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Thread summary:

Debt: oligarchs, credit, real estate, insurance, asset.

 
Old 03-01-2009, 04:14 PM
 
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This deserves a thread of its own. I am now seeing more and more Oligarchy sightings in various media. Please post such sightings here.


YouTube - Six Minutes with the Renegade Economist - Michael Hudson Special...
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Old 03-01-2009, 05:16 PM
 
Location: Some place very cold
5,500 posts, read 19,529,005 times
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That's a very good video. Thank you for posting it. "Oligarchy Sighting" is a little misleading though. What Michael Hudson is saying -- and what I've also been repeating over and over again in my posts in this forum -- is that the debts have to be written down, otherwise they grow exponentially and continue to suck the life out of the economy.

And there really is no other choice. You must write down debt, because the debt in this country has risen beyond the ability to pay.

I love his analogy of the FIRE (financial, insurance, and real estate) economy to a parasite that sucks the life blood out of the real economy. The life blood being the interest we continue to pay on debt.

He only mentions oligarchy at the end of the video. In essence he is saying that our government no longer serves the many (as in a democracy). Now it serves the few as in oligarchy. Actually kleptocracy which is the stage before oligarchy. All democracies eventually become oligarchies.

W.
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Old 03-05-2009, 03:17 PM
 
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 5,497,700 times
Reputation: 1691
Funny isn't it. Two posts...............only two.

Micheal Hudson actually has a solution geared to this crisis........debt forgiveness.

Now I do understand that this "forgiveness" may be distasteful to alot of folk out there. In fact it extremely distasteful to me....But let's face it......even though this would seem like a get out of jail free card for people who foolishly borrowed money..........at this point both the bank's greed to get their money and the "people's" foolish extravagances through the years have place innocent folk who didn't play the game behind the 8-ball. Actually we pretty much all are behind the 8-ball right now. Maybe some you out there are fortune enough to be wealthy enough to ride it out........maybe......for now anyways. But I doubt the major of folks can. And that going to create problems even with the FDR like programs that will be coming down the pike. Yes maybe Debt forgiveness (at least on a partial level) might actually stop our hemorrhaging or at least slow it down a bit.
As for share holders in these companies being wiped out by this forgiveness..........look at Citicorp is....what it under a buck right now per share..........I think the time of worrying about how the companies look is long past it bigger than that now. And Yeah it sucks but really in the end can you get blood from a stone (borrows that can't pay on top of probably being unemployed.) I think it's just time to take your loses and start fresh again.
As for the banks who would be getting screwed on promises made to them to dumb borrowers. Well I don't really end most people have much sympathy toward them. I mean come on....bank with all there resources should have seen this coming along time before it happen...Actually I put dollar to donuts they did see it....so...fook'em.
As for the moral hazard issue. Guys it gotten to the point to where we are damned if we do and damned if we don't. I really like if a close family member fook's up and jeopardizes the family as a whole. You know you have to do something about the issue and that something maybe against you personal vaules.......but you know if you didn't do it..........The idiot family member that cause the whole problem will take everybody else down with them.
It sucks, It wrong, But........It is what it is.

Now here's the tricky part how do we Force the banks to write down the bad debt? Will it be by political means? Or will come to violence to settle this issue? I don't know. I leave that for another CDer to answer for now.
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Old 03-05-2009, 03:43 PM
 
Location: Chino, CA
1,458 posts, read 2,900,278 times
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Quote:
Originally Posted by baystater View Post
Funny isn't it. Two posts...............only two.

Micheal Hudson actually has a solution geared to this crisis........debt forgiveness.

Now I do understand that this "forgiveness" may be distasteful to alot of folk out there. In fact it extremely distasteful to me....But let's face it......even though this would seem like a get out of jail free card for people who foolishly borrowed money..........at this point both the bank's greed to get their money and the "people's" foolish extravagances through the years have place innocent folk who didn't play the game behind the 8-ball. Actually we pretty much all are behind the 8-ball right now. Maybe some you out there are fortune enough to be wealthy enough to ride it out........maybe......for now anyways. But I doubt the major of folks can. And that going to create problems even with the FDR like programs that will be coming down the pike. Yes maybe Debt forgiveness (at least on a partial level) might actually stop our hemorrhaging or at least slow it down a bit.
As for share holders in these companies being wiped out by this forgiveness..........look at Citicorp is....what it under a buck right now per share..........I think the time of worrying about how the companies look is long past it bigger than that now. And Yeah it sucks but really in the end can you get blood from a stone (borrows that can't pay on top of probably being unemployed.) I think it's just time to take your loses and start fresh again.
As for the banks who would be getting screwed on promises made to them to dumb borrowers. Well I don't really end most people have much sympathy toward them. I mean come on....bank with all there resources should have seen this coming along time before it happen...Actually I put dollar to donuts they did see it....so...fook'em.
As for the moral hazard issue. Guys it gotten to the point to where we are damned if we do and damned if we don't. I really like if a close family member fook's up and jeopardizes the family as a whole. You know you have to do something about the issue and that something maybe against you personal vaules.......but you know if you didn't do it..........The idiot family member that cause the whole problem will take everybody else down with them.
It sucks, It wrong, But........It is what it is.

Now here's the tricky part how do we Force the banks to write down the bad debt? Will it be by political means? Or will come to violence to settle this issue? I don't know. I leave that for another CDer to answer for now.
When you force banks to "forgive" debt, your still reducing the money supply at the Full expense of the people who own the debt (everybody else). So, how is that fair that debt be forcibly "forgiven"?

Instead, how the government is addressing the problem... is by taxing the rich to create "jobs"... so then people can pay off their debt. So, instead of having debts magically "forgiven"... people would have to work, learn, and excel to pay down their debt. Taxation is more targeted than having banks forced to forgive debt. Because if banks get to decide, the loss from the forgiven debts are going to be drawn from the populaces retirement accounts. With taxation, it'll target a more specific wealth group.

Ultimately, somebody is going to be dinked with the money supply shrinking. With taxation, the wealthy gets hit with "higher" taxes, but at least they get that new road, cleaner air, more efficient electricity, etc. instead of the debtor just walking away scotch free.

-chuck22b
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Old 03-05-2009, 04:25 PM
 
3,720 posts, read 4,443,873 times
Reputation: 4741
Quote:
Originally Posted by Woof Woof Woof! View Post
That's a very good video. Thank you for posting it. "Oligarchy Sighting" is a little misleading though. What Michael Hudson is saying -- and what I've also been repeating over and over again in my posts in this forum -- is that the debts have to be written down, otherwise they grow exponentially and continue to suck the life out of the economy.

And there really is no other choice. You must write down debt, because the debt in this country has risen beyond the ability to pay.

I love his analogy of the FIRE (financial, insurance, and real estate) economy to a parasite that sucks the life blood out of the real economy. The life blood being the interest we continue to pay on debt.

He only mentions oligarchy at the end of the video. In essence he is saying that our government no longer serves the many (as in a democracy). Now it serves the few as in oligarchy. Actually kleptocracy which is the stage before oligarchy. All democracies eventually become oligarchies.

W.
I thought we were a Republic.
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Old 03-05-2009, 04:27 PM
 
3,720 posts, read 4,443,873 times
Reputation: 4741
If debt is going to be forgiven, it should come with a 1099 and the loss of the asset.
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Old 03-06-2009, 08:31 AM
 
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 5,497,700 times
Reputation: 1691
Quote:
Originally Posted by chuck22b View Post
When you force banks to "forgive" debt, your still reducing the money supply at the Full expense of the people who own the debt (everybody else). So, how is that fair that debt be forcibly "forgiven"?

Instead, how the government is addressing the problem... is by taxing the rich to create "jobs"... so then people can pay off their debt. So, instead of having debts magically "forgiven"... people would have to work, learn, and excel to pay down their debt. Taxation is more targeted than having banks forced to forgive debt. Because if banks get to decide, the loss from the forgiven debts are going to be drawn from the populaces retirement accounts. With taxation, it'll target a more specific wealth group.

Ultimately, somebody is going to be dinked with the money supply shrinking. With taxation, the wealthy gets hit with "higher" taxes, but at least they get that new road, cleaner air, more efficient electricity, etc. instead of the debtor just walking away scotch free.

-chuck22b
Oh chuck. You know and I know this is going to be very ugly no matter how we play this. There is no "fair" in any of this. And the little guy (the poor, the middle class, and upper middle class) is going to take it in the rear and like it no matter what.
Now I understand your argument it make sense.........in a moderate recession... But I think we are will passed this point (my opinion). The housing and credit bubble has destroyed us....I don't say that lightly and it's not to be an alarmist. But from my perspective at this point and what I'm observing (on that street) and researching..this downturn is not just a downturn but a death spiral only being slowed by the amount of money being thrown at the situation. Basically it's just horrid. This tax the rich and create job is not going to work. It just doesn't got far enough and will not bridge the gap of is need to settle out this issue. Which lead me to say who are the rich anymore? Lot of "rich" folks are being wiped out at the by the financial crisis. I mean it just like the cooked books at enron. They may look good on paper but when you look at alot of people in depth you realize these people are already owned by the banks. They really don't own anything or have much of a real cash reserve. Plus on top of this a lot of these folk will be losing there jobs soon and there house of cards will fall. Honestly Chuck I don't think there's going to be enough rich people to tax by the end of this.
As to creating jobs and making people work to pay off there debts. As I said earlier you can't get blood from a stone. The people who simply can't pay there debt at this point, won't. What I mean is this. If you take all the assets worth anything from a (heavily indebted) debtee and you garnishment a persons check. What you are creating is situation where (eventually) there is not much of an incentive to work by the debtee. These folk come to realize or perceive that they will never get ahead. So why bother being industrious? Why not just instead try to latch on to government both with housing and food and perhaps work a menial job so not have you check garnished that much each week. Basically you would be creating a welfare state because there is not incentive to work. Of course if you want to bring back debtor prisions...OK...I don't think that will help much but maybe that would scare enough people to stay on the strait path.

I don't know Chuck maybe your way may work. Actually I wouldn't much mind if it did. I would like to see this country's infrastructure be rebuilt with the 21st and 22nd century demands in mind. I'd also like to see America's population learn a hard lesson in responsibility. And that you can't just have anything you want, when every you want it with out paying a price. But I think we are passed such thing at this point. In my mind wiping a lot of the slate clean allows for America (Americans) to start over again and rebuild anew. The wiping the slate clean will be very painful in the short term but to be honest I think either way the majority of the population is going to feel alot of pain either way. So why not just get it over with now....with the quick and dirty way and go on with our lives.
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Old 03-06-2009, 09:30 AM
 
Location: Londonderry, NH
41,505 posts, read 49,604,613 times
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I wouldn't mind forgiving some debt (government ownership of the mortgage and the payment turned into rent) but would be insensed if my pension disappeared.
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