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Sander's is right, Bernanke should be replaced and with someone that has some new ideas that would promote fair trade over free markets. Someone perhaps like Stiglitz, who would probably be too smart to take the job.

Summers of course was the one to petition for Stiglitz's removal from the World Bank in 2000 when Stiglitz's published research regarding the IMF's shock therapy policies actually lowered GDP and increased poverty in the countries that followed them.


Pr. Essig,

There is a story about Nikita Khrushchev. Supposedly he was giving a speech to the Central Committee, denouncing Stalin and his bloody crimes. At some point some committee members just blurts out "Where were you when all of this was going on?". Khrushchev stops and scowls, looking around at the scores of faces in the rooms and shouts "Who said that?, who said that?!". Of course no one answers. After a long, dramatic pause Khrushchev says "That's where I was."

Nikita Khrushchev was of course one of Stalin's most able and effect agents. He oversaw the arrest and execution of many Communist Party members, Red Army officers, local government officials, and just plain "suspicious" characters. His hands were hardly clean but he was hardly in a position to stop the purges had he desired to do so. He would have been purged and probably executed himself had he done so. However, once he was in power he did try to undo a lot of what Stalin had done, of course not too much so as it have any fingers pointing at him.

Mr. Bernanke is our little economic Nikita Khrushchev. Under the old regime he went with the flow, deregulation and laissez-faire capitalism were the party's line and he toed it. Had he opposed the Fed's hands off strategy he would have been booted out. Now that the winds are blowing in a different direction and the disasters of the old regime are apparent, Mr. Bernake would like to be seen as the technocrat above party and politics who can lead us forward from the nightmare of the past. However, like Mr. Khurshchev, his own complicity in the old regime limits his ability to lead the way for the new regime.

He should indeed go so there can be a real house cleaning.


Bernanke is an economic terrorist and should be jailed as any terrorist....


Good comment. Remember how Brooksley Born was marginalized by Greenspan at the free market alter. Bernanke has become as cocky as Greenspan.


I have 2 things to say:
- All the things you mentioned above are correct.
- Ben will be selected again.


Let's remember that Greenspan put the markets into free fall at the point where unemployment went below 4%. Maintaining unemployment at about 6% (suppressing wage growth) while growing the economy is the game plan. High levels of immigration is the primary means of optimizing that plan--working Americans be damned.
Marx's prediction of the end game, a small magisterial oligarchy and a huge mass of working poor, is coming true.

Laurie, you use the term neo-liberal capitalism quite frequently and I wonder if you would give us your working definition of it and offer a summary of its five or so most salient features. Thank you.

Laurie Essig

Perhaps I'll write a longer piece in response, but until then, first and foremost I would recommend reading an actual expert- like David Harvey's A Short History of Neoliberalism or Naomi Klein's Shock Doctrine. But let's say that in terms of economics, Neoliberalism appeared as a response to Keynesian economic policies. It is the idea that the state should not regulate or limit the activity of the market- so a complete deregulation of banking, communications, but also food safety, health care, etc. Neoliberalism relies on certain older Liberal philosophical traditions that humans do best when left alone to fend for themselves within the market- and so the role of the state is to allow for the "free market." But in fact what Neoliberal Chicago School economics do is create a sort of welfare state for the benefit of corporations (see everything having to do with the bank bailouts) and destroy any sort of state services for ordinary people. The economics was backed up by the Neoconservative political revolution that repackaged the older LIberal philosophical ideas of the "rugged individual" and "personal responsibility" and "pulling yourself by your own bootstraps" ignoring the fact that we "individuals" were increasingly forced to work for the corporations, the only "citizens" that mattered- transferring wealth from 80% of Americans who have become poorer since 1980 and transferring to the top 20%- especially the top 2-3%.


I agree.

Before I copy-paste the gist of what Mary
Anastasia O'Grady wrote 9/29/2008, let me
just say this one urgent message:

absent a meaningful public option, the health insurance cartel will not be allowed to impose exclusions but will understand they're still a cartel and will use the former and latter for the reason and the power to raise premiums as much as possible, deliberately as painfully (and greedily) as possible so as to blame same on the reformers)

The disengenuous talk about buying cross state lines is meaningless b.s. The state divisions are simply a facilitation, currently, for slicing and dicing for the purpose of singling out groups the insurers' computers inform as to being likeliest to fail meeting medical service ratio-based profit levels. Those who don't measure up to being sufficiently free from disease receive frozen account letters: welcome to stay, but, essentially, you're now in a premium death spiral.

Here's what Mary Anasatasia O'Grady wrote:

What We Can Learn From Chile's Financial Crisis

"...The main problem with buying distressed and hard-to-value assets from a bank is that, if the bank is to attract new capital, it is necessary for the government to overpay. And while the value of those assets may eventually move higher, the taxpayer is exposed to great risk, risk that really belongs to the bank and its shareholders. Such a huge federal expenditure also raises the risk of inflation.
A further problem is that the Treasury is itself engaging in hedge-fund speculation. This expands the role of the state in the economy at a time when downsizing that role is more important than ever....

Chile used such an instrument to recover from its 1983 banking crisis. It is true that the government intervened directly in two banks, wiping out shareholders, removing management and nationalizing the firms. Those banks were later re-privatized in a sale that gave tax incentives to encourage Chileans to participate in the offering.

The many other banks that were in trouble were handled differently. For those, the government provided loans that were secured by bank assets, with an agreement that the banks would later repurchase those assets.

These "repos" had conditions attached, including a provision that the shareholders could not take profits out of the company until the loan was repaid. This meant that shareholders were asked to give something in return for getting rescued by taxpayers; and it gave the bank a strong incentive to get back on its feet and return the money.

Another advantage of this model over the Paulson plan is that although the Chilean government took the bank assets as collateral against the loan, it did not adopt responsibility for managing the assets. That role stayed with the bank.

It was important that the government was a subordinated creditor; otherwise it would have been difficult to bring new capital into the bank. But if the U.S. were to use secured loans, it might not be necessary to make the loans at subsidized rates, as Chile did. Chile was in a depression. In the U.S. case, a penalty rate might be preferred in order to ensure that the banks will use the facility only as a last resort...."


Oh, there's one more thing.




Thanks, Laurie. That jibes with the open-borders policy that began with Bill Clinton's gift of a slave class of illegal immigrants to pluck Bill Tyson's chickens and buff Sam Walton's floors. Bush the First, to great effect, actually prosecuted illegal *employers* at the rate of 1100 a year. By Bush the Latter prosecution dropped to a rate of 10 a year and some 8 million illegal jobs had become grist for the mill.
I know talking about this is difficult for people who don't want to appear bigoted (or who don't want to face the reality of class war happening right in front of their faces, or give up the $2 Big Macs that they are increasingly unable to afford) and I know I rant but it is very difficult to find a policy that better illustrates neo-liberalism than our open-borders policy.
And, yes, of course, it is sold with the myths you mention, the foremost being the belief in the myth of the American Dream, a nightmare for blacks, Native peoples, immigrants, particularly illegal ones-- everyone who has had to suffer through the Crucible. And unborn generations, mute species and the peoples of the vast lands we decimate for Big Macs and patio furniture.



While I'm still reading about this stuff, you hit the nail on the head with neo-liberalism. Unfortunately Clinton's neo-liberals are alive and well in the White House and if we do not reform the system, break up too big to fail we are headed for another fall. All the shoes have not dropped and debtor nations in eastern Europe are the next to fail. We have a systemic problem with our economic policies and the fact that no one is addressing it or even mentioning it is suicide.


In Britain Lloyds, Royal Bank of Scotland and Northern Rock will be broken up.

Just cartels wouldn't seem to afford the U.S. the innovative, competitive growth engine
required to repair the damage incurred by the preceding sell-out U.S. Administration.

The banking sector of course parallels the health insurance cartel.

As offered by myself elsewhere in TrueSlant,



is currently unaware of how
Mr. Obama’s health reform law improves
quality relative to cost in the manner described
below, with the Cleveland Clinic and Duke Medical Center cited as models.
As to whether turning the health insurance
cartel into a utility though with the same sort of offer you can’t refuse as compared with the present practice is desirable, I’m noncomittal.

Simply repealing the cartel’s immunity from the antitrust laws might be preferable, if combined then with simply buying indigents coverage. As to exchanges and medical service (cost) ratios, it will matter as to who (can Jerry Brown do it, whether as Attorney General or Governor?) can police and enforce same.


The Hospital That Could Cure Health Care
Cleveland Clinic is both highly effective and fiercely efficient.

So why are its methods so rare?

by Jerry Adler and Jeneen Interlandi

Newseek, Dec. 7, 2009 Publication pages 52-56

“…in 2006 Cleveland Clinic abandoned the traditional departments in favor of 25 “institutes” organized by disease or organ system. This works well for patients, who don’t care whether their back pain is cured by a rheumatologist, a neurologist, or an orthopedic surgeon. But, says Regina Herzlinger, an expert in health-care economics at Harvard Business School, it runs afoul of the dominant fee-for-service system of medical billing, which discourages cooperation across fields. When Duke University Medical Center set up a disease-management system for congestive heart failure, coordinating the efforts of cardiologists, primary-care doctors, pharmacists, and nurse practitioners, it drove down the cost of treatment by 40 percent in a single year, while reducing readmissions and improving outcomes.

a visit to Cleveland Clinic makes it hard to avoid the conclusion that if you’re looking for “waste” in the health-care system—defined as expenses that do not directly contribute to medical outcomes—a good place to look is the nation’s cobbled-together system of competing private insurers. “

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