Thursday, November 13, 2008

Economic Insecurity Update: Stiglitz & Soros Speak Truth, While Tone-Deaf Nero Fiddles Out-of-Tune Encore for G-20

Migrant Mother/Pea-Picker in the Dust Bowl, Photo by Dorothea Lange, 1936


Economic Insecurity Update: Stiglitz & Soros Speak Truth, While Tone-Deaf Nero Fiddles Out-of-Tune Encore for G-20

By Richard Power


According to the Financial Times, this 21st Century Nero's "hopes for success at the international financial summit this weekend are likely to be limited to preventing tougher regulations on US-style capitalism."

Well, while this tone-deaf, 21st Century Nero fiddles his out-of-tune encore to the G-20, against a backdrop of economic and environmental disaster; those, like Joseph Stiglitz and George Soros, who understand the music of life, are speaking out.

Nobel prize winning economist, Joseph Stiglitz, writing in Der Spiegel:

To too great extent, there has been a race to the bottom in accordance with the myth that deregulation breeds innovation. Instead, the innovation was greatest when it came to getting around the regulations designed to ensure good information and a safe and sound financial system. ...
Financial market regulators, at both the national and international level, have failed. To a large extent, Basel II, the new framework of bank regulation, was based on self-regulation, itself an oxymoron. Banks have shown that they are not up to the task of managing their own risk. But even if they had, there is the more fundamental problem of systemic risk.
The current global financial architecture hasn't been working well. But more than that, it is unfair, especially to the developing countries. They will be among the innocent victims of this global crisis that wears the “made in America” label. ... We need a new financial facility to help the developing countries, one whose governance reflects the realities of today. Going forward, this new facility might lead to deeper reforms at the IMF. Such a facility needs to be created quickly, but if experts from the finance ministries and central banks are loaned out to this new institution, it could be up and running in short order.
There are further reforms that need to be undertaken. ...
Joseph Stiglitz, Der Spiegel, 11-12-08

George Soros, "financial speculator, stock investor, philanthropist, and political activist," testifying before the US House of Representatives Oversight and Government Reform Committee:

* Said "a deep recession is now inevitable and the possibility of a depression cannot be ruled out."
* Said hedge funds were an integral part of the financial market bubble which now has burst.
* Said hedge funds will be "decimated" by the current financial crisis and forced to shrink their portfolios by 50-75 percent.
* Said Fed, Treasury Department and the SEC must accept responsibility to prevent market bubbles from growing too big in future.
Said impossible to prevent market bubbles from forming, but they can be kept within "tolerable bounds."
* Said financial engineering should be regulated and new products approved by regulators, and that such regulation should be a high priority of the new Obama administration.
* Said a recent IMF credit facility not large enough to stabilize markets.
Reuters, 11-13-08

Some Posts Related to Economic Security

Economic Insecurity Update: Woods & Forests Are Being Felled Mercilessly, We Will Miss None More Than Bretton Woods

Economic Insecurity Update: Breaking It Down -- The Shock Doctrine Full-Throttle

From Wall Street to Galveston: "Sometimes the aftermath of the storm is worse than the storm itself ..."

Economic Insecurity: Will the Cult of Milton Friedman (and Hidden High Priestess, Ayn Rand) be Smashed? -- "None of This Had to Happen ..."

Economic Insecurity: Stiglitz on the Three Trillion Dollar War; Its Devastating Impact & Its True Winners

Economic Insecurity Update: False Religion of Laissez-Faire & Milton Friedman, Its Most Persuasive Cult Leader, Have Led Us to a Monetary Jonestown

Economic Security Update: Brazilian Super Model Gisele Bundchen Joins Warren Buffet in Ditching the Dollar

Economic Security Update: "What do Brazilian supermodel Gisele B√ľndchen and the People's Republic of China have in common?"

Randi Rhodes Interviews Naomi Klein -- "Not just the craziness of the Bush gang ... the logical culmination of a 25 year war on the state ..."

Hard Rain Journal 5-22-07: Economic Security -- Get Busy Living, or Get Busy Dying

Hard Rain Journal 6-6-07: Future Economic Security, Both Short Term & Long Term, Requires Choosing Conscience & Common Sense Over Racketeering

Hard Rain Journal 10-30-06: Economic Security -- GAO Chief Warns Economic Disaster Looms

SPECIAL EDITION: Words of Power Interviews Nomi Prins, Author of "Jacked: How 'Conservatives' are Picking Your Pocket"

SPECIAL EDITION: Generation Debt -- Why Now Is A Terrible Time To Be Young, Words of Power Interviews Anya Kamenetz

For the Words of Power Climate Crisis Updates Archive, click here.

, , , ,