Fascinating article on the Motley Fool website about the pernicious nature of Credit Default Swaps. Here is a quote from
Charles Thomas Munger the Vice-Chairman of
Berkshire Hathaway Corporation, the diversified investment corporation chaired by investor
Warren Buffett.
"If I were in charge, I'd take away everything from banks that wasn't boring. Completely shut down [credit default swaps] 100%. What's the harm in this? The world worked just fine without them. We don't need an economy that resembles a vast poker tournament."
On a tangential note, it behooves us to make sure the
free market zealots become aware of the liberal economists and liberal economic experts who were right all along. Those Liberal economists who predicted this free market clusterfuck years ago.
Maybe some sane free market zealots will see the light. The others will have to go to their grave believing in the fairytale of Reagan’s great unbridled and deregulated markets fantasy. That’s their story, and they’re sticking with it!
The Liberal Economists Free Market Zealots Ignored:
Joeseph Stiglitz, Naomi Klein.
http://www.newsweek.com/id/207390/page/1
Why Washington Ignores an Economic Prophet
Joseph Stiglitz predicted the global financial meltdown. So why can't he get any respect here at home?
Stiglitz has warned for years that pro-market zeal would cause a global financial meltdown very much like the one that gripped the world last year.
Malaysian economist Andrew Sheng says, "I think Stiglitz is the nearest thing there is to Keynes in this crisis."
To his critics—and there are many—Stiglitz is a self-aggrandizing rock-thrower. Even some of his intellectual allies note that while Stiglitz is often right on the substance of issues, he tends to leap to the conclusion that government can make things better. Harvard economist Rogoff has called him intolerably arrogant—though he added that Stiglitz is a "towering genius.
Stiglitz's defenders say one possible explanation for his outsider status in Washington is his ongoing rivalry with Summers. While they are both devotees of Keynes, Summers often has supported deregulation of financial markets—or at least he did before last year—while Stiglitz has made a career of mistrusting markets. Since the early '90s, when Summers was a senior Treasury official and Stiglitz was on the Council of Economic Advisers, the two have engaged in fierce policy debates
Despite the Obama team's occasional efforts to reach out to him, Stiglitz remains deeply unhappy about the administration's approach to the financial crisis. Rather than breaking up or restructuring the big banks that failed, "the Obama administration has actually expanded the notion of 'too big to fail,' " he says. In a veiled poke at his dubious standing in Washington, Stiglitz adds: "In Britain there is a more open discussion of these issues." A senior White House official, responding to this critique, says that the Obama administration is most often criticized these days for intervening too much in the economy, not too little.
In other respects, Obama is embracing some of Stiglitz's views, suggests Peter Orszag, director of the Office of Management and Budget—and a former Stiglitz protégé (he worked for Stiglitz during the Clinton administration). One example: Obama's new idea for reforming health care by creating a government-run program to compete with private-sector insurers. "There is an intellectual paradigm in health care that says you should move to purely private markets," says Orszag. "Joe's perspective would suggest major difficulties [with that]. That led to the thought that we need a mix: there is an important government role."
Excerpted
A term like capitalism is incredibly slippery, because there's such a range of different kinds of market economies. Essentially, what we've been debating over—certainly since the Great Depression—is what percentage of a society should be left in the hands of a deregulated market system. And absolutely there are people that are at the far other end of the spectrum that want to communalize all property and abolish private property, but in general the debate is not between capitalism and not capitalism, it's between what parts of the economy are not suitable to being decided by the profit motive"
— Naomi Klein
Obama f*cked up too. Smooth move, shutting out liberal economists who predicted the shit storm that would hit as a result of unbridled and deregulated capitalism. Neoliberal free traders Summers and Giethner? Lame. Who’d thunk Obama wasn’t the radical muslim communist that Sarah Palin made him out to be?
