Oops, I forgot its link. Here it is. http://www.bloomberg.com/apps/news?pid=20601087&sid=afYsmJyngAXQ&refer=home
Peace and best wishes. Xi On Apr 17, 4:35 pm, xi <[email protected]> wrote: > My comment: Besides what he suggests between lines about White House > ties to Wall Street and therefore the "conflicts of interests" that > obviously I will not comment because it is not my country, his > analysis about US economy situation, and in particular its financial > system, is the best that I have read or listen from an American > economist in many years. > > More and more, the current policy of the US Treasury seems to be based > on two strategies, to inflate financial system and to upgrade its > protectionism. The ealy positive and promising action, its economic > stimulus plan, seems to be losing ground. Therefore, we have more of > the same Mr. Paulson´s policies. > > “The bank restructuring has been an absolute mess.” The return to > taxpayers from the TARP is as low as 25 cents on the dollar, he said. > In other words, real US economy wastes 75 cents per each dollar spent > on banks. > > The Troubled Asset Relief Program, or TARP, isn’t large enough to > recapitalize the banking system, he said. I would add more, to revive > those dead institutions, US treasury and Fed should put into banks > hundreds of billions every quarter. Because the real problem, the true > source of US financial problem, is that the three healthy sources > where banks get money anywhere, cannot put that funds into banks. > First of all, householders cannot save because they struggle to > survive and to meet its high life standards and consumption levels > that they leant in the past. Secondly, mostly because high > protectionism in USA that is gaining ground with the fresh "buy > American" policy and low public social networks, corporations lose > ground year after year aand their profits as percentage of total > amount of US dollars, or as percentage of total liquidity, fall. And > thirdly, because the bigger householder, the Federal government, does > not save, des not cut deficits, rather it increases the size of the > problem. Without inputs, banks produce less and less outputs. Their > profits are fake, to be honest. > > In fact, as he said, “It’s a real redistribution and a tax on all > American savers.” Again, since monetarism in the seventies, it means > to disencourage savings. I must add from householders to bondholders > and share holders. Even worse, a fake wealth wealth. And even much > worse, according to him the rate of return of that fake wealth > redistribution is just 1 on 4. A wrong step in the wrong direction. > > Even worse, the deeper problem in my opinion is as he says: “Even if > there is no quid pro quo, that is not the issue. The issue is the > mindset.” “America has had a revolving door. People go from Wall > Street to Treasury and back to Wall Street,”. I must add that what > Wall Street boys get from the Treasury is not true wealth, it is fake > paper that looks like the ancient US dollars but its real value is > just a fraction of it. To fix that mindset, the fake belief that > problems can be fixed through financial means, will take probably one > generation or longer, new programs in universities of economics in > USA, new schools of business, fresh faces, new books, etc. > > And the second error from that mindset, although he does not cite it, > to do not take into account the reaction from the rest of the world. I > do not mean politics, I mean the natural reaction that economies and > markets take disregarding human wishes. US economy is not decoupled > from the world since years ago, for good and, in this case, for bad. > > Although damage is already done since many years ago, I deeply and > honestly want that they realise it as soon as posible and change their > policies. The sooner it starts, the shorter and lighter this decades- > long crisis will be. Prof. Stiglitz is an authoritative voice and he > could not speak clearer and louder. > > Peace and best wishes. > > Xi --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
