COMMENT ON: ‘Volcker Rule’ Stalls In Senate: Geithner May Give Regulators Leeway In Applying Plan

Democratic and Republican Senators who obstruct the effort to create robust finance/bank regulation should be thrown out of office by their various constituencies. We possess the ultimate power. When we elected these bozos we failed to use it well. 2010 is a chance to do right, not repeat history, We should also require any Senators we elect to end the filibuster.

Read the Article I’m commenting on at Huffington Post


President Obama’s Global Op-Ed Full Text

I go with the President and feel that most of the critical commentaries I have read or seen are based on some bias or another. I trust Barack Obama to see the whole picture and to make the necessary judgments to get the ship sailing right. I am just glad that most people avoid reading what I read every day, from the NYTimes to the HuffPost. Fortunately there is an Obama Movement and politics remains the art of the possible, not a fate decreed by naysayers mired in past prejudices. Here’s the source for the President’s Op Ed which appears below.


We are living through a time of global economic challenges that cannot be met by half measures or the isolated efforts of any nation. Now, the leaders of the Group of 20 have a responsibility to take bold, comprehensive and coordinated action that not only jump-starts recovery, but also launches a new era of economic engagement to prevent a crisis like this from ever happening again.

No one can deny the urgency of action. A crisis in credit and confidence has swept across borders, with consequences for every corner of the world. For the first time in a generation, the global economy is contracting and trade is shrinking.

Trillions of dollars have been lost, banks have stopped lending, and tens of millions will lose their jobs across the globe. The prosperity of every nation has been endangered, along with the stability of governments and the survival of people in the most vulnerable parts of the world.

Once and for all, we have learned that the success of the American economy is inextricably linked to the global economy. There is no line between action that restores growth within our borders and action that supports it beyond.

If people in other countries cannot spend, markets dry up — already we’ve seen the biggest drop in American exports in nearly four decades, which has led directly to American job losses. And if we continue to let financial institutions around the world act recklessly and irresponsibly, we will remain trapped in a cycle of bubble and bust. That is why the upcoming London Summit is directly relevant to our recovery at home.

My message is clear: The United States is ready to lead, and we call upon our partners to join us with a sense of urgency and common purpose. Much good work has been done, but much more remains.

Our leadership is grounded in a simple premise: We will act boldly to lift the American economy out of crisis and reform our regulatory structure, and these actions will be strengthened by complementary action abroad. Through our example, the United States can promote a global recovery and build confidence around the world; and if the London Summit helps galvanize collective action, we can forge a secure recovery, and future crises can be averted.

Our efforts must begin with swift action to stimulate growth. Already, the United States has passed the American Recovery and Reinvestment Act — the most dramatic effort to jump-start job creation and lay a foundation for growth in a generation.

Other members of the G-20 have pursued fiscal stimulus as well, and these efforts should be robust and sustained until demand is restored. As we go forward, we should embrace a collective commitment to encourage open trade and investment, while resisting the protectionism that would deepen this crisis.

Second, we must restore the credit that businesses and consumers depend upon. At home, we are working aggressively to stabilize our financial system. This includes an honest assessment of the balance sheets of our major banks, and will lead directly to lending that can help Americans purchase goods, stay in their homes and grow their businesses.

This must continue to be amplified by the actions of our G-20 partners. Together, we can embrace a common framework that insists upon transparency, accountability and a focus on restoring the flow of credit that is the lifeblood of a growing global economy. And the G-20, together with multilateral institutions, can provide trade finance to help lift up exports and create jobs.

Third, we have an economic, security and moral obligation to extend a hand to countries and people who face the greatest risk. If we turn our backs on them, the suffering caused by this crisis will be enlarged, and our own recovery will be delayed because markets for our goods will shrink further and more American jobs will be lost.

The G-20 should quickly deploy resources to stabilize emerging markets, substantially boost the emergency capacity of the International Monetary Fund and help regional development banks accelerate lending. Meanwhile, America will support new and meaningful investments in food security that can help the poorest weather the difficult days that will come.

While these actions can help get us out of crisis, we cannot settle for a return to the status quo. We must put an end to the reckless speculation and spending beyond our means; to the bad credit, over-leveraged banks and absence of oversight that condemns us to bubbles that inevitably bust.

Only coordinated international action can prevent the irresponsible risk-taking that caused this crisis. That is why I am committed to seizing this opportunity to advance comprehensive reforms of our regulatory and supervisory framework.

All of our financial institutions — on Wall Street and around the globe — need strong oversight and common sense rules of the road. All markets should have standards for stability and a mechanism for disclosure. A strong framework of capital requirements should protect against future crises. We must crack down on offshore tax havens and money laundering.

Rigorous transparency and accountability must check abuse, and the days of out-of-control compensation must end. Instead of patchwork efforts that enable a race to the bottom, we must provide the clear incentives for good behavior that foster a race to the top.

I know that America bears our share of responsibility for the mess that we all face. But I also know that we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people.

This G-20 meeting provides a forum for a new kind of global economic cooperation. Now is the time to work together to restore the sustained growth that can only come from open and stable markets that harness innovation, support entrepreneurship and advance opportunity.

The nations of the world have a stake in one another. The United States is ready to join a global effort on behalf of new jobs and sustainable growth. Together, we can learn the lessons of this crisis, and forge a prosperity that is enduring and secure for the 21st century.


Phony Wealth


It’s the Wall Street Journal’s assessment that we have lost 18 percent of our wealth.

I think it is time to revive Holden Caulfield’s general attitude and call our wealth phony. For each instance of alleged wealth, we have seen an instance of skyrocketing costs.

I can remember my dad, who was a well-to-do lawyer in NYC, telling me that I might expect a magnificent inheritance — at the time it was about one-fifth of what is now being asked, even in a recession, for a studio apartment in Manhattan. My dad lived to see the 2000s and by then had accumulated a good deal of phony wealth.

We all got taken in by it. For a while. I lost faith in it pretty quickly because literally everything I could have bought for $1000 some decades ago now cost many times as much. Houses and cars in particular. I always figured the computer was the new car because they used to cost what I could have bought a VW bug for in the 1960s. Also they were sold with the same lingo-hype.

I am not sure where inflation is in this because my impression is these increases in costs were not counted as inflation. But I surely know that when a restaurant asks $100 for a meal that once cost $15, my money is basically phony. The only thing that saves me is that I never pay close to $15 for a meal today. I feed low on the totem pole with no regrets.

Because, you see, I was NOT a wealthy WS lawyer, I was a quixotic radical semi-free spirit, knew how to get along with very little money and never put that much store in it. The one exception for me was a brief time of online business where I got sucked into believing the hype for a while, only to finally realize that it was just as phony as everything else to do with wealth.

Yes, wealth and phoniness go hand in hand folks. Take it from one who knows. Maybe back in my odd youth there was a wealth that was not phony, but, looking back now, it was pretty shaky even then.

The way the market works, even now, is that when we have valueless money, but less of it, say 18 percent less, we will get by by paying less. Some, the poorest, will get screwed more than the wealthy, but society will not tank. Obama is about making the playing field more level.. I like that. I believe in that.

Otherwise, like Holden Caulfield, I thumb my nose at the WSJ and say it’s all phony.


Food for Thought on The Banks

From Simon Johnson, quoted by Economist’s View:

How then do we really privatize? By exercising leadership: take over insolvent banks and immediately reprivatize them. … The taxpayer retains a significant number of shares (or the option to buy common stock) as a way to ensure upside participation…

Above all, we need to encourage or, most likely, force the large insolvent banks to break up. Their political power needs to be broken, and the only way to do that is to pull apart their economic empires. It doesn’t have to be done immediately, but it needs to be a clearly stated goal and metric for the entire reprivatization process.


pattern language, politics

Further Thoughts on “Our Crisis Is Not Economic”


The original is in blockquotes.

The best way to understand the current economic crisis is to see that it is not economic. It is political, but even that designation is inadequate. It is a seismic evolutionary fissure that has yet to be fully identified. This post, and links to a few other exploratory posts on this blog, will seek to outline what I believe to be the prominent features of our situation and the likely avenues for a move into the future.

Though this was written first a year ago, it remains true. Virtually no one, including the experts, claim to know the future. Some sense of the future is necessary for any confidence to take root.

We are watching the Dow continue to sink. I believe it is partly due to the probability that many businesses are unable to determine whether the products they produce are relevant to a future they cannot grasp.

Any influential text on economics, philosophy or history has claimed that it understands what a crisis is and what the way out is. The premise of this post and of the Pattern Language posts I am writing and of this blog generally is that the age of oil is ending. This is hardly an original thought. But I also assume that the age of the automobile is ending. This means that the entire structure of global development, which emulates the United States, is doomed if it continues this emulation. And that we in the US are economically doomed if we assume that we can build an economy on growth, on the continuation of an automobile economy and on the premise that people in the future are going to wish to purchase separate dwellings at prices approaching the values they had when the prices started free falling.

In the broadest sense the evolutionary change now taking place represents a battle between the predatory instincts that Veblen flagged with such prescience more than a century ago and the workmanlike instincts that he so admired. It is odd to me that people will read Baudrillard who builds on Veblen and never turn a page of the original texts which can be found, happily now, online.

The reason the current crisis is not economic is that our economy is by any measure unsustainable.

If this is true, then the sort of economics 101 thinking of Rachel Maddow and everyone else who believes we can spend our way out of this is either a palliative or a desperately erroneous assumption. Sustainability is a nice green code word to which many give lip service. But at root it is an invitation to a scaled back way of life and that is hardly what people want. Our crisis involves reckoning with our human battle between lassitude and the proactive responsibility needed to deal with real and significant change in the way we live. Sustainability means we build and design in such a way that our goal is anti-growth. Of rather that our idea of growth has morphed from an emphasis on the acquisition of more and more to the conscious making do with less and less. Not that we do not grow as human beings or as communities or spiritually. All these nice realities are enhanced by the change we are going through.

Consider a simple example. We build houses now that are hugely expensive and even more so when we consider all the things we put in them. What if we were to concentrate on producing customized spaces which would be our own rooms and which would not require us to purchase beds, couches, chairs, desks and such, because they would be built in. What sort of disruption would this cause in a company that is entirely devoted to creating household objects that would become obsolete through such an understanding?

Do you see the problem that is facing businesses? What do they make if the whole world of growth is melting before their eyes? And it is.

We cannot survive by hallowing indebtedness ad infinitum, both as a government panacea and an individual or family lifestyle or as a prominent feature of much business. A culture of indebtedness is not sustainable.

This raises an entirely different but related issue. We hear that our entire economy depends on debt. That banks have functioned by enlarging their risk to many times the funds they possess and that wealth itself is dependent on this legerdemain. We have apparently lived through a time when this shaky premise was raised to the fifth or tenth power by wildly greedy and deluded financial dealers. And now it seems we are trying to vaporize the resulting paper debt with real paper which we call money.

Does this not have the feel of confronting one fiction with another, in the hope that we will somehow restart the economy?

But wait. The economy cannot be made to work because it is built not only on untenable debt but on untenable notions that a growth economy can continue to function in our world.

It will function only if we translate capitalism and growth into a concerted effort to make sustainability the value we build in to everything.

We cannot survive by palliative tweaks to our current structures under the label of “green.” Current advertisements for companies that claim to be going green may lull us into believing that we can survive by moving, this way and that, among existing options such as various fuels.

The current and likely future of the green economy, fueled by modest but significant investments, will be to try to shore up the structures of our metrosprawl, commuter, debt-based society. This will not do anything more than create a false sense of security while wasting time before the ultimate decision is made — to end the dominance of the private car, to end the dictatorship of debt, and to begin creating human settlements that have the elements needed to enhance life and sustain it safely and creatively.

Even if we could prop up the current system, it would not accomplish the best purpose of an economic system, which is to make it possible for all within it to achieve a measure of relief from poverty, illness and ignorance.

Elsewhere I have argued that our global system is one of benign genocide, fuelled by the partnership of capitalism and philanthropy. The beginning arguments for this position can be found by searching out the relevant keywords on this blog. The point here is that all talk of Millennium goals and of reducing global poverty, ignorance and disease depends on a stiff-arm NO of all the world to a metrosprawl future. Monte Python was right in The Life of Brian to portray hell as a parking lot.

At its best, our global system can be described as an amalgamation of capitalism (widely understood) and philanthropy, defined as the sum total of activities we engage in under the label not-for-profit,. Including educational and medical institutions as well as the plethora of associations and NGOs and governmentl agencies that are non-profit (sic).

Our current system is a faltering machine whose product is benign genocide — which I define as the sum total of global deaths that result from the way the system is set up. Any honest redoing of our global economy must at least recognize why the current mechanisms fail. Or else we shall be condemned to self-delusion. believing than incremental tweaks are a real solution and celebrating achievements whose celebration is in itself a cause for tears.

The answer to the conundrum created by acknowledging that our present economic system is unsustainable, is an integral politics which is providentially the potential of an Obama candidacy.

Such a politics can communicate that the solution to our problems is not merely a matter of moving beyond religious, racial, gender and cultural barriers, but by creating a culture of integral communication of the elements needed to conquer problems and of integral projects which exemplify such behavior in action.

If Barack Obama is elected, he will be a leader fit for these times. He will, I believe, propose not that we compete to bring our economy back but that we move to a post-oil, post capitalist-philanthropic, post-debt-enslaved, post-consumer culture based on a reclamation of key values that have been sliced and diced in our Balkanized intellectual environment.

The primacy of the individual. This is not conservative or liberal, it is simply the truth.

The primacy of public space as a measure of cultural attainment.

The creation of new human settlements based on a wedding of high technology and values implicit in Christopher Alexander’s pattern language. These I envision as experimental nodes where groups live independent of the need to drive cars.

The understanding that being green involves doing so on a scale that requires what the New Testament calls new wine skins. In other words, it makes sense to build something green and integral from bottom to top that can be home and workplace and cultural space for from five to ten-thousand.

Green yes. Beyond green and integral. Absolutely. Changing the world. Understood.

A concluding thought: The actual material elements needed to create the sort of settlement I envision, car-free, eco-sufficient and integral would create a blue-print for a completely revived business and even a changed business culture, if that is possible.

Elements would be all of the new products needed to create a completely workable matrix for a settlement one mile in diameter — including

1. All the elements needed to enable recycling for the entire community, power from all sources for the entire community, and security for the entire community.

2. All of the forms and materials to make the forms of the lego blocks needed to enable the creation of customized spaces that are transportable as containers are today and which can be assembled onsite within the matrix. This is virtually fifty new industries.

3. All of the work needed to transform all existing institutions so that they can reconstitute themselves as nodes within new human settlements. This means the creation of new models for a dispersed education, a dispersed health, a dispersed corporation and so forth model.

Need I go further? All one has to do is to think beyond the dominance of the car and to the need for integral and eco-sufficient communities to begin to imagine a way to reconstitute capitalism not as an engine of infinite growth of the sort we have known, but as the engine of sustainable societies.

I will go this far. Paul Krugman won a Nobel for his acuity in economics. In a recent NY Times column, he suggests that the economy will rebound when housing and cars become more marketable. I am saying that that day will not come. It may come in some partial and even artificial way. But Krugman is wrong not because there might not be some recovery, but because he still believes that the future belongs to housing of the sort we have in our metrosprawl and to automobiles of any sort. Anders Nygren long ago wrote a salient essay on the role of the self-evident in history. It is self-evident today that automobiles and detached houses no longer have the capacity to drive an economy. But for this very reason it is completely ignored. It is self evident that, like ponzis, growth economies are unsustainable. But no one seems to pay it any mind.

pattern language, politics

10 Reasons Private Cars Will Become Obsolete

This is an ancillary post designed to woo the reader to follow my evolving Pattern Language series in which I discuss Christopher Alexander’s classic Pattern Language in reference to its online incarnation. The essential links for this are below:



1. Initial Cost — with $30K as a general base figure, we are looking at an impossibility for most and and an unwise purchase for many.

2. Money Pit — Not only fuel but all other expenses associated with having a private car. This is the trick the past economy plays on us all. The other big Money Pit is the detached home.

3. Time is money. Whether true or not, the time spent driving on congested arteries is a personal loss-leader.

4. Commuting is going to decline. As we move into the next stage, work will become decentralized and cyber-facilitated. Internet cafes will morph into secure office nodes close to homes of workers. The trade-off will be better performance and less emphasis on filling empty work hours. Competence will be rewarded. This is what makes Obama’s broadband emphasis far-seeing.

5. Seismic Culture Shift. I believe most of what we call metrosprawl is so horrendous that it will be imploded or torn down within a decade or two and replaced by human settlements that incorporate the social, cultural and commercial features of cities and towns. These will be car-free. There will be a corresponding evolution of public vehicular transport. These will replace cars over time. This seismic change will essentially replace the one home and two car garage mentality.

6. Geriatric Warp. As the population, ages there will be insistence on existence that does not mandate ownership of a car. Buses will evolve as will the uses of existing rail beds as mental energy becomes more focused on the idea of a post-automobile world.

7. Entrepreneurial Options. The US will only get out in front of the emulative flow of global commerce by developing the model for a post oil society. This will be the economic motivation to release money to build the models of car-free human settlements.

8. Zoning Reprogramming. Today’s zoning is primitive. The zoning of the future will allow for a mix of everything needed to enhance life within walking distance. Cars will become things you rent to tale a trip in the country. Essentially shops and concerns will be branches of Web-based warehousing and delivery systems. But uinst4ead of being housed in monster highway hangars they will be part of pedestrian accessed commercial nodes scattered through car-free human settlements.

9. Individualism Reconsidered. The selling point for cars is the fatuous assumption that a car expresses one’s individuality. This has been true in the past but the economic crisis is changing the definition of a valid individualism. Henceforth, a valid individualism will become more and more the exercise of choices that make less and less attractive the congestion, accident rates and design disasters that can be associated with the dominance of the automobile. Cars will become matters of choice rather than necessity. Over time their use and essentiality will decline.

10. A New Economy. The jobs of the future will be entirely different than they are now. They will be closer to home and more micro, as in: the people who run the mini-educational and mini-health services, etc., that will become the standard features of pedestrian human communities.

BONUS REASON — We are free to build what we want to build. We are not captive to what looks as though it will dominate us forever.