What the hell?
‘OBMAMA: All right, Chuck Todd. Where’s Chuck?
Question: Thank you, Mr. President. In your opening remarks, you talked about that, if your plan works the way you want it to work, it’s going to increase consumer spending. But isn’t consumer spending, or overspending, how we got into this mess? And if people get money back into their pockets, do you not want them saving it or paying down debt first before they start spending money into the economy?
Obama: Well, first of all, I don’t think it’s accurate to say that consumer spending got us into this mess. What got us into this mess initially were banks taking exorbitant, wild risks with other people’s monies based on shaky assets and because of the enormous leverage, where they had $1 worth of assets and they were betting $30 on that $1, what we had was a crisis in the financial system.’
Uh, I don’t remember about Todd receiving that Nobel Prize in economics. But here is what Paul Krugman said about the cause of the crisis:
‘ What lies behind the credit squeeze is the combination of reduced trust in and decimated capital at financial institutions. People and institutions, including the financial institutions, don’t want to deal with anyone unless they have substantial capital to back up their promises, yet the crisis has depleted capital across the board.’
Does that sound to you like “too much consumer spending” was the problem?
And what does Krugman advise?
‘ policymakers around the world need to do two things: get credit flowing again and prop up spending.‘
Krugman is the world expert on how the last Depression was ended.
Or here is another Nobelist, Joseph Stiglitz, who was prescient just as the crisis was beginning to break:
‘The present financial crisis springs from a catastrophic collapse in confidence. The banks were laying huge bets with each other over loans and assets. Complex transactions were designed to move risk and disguise the sliding value of assets. In this game there are winners and losers. And it’s not a zero-sum game, it’s a negative-sum game: as people wake up to the smoke and mirrors in the financial system, as people grow averse to risk, losses occur; the market as a whole plummets and everyone loses.’
Yeah, that sounds to me like a lot of shenanigans by bankers and high-powered financiers. Not. Spending. By. Consumers.
Why is it that bright people like Todd say these things?
I just have to speculate that corporate news is so tied in with the superwealthy that they make up things to protect the continued ability of the top 1 percent to take home 20 percent of the income of the country every year, even when they have demonstrated that they don’t deserve this lion’s share– since they are not making the rest of us prosperous but rather running the country into the ground.
End/ (Not Continued)