One for the true believers

Here’s one from George Monbiot for the Slugger true believers.
Quotes

“How did politics in the US come to be dominated by people who make a virtue out of ignorance? Was it charity that has permitted mankind’s closest living relative to spend two terms as president? How did Sarah Palin, Dan Quayle and other such gibbering numbskulls get to where they are?

In the most powerful nation on earth, one adult in five believes the sun revolves round the earth; only 26% accept that evolution takes place by means of natural selection; two-thirds of young adults are unable to find Iraq on a map; two-thirds of US voters cannot name the three branches of government; the maths skills of 15-year-olds in the US are ranked 24th out of the 29 countries of the OECD.”

It’s at this point that the British fall into the trap of misguided complacency, aka feeling jealous of Americans. However, with all the current talk of a return the Keynesianism, I can’t resist sharing a piece of doggerel from 1946. This was when, with the British ambassador to Washington Lord Halifax, Keynes the world’s most celebrated economist was desperately negotiating the post-war financial bail-out with the hard-nosed Americans – and sometimes riling them with his brilliance. (This isn’t one for angry anglophobes).

“In Washington Lord Halifax,
Once whispered to Lord Keyes:
“It’s true they have the moneybags,
But we have all the brains.”

  • The thing is no matter how stupid up to two thirds of US voters are, the remaining third are clever enough to use them to make us all their lapdogs. So who has all the brains?

  • wild turkey

    ‘but we have ALL the brains’

    well Brian, yes and no. Keynes had the brains and Bretton Woods led to the most sustained growth of western industrialised economies in the 20th century. Admittedly, third world countries producing primary goods that fed the growth hneed not apply for the good times… until Vietnam.

    However, with respect to a blog about ‘Northern Ireland politics and culture’ the most apposite section of Monbiots piece is this:-

    ‘The US is peculiar in devolving the control of education to local authorities. Teaching in the southern states was dominated by the views of an ignorant aristocracy of planters, and a great educational gulf opened up. “In the south”, Jacoby writes, “what can only be described as an intellectual blockade was imposed in order to keep out any ideas that might threaten the social order.”

    The Southern Baptist Convention, now the biggest denomination in the US, was to slavery and segregation what the Dutch Reformed Church was to apartheid in South Africa. It has done more than any other force to keep the south stupid. In the 1960s it tried to stave off desegregation by establishing a system of private Christian schools and universities. A student can now progress from kindergarten to a higher degree without any exposure to secular teaching. Southern Baptist beliefs pass intact through the public school system as well. A survey by researchers at the University of Texas in 1998 found that one in four of the state’s state school biology teachers believed humans and dinosaurs lived on earth at the same time.’

    Even with respect to the ongoing education debate, does the above ring any bells for anyone round these parts? Obviously dinosaurs and humans continue to live on earth at the same time, but then our peculiar Jurasic Park is called Stormont.

    When the dust settles and scientific, as opposed to social, darwinism is finally accepted by all perhaps this particular sliver in place and time will merely be seen to be the inevitable, if tragic, outcome of a wretched excess of in-breeding.

    By the byr. Ms Palin believes humans and dinosaurs once shared the earth. If my take on the recent abortion debate, or lack thereof, is correct, all the poltical parties (well at least the boys) are singing off the same hymm sheet as the Palinistas.

    Is this a great place or what?

  • Sean Fear

    If they’re so stupid, why are they so much more successful than everyone else?

  • Big Maggie

    Brian

    An excellent article. This is something new I learnt from Susan Jacoby’s book:

    ‘Jacoby shows that there was once a certain logic to its anti-rationalism. During the first few decades after the publication of The Origin of Species, for instance, Americans had good reason to reject the theory of natural selection and to treat public intellectuals with suspicion. From the beginning, Darwin’s theory was mixed up in the US with the brutal philosophy – now known as social Darwinism – of the British writer Herbert Spencer. Spencer’s doctrine, promoted in the popular press with the help of funding from Andrew Carnegie, John D Rockefeller and Thomas Edison, suggested that millionaires stood at the top of a scala natura established by evolution.’

    We should be very nervous of the USA and those who control it.

  • Pete Baker

    Brian

    “In the most powerful nation on earth, one adult in five believes the sun revolves round the earth..”

    On a point of [potential] interest it was on that news and, partly, to try “to avoid a similar situation developing here” that I started my occasional Notes on the Solar System“eppur, si muove”

    Although sometimes I think it’s already too late..

  • wild turkey

    Big Mags

    Your point about social, as opposed to scientific, Darwinism is dead on. There was a deliberate effort to confuse survival of the fittest with the agenda of the greediest and sleaziest.

    Then again, some people still take Ayn Rand seriously. FFS!

    good luck

  • Big Maggie

    wild turkey

    You hadn’t posted before my last post so I missed your remarks on Stormont and dinosaurs LOL!

    Re Stormont, another of George Monbiot’s remarks is very apt: ‘Ignorant politicians are elected by ignorant people.’

    Which of course is why the DUP and Sinn Fein are in power.

  • Steve

    If they’re so stupid, why are they so much more successful than everyone else?

    Posted by Sean Fear on Oct 29, 2008 @ 09:21 PM

    They arent that much more succesful than every one else

    But as a western free nation they didnt have the centuries of inbuilt political incest where the goodies were reserved for those already at the top. Success was there for the taking and the strong took it and the weak paid the price.

    but the 20’s and the naught’s(silly era name) have turned america into a country where the goodies are are reserved for those at the top and we are seeing that this inevitably leads to collapse as a really good pyramid is built with a solid base and a narrow top not with a narrow base and a broad top

  • Sean Fear

    8. Oh, I dunno. Being the richest per head (bar a few oil rich sheikhdoms and tax havens), and most powerful nation, for at least 60 years is a pretty good run by any historical yardstick.

    It’s terribly comforting to think that Americans are thick, but it’s pretty common throughout history for less successful groups to think that more successful groups are thick, but get ahead by cheating.

  • wild turkey

    Big Maggie

    ‘Ignorant politicians are elected by ignorant people. Which of course is why the DUP and Sinn Fein are in power. ‘

    Shit, you’re obviously on the senior civil service fast track career advancement programme.

    Tell us how it all turns out, ok?

    Good luck (and you know I mean it)

  • Ex-Irish

    Sean
    “why are they so much more successful than everyone else”

    Because we work harder, are more optimistic and aren’t afraid of failure. All things that are lacking in Socialist Northern Ireland.

    Take care, comrades.

  • Pete Baker

    Slightly more on topic..

    I can’t help feeling that Monbiot writes more in response to Simon Schama than to Jacoby.

    Here’s the recent episode of Schama’s latest TV series – “The American Future: A History, by Simon Schama – American Fervour

    Simon explores the ways in which faith has shaped American political life. His starting point is a remarkable fact about the coming election: for the first time in a generation it is the Democrats who claim to be the party of God. It is Barak Obama, not John McCain, who has been talking about his faith.

    What was was it Monbiot said..

    “One theme is both familiar and clear: religion – in particular fundamentalist religion – makes you stupid.”

    And here’s what Barack Obama tells an election rally audience in Simon Schama’s programme [1 min 40 sec in].

    “There’s nothing that can stop us, because that’s God’s intention. So, I just want all of you to pray that I can be an instrument of God.”

    Indeed.

  • Paul Wolfowitz backs Obama. I think that says it all Pete. Great quotes though.

  • latcheeco

    Article about thick Americans right under Pete’s NASA piece! The irony is classic. Are those Mars rovers lost on their way to Blighty? Maybe Monbiot’s use of the word numbskull was misplaced Bwian.

  • Big Maggie

    “There’s nothing that can stop us, because that’s God’s intention.

    If he loses where does that leave God?

  • latcheeco

    Maggie,
    At least he’ll still have his chosen people as a consolation prize.

  • cynci

    Try asking the same questions in North or West Belfast….of the chamber at Stormont for that matter!

  • Steve

    Sean
    “why are they so much more successful than everyone else”

    Because we work harder, are more optimistic and aren’t afraid of failure. All things that are lacking in Socialist Northern Ireland.

    Take care, comrades.

    Posted by Ex-Irish on Oct 29, 2008 @ 09:58 PM

    And I add able to leap tall buildings walk on water and lift ten times their own weight in gold right off the streets as thats what they use for tarmac

    code word: rather all I have to say about that is…..rather

  • Ex-Irish

    Steve, spend some time in NI. You’ll know what I mean when you do. The levels of begrudgery, bigotry, laziness, sponging and benefit fraud are at levels not seen elsewhere on Earth.

    Love Canada btw. Fantastic place. Hoping Barack can push us in that direction.

  • Comrade Stalin

    But as a western free nation they didnt have the centuries of inbuilt political incest where the goodies were reserved for those already at the top. Success was there for the taking and the strong took it and the weak paid the price.

    Yup.

    The interesting thing about the USA is that in the absence of a monarchy, they’ve sort of developed their own alternatives. The tabloids, rather than gossiping about the royals, gossip instead about celebrities who are famous and revered right through their adult lives to their deaths. In politics, you’ve got family dynasties which go back several generations pulling the strings, and who are elected on very questionable merits by a very questionable electoral process.

    There are a lot of things that are great about the USA, but the way they select and organize the people who run it is far from top of that list.

  • latcheeco

    Agree Comrade,
    But it reminds me of Churchill’s quip about democracy as a form of government. The USA is the worst country except for all the other countries. There may be an arguement given the American experience that perhaps most people are not democratic by nature and do tend to lean eventually towards some form of aristocracy. Vote me for King!

  • lorraine

    a country that elects george bush isn’t really a mature country. america may be a geographically large country with a massive human rights abuse fingerprint on the world, but as a beacon of freedom and inspiration to the oppressed it rank along with whoever is in the bottom league of amnesty international’s violators of human rights.

  • RepublicanStones

    ‘a country that elects george bush isn’t really a mature country’

    Eh, well to be fair, they didn’t, at least not the first time.

  • Ex-Irish

    ‘a country that elects george bush isn’t really a mature country’

    Should we judge Ireland by it’s recent leaders?

    – Bertie “I won it on the horses” Ahern
    – Ian “The pope is the anti-Christ” Paisley
    – Gerry “Is that an AK47 in your pocket or are you just pleased to see me?” Adams

    Very mature indeed.

  • latcheeco

    Also Brian,
    If I walked in to a NI high school, how many kids in an average secondary school in an average class (representing most of the population) would be able to point out Idaho or South Carolina on a map; Or even Slovakia or Estonia? It depends on perspective; this is a big continent wide country.In the U.K. NI may have the best results at the top but it also has the worst at the bottom.

  • latcheeco

    Ex-Irish,
    Sure, its lost on them.
    Lorraine,
    How’s your government working out? How’s its human rights record? What school are those 11 year olds going to next year btw? Sure you’ve only been working on that issue for at least ten years.

  • latcheeco

    Pete,
    And as regards the religion issue. Doesn’t the established church in the U.K. believe the queen is its head because she is next to God? But Americans are far out in their beliefs!

  • RepublicanStones

    I think to be fair you have to judge each country not just on who they elected but also on who they could have elected.

    Al Gore and John Kerry vs John Bruton (again) and Enda Kenny.

  • pauljames

    That recent recipient of American citizenship Christopher Hitchens has this to say in Slate.
    “This is what the Republican Party has done to us this year: It has placed within reach of the Oval Office a woman who is a religious fanatic and a proud, boastful ignoramus. Those who despise science and learning are not anti-elitist. They are morally and intellectually slothful people who are secretly envious of the educated and the cultured. And those who prate of spiritual warfare and demons are not just “people of faith” but theocratic bullies. On Nov. 4, anyone who cares for the Constitution has a clear duty to repudiate this wickedness and stupidity.”

    But are we any closer to getting an atheist elected to high office Chris?

  • latcheeco

    PJ,
    Nope,not if Christopher(how can I be contraversial and get airtime) Hitchens is the poster boy for atheism, but probably closer than Gt.Britain is to having a catholic for monarch.

  • abucs

    I wonder where Europe would be now if not for the US during and after the World Wars and the large amount of investment poured into Europe from America after its two (near) self-destructions ?

    Zimbabwe maybe ?

  • Modernist

    Has no one drawn parallels with the DUP yet. I mean come on the wife of the leader comes on the radion calling homosexuality an abomination a few days after some young lad was visciously attacked for being gay, or how about Mervyn Storey and his ideas on creationism

  • Harry Flashman

    See those nice shiny personal computers you’re all typing on, see that internet thing that yez are so fond of?

    Which thickos invented them?

    Can anyone provide actual hard data (IQ scores, academic records etc) that actually PROVE (as opposed to simple illogical prejudice) that George W Bush, Dan Quayle, Sarah Palin etc are actually any less intelligent than Al Gore, John Kerry, Joe Biden etc?

  • Dave

    You only have to look at Northern Ireland to realise what happens to a people who dependent on the public sector employment or at the dismal state of the farming industry in Europe to realise what happens when it becomes dependent on interventionism and subsidy. Neither is particularly edifying. In addition, take a quick look at the reaction of the Irish people to a budget that cut a paltry 2 billion where the deficit will be circa 18-20 billion next year for a clearer understanding of how difficult it is to take the sweeties away from the children when you can’t afford to give them anymore. People now think the state is abusing their human rights when it tries to act prudently. They think that the State is a generator of wealth rather than a distributer of the wealth that is generated by the entrepreneurial citizens – the citizens who are best suited to reinvesting that wealth in the economy.

    Keynesianism assumes that the State is imbued with Papal infallibility. Yet you need only take a quick look at the morons that you consistently elect to the exercise executive power of the State to understand that this is not the case. These people are not brilliant entrepreneurs, so they are not better suited to the task of creating wealth than said brilliant businessman. They’re mostly mediocre hacks from the legal, academic and accounting professions who are pimping for your votes to compensate with the status of public office for a sense of achievement that is conspicuously lacking in their former realm of earning a living. As with the means by which they came to prominence, they exercise that executive power by dispensing patronage, appointing other mediocre hacks to quangoes. Keynes, and his level of State interventionism is a recipe for stagnation, mediocrity and economic backwardness.

    Keynes never grasped that once the State creates all of these public sector jobs – intended as a temporary measure to alleviate the effects of recession – that it never has the courage to fire any of them when the actual recovery process is undertaken by actual wealth-creators in society. These public sector workers simply retard the recovery process and never accelerate it. Just look at how his policies turned a recession into a depression during 1930s America. Nationalising the banks or promoting any other form of State capitalism is deeply misguided Nannystatism. Of course, the main risk with Keynesianism in the current unstable environment is stagflation. And there are already signs that this is looming – look at recent activity in the commodities markets.

    Lastly, look at how the State mismanages macroeconomic policies for a clue as to why you want to minimise its input, nor maximise it. The US Federal Reserve held interest rates too low for too long, thereby promoting record levels of credit fuelled public spending and, of course, record levels of debt. This was a bad mistake, and it is you who will be expected to pay for it. There is an inviolable law of common sense in this: you have to earn the wealth to repay the wealth that you have already borrowed before you can go on another spending spree. So economic activity will stay low no matter what inducement is offered to stimulate it simply because bills with ‘Final Demand’ written on them will be arriving through your door to remind you that you’ve have too much debt to spend on those consumer goodies you spent the last 7 years buying because the State had a policy to stimulate your demand for said consumer goodies by proffering cheap credit via its base lending rates.

    The party is over, kids. It’s time to tidy up the mess and get on the wagon for a few years. Nanny got you into this mess and she isn’t going to get you out of it. Remember Dave’s Law states that ‘The general public, if left unchecked, tend to elect morons.’ For example, it’s likely said morons will now elect as president a mediocre academic with no record of accomplishment in any of his various odd jobs beyond smooth-talking his way into the Senate while believing him to be the next messiah. Oh, and one last point: Americans have the highest level of third level graduates in the world per capita, 42% compared to just 24% in the UK. In addition, it has a literacy rate of 98% – but let’s not sneer at the poor and the immigrant 2% who can read or write or demean their voting choices, eh? That’s not consistent with being on the liberal left.

  • Alan

    There you go again, Dave !

    Interesting that, after you dragged along Alan Greenspan to support your analysis yesterday or the day before, you now see fit to dump on the Federal Reserve because you forgot that you were arguing against state intervention anyway.

    It’s interesting that even Greenspan (yes, even Greenspan the arch foe of regulation ) has finally, begrudgingly and in a low enough voice not to be heard by his right wing pals, agreed that it “was a mistake” to believe that the free market could regulate itself. If the free market cannot regulate itself, then who has the accountability, clout and continuity to do that – other than the state.

    The paradigm has shifted.

  • Greenflag

    Dave ,

    ‘Keynesianism assumes that the State is imbued with Papal infallibility. ‘

    It does’nt . There is a role for the State when ‘markets ‘fail to deliver . No State can exist for long with mass unemployment or with an ever increasing gap between a tiny wealthy minority and an emisserated majority . That’s what gave the Germans their Hitler and the Russians their Stalin . The Chinese Communist One Party State has been able govern while implementing Professor Friedman’s neo conservative economics ? Strange eh ?
    Neo conservative economics works best when there is no political opposition or minor opposition if any . Is this why the Bush /Cheney administration have been attempting to undermine the USA Constitution since they came to power?

    ‘Yet you need only take a quick look at the morons that you consistently elect to the exercise executive power of the State to understand that this is not the case.’

    I assume you are referring to NI politicians. We can see from your posts that ‘democracy ‘ is not your thing . Regrettably from your perspective people in Britain , Ireland and elsewhere in the EU are not of a mind to pass over control of their Governments entirely to the large corporations . As for Northern Ireland the very state itself was built on a moronic basis from the badly drawn border at the first partition . After ‘repartition’ the need to elect ‘morons ‘ to keep up the pretense will diminish and eventually disappear . I would not use Northern Ireland as an example of democracy. It’s still learning .

    ‘ Americans have the highest level of third level graduates in the world per capita, 42% compared to just 24% in the UK.’

    So what percentage of that 42% have degrees in Fundamentalist Christianity /Divinity, Basketball, Bible Studies , Cosmetology , and Aesthology, Astrology , Culinary Arts and Football? BY the time you take out all the degree mills and charlatan shows the USA’s percentage figure may be less than the British or similar .

    I’m aware that the top USA universities attract the brightest students not only from the USA but from across the world but these top universities are not the ‘majority’ of third level institutions .

    ‘Remember Dave’s Law states that ‘The general public, if left unchecked, tend to elect morons.’’

    What does ‘unchecked ‘ mean ? How do you propose to check them ? One party neo conservative rule by the ‘free market uber alles ‘ party ?

    ‘For example, it’s likely said morons will now elect ‘

    You still don’t get it . Said ‘morons ‘ are going out to vote in record numbers to get rid of the neo conservative ‘nutters’ who have destroyed the USA’s economy over the past 30 years .

    ‘The party is over’

    It is indeed . It’s over for the neo cons and their destructive economic and foreign policies . Depending on the degree of defeat the party may even be finally over for the Republican Party in it’s present format . With secular and liberal republicans from yankeeland leaving behind the gun toting -born agains and neo conservative oil lobby financed ‘war’ imperialists .

    The ole South is not what it once was so the Guardian writer Bonoit will have to amend his thesis .As the South has become urbanised and more immigrants have moved in States like Florida , Virginia , North Carolina and others like Missouri may be moving into the ‘blue ‘ camp post this election .

    Sarah Palin will have just a rump of white born again racist ‘nutters’ to help her propell another attempt on the White House . The numbers are just not there .And in 2102 even less so .

  • susan

    Some fascinating background in the comments here.

    As a point of interest, yesterday 76 American Nobel Prize winners — including all three Americans awarded prizes in science in 2008 — endorsed Barack Obama for president in a strongly worded letter praising his support for the advancement of science and technology, and strongly criticising the record of the Bush Administration.

    http://www.salon.com/politics/war_room/2008/10/29/nobel/index.html

  • susan

    Martin Chalfie, one of this year’s winners for the Nobel Prize in Chemistry, explains on YouTube why as a scientist and as an American he strongly endorses Barack Obama:

    http://uk.youtube.com/watch?v=WAr0MesBfXo

  • susan

    And back to the topic of true believers and misconceptions, Al Jazeera interviewed many Americans attending a rally in support of Sarah Palin for Vice President, and let them have their say in their own words:

    http://uk.youtube.com/watch?v=zRqcfqiXCX0

  • RepublicanStones

    LMAO Susan, they didn’t do themselves any favours.

    Keyword: sense

    If only !

  • Big Maggie

    Sam Harris had this to say in the LA Times:

    Americans have an unhealthy desire to see average people promoted to positions of great authority. No one wants an average neurosurgeon or even an average carpenter, but when it comes time to vest a man or woman with more power and responsibility than any person has held in human history, Americans say they want a regular guy, someone just like themselves. President Bush kept his edge on the “Who would you like to have a beer with?” poll question in 2004, and won reelection.

    This is one of the many points at which narcissism becomes indistinguishable from masochism. Let me put it plainly: If you want someone just like you to be president of the United States, or even vice president, you deserve whatever dysfunctional society you get. You deserve to be poor, to see the environment despoiled, to watch your children receive a fourth-rate education and to suffer as this country wages—and loses—both necessary and unnecessary wars.

    I particularly like the bit about the ‘average neurosurgeon’.

  • Greenflag

    ‘And in 2102 even less so .

    Oops . Somehow I don’t think Sarah Palin will be making a run for President in 2102. Not at age 144 approx ?.

    Correction it should have been 2012 . And none of yiz dyslexics out there even noticed .

    As we are getting close to Election day it’s time for the moderator or whoever to set up an Electoral College Predictor competition to see who gets the nearest to or even the exact number of electoral college votes for both candidates ?

  • Greenflag

    And one for the non true believers . Tommy Tiernan’s mass

    May raise a chuckle from the cynics , non believers , skeptics, cynics etc etc . May not suit catholics , australians , bank managers , priests , sensitive irish people ,fundamentalists , africans or tax collectors named Zebedee 🙂

  • Zebedee

    May not suit africans or tax collectors named Zebedee

    Hmmpphh! I’m an African tax collector and I resent this!

  • Dave

    Susan, while it may come as a surprise to you, scientists, like the motor industry, are just another group of vested interests who will endorse whichever candidate offers them the most taxpayers’ money (they also endorsed Al Gore and John Kerry). They have stated that selfish interest is their criteria in proffering their endorsement. However, most voters are intelligent enough to understand that the executive branch of government is concerned with a broader range of issues than those that concern those individuals and they will not be unduly influenced by said tiny groups of individuals, however distinguished. It would be a very unintelligent act to vote for Obama simply because said individuals encourage you to. The statement ’76 Nobel Prize winners endorse Obama’ is as meaningless as ‘800 Nobel Prize winners did not endorse Obama’ and both should be dismissed as irrelevant to the salient issues.

    On the other hand, economics is very much relevant to the management of the economy. Therefore, when 300 senior economists including numerous Nobel Prize winners for Economics release a statement endorsing John McCain as president, then that is far more salient and newsworthy:

    http://thepage.time.com/mccain-release-on-economists-backing-his-proposals/

    Don’t you agree? 😉

    “Interesting that, after you dragged along Alan Greenspan to support your analysis yesterday or the day before, you now see fit to dump on the Federal Reserve because you forgot that you were arguing against state intervention anyway.” – Alan

    Pardon? I have never argued that the state should not regulate or legislate. How can there be a State if neither function is performed? Did I even hint that fiscal policy should not be a function of the Federal Reserve? I am arguing against state intervention in the economy as that is understood in free market dynamics.

    “It’s interesting that even Greenspan (yes, even Greenspan the arch foe of regulation ) has finally, begrudgingly and in a low enough voice not to be heard by his right wing pals, agreed that it “was a mistake” to believe that the free market could regulate itself. If the free market cannot regulate itself, then who has the accountability, clout and continuity to do that – other than the state.” – Alan

    He did no such thing. He argued for regulation and he explained why state intervention undermined the principle of self-interest which ensures that parties to a transaction do not act irresponsibly. If there is no risk to a party in a transaction, then that party cannot by definition behave recklessly. What the state did by intervening in the free market system to underwrite the risk with an implicit guarantee is make it impossible for a lender to be reckless. That is why the system failed, and that is what Alan Greenspan was getting at. For more detail on this, see Greenspan’s mentor, Ayn Rand.

    I pasted the quotes before which outline Greenspan’s consistent position but here they are again:

    [i]At the core of this crisis is massive state intervention in the economy. Let’s hear what Alan Greenspan has to say about what happens in markets when government intervenes to absorb risks via implicit state guarantees, leaving private business with virtually risk-free models of acquiring wealth:

    “Typically in a market system, lenders and investors monitor and discipline the activities, including leverage, of their counterparties to assure themselves of the financial strength of those to whom they lend. However, market discipline with respect to the GSEs has been weak to nonexistent. Because the many counterparties in GSE transactions assess risk based almost wholly on the GSE’s perceived special relationship to the government rather than on the underlying soundness of the institutions, regulators cannot rely on market discipline to contain systemic risk.

  • Dave

    [b]Continued[/b]

    When these institutions were small, the potential for such risk, if any, was small. Regrettably, that is no longer the case. From now on, [b]limiting the potential for systemic risk will require the significant strengthening of GSE regulation and the GSE regulator. Determining the suitable amount of capital for Fannie and Freddie is a difficult and technical process, and in the Federal Reserve’s judgment, a GSE regulator must have as free a hand as a bank regulator in determining the minimum and risk-based capital standards for these institutions.[/b]

    Beyond strengthening GSE regulation, the Congress will need to clarify the circumstances under which a GSE can become insolvent and, in particular, the resultant position–both during and after insolvency–of the investors that hold GSE debt, as well as other creditors and shareholders. This process must be unambiguous before it is needed. Current law, which contemplates conservatorship and not receivership for a troubled GSE, requires the federal government to maintain GSEs as ongoing enterprises, but other than the symbolic line of credit at the U.S. Treasury, provides no means of financing to do so. Left unresolved, such uncertainties could threaten the stability of financial markets.

    World class regulation, by itself, may not be sufficient and, indeed, might even worsen the potential for systemic risk if market participants inferred from such regulation that the government would be more likely to back GSE debt in the event of financial stress. This is the heart of a dilemma in designing regulation for GSEs.” [/i]

    Notice his last sentence? He said that regulation, no matter how brilliant, would make the situation worse if it did not remove the implicit state guarantee from the GSEs. In other words, if the state continued to underwrite the risk, then it would continue to undermine the system.
    Incidentally, I admire Greenspan immensely, but like all public sector workers, he holds on to his job by pleasing his political masters and he is prone to implement their mistakes and political expediencies as a substitute for economic policy as he did by keeping interest rates low for so long at the behest of his masters. The Federal Reserve, while nominally independent, is obliged to implement fiscal policies that are compatible with government policies. Of course, government policies are usually political, and political expediencies don’t mix well with monetary policies or the free market system, resulting in political agendas masquerading as economics and dismal consequences. I don’t see a way around that other than by electing patriotic and capable politicians who are prepared to plan beyond the next election. You can’t have full separation between the two because if you did them you could have executive government trying to influence the economy in one direction and the Federal Reserve trying to influence it in the opposite direction.

    Greenflag, Dave’s Law wasn’t intended as a actual theorem. And socialism doesn’t work, so Obama will surpass Bush as the worst president in recent history after just one term. The morons are the ones who elect Europhiles. 😉

  • susan

    Dave, it may come as a surprise to you, but I actually read the letter signed by the 76 American Nobel prize winners endorsing Barack Obama, and could not possibly be unaware that their endorsement was based on Barack Obama’s platform on education and the advancement of scientific and technological progress. I mean, honestly.

    You seem to be implying that education and the advancement of science and technology is “narrow self interest” on the part of Nobel laureates. It isn’t. Improved education, breakthroughs in science and technology can enrich many lives, and the lives of nations.

    As for the letter signed by the economists, many of whom have served in previous Republican administrations — economic policies divorced from political realities are less than convincing. FOr example, the US Supreme Court has already rejected the constitutionality of a line-item veto, yet these economists write of a “constitutionally-valid line item veto.” What’s up with that? Do they plan to amend the US constitution? The economists make no adjustments for the cost to the nation of war without end in Iraq based on McCain’s stated policy goals for Iraq, and don’t even touch on the $5.7 trillion in additional deficits over 10 years projected by the (non-partisan) Tax Policy Center analysis of McCain’s program:

    http://www.taxpolicycenter.org/publications/url.cfm?ID=411750

  • susan

    Here’s a table explaining where the estimation that McCain’s tax cuts alone would cost $5.7 million in additional deficits over ten years —

    http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=1786

  • abucs

    Religious thought shackles our economic, scientific, political and civil societies ??

    Must religion be a threat to liberty ??

    An interesting speech this year at the Acton Lecture on this particular subject.

    http://www.abc.net.au/rn/religionreport/default.htm

    http://www.abc.net.au/tv/fora/stories/2008/08/07/2327152.htm#

    http://www.acton.org/programs/lectures/

  • 6countyprod

    Vengeance is mine, I will repay saith the Lord Obama.

  • Greenflag

    Dave ,

    ‘That is why the system failed, and that is what Alan Greenspan was getting at. For more detail on this, see Greenspan’s mentor, Ayn Rand.’

    So Greenspan supped at the feet of the Goddess of Greed and self Ayn Rand ?. When you add Rand’s brand of early 20th century voodoo onto Friedman trickle down economics it should come as no suprise to anybody that the USA under the neo conservatives for the better part of the past 30 years has ended up as virtually a basket case economy mired in war and with it’s overseas reputation at an all time low 🙁

    Perhaps you need to read the American Constitution to wean yourself away from the fundamentalist nutters on the right and it’s ‘intellectual ‘ underpinners Rand , Limbaugh , Friedman , and media shock jocks O’Reilly , Hannity , Coulter etc etc etc etc .

    The American Constitution begins with

    ‘WE the people’ and not with with ‘I the Corporation’ or ‘I the entrepreneur’ or ‘I the mortgage broker’ or ‘I the fundamentalist’ or ‘I the banker’.

    Individuals have rights as well as responsibilities . We owe our freedoms to the fact that ‘individuals ‘ have banded together historically to ensure that ‘individual’ despots kings , dictators , popes , tsars etc had their powers reduced or curtailed for the greater good.

    Ayn Rand was a naive idealist who somehow believed that man was or could be an entirely ‘rational ‘ animal . The lesson of history is that whereas many may strive for that goal ‘humanity ‘ has an emotional side .

    In a world with 7 billion ‘individuals’ the cult of the ‘individual uber alles ‘ is not one that will ever make practical political or economic sense -never mind the fact that it is pseudo philosophical horseshite of the first order !

    We Irish may live on an island but we’re not alone 😉

  • Greenflag

    6county prod ,

    Never mind the Lord repaying – it’s the voters in his own home State that Senator McCain has to fear at this stage .

    ‘Barack Obama’s campaign announced Friday that it was going on the air in John McCain’s home state of Arizona for the first time this cycle, as a new CNN poll of polls released this morning finds the Republican nominee leading the Illinois senator there by just 4 percentage points, 49 to 45 percent. Six percent of the state’s voters said they were unsure about their presidential pick.

    Obama campaign manager David Plouffe told reporters the campaign’s positive closing argument spot, ‘Something,’ will hit the airwaves in Arizona. He also said the campaign was going back on the airwaves in Georgia and North Dakota with its negative closing argument spot,

    360 Electoral College Votes for Obama with McCain at 180 .

    It’s goodbye and good riddance to Senators Stevens , Dole and to many Republican Senators and Congressmen who have not as yet been ‘jailed ‘ for fraud , corruption or sexual malfeasance with minors or female office staff etc .

  • 6countyprod

    Greenflag

    FLASHBACK
    November 2, 2000 Florida tracking poll: ‘Gore leads Bush by 12%’, NY Times

    So what do OB and Chavez have in common?

    Perish the thought, but it looks like, in the coming Age of Obama, only the worshippers will get front-row seats to history.

  • Greenflag

    6countyprod :

    Flashforward it’s 2008 not 2000.

    In retro Bush was very lucky to win in 2000 .Gore was too confident . Obama has run a much more professional campaign . If he manages to run the country the same way he’s run his campaign the country should be well on the way to ‘recovery’ by 2012 .

    It’s obvious to all bar the blind, deaf and dumb that the Republicans have nothing to offer but a semi bare board of half baked ideas which have not worked for most middle class Americans .

    So what’s your prediction for Electoral Colleg votes or would that exercise be just too painful ?

  • Greenflag

    ‘So what do OB and Chavez have in common? ‘

    More ‘fear mongering ‘nonsense . More important is what has Chavez got in common with all of South America’s political leaders except for Colombia ?

    The answer is that since Bush/Cheney and the neo con nutters of the extreme right took control of the USA government in 2000 they have turned every country in South America against the USA in a manner not seen since the 19th century .

    IN the Economist worldwide ‘electoral college ‘ Obama is ahead by 9,000 to 230 for McCain . The only coutries giving McCain a small advantage are Iraq , Sudan , Namibia , and Algeria ? The rest of the world is solidly 85% in favour of a change in the USA administration .

    Just as well they haven’t got a real vote eh ?

  • 6countyprod

    Greenflag:

    Here are 10 reasons why Americans should vote for McCain,

    and here are 10 reasons why McCain might just win come Nov 4.

    PS God help Colombia if Obama starts backing the scumbags of FARC!

  • 6countyprod

    Seems like Obama is better than Palin after all!

  • latcheeco

    Greenflag,
    You’re wasting your breath. It’s like trying to describe green to a blind man. Roll on Tuesday. Hopefully it’ll be one for the wee man at last.

  • As Proved BY Northern Ireland

    ‘believed humans and dinosaurs lived on earth at the same time.’

  • Comrade Stalin

    Should we judge Ireland by it’s recent leaders?

    Yes. Although Ireland doesn’t have a large military and lots of angry people who want to use it to invade countries over faked intelligence reports.

    Talking to Dave is like arguing with a drunk. You can’t get through. Only Rush Limbaugh and his contemporaries can.

  • Greenflag

    Projection

    Obama 360 Electoral College votes

    McCain 180 ECV’s

    One of the most amazing election campaigns in USA political history . Not only interesting because of the increased polarisation of American society over the past 8 years but also in the extent to which the incumbent President had to keep his mouth shut during virtually the entire campaign .Cheney finally gave McCain the old knife in the back treatment by endorsing his campaign from Wyoming ? That’s all McCain meeded at this stage .

    Thank you Dick was Obama’s response 😉

  • Dave

    Comrade Stalin, I enjoyed the dramatic irony of a socialist complaining about ideological indoctrination. 😉

    Greenflag, and what does your last post tell you about your thesis that Americans now a support social democratic model as is common in Europe? They are voting against the Republicans as opposed to voting for the Democrats. In short, they are ‘agin’ and not for. That was the angle that Obama used. He didn’t argue for anything: he argued against the status quo, i.e. his mantra was ‘change from…’ and not ‘change to…’ And even as Bush sank in the opinion polls to a record low, ensuring that a Yorkshire terrier could have been proffered by the Democrats and duly elected by the public, Obama can barely scrape a single digit lead over a Republican. Some endorsement, eh? As Bill said, “It’s the economy, stupid.” And it is the economy that will undo the tax-and-spend Democrats in one term.

    Greenie, no one dies to defend an economy. They fight for fundamental freedoms and the right to self-determination. So, while the economy is important to people, their freedom and fundamental rights are far more important to them. This is another area were Obama will come unstuck as he tries to meddle with the Constitution. Now, as for your remarks about the US Constitution, perhaps you should ask the Americans to read it and to ponder if they should elect a president as its upholder who has stated that he doesn’t respect it, stating that it has “deep flaws” and is an “imperfect document.” He regards it as a “document of negative rights” and believes that it should be a document of positive rights. This is a common agenda among social democrats who want to remove certain political and economic policies from everyday government and inject them into a Constitution, thereby ensuring that certain functions must be performed by the State irrespective of the philosophy of its elected government. For example, the right to own private property stated in the Constitution as a negative right (meaning that the government must not prevent you from owning a house) could be restated as a positive right, imposing an obligation on the government (i.e. taxpayers) to provide you with a house. FDR tried this before in his defeated proposal for a second Bill of Rights, and you can bet your last dollar that Obama (and especially Barney Frank – who has most responsibility for the affordable housing fiasco of Fannie Mae and Freddie Mac) will be planning along similar lines. This deranged idealism will make it an interesting four years ahead as the mediocre teacher with impeccable liberal left credentials encounters the real world. 😉