A 2012 Victory Won't Bring Back the Economy: Only a Private Debt Jubilee

Cross posted in Orange.

Yes, this is true. It's not a popular saying, but I'm not here to make everyone feel good for 2012 electioneering while people are suffering to feel a sense of belonging among the Washington elite prognosticating over poll numbers instead of real issues. As we have this debate over 4 percentage points in the tax code, the overall omission of most Americans suffering from the fallout of the housing bubble is insulting.

That's right. This debate ignores the big elephant in the room; the millions of people underwater defrauded into mortgage debt and other private debt chaining them to their deflating assets with no sufficient income prospects added up and compounded in a usurious fashion sucking demand out of the economy. For those that do not "got theirs jack" and can't afford cable news to cheer along with this partisan war syndrome dynamic, this actually matters.

It matters because as I have chronicled here, here, here, and here, the Foreclosure Fraud Settlement was an insult to the millions injured from the fallout of this bubble once NY AG was bought off to prop it up with stilts. Banks were given credit for the HAMP mods in addition to being propped up by the other failed HARP program. Basically those that defended that settlement or any of these programs anymore have to admit now they knew nothing.

For want or need of a nice election tune, many are tuning in to this election while too many are tuning out these debilitating economic problems because the absolute failure to deal with them at all. I partially understand, it is daunting and demoralizing, but whether one wants to tune in to these problems or not, the song remains the same.

It's the song of the decade and it goes well beyond this election.

Now there are other solutions besides debt forgiveness, but none theoretically as quick and feasible. Also I'm beginning to tire myself out talking about the President and everyone in Congress being stuck on stupid when it comes to deficits and the federal budget they write while knowing nothing at all about national accounting. Nope, we do need Modern Monetary Theory, deficits, and a job guarantee, but Post Keynesians are right too; we need a private debt jubilee.

Those are the few solutions that would work and no one in the beltway, even the progressive beltway, is talking about them at all. So I was rather surprised and delighted to see Steve Clemons and Richard Vague pick this up and articulate it rather well despite some small nitpicks I have.

Want Economic Growth? Forgive and Restructure Debt for American Working Families

It's private debt that matters most.

There is about $24 trillion in consumer and business debt held in the United States today and this dwarfs the federal debt, money supply, and the nation's GDP.

Smiley faceIn a short report (pdf) we are releasing today that explores the behavior of private debt before and after economic crises -- not only in the U.S., but in Japan as well as a number of European nations -- we have noted that (1) a fast run-up of private debt combined with (2) a level of private debt more than 150% of GDP were evident in both the Great Recession of 2008-2009 as well as in America's Great Depression.

Federal debt was inconsequential to these crises. Charts in the report (pdf) we are posting today make clear that Spain, economically beleaguered today, was in excellent federal balance sheet health before the recent Eurozone financial quakes started.

[............]

In ancient times and as recorded in the old Testament of the Bible, the Land of Israel forgave all debts periodically, and the economic basis point for lands and slaves was reset in what was called "Jubilee."

Yes, I love the point about Spain having their budget balanced and still falling into recession because of the massive global housing bubble that hit them that we and the U.K exported across the world. I love it because it stops deficit terrorists in their tracks because they have no answer to it like they have no answer to how Japan has never defaulted even though it was downgraded by S&P and had a debt to GDP ratio of over 200%. The biblical reference to Israel's jubilee is prescient and kind of makes us look bad in modern times when we are supposed to be more evolved.

I think it's time we at least live up to some of the worthy economic standards of ancient biblical tribes. Even Kings forgave debt about every 7 years or so. Can we live up to that and at least talk about this? Or will I be crucified for bringing it up and having lack of faith that an election will solve this problem even though the lack of mention signals it won't even come close?

It basically goes down to economist Michael Hudson's accurate prescient adage:

"Debts that can't be paid won't be paid."

Here's one of Hudsons' colleagues at the UMKC talking about the head of FHFA Edward Demarco's continuing opposition to principal write downs.

The Black Financial and Fraud Report: Agency Says No to Mortgage Relief

JAY: And what alternative does the Obama administration have? Some people have suggested perhaps the Fed could do something like this in terms of pressuring the big banks. I guess that wouldn't affect Fannie and Freddie mortgages so much, but a lot of these mortgages are also held by big banks. Is there some policy alternative there?

BLACK: There's probably no effective alternative. Obama, of course, could use the bully pulpit and urge the largest banks to do this, urge them to come together and create a plan. If they were to do that, that would pressure Fannie and Freddie to do the same thing. But I really can't see the big banks answering the call of the Obama administration in helping to get it reelected.

No, their chance to do something about this was in the massive foreclosure litigation. Remember when the largest banks engaged in massive foreclosure fraud to the tune of 10,000 times a month, you know, more than 100,000 times a year, and they were sued by many of the state attorney generals? And, unfortunately, the Obama administration pressured the states to enter into a very weak settlement. This is when the Obama administration was completely in bed with the big banks. And so they didn't get as part of that settlement anything really significant in reducing the principal amount of the debt. There are some programs, but they're trivial compared to the scope of the problem.

I like how Bill Black delves into the fake stress tests many delusional Democrats touted as being serious(during Geithner's PPIP proposal run-up which still tells us nothing about bank solvency), even though Black lines up the multiple banks that failed right after being shown solvent by their fraudulent pseudo accounting methods. Economic history is hard to deny even though many will try.

I also agree with Black that there were options during the proceedings of the Foreclosure Fraud sellout, but they were pissed away. FHFA is an independent agency so DeMarco can't be fired. However that is also a poor excuse I have heard more than once. Yves Smith lays out why rather well why that is the case as she always does.

Why “Firing Ed DeMarco” is No Solution to FHFA Refusal to Engage in Principal Modifications (Updated)

As much as this blogger is firmly of the view that this is a poor economic decision (deep principal mods are a sound idea, as long as you have a decent approach for vetting borrower income and other debt payments to see if they are viable with a mod), I have to hand it to DeMarco as a bureaucratic infighter. He is effectively throwing the abortion of HAMP results in Treasury’s face. Recall that HAMP did not require borrowers to default in order to qualify for mods, yet many did out of misdirection by servicers. Now in fact, servicers are unlikely to play that game this time, since a principal mod reduces their servicing income. But the fact, as detailed by Neil Barofsky in his book Bailout, that Treasury was indifferent to how homeowners fared under HAMP, and merely saw this as a vehicle for “foaming the runway,” meaning spreading out the number of foreclosures over time, rather than saving borrowers, led to irresponsible actions (like ordering servicers to sign up people for trial mods initially without even qualifying them), numerous changes in program design (disastrous for highly routinized servicers) and lack of concern with the fact that many people lost their homes by virtue of HAMP who might have kept them, has produced some data (in particular, informed estimates of the number of people who defaulted to qualify for HAMP) against the Administration.

[...............]

The way to beat this is not via taking out a contract on DeMarco, it’s in doing a better job of promoting the merits of principal mods and debunking the “deadbeat borrower” meme.

[............]

Update 7:00 PM: Adam Levitin points out, per Ezra Klein, that Obama could get rid of DeMarco via simply making a permanent appointment on a recess. Technically true, but Obama had that option to him long ago, in fact back in 2010 when the Senate let his appointee Joseph Smith hang in the breeze and Smith withdrew. And he also could have done it earlier this year, when DeMarco first made his opposition to principal mods clear (he deferred taking a stand as long as possible).

To replace DeMarco at this juncture would be waving a red flag in front of Fannie and Freddie hating Republicans, and would bolster Romney’s campaign by giving them a solid anti-Obama talking point. And the reality, as we indicated above, is that Obama has never been serious about helping homeowners. He’s never crossed swords with the folks who demonize borrowers in distress, never had any of his minions get tough with recalcitrant servicers. He has plenty of latitude to make an impact, and the only thing he threw his weight behind was the cosmetic, bank-serving mortgage settlement. He’s clearly made the calculation, and he has determined he is well served with DeMarco in place as a scapegoat.

There's always a scapegoat too many partisans point to to keep Democrats from doing their jobs. This involves this president doing recess appointments whenever he can make to stop Republican obstruction, just like George W. Bush used to do when Democrats didn't like his appointments. But president Obama didn't even want to appoint Elizabeth Warren that way even though he had to appoint Richard Cordray that way. He could have gotten rid of DeMarco through a recess appointment of his nominee from NC, but the absence of such a move speaks volumes, especially since Demarco has become a convenient scapegoat.

This recess appointment to get rid of DeMarco was not on the agenda even though FHFA own or guarantee roughly half of all underwater mortgages. Doesn't sound like it was thought of as a pressing problem by this administration and everyone who makes this excuse since we didn't hear anything back in 2010. Principal write downs would benefit the agency as well as the economy.

Adding that fact onto the Foreclosure Fraud sellout in general is just uninspiring. This is a big enough problem to make these points and they need to be made even during an election. To want them to go away is to want people and their concerns and well being to go away. There's never going to be more leverage than right now to advocate for those enslaved by private debt.

So basically, to sum up, there are no excuses even about Ed Demarco that excuse the President from drastically mishandling this. SIGTARP Neil Barofsky lays these indisputable facts out in this new book. He knows better than you or I because he was actually there. Maybe you don't care, but you should.

I'm sorry this real world problem ignored by the beltway in this diary doesn't inspire hope, but it really shouldn't. We can only hope this issue even gets a mention much less any real solution to it that is not a giveaway to the banks. I hope that changes for the good of the people and not the SCOTUS definition of people; real people who need real help.

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It's good to see you focusing on the possible.

geomoo's picture

: )
(I appreciated your response to my long comment on this issue in your essay)

This does seem to be the question, but I would say more how do we form the necessary political coalition rather than ask who would comprise it. If we lived in a world of acknowledged reality, there would be no lack of motivated constituents. It is hard to create coalitions in the face of floods of propaganda. As priceman acknowledges, this essay won't be popular. The facts presented here will not be raised even among most progressives, so the issue of forming an effective coalition is unlikely to be addressed, even among well-meaning progressives, too many of whom would see any coalition to pressure Obama on these matters as a coalition which would hurt his re-election chances. The machinations of the establishment have been brilliant at blunting truly progressive politics, a fact demonstratred nowhere more clearly than in the issue under discussion.

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How is it possible to develop a ...

BruceMcF's picture

... strategy how to develop a coalition without a vision of the core members of the coalition?

If we "lived in a world of acknowledged reality" then those who wanted to push policies that were politically infeasible in that world would set about building the propaganda development and dissemination institutions to eliminate that obstacle, and we'd be right back here.

We've never entirely lived in a "world of acknowledged reality" and never shall, as we are social primates and we institutionalize the regularities of the current social rules and form legitimizing stories about them. Its rather a matter of degree. Acknowledged reality played a wider role in the 50's and 60's than it does today, though critiques of the status quo conventional wisdom of the 50's and 60's reveal that it was far from a "world of acknowledged reality" across the board.

As far as flood of propaganda, that's the point of identifying potential core members of a coalition who will strongly benefit from a particular reformist push, since if that includes those who are part of the current establishment position, that opens up a wedge strategy to woo them.

As far as the Obama re-election campaign, its not as if a progressive change coalition is something that can be formed in a matter of months. Indeed, given the time lost in 2009-2010, having more than a marginal impact on the 2015-2016 race, which will either be an open race or a fight against an incumbent Romney administration, looks like long odds. A more realistic target would seem to be 2020 and 2024.

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Over half of mortgages are under water

geomoo's picture

That's a pretty good starting point for your coalition. Add the already homeless to the list. Iow, it's not difficult to define the members of the coalition, assuming people act in their own best interests. Add also people of means who have integrity and are interested in operating in a stable financial environment. My point is that I think the question of who would form this coalition only arises because the poor and suffering are largely invisible in America, and because smoke and mirrors are preventing most people from even being aware of the state of affairs.

Yes, it is a matter of degree, and matters are severely worse today than in the 50's and 60's. Compare coverage and resultant public reaction to the Vietnam conflict with the conflicts in Iraq and Afghanistan, and it is clear that we live in a dramatically different environment, propaganda-wise, than existed in that era. Of course, the internet ameliorates this situation to a certain degree, but not nearly enough to shift the balance.

Valuable analysis. Back to the Obama re-election campaign, your points are well taken, but the issue is that many of the most effective activists would not only not participate even in beginning to organize around this issue with a long-range strategy in view, but that they would actively undermine efforts by others to do so. I'm not going there, but I expect the response to this diary on dkos to bear me out on this. This is a crippling problem, and it is less one of finding members of a coalition than of being able to place obvious, important issues in the public eye for discussion that is not fatally undermined by partisans with short-term views or outright desire to destroy democracy by corrupting public discourse.

I hesitate to get too into it with you over this, because in the scheme of things, our energies are best spent in mutual support against myriad obstacles rather than in back and forth nitpicking, but I will point out that there seems to be a striking difference between your acceptance of the inherent value of brainstorming and analyzing potential ways to change living in the exurbs with what I interpreted, perhaps inaccurately, as a challenge to only look at the current question in respect of what is possible. Forgive me if I have read you wrong and you were doing nothing more than accepting this analysis and moving on to the necessary step of looking for skillful action, something which you seem quite good at.

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I just posed the same question I posed myself ...

BruceMcF's picture

... while writing the Exurb piece ~ where is the wedge that sets the interests of the existing powers that be into conflict? Posing the question does not imply that there is no available answer. My not seeing where the opportunity for the wedge may lie with this policy certainly does not imply that its not there.

For the radical reactionary so-called "conservative" movement, the biggest one was US peak oil in 1968, which removed the interest of US oil producers in pursuing a high employment economy which would lead to an increase in the West Texas oil quotas, with the quota permanently raised to 100% in 1970. That not wedged off an important member of the Cold War Liberal coalition, and substantially increased the finance for the establishment of the radical reactionary propaganda machine.

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I'll put this another way

geomoo's picture

It is difficult if not impossible to form coalitions in the absence of a common collective view of reality. It seems to me artificial to attempt to form a coalition in the abstract. My point is that, were this issue to be discussed honestly and openly, coalitions would arise organically, consisting of those who care about these things for various and sundry reasons.

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I'll put it this way then ...

BruceMcF's picture

It is difficult if not impossible to form coalitions in the absence of a common collective view of reality.

But that common collective view only has to overlap with respect to the policy platform that the coalition is pursuing. There is not so much need for a common collective view of reality between coalition partners as there is within the membership of a given coalition partner.

And there is also the complementary task of undermining the prevailing establishment coalition, which requires undermining the common collective view of reality that informs the establishment coalition.

It seems to me artificial to attempt to form a coalition in the abstract.

Identifying potential coalition partners when evaluating potential coalition platform planks and "attempting to form a coalition in the abstract" are distinct things. Effective politics makes strange bedfellows.

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More feasible than other solutions I want

priceman's picture

like a job guarantee, because this WH said they had no stomach for it. They halfassed all along the way some forms of modifications even though they refused to write down debts during the transition which Paulson agreed to. You just demand at this point. You get mad as hell. Sure maybe you won't get it done, but you have more in your pocket than giving $ to a politician who lies to you about it. With that money you can try to inform the masses or support your own movement towards such endeavors, all more worthwhile than what the DNC , DSCC, DCCC or the president will do with your money.

But first you have got to get mad!

I don't claim to have the answer to the promised land, but I know you'll never get there unless you demand a ticket.

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I hope so

priceman's picture

Even that seems optimistic, but I have a different prediction. IF and when the next crash comes, what populist movements and the leaders they pick decide will set our future. It's only in those movements does our trajectory change historically.

Rahm Emanuell was right about that if nothing else.

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Post 2016 is an awfully long time ...

BruceMcF's picture

... it extends from 2017 to the end of the US as a distinct society and/or industrial economy, I should hope that is not an excessively optimistic time window ... though for a society presently on a course of suicide as a national economy, maybe any time window at all is a bit optimistic.

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I do appreciate the optimism

priceman's picture

I'm not saying you are definitely wrong(I just don't have a lot of faith in the electoral system), but there is likely to be another crash before then. What decisions we make afterward during that state of shock will set the trajectory either way.

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I would deposit this

priceman's picture

Supporting sellout Democrats because they are the lesser of two evils is a widespread problem. In this scenario we need to have better standards as they now do in Latin America when a crisis hits because they learned the hard way. I would say it's a positive goal to lead the people back once astray when the barn is on fire again and we won't accept any politician who hires Foxes in the hen-house.

Ultimately that is what I view as positive these days, and of course we should work to lay the groundwork. I would argue that Occupy has done this better than the Democratic veal pen organizations and will continue to in this likely scenario..

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And I would again raise the question of what is meant by ...

BruceMcF's picture

... 'support'.

Voting for the Lesser of Two Evils is one thing. It is, after all, Less evil, which is better than more evil, except for the Cthulu voter.

Actively supporting the Lesser of Two Evils is something else entirely. Why spend time doorknocking for, phonebanking for, writing LTE for, contributing to, a LOTE candidate? There are progressives and populists out there to support. Supporting them makes more sense than supporting a LOTE candidate.

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Yeah, but the dropped Eugene McCarth dynamic affects even populi

priceman's picture

sts. No one will speak ill of the President and they should if he wastes a crisis as he did in 2008. It's no wonder Brown Kaufman didn't pass in 2010. It needed to pass in 2008. But does Sherrod Brown say the emperor has no clothes? Nope, it's go team lesser of evils. Congress doesn't work for the president and they are there to check the president, but they don't act like it. They act like an employee of the executive whether (D) or (R).

So yeah, vote and support for populist candidates, but we should demand they represent their districts is Representatives and states if they are Senators. We should pay less attention to the presidential dictators except to use Congress power to reign them in, but no one is doing it. So that's why "But Romney is worse" doesn't fly with me. The system is worse when we don't demand a balance and separation of powers. Just FYI and so you know where I am coming from with every post because I have a reason to be discouraged.

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I would expect and hope that Sherrod Brown ...

BruceMcF's picture

... doesn't directly criticize the President in the middle of the Presidential re-election campaign. He needs to get win his own re-election against a flood of corporate money in order to have the most clout in the lame duck fight to undermine Social Security that is coming this November and December.

If we start tallying the Senators who have criticized the President for putting unnecessary cuts to Social Security on the table in the "Grand Bargain", I reckon that we would be fine with the fingers of both hands, and might be able to get by with one hand. Bernie and Sherrod are two of them.

The point about "Romney is worse" is that if efforts to build a progressive populist movement able to put more than the current mild pressure on elected politicians achieve some success over the next two years, a 2015-2016 against a lame duck Obama administration versus a 2015-2016 against a first term Romney administration is far more promising ground on some policy fronts, and there is no reason to think it would be any less promising ground on any policy front.

It costs nothing to concede up front that Romney is worse, when criticizing the current administration for its bloody Imperial foreign policy, doomed to eventual failure, its suicidal energy policy or its authoritarian approach to domestic dissent. Or for its misguided neoliberal economic policy.

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During an election is more understandable

priceman's picture

But on HCR and fake financial reform, AWOL. But after the election, specifically after a crisis, that can be a once in 20 year prospect for a Democrat to be in office with that amount of leverage and it was wasted because of the the dynamic i speak of.

For the record, everyone knows Romney is worse, even JIll Stein, but how much qualitatively worse? Not enough to pretend this election really matters, besides, I think Obama has it in the bag, not that he deserves it, but Romney is not going to win.

That pressure has to be here to get Congress to stop whoever wins the Presidency from going after SS and medicare and Obama being a lame duck will mean he won't care so it's not really that strong of an argument, though technically on some things he will be different and better than Romney but the bar is pretty low compared to what we really need.

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In terms of climate change ...

BruceMcF's picture

... I think a Romney administration resets us back to the W Bush administration, except at a higher concentration of greenhouse gases.

The fact that fighting for change under a Democratic administration faces the obstacle of losing the support of the the Democrats for whom IOKIYAD does not mean that there's no functional difference between the two, since we do not escape that challenge when there is a Republican in the White House, we simply punt that challenge into the future. And we are running short on futures to punt the climate change challenge into.

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I have no answer to this issue

geomoo's picture

and I won't pretend to, but I want to put something on the table that seems to be where my integrity is going these days. Authoritarian countries with one candidate on the ballot typically exert great pressure on the populace to cast their meaningless votes. Then they can pretend that they have support of the public, that their politics is connected to the lives of people. One way to make the point that there is no connection is to withdraw from participation. Imagine a U.S. election in which 5% of the country voted. There would be a strong message in that. In short, if a system is corrupt enough and causing enough suffering, then a person is justified in refusing participation, because participation in some ways grants legitimacy. The crucial question, imo, is whether participation has enough impact to sufficiently ameliorate the evils. With the direction I see our country going and the slim difference between the major parties, I no longer think it does.

I have made the same decision wrt dailykos. I believe it does damage to the issues I care about to lend legitimacy to the notion that the site is an open, democratic community which is a potential vehicle for effecting progressive change. I believe personally that the site is rigged by the few people who control it such that the issues I care about are certain to be sidelined, co-opted, watered down, explained away, and kicked down the road. Personally, I believe the site originated for this purpose, but that is mere deduction. Right now, I don't participate. But I can also imagine posting diaries there, because I have a lot of respect for the vast majority of people who participate, and I do believe opinions of true activists can be affected there. After seeing what happened around Libya, I no longer believe that truly progressive opinions stand a chance there of hindering the actions of TPTB. When the heavy hitters, assassins, and obfuscators come out in force, forget about clarity. It's all over.

As I say, I have no answer to this question, but I did want to throw out non-participation as a legitimate response to the painful situation we face. If I had complete integrity with my beliefs, I would stop paying my federal taxes as long as they go to war crimes, weaponry, empowerment of big oil, etc. etc. etc. I still pay taxes.

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Great Emma Goldman quote

geomoo's picture

That's what I've been trying to say, and all in 8 words. I'll be keeping that quote. It's as complete and telling as Anatole France's perfect "The law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets, and to steal bread."

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Great points on participation, geomoo

priceman's picture

I am a little ashamed of looking back at myself in 2008 when I bought some of the BS. I can see others in that same mindset and I can see how they are controlled. IT is really unnerving and awakening. Of course that doesn't mean everyone who votes and participates but the partisan war syndrome is detrimental to our society and other societies as you chronicle and the leaders who manipulate it.

I, like you, merely participate on kos because of the people I love there who do participate in the big pond via your david mizners, dallasdocs, bob swerns. There is a fan base that do appreciate when I write something, they are just not the majority; I would say a little less than half.

I hear you on taxes, but the IRS will come after you if you don't pay either way and that's a good enough reason to do ti and not feel guilty of it. Of course they should go after GE and coporations who pay 0 taxes too, and war profiteers, but they don't.

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By contrast, in the US the oligarchs work very hard ...

BruceMcF's picture

... to discourage voting by the "wrong sort of people". If the oligarchs were not fighting so hard to deny the vote to he "wrong sort of people", that would be more credible.

It would seem to do more to threaten the status quo to vote third party than to stay home, given that the oligarchs discourage third party voting and encourage the disaffected to stay at home.

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Agreed re third party voting

geomoo's picture

which, in terms of results, is tantamount to non-participation. That's what I'll be doing. Symbolically, it seems important, representing the difference between giving up completely and working elsewhere. But to me, it is past time to withdraw participation in the two-party system.

Interesting point concerning discouraging voting. To me, that's just another example of the prevalent, "We can do this the easy way or the hard way" message we get from our overlords. The easy way is to pretend we have a democracy and that we the people always lose fair and square even when we elect faux liberals like Obama. The hard way is that we give up completely and any idiot stands in to pretend to be in charge while the oligarchs pillage unimpeded.

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Color me skeptical on that.

BruceMcF's picture

It seems a bit pat as a way of explaining away the effort that the oligarchs spend on making it harder to vote.

There is a difference between how things normally happen and how things might happen. There is an establishment, and a status quo, which serves existing vested interests and no elaborate argument is required to predict that the foundations of the status quo will rarely be exposed to any serious risk of being disrupted by the regular political process.

But the oligarchs are not satisfied with the status quo, they want to continue impose even more radical change than they already have, and it will be more convenient to them as they do so that there is no opportunity for a grassroots backlash.

And its even more important for the oligarchs that people do not see the election of anti-corporatists as an avenue to express their disgust with the current status quo.

In the end, I reckon that people staying home make them happy, and people voting in opposition to their preferences does not. So in choosing between making the oligarchs more or less happy, I go with less happy.

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Well, there are wars between factions

geomoo's picture

of oligarchy. In fact, by and large they are obsessed with fighting, fighting anything. This infighting creates localized motivations to suppress the vote. Suppressing the vote will always benefit one side or the unless suppression happened to affect both sides equally. Whichever side benefits from vote suppression will likely engage in it--such is our thoroughly corrupt system, a system with no good team and no bad one, with few surviving human values. The mere raw issue-unrelated fact, that voter suppression will benefit one side practically ensures that one side will pursue it, irrespective of its connection to any broader issues. The fact of voter suppression by many corporations does not prove that electing the guy who is a certain kind of sucker prefers will result in any meaningful damage to them.

I thoroughly agree with the third paragraph above. It seems to me an argument in my favor, not yours. Damned if you do, damned if you don't. We can do this the easy way or we can do this the hard way.

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Feeling exercised

geomoo's picture

The attitude I'm reading reminds me of this Gore Vidal quote:

There is no human problem which could not be solved if people would simply do as I advise.

If we are to believe predictions which are rapidly proving too conservative, It would probably already be too light for climate change even if we were in full-scale ramped-up mode at this moment. I could give a shit how happy the oligarchs are--I want to see something with half a chance of success at something. There is still torture, still war, still either Machiavellian or psychotic foreign policy (or both) and ominous movement toward the police state at home. It has been a slight relief not to see Bush strutting around, and I guess we haven't invaded Mexico yet, but having this lesser evil in the WH has done almost nothing to stop the continuing concentration and wealth and thus power in the hands of people who have proven themselves ruthless many times over. I'm not looking to make anyone unhappy. I'm looking for a way to save our asses. Obama ain't it. Sure, take some momentary pleasure in proving that the strategy of pretending to work for the many and for more liberal goals is still more popular in America, and would still win if given a chance. I guess there is some satisfaction in that. It doesn't mean that any of the pressing things, and I do mean pressing things, that need to get done will get done.

I believe it is always a mistake to believe a thing is so just because your opponents say it is not; similarly, I believe it is a mistake to base strategy on simplistic frustration of your opponent. Strategy should be based on what you want to achieve and how you think you can best achieve it.

I gave the example of behavior in authoritarian countries not as a proof of a theorem but rather as a reminder of how fake democracy looks. I repeat, I do not know the answer to the dilemmas we face. That doesn't mean I'm looking for someone to tell me what I have to do or whether my behavior is optimal as we watch democracy circling the drain. I would prefer to brainstorm than to attempt to prove anything.

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Although this is running into the margin ...

BruceMcF's picture

If we are to believe predictions which are rapidly proving too conservative, It would probably already be too light for climate change even if we were in full-scale ramped-up mode at this moment.

There is no too late to make the effort to try to reduce the impact of climate change until we have crashed industrial society. On our current track, we have moved beyond fending off climate change, then moved beyond moderating climate change and are aiming at preventing Easter Island for modern civilization.

We are already heading for catastrophe, and while we don't know for sure where the boundary between a survivable catastrophe and total cataclysm lies ~ that is the crucial experiment that Big Oil and Big Coal will certainly have us try if we allow them to call the shots.

I could give a shit how happy the oligarchs are--I want to see something with half a chance of success at something.

I view handing over the remaining democratic institutions in place to the oligarchs without a fight as suicide.

We've known that the White House would be in corporate hands for 2009-2016 at least since early 2008. The only question up in the air on that front has been which wing of the corporate party would be running the place for 2013-2016. So I don't see the benefit of constantly buying into the media narrative that Obama v McCain or Obama v Romney is about issues like:

having this lesser evil in the WH has done almost nothing to stop the continuing concentration and wealth and thus power in the hands of people who have proven themselves ruthless many times over

Why would we expect that having a Hedge Fund Democrat in the White House would do anything to stop the concentration of wealth ~ that is not something that the different wings of the corporate party disagree on. The only things it can make a difference on are things that the different wings of the corporate party differ on.

And although I take it that you do not want me to take the fact seriously that we are careening toward a possible civilization ending collapse, as civilizations once in a while experience, and do not want me to argue the best position I can see the best I can see it, but would rather I .... I am not sure what, but something else ...

... this whole wasted focus on the Presidential race is also quite clearly what the oligarchs want. They do not act as if they want anyone to be exercising their remaining rights under the remaining democratic institutions unless it is their own rent a mob. Which is good enough for me for a working hypothesis that there's still some opportunities to use the remaining democratic institutions in ways which threaten their plans.

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I agree with most of that post

geomoo's picture

The parts I disagree with involve wildly inaccurate interpretations of my meaning and intent. If I could put it generally, the state of the world, about which we almost completely agree, leaves me feeling uncertain and somewhat desperate to find effective responses which have an actual chance of success. You seem to have a different reaction. The part I don't like is being constantly told that I am wrong rather than enjoying engagement with a sense of common purpose.

I don't know that there's anything more to say. The situation seems a chronic one. I find it unpleasant and unproductive. Otoh, a well-known pooh bah on dkos used to always tell me that arguments bring page-views, so perhaps there is gold in having on-going interaction between us in which I look for mutual answers and you tell me why I'm wrong. I don't think I have the stomach for it.

I like what you're doing, and I find your wealth of information to be invaluable. Your focus and approach seem to me to be as valid as any response to the approaching catastrophe as I have come up with. Please keep on going. In that I have responses to what you are doing which seem to lead not to fruitful discussion but to me being told why I am wrong, I will likely avoid getting in your way in future. And that's okay, too. I don't need to be a part of that.

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The thing is ...

BruceMcF's picture

... saying "I have no answer to this issue, and I won't pretend to, but I want to put something on the table that seems to be where my integrity is going these days.", and then following up with, "Authoritarian countries with one candidate on the ballot typically exert great pressure on the populace to cast their meaningless votes."

... that reads like saying "I don't want to get into an argument about this, but" as a prelude to saying that, basically, the position I had just argued seemed just about what an authoritarian dictator would say.

So was I expected to refrain from saying how I thought my position differed from the position of an authoritarian dictator running a single-party election?

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No worries, Bruce

geomoo's picture

I would prefer to just move on. I think you have misunderstood me more than once in this thread. I don't see any reason to try to untangle it. We are just getting to "know" each other. I'm glad you're here. I value what you bring. Let's just move on from this, okay?

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Comment posted prematurely

geomoo's picture

and I lost power before my editted version was saved. Anyway, among other refinements, I meant to say that the hard way can be as stated or the even harder way can be that some kind of resistance is mounted, a la Occupy, which discomforts the heavily armed powers that be, heavily armed both militarily and ideologically.

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the Latin American countries are moving forward

sartoris's picture

In the 60s and 70s Americans laughed at the so called Banana Republics with their unstable regimes and even more unstable economies. No one laughes at Brazil, Argentina or Venezuela these days. Ecuador put Chevron on trial and won an 8.5 billion fine for environmental damages. True, it is unlikely they will ever receive one penny of the fine but the point is that their government actually stood up to one of the largest oil companies in the world. America just stands cap in hand letting the oil companies do whatever they wish. America could certainly learn a lot from the Latin American countries which we used to oppress.

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Absolutely, sartoris7

priceman's picture

WE not only laughed our Chicago school of economics made it happen and reeducated many Latin Scholars circa Shock Doctrine and were involved every step of the way as was Milton Friedman. They've had depressions way worse than our great Depression so is it any wonder they reject the neoliberal model? You're right we were directly involved in repressing them from the 60's, 70s, and 80s(where the Reagan administration started killing them).

You make the right point on Ecuador and it does matter still, and don't forget Bolivia who stopped Bechtel and the IMF helping them from privatizing its water supply. Argentina told the IMF to shove it, defaulted, and after their crisis their economy improved rather dramatically(after getting worse for a short time) showing why Greece should leave the euro zone despite the fear mongering.

Just one story of many.

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100% Correct

sartoris's picture

You are 100% correct. The countries were not unstable because of some flaw in their own systems, they were unstable because of our direct intervention. We shoved bad policies upon them and played with them like they were nothing more than pieces on a gameboard. Perhaps more than in any other place we have blood on our hands in Latin America.

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Network should be required viewing

sartoris's picture

About 3 months ago I rewatched this movie. It not only holds up it is nearly a perfect movie. This movie should be required viewing for all Americans between the ages of 12 and 90, especially, and I mean ESPECIALLY, fox news viewers..........ok, it would probably make their heads explode but I'm Sartoris7 and I approve this idea.........

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a truly excellent post priceman!

poligirl's picture

the whole foreclosure issue has been a mess and no one in DC seems to really want to help we the people. instead of excuses, we need solutions from them... if i made that as many excuses (about as many thing) as they do at my job, i'd be fired... there's a lesson there for the voter, but i've no doubt it will go unheeded... sigh...

and i love the fact that your posts are so well researched! :D

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Thanks, poligirl!

priceman's picture

Exactly, they want our full support and standards they never live up to while ignoring real problems like that everyone is in debt and can't spend to provide income so we can get jobs, well paying jobs. They want to prop up the institutions who put everyone in debt by defrauding them.

They tell us we need them. No, we don't. WE don't need them or their paid lackeys when ti comes down to it. Enough people just have to realize that. Without us they and their pay masters ultimately couldn't exist.

Thank you! I try. I actually come into each one thinking it will be short. :D

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at a minimum

sartoris's picture

I think this is a good idea but I would limit it to only housing debt. However, I think that our current personal bankruptcy laws need to be completely rewritten. Student debt must be included in bankruptcy proceedings. Bankruptcy should be allowed once every 5 years for individuals with a networth of less than 1 million. The foreclosure crisis has not been dealt with and it will continue to be an impediment to longterm economic recovery.

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I'm going to disagree slightly

priceman's picture

A first for you. :D

Credit card debt is ridiculous and bankruptcies have been perverted since our VP pushed forth the bankruptcy bill; cramdowns are essentially gone. I also think student loan debt should be forgiven because there are no jobs out there for graduates who have to lurch out after this bubble burst like me. It doesn't sound like we are too far apart. Mortgage debt is the biggest, but over the past 35 years there is just too much private debt buildup, Ponzi debt as Minksi called it, and not enough income to service it and because there is not enough income, people go into debt even though they can;t afford it in every area and the lack of underwriting standards should tell us that there will be borrowers who can't service their debt and the lack of those standards is mostly Congress's fault.

Thanks, sartoris7!

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I'm open to ideas on this topic

sartoris's picture

Well, I'm generally pretty narrow minded and not receptive to looking at a problem in a different light..........however..........this is a topic I need to study a bit more. Thanks for posting another great essay. I'll do a bit of reading on this subject.

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Perverse motivations, not "stupid[ity]"

geomoo's picture

In his discussion of "fictitious capital", Michael Hudson explains that there are logical reasons for capital managers to resist rescuing the 99% from their debt load, or even to cut their losses and optimize the payback they receive from bad mortgages. The owners and managers of capital understand that poor and middle class people could never pay back enough to protect them, the capital managers, from the trillions of dollars of fictitious capital they have loaned without collateral. Rather than facing up to an untenable situation and engage in realistic and necessarily painful crisis management, financial elites are, to quote Cassiorodus, attempting "to realize the imaginary profits they've 'created' for themselves". These imaginary profits gained from investment of fictitious capital can only be realized by forcing trillions of dollars of debt on to the heads of the 99%. Put another way, they are hoping to avoid paying the piper by making the people pay the price for the sins of the elite.

The following video brings much clarity to this issue. I strongly urge anyone interested in the issue to watch it. I do not follow these matters closely, and this video brought me the most complete overview I have found.

http://www.nakedcapitalism.com/2012/08/michael-hudson-on-fictitious-coll...

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I didn't call them stupid, geomoo

priceman's picture

I called the government stupid.

Congress being stuck on stupid when it comes to deficits and the federal budget

Also fictitious capital is floated by government bailouts.

I've seen that video and it is enlightening.

Can you please let me know which passage you are referring to in my diary?

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Not sure what you mean about which passage

geomoo's picture

The only specific reference I notice is to the use of the word "stupid", which I would argue is also inaccurate in respect of Congress, who are protecting their own self-interests quite cleverly rather than serving the people. But perhaps you are correct; perhaps it truly is a lack of understanding and I have become too cynical. In any case, it doesn't matter when it comes to formulating a response. As Bacevich has said, the purpose of Congress is to re-elect members of Congress, a job they are performing quite successfully, despite their miserable public approval ratings.

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Well I understand Hudson's piece perfectly fine is what I mean

priceman's picture

I mainly wanted to know what you were objecting to specifically because I think you might have misunderstood me.

My reference to stupid was in their knowledge(our Reps) of national accounting not capital managers who do know national accounting for the most part(they know their assets increase with government deficits) but they do know how to stay in office. Bacevich is right.

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Simple misunderstanding

geomoo's picture

I refer to Hudson's piece as corroboration of and supplementary to the essay. No critique or corrective is intended. To me, it is all of a piece with several different angles for viewing profitably. I find the notion of "fictitious capital" to be especially clarifying when considering the points you are arguing.

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Principle reduction

aigeanta's picture

really seems to be the only way to go. When we have stock market bubbles, eventually the price of stock crashes and the bubble is deflated. With real estate bubbles, the price of the homes drop but people are still paying the same mortgage. If you think about it, it's just a terrible, terrible investment to buy a home as opposed to stocks. At least you can sell your sinking stock on a whim and you aren't stuck paying a monthly fee to keep something you can't get anyone to buy.

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Exactly, aigeanta

priceman's picture

You aren't chained to your stocks like a deflating real estate asset, and even if you are in some ways there are saws available. This whole home ownership American dream fad is a nightmare. My advice: stay a renter where you are as mobile as other capital is. We don't have any defined standards so it's better to stay unchained in the game.

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The way we achieved principal reduction ...

BruceMcF's picture

... in the 1930's was through an extended wave of bankruptcies. Private debt as a percentage of GDP rose through 1930, as GDP dropped faster than bankruptcies destroyed debt, but by 1932 debt destruction had caught up, and private debt as a percentage of GDP decline through the 1930's and through WWII.

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Speaking of Jesus

geomoo's picture

What??!!!

Theologian David Ray Griffin has argued that discontinuation of the traditional debt jubilee by the Romans, leading to debt slavery and widespread poverty, was one the primary factors leading to the rise of Jesus as a savior. He wasn't the only one crucified--thousands were crucified by the Romans as a means of control. If they had had television, I expect that would have been able to use gentler means and that only a few would even have heard of the obscure radical languishing in Guantanamo. I mentioned Bradley Manning the other day at a table of well-informed liberals. No one knew his name.

"Jesus? Who's that? I don't have time for that now, I'm too busy defending Christianity."

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Romney is worse but Obama is not serious about climate change

sartoris's picture

Yes, Romney is worse. Yes he would be worse in every aspect on every single issue. There is not one issue in which Romney would be better dancing horse vouchers for inner city children notwithstanding. However, the present administration is not at all serious about climate change. This administration pays lip service to most enviromental concerns. The president can stop Mountain Top Removal mining today if he wished. He could have stopped the now permitted drilling in the Arctic. He can stop the Keystone pipeline if he wishes. Yes, he did raise the CAFE standards and that is important. Yes, he is a believer in climate change and that is important. Yes, he is better than Romney but he can do more, he simply chooses to not do more.

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Very true and my POV

priceman's picture

Climate change is a tipping point where if Obama approves the Keystone pipeline like he is going to, it doesn't matter if he is better on climate change because he's not even going to be close to even mentioning getting to 350 ppm. One step forward won't get us 100 ft out of deep shit.

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