Former Republican stalwart turned visionary iconoclast Kevin Phillips raises one big red flag in today’s article for The Washington Independent, The Plunge Protection Team: An Elite Group Protects the Financial Sector

Phillips notes that people who think that the Federal Reserve’s "bailout" of Bear Stearns is a new development are very, very mistaken:

the President's Working Group on Financial Markets – nicknamed "the Plunge Protection Team" by The Washington Post in 1997 –  quietly observed its 20th birthday on Mar. 18.

The "bail out" of Bear Stearns five weeks ago did nothing to solve the underlying causes of the unfolding financial meltdown, so another major crisis is unavoidable. The "bail out" of Bear Stearns has merely bought more time for the big players on Wall Street to try and drag this out past the November election, because what they fear above all else is the rise of a progressive political movement strong enough to pry loose their grasp on the credit mechanism -- the financial system -- of our economy.

Michael Greenberger, former Director of Trading and Markets at the Commodity Futures Trading Commission (CFTC), was interviewed by NPR’s Terry Gross this past Thursday, April 3.

When people tell you this is the worst economic crisis since World War Two, that’s a way of not saying the panicky thing, which is, we may be heading for a depression.  

You really, really, really, really need to listen to this interview, and get other people to listen to it, also. It is almost 40 minutes long, but worth every info-packed, thought-provoking second.

Just when you think that Novak has plumbed the depths of duplicity and mendacity, he conjures up a new act of evil. Now he proposes destroying Social Security as a means for the Rethuglicans to gain politically in the coming election season. From Novak’s op-ed carried by Washingtonpost.com among others:

Cutting the payroll tax, which funds Social Security, would not be easy but would offer a rich economic prize in this lean Republican year.

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It being Easter Sunday, when Christians are supposed to celebrate Christ’s defeat of death (entropy) I thought it appropriate to share an awesome 1993 study by heterodox economist Michael Hudson I discovered two weeks ago: The Lost Tradition of Biblical Debt Cancellations (the link to the pdf file is near the bottom of the page, just above "books"). In my humble opinion, this document has the potential to undo centuries of damage done to Christianity and Judaism by oligarchs and usurers.

Especially in the context of the ongoing economic and financial crises, in which it is clear that we the people are being sacrificed to save a rotten and useless financial system – bailouts for Bear Stearns and Wall Street, but not foreclosed homeowners - Hudson’s study is very powerful. So first let me set the context.

I want to thank the organizers of the Take Back America Conference for allowing me, at the last minute, to attend as a media representative of epluribusmedia.org.

In introducing the panel, The Economics of Shared Prosperity Lawrence Mishel, president of the Economic Policy Institute argued forcefully:

The dominant economic philosophy of neo-liberalism – that markets solve all problems, and everyone can be left to take care of themselves – is now completely discredited. What we need to say loud and clear is that the era of small government is over. Remember that it was a Democratic President, Clinton, who joined the neo-libs, the conservatives, and the republicans in 1997 when he said the era of big government is over.

Laying the Groundwork for the Ultimate Backroom Deal
The 1854 Kansas-Nebraska Act, allowing territories and new states to decide for themselves whether to be free or slave, began the final phase of disintegration of the old political order, and the Whig and Democratic Parties of the time. In 1856, the new-fangled Republican Party fielded its first candidate for President of the United States. A little known fact is that one of the people discussed at the 1856 Republican convention for the vice-presidential position was a gangly, rather ugly prairie lawyer from Illinois. You’all can easily guess his name.

Seems to me a lot of people don’t realize the worst financial crash since 1929 has already occurred. I suppose they are waiting for a big explosive fireball and a lot of noise like in a Hollywood movie, or for the nightly news on their wide-screen televisions to show pictures of desperate bankers and brokers splattered on the sidewalks in front of 60-story temples of finance.

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At the Technology, Entertainment and Design conference in Monterey, California today, pioneer geneticist Craig Venter revealed a "fourth-generation fuel" project he believes is about 18 months away from perfecting a bio-engineered life form that will produce fuel by feeding on carbon dioxide, a common waste product responsible for much of global warming.

"We have modest goals of replacing the whole petrochemical industry and becoming a major source of energy," Venter told an audience that included Al Gore and Google co-founder Larry Page. "We think we will have fourth-generation fuels in about 18 months, with CO2 as the fuel stock."

Sara Robinson posted an excellent on Campaign for America’s Future a few days ago, outlining the seven preconditions for violent revolution discussed by Caltech sociologist James C. Davies in a 1962 article in the American Sociological Review. Davies’s work was largely based on the seven "tentative uniformities" identified by another scholar, Crane Brinton, who had studied and correlated the origins of the Puritan, American, French, and Russian revolutions.

"...it struck me," Robinson writes,  "that the same seven stars Brinton named are now precisely lined up at midheaven over America in 2008."

Tip 'o the hat to RFK Action Front for catching this one:

In response to Democrats in the Senate trying to add home heating subsidies for poor families to the economic stimulus bill, the Wall Street Journal editors wrote:

As for home heating subsidies, these encourage greater energy use, especially in the Northeast, which depends on oil more than natural gas. This is thus more of a stimulus to foreign oil exporters than to the U.S. economy. Think of it as one more subsidy to add carbon to the atmosphere, notwithstanding the usual global warming grandstanding.

Last week, the financial news was full of stories on credit default swaps, which appear to be the next shoe ready to drop in the financial crises millipede that has engulfed the globe since the IKB Deutsche Industriebank of Germany announced on July 30. 2007 that it was marking down the value of some of its financial derivatives based on U.S. sub-prime mortgages. From the comments posted in various blog discussions,  of credit default swaps, it is very clear that the vast majority of people are very, very confused. More troubling, most people are unable – or unwilling – to recognize that the world as they know it now crashing down about their ears.  

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From Princeton University professor Larry Bartels, Economic Inequality and Political Representation:

Excerpts are available downstairs:

At truthdig.org. Chalmers Johnson has a lengthy but very informative review of South Korean economist Ha-Joon Chang’s Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism , which came out in December 2007. (ISBN-13: 9781596913998).

This book review provides some excellent history of how the U.S. economy was actually built. I think a major vulnerability of the Republicans is that they believe in and rely on a completely false "story" about the American economy. Republicans and conservatives believe Adam Smith was the genius upon which American capitalism was built. That is simply not true. It was Alexander Hamilton, the first Secretary of the Treasury, who during the Revolutionary War commanded an artillery unit, then served Washington as aide de camp. Does it make any sense for the Founders to revolt against England, then turn right around and embrace the economic ideas of a scribe for the English oligarchy?

I found this on nakedcapitalism.com:

This article from Project Syndicate (hat tip Mark Thoma) is a report from Davos by Nobel Prize winner Joesph Stiglitz on the considerable skepticism abroad toward US financial and business practice, particularly our faith in deregulation. It is a telling indicator of how rapidly the world is changing, yet many in the US are still in denial.

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For the past few years, DailyKos is reportedly the most popularly read progressive political blog in the world. And on DailyKos, one "BondDad" has established a huge following for his posts on financial and economic matters, usually full of vivid graphs and concise explanations of events in the financial markets. Up until this past summer or autumn, "BondDad" presented his analysis from a perspective I fully agreed with: the U.S. economy was much weaker than it appeared to be because wages and earnings for the working and middle classes have stagnated since the 1970s, and a monstrous bubble of debt has been created to allow Americans to keep consuming despite their declining incomes.

One of the few useful things I learned in my 9 to 5 job years ago was the business adage, "If you find yourself in a hole, the first thing you do is stop digging." Well, what was decided last week at the World Economic Summit in Davos about the systemic solvency crises unleashed by the debacle in U.S. subprime mortgages has been made rather clear today: we’re going to keep on digging. British Prime Minister Gordon Brown announced that he intends to give Mervyn King a second five-year term as governor of the Bank of England, the central bank of the United Kingdom. King’s current term ends in July.

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In Asia Times Online, the inestimable Henry C. K. Liu lays out the terrifying reality of where the world financial crisis is headed. In a lengthy article entitled, The Road To Hyperinflation, Fed Helpless In Its Own Crisis, Liu responds to the former U.S. Federal Reserve chairman Alan Greenspan’s defensive but arrogant article in the December 12, 2007 edition of the Wall Street Journal, in which Greenspan blamed the current world financial crises on China and the developing world for "saving too much." Liu harshly condemns Greenspan, explains how Greenspan engineered the mess during his tenure as Fed chairman, and concludes that now there are only two options left:

The Fed has a choice of accepting an economic depression to cut off stagflation, or ushering hyperinflation by flooding the market with unproductive liquidity.

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