[Peace-discuss] progressive economists on the Fed's QE2 and the Catfood Commission

Tue Nov 16 12:06:04 CST 2010

Mark Weisbrot: Fed's QE2 is the only good thing going, and Europe
should be emulating the Fed, not destroying Greece, Spain, Ireland and
Portugal with austerity:
http://www.guardian.co.uk/commentisfree/cifamerica/2010/nov/12/g20-summit-currency-wars

Dean Baker: Aqua Buddha and the Number 21
Dean Baker calls out Alan Simpson and Erskine Bowles, co-chairs of
Obama's deficit commission, for their unexamined attachment to the
dogma that government spending should be capped at 21% of GDP.
http://www.truth-out.org/aqua-buddha-and-number-2165125

-- 
Robert Naiman
Policy Director
Just Foreign Policy
www.justforeignpolicy.org
naiman at justforeignpolicy.org

Urge Congress to Support a Timetable for Military Withdrawal from Afghanistan
http://www.justforeignpolicy.org/act/feingold-mcgovern

g going, and Europe should be emulating the Fed:

G-20 Barking Up the Wrong Tree: Bad Macroeconomic Policies, Especially
in the High Income Countries, Are the Main Threat to World Economic
Recovery
http://www.guardian.co.uk/commentisfree/cifamerica/2010/nov/12/g20-summit-currency-wars

On Tue, Nov 16, 2010 at 11:36 AM, Morton K. Brussel
<brussel at illinois.edu> wrote:
> Wayne, I thought you would enjoy this remarkable video:
> http://www.youtube.com/watch?v=PTUY16CkS-k&feature=share
> Others may too.
> --mkb
>
>
> On Nov 16, 2010, at 8:11 AM, E. Wayne Johnson wrote:
>
> "...there was an uncommon flash of common sense in Washington last week. A
> special bipartisan presidential panel on reducing the national deficit
> proposed $4 trillion in federal spending cuts.
> All political sacred cows were targeted. The biggest: the monstrous $700
> billion military budget. A third of US worldwide military bases would close.
> There would be cuts to social security, mortgage deductions, delays in
> retirement age, an end to politician’s local pet projects. Taxes would
> rise.  The howling has already begun. Unfortunately, such unpopular, drastic
> spending cuts seem highly unlikely, particularly in the new US Congress
> where Republicans and Democrats will be deadlocked. America would need an
> economic dictator to implement the panel’s full plan.
>
> China has one – the Communist Party. America does not and is rudderless.
> More empires have been undone by financial collapse than invasion or
> battlefield defeats. The once mighty United States is staggering in this
> direction. "
>
>
> China Scorns US Funny-Money
>
> by Eric Margolis
> http://www.lewrockwell.com/margolis/margolis214.html
>
>
> One day, the emperor of ancient Babylon summoned his treasury overseer and
> exclaimed, "I need more money to wage war on those filthy Hittite
> terrorists!
>
> "But I looked in my great treasure chest and it’s nearly empty. There are
> hardly any gold coins left," he thundered.
>
> "Oh Light of the Euphrates," groveled his terrified minister, "we are out of
> gold. Your wars have become too expensive."
>
> "But I have a solution, your celestial greatness. We will quietly trim the
> amount of gold in our imperial gold coins to make them go further. No one
> will notice."
>
> Fast forward to Washington, 2010. It’s no longer called "clipping coins."
> Today, the name for debauching a nation’s currency is called "quantitative
> easing(QE)," but it’s still the same old fraud committed by financial
> flim-flam men.
>
> Washington is flooding financial markets with $600 billion of worthless
> dollars, hoping a rising tide of Monopoly money will somehow lift America
> out of recession. The Fed’s first QE effort was a fizzle. Welcome to QE2. In
> high finance, hope springs eternal.
>
> The US government is stoking worldwide inflation in order to lower its
> outstanding debt by repaying creditors with depreciated dollars. The rest of
> the world is boiling angry at Washington.
>
> Just before last week’s G20 economic summit in South Korea, China’s state
> credit agency publicly downgraded America’s credit rating and questioned US
> leadership of the world’s economy.
>
> In an unprecedented, stinging rebuke, China scolded Washington for
> "deteriorating debt repayment capability," and predicted quantitative easing
> would lead to "fundamentally lowering the national solvency."
>
> This was a real slap in the face heard around the globe – particularly
> coming from a bunch of commies! China is the largest holder of US government
> debt.
>
> I remember the day when my father, a New York financier, used to sneer at
> iffy stock or bond issues as, "Chinese paper." Now, it’s "American paper."
> How the world has turned.
>
> Washington has been blasting China for manipulating its currency to keep the
> value low – which is quite true. Embarrassingly, Germany and Brazil just
> accused the US of being as big a currency manipulator as China – which is
> also quite true. The EU refused to join the US in alone blaming China for
> world financial and currency instability.
>
> A depreciated dollar boosts US exports and hurts nations exporting to the
> US. Economists call it, "beggar thy neighbor," a destructive trade practice
> that played a key role in the 1930’s world depression.
>
> This money flood is eroding the value of the dollar, the world’s premier
> medium of exchange. In the past two months, the US dollar has dropped 6%
> against other major currencies. Frightened investors are piling into gold,
> now up 17% in 60 days.
>
> The Obama administration, just "shellacked" by voters in mid-term elections,
> and desperate to lower unemployment, is gambling more debt shock therapy
> will spark the economy back to life. But massive, unsustainable debt caused
> the US financial meltdown in 2008.
>
> The US public debt has hit a stratospheric $14 trillion. You don’t treat a
> poisoning victim with more poison. Spending one’s way to prosperity with
> borrowed money is a dangerous chimera.
>
> But panicky politicians are ready to try any sort of economic snake oil
> remedy to save their skins. Before 2007, America was living high on phony
> financial froth. Finance had become America’s leading business. Those days
> are over but no one dares to tell the voters.
>
> Besides destabilizing world exchange rates and trade, Washington’s money
> flood is pouring into emerging markets as American investors seek higher
> returns than the miserable pittance available at home, creating highly
> volatile capital flows.
>
> The so-called financial rescue package brought in by Presidents Bush and
> Obama have been a bonanza for Wall Street and the banks, and a catastrophe
> for savers and ordinary citizens.
>
> During the 1980’s, we saw fragile Asian economies battered as investment
> from the US flooded in, then out. This is happening again, boosting
> currencies of many nations, making their exports uncompetitive. Investments
> barriers are going up from China to Brazil.
>
> President Barack Obama inherited a horrible mess from the Bush
> administration. However, his wrongheaded economic response is undermining
> the world’s economic order. A nation’s currency is more a symbol of its
> strength and good name than its flag. Running down the US dollar, which
> ruled world finance since 1945, could mark the beginning of the end of the
> American era.
>
> That’s what the American delegation to the G20 economic summit in Seoul,
> South Korea and Yokohama, Japan, heard last weekend. Obama’s economic
> policies, notably his attempts to stimulate the US economic with the
> steroids of more deficit spending, were roundly rejected and criticized by
> other G20 members. No decisions were reached on exchange rates.
>
> However, there was an uncommon flash of common sense in Washington last
> week. A special bipartisan presidential panel on reducing the national
> deficit proposed $4 trillion in federal spending cuts.
>
> All political sacred cows were targeted. The biggest: the monstrous $700
> billion military budget. A third of US worldwide military bases would close.
> There would be cuts to social security, mortgage deductions, delays in
> retirement age, an end to politician’s local pet projects. Taxes would rise.
>
> The howling has already begun. Unfortunately, such unpopular, drastic
> spending cuts seem highly unlikely, particularly in the new US Congress
> where Republicans and Democrats will be deadlocked. America would need an
> economic dictator to implement the panel’s full plan.
>
> China has one – the Communist Party. America does not and is rudderless.
> More empires have been undone by financial collapse than invasion or
> battlefield defeats. The once mighty United States is staggering in this
> direction.
>
> November 16, 2010
> _______________________________________________
> Peace-discuss mailing list
> Peace-discuss at lists.chambana.net
> http://lists.chambana.net/mailman/listinfo/peace-discuss
>
>
> _______________________________________________
> Peace-discuss mailing list
> Peace-discuss at lists.chambana.net
> http://lists.chambana.net/mailman/listinfo/peace-discuss
>
>

-- 
Robert Naiman
Policy Director
Just Foreign Policy
www.justforeignpolicy.org
naiman at justforeignpolicy.org

Urge Congress to Support a Timetable for Military Withdrawal from Afghanistan
http://www.justforeignpolicy.org/act/feingold-mcgovern