More finance news from The Oracle

Episode two of The Oracle, Max Keiser's irreverant, curmudgeonly finance show on BBC World aired yesterday and it's up on YouTube today -- all financial coverage should be this good.

[AirPillo #1 11:13 on Sat, Jan.17]

Have you noticed that even though this scenario seems to quite comfortably fit the moniker of "stagflation", nobody wants to use the word?

[noen #2 11:15 on Sat, Jan.17]

The show seemed a little flat to me but I liked Nigel Eccles' analogy to Tudor princes. Welcome to the neo Feudal Empire. Hubdub looks interesting too.

[zuzu #3 12:14 on Sat, Jan.17]

Hmm... episode two isn't on the Internet Archive yet.

Have you noticed that even though this scenario seems to quite comfortably fit the moniker of "stagflation", nobody wants to use the word?

Yes.

Television "economists" (Max aside) are notoriously optimistic. As if 10-30 years of disastrous fiscal and monetary policy will somehow be corrected in less than a year.

Just don't try telling neo-Keynesians such as "Nobel prize winning"* Paul Krugman that.

*(Who got his Nobel prize for essentially rebranding Mercantilism.)

[zuzu #4 12:27 on Sat, Jan.17]

Also, I suggested Niall Ferguson's Ascent of Money series back when it was airing on Channel 4. Looks like now it's finally airing on PBS as well.

[noen #5 12:40 on Sat, Jan.17]

You tell 'em Zuzu, A Nobel Prize? Psssshaw! I hain't ta gwine be tricksied by yor fancy book larnin'! Those grapes waz mos definitely sour.

[rasz #6 12:44 on Sat, Jan.17]

BUT but but.. but only TERRARISTS watch AlJazeera!
Funny how not long ago that was the only place to watch Max Keiser.
You might want to have a look at People & Power series , it will rob you of any hope you had in free market.

[flytch #7 13:57 on Sat, Jan.17]

How do you steal from the poor and give to the super rich? BAILOUT...
This is a going to make billionaires out of the bankers who are laughing all the way...

[zuzu #8 18:48 on Sat, Jan.17]

You tell 'em Zuzu, A Nobel Prize? Psssshaw! I hain't ta gwine be tricksied by yor fancy book larnin'! Those grapes waz mos definitely sour.

Yeah, it's not like Henry Kissinger was ever awarded a Nobel Prize, or that Adolf Hitler was ever nominated for one. Clearly the prestige of Nobel laureates is indisputable!

[noen #9 22:31 on Sat, Jan.17]

Ah yes, the war criminal Kissinger. Excellent example. Completely proves your point, uh huh.

[Metronicity #10 00:47 on Sun, Jan.18]

Please write out 100 times "irreverent".

[stuckinkiel #11 03:27 on Sun, Jan.18]

Instead of "irreverent", try boring, strained unfunny and uninformed.

[misterdna #12 06:19 on Sun, Jan.18]

While I enjoyed the show and thought it was decent, I'm not really seeing why Cory saw it as good/interesting enough to post. Most other economy-related posts on Boing Boing I find much more insightful/interesting.

[dculberson #13 07:18 on Sun, Jan.18]

Being nominated for the Nobel Peace Prize is a far cry from being awarded it. Adolf Hitler's nomination does nothing to impugn the reputation of the prize itself.

[zuzu #14 08:22 on Sun, Jan.18]

Instead of "irreverent", try boring, strained unfunny and uninformed.

Strained... sure, it's a new show (pilot episodes) and they're still finding their groove. It also lacks the luster and polish of an expensively produced show; compare with other independent shows such as The Internet Cafe.

Max also does seem like he has more time to prepare to be funny and entertaining on People and Power than he does for a weekly show such as this.

But uninformed? How so? Max is one of the very few economic analysts being broadcast that seems to understand the quantity theory of money -- that increasing the supply of money merely decreases its value proportionally, ala supply and demand. Artificially cheap credit is what caused this economic meltdown; so even cheaper credit ultimately makes the situation worse not better. (The "credit crunch" is a correction for the fact that there was too much credit and not enough saving.)

Being nominated for the Nobel Peace Prize is a far cry from being awarded it. Adolf Hitler's nomination does nothing to impugn the reputation of the prize itself.

Fair enough, but I think my point still stands that simply pointing to a Nobel prize is a guised argument from authority. Who Paul Krugman is has no real bearing on whether his economic analysis is accurate or not. (I recognize this fine line of "expertise", but "experts" also agreed there were WMDs in Iraq. "Experts say.")

[noen #15 10:10 on Sun, Jan.18]

Zuzu, all you ever do is argue from authority. You never present any actual arguments, you just post links to wikipedia as if that somehow proves your point.

And you're intellectually dishonest in that you never seriously consider the merits of the other side. You are a Libertarian true believer and hold to it's tenets with as much religious fervor as any fundie does.

Libertarianism is dead. It failed the real world test of the past 30-40 years where it's advocates, such as Allen Greenspan, were given the freedom to put the free market mantra into practice. It failed and it failed miserably. Rationalizing that we didn't "really" implement the true dogma of free market proponents is essentially a religious argument. It's exactly how one would expect a true believer to behave. In the rational, scientific world when an experiment fails you take a serious look at why your theory was wrong.

We're all Keynesians now.

[Robert #16 10:48 on Sun, Jan.18]

Heard a piece on NPR on Friday, where they said that for decades, America has been pushing consumerism (i.e. imports), with Europe and Japan the proud recipients of that money (i.e. exports), with Germany specifically being a huge exporter. That probably explains Germany's enormous cash savings and America's enormous debt.

The piece went on to say that we can go two ways: more of the same (so that the next crash is even worse), or reverse the flow (so American exports are bought by Europe and Japan).

[arkizzle / Moderator #17 11:25 on Sun, Jan.18]

Noen,

I find ZuZu contextualizes things fantastically. Often the basic tenets of a new thing have been done in other ways or have opponents I hadn't previously known about, and Zu's links lay it all out. Frankly, the absence of solid opinion is often a positive thing, in this way.

I often come away from a ZuZu-comment with a better understanding of the topic, and sometimes with a joke to boot. I appreciate the time it takes him to assemble the barrage of handy, cross-referenced links, whether they are wrapped in opinion or not.

[Takuan #18 11:33 on Sun, Jan.18]

gotta follow the meta-argument Noen. If Zuzu were full of shit we all would have cut him to pieces long ago. Credit where due - and may I point out that sometimes you make damned fine posts too, when you want to. You both improve the place.

[noen #19 12:43 on Sun, Jan.18]

Ok, understood. It's just that for me these are not abstract ideas. The consequences of free market principles have a direct negative effect on my well being.

I'm on disability, I simply can't survive in the world they want. California is going to stop payments to the poor and Robert Rubin (a Wall Street toadie) wants to put an end to Social Security and Medicare. These gov programs quite literally keep me alive and are exactly the kind of things that the Libertarian ideology wants to eliminate. I think I do a good job of keeping my cool around those who would cut my throat, though sometimes I fail at that.

Libertarian philosophy is based on a fundamental misunderstanding of human nature. We do not act in our rational self interest only. Only socially alienated people, the kind over represented on the internet, would reach the conclusion that it's possible to survive on one's own without the support of a community. It is a fantasy, a flight from reality into a dream world where the Ego can engage in it's delusions of grandeur and self sufficiency. All such fantasies eventually crash and crash hard.

[Takuan #20 12:55 on Sun, Jan.18]

write.

[arkizzle / Moderator #21 14:03 on Sun, Jan.18]

If you see only sides,
Life will ever divide.
If you soften your gaze,
black & whites become grey.

[zuzu #22 19:10 on Sun, Jan.18]

Libertarianism is dead. It failed the real world test of the past 30-40 years where it's advocates, such as Allen Greenspan, were given the freedom to put the free market mantra into practice. It failed and it failed miserably. Rationalizing that we didn't "really" implement the true dogma of free market proponents is essentially a religious argument.

It's never been anything close; your definition of "libertarianism" is a straw man. I would call it Corporatism, or even Fascism. Alan Greenspan was a Monetarist; at least until he became chairman of the Fed. (Then, after he's chairman, he writes a book like he wasn't in exactly the position to fix the problem, which is odd to say the least.)

To quote David Cay Johnston on Democracy Now! on 8 October 2008:

Well, the senator from Arizona’s description of the facts is just extraordinary for being a fact-free zone. Fannie Mae and Freddie Mac never originated a single loan. They certainly are participants in what went on here, but the problem was caused by this notion of, quote, “deregulation.”
And, of course, there is no such thing as deregulation. Everything has rules. Think about baseball, which is a trivial, a fun activity. Baseball regulates how many stitches are on the baseball. And all deregulation has meant for the last thirty years is new rules that favor those with the most money.
Well, the rules that were set up encouraged bad lending practices, and, most importantly, they separated risk from responsibility. You’re always hearing about risk and reward being tied together, but they separated risk from responsibility, because if you’re a bank and you make a loan and you have to hold that loan or some of your loans in your portfolio, you’re going to be very careful about vetting the borrower to make sure you’ll get back the principal and the interest. But if you can package a loan, securitize it and then sell it to places like the pension funds that you and I support with our tax dollars for public employees, then what do you care if the loan goes bad, especially if you get big fees and especially if the more toxic the loan is, the less likely it is to be repaid, the bigger your fees? That’s what deregulation has meant, and that’s what’s brought us to this pass.
The fact is that we have a government—we were promised in 1980 by Ronald Reagan: “Elect me, and I’ll get you very quickly to balanced budgets.” Instead, we have four times the amount of government debt that we had back in 1980.
The taxes that Americans have paid in advance for Social Security benefits in the future were spent, principally to finance tax cuts for the wealthiest Americans. Right now, with the bailout in effect next year, all of the tax—the equivalent of all the income taxes that you pay in January, February, March, April and a good chunk of May just go to pay interest on the national debt, you know, and that money goes to China, foreign sovereign funds, wealthy individuals, insurance companies. It is a transfer from working people to those who are already wealthy.

(emphasis and hyperlinks added)

[zuzu #23 10:01 on Mon, Jan.19]

c.f. More Awful Truths About Republicans by Robert B. Ekelund and Mark Thornton:

But an insidious form of "market-based policy" is also a real culprit in the current mess. In 1999 a bill was passed by a Republican Congress and signed by Democratic President Bill Clinton that rescinded the Depression era's divorce of commercial banking activities from investment banking, called the Glass-Stegall Act of 1933. That opened a floodgate of "creative" financial instruments backed by notes and other commercial paper. Much of the banking regulation of the Roosevelt administration — including abandonment of the gold standard — made absolutely no sense, but markets can fail with dire short-run consequences under a fiat monetary system. With Glass-Stegall, Congress put its finger on and mitigated the tendency and temptations of banks to create massive costly externalities to society, in this case, by holding bundled mortgage-backed securities which were deemed safe by rating agencies but which ultimately failed the market test.
The Financial Services Modernization Act of 1999 would make perfect sense in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance; but in the world as it is, this "deregulation" amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly. Such government privileges are nothing new to Republicans — consider the effective subsidies to the pharmaceutical, sugar, and steel industries — but this particular gift to financial institutions is what allowed the credit bubble to expand to such absurd proportions, because it allowed banks of all types to engage in increasingly risky transactions and to greatly expand the leverage of their balance sheets. As the crisis unfolds, credit continues to contract, the risk of bank failures increases, and the possibility of far more serious economic consequences become more apparent. The S&L crisis cost the taxpayers a few hundred billion, but this crisis has the potential of saddling the taxpayer with several trillion in bailouts.
So far, the Republican solution has been to bail out lenders — wealthy financial-industry professionals for the most part — who made unwise market decisions with subsidies and election-year subventions. With Hank Paulson, the former CEO of Goldman Sachs, as Secretary of the Treasury and the big banks on the Board of Directors of the New York Fed, it should not be too surprising that the Fed has been listening only to Wall Street while ignoring Main Street.

(emphasis and hyperlinks added)