Financial Policy the Definition of Insanity

Abandon Ship!
Abandon Ship!

The old saying goes that the definition of insanity is “doing the same thing again and again expecting different results.” There is talk now of more money needed to keep the big banks afloat. It has become apparent that Bank of America “needs” billions of dollars more (roughly $34 billion, with a B). If it didn’t work the first time, why should it now?

As we shake our heads in disbelief from that news, I should also mention the updated regarding the audacious bonuses that insurance giant AIG paid out after the government bailouts. Turns out AIG’s estimates of the bonuses paid were off by a littleby a factor of FOUR!!!

The total number is believe the be around $450 million in bonuses, given (for incredibly poor behavior) as “retention bonuses.” Seems to me their employees are not going to find jobs elsewhere, so a retention bonus is superfluous at best and deceptive at worst. That is nearly half a billion in taxpayer money given to greedy CEOs already worth more than the average American will make in their lifetime.

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Sustainable Economics Blogs

Green Blogs

Green Blogs

Here are a few new blogs I’ve found that I want to make aware to you. These blogs all deal in roughly the same area: steady state, or sustainable, economics. They show the growing undercurrent of desire for a sustainable economic that is rushing towards the surface.

  • Shift Happens – From the mission statement: “‘Shift Happens’ will inspire readers by informing them on current economic and political trends by informing the readers on the paradigm shift towards a more sustainable future.”
  • Gaian Economics – Writing to empower you to become part of the economic discussion, because “All other green campaigns become futile without tackling the economic system and its ideological defenders. “
  • No Impact Man > Sustainable Economics – No Impact Man’s sustainable economics section, he’s got lots of good posts.
  • Share the World’s Resources – “STWR advocates for essential resources such as food, water and energy to be shared internationally under the agency of the United Nations.”
  • USSEE Blog – Then United States Society for Ecological Economics blog
  • The Inspired Economist – A forum for the “New Economy” focused on the triple bottom line – people, planet and profit.
  • CASSE BlogThe Center for the Advancement of the Steady State economy is the source for steady state information online. See also their news section for more updates.

If you see something missing from the blogosphere and/or want to help spread the word on this subject – create your own blog! WordPress is what I use and it is a great, free way to blog.

Federal Reserve Transparency

The Fed is the Problem
The Fed is the Problem

The U.S. Federal Reserve is our nation’s bank, created at the beginning of the last century (big thanks to President Wilson) to centralize our banking system and stabilize our currency. It is quasi-public, having both private corporations and public agencies with controlling interest.

“The Fed,” as they call it on the street, controls our money, interest rates, “supervises” banking institutions, and has other means to inflict chaos into our economy. Despite being a blend of private and public the Fed keeps its business behind locked doors. It is hard for a government by the people, for the people to have a functioning banking system if they have no control or oversight of it. We should do something about it!

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Say No to Bonuses

AIG paid more than 20 times the average US yearly income to executives in bonuses.

We own a substantial amount of companies that were on the brink of going under not to long ago. Now they are trying to defend what they call “retaining” bonuses: extra money to keep on executives. These are not the average “good-job, here’s a grand” bonuses that most professionals might be accustom. These are more than $1,000,000 bonuses. That is 20 times the average yearly income in the US – in a yearly bonus! 52 people who received these payouts are no longer with the company.

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Accountability in Media?

Jon Cramer on Daily Show
Jon Cramer on Daily Show

The financial crisis is largely attributed to the collapse of the housing market and reckless leveraging of bad securities. Recently Jon Stewart began a campaign on The Daily Show to expose the effects of our corporate-owned media’s influence on this crisis, namely CNN (no link to them for a reason).

Our media should be a protected, locally-sourced, community-driven industry. It should not be corporate owned, money-driven. Radio and TV were once a community service, now they are a community annoyance.

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The Great Disruption

The Great Depression

A fellow citizen sent me an article; one that I feel everyone should read. New York Times columnist and writer of The Lexus and the Olive Tree, Thomas L. Friedman (not to be confused with Benjamin Friedman) recently wrote about our dire times and what Paul Gilding calls “The Great Disruption” – “when both Mother Nature and Father Greed have hit the wall at once.”

As Friedman notes in his article “The Inflection Is Near?“:

“We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese …

We can’t do this anymore.”

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Why the Stimulus Packages Will NOT Work

Recently congress passed the nearly $800 billion “stimulus” package (passed with strong republican opposition). For more information on the package itself, you can even go to the website devoted to it to learn more. There are many mixed views on it’s ability to help, harm, or do nothing to our economy. I confidently believe that it will likely be one of the latter two – harm or do nothing.

We may see a short upswing, perhaps even a temporary rebound, but it is likely to be years from now. We have yet to really see the impact of 3.6 million lost jobs until each one of those people run out of unemployment benefits – that’s when the proverbial shit will hit the fan.

However, this stimulus package is no better than using a bucket on a barn fire – any relief will be an illusion and not a fix to the real problem. The system doesn’t work, so the stimulus will not work. Consider the following…

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The New New Deal

When Franklin Roosevelt initiated the first “New Deal” he pushed through reforms in the banking laws. Today we are faced with one of the most dire financial crises since the depression. Why? Because our system is broken. Most of us know this, but many feel as though it is still the only or best option we have for an socioeconomic model.

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