The Albanian Financial Crisis of the 90s

I found an IMF scolding and lecture about the Albanian financial crisis post "freedom". It's pretty funny.

The IMF blames the bubble on the backward Albanian people, who were financially naive enough to believe that they could invest in something and get more money back! Those dumb Albanians. I wonder if they were stupid enough to believe that they could retire on their profits!

Then the IMF lectures about the importance of strong financial regulation with powers to shut down improper speculation.

And the Albanians, being the backward people they are, actually got mad when the scheme was revealed to be a fraud, and they realized that their investments were no good. They rioted! The proper thing to do, of course, is to give the 40lK (whoops, pyramid scheme) more money so that it overcomes your losses and looks as if you are in the black. And plan to work for the rest of your life. At least, that's what the financial advisors who give yearly talks to we employees tell us.

http://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm

The Police Acted Stupidly Arresting Someone

"The police acted stupidly arresting someone when there was already proof that they were in their own home".

The Great Republican Noise Machine is making a lot of noise about this statement. And the dumbass Great American Public is bleating agreement as instructed. I've got to say that this seemed like a reasonable statement to me. I've heard worse from a President.

Let's see. What happens when a President says something outrageous.

"Go shopping, go to Disney World.."

"Let's put it this way. They're no longer a problem to the US."

"Heckuva job, Brownie!"

"There are some who feel that if they attack us, we may leave prematurely.... My answer is -

bring 'em on!"

"Our enemies never stop thinking of ways to hurt our country and neither do we".

"Those weapons of mass destruction got to be here somewhere".

The Deserving Rich

The argument among we peasants over increasing taxes on the rich is pretty fascinating. No one wants to give up services (at least the ones they personally benefit from), but very few seem to want to pay for them. Even more interesting, they don't want the rich to pay their share, let alone more on the excess that they collect. They don't believe in "income redistribution", although the last 30 years have seen a massive redistribution from the poor to the rich. Workers feel that you can't get blood from a turnip. That's right, you can't. But you can get blood from a leech! Especially from those who have engorged themselves for thirty years.

Ordinary people believe that people who work hard, or invent something popular, have a right to their millions. And they believe that people with millions must have worked hard or invented something useful. This is the flaw in the logic.

If inventing something popular makes you a millionaire, the inventor of TV and his family must be wealthy beyond belief, right? Wrong. How about air conditioning, which changed the demographics of the US? Wrong. If working hard makes you rich, underground coal miners and roofers should be millionaires. Wrong again.

Who is rich? Goldman Sachs executives, corporate raiders, the Walton family. People who rip off others, either at the workplace or in banking. When they show the "retention" bonuses that the elite get, then people get mad. When they hear about the obscenely rich Waltons screwing WalMart workers of their overtime, then they get mad. Show people the actual rich, and they realize that they don't deserve such wealth. But their imaginary rich are getting their just rewards.

There is great scorn placed upon the poor who blow their money on cigarettes, or junk food. Everyone has an opinion on how the undeserving poor should spend their money. People have no problem with taxes on "sins" like cigarettes, and some states seem to think that they can balance their budget on the backs of smokers alone.

But let some rich guy buy a company, lay off its workers, strip its pension funds and move the whole thing to China, and it's considered his right. Not only his he not taxed, our taxes go to help him do it.

Rich people are too irresponsible to be allowed to keep all their money. They just gamble it away on Wall Street. There isn't a cent of tax charged on their gambling. And worse, they want us to cover their debts!!

For their own good, we need to return to the high tax rates of the 50s. There is no reason to tempt them with such ridiculous amounts of money. They've proven that they can't be trusted with it.

US Assassins

There's a lot of discussion of what on earth the disclosure of Cheney's death squads means.

Mainstream media discusses it as presented - bizarre though that may be. Alternative media points out that we all knew it was happening - Bush bragged about it in the 2003 State of the Union address. Jeremy Scahill points out that Clinton did it too, although he seems to focus on the Middle East.

One of my co-workers was a Marine sniper in the 90s. I'm not sure of the exact dates, but he was involved in the first Gulf War, because he defended the Highway of Death by saying that the US soldiers were simply trying to prevent the Iraqis from stealing vehicles that they could then use later!!

Anyway, he told me once that he killed people in Iraq AND Columbia. When I said that he was killing the good guys in Columbia, he told me "They're all bad guys."

So I allowed that they may have been true, and then he said, "But I did wonder sometimes why they picked this one to kill and not that one."

So, just so you know, it isn't just the CIA and it wasn't just during the Bush years and it isn't just countries that we are at war with.

And, personally, I believe that the hit squads operate in the US. For instance, when Paul Wellstone was killed, I was quite sure that they blew up his plane, or something, and the same guy told me that it was quite easy to sabotage a plane without explosives. Unfortunately, I can't remember how he said it was done. And although he is a right wing Republican, he agreed that Paul Wellstone was assassinated.

Downsizing

I watched a chirpily happy "newstory" the other day. A family that had been living large, with SUVs, a McMansion, multiple flat screen TVs, and other amenities, had their income cut. The story was about "learning what's important", and showed them selling the cars, growing a garden, and eating at home, instead of in fancy restaurants. Guess what? It wasn't that bad. They kind of liked spending more time with their family. (And they weren't even fired politicians.)

So here's the thing. My country and state and city have been living large, with lots of wars and roadbuilding, corn-stuffed cows and chickens, prisons and fancy prison-like schools, complete with guards. But now, our income has been cut. Or rather, it was cut years ago, but they kept borrowing for all the amenities, even adding Homeland Security and bank bailouts in this century. Man, that's expensive!

I'm ready to cut back. I want to put the Pentagon on a budget! Stop the wars. Stop the incessant road-building. Without the wars, we can't afford oil or cars anyway. Let the kids go to school in the old open schools. Legalize pot, for Pete's sake. (And everyone else's). That should make the prisons cheaper to run. Let them grow gardens. Some of them do anyway. Quit paying the corporate farmers to grow too much corn. Let's have some land reform in the USA.

Let the banks fail. Then the small banks and credit unions who didn't participate in the orgy can take care of our banking needs. Back off on Homeland Security and the spying and paper-checking that goes with it.

Let's cut back and spend more time with our families! Isn't that what's really important? (Cut to the violins and soft focus picture montage here).

Or at least, let's quit destroying other people's families, killing their children, burning their houses and making their lives miserable. It's too expensive. We really can't afford it anymore.

Laws For the Rich, Laws for the Poor

Illegal wars of aggression, illegal spying on Americans, illegal imprisonment, illegal torture and assassinations, illegal hirings and firings, illegal graft and looting - why are you so hung up on the past?

Dear Leader Obama has said that we must look forward, not backward. Those who broke the law should not be held accountable, no matter how many suffered and died. It's just such a downer to burden your beautiful minds on negative thinking.

But those who protested and fought back against the crimes? Well, yeah, they have to be held accountable.

One of the most egregious examples is that of Tim DeChristopher, a student who went to a demonstration against a BLM auction in December 2008. The Bush/Cheney administration was trying to shovel through a last giveaway of American public land to oil companies. He decided that standing outside and protesting wouldn't really help that much, so he went inside, took an auction paddle and started bidding on land. He bought some land, and ran up the bidding on other pieces, cutting into the oil companies potential profits, so he was arrested. Wouldn't you think that disrupting an illegal proceeding in a legal way (bidding in an auction) would be a great place to apply the "looking forward, not backward" template? Especially because the Obama administration has decided that the entire auction was conducted illegally?

Just why is bidding in an auction illegal? When leveraged buy-outs are legal, that is, the buying of companies using the company's assets as collateral? When the buyer can then strip the company's assets, fire its workers, and raid the pension fund? Why is not having money to pay for oil leases illegal, when not having money to buy a corporation is fine?

What about the so-called collateralized debt obligations? In the last 10 years, the rich have gambled with money they didn't have, and now are blaming it on us. You know, the working class that bought houses "they couldn't afford", (after the mortgage resets, that is), which mortgages the rich speculated on for far more than they were worth. No one knows the numbers, but it's something like $500 billion of houses gambled into $65 trillion debts. How is that legal?

What about taking money from the government to do a job and then not doing it? Isn't that illegal?

What about selling stocks that you don't even own? While nominally illegal, it is widely done. How is bidding without money prosecutable, while selling that which you don't own is not?

But while the rich cheat, steal, loot and kill, only Tim DeChristopher continues to be prosecuted while Bush/Cheney/Rumsfield/Gonzalez/Yoo/Addington/Bybee, etal., carry on their privileged high paid lives.

Too Stupid to Live

It's not an official DRG, just an unofficial ER diagnosis - Too Stupid To Live. You wouldn't believe what some people do. Two of my favorites - looking into a homemade gun to see why it didn't fire (it did), and getting into a firepit to add gasoline to the fire. But individual carelessness is not my point.

Faced with the ongoing warming of our planet, or "Hell AND Highwater", our Congress is moved to action. What do they choose to do? Why, bail out the financial sector by creating a new form of speculation - profitting on the demise of our ecosystem, or cap and trade.

Passed by the Democrats in Congress, except for Dennis Kucinich, who voted against it out of concern for our planet, and my congressman, who voted against it because it didn't give enough to the coal companies (!), it is being stalled by the Republicans in the Senate, who call it a tax increase. No, it's a giveaway to polluters, so I'm sure that after posturing for their home mouth-breathing constituents, they will vote for it.

James Hansen, the NASA scientist who is increasingly concerned about the lack of action to save our atmosphere wrote a letter in which he calls the program . 8 2. Some permit traders will become millionaires by speculating on carbon prices – this money does not come out of thin air – it comes out of consumer pockets. 3. An effective cap will eventually cause a high implicit tax rate. As Nordhaus (see below) notes, volatility of this tax may become “extremely unpopular with market participants.” Such problems would cause repeated changes, or abandonment, of a global cap-and-trade system. If that system attains only limited coverage, as is now the case, worse problems will arise in the global offset markets. For these reasons, and because they believe a cap-and-trade approach will continue to stymie international negotiations, many of the top American economists from across the political spectrum vigorously oppose cap and trade. Notable among these are William D. Nordhaus, Joseph E. Stiglitz (Making Globalization Work, Chp. 6), and N. Gregory Mankiw. On Permit Price Volatility. You say, [Emission permits] “will generally provide greater security and improved risk management for firms and market participants than a tax or administratively set prices.” Actually, volatile permit prices are almost universally considered to be an unavoidable deficiency of cap and trade relative to a carbon tax. Nordhaus, in A Question of Balance (2008), examines the volatility of SO2 permit prices in the United States under the SO2 cap and trade program and finds they have been twice as volatile as the S&P 500 index and nearly as volatile as oil prices. He then concludes (p. 155): Such rapid fluctuations are costly and undesirable, particularly for an input such as carbon whose aggregate costs might be as great as those of petroleum in the coming decades. An interesting analogue occurred in the United States during the monetarist experiment of 1979-1982, when the Federal Reserve targeted quantities (monetary aggregates) rather than prices (interest rates). During that period, interest rates were extremely volatile. In part because of this increased volatility, the Fed changed back to a price-type approach after a short period of experimentation. This experience suggests that a regime of strict quantity limits might have major disruptive effects on energy markets and on investment planning, as well as on distribution of income across countries, inflation rates, energy prices, and import and export values. Quantity limits might consequently become extremely unpopular with market participants and economic policy makers. [emphasis added] We now have data on EAU futures that were unavailable to Nordhaus when he made his study of volatility. Using futures with settlement date December 2012, which now have a four year time series, we find they are 2.9 times as volatile as the S&P 500 from the opening of the EU market on 22 April 2005 until 27 April 2009. On Price Discovery. The hope that futures and options markets will “reveal” future carbon prices under a cap and trade system is a case of whistling past the graveyard – with the gravestones bearing names like “securitization,” “derivatives,” and “credit-default swaps” that have brought the global economy to the brink of ruin. It would be less than prudent to give license to institutions in Australia and elsewhere to construct new, potentially toxic financial instruments, particularly ones that will help decide the fate of essential investment in zero- and 9 low-carbon technologies. 8 I also have to question the capacity of millions of Australian households and small-business owners to employ price discovery to guide their decisions to purchase low-carbon cars and houses and to move generally to climate-sustainable lifestyles. Why not just give them the future carbon price straight-up? On Progressively Rising Tax Rates. You note that you are “unaware of instances where countries have committed to, and delivered, a program of progressively rising tax rates.” Yet pollution taxes have rarely been tried under the traditional mindset favoring command-and- control regulations. Nevertheless, two examples of progressively rising pollution taxes come to mind: the tax on chlorofluorocarbons and other ozone-destroying chemicals implemented by the United States beginning on Jan. 1, 1990 to support the Montreal Protocol 9 ; and the carbon tax that took effect in British Columbia, Canada’s third largest province and roughly the same population as your state of Victoria, last July 1. 10 Your concern that “a price-based approach [such as a carbon tax] may not be capable of achieving the political mandate required to deliver the ambitious emissions reductions called for by the science, over the long run,” surely depends upon whether 100% of the carbon fee is returned to the public. Certainly, the nation should and will have the option of deciding whether the carbon fee will continue and how fast it will rise. My guess is that, as they see the benefits and consequences, and as many receive more in dividends than they pay in increased fossil energy cost, they will encourage continuation of this simple, honest, transparent system. In contrast, when cap-and-trade problems associated with “securitization,” “derivatives,” “credit-default swaps”, and speculator millionaires arrive, there is likelihood of public outrage and demise of support for emissions reduction. On implementation. The carbon tax in British Columbia took only months from announcement, in February 2008, to implementation, in June 2008. Cap and trade schemes have taken an order of magnitude longer to craft and introduce. 11 The difference arises from the complexity of cap and trade vs. the simplicity of a carbon tax or fee. It is this contrast that helps account for the shift in opinion that has become palpable in the U.S. business community, the political commentariat and, now, in the U.S. Congress. 8 I commend the recent (March 2009) report by Friends of the Earth, USA, Subprime Carbon? Re-thinking the World’s Largest New Derivatives Market, http://www.foe.org/subprimecarbon, for clearly and soberly “connecting the dots” between carbon emission permit trading and carbon derivatives. 9 According to a retrospective analysis by the Arthur D. Little consulting firm for the Alliance for Responsible Atmospheric Policy, the tax on CFC’s began in 1990 at $3.00/ODP-kg (ODP denotes ozone-depletion units) and automatically increased each year by $1.00/ODP-kg, finally reaching $18.80/ODP-kg in 2002. See http://www.arap.org/adlittle/2.html. 10 The British Columbia carbon tax began at $10 per metric ton of carbon dioxide on 1 July 2008 and is scheduled to increase annually by $5/tonne, reaching $30/tonne on 1 July 2012. 11 A case in point: “RGGI,” the most ambitious cap and trade scheme in the U.S., the northeast states’ Regional Greenhouse Gas Initiative, was announced in 2003 and started in 2008. It is minimalist and covers only electricity. Its allowances have been trading at a pathetically low value of about $3 per tonne. 10 The dividend, which you presumably would choose to give to all adult legal residents, can be implemented just as quickly, delivered electronically to bank accounts every month. It could be added to debit cards of anybody who does not have a bank account. In closing, I note the recent comment of New York Times columnist Thomas L. Friedman: [S]simplicity matters. Americans will be willing to pay a tax for their children to be less threatened, breathe cleaner air and live in a more sustainable world with a stronger America. They are much less likely to support a firm in London trading offsets from an electric bill in Boston with a derivatives firm in New York in order to help fund an aluminum smelter in Beijing, which is what cap-and-trade is all about. People won’t support what they can’t explain. 12 I believe Friedman is right about Americans and that the same applies to Australians. People are hungry not just for a sustainable climate, and cleaner air and water, but for political openness and honesty. They want their leaders to level with them. I hope that you will provide leadership, and encourage other nations, toward a path that can achieve these ends. Thank you for your openness to my information and point of view. I look forward to your reply. Sincerely, James E. Hansen 12 Thomas L. Friedman, “Show Me the Ball,” The New York Times, http://www.nytimes.com/2009/04/08/opinion/08friedman.html.">The Temple of Doom.

Our economic system is artificial, man-made, isn't working for the good of all and can be changed.

Our environmental system is natural, supports an astounding variety of life, and needs to be preserved.

So what do our so-called leaders do? Subsidize the financial system at the expense of the natural world. Just like the so-called environmentalist Al Gore did in the 90s.

Maybe we're just too stupid to live.