Not too often that a new book comes out which becomes a lead item on a financially-oriented website like this one, but the headline “New Book by MIT Sloan Professor Warns of Next Financial Meltdown In 13 Bankers, Simon Johnson calls for breakup of nation’s biggest banks…” OK,. more?
“Channeling Thomas Jefferson and Theodore Roosevelt, MIT Sloan School of Management Professor Simon Johnson warns in a book being released today that a “new financial oligarchy” threatens not only the nation’s economy, but its political core. In 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown (Pantheon), Johnson, a professor of entrepreneurship and management, says the book provides “the back story” for the 2008 financial crisis “and for all the issues being raised now around financial reform. We hope the book helps people have a badly needed conversation about what we must do to push back against dangerous, narrow interest groups that now threaten our economic well-being.”
“That thought should frighten us into action.” In 13 Bankers, Johnson, a former chief economist for the International Monetary Fund, and co-author James Kwak cite historical precedents and offer financial analysis to conclude that a second financial shock is inevitable unless the financial and political stranglehold held on Washington by the nation’s biggest banks is broken. “The best defense against a massive financial crisis is a popular consensus that too big to fail is too big to exist,” the authors write. “This is at its heart a question of politics, not of economics or of regulatory technicalities.”
The book points out that the current concentration of financial and political power is not unlike other moments in American history. President Theodore Roosevelt, for example, challenged the monopoly powers of banker and industrialist J.P. Morgan. “No one thought he could win,” Johnson says in an interview, “but he did succeed in the first prosecution of a corporation under the Sherman Antitrust Act.” Roosevelt, he said, began a process that helped people understand the need to rein in the power of corporate giants, such as John D. Rockefeller’s Standard Oil, “which was arguably more important as a single company in 1910 than J.P. Morgan was then or J.P. Morgan Chase is now,” says Johnson.
Similar leadership is needed from the Obama administration and Congress now, according to 13 Bankers, which concludes that regulatory changes and other responses to date have been vastly inadequate. Johnson supports the administration’s proposed consumer protection measures, but overall, “You can’t just tweak a few rules and expect to rein in these big institutions.” Instead, the book calls for the six biggest banks to be broken up and for hard limits to be imposed so that banks cannot rebuild themselves into political and financial powerhouses. “Saying that we cannot break up our largest banks is saying that our economic futures depend on these six companies,” notes 13 Bankers. “That thought should frighten us into action.”
13 Bankers: The Wall Street Takeover and the Next Financial Meltdown is available from Amazon for $18-bucks (*I always get something else to get the order up to $25 to get the free shipping…cheap is as cheap does…).
The well-connected Deka-file has a most curious story headlined “G8 skips Iran sanctions to boost secret US opening to Revolutionary Guards.“ the gist of it seems to be that the US is trying to step-around the hard-line clerics and deal directly with the RevGuards leadership on things like nuclear power. But, of course, as anyone knows, nothing ticks off a lader (or boss) more than going outside of the established ‘chain of command” so while this looks promising maybe at one level, I figure it’ll do nothing more than piss off the clerics (even more) at another. You know who’s cockamamie idea I think this is?
May keep that front quieted down during Passover, though…
They Paid How Much for a Volvo?
Another $900 million plus $1.8 billion is…er….coffee needed…uh….$2.7-billion? Oh, well, gotta spend them dollars on something, I suppose…
The NYC MTA and presumably others around the country are on higher alert following the double suicide bombing in Russia Monday. Washington’s got bomb sniffing dogs out around the Metro. Wonder how they react to corned beef on rye? Or, wonder if bomb-sniffing dogs have to eat a super-bland diets? Never tried to train one, just wondering…
Indicted or Incited?
I’m watching the follow-up to the arrest of nine Christian militia members on charges they were planning to wage war on the USA. I guess the thing I’m not seeing answered yet (maybe at arraignment?) is how did the government know which seems to me it might circle back to the question of government informants and that in turn could lead to the fine line between informing and inciting…but I suppose all that will come out in the wash. Unless it’s the white wash, of course.
Don’t know if you’ve seen it, but up in Colorado, a lawsuit has been filed over a 2007 SWAT drug bust – based (once again) on a confidential informant. Looks like the charges have been dropped as there was no evidence of anything illegal going on and that could cost authorities a fair bit of dough.
Again, gets me to wondering who’s more dangerous: purported (but sometimes incorrectly as in the Colorado case,) perps or the government that’s hiring telltales that sometimes…you know… tell tales…..
Lumbering Toward Disaster
Couple of weeks back I was whining about crappy lumber quality since we’re adding on to my office. Comes this from a reader now:
“A couple of weeks ago you were complaining about the quality of the 2 x 4′s that you were getting. Seems the pine beetle is destroying many of the Western Forests and reducing quality and quanity of wood products.
I have read where lumber prices are up 40%, but I have to ask why this is the case with lower New homes being built. Could it be that everyone is working hard to fix up what they have?
A local lumber yard here where I live sells all of their hardwood logs to the Chinese. Plus another thing that I have noticed is that many trailer loads of lumber are traveling around without being tarped properly, even in the rain. Could too many drivers be falling off of loads and getting injured forcing up Workers Compensation rates for trucking companies play a factor in this too? Just my 5 cents worth, it used to be 2 cents but due to inflation, well you know the rest. “
I don’t know, but the whole lumber yard experience which was one a joy has turned into a nightmare for the ‘home handy-bastards’ of the world like me.
Sealing the Exits
A number of readers have pointed to the fine tyler Durden piece about how “It’s Official – America Now Enforces Capital Controls” which, as any student of Germany priors to WW II knows, is the kind of things (sealing the financial borders) that can often be a prelude to be international blow-ups (literally and…).
One of the more interesting theories floating about is that the US – and other countries run by the corporate cannibal capitalists of the PTB is that the borders and populations will be increasingly ‘confined to quarters’ [a fine pun, if I do say so] in the period leading up to whatever the Big Tipping Point of 2011/2012 is.
So, what else might be in store. In other words, as a ‘thought experiment’ what are the kinds of actions that leaders of countries/governments could take if they knew there was some kind of planetary shift ahead?
For one thing, like we’ve been hinting, there would likely be storage of large supplies of food and materials going on. We periodically here of such things – rumors of massive truck convoys moving foods into underground storage bases, but seldom with enough substance to print and never with pictures.
On the other hand, there’s been enough ‘leaked’ out of Hollywood about UFO/Alien Wars (War Between the Worlds kind of stuff and should I mention the 2012 movie with the billion Euro price per ticket?) that we have to wonder.
Then there’s the whole matter of Terra Entity stuff which is supposed to put this year so far into the record books that there won’t be any question that things have changed – and with it, dwindling food supplies to come. In the lead-in, we’re now seeing precursor events like “Heavy rain threatens to topple records in East“.
Minor inconvenience now, but start clipping these stories since its the floods, droughts, tornadoes and insect infestations that screw things up as the year goes on that this all leads into that you’ll want to be looking for.
Without sounding like an old Kung-Fu episode, yes, Grasshopper, this is to be taken most seriously – grasshoppers.
The good news, such as it is, is that both our cat out here on the ranch seem to like grasshoppers. Might be able to save a few bucks on cat food this year. Of course, the other things that seem to thrive on grasshoppers are birds and scorpions, which we get a fair number of. Which is why we keep enough Demon and other pesticides & sticky-traps around to at least keep the home and office free of too many critters.
Then there’s the problem of colony collapse:
I live in Pasadena, TX. I’ve been reading for a year and a subscriber since the fall. I very much enjoy your information. I wanted to let you know that I have an orange tree covered in blooms and not 1 bee. Last year I had numerous bees and ended up with 200 oranges off of this 5 yr. old tree. It looks like I’m going to have to help Mother Nature along and hand pollinate this year. I have a small vegetable garden in my yard that I guess I’ll have to hand pollinate, also.
Keep up the good work. The more information I have, the less stress I have….”
Yeah, but the more I seem to get: no bees and grasshoppers all over the place…which one of the Four Horsemen was Famine, again?
Wasn’t it Conquest (hmm…seems to be that going on…), War (ummm…), Commerce with a measure of wheat for a day’s wages…close on that..and Death via famine, plague and by the wild beasts…
Say! Speaking of which – rumors about that deer and other wild critter populations are falling. Like this reader note:
“George, we had some sort of significant impact on our deer herd in south Alabama this past deer season. There seemed to be a lot of missing young deer. Usually a large percentage of the deer killed are young bucks, from six month to 1 ½ years of age. They were no shows for the season, everybody saw less, a lot less deer. I have been in contact with our district game warden, and mentioned the prediction of less animals being in the game population. He wants to talk to me in person. Do you remember the reference from one of Cliff’s reports about less animals? I bought the reports, but can only find the last one, I think it was in one from like Nov-Dec 09.
No, but talk to the game warden and let us know? Our herd here seems down a fair bit, too.
Some ‘good’ news? The Gulf Stream is not slowing down, at least so say science types.
So are the oceans getting healthy? I think not – especially when there are stories about how a “Mysterious Whale Die-Off is Largest On Record.“ So no, fish & chips will probably disappear somewhere in the future.
How often have I told you that the extreme of marketing are the benchmarks of the world’s decline? So comes before the court of public opinion our next case this morning under the headline “Singer Erykah Badu strips at JFK assassination site in new video“. The singer involved reportedly “responded to the controversy via Twitter.”
That must’a been some set of twits….er…tweets…. OMG what’s ‘correct’ anymore? Is the whole world nuts?
Oh, it is? Why of course! That explains everything…including why market futures are up ahead of the open.
Even professional entertainers of the clown variety (on stage, not the ones in office) are noticing the shift:
“My job as a clown is one of the first professions to feel the negative impact caused by a dwindling disposable income. Thanks to the slap-stick government, we are now entering the largest economic depression in the history of the USA and possibly the world. Desperate for funds, the political elite are seeking to tax the service industry, including entertainers.
These ruthless thugs in office will soon be sending us hard working clowns to the tax slaughter-house. Who is next? We need to t-ax the politicians out of office and take back our constitution, at least what’s left of it.”
Want to place bets on the turnover rate in the November elections? Well take jokes & humor where we can find them…although like America’s sense of humor, things are getting a little tense.