So who are the fools?

Just a warning that this is one of those rant type posts.

Also, I'm grumpy because it's snowing.

If you've been looking for a basic explanation of the banking crisis, look no more.
NPR did a fabulous one hour show on this topic on Feb 27, called Bad Bank (I find it fun to say it in a scolding manner. Bad, bad bank. Very naughty. Just sit there and think about how bad you've been.)

The collapse of the banking system explained, in just 59 minutes. Our crack economics team—the guys who explained the mortgage crisis, Alex Blumberg and NPR’s Adam Davidson—are back to help all of us understand the news. For instance, when we talk about an insolvent bank, what does it actually mean, and why are we giving hundreds of billions of dollars to rich bankers who screwed up their own businesses? Also, two guys go to New Jersey to look at a toxic asset.

Kids from around 10 and up should be able to follow it. They may even like it. Hugo was giggling at parts of it - it really is well done. I'm not grumpy about this show - I'm loving the show. Do check it out. BTW, it has a convenient break at just before the 26 min mark if you need to split it into two parts. (ht to SpyCar from the Well Trained Mind boards who told us all about this show! Thx SpyCar!)

From my perspective, two things about this fiasco stand out, only because they're just now starting to be talked about.

First, the fact that there's no free lunch. WE, the people, are going to be paying for this mess one way or another for years to come. It seems to me that there are still people who think this will all magically right itself, with only minor hardships for the average Joe & Jane. Well, that just can't be. You cannot incur these levels of public debt without repercussions.

Second, if this banking problem happened outside of the US, the IMF would have insisted the country nationalize the banks. Them's the rules folks! It's happened lots of times before in other places. But because this is the USA, all of a sudden the rules are different. (or it might still happen, late one Friday afternoon)

I think these points are important because they bring forward the underlying reasons for a lot of anger in the world against the US. Alexandra Szacka from the CBC is reporting a huge wave of discontent with the US in Russia where many people believe the US is trying to destroy their country. Globally, I believe many people are going to be increasingly dissatisfied with the US, a country which has been pushing de-regulation, free markets, capitalism RAH RAH RAH on to all other countries, often at huge costs to those nations, but with tons of reassurances that this was the way of the future, just growing pains you see, things will soon improve and you'll enjoy prosperity! And many countries followed the rules, did what they were required in order to secure loans, contracts, trade, access to markets. But when the shit hits the fan in the US - well, now, things all of a sudden are different and different rules are supposed to apply.

For example, CBC's Dispatches reported about the situation for Latvia's dairy farmers who saw boom times when Latvia joined the EU. They were encouraged to grow big and fast.

"farmers borrowed heavily to increase production for exports to free markets in the west"
"have seen demand and sales dry up. .... "

Farmers are on the brink of bankruptcy and want the government to help.

But "under the terms of a bailout loan from the IMF, the Latvian government has to do the opposite of what they're doing in the West: make big cuts in public spending."

Audiofile of the show is found here March9/15, 2009, in Part One as MP3 Headless statues, headless cattle and challenges to the survival of Latvia.

Stimulus packages are all of a sudden OK for us, but in developing countries numerous industries have been strangled by the prohibition of government subsidies. So, for instance, when it was convenient for the global agribusiness sector to have free markets, we were all for them and the little countries had to go along, slash farming subsidies and let their farms fail. Now when free markets are painful for our people in our major industries, we pull the plug on that idea. Oh it is ok for you little people to suffer the growing pains of free market capitalism; but not us, not at this scale, it's too big, and anyway, we're special.

I think a lot of people are realizing this, and with the rise of global communication, the message is getting out far and fast. People may not understand all the details but most people understand they're getting screwed. And that leads to anger. I think there are a lot of angry people out there, and the G20 protests are just the tip of the iceberg.

Some interesting reading:

I think I read this about a year or two ago and while there were parts of the book that I think should have been saved for either the confessional or the therapist's couch (a bit too much woe is me, I was a bad boy & I really regret it), the book is well worth reading. I think a lot of people will read it and say 'of course. We kind of knew this deep inside, right? But. Oh man. Shit."

Amazon.com description:

Perkins, a former chief economist at Boston strategic-consulting firm Chas. T. Main, says he was an "economic hit man" for 10 years, helping U.S. intelligence agencies and multinationals cajole and blackmail foreign leaders into serving U.S. foreign policy and awarding lucrative contracts to American business. "Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars," Perkins writes. Confessions of an Economic Hit Man is an extraordinary and gripping tale of intrigue and dark machinations. Think John Le Carré, except it's a true story.

Perkins writes that his economic projections cooked the books Enron-style to convince foreign governments to accept billions of dollars of loans from the World Bank and other institutions to build dams, airports, electric grids, and other infrastructure he knew they couldn't afford. The loans were given on condition that construction and engineering contracts went to U.S. companies. Often, the money would simply be transferred from one bank account in Washington, D.C., to another one in New York or San Francisco. The deals were smoothed over with bribes for foreign officials, but it was the taxpayers in the foreign countries who had to pay back the loans. When their governments couldn't do so, as was often the case, the U.S. or its henchmen at the World Bank or International Monetary Fund would step in and essentially place the country in trusteeship, dictating everything from its spending budget to security agreements and even its United Nations votes. It was, Perkins writes, a clever way for the U.S. to expand its "empire" at the expense of Third World citizens.

Also making me think recently is the issue of water. I just finished this

(btw, did you know there are some places where all you have to do is say "Maude Barlow" and people's foreheads bulge out with veins and they start sputtering and hollering? It's fun. Try it for example with anyone who has the Fraser Institute bookmarked and waits by their mailbox for the Fraser Forum)

as the 5th annual World Water Forum wrapped up with with recognition of water as a "basic human need" but not a "human right".

Water not recognized as human right in forum statement

Do we really need to think very long to figure out whom this benefits? Does it benefit Jane & Joe Average Public? Or does it perhaps benefit the big multinational industries who with the revolving door of business/government are hellbent on controlling certain assets? Gee, I wonder.

In other reading, check out Home Is..... the blog of a self-described 'doomer'. Wendy has recently been persuaded to keep the blog up, and she's been reposting some of her posts from last year - fabulous stuff about where to live and how to survive in the event of "the end of the world as we know it". Check it our for good, thought provoking stories, and links to such gems as the essays & blogs of FarFel who survived the economic & social collapse of Argentina & reports that: "that those with a small piece of land (on which to grow food or raise animals) and neighbors close by (for "group" protection) fared the best, i.e. those in the suburbs."

Now go plant your garden.

I wish I could.

Have I mentioned it's SNOWING??!!