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Apparently, the new Republican line on the stimulus is this:

To give the proposed economic stimulus plan some perspective, “if you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn’t have spent $1 trillion."

Part II
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Economic writers from the 16th through 20th centuries recognized that free markets required government oversight to prevent monopoly pricing and other charges levied by special privilege. By contrast, today’s neoliberal ideologues are public relations advocates for vested interests to depict a “free market” is one free of government regulation, “free” of anti-trust protection, and even of protection against fraud (as evidenced by the SEC’s refusal to move against Madoff, Enron, Citibank et al.). The neoliberal ideal of free markets is thus basically that of a bank robber or embezzler, wishing for a world without police so as to be sufficiently free to siphon off other peoples’ money without constraint.

She patronizes the grimy discount stores whose prices run even lower than Wal-Mart's, and can tick off their notable sales going back for months. "I had some oranges," she recalls with a self-deprecating smile. "A couple of months ago, they had grapes on sale." And, "If it's less than three dollars for a package of six steaks, that looks like a good deal to me." (She tries not to think too hard about the quality of a 50-cent steak.) Her staples include PB&J, canned ham salad, soup: "I'll get chicken noodle or Campbell's Chunky. There's meat in there. You can pour it over noodles and put butter on it. It's like a delicacy."

In essence, the nation's biggest employers of unskilled labor often leave workers having to feed from the public trough. In 2004, a year in which Wal-Mart reported $9.1 billion in profits, the retailer's California employees collected $86 million in public assistance, according to researchers at the University of California-Berkeley.

Police are preparing for a "summer of rage" as victims of the economic downturn take to the streets to demonstrate against financial institutions, the Guardian has learned.

Britain's most senior police officer with responsibility for public order raised the spectre of a return of the riots of the 1980s, with people who have lost their jobs, homes or savings becoming "footsoldiers" in a wave of potentially violent mass protests.

Superintendent David Hartshorn, who heads the Metropolitan police's public order branch, told the Guardian that middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.

He said that banks, particularly those that still pay large bonuses despite receiving billions in taxpayer money, had become "viable targets". So too had the headquarters of multinational companies and other financial institutions in the City which are being blamed for the financial crisis.

...the little bit of checking that has been done appears to reveal that a very large fraction of these securities contain, on the face of it, misrepresentation or fraud in the files.

So here we are: The banks are sitting on paper originally valued at 100 cents on the dollar (or even more) which is now worth 20 or 10 or 0 cents. If they sell the stuff at those prices, most of the capital they’ve put behind those assets will be erased, leaving them insolvent, technically and perhaps literally – as in, unable to cover their current liabilities. On the other hand, if they don’t sell their pieces of Big Shitpile, all their capital (including what Uncle Sam has already thrown into the till) will remain frozen in place, blocking them from doing any new lending. Without new lending, they can’t earn the profits they need to make good the losses they are sitting on. Zombies. Night of the Living Dead Banks.

The banks know this, investors know this, Geithner and Co. know this. And everybody knows that the others know. (...)

One of the things that creeps me out about the political system’s response to the crisis so far – the insolvency of the banking system in particular – are the increasingly desperate attempts to maintain a phony façade of free markets and private enterprise, in an economy now utterly dependent on the federal safety net. I totally expected that from Hank Paulson and the Cheney Administration, but is Obama’s financial team really pressed from exactly the same Wall Street mold?

It may be best not to think too much about that question. It reminds me too much of the USSR’s fetish for preserving the trappings of socialist "democracy" – a Supreme Soviet, a ministerial government, courts, etc. – even though the actual decisions were all made, behind the scenes, by the party and the Politburo. It’s not a good sign when societies routinely lie to themselves about such big, fundamental truths, which in turn suggests that toxic assets may not be the poison we most need to worry about: The rottenness and decadence of the entire system may do us in first (not exactly a new theme for me.)

In Giovanni Arrighi’s thorough account in The Long Twentieth Century, we see hegemony shifting from the city states of Genoa and Venice in the sixteenth century to Amsterdam and the Low Countries in the seventeenth before concentrating in Britain from the late eighteenth century until the United States eventually took control after 1945. There are a number of features to these transitions that Arrighi emphasizes and which are relevant to our analysis. Each shift, Arrighi notes, occurred in the wake of a strong phase of financialization (he cites with approval Braudel’s maxim that financialization announces the autumn of some hegemonic configuration). Each shift, Arrighi notes, occurred in the wake of a strong phase of financialization (he cites with approval Braudel’s maxim that financialization announces the autumn of some hegemonic configuration).

The laughter was at its height when Obama officials explained that the White House planned to guarantee a wide swath of toxic assets -- which they referred to as "legacy assets" -- but wouldn't be asking Congress for money. Rep. Brad Sherman (D-CA), a bailout opponent in the fall, asked the officials to give Congress the total dollar figure for which they were on the hook. The officials said that they couldn't provide a number, a response met by chuckling that was bipartisan, but tilted toward the GOP side.

Elizabeth Warren, chairwoman of the Congressional Oversight Panel for the bailout funds, told the Senate Banking Committee on Thursday that Treasury in 2008 paid $254 billion and received assets worth about $176 billion. (...) Referring to overpayment on assets, Warren said Treasury has failed to specify its goals and methods in helping more than 300 institutions. "There may be good policy reasons for overpaying, but without a clearly delineated reason, we can't know that," Warren said. Senate Banking chairman Christopher Dodd, D-Conn., said the overpayment was sure to "raise eyebrows." "I can understand some gap," he said. "No one is expecting perfection between the price you pay and what you think you're getting. But that's a pretty large disparity."

Gowan: Consequences of the New Wall Street System

Much of the mainstream debate on the causes of the crisis takes the form of an ‘accidents’ theory, explaining the debâcle as the result of contingent actions by, say, Greenspan’s Federal Reserve, the banks, the regulators or the rating agencies. We have argued against this, proposing rather that a relatively coherent structure which we have called the New Wall Street System should be understood as having generated the crisis. But in addition to the argument above, we should note another striking feature of the last twenty years: the extraordinary harmony between Wall Street operators and Washington regulators. Typically in American history there have been phases of great tension, not only between Wall Street and Congress but also between Wall Street and the executive branch. This was true, for example, in much of the 1970s and early 1980s. Yet there has been a clear convergence over the last quarter of a century, the sign of a rather well-integrated project. [30]

An alternative explanation, much favoured in social-democratic circles, argues that both Wall Street and Washington were gripped by a false 'neo-liberal' or 'free-market' ideology, which led them astray. An ingenious right-wing twist on this suggests that the problematic ideology was 'laissez-faire'—that is, no regulation—while what is needed is 'free-market thinking', which implies some regulation. The consequence of either version is usually a rather rudderless discussion of 'how much' and 'what kind' of regulation would set matters straight. [31] The problem with this explanation is that, while the New Wall Street System was legitimated by free-market, laissez-faire or neo-liberal outlooks, these do not seem to have been operative ideologies for its practitioners, whether in Wall Street or in Washington. Philip Augar's detailed study of the Wall Street investment banks, The Greed Merchants, cited above, argues that they have actually operated in large part as a conscious cartel—the opposite of a free market. It is evident that neither Greenspan nor the bank chiefs believed in the serious version of this creed: neo-classical financial economics. Greenspan has not argued that financial markets are efficient or transparent; he has fully accepted that they can tend towards bubbles and blow-outs. He and his colleagues have been well aware of the risk of serious financial crisis, in which the American state would have to throw huge amounts of tax-payers' money into saving the system. They also grasped that all the various risk models used by the Wall Street banks were flawed, and were bound to be, since they presupposed a general context of financial market stability, within which one bank, in one market sector, might face a sudden threat; their solutions were in essence about diversification of risk across markets. The models therefore assumed away the systemic threat that Greenspan and others were well aware of: namely, a sudden negative turn across all markets. [32]


[30] There were tensions between Wall Street and New York state regulator Eliot Spitzer after the dot.com bubble burst, but this simply highlighted how strong was the consensus at a higher level.
[31] References to these kinds of debates can be found in Andrew Baker et al., Governing Financial Globalization, London 2005.
[32] See Greenspan, ‘We will never have a perfect model of risk’; Alan Beattie and James Politi, ‘Greenspan admits he made a mistake’, FT, 24 October 2008.

Cálice

(Translation)

Censored version:

Gogol: Vous ne pensez pas qu'il y a une juste mesure entre le capitalisme débridé d'un Sarkozy et votre ligne radicale archaïque ?

Commençant son aventure il y a quatre siècles, le capitalisme, même débridé, est beaucoup plus ancien et archaîque que toutes les lignes radicales qu'on lui oppose. Cessons de considérer que le libéralisme, à la mode dans les années 1840, incarne la modernité et les réformes. C'est le communisme qui est une idée neuve en Europe.