Dystopian Paradox

Maureen Dowd in her NYT column today bemoaned to the offshoring of domestic journalism including reporting. I posted the following comment to he article:

The USA will soon be a third world country unless the government takes back control of the generation of US money (read “dollars”). Private money generated by private financial institutions is accounted for with a dollar sign. Deregulation of the private financial sector combined with Nixon’s announcement to the world in 1970 that dollars will be redeemed only in Treasury debt has resulted in what we see today: the deterioration of our industry and the financial credit (debt) crisis.

Globalization has resulted in the inflation of non-productive assets, that is, assets that don’t find their way to fund increased industrial productivity. Interest income does not equate to increased productivity but only accumulation of dollars for those who own the assets that produce the interest. That has meant stagnation for those who work to make a living, including journalists.

Displacement of US industry with offshore facitlites and labor is but one result of our unregulated international financial system. Get your brighter investigative journalists to educate themselves about the interworkings and dynamics of the international private financial system.

Use the power of the pen you now hold to advance the well being not only of domestic journalism but rather all aspects of American industry. Get educated and then educate your readership before the owners of the NYT take your pens away from you.

I checked and my comment has been published (number 128 on the sixth page) but it didn’t make the editors’ selection list. Maybe the NYT management has on its editorial board the equivalent of a KGB political officer who serves side by side with military officers to keep them in line.

The Group of Twenty published a Declaration on November 15 at the summit meeting in Washington. It describes the cause of the crisis as follows:

3. During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.

4. Major underlying factors to the current situation were, among others, inconsistent and insufficiently coordinated macroeconomic policies, inadequate structural reforms, which led to unsustainable global macroeconomic outcomes. These developments, together, contributed to excesses and ultimately resulted in severe market disruption.

As to the world financial crisis, the primary culprit is our unwillingness to accept reality. President Reagan egged us on to our profligate ways and we bought into it: prosperity with no accountability.

Carter had warned us in 1980 in his state of the union speech:

Our material resources, great as they are, are limited. Our problems are too complex for simple slogans or for quick solutions. We cannot solve them without effort and sacrifice. Walter Lippmann once reminded us, “You took the good things for granted. Now you must earn them again. For every right that you cherish, you have a duty which you must fulfill. For every good which you wish to preserve, you will have to sacrifice your comfort and your ease. There is nothing for nothing any longer.”

In part because of the Iran hostage crisis, Carter had zero political capital by that time. Reagan won a landslide. Enter huge deficits, deregulation, opportunists, greed, corruption, arrogance, irresponsibility, and perverted ideologies clothed in religious garb.

There is no free lunch and there is no free shopping spree in reality. The IOU has come due.

Obama inherits this horror show and starts out with some political capital. Let’s hope he invests it wisely so that it grows, giving his administration the power to tackle effectively the environmental crisis and render fear-based politics ineffectual .

Ridge Dickey

While having little use for any Republican presently holding office, I don’t automatically support the Democrats on every issue. Obama and Pelosi are calling for a Detroit bailout, which I don’t support.

My view is that the present management of Detroit and its present shareholders should disappear. They chose a parasitic agenda- short-term profits while the host dies. They must be accountable for the consequences of their choices.

Let Detroit either expire or morph through Chapter 11 proceedings. If it emerges from Chapter 11, then hopefully the process will have turned a syphilitic spirochete into a butterfly.

Once in Chapter 11, the fed can come in with funds with lots of strings attached, including strict criteria on vehicles powered by something other than carbon fuels, and the cost of USA produced parts being the majority with final assembly here.

Corporations are suppose to hold the public trust. Greedy management, shareholders and government leaders have conspired to destroy this concept in our collective public consciousness. We must make the term “public trust” a part of our daily lexicon in the context of our present economic woes. The constitution neither mandates nor sanctions monopolies of wealth and power.

GM, Ford and Chrysler are examples of corporate and shareholder greed sucking the blood out of the future economic potential of this country, resulting not only in our own loss but that of future generations.

And the financial industry should be no more sacrosanct than Detroit. As to their management and shareholders and government officials who support them including Henry Paulson, let them all eat dirt.