Great interview with economist and historian Niall Ferguson. But what can I say, I'm a sucker for anyone who knows how to put things perspective, particularly historical perspective.
Sunday, December 13, 2009
Wednesday, November 25, 2009
Frontline | Inside the Meltdown
On Thursday, Sept. 18, 2008, the astonished leadership of the U.S. Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. "There was literally a pause in that room where the oxygen left," says Sen. Christopher Dodd (D-Conn.).
As the housing bubble burst and trillions of dollars' worth of toxic mortgages began to go bad in 2007, fear spread through the massive firms that form the heart of Wall Street. By the spring of 2008, burdened by billions of dollars of bad mortgages, the investment bank Bear Stearns was the subject of rumors that it would soon fail.
"Rumors are such that they can just plain put you out of business," Bear Stearns' former CEO Alan "Ace" Greenberg tells FRONTLINE.
The company's stock had dropped from $171 to $57 a share, and it was hours from declaring bankruptcy. Federal Reserve Chairman Ben Bernanke acted. "It was clear that this had to be contained. There was no doubt in his mind," says Bernanke's colleague, economist Mark Gertler.
Bernanke, a former economics professor from Princeton, specialized in studying the Great Depression. "He more than anybody else appreciated what would happen if it got out of control," Gertler explains.
To stabilize the markets, Bernanke engineered a shotgun marriage between Bear Sterns and the commercial bank JPMorgan, with a promise that the federal government would use $30 billion to cover Bear Stearns' questionable assets tied to toxic mortgages. It was an unprecedented effort to stop the contagion of fear that seemed to be threatening the rest of Wall Street.
While publicly supportive of the deal, Treasury Secretary Henry Paulson, a former Wall Street executive with Goldman Sachs, was uncomfortable with government interference in the markets. That summer, he issued a warning to his former colleagues not to expect future government bailouts, saying he was concerned about a legal concept known as moral hazard.
Within months, however, Paulson would witness the virtual collapse of the giant mortgage companies Fannie Mae and Freddie Mac and preside over their takeover by the federal government.
The episode sent shockwaves through the economy as confidence in Wall Street began to evaporate. Within days, in September 2008, another investment bank, Lehman Brothers, was on the brink of collapse. Once again, there were calls for Bernanke and Paulson to bail out the Wall Street giant. But Paulson was under intense political pressure from conservative Republicans in Washington to invoke moral hazard and let the company fail.
"You had a conservative secretary of the Treasury and conservative administration. There was right-wing criticism over Bear Stearns," says Congressman Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
Paulson pushed Lehman's CEO Dick Fuld to find a buyer for his ailing company. But no company would buy Lehman unless the government offered a deal similar to the one Bear Stearns had received. Paulson refused, and Lehman Brothers declared bankruptcy.
FRONTLINE then chronicles the disaster that followed. Within 24 hours, the stock market crashed, and credit markets around the world froze. "We're no longer talking about mortgages," says economist Gertler. "We're talking about car loans, loans to small businesses, commercial paper borrowing by large banks. This is like a disease spreading."
"I think that the secretary of the Treasury could not fully comprehend what that linkage was and the extent to which this would materialize into problems," says former Lehman board member Henry Kaufman.
Paulson was thunderstruck. "This is the utter nightmare of an economic policy-maker," Nobel Prize-winning economist Paul Krugman tells FRONTLINE. "You may have just made the decision that destroyed the world. Absolutely terrifying moment."
In response, Paulson and Bernanke would propose -- and Congress would eventually pass -- a $700 billion bailout plan. FRONTLINE goes inside the deliberations surrounding the passage of the legislation and examines its unsuccessful implementation.
"Many Americans still don't understand what has happened to the economy," FRONTLINE producer/director Michael Kirk says. "How did it all go so bad so quickly? Who is responsible? How effective has the response from Washington and Wall Street been? Those are the questions at the heart of Inside the Meltdown."
As the housing bubble burst and trillions of dollars' worth of toxic mortgages began to go bad in 2007, fear spread through the massive firms that form the heart of Wall Street. By the spring of 2008, burdened by billions of dollars of bad mortgages, the investment bank Bear Stearns was the subject of rumors that it would soon fail.
"Rumors are such that they can just plain put you out of business," Bear Stearns' former CEO Alan "Ace" Greenberg tells FRONTLINE.
The company's stock had dropped from $171 to $57 a share, and it was hours from declaring bankruptcy. Federal Reserve Chairman Ben Bernanke acted. "It was clear that this had to be contained. There was no doubt in his mind," says Bernanke's colleague, economist Mark Gertler.
Bernanke, a former economics professor from Princeton, specialized in studying the Great Depression. "He more than anybody else appreciated what would happen if it got out of control," Gertler explains.
To stabilize the markets, Bernanke engineered a shotgun marriage between Bear Sterns and the commercial bank JPMorgan, with a promise that the federal government would use $30 billion to cover Bear Stearns' questionable assets tied to toxic mortgages. It was an unprecedented effort to stop the contagion of fear that seemed to be threatening the rest of Wall Street.
While publicly supportive of the deal, Treasury Secretary Henry Paulson, a former Wall Street executive with Goldman Sachs, was uncomfortable with government interference in the markets. That summer, he issued a warning to his former colleagues not to expect future government bailouts, saying he was concerned about a legal concept known as moral hazard.
Within months, however, Paulson would witness the virtual collapse of the giant mortgage companies Fannie Mae and Freddie Mac and preside over their takeover by the federal government.
The episode sent shockwaves through the economy as confidence in Wall Street began to evaporate. Within days, in September 2008, another investment bank, Lehman Brothers, was on the brink of collapse. Once again, there were calls for Bernanke and Paulson to bail out the Wall Street giant. But Paulson was under intense political pressure from conservative Republicans in Washington to invoke moral hazard and let the company fail.
"You had a conservative secretary of the Treasury and conservative administration. There was right-wing criticism over Bear Stearns," says Congressman Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
Paulson pushed Lehman's CEO Dick Fuld to find a buyer for his ailing company. But no company would buy Lehman unless the government offered a deal similar to the one Bear Stearns had received. Paulson refused, and Lehman Brothers declared bankruptcy.
FRONTLINE then chronicles the disaster that followed. Within 24 hours, the stock market crashed, and credit markets around the world froze. "We're no longer talking about mortgages," says economist Gertler. "We're talking about car loans, loans to small businesses, commercial paper borrowing by large banks. This is like a disease spreading."
"I think that the secretary of the Treasury could not fully comprehend what that linkage was and the extent to which this would materialize into problems," says former Lehman board member Henry Kaufman.
Paulson was thunderstruck. "This is the utter nightmare of an economic policy-maker," Nobel Prize-winning economist Paul Krugman tells FRONTLINE. "You may have just made the decision that destroyed the world. Absolutely terrifying moment."
In response, Paulson and Bernanke would propose -- and Congress would eventually pass -- a $700 billion bailout plan. FRONTLINE goes inside the deliberations surrounding the passage of the legislation and examines its unsuccessful implementation.
"Many Americans still don't understand what has happened to the economy," FRONTLINE producer/director Michael Kirk says. "How did it all go so bad so quickly? Who is responsible? How effective has the response from Washington and Wall Street been? Those are the questions at the heart of Inside the Meltdown."
Sunday, November 22, 2009
Hernando de Soto, Naomi Klein, and Joseph Stiglitz On Economic Power
Hernando de Soto, Naomi Klein, and Joseph Stiglitz with moderator David Harvey (see bios below) discuss power through the lens of the economy. This discussion took place at the City University of New York (CUNY) on October 20th 2008 and runs just over 1 hour.
I thought de Soto made some very important points about property rights; without property rights, the true potential of markets cannot be realized. The US has shown the powerful liberation of potential of all individuals in a marketplace if each individual understands that the law will protect them from theft or fraud, and that they are just as accountable to the same law. It is the property rights system that allows market individuals to make deals with one another without necessitating confidence (which is time-consuming to build and foster) in the other party; this mitigates or even eliminates the first-mover problem which is essential to doing business.
Stiglitz and de Soto highlight that in our current financial crisis, the US resembles a banana republic because the property rights system, or the financial rule of law, does not exist on derivatives. This is a truly scary prospect as the derivatives market is at least an order of magnitude larger than the entire globe's GDP.
Hernando de Soto - Hernando de Soto is President of the Institute for Liberty and Democracy, headquartered in Lima, Peru and considered by The Economist to be one of the two most important think tanks in the world. Time and Forbes have chosen him as one of the leading innovators in the world, and more than 20,000 readers of Prospect and Foreign Policy ranked him as one of the world's top 13 public intellectuals. He has served as President of the Executive Committee of the Copper Exporting Countries Organization, as CEO of Universal Engineering Corporation (one of Europe's largest consulting engineering firms), as a principal of the Swiss Bank Corporation Consultant Group, and as a governor of Peru's Central Reserve Bank. He is the author of several books and papers on economic policy, including the seminal work The Mystery of Capital.
Naomi Klein - Naomi Klein is an award-winning journalist, author, and filmmaker. Her first book, the international bestseller No Logo: Taking Aim at the Brand Bullies, was translated into twenty-eight languages and called "a movement bible" by The New York Times. She writes an internationally syndicated column for The Nation and The Guardian and reported from Iraq for Harper’s Magazine. In 2004, she released The Take, a feature documentary about Argentina's occupied factories, co-produced with director Avi Lewis. She is a former Miliband Fellow at the London School of Economics and holds an honorary Doctor of Civil Laws degree from the University of King’s College, Nova Scotia.
Joseph E. Stiglitz - Joseph Stiglitz was chief economist at the World Bank until January 2000. Before that he was the chairman of President Clinton's Council of Economic Advisers. He was awarded the Nobel Prize in economics in 2001. He is currently a finance and economics professor at Columbia University. He is the author of Globalization and Its Discontents and The Roaring Nineties.
David Harvey - David Harvey is a Distinguished Professor at the City University of New York (CUNY) and author of various books, articles, and lectures. He has been teaching Karl Marx's Capital for nearly 40 years.
I thought de Soto made some very important points about property rights; without property rights, the true potential of markets cannot be realized. The US has shown the powerful liberation of potential of all individuals in a marketplace if each individual understands that the law will protect them from theft or fraud, and that they are just as accountable to the same law. It is the property rights system that allows market individuals to make deals with one another without necessitating confidence (which is time-consuming to build and foster) in the other party; this mitigates or even eliminates the first-mover problem which is essential to doing business.
Stiglitz and de Soto highlight that in our current financial crisis, the US resembles a banana republic because the property rights system, or the financial rule of law, does not exist on derivatives. This is a truly scary prospect as the derivatives market is at least an order of magnitude larger than the entire globe's GDP.
Hernando de Soto - Hernando de Soto is President of the Institute for Liberty and Democracy, headquartered in Lima, Peru and considered by The Economist to be one of the two most important think tanks in the world. Time and Forbes have chosen him as one of the leading innovators in the world, and more than 20,000 readers of Prospect and Foreign Policy ranked him as one of the world's top 13 public intellectuals. He has served as President of the Executive Committee of the Copper Exporting Countries Organization, as CEO of Universal Engineering Corporation (one of Europe's largest consulting engineering firms), as a principal of the Swiss Bank Corporation Consultant Group, and as a governor of Peru's Central Reserve Bank. He is the author of several books and papers on economic policy, including the seminal work The Mystery of Capital.
Naomi Klein - Naomi Klein is an award-winning journalist, author, and filmmaker. Her first book, the international bestseller No Logo: Taking Aim at the Brand Bullies, was translated into twenty-eight languages and called "a movement bible" by The New York Times. She writes an internationally syndicated column for The Nation and The Guardian and reported from Iraq for Harper’s Magazine. In 2004, she released The Take, a feature documentary about Argentina's occupied factories, co-produced with director Avi Lewis. She is a former Miliband Fellow at the London School of Economics and holds an honorary Doctor of Civil Laws degree from the University of King’s College, Nova Scotia.
Joseph E. Stiglitz - Joseph Stiglitz was chief economist at the World Bank until January 2000. Before that he was the chairman of President Clinton's Council of Economic Advisers. He was awarded the Nobel Prize in economics in 2001. He is currently a finance and economics professor at Columbia University. He is the author of Globalization and Its Discontents and The Roaring Nineties.
David Harvey - David Harvey is a Distinguished Professor at the City University of New York (CUNY) and author of various books, articles, and lectures. He has been teaching Karl Marx's Capital for nearly 40 years.
Frontline | The Warning
"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"
In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."
Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.
"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."
http://www.pbs.org/wgbh/pages/frontline/warning/view/
In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."
Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.
"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"
Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."
Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.
"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."
http://www.pbs.org/wgbh/pages/frontline/warning/view/
More Bill Black
Here are two more videos from straight-shooter Bill Black. I highly recommend these as he is able to convey just how twisted the banking, investing and regulatory systems are, and the corruption starts from the top with the CEOs.
From Bill Moyer's Journal on PBS (~29 mins):
From Yahoo's Tech Ticker (~6 mins):
From Bill Moyer's Journal on PBS (~29 mins):
From Yahoo's Tech Ticker (~6 mins):
Sunday, August 30, 2009
Confessions of an Economic Hitman
In this radio interview, John Perkins, the author of Confessions of an Economic Hitman, discusses his book and its message.
The premise of an economic hitman is this: an agent of the US government, working through a private company (typically a construction company), goes to a developing nation that has resources. The economic hitman sells the developing nation an infrastructure construction project that is much too big (based on greatly inflated projections). The nation then takes out an enormous loan from the World Bank and other large banks to pay for the project. The economic hitman then uses money and power to corrupt (or further corrupt) those in power in the developing nation so that the nation defaults on its debt, allowing private corporations to buy up the public resources. The private companies then export the resources with little to no benefit to the developing nation.
An eye-opening and worthwhile watch.
The premise of an economic hitman is this: an agent of the US government, working through a private company (typically a construction company), goes to a developing nation that has resources. The economic hitman sells the developing nation an infrastructure construction project that is much too big (based on greatly inflated projections). The nation then takes out an enormous loan from the World Bank and other large banks to pay for the project. The economic hitman then uses money and power to corrupt (or further corrupt) those in power in the developing nation so that the nation defaults on its debt, allowing private corporations to buy up the public resources. The private companies then export the resources with little to no benefit to the developing nation.
An eye-opening and worthwhile watch.
Tuesday, August 25, 2009
The Great American Bank Robbery - William Black
The Great American Bank Robbery is a lecture by William Black, a professor of economics and law, a former regulator, and author of The Best Way to Rob a Bank is to Own One. This video features about one third lecture, one third discussion with the moderator, and one third Q&A with the audience.
*(If you are unfamiliar with the with the subprime mortgage-CDO-CDS debacle check the primer below the video)
He covers the sheer insanity that we currently face in the realm of the subprime mortgages, their derivatives, and the total and complete fraud in the corporations, regulators, and government agencies involved.
*If you are unfamiliar with the with the subprime mortgage-CDO-CDS debacle check out this primer:
http://docs.google.com/present/view?id=ddp4zq7n_0cdjsr4fn
Although I despise Glenn Beck, he does a decent presentation of how Goldman Sachs is our Treasury department and the roles Goldman and AIG played in this whole mess
If all this seems just too much to be true, read any three articles from The Market Ticket and you will see that, in fact, not only is it true but it is still happening and it is accelerating.
Jaw-dropping, mind-blowing stuff. Ignore it at your own peril.
*If you are unfamiliar with the with the subprime mortgage-CDO-CDS debacle check out this primer:
http://docs.google.com/present/view?id=ddp4zq7n_0cdjsr4fn
Although I despise Glenn Beck, he does a decent presentation of how Goldman Sachs is our Treasury department and the roles Goldman and AIG played in this whole mess
If all this seems just too much to be true, read any three articles from The Market Ticket and you will see that, in fact, not only is it true but it is still happening and it is accelerating.
Monday, August 24, 2009
A Crazier Future - Nassim Taleb
A Crazier Future is a lecture by Nassim Taleb, a former trader, now a statistician with soul of epistemologist and the author of the Black Swan. He summarizes the premise and points of the Black Swan in the first half of the video then takes questions during the second half.
The title Black Swan refers to before the discovery of Australia, all swans were white. That is to say, time and time again in Europe swans were only white therefore it was inferred that all swans were white. But with the discovery of Australia, a black swan was discovered and the theory-thought-to-be-law that swans were white was proved wrong in a single instance.
This ties into the fact we often face low-probability events (like encountering black swan when none had previously existed) with high-impact outcomes in the world we live in, particularly in economics. Traditional statistics cannot forecast such events because it operates the same way the Europeans did with the swans - made an inference based on incomplete data.
Great video, enjoy.
The title Black Swan refers to before the discovery of Australia, all swans were white. That is to say, time and time again in Europe swans were only white therefore it was inferred that all swans were white. But with the discovery of Australia, a black swan was discovered and the theory-thought-to-be-law that swans were white was proved wrong in a single instance.
This ties into the fact we often face low-probability events (like encountering black swan when none had previously existed) with high-impact outcomes in the world we live in, particularly in economics. Traditional statistics cannot forecast such events because it operates the same way the Europeans did with the swans - made an inference based on incomplete data.
Great video, enjoy.
Friday, August 21, 2009
The Commanding Heights
The Commanding Heights is a PBS documentary, broken into 3 two-hour parts. It is an excellent and thorough look at the various economic theories and their role in shaping the world economy over the last century.
The Commanding Heights Part One: The Battle of Ideas
"A global economy, energized by technological change and unprecedented flows of people and money, collapses in the wake of a terrorist attack .... The year is 1914. Worldwide war results, exhausting the resources of the great powers and convincing many that the economic system itself is to blame. From the ashes of the catastrophe, an intellectual and political struggle ignites between the powers of government and the forces of the marketplace, each determined to reinvent the world's economic order. Two individuals emerge whose ideas, shaped by very different experiences, will inform this debate and carry it forward. One is a brilliant, unconventional Englishman named John Maynard Keynes. The other is an outspoken émigré from ravaged Austria, Friedrich von Hayek. But a worldwide depression holds the capitalist nations in its grip. In opposition to both Keynes and Hayek stand not only Hitler's Third Reich but Stalin's Soviet Union, schooled in the communist ideologies of Marx and Lenin and bent on obliterating the capitalist system altogether. For more than half a century the battle of ideas will rage. From the totalitarian socialist systems to the fascist states, from the independent nations of the developing world to the mixed economies of Europe and the regulated capitalism of the United States, government planning will gradually take over the commanding heights. But in the 1970s, with Keynesian theory at its height and communism fully entrenched, economic stagnation sets in on all sides. When a British grocer's daughter and a former Hollywood actor become heads of state, they join forces around the ideas of Hayek, and new political and economic policies begin to transform the world."
Commanding Heights Part Two: The Agony of Reform
"As the 1980s begin and the Cold War grinds on, the existing world order appears firmly in place. Yet beneath the surface powerful currents are carving away at the economic foundations. Western democracies still struggle with deficits and inflation, while communism hides the failure of its command economy behind a facade of military might. In Latin America populist dictators strive to thwart foreign economic exploitation, piling up debt and igniting hyperinflation in the process. In India and Africa bureaucracies established to end poverty through scientific planning spawn black markets and corruption and stifle enterprise. Worldwide, the strategies of government planning are failing to produce their intended results. From Bolivia and Peru to Poland and Russia, the free-market policies of Thatcher and Reagan are looked to as a possible blueprint for escape. One by one, economies in crisis adopt "shock therapy" -- a rapid conversion to free-market capitalism. As the command economies totter and collapse, privatization transfers economic power back into entrepreneurial hands, and whole societies go through wrenching change. For some the demands and opportunities of the market provide a longed for liberation. Others, lacking the means to adapt, see their security and livelihood swept away. In this new capitalist revolution enlightened enterprise and cynical exploitation thrive alike. The sum total of global wealth expands, but its unequal distribution increases, too, and economic regeneration exacts a high human price."
Commanding Heights Part Three: The New Rules of the Game
"With communism discredited, more and more nations harness their fortunes to the global free-market. China, Southeast Asia, India, Eastern Europe, and Latin America all compete to attract the developed world's investment capital, and tariff barriers fall. In the United States Republican and Democratic administrations both embrace unfettered globalization over the objections of organized labor. But as new technology and ideas drive profound economic change, unforeseen events unfold. A Mexican economic meltdown sends the Clinton administration scrambling. Internet-linked financial markets, unrestricted capital flows, and floating currencies drive levels of speculative investment that dwarf trade in actual goods and services. Fueled by electronic capital and a global workforce ready to adapt, entrepreneurs create multinational corporations with valuations greater than entire national economies. When huge pension funds go hunting higher returns in emerging markets, enterprise flourishes where poverty once ruled, but risk grows, too. In Thailand the huge reservoir of available capital proves first a blessing, then a curse. Soon all Asia is engulfed in an economic crisis, and financial contagion spreads throughout the world, until Wall Street itself is threatened. A single global market is now the central economic reality. As the force of its effects is felt, popular unease grows. Is the system just too complex to be controlled, or is it an insiders' game played at outsiders' expense? New centers of opposition to globalization form and the debate turns violent over who will rewrite the rules. Yet prosperity continues to spread with the expansion of trade, even as the gulf widens further between rich and poor. Imbalances too dangerous for the system to ignore now drive its stakeholders to devise new means to include the dispossessed lest, once again, terrorism and war destroy the stability of a deeply interconnected world."
The Commanding Heights Part One: The Battle of Ideas
"A global economy, energized by technological change and unprecedented flows of people and money, collapses in the wake of a terrorist attack .... The year is 1914. Worldwide war results, exhausting the resources of the great powers and convincing many that the economic system itself is to blame. From the ashes of the catastrophe, an intellectual and political struggle ignites between the powers of government and the forces of the marketplace, each determined to reinvent the world's economic order. Two individuals emerge whose ideas, shaped by very different experiences, will inform this debate and carry it forward. One is a brilliant, unconventional Englishman named John Maynard Keynes. The other is an outspoken émigré from ravaged Austria, Friedrich von Hayek. But a worldwide depression holds the capitalist nations in its grip. In opposition to both Keynes and Hayek stand not only Hitler's Third Reich but Stalin's Soviet Union, schooled in the communist ideologies of Marx and Lenin and bent on obliterating the capitalist system altogether. For more than half a century the battle of ideas will rage. From the totalitarian socialist systems to the fascist states, from the independent nations of the developing world to the mixed economies of Europe and the regulated capitalism of the United States, government planning will gradually take over the commanding heights. But in the 1970s, with Keynesian theory at its height and communism fully entrenched, economic stagnation sets in on all sides. When a British grocer's daughter and a former Hollywood actor become heads of state, they join forces around the ideas of Hayek, and new political and economic policies begin to transform the world."
Commanding Heights Part Two: The Agony of Reform
"As the 1980s begin and the Cold War grinds on, the existing world order appears firmly in place. Yet beneath the surface powerful currents are carving away at the economic foundations. Western democracies still struggle with deficits and inflation, while communism hides the failure of its command economy behind a facade of military might. In Latin America populist dictators strive to thwart foreign economic exploitation, piling up debt and igniting hyperinflation in the process. In India and Africa bureaucracies established to end poverty through scientific planning spawn black markets and corruption and stifle enterprise. Worldwide, the strategies of government planning are failing to produce their intended results. From Bolivia and Peru to Poland and Russia, the free-market policies of Thatcher and Reagan are looked to as a possible blueprint for escape. One by one, economies in crisis adopt "shock therapy" -- a rapid conversion to free-market capitalism. As the command economies totter and collapse, privatization transfers economic power back into entrepreneurial hands, and whole societies go through wrenching change. For some the demands and opportunities of the market provide a longed for liberation. Others, lacking the means to adapt, see their security and livelihood swept away. In this new capitalist revolution enlightened enterprise and cynical exploitation thrive alike. The sum total of global wealth expands, but its unequal distribution increases, too, and economic regeneration exacts a high human price."
Commanding Heights Part Three: The New Rules of the Game
"With communism discredited, more and more nations harness their fortunes to the global free-market. China, Southeast Asia, India, Eastern Europe, and Latin America all compete to attract the developed world's investment capital, and tariff barriers fall. In the United States Republican and Democratic administrations both embrace unfettered globalization over the objections of organized labor. But as new technology and ideas drive profound economic change, unforeseen events unfold. A Mexican economic meltdown sends the Clinton administration scrambling. Internet-linked financial markets, unrestricted capital flows, and floating currencies drive levels of speculative investment that dwarf trade in actual goods and services. Fueled by electronic capital and a global workforce ready to adapt, entrepreneurs create multinational corporations with valuations greater than entire national economies. When huge pension funds go hunting higher returns in emerging markets, enterprise flourishes where poverty once ruled, but risk grows, too. In Thailand the huge reservoir of available capital proves first a blessing, then a curse. Soon all Asia is engulfed in an economic crisis, and financial contagion spreads throughout the world, until Wall Street itself is threatened. A single global market is now the central economic reality. As the force of its effects is felt, popular unease grows. Is the system just too complex to be controlled, or is it an insiders' game played at outsiders' expense? New centers of opposition to globalization form and the debate turns violent over who will rewrite the rules. Yet prosperity continues to spread with the expansion of trade, even as the gulf widens further between rich and poor. Imbalances too dangerous for the system to ignore now drive its stakeholders to devise new means to include the dispossessed lest, once again, terrorism and war destroy the stability of a deeply interconnected world."
Saturday, July 4, 2009
Stop Spending Our Future - The Crisis
This 2+ min video outlines and gives historical context to the recent, on-going and future government spending. Although informative, it strikes an alarmist and blaming tone (in my opinion it's justified but blame doesn't solve problems). I find the numbers alone are frightening enough: I think there is no need for trying to induce panic in the viewer with mood music and a symbolic diver.
Agenda: showcase the scale of government spending, get viewer to question the government spending
Thursday, July 2, 2009
A Crude Awakening
A Crude Awakening is a 1 hour 22 min documentary all about oil: its uses, our dependence, the implications of peak oil, and the consequences of a petro system. It is very high-quality and well done, with a nice soundtrack of Philip Glass. It is relatively bias-free, as in it doesn't demonize any one group; I found it more informative and education-orientation than persuasive and action-oriented. It is a great, easy-to-watch, powerful documentary that I highly recommend.
Agenda: explore our socio-economic integration with petroleum, explore the topic of peak oil and its possible consequences on the world, review current alternatives to oil.
Monday, June 15, 2009
The Money Masters
The Money Masters is a 3.5 hour documentary detailing the history of the US monetary system. It is long but I consider it essential background information for directing our future course as a nation.
Yes, it's a bit dry and slow; the narrator likes to shake his pen at you, and there are plenty of hard cuts to countless different locations (hard cuts bad, change of scenery good). The film was made from 1996 and the production quality is low.
Yet, as the film gets going, the story of monetary history takes on engaging and thought-provoking qualities. It is obviously thoroughly researched and the quotes are always pointed, relevant, and supportive of the claims he makes.
He goes into detail on the Federal Reserve system, central banking, fractional reserve banking, fiat money, debt-based money, silver and gold, and the gold standard. He changed me from pro-gold standard to anti-gold standard with a simple argument:
The aim of the gold standard is to distribute control of wealth and create an inflation proof currency. However, (as of 1996) central banks of the world controlled 2/3rds of the gold. A return to a gold standard therefore would not decentralize that wealth and with that, inflation would not be affected. For further elaboration, just watch the video.
Agenda: showcase the evils of central banking, eliminate fractional reserve banking, eliminate of the Fed, move to a government issued and controlled fiat money (non-debt-based) similar to Lincoln's greenbacks
Yes, it's a bit dry and slow; the narrator likes to shake his pen at you, and there are plenty of hard cuts to countless different locations (hard cuts bad, change of scenery good). The film was made from 1996 and the production quality is low.
Yet, as the film gets going, the story of monetary history takes on engaging and thought-provoking qualities. It is obviously thoroughly researched and the quotes are always pointed, relevant, and supportive of the claims he makes.
He goes into detail on the Federal Reserve system, central banking, fractional reserve banking, fiat money, debt-based money, silver and gold, and the gold standard. He changed me from pro-gold standard to anti-gold standard with a simple argument:
The aim of the gold standard is to distribute control of wealth and create an inflation proof currency. However, (as of 1996) central banks of the world controlled 2/3rds of the gold. A return to a gold standard therefore would not decentralize that wealth and with that, inflation would not be affected. For further elaboration, just watch the video.
Agenda: showcase the evils of central banking, eliminate fractional reserve banking, eliminate of the Fed, move to a government issued and controlled fiat money (non-debt-based) similar to Lincoln's greenbacks
Sunday, June 14, 2009
Money as Debt
This 50 minute video describes simply, but also thoroughly, how banking works today and how banking came to be that way. It covers fractional reserve banking, debt-based money, gold, etc.
However, I strongly dislike the cheesy clip art style animations and the obviously over-the-top characterizations of bankers and government (and everyone else frankly). Also, he uses some spurious or questionable quotes (like the Woodrow Wilson one). Yet, a great deal of powerful information lies beneath that veneer of heavy-handed bias. Use your head and don't throw the baby out with the bath water.
I still heartily recommend watching it.
Agenda: bankers are evil, elimination of debt-based money (debt to private banks), banking as non-profit government outfit that makes interest-free loans, government created and managed value-based money (money printed by gov't for public works that promote economic growth: roads, bridges, harbors)
(There is about 15 secs of black video before the it actually begins. Just wait it out or skip it.)
I know there is a revised edition of this video on DVD which I believe addresses some the issues I have with this video. I also know there is a sequel; I am in the process of finding both.
However, I strongly dislike the cheesy clip art style animations and the obviously over-the-top characterizations of bankers and government (and everyone else frankly). Also, he uses some spurious or questionable quotes (like the Woodrow Wilson one). Yet, a great deal of powerful information lies beneath that veneer of heavy-handed bias. Use your head and don't throw the baby out with the bath water.
I still heartily recommend watching it.
Agenda: bankers are evil, elimination of debt-based money (debt to private banks), banking as non-profit government outfit that makes interest-free loans, government created and managed value-based money (money printed by gov't for public works that promote economic growth: roads, bridges, harbors)
(There is about 15 secs of black video before the it actually begins. Just wait it out or skip it.)
I know there is a revised edition of this video on DVD which I believe addresses some the issues I have with this video. I also know there is a sequel; I am in the process of finding both.
A Brief History of US Money
This 13 minute run-down of the history of the US dollar is an excellent and concise summary. It is chocked full of facts and careful examinations of the variants of US money. He makes his position quite clear at the end, which some may not agree with, but I'm glad he is so overt with it. He does a great job of piecing together history with the value of the dollar to draw out the true power of the dollar value versus time graph.
Agenda: abolish the Fed, return to a gold/silver standard, return to coins
Part 1:
Part 2:
Agenda: abolish the Fed, return to a gold/silver standard, return to coins
Part 1:
Part 2:
Chris Martenson's Crash Course
As my first real post, I unhesitatingly recommend the Crash Course by Chris Martenson. I cannot stress enough the importance of this video seminar, freely available at
http://www.chrismartenson.com/crashcourse
This 20 chapter video seminar is the most comprehensive, far-reaching, thorough, even-handed, and level-headed look at the economy, energy, the environment, and the future. All this is accomplished in an educational, apolitical manner. Chris presents facts and graphs, not to shock and awe you, but to educate. He teases so much meaning out of each graph, it has changed my views of the graphs from "dry data" to "profound conclusions based in fact"
You must see this video seminar.
Be warned though, the first quarter of the seminar is slow and can take some effort to slog through. This is by far the weakest part of the entire course but it is not representative of the rest of the course.
Also, the overall length is about 3.5 hours which seems daunting at first but you will be compelled to finish once you get into the meat of presentation. (The previous statement is me speaking from witnessing people so drawn in by the series that they drop whatever plans they originally had just so they can finish the course.) In other words, the length becomes perfectly justifiable once you understand the breadth and depth of the seminar.
Watch the Crash Course
The chapters titles will give you a good idea what the course is all about:
http://www.chrismartenson.com/crashcourse
This 20 chapter video seminar is the most comprehensive, far-reaching, thorough, even-handed, and level-headed look at the economy, energy, the environment, and the future. All this is accomplished in an educational, apolitical manner. Chris presents facts and graphs, not to shock and awe you, but to educate. He teases so much meaning out of each graph, it has changed my views of the graphs from "dry data" to "profound conclusions based in fact"
You must see this video seminar.
Be warned though, the first quarter of the seminar is slow and can take some effort to slog through. This is by far the weakest part of the entire course but it is not representative of the rest of the course.
Also, the overall length is about 3.5 hours which seems daunting at first but you will be compelled to finish once you get into the meat of presentation. (The previous statement is me speaking from witnessing people so drawn in by the series that they drop whatever plans they originally had just so they can finish the course.) In other words, the length becomes perfectly justifiable once you understand the breadth and depth of the seminar.
Watch the Crash Course
The chapters titles will give you a good idea what the course is all about:
- Chapter 1: Three Beliefs (Time: 1:46)
- Chapter 2: The Three "E"s (Time: 1:38)
- Chapter 3: Exponential Growth (Time: 6:20)
- Chapter 4: Compounding is the Problem (Time: 3:06)
- Chapter 5: Growth vs. Prosperity (Time: 3:40)
- Chapter 6: What is Money? (Time: 5:55)
- Chapter 7: Money Creation (Time: 4:19)
- Chapter 8: The Fed - Money Creation (Time: 7:13)
- Chapter 9: A Brief History of US Money (Time: 7:14)
- Chapter 10: Inflation (Time: 11:48)
- Chapter 11: How Much Is A Trillion? (Time: 3:28)
- Chapter 12: Debt (Time: 12:32)
- Chapter 13: A National Failure To Save (Time: 12:06)
- Chapter 14: Assets & Demographics (Time: 13:41)
- Chapter 15: Bubbles (Time: 14:10)
- Chapter 16: Fuzzy Numbers (Time: 15:52)
- Chapter 17: PART A: Peak Oil (Time: 17:52)
- Chapter 17: PART B: Energy Budgeting (Time: 12:15)
- Chapter 17: PART C: Energy And The Economy (Time: 7:05)
- Chapter 18: Environmental Data (Time: 16:22)
- Chapter 19: Future Shock (Time: 8:02)
- Chapter 20: What Should I Do? (Time: 19:48)
First
The aim of this blog is to act as a repository for all things I find interesting about the economy.
Economy interesting? "No way" you may say, just as I would have said a few short weeks ago.
But I shit you not.
After just a few weeks of dicking around on the internet: watching videos and reading, I feel absolutely compelled to show the glimpses of truth I have seen to others. I cannot imagine any other course of action.
Thus, this blog will be my running bookmark list of videos to see and things to read to more quickly and conveniently sort, sift, and share what I have found on the economy.
Economy interesting? "No way" you may say, just as I would have said a few short weeks ago.
But I shit you not.
After just a few weeks of dicking around on the internet: watching videos and reading, I feel absolutely compelled to show the glimpses of truth I have seen to others. I cannot imagine any other course of action.
Thus, this blog will be my running bookmark list of videos to see and things to read to more quickly and conveniently sort, sift, and share what I have found on the economy.
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