 99%. It isn't just a slogan. It is the reality. And our economy cannot succeed as long as there is such a huge disparity.
As I said, I do not know what to do about this.
It's partly caused intentionally by the excessive greed of the rich and their purchase of political power. But it is also caused by computers and outsourcing and the change to a global economy in which capital is free to move around but, labor is by its very nature, stuck.
People cannot easily move away from family, their homes. Capital can travel without suffering the losses that human beings do.
The other day, a DUer was arguing in favor of the right to just work in any country you want. That may be OK if you are young and single, have no children, no elderly parents, no disabled family members or other relationships that tie you to a place or a culture. That idea assumes that you learn languages easily and travel well.
It's crazy. I tried it. It works when you are young, and then you just want to go home. People really do eventually get homesick.
There are lots of ideas about how to deal with the technological changes in the workplace, but I don't know which of them are practical.
mbperrin
(7,672 posts)For example, a $10 million dollar road extension was built here in my county to accommodate a large energy company which said they were going to build a plant there, and they requested county taxpayers build the road. In exchange, 50 new jobs would be created.
I didn't see it as a great deal, anyway, but it really turned bad after the road was built and the company changed their mind.
They should have to pay for that new road to nowhere. They owe the taxpayers $10 million. Very simple example.
Now, a long-existing plant wants to leave a community and go overseas. Okay, but first, they must pay for the infrastructure they were using, that now will not be paid for in tax revenues. The costs of all transport to and from that plant, the educations of all the employees, the demolition and restoration of the plant area to its natural state, the expense of replacing those jobs and so on. THEIR decision made all those problems, so they should have to pay for them, in cash. It's the old, "you break it, you buy it" rule. Common sense, nothing radical, although you will hear caterwauling like unto people being boiled in oil.
As of now, they simple privatize all profits and socialize all losses.
HOW to convince the voters to not listen to all the astroturf and contrived ads about "YOU were gonna be rich some day, but not now" and "this is communism" and "this will destroy jobs", I don't know. They hold a large megaphone available on demand.
But just like a divorce where a relationship goes bad, there is a division of property, awards of support and alimony, temporary payments, custody decisions, there needs to be a settling of accounts when a business begins or ends it presence.
Laelth
(32,017 posts)-Laelth
bemildred
(90,061 posts)DemReadingDU
(16,000 posts)The longer the meltdown is orchestrated, the more money to be made by the banksters and the less the 99% will have.
Benton D Struckcheon
(2,347 posts)...the crises will keep getting bigger. What happens in each cycle is the Fed validates what the banks did in the runup to each crisis by guaranteeing that the folks who bought the deals, whatever they are, will be made whole. In this case the damage was so big the US government itself got into the business of guaranteeing the deals.
It isn't actually inevitable, it just seems like it is. His recommendations for ending the cycle were (these will sound very familiar): breaking up the big banks, and being unfriendly, rather than friendly, towards financial innovation. In other words, heavily regulate the financial sector and keep an eye on anything they do to try to circumvent those regulations.
It's common sense stuff, the stuff that kept the financial sector stable from the thirties to the sixties. When Minsky wrote his books, he could already see Glass-Steagall being frayed at the edges. He didn't live long enough to see it get repealed and get this blowup we had, but he knew it was coming.
There will be another one, many years down the line. It will be even bigger than 2008. Maybe when it comes we'll finally get a reformer who will truly bring Glass-Steagall back. Until that happens, we'll be on this wheel of misfortune.
lrellok
(41 posts)Your "meltdown" is already underway. Consumer confidence is flagging, Consumer demand is down, The stockmarket is cresting at the same levels as the previous crash, record profits are contracting. Give it six months, and "Market Analysts" will be explaining how no one could have predicted another crash would begin this spring.