19
Sep
08

On air: Should governments control the Markets?

It’s been a jittery week to say the least on the world financial markets. We’ve seen US investment bank Lehman brothers go bust, Merrill Lynch being forced to sell itself to Bank of America, a multi billion dollar bailout of insurance giant AIG and a takeover of British bank HBOS by rival Lloyds TSB.

The UK government has decided to waive competition laws to allow HBOS and Lloyds TSB to merge. Last night the Financial Services Authority announced a crackdown on excessive short-selling, the sort of speculation that can send companies spinning towards bankruptcy.

As the BBC’s Business Editor Robert Peston says on his blog, “The American way of capitalism doesn’t seem all that brilliant right now.”

What is the alternative?

On this blog many of you have been talking about greater regulation and why governments, particularly the US and UK, jump in to bail some institutions out and leave others to sink. Have the markets failed so badly, that we have to think about things differently? One way round that would be to bring the markets under public ownership. Run them for the good of the country, rather than allowing speculators to line their pockets.

Today Global markets have risen, helped by news that US officials are working on a plan to help rid US banks of their bad debts. Another partial step in by the US government.

Is this the only way to ride out this crisis? The only way to stop it happening again? Could this spell the end of greedy capitalism?

But what about the effects on business, could business suffer under public ownership of the markets? Is the answer greater regulation? Or should we let the markets sort themselves out and ride the storm?


118 Responses to “On air: Should governments control the Markets?”


  1. September 19, 2008 at 14:16

    “One way round that would be to bring the markets under public ownership.”

    Snigger. You might want to tighten up on that question. What do you mean by “markets”? The London Stock Exchange? That’s a market. Sure, why not, won’t make much difference. LIFFE? That’s a market. Want to make is publically owned? Again, why not? (Or indeed why?)

    But if you mean “the markets”, all those diverse places where people buy and sell, swap and trade, plus all the things that people buy and sell, all the things that people swap and trade, then you’re insane.

    “Run them for the good of the country, rather than allowing speculators to line their pockets.”

    Everyone who buys anything in a market is a speculator. They think that what they’re buying will make them happier than what they’re giving up to buy it. If you’re really talking about taking all of that into public ownership then you’re talking about the abolition of private property.

    Which is entirely insane.

  2. 2 John in Salem
    September 19, 2008 at 14:30

    When considering such a plan you have to apply the following principle ~
    The greater the number of people, the lower the average IQ.

    Or we could just let the government run the markets because we know all the smartest people are in the government and there’s never any corruption or greed to worry about, right?

  3. 3 Dennis@OCC
    September 19, 2008 at 14:36

    I think at this rate…the markets will be publicly owned in very short order.

    Dennis

  4. 4 Dennis@OCC
    September 19, 2008 at 14:37

    In my personal opinion, the markets should have a chance to ride this storm…And if necessary…then the option of the public owning the markets–should be look at…in the LAST option….

    Dennis

  5. 5 Vijay
    September 19, 2008 at 14:42

    Publicly owned markets aren’t a necessity,but publicly regulated markets are.
    One has to establish what are the markets purpose and regulate them accordingly.
    Markets should neither be gambling,nor pass the hot potato nor find a mug use a mug.

  6. 6 1430a
    September 19, 2008 at 14:46

    hello everyone,
    well the capitalism system in America is collapsing.And to save them from further danger if economic instability the government is buying them publicly.
    But as they say if u spoon fed you children they cannot move freely.Hence if the government keeps on acting like the mother and protecting the firms then these firms will never be able to grow or develop
    Thank you
    Abhinav.

  7. 7 Katharina in Ghent
    September 19, 2008 at 14:51

    The thing that banks, and investment banks in particular, sell is money, but money is just a number on the paper, so it’s easy to loose perspective and start dealing with numbers that are mind boggling. (Billions? Trillions? Who knows how much money that really is???) I don’t think that capitalism per se has failed, but when left unattended, these companies behave no better than a teenager with all of daddies credit cards, not just one. Clearly public observation and regulation has to be improved. If some of the companies have to be grounded for life, so be it, clearly they have shown that they cannot be trusted with. The markets themselves have not failed, but the people operating in them, they have completely lost touch with reality.

  8. 8 Bob in Queensland
    September 19, 2008 at 14:54

    A “stock exchange” is just an infrastructure to facilitate trading. Public ownership of this would achieve nothing. The actual market is thousands–or millions–of people and organisations buying and selling things–stocks & shares, bonds, commodities and lots of more esoteric concepts. There is nothing tangible for a government to own.

    Greater regulation–yes. Public ownership? Impossible.

  9. 9 Virginia Davis
    September 19, 2008 at 14:59

    This financial crisis, its parameters greater than or as great as The Great Depression, will see a permanent change in what the US now calls capitalism.

    This presidency, soon to be over, has established, is establishing an enormous deficit. Where is the money? What is real here?

    In my opinion, China will be instrumental in changing “the market system” and the economic realities of the United States.

    The American taxpayer is being shafted by short sighted government officials and elected representatives.

    China controls its finances.

    Perhaps the next president can change American finances to deal with our newly acquired debt. Perhaps not.

    Virginia in Oregon

  10. 10 Jessica in NYC
    September 19, 2008 at 15:08

    The prosperity of the 90s gave the false hope that the economy would stay strong and a lot of regulations when unchecked and unbalanced by Clinton’s administration. Bush’s administration has been grossly negligent in allowing corporate greed to grow out of control. There were a lot of key warnings that were ignored and it’s true that “The American way of capitalism doesn’t seem all that brilliant right now.”

  11. 11 Shaun in Halifax
    September 19, 2008 at 15:13

    Whenever the government regulates something, it has to implement the regulatory infrastructure, hire the people to regulate and set up the terms. All of these things cost money. And how does the government offset this expense? It increases the price to compensate for the extra overhead.

    My example is gas regulation in some provinces in Canada. if you go to gas buddy, you can see that regulated prices are regularly higher than non-regulated ones. Why? They need to pay for the regulatory body.

  12. 12 steve
    September 19, 2008 at 15:14

    Doesn’t this happen every 10 years? There’s always some crisis every deckade. At the end of the 1980s, the Savings and Loans were failing. End of the 1990s early 2000s the dot com bust happened. IN the 1970s we had stagflation and gas lines..

  13. September 19, 2008 at 15:22

    No, Governments could function without direct involvement by understanding and controlling the system. They should use benchmarks to judge the slowing and weakness is developed in the system. Bench Marks like:

    1) negative savings rate

    2) more then .03% wage disparity.

    3) credit companies paying the highest CEO wages

    4) Massive home foreclosure.

    There are just off the top. When the government sees tings like these they need to adjust policy. Companies should be allowed to loan to whoever they want, just not with government backing. I guess to begin with we need people making rules who understand the cause and effect of economics.

  14. September 19, 2008 at 15:31

    No markets should be free and clear devoid of government control.

    However, we should have a government sponsored company for private health care. This company should be available for all who want reasonable cost, full coverage. Private companies can compete against this entity.

    Private health care companies should be able to compete if they don’t create absurdly expensive CEO positions with millions of dollars bail out packages.
    If they got rid of all the lawyers to defraud customers out of coverage.

    Regular investing companies should always have their CEOs held accountable if they fail. All accounts must be confiscated when CEO screw up companies. They do not deserve to take all and leave stock holders losing.

    Golden parachute people should be allowed to go broke along with everyone else, that should be law. All assets taken to pay off universal debt.

    troop

  15. 15 Robert
    September 19, 2008 at 15:37

    The root of problem is banks will not lend to each other. Short of draconian regulation forcing the banks to to lend nothing will help.

    Even if you nationalise the markets then banks would just conduct the same deals they do now via private contracts. We’d found out 3 months later in the quarterly report instead of in the open market. It would make no difference.

  16. September 19, 2008 at 15:41

    Speculation is one of the causes that can lead to markets downfall. One of the causes of the unprecedented high oil prices from last April to August were the speculations coupled with the political situations in areas like the Middle East.

    However the state shouldn’t come to the total ownership of markets as this will amount to communism in disguise. Businesses should be allowed to trade freely by respecting the competition rules. Investors shouldn’t take too much risks driving prices and shares very high only to fall sharply when financial institutions like banks are on the verge of bankruptcy.

    The lesson to be learnt from the current financial crisis is that markets should be immune from sudden crush by foreseeing the crisis at its start and not to let it get out of control. Otherwise, the injection of billions of dollars in banks will be just like an aspirin that has a short calming effect for a disease needing a thorough surgical operation.

  17. September 19, 2008 at 15:56

    in a purely Capitalist society Goverments have no business in controlling whatever happens in the private sector.

  18. 18 Rajeem
    September 19, 2008 at 15:57

    Dear BBC WORLD HAVE YOUR SAY, Our topics for discussion are gradually becoming predictable. Either is American election related or Financial crisis. Are there no other things happening in the World to talk about? I am gradually becoming reluctant to listen to the show because the topics of become monotonous. Thanks. Rajeem.

  19. 19 Vijay
    September 19, 2008 at 16:02

    @Jessica
    Bill Clinton balanced the budget, got rid of the national debt problem ,his market fixes were rational at the time ,after he was out of office ,the next administration did not change when the circumstances change.
    @steve
    The problems now are far greater than before,its not a blip like the other events you mentioned.
    @Shaun in Halifax
    Are you talking about a public gas monopoly or simpy fixing the minimum and maximum gas price,if it is the latter then there won’t be any cost associated with the practice.

  20. 20 DOLAPO AINA
    September 19, 2008 at 16:14

    Without being grandiloquent with financial and monetary terms, so that the layman can understand what is going on. This is all about greed. While the moves are what are on ground now, it implies that those who caused this financial turmoil would or might go free. Making the average person pay through taxes.
    Presently, the actions taken seem to be a good alternative but for how long would the global populace keep on bailing out reckless financial institutions and their heads. Countries need to begin cutting their financial ties with the American economy, though this is almost impossible. But realistically, those countries whop have less of financial ties with the American economy didn’t really feel the impact of this near total collapse. And a lot of these countries are in Africa.
    Some questions need to be asked. Did this problem elude everyone including the heads of government financial institutions?

    Dolapo Aina,
    Lagos, Nigeria.

  21. 21 DOLAPO AINA
    September 19, 2008 at 16:19

    Without being grandiloquent with financial and monetary terms, so that the layman can understand what is going on. This is all about greed. While the moves are what are on ground now, it implies that those who caused this financial turmoil would or might go free. Making the average person pay through taxes.
    Presently, the actions taken seem to be a good alternative but for how long would the global populace keep on bailing out reckless financial institutions and their heads. Countries need to begin cutting their financial ties with the American economy, though this is almost impossible.
    But realistically, those countries who have less of financial ties with the American economy didn’t really feel the impact of this near total collapse. And a lot of these countries are in Africa.
    Some questions need to be asked. Did this problem elude everyone including the heads of government financial institutions?

    Dolapo Aina,
    Lagos, Nigeria.

  22. 22 Frank from Illinois
    September 19, 2008 at 16:23

    These institutions made tons of money, and their executives took it all home with them, making loans that will never be repaid. Now the bad debt should be nationalized, and I should take the loss????

    I have been Obama’s biggest supporter for his promise to do things differently, and
    I have never voted republican for president in 40 years.

    But If Obama buys this, I would vote republican in protest. They couldn’t possibly be any worse.

  23. 23 selena in Canada
    September 19, 2008 at 16:38

    @Frank

    You are buying a pig-in-a-poke if you think Obama will do anything different. No one can do anything different. The forces are much greater than Obama or McCain or anyone else in the current system.

    The time is ripe for a revolution. But against whom? The controllers have had enough time to cover their tracks.

    No one will ever get to the bottom of what has happened. But this time maybe the middle class will pay as well as the poor. That is a real force for revolution!

  24. 24 David In Florida
    September 19, 2008 at 16:41

    I always use to make the joke that my goal in life was to work so I could get a $10,000,000.00 line of credit, take it all in cash and flee to Costa Rica.

    Now it looks like if I got a $100 billion line I wouldn’t have to go anywhere.

  25. 25 Vijay
    September 19, 2008 at 16:50

    @Dolapa Aina
    Are you a merchant banker?Go on be grandiloquent it would be nice to hear real financial and monetary terms to describe the present situation.

  26. 26 Jessica in NYC
    September 19, 2008 at 16:55

    @ Vijay

    “Bill Clinton balanced the budget, got rid of the national debt problem ,his market fixes were rational at the time ,after he was out of office ,the next administration did not change when the circumstances change.”

    I absolutely agree! Since I am in NYC I feel and have felt every pinch of the US declining economy this past few years. I am struggling to understand how the financial market was left unchecked so long. After Enron, not exactly the same as AIG, Fannie Mae and Freddie Mac, but I expect safe guards and proper government regulations to monitor our market.

  27. 27 archibald in oregon
    September 19, 2008 at 16:59

    They made their beds, they should sleep in them………..no more bail outs at the expense, ultimately, of the little people………

  28. 28 Robert
    September 19, 2008 at 17:04

    Jessica

    Perhaps Bush mistook no interfernce in the markets to mean not bothering to pay attention to it.

  29. 29 Syed Hasan Turab
    September 19, 2008 at 17:30

    The way US economy expended after Hong Kong & the way US economy went down after 9/11 both sitution’s are not appropriate for an economy.
    To achieve solid financial goals every economy need solid foundation & this foundation takes some time, overnight booming economy is a latest technique i.e. bubble creation & suck the public saving’s for short term benifit of the corporation, this is how market crash & bankrupcy kind of situation’s arises.
    All this situation’s are learning point for Government Monitors, if a business is involve in public trust & public financing suppose to provide solid footing’s, foundation & security to security & exchange board, a complete Govt controll will create lot of complecation’s & eat out the financial market.

  30. 30 Thea Winter - Indianapolis IN, USA
    September 19, 2008 at 17:30

    @ Steve,
    Doesn’t this happen every 10 years? There’s always some crisis every deckade. At the end of the 1980s, the Savings and Loans were failing. End of the 1990s early 2000s the dot com bust happened. IN the 1970s we had stagflation and gas lines..

    You are correct. The US Government just puts tax payers money into the system and it all goes away in a few months after the new president is in office.

  31. 31 Dinka Alpayo,Kampala
    September 19, 2008 at 17:31

    YES. As long as the government still collecting taxes from us in our daily life in the market places then they should take over market even when its risks or benefits them.Because people does have power but not that to take up market, If the government doesnot police they area who newt to police the area,should we call in the rebels/bandit to police? the answer is NO.

  32. 32 Jessica in NYC
    September 19, 2008 at 17:32

    @ Robert

    Indeed and it’s very depressing.

    The government should not control everything, but why weren’t there benchmark or some kind of red flag raised? Seriously, how many incompetent people are there in Washington not doing their job?! This is a colossal failure from numerous governmental departments with 100s of staff members. Maybe they did raise the red flag warning Bush & Co, but it was ignored… wouldn’t be the first time Bush ignored vital information to help his friends.

  33. 33 Roberto
    September 19, 2008 at 17:44

    RE ““The American way of capitalism doesn’t seem all that brilliant right now.””
    ——————————————————————————————————–

    ——– The American way of capitalism has increasingly become the American way of accounting and bank fraud as governments are financed to assist them in increasingly complex and illegal global ponzi schemes.

    America citizens are vanishing, being replaced by red and blue states where the largest scale illegal human and drug trafficking in the world’s history goes on unabated as a perfect complement to the vast ponzi schemes.

    Oh, there’s a few of us left mind you. We’re sorta like polar bears watching their critical sea ice melt around them. I hear there’s gonna be some government retraining programs so we can become deer or coyotes who are doing quite well in their jobs these days.

  34. 34 Thea Winter - Indianapolis IN, USA
    September 19, 2008 at 17:46

    Ihave been doing a lot of thinking on this issue. Here is what I have come up with.

    The US financial system is dependent on people spending money. The so-called middle class (smaller than ever) has seen high paying job going overseas quickly with fewer job here. The jobs that are here are lower paying. We do not make anything here anymore so we just spent money on credit cards to keep the economy going. Well, now it is time to pay. For all of us. The only problem is that both political parties are to be blamed for these issues. Lets stop sending jobs overseas, make products here, and purchase those produces here. MADE IN AMERICA! FOR AMERICA.

    The money the FED is spending on this buyout is estimated to be over $3,000 per person. I say spend that money on starting up the factories that were closed, get Americans working again, and then the financial institution will came back. The Government is NOT spending the money in the correct place,

    Thea Winter
    Indianapolis, IN

  35. 35 selena in Canada
    September 19, 2008 at 17:57

    There is a lot of sense in what you are saying Thea. Globalization created this problem. I am not saying that global markets are necessarily bad. What I am saying is to close a profitable plant in the Us and move overseas to make a bigger profit for shareholders is dead wrong.

    Someone in authority should have seen that coming!

  36. 36 viola
    September 19, 2008 at 17:57

    I think there’s nothing basically wrong with capitalism. I believe it was on the Charlie Rose program that I heard one expert comment that these kinds of problems occur because the accounting (which is supposed to give a clear picture of what is happening) is defective. Same thing with ENRON.

    Too many view accounting as the method by which you avoid taxes, rather than as a tool which enables better decision-making.

    There is a saying: If you owe the bank $500, that’s your problem. If you owe the bank $1,000,000 that’s the bank’s problem. That same principle operates across all the financial sectors. It ultimately becomes the taxpayer’s problem.

    Canada

  37. 37 Jonathan
    September 19, 2008 at 17:58

    @Selena~

    I have this intense deja vu feeling, but I’ll ask you again (I think) why in the world you think that “poor” people are affected by these goings-on at investment banks.

    Do you know any “poor people” who are heavily invested in common stock of Lehman Brothers, or Merrill Lynch, or Bear Sterns, etc.? Do you know any poor people who are heavily leveraged in derivatives? (Credit default swaps maybe?) Do you know any poor people who have anything at all to do with the investment banking industry?

    No? I’m guessing not. The people with those investments tend to be rich people, although a lot less rich than they were a month ago. Now, I don’t happen to think that “rich” people are “bad” and poor people are “good,” but I know you do, or you did last time I heard. So why are you concerned? Poor people don’t pay taxes either, so it seems to me that they are perfectly safe.

    On a different note: Did you see my response to you on yesterday’s page about garbage men and CEOs, telling you how much garbage men earn and asking how much you think CEOs should earn? It’s very impressive.

  38. September 19, 2008 at 17:59

    I have read today a number of topics put forward by BBC’s Editors, they all are resounding the same information but under different titles. These interest will benefit the power that feeds them and to the powers that can take it away. My endeavor is to make the propaganda machines of the world pay out like the slot machines of Mississippi’s Riverboats.

    Governments have had a long time to obtain the ability to exploit and form their society. So with such a structure in place, you will have to look elsewhere for the truth.

    The government own the currency and the precious metals that back them up, not the people. The people only lease it and it’s value changes at the will of their government.

    The Great Depression, the history of that error was rewritten as it was being made. It was a era of government take over and control of the minds and property of the American People. Other nations saw how the USA has sugar coated slavery and called it freedom. That is the reason there was a WWII. Zombies indeed have become every world citizen, fed daily and constantly to where they are addicted to the governments propaganda like a junkie doped up and constantly looking for a fix.

    Today the same is happening. A New FBI engulfs the federal, state, county and city government just like the NAZI SS. Every congregation is infiltrated that can develop and that exist. The Pentagon now forms and manipulates the US Government’s Citizens.

    Only those that serve the War Machine and it’s propaganda own a piece of the blood pie and only by allocation exercise any agenda. Those who are seen unprofitable and a hindrance are being destroyed, small ownerships of the US Stock Market, those non-supportive of it’s crimes, as wellas the the aged and disabled who can no longer work.

  39. 39 Thea Winter - Indianapolis IN, USA
    September 19, 2008 at 18:06

    @ selena in Canada
    Someone in authority should have seen that coming!
    YES!!

  40. 40 Dinka Alpayo,kampala
    September 19, 2008 at 18:07

    Broke down of U.S economics is a broke down of HUMANITARIANS WORKS in the world and the poor people in the world are going to enbrace themselves with dangerous situation because U.S is a only country in the world which response to the human needs in the times of difficulties while other countries are just a economists.

  41. 41 Marco Lavoie
    September 19, 2008 at 18:09

    Now!

    Wait a minute the FEDS reserve will issues bonds in order to bail the banks. Do you mean the dividend lovers will go to the bankrupt banks to borrow money (banks notes) than go the FEDS to purchase treasury bonds in order for the Treasury to print more money to funnel back to bank the fresh printed money guaranty by issues bonds from the same dividend lovers …wait a minute I getting dizzy…sound like wag the dog’s tail ….genius…I must say ….that way they will be able to shop for more shares until the bonds lovers (ex-dividend lovers. remember…) drop. Freedump!

    Bush has now become an expert in Finance by meeting “The Challenges of utopians capitalists’ financiers” what ever that mean. This New World Order will miss this great Leader; after all HE is not only a great military commander but also a Great economist ….Bourgeoisie at its best….

    They will find a way to keep their way of life intact…go & enjoy shopping seek happiness in a box.
    The Feds will bail out the utopians ideologist capitalist by getting rid of the banks bad debts, boy I wish it was that easy for me. If I knew that I would have open a bank years ago, guaranty to never fail. Bourgeois protecting bourgeois what a Joke! Rich dividend lovers now will be able to lend their own worthless money to the Federal Treasury Bank collect stable & guaranty rates of returns on their bonds unable them to keep their shares. This is ridicules but in line with freedump concept, Bravo!

    The bourgeois SS style utopians capitalist lovers must act now or they will have to start looking for real work, the days of reading how they stocks performs in their propaganda newspapers will no longer be relevant. The Treasury department is to mass produce the mighty commodity dollar ummm! let see “Marx’s theory,”a commodity has value, which represents a quantity of human labor. The fact that it has value implies straightaway that people try to economies its use” Marx was/is not a club member therefore void his theories.

    May God Bless this New World Order & its financial systems

    Freedump!!!!!

  42. 42 Julie P
    September 19, 2008 at 18:11

    I am not convinced that government should control markets. From what Bob wrote he read mind on this subject. However, I happen to feel there needs to be some form regulation as this Ponzi scheme has gotten way out of hand to say the least.

  43. September 19, 2008 at 18:11

    I like Tim’s justification of complete deregulation, lol. Nice to see you post here.

    But he is right in some respects – you cannot take private ownership out of the equation, you can, however, regulate the market itself.

    With complete deregulation you find that those who will make a killing do – they really don’t care about what they are selling/buying/re-selling as long as they make profit from it. Their pocket book is more valuable than yours. In essence, that isn’t a bad thing, until you hit a place where we are now – with the correct regulation – saying what is legal and illegal to do, you have a safer bet, but that won’t drive up the stock market in itself – you still need those who will speculate.

    Short selling is not legal in the UK – in the US it is encouraged. While you have the NYSE in charge of the world economy, effectively, you have to work around the US rules, a shift from that may be a better bet. Each crisis has started in the US – that explains a lot.

  44. September 19, 2008 at 18:12

    James Tinsley, B.A.
    Fort Smith Arkansas-USA

    What our President, Treasury Secretary, Federal Reserve Chairman and Congress are doing and saying is that average American citizens will only be helped and protected as long as the wealthy elite minority ruling faction-the power brokers and super rich-remain welathy and in power. They are displaying the characteristics and attitude of Aristocracy, something Brits are very familiar with.
    One note to the remark made by Mr. Butler on-air that “everybody has enjoyed the party.” If that is true why has the number of families and children in poverty in America and around the world risen evry year for more than a decade?

  45. 45 bobsyouruncle
    September 19, 2008 at 18:12

    The Gov. are fixing the problem by pulling money out of the ether. But, the little guy looses real money.

  46. 46 Shane in Oregon, USA
    September 19, 2008 at 18:13

    I’ve never been a believer of conspiracy theories, but I am becoming suspicious of the Federal Reserve. What are the implications of the Fed taking over corporations? Wouldn’t a North American Union and a replacement dollar look more appealing than the current crisis or am I just insane?

  47. 47 Harrison -
    September 19, 2008 at 18:15

    The problem is that the institution that makes the loan does not keep it, they sell the loan and thus have no concern about the quality. We need regulation to change this pattern. A bail out is not the answer.

  48. September 19, 2008 at 18:16

    Shaun –

    My example is gas regulation in some provinces in Canada. if you go to gas buddy, you can see that regulated prices are regularly higher than non-regulated ones. Why? They need to pay for the regulatory body.

    I disagree with you.

    In NB the price on Monday went up 14c – that was in reaction to Ike – yesterday it came down 16c – that would not happen in places where regulation was happening. The petrol companies would keep the price artificially high making more profit – I do believe that this is happening in the UK.

    The UK government should scare the petrol companies to death by saying that fuel prices will be regulated centrally – unless they do begin to fall in line. Too many in the UK are hurting because of “the free market” – we could say gouging, of course.

  49. 49 roebert
    September 19, 2008 at 18:20

    What’s needed is re-fragmentation of markets, getting rid of the giant corps, cartels etc., cutting production and market units down to more localized and manageable size, with the additional benefit of increased diversity and competition. Communities should have more say over their regional economies, their resources, markets and pricing structures. Increased and fierce localization will reverse runaway speculation by the remote giants who manipulate markets (often dishonestly) for ‘paper value’ purposes.

    It’s not for governments to control markets (they are just as dishonest and greedy as any other manipulative giant corp), it’s for the community (the smaller the better) which has a direct knowledge of and direct interest in what’s happening to its commodities, especially its basic needs commodities: food, utilities, housing.

    Get local.

  50. 50 Thea Winter - Indianapolis IN, USA
    September 19, 2008 at 18:21

    I understand the your guest stated that the jobless rate in low. Howerever, the jobs we have are lower paying. Note that news today that household incomes are lower then last month. After years of lower paying jobs the people who spend the money do not have any more to spend.

  51. 51 jon
    September 19, 2008 at 18:21

    The businesses and shareholders were reaping large profits for the past 8 years. They knew about the risks; AIG bought as many mortgages as they could, even after people were unable to pay the first payment on their mortgage. They should pay the price for their welcoming of risk. I also think that if there is a bailout of big financial companies, there should have been a similar plan for entrepenuers, who more often than not fail. There is also an argument that a company is made an example of, other companies will be more risk averse in the future and this will not happen again. Finally how are taxpayers responsible for bad management decisions?

  52. 52 Harrison - USA - Oregon
    September 19, 2008 at 18:22

    The US bail out is based on the extent that the failure affects foreign investments, Thus Fanny, Freddy, and AIG are bailed and others are not. The pressures came from China, Japan etc.

  53. 53 steve
    September 19, 2008 at 18:24

    @ Thea

    Even if people are in lower paying jobs, that’s better than the 25% unemployment rate during the great depression and breadlines.

    My great parents on my mom’s side were very wealthy, and lost absolutely everything after the crash in 1929. My great grandfather wound up collecting garbage from the streets and trying to sell it to people. Went from being very wealthy, to trying to sell garbage to people.

    There’s no comparison.

  54. September 19, 2008 at 18:25

    This entire situation is deplorable. It’s just another way to shift the wealth upwards and the debt downwards. These banks and large companies have been robbing the public with absolutely no conscience or accountability. They have slowly destroyed all the safe-guards put in place after the Great Depression that were made to keep these corrupt practices from happening in the first place. I say let them suffer, weed out the corrupt bankers and fine and jail them. Use that money to fix it, instead of making the public foot the bill.

  55. 55 John Foster
    September 19, 2008 at 18:26

    What I have been thinking recently is a about the size of these institutions and some anti-trust implications. If AIG was too big to fail, was there a problem in competition? Did consolidation run through the financial companies and therefore they become too big to fail? Is this a failure of anti-trust regulations?

  56. 56 Sue
    September 19, 2008 at 18:27

    Are those running the new government regulations be the same pompass, conceited, greedy CEOs that ran the let the market get where it is today?

    Where are THOSE checks and balances?

    Somehow I think they will have the connections to continue their exagerrated salaries. They rode the windfall and benefited from the good times. Will they come out the winners in the downfall?

  57. September 19, 2008 at 18:29

    Does it strike anybody as odd that on a ligitmate finical crisis stocks plunged. But on nothing more then a news conference and a promise the market rebounds?

  58. September 19, 2008 at 18:33

    Congressman Ron Paul was spot on in the following youtube as it is utterly unacceptable for private companies to be bailedout for crooked dealings:

    Ron Paul was spot on with the following youtube:

    Ron Paul Discusses Financial Turmoil and the Fed 9/18/08

  59. September 19, 2008 at 18:34

    James Tinsley
    Fort Smith, Arkansas-USA

    There is only one sure way to fix our current debacle. As our financial markets and economy is intimately tied to our Tax Code. That is to say, the primary reason these capitalists were able to create these “toxic” instruments and act as they have is because of changes and modifications in the Tax Code. So, to really fix this and live up to the legacy of Adam Smith is enact Equal Taxation and then clearly define the rules of commerce and contracts specifically, succinctly and then act as abritrator and umpire. In other words government should do nothing more but establish the rules of the game and then allow elements of the market to sink or swim based on the efficacy of thier business model and practices.

    As for Equal Taxation by that I mean that their are no write-offs, no deductions, no deferrments, no special staus, rights or privileges for any person, corporation, or group. If a citizen, public or private, has income or profit/earnings greater that the amount that can be earned or made free from taxation then EVERYBODY should have to pay a certain percentage in taxes, such as 13%.

  60. September 19, 2008 at 18:34

    Leaders should be held responsible for their actions. Financial Leaders should be held _personally_ responsible for their actions, and if their actions make institutions fail, they should be held _personally_ financially liable.

    If the stockholders don’t like what has been going on with a particular company, they should remove their financial support and let the institution fail. Businesses rise and businesses fail – that’s Capitalism!

    AND, when an institution fails, the mis-manager should not be rewarded with a “Golden Handshake.” They should be fired and all their personal, family assets seized to repay the investors for the mistakes that had been made.

    This would start re-creating some sense of personal responsibility to business.

  61. 61 Serina
    September 19, 2008 at 18:35

    Serina in Singapore emailed the programme:
    The problem with markets and institutions is that greed and stupidity rule and ultimately we the people who pay in the end have no idea what crooked practices or criminal activities go on until crashes occur. Eventually in order to save the world from a massive crisis governments need to bail these institutions out which means that taxpayers pay for the excesses and the institutions can operate with impunity as they realise they will be saved and have no incentive to change their ways

  62. 62 Thea Winter - Indianapolis IN, USA
    September 19, 2008 at 18:35

    Hi Steve,
    Thanks for your comment. However, I was not trying to compare today with the great depression. I do not believe we are even close to that and I don’t think is it going to happen. The issues is that people are working harder to just maintain their life with no extra to spend. If it continues we will limp along for a long time.

  63. September 19, 2008 at 18:35

    P.S. I’m Katherine from Portland, OR, USA

  64. 64 Igor
    September 19, 2008 at 18:35

    Igor emailed the programme:
    Government should intervene in market processes when they threaten the well-being of the people.

  65. 65 John
    September 19, 2008 at 18:36

    John in Ontario, Canada emailed the programme:
    Do you think fraud charges should be laid against individuals OR was it simply clever people feeding stupid greedy people as in buyer beware?

  66. 66 B. Hamrick
    September 19, 2008 at 18:37

    The issue here is really a result of our evolved economic structure. The western world has adopted the notion of debt as an everyday and necessary component of our economy, when it is in fact the reason for nearly all of our economic problems.

    Even worse is the notion of fractional reserve banking, which causes drastic price increases and devaluation of currency. All of the economic crises we are experiencing right now (i.e. credit crisis, housing market crisis) are the direct result of government allowance of fractional reserve banking.

  67. 67 Jonathan
    September 19, 2008 at 18:38

    Yes, absolutely, the government must seize banks immediately if not sooner, so it can run them efficiently. I am so sick of those greedy capitalists losing billions of dollars on bad loans. Poor judgment and squandering vast amounts of money is the job of the government. Nobody does it better.

    Jonathan
    San Francisco

  68. September 19, 2008 at 18:39

    The great turn down and economic burden has just begun. In just a year from now if you can’t see it as yet the inflation of every price will be understood as a depression and not a inflation. Salaries of everyone not somehow supportive as in the military or supplying the war machine with it’s needs and resources will loose all they have. The poor even now can not afford the price increases and what they have is dwindling effortlessly to make ends meet.

  69. 69 Ammar
    September 19, 2008 at 18:39

    Ammar in Singapore texted the programme:
    Why does the American economy always have to have a hangover? Why does it party when it can’t bear the consequences? It’s like global warming – everybody everywhere gets affected in some way, whether you are part of it or not. America being a world leader yet so inefficient – why?

  70. September 19, 2008 at 18:40

    A constant part of wealth creation in the US, besides all the “good” ways (innovation, enterprise, hard work), is the transfer of wealth from the public coffers to private hands. Every “crisis” has always resulted in tax payer money being handed over to the financial elite.

    The other aspect of this is that we have set up a real temporal scam. Financiers invest in opportunities that will show a profit for four or five years and then go belly-up. They skim off the benefits of short term profit, and then claim bankruptcy or the threat of bankruptcy to hand off the losses to the public domain. CEOs etc. get their bonuses for profits shown on a quarterly or annual basis, but the consequences of their actions don’t show up until years down the road. They get to keep their personal profits and we get to carry the bucket.

  71. 71 Max
    September 19, 2008 at 18:40

    Max in Singapore texted the programme:
    Allowing the privatisation of profits and passing the debts to society falls in the category of “high crimes and misdemeanours”.

  72. 72 Gabriel in the US
    September 19, 2008 at 18:43

    Regarding US economic policies, I highly recommend the fine books of Kevin Phillips. Mr. Phillips does a very good job of breaking down how the US economy has evolved and how it is influenced. I am affraid to say, however, that despite being very readable the overall themes get depressing in how obviously the system is rigged once it is all explained.

    Regarding politics and politicians, as a US citizen I cannot express how disappointed I am with our country’s leadership–both from the Democratic and Republican parties. I am also very disappointed with how short-sighted and ignorant the average American voter is, or at least appears to be.

    Honestly, I am at a loss to explain how McCain can run on a basically campaign which is more or less “hold it steady” and how Palin can be anything other than a complete joke given how ill-prepared she is for this level of politics and leadership. It’s been said before than democracy can be a dangerous form of government… and I think that the US Presidential elections bear this out all too well.

  73. 73 Paul Harbin - Waco, tx.
    September 19, 2008 at 18:43

    If we were the market, and we are also the government … to handle a crisis should we not send in the police and let a neighborhood sort out it’s own problems regardless of what crimes might be occurring within?

    If what we have done and do as a collective had not need for regulation, there would be not a need for government, the un, nato, etc. The fact of the matter is, we aren’t not ready to take on the responsibility our being our brother’s keepers, we fail at it.

    Yes, we need regulation. Is it the single answer, no. We need ethics. The fact of the matter is, as long as we remain human, we will never be perfect, and we will try and fail, and we will try and succeed. And hopefully, we will gain the wisdom to look back on such things in retrospect and apply the knowledge from what we are learning to prevent it from happening again.

    Government should not have ultimate control of the market no, should it be involved as to make sure the general practices are sound, yes. The individuals doing so need to be sound as well, and I think herein lies the bulk of our current problem.

  74. September 19, 2008 at 18:44

    So where are my people who were just telling me last month that the government has never run anything right or efficiently?

  75. September 19, 2008 at 18:44

    Maybe we should put corrupt politicians and greedy mis-managers of business back into the human food chain! This might solve some of the larger problems! =8-)

  76. September 19, 2008 at 18:47

    James B.

    The “flat Tax” or “Fair Tax” would have been great in 1800. today’s business structures are way more complex. I used to dig ditches for the cable company. I needed big and expensive tools, spent a lot of gas, and had multiple expenses that could not be assigned to a job. The maker of that equipment got taxed on it when I bought it. My customers paid taxes on the money they earned when they paid me to use it. I could never accurately jude how much a piece of equipment is going to cost if I had to include that cost in my bids. Gas changes daily. This past year would have sunk millions who work und the 1099 environment. If you work in a office and just drive back and forth to work everyday, you have nothing to consider. But is your cost of doing business changes from day to day and week to week, but you are booking jobs a year in advance, you are getting your throat cut if you can’t write them off.

  77. 77 Teresa Giuffre/Portland, OR
    September 19, 2008 at 18:47

    Adding insult to injury are the multimillion dollar exit packages that the CEOS of these failing companies walk away with; us taxpayers are essentially footing THAT bill too.

  78. 78 Jens
    September 19, 2008 at 18:48

    thea,

    the 3000 bucks per person is nothing compared to the 5000 buck the iraq war is costing us EVERY SECOND.

  79. 79 John
    September 19, 2008 at 18:49

    John emailed the programme:
    And who’s going to bail out the US? OK, billions of dollars to bail out a few financial institutions, but this is going to exacerbate the US budget deficit, meaning more borrowing. This combined with a huge trade deficit. How on earth is the U.S going to service these debts without compromising state investment?

  80. 80 Ken
    September 19, 2008 at 18:50

    Ken in Portland, Oregon, emailed the programme:
    What infuriates me is how congress touted bankruptcy reform a few years ago as a way to “hold consumers accountable” for spending, but is now engaged in a massive transfer of wealth from the middle class to the wealthy who have proven their lack of responsibility. And with Bush’s tax cuts of the rich they won’t be held responsible to assist in paying for their folly. The “irresponsible” middle class will be.

  81. 81 Kelley
    September 19, 2008 at 18:51

    Kelley in Venice, California, emailed the programme:
    As part of the US bailout of these banks and insurance companies, any company that sells these bad/securitized loans is admitting the incompetence of its officers and directors, especially in the face of a ‘bubble’ as obvious in foresight as the tulip bubble was in hindsight.

    Therefore, in turning over these bad instruments, the officers and directors of these companies should also be forbidden from officer or director positions, or the ownership of more than 5%, in any publicly traded company in the US, for a period of ten years.

    Also, mortgage brokers whose names appear on any of the underlying mortgages should be investigated, and any that had a statistically significant percentage of the bad loans should be appropriately charged, with filing false paperwork, misrepresenting the customer or their loan instruments, or such charges as may be appropriate.

    In order to save the rest of our financial body, some amputation is required.

  82. 82 Colin
    September 19, 2008 at 18:53

    Colin in Portland, Oregon, emailed the programme:
    Why should we pay for other’s risk taking. Let the banks fail and those who cannot afford their homes will loose them. It is not nice but it is fair.

  83. September 19, 2008 at 18:54

    The fix for all of this as to not repeat history is for the government to keep an eye on one thing. Wage disparity. If the government controls the distance between the top and the bottom, capitalism can flourish generally unrestricted. When the day comes that just living a meager version of the American Dream doesn’t require having a credit card, car loan, house mortgage, health insurance, or student loans to survive, the economy will take care of itself. But as long as one company can pay one employee $10 million dollars a year and another one $18,000 a year this problem will be cyclical. Kind of like a transmission with a dirt ball in it.

  84. 84 Thea Winter - Indianapolis IN, USA
    September 19, 2008 at 18:56

    @ Teresa in Partland,
    To add to your point. Business also can write off losses on their taxes. Not all the losses but the last time I looked I think the writeoffs are a % and that % can be taken each year for four years after the losses. We taxpayers are getting a double hit.

  85. 85 steve
    September 19, 2008 at 18:58

    The last caller called concerned about his 401k. If anything, so long as he’s not near retirement, this is good, because the value of the shares in his portfolio become worth less, so you can buy more shares with your contribution, and when the market goes back up, you were able to buy more shares, and have a lot of values. Remember, retirement planning is long term, not short term. I have 30+ more years until I retire, so I’m not at all concerned about the drop in the value of my 401k, because i can now buy more shares with my contribution, and values will go up again. And in the future, they will go down. The point is that when you near closer to retirement, you change your 401k to be more conservative in it’s approach, such as municpal bonds.

  86. 86 Thea Winter - Indianapolis IN, USA
    September 19, 2008 at 18:59

    @ jen,
    True, but Iraq is not the issue we are taking about today. I think we should be out of Iraq. I am not sure, being there so long may be part of the issues. However, I have not thought about that conection yet. Maybe I should!

  87. 87 Ann
    September 19, 2008 at 19:04

    Ann in Oregon emailed the programme:
    The commitment of public funds and credit for the direct benefit of privately owned AIG is beyond the limited legal authority granted by the Constitution.
    Beyond the Constitutional deficiencies, the bailout establishes a dangerous precedent enabling the Fed and/or Government to nationalize virtually any business or property within the United States without legal authority or congressional approval. In fact, a lawsuit has been filed by WE THE PEOPLE Foundation demanding that the government produce evidence of its legal authority.

  88. 88 Joris
    September 19, 2008 at 19:06

    Joris emailed the programme:
    I believe goverments should bail out carefully chosen financial institutions towards the goal of stabilizing and protecting the greater market. Taxpayer monies should be used, and yet these bailouts should demand interest with repayment. As the goverment collects the interest (or quarterly), It should be vouchsafed and diverted to the taxpaying populace in the form of tax rebates. This would then generate a stimulus package which strengthen the market.

  89. 89 Marco Lavoie
    September 19, 2008 at 19:11

    The Treasuray printed money to save AIG ok find ummmm! Wait a minute Didn’t AIG just purchase a famus soccer club in Europe which club is it again …does that mean CEO of those Falling banks will be able to upgrade their bonus (hint up date their Yatch..cars..houses & mistress……What a world this New World Order…corect me but is AIG just purchase a soccer club ?

  90. 90 Jens
    September 19, 2008 at 19:12

    Thea,

    my name is JENS. the economy and the war go hand in hand. one cannot burn absurde amouts of money on an unjustified war and hope all is going well. the reality is catching up……

  91. 91 John LaGrua/New York
    September 19, 2008 at 19:14

    The danger now is in the prospect of politicians overeacting wih grandstand plays to benefit their image as guardians of the public. This financial disaster is a by product of a societal change in the US ,emulated elsewhere ,from production to gluttonous consumption and immediate gratication of any and all appetites.The political leaders in any country greatly influence the public behavior.for good or ill.By encouraging continued profligacy via monetary policy and irresponsible self idulgence successive administrations have pandered to the public by promising ,”The good life now.””Now the bill has arrived and the politicians bleat and thunder against the Wall Street villians who destroyed he fantasy of the free lunch.The Titians of Wall street have been humbled but the politicians rant on spending vast amounts of money creamed off the top during the false boom to get elected to give us more of the same in a different package .Forget “Change Washington”The people must change themselves and then demand of the government to follow policies of prudence and realism.This crisis could be only the first wave of a building of a hugh tsunami which mignt sweep away not only capitaism but freedom

  92. 92 Jens
    September 19, 2008 at 19:18

    Marco,

    which football club would this be then??????

  93. 93 Ronad
    September 19, 2008 at 19:23

    Yes, the function of the government is to maintain balance but allow for change in a competitive society.

    In the case of the US, the Federal Reserve should be allowed to randomly buy and sell US stocks. As such the Fed would create liquidity in the market and would average a 15% rate of return because it will always do the right thing at the right time. It will buy low and sell high.

    Buying low add money to the economy. Selling high pull money from the economy. It has to be random or illogical, because if we know what the Fed is buying and selling we will do the same.

    Storage of wealth in the world is in assets or debt. Economic cycles are normal and the goal of government is to reduce the violent swings for the common good.

    Never under estimate the power of a government to print money in a down market. Consider the Fed buying and holding 100 trillion dollars of American Stock in one week. The economic would boom out of control. Now consider the Fed selling 100 trillion dollars of stock trying to slow the economy down in one week.

    The problem of ignoring international markets is devaluation of your currency. That is why balance should be the goal.

  94. 94 Marco Lavoie
    September 19, 2008 at 19:25

    Manchester… is it…

  95. September 19, 2008 at 19:25

    @dewightofcleveland

    I was not talking about “flat” taxation but equal taxation. That is EVERYBODY, EVERY entity that, after doing the calculations, owes taxes should have to pay taxes. The taxation I am proposing could be said to be “flat” because everyone pays the same rate or %. But, that is the only aspect of it that is flat, it is in fact EQUAL as opposed to flat and by EQUAL I mean that EVERYONE that owes pays-no exception, no bullsh#t. As for the other issue you raised the Equal Taxation that I am proposing does take into account LEGITIMATE cost of doing business expenses. However, as I stated previously, everything is clearly defined. In other words, unlike our current tax code (that I have used to my own financial benefit and to avoid paying taxes in the past) which is known throughout the world to be the most “political” document in the world Equal Taxation allows for recognized cost of business expenses. Expenses that will be narrowly and specifically stated. I will not go into to the minutia here as they are quite detailed, but suffice it to say what I propose would be much more succinctly written and narrow than what can be done today.
    One more point, we are told often (especially by Republicans) that the United States has the second highest corporate tax rate in the world. That is true. What they do not say and will never acknowledge when pressed by reporters is that the actual amount that coporations pay-if they pay any tax at all- amounts to somewhere between a 12% and 15% rate. So for anyone that says my insistance that corps and so-called non-profits (including religious orgs) should be made to pay 13% over the the amount that can be earned without any tax at all reveal their true inclination which is that the rich and priviledged should not haveto pay any tax.

  96. 96 Brian
    September 19, 2008 at 19:29

    Brian in Portland, Oregon emailed the programme:
    The decision of Government intervention or letting the free market determine the outcome is only one part of the equation.
    The damage is already done and it is releasing its multiplier effect. Now the collateral damage is rapidly spreading quickly to PRUDENT homeowners and investors. All homes and land initially unaffected are now decreasing in value also. For example, a house in Stockton California, (USA) 20 months ago had a market value of $428,000, now it is for sale for $168,000. Before making initiated new regulations, Governments need to fully understand the entire breadth and depth of ramifications from their past and future decisions.
    Even for homeowners that are NOT facing foreclosure and who have been prudent and responsible all along, are facing significant loses.

    PROPOSED QUESTION:
    If the US Government bails out these ailing financial institutions, what is the breadth, depth, chance, and time it will take to “trickle” down to the average homeowner, and halt and reverse any further financial collateral damage?

  97. September 19, 2008 at 20:03

    The situation speaks the failure of capitalism very loudly and clearly. It confirms what moral, altruistic and people-utilitarian philosophers, economists, sociologists, anthropologists and progressives have said since the 16th century. It is important to note that socialism was caused to fail by the fundamentalist, globalist and bigot USA directly and through the IMF, WB, WTO, and the so-called “experts”. Capitalism failed because of its intrinsic corrupt base and modus operandum, and individualistic and the winner takes all – “the U.S. survival of the fittest” – ethics.

    Governments should have ownership in trust for the nation that it governs of the sources or means of producing all the things that the nation needs for her existence; appoint the people who would convert them from their raw forms to the forms that are useful and beneficial to the nation; stipulate punishment for any misappropriation of them and for the costing of their enjoyment, so that no one lacks what is necessary for existence and happiness or the enjoyment of living

    Why should governments have these prerogatives? A government is like a father to the nation that it governs. Just as fathers have the duty to provide for and care for their children and wives, governments have the duty to provide for and care for its children – the nation that it governs. Without the prerogatives, governments would not be able to carry out this duty, just as a father would not be able to carry out his duty without a well-paying job

    The failure of the financial institutions is due to the fact that the prerogatives of governments were usurped by individuals who are private capitalist. They also imposed on the government their deregulation and liberalisation. The sole aims of their practice are profit maximisation, wealth maximisation, authority and power maximisation and absolute control of government and people. Such a system could not have lasted for ever. In fact, privatisation has been kept alive by share aggressiveness, containment, stubbornness and criminality, and not by functionality, efficiency, morality or ethics.

    Prince Awele Odor

    Lagos, Nigeria

  98. 98 Owen (Singapore)
    September 19, 2008 at 20:29

    I think the government should control the market. In fact, the government of U.S.A is controlling it all the while.
    I think that the current crisis is in fact, a product of the government intention.

  99. 99 Bert
    September 19, 2008 at 20:49

    Uh, no. The govt, in western democracies anyway, is not viewed as some benevolent father who knows best. The govt is, intsead, a steward of the people. It is a servant of the citizens, who have given it certain tasks to perform.

    What I truly don’t get is, how come everyone wasn’t wringing their hands in the past 4-5 years or so, when housing prices were skyrocketing? Why didn’t that cause a panic?

    This whole crisis now is really a fallout of a housing market gone ape, and of overly greedy people trying to get into it when they were ill equipped to do so. And of course, inredibly reckless loan institutions that had to keep those loans going, even when they could see that many of those applying for these loans could not afford them. Not unless the totally bonkers housing market kept up its reckless pace.

    Which, naturally, it did not do.

    The correct operation WOULD HAVE been for loan institutions to stop approving loans when housing prices rose so fast, and incomes did not follow. That would have quickly slowed the increase in housing.

    This crisis does not spell any doom of capitalism. Instead, it shows that capilal markets do adjust themselves quite nicely, even if violently, when they are allowed to go so far out of kilter.

  100. 100 Bert
    September 19, 2008 at 21:01

    A govt bailout means that all prudent investors out there are going to have to cover the reckless people who really thought that house in Stockton was worth $428,000. And went for it, even though they knew darned well that they weren’t making enough money. If its value is now $168,000, perhaps it means that’s closer to its true worth.

    So okay, the people who took out that crazy loan will be allowed to go on with their lives, not to be imprisoned as they might have been a couple centuries ago, but they’ll find it hard to play such a stunt again.

    Hey, at least they won’t be required to perform slave labor to cover their indiscretion, eh?

    But again, the panic should have set in when home prices doubled every couple of years. Sure scared me.

  101. 101 selena in Canada
    September 19, 2008 at 21:05

    @Jonathan

    Why am I always apologizing to you?

    Sorry for not responding. I am very busy and not able to read all the posts.

    How are poor people affected? Because of the uncertainty, everyone is scared and even people with money are tightening their belts. When people stop spending money they stop buying. They don’t buy the cheap goods from Wal Mart so WalMart needs less employees. People in China are left with stock they can’t sell to WalMart, so poor people there lose their production jobs. You can surely see this. This chaos produces a trickle down effect and a ripple effect and any other effect you could name 😉 directly affecting the poor.

    By the way, I am expecting China to help out soon (if they haven’t already) because they don’t want to be left with goods they can’t sell to the US.

    As for the garbage collectors, all I can say is the garbage collectors I know do not make much more than the minimum wage. if there are others who make good money, good for them. Their jobs keep us safe.

  102. 102 Jens
    September 19, 2008 at 21:13

    Marco,

    zero points.

    AIG is only the shirt sponsor of manchester united. they certainly do not own the club. this honer belongs to the glazier family, also owner of tampa bay, as far as i remember.

  103. 103 John in Scotland
    September 19, 2008 at 21:16

    Many of us predicted this happening along time ago . It was on the cards to happen after the failure of the Bretton Woods agreement in the 50,s .It is endemic to a capitalist free market where competition ultimately leads to catastrophe . It is what is called “the insoluble contradiction of capitalism”. So this was no mystery to me and I ve watched it getting closer by the year .

    So where is it going to go and what can we do ? Well for a starter taking the heights of the financial sector over into public ownership is actually Socialism emerging out of neccessity . Trouble is these guys aren’t socialists ,and give them half the chance they’ll hand it right back to the gangsters with a freeby from us .

    We need to wake up and see the bigger picture …we have a planet to save. We need to organise at more efficient and local levels ,take control of our lives and think not just of our children but our childrens children.

    We live in a toxic world …largely of their making …but we bought in to the adverts. Its time to kick ass !!!

  104. 104 w.stevenson
    September 19, 2008 at 21:29

    Would it be possible instead of bank mergers. To form a group similar to NATO That would make any single bank be protected from financial attack. If this were possible it would have prevented the HBOS merger with TSB. and the loss of the bank of Scotland

  105. 105 Syed Hasan Turab
    September 20, 2008 at 04:17

    US economy is exazetly like US Govt, A defasit budjet may not be able to hold the economic burden, why not we check & balance our books with Japan & China as the borrowing’s are way more then our budjet.

  106. September 20, 2008 at 06:21

    At the outset I agree with Mr.Rajeem’s comments that the BBC is mostly conserened about America’s and British political and financial stability. In this process you forget that there are other countries in the word which needs your attention and public comments and debates..Particularly in Asia. Sri lanka is going through huge crisis due to civil war and discriminatory policies of the goverment.Hundreds of thousands of people are Internally Displaced, due to deliberate shelling and aerial bombing of the civilian populations by the government. .The people who were living on their own steam has been reduced to beggars.There is nobody to give anything to the beggars. The humanitarian agencies have been asked to withdraw from the affected areas with a view to force the population into submission. You don’t seem to worry about this at all.

    Coming back to USA it apperas that America and even Britian is run by a couple of companies,hitherto encouraged by the respective governments. In short they have put all their eggs in one basket. It is high time the so called wealthy nations
    have adequate regulatory system and introduce some sort of financial moratorium on companies and also prevent subsidiaries/ groups depending on the parent companis. All the companies shoud contribute certain percentage of their eanigs to a reserve fund supervised by the government.These contributions together with the interest earnings may be exempt from tax. This a laymans point of view.Perhaps financial pundits could draw up suitable regulations.,despite their terrible failure.

  107. 107 John in Scotland
    September 20, 2008 at 11:06

    Clearly people are quite outraged and wan ta change in the way we do things . Trouble as in the above contributions it is clear we will never agree on anything . This creates instant inertia …and this is the danger .

    . Will we complain for a while….feel helpless ….internalise our angst …instead of being focused and acting in concert against those who will merely rejig the same old message which labour has done for the past 10 years .

    One thing is FACT … history has now shown that the ideological principles of neo liberalism and Globalisation in THEIR sense of the word is now a burnt out and redundant theory . History has just put it in the rubbish bin.

    If WE …and I mean” the people “fail to grasp what is going on here and all the ramifications of continuing in this INSANE way…with all the spin offs of disaster it has over the years brought us as in global warming …grotesque inequalities in consumption…overproduction …waste pollution and an extreme poverty/ wealth imbalance…then we deserve to go the way of the dinosaur……..

    I just pity the kids who have no choice in the matter…..and the Tiger …The Whale ……….

  108. 108 John in Germany
    September 20, 2008 at 11:37

    We the people have had our say, this choice is given us at every election.
    As we put the cross on the ballot paper, knowing that most of the election prommisses will be broken, that very few politicians are interested in the folk, thier interest lays in thier own careers and what the pention rights are, and how many board positions they can fill without overdoing it.

    What is the use of Governmental control?, it seems that most politicians were lawyers, and very few finance specialists. Stop the greedy speculation in comodities, allow them to be sold source to user. Speculatns are not employers, they work mainly on thier own, or support very few.

    Question. Who has gained in this debarcle, some one must have done, and the tax payers are collecting the bill. There must be some wall Street types laughing al the way to the next million. The provisions have all been paind on the house loans, on the advanced monies, from the exchange rates, and so on. The Government has covered the costs. Government monies are our monies,

    Honour is not a word used in the global finance world, Greed is, and no one is interested who gets sucked into the whirlpool.

    Control yes, but by really independant Finance Experts, not politicians. There must be a lot out there that are not for sale.

    John in Germany.

  109. September 20, 2008 at 11:44

    Further to my previous comments, I am inclined to believe that pumping in taxpayers money to pull out troubled banks and companies is unfair. What is the taxpayer going to get in return?. Alread Bush has gambled millions of dollars from Taxpayers money in Iraque with no return at all.Mountain Labour could not bring forth even a mouse.Bush has brought misery and hardhips not only for the Iraques but also for the Americans. I think the bankruptcy is also due to the war on Iraque.
    When a plane crashes or Trains and other vehicles meet with accidents inquiries are held and those responsible are punished.. Similarly a commission of inquiry should be held forthwith and a report should be submited to the public within 3/6months.All responsible for the crash should be punished and their assets freezed.

  110. 110 Shakhoor Rehman
    September 20, 2008 at 12:07

    Friedmann and Keynes have always been two sides of the same coin.

  111. 111 Roberto
    September 20, 2008 at 13:27

    RE “”What is the taxpayer going to get in return?””
    ——————————————————————————————————–

    ———- The taxpayer gets to bail out the crooks so they can continue to keep his nose to the grindstone.

    That’s what little people were put on this earth for, to pay taxes so the Leona Helmsely’s of the world can hire them for a pittance to fluff her pillows, change the bib of her hubby Harry, and clean the messes left by her matching pink coiffed toy poodles.

  112. 112 ogola Benard
    September 20, 2008 at 15:58

    quiet surprising for stock exchange! what is the market price and the current book value?

  113. September 21, 2008 at 21:01

    Clinton left the ‘tech bubble’ with partial regulation. At least he left with a surplus national budget. Now with total deregulation the economy has become a ‘black hole’ . Each day it is getting larger and larger which, in principle, is to be filled by the taxpayers and taxpayer’s children and future generations. Various figures of the US national debt have been advanced – 700b, 1t, 3t,8t, and even 13 t! It seems no one seems to be sure, with spill offs in the global economies. is’nt it time for an Independent Apolitical Review with recommendations as to what should be done in the mid and longer terms, after the US elections, to minimise further damage and restore confidence in the economic and financial systems.

  114. 114 Muhammad Ichlas
    September 23, 2008 at 07:49

    Here in the United States our government is basically choosing to socialize the holdings, or lack thereof, of large financial corporations. I would have more respect for our government if a similar commitment was made to help people who lost their homes due to the greed of the financial industry. I am happy that the US government is become open minded to the concept of socialism but unfortunately the benefits of this are currently reserved for the wealthy.

  115. 115 Alex
    September 23, 2008 at 16:33

    The recent Bail outs of the major financial institutions around the globe is not a good sign. The market should be allowed to take its course. While i agree in the thought of a “safety net” to prevent total economic default, investors should be responsible for thier decsions. If you make a risky investment be prepared for the potential failure. If the buy outs continue, the US is looking at a more socialized economy with excessively high taxes. Leave the market be. increasing reliance on the government is never a good thing.

    @Muhammad Ichlas
    socialism is not the answer, why reward people with welfare checks and government bailouts. hard work is more deserving of rewards, and capitalism allows for that.

    The heads of the investment firms should be ridiculed for potentially squandering the pensions and retirements of thousands. However, any investment whether mutual fund or bond is a risk and that is why people diversify thier portfolios… to minimize risk.
    also people must stop living outside thier means

  116. 116 John Smith - Jamaica
    September 25, 2008 at 02:03

    Governments should not control the markets, but they should play a regulatory role. After all if left up to their own demise, greedy fund managers will find more creative ways of taking risk and it is government who should help reign in their stupidity with its policies and legislations.

  117. 117 Micci Laroza
    September 30, 2008 at 14:22

    They controlled it before and will continue to do so.


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