ChickenBones: A Journal
for Literary & Artistic African-American Themes
The murderous military source of capital for investment in manufacturing Smith and others
dismiss as a gift of an invisible hand. Certainly, Smith possessed, of course, little
understanding of how his natural economic system would develop after centuries. It is doubtful
he could recognize what goes today for capitalism, especially in the financial services industry
Capitalism the Beautiful: Bean Bags and Goldilocks
By Rudolph Lewis
Adam Smith did not see the Invisible Hand as a market force but a moral force that corrected market forcesWilson
That I have read only a few snatches of The Wealth of Nations, I am uncertain how much Adam Smith knew about the capitalism we know today. He never uses the word “capitalism” in The Wealth text. Of course, he seems to have a knowledge of rudimentary aspects of capitalism, which he describes as a natural display of economic activity, and that this natural system was always in play in human activitythat it was however disrupted in Europe by the Fall of Rome and the social monarchical rigidity of the Middle Ages, along with the prohibitions of the Catholic Church with its opposition to the excesses of financiers, money, and credit.
Clearly, Smith understood that finance (capital) plays a role in the group activity which brings about the development of manufacturing, production, and trade. He knew the necessity for a division of laborbosses and workers, that is, beyond the guild system. Of course, the English bosses were not by necessity fully owners for they might have borrowed capital or they might be partners in an enterprise with those who had no role harvesting the earth or the seas, the directing of production, or involved in the direct selling or trading of goods or services. Unlike the guild leaders, they might have been without any useful skill. One might say they were better gamblers than artisans and artists. Some sat in their lounge chairs and merely collected interests on their loans or investments, and reinvested their capital in the production of other goods or enterprises, such as the slave trade, mining, or whalingfor the accumulation of more capital. The impulse of greed is ever-present in capitalist activity.
Contrary to the story Smith relatesthey [the capitalists] consume little more than the poor these moneylenders of his time built fine houses or estates in the city or countryside and hired servants so that they could lounge further, entertain guests lavishly, gamble now and again, and possess a few mistresses, all of which to find other pursuits through which they could acquire more wealth for this or that imported knick knack, and/or possibly put aside money for the education of their sons at Harvard or Oxford. Or these well-heeled fellows might be ambitious enough to put aside a fortune or a trust that their sons might get a proper start to carry on the family name and reputation in business or politics, or so that their daughters may pursue womens studies so that she may make a fitting wife for the son of one of his wealthy friends.
That capitalists consumed little more than the poor may have been true of Smith the Scots few frugal friends. I do not question his memory or direct observation. But even these few exemplary fellows he acknowledges beyond their thriftiness were in no way exceedingly moral or civic minded. Such terms as vain, selfish, insatiable, rapacious he applies to their character. Certainly, they were not particularly fair-minded, or esteemed in camaraderie with those whom they depended on for their fortunes. What good that they did or do for society and for workers they employ they do so unintentionally and unknowingly of the consequences of applying their capital to production or acquisition I have never known much good done by those who affected to trade for the public good. It is an invisible hand that brings about the good, Smith contends.
The invisible hand of which Smiths speaks of in The Wealth text and The Theory of Moral Sentiments (TMS), you may call a moral force, might be also referenced as “Providence” (a term used in TMS), or God, or Mother Nature, or whatever. Its raison detre is to right the balance in societal relations, or in the shortcomings of these traders or social leaders, to perpetuate the species and bring a modicum of happiness even to the beggar by the wayside. This Smithian scenario, of course, is pious hogwash, or as Newt Gingrich calls it, pious baloney. It should be acknowledged however belatedly that Smith in both The Wealth and Moral Sentiments passages acts as an apologist for greedy and exceedingly powerful exploiters of the weak, the poor, and the powerless.
For these financiers or corporatists have at their beck and call laws instituted in their parliaments and congresses and legislatures in their interest laws and contracts, and judges under powdered white wigs or other symbols of piety and judiciousness to render judgement in favor of these traders and capitalists. Most of all they have the State in general with all its security forces to protect and sustain their acquisition and uses of property and wealth (at home or abroad), which ultimately were acquired by hook or crook, by conquest and blood or by intrigue and threats.
Although Joyce Appleby, in her The Relentless Revolution: A History of Capitalism, may be right that England solved the problem of famine (if not for the Irish) that facilitated more easily capitalist development in the British Isles, most of the men, women and children of Smiths era and throughout much of the 19th century lived in hovels, suffered unhealthy short lives as they were greatly exploited in mines, on ships, and in dangerous factories. That is what happened to free Englishmen men. Let us not speak extensively of the horrors of the forced labor ending black lives tragically after six years in the cane fields and sugar factories of Hispaniola and Jamaica or the acquisition of wealth from Indian lands, and men and women and children imported from West Africa and the training that reduced them to a life of slavery in the production of tobacco and rice in Virginia and South Carolina, and field and domestic servitude in New York. Of these humanitarian crimes that laid the foundation for capitalism, Smith is more or less loudly silent.
The murderous military source of capital for investment in manufacturing Smith and others dismiss as a gift of an invisible hand. Certainly, Smith possessed, of course, little understanding of how his natural economic system would develop after centuries. It is doubtful he could recognize what goes today for capitalism, especially in the financial services industry (that we call Wall Street), e.g., making money on insuring debt, opaque instruments disconnected from the real economy of production and purchase and tarde of durable goods, other products, land, and housing. In her Book-TV interview Joyce Appleby skirted the dysfunctions of finance economy, the Wall Street white collar casinos and the invisible $600 trillion in derivatives. Though continuing to ever praise capitalist Exceptionalism, Appleby also does not emphasize the differences between the capitalism of the 17th and 18th centuries, and the mercantile world of Adam Smith, its theft, plunder, and conquest. For that meant dealing with the ugliness of the African trade and the brutalities and genocide against the indigenous peoples of the Americas.
Applebys criticism, like Smiths, soft pedals the connection of capitalist advancement to the exploitation of African and Indian labor and theft of African and Indian landsthe capture, exploitation, and development of other peoples lands are dismissed absurdly hypocritically in terms like White Mans Burden, advancement of civilization, or humanitarian acts of the invisible hand. She, like Smith, suggests also that capital available to a few English individuals was an invisible-hand gift, or an act of fate, or Providential. The role of the international exploitation of Africa and the New World by the West is left out while so much praise is heaped upon Western or Anglo-American ingenuity, or too commonly and by too many commentators who like Niall Ferguson in his Civilization: The West and the Rest , attempt to boost favorably but blindly by half the success of the West over the East in matters of material and moral progress.
Applebys emphasis is particularly on the peculiarities of English culture, e.g., their attitudes toward individualism (aggressiveness), innovation, and science. Capitalism then in her mind like that of Smith’s is a natural impulse rather than a rational system (or even a system of morality), that is, this economic activity with its emphasis on greed is peculiar to English (or Anglo-Saxon) culture. Certain conditions in England, unlike Holland with its laidback adventurous people, contributed to its peculiar development on the English isle. England was able to feed itself twelve months of the year and thus that contributed to its relaxed and studied independence to explore and acquire wealth. One can only wonder whether the oppression of the Irish was another factor, a training lab in how to oppress, exploit, and control other peoples. The English success, she contends brought forth imitators especially in the 19th and 20th in the United States of America, which produced, for what Smith might now see, an unimaginable global military and economic power.
Of course, Appleby’s The Relentless Revolution may fill in these black holes that occur in Applebys answers during the Q&A interview. She allows that certain capitalist excesses occurred in mining, slaving in swamps and in cane-cotton-or rice fields or on whaling shipsand the criticisms have some validity. She demurs that the Glass-Steagall Act of 1933 was abolished by the GrammLeachBliley Act (1999) which was signed into law by the New Democrat President Bill Clinton. Shes also a bit troubled by todays movement of capital around the globe. Appleby may be aware too of the recent criticism of Apple: in the Chinese manufacture of its computers, the local manufacturer in China receives $4 in profit while Apple pockets over $80. Apple has stored away over $300 billion as an untouchable resource. This multinational corporation, its indicters say, is unconcerned about the health hazards of workers involved in creating their wealth and power.
Though aware of capitalist criticisms (the facts and figures of its creative destruction) she yet overrates Capitalism the Beautiful as well as the legislative ability to reform its excesses in these times when over $77 million is spent on lobbying, $33 million spent on campaign contributions. The Obama administration is shooting for a billion or more dollars for its presidential campaign. Where will it come from? Who has that kind of money in a downturned economy? Who will profit the most by such expenditures? According to Les Leopold, in his book The Looting of America, the top 400 winners of fantasy-finance casinos in 2008 averaged $3.9 billion: Thats equal to about 10 percent of the entire gross domestic product of the United States (165). Mitt Romney, who has a cool quarter billion and pays less than 15 percent on his income of over $20 million a year, lives leisurely to pursue the presidency and tells us this 2012 campaign season we envy his success. That he believes in a merit society. Is he really 1000 times smarter than the average worker, works 500 times harder than the average Joe?
The worst of Applebys criticisms is the belief that capitalism as culture is capable of overcoming all other cultures for the good of all peoples. This faith leads her to suggest that capitalism by necessity generates democracy and a civilization she finds acceptable. If she dares to look out her rosy window, there in the real world of the USA are 94.6 million nonsupervisory workers who earn less than the average worker did in 1973. Also out there are about 44 million Americans with no health care (165), according to Leopold. The problem with Appleby’s argument is the she is not willing to tackle the lack of morality in the capitalism we have come to know in the last three decades or more. John Taft, in his book Stewardship: Lessons Learned from the Lost Culture of Wall Street, seems more than willing to tackle the issue of greed and irresponsibility as a central aspect of capitalism. He discounts Smith’s “invisible hand.” He wants something more rational and more moral. he argues that the financial services industries must be driven by convictions of “purposefulness, accountability, humility, integrity, and foresight . They have a larger duty than what has been exhibited and exposed by the market crash of 2008.
Appleby writes a popular book rather than an academic book, one that might possibly pass Texas censors. This format allows her to utter patriotic and ethnocentric generalities without careful reasoning and evidence. This is a book romancing capitalism, as Rick Perry did his niggerhead stone in Texas, rather than a balanced critique of its advantages and disadvantages, the devastation and decimations of countries and peoples that has been encouraged by a narrow self-centered ideology in its restless aggression for markets and profit. Appleby also does not acknowledge that capitalism takes different forms as it operates in different political and cultural contexts, as among the Asian TigersTaiwan, Hong Kong, South Korea, and Singaporeand that capitalist activity does not lead by necessity to Anglo-American culture or its styles of democracies.
Her assertion that there is something about individual initiative in the American psyche that is inexplicable. Her belief (her mystificication) that Americans are naturally against collective action is unconvincing and causes us to wonder about her critical honesty. In her talk, Appleby ignoresputting aside conquest, slavery, and Jim Crowthe role that the State has played in conjunction with capitalist gangs and thugs and other contractors in strike breaking and head cracking and murder and executions of working men and labor leaders. In deadly earnest State action against Labor and the supporters of Labor resumed in the early 1980s under Ronald Reagan. This anti-union activity by the Statealong with the financial resources of such billionaires as the Koch brothers for lobbying and other immoral activitiescontinues to be employed by governors and other politicians, media conglomerates to defeat collective action, as we have seen recently in the attempted dismantling of government unions in Florida, Wisconsin, and other mid-western states.
In a C-Span interview, Joseph Ellis discusses his book American Creation. The dialogue provides some background for the present Tea Party arguments for small government and states rights. Ellis contends the nation began with a conflict between Alexander Hamilton and his adherents (including George Washington), and Thomas Jefferson and other Southern planters about what economic or political activity would be most advantageous for the Republic. That is, there were those who wanted a strong central government (Washington, Marshall and other Hamiltonians) and a more efficient capitalism and then there were those who emphasized state rights (Jefferson and Madison and Monroe) and the less fierce capitalism of the plantation economy.
Ellis concludes that the Virginia planters were suspicious of Hamiltonian capitalism and had more faith in land than money. Jefferson dismissed Hamilton as an “accountant,” not too unlike, possibly, in temperament possibly of today’s derivative dealers and innovators of credit default swaps. The planters on the whole had little understanding of how interest and debt and banks operated in a national economy. Appleby and Ellis agree, however, that the planters nevertheless were involved in capitalist enterprise, however inefficient Ellis believes it was. Although they were troubled by the immorality of slavery, the planters were unprepared imaginatively, politically, and economically to dispense with African slavery, nor were Hamiltonians restrained enough in their morality to respect the property rights of Indian tribes like the Creek.
Rather than the immorality of capitalism in whatever form it assumes, Ellis emphasizes the lack of slave work efficiency and thus the immorality of the slaves themselves, rather than that of the slavers. Virginia might have been wealthier, Ellis imagines, if it had gotten rid of slavery in the 18th century. But what do we do with the Negroes? If Southern planters, Ellis argues, had passed a prohibition against slavery in the lands of the Louisiana Purchase and collected revenues from the sell of those lands (whose possessions were naturally in the hands of Indian tribes) as a means of encouraging and compensating the planters to forego their love of swarthy unpaid servants, capitalism could have progressed more quickly and efficiently, and a civil war, possibly, could have been avoided. Of course, the Civil War, Appleby and Ellis agree, was not so much against slavery or concern about the enslaved as it was about the extension of slavery into the Louisiana Territories, or a more efficient way to exploit the lands they intended either to extort or seize by force. This line of historical thought, however, has been countered by Chandra Manning in her book What This Cruel War was Over: Soldiers Slavery and the Civil War. In a fairly brief monograph, Manning reveals that the Civil War soldiers (North and South), felt that the martial conflict was indeed about slavery.
Like Appleby, Niall Ferguson, a Hoover Institute ideologue, also makes a cultural as well as a moral argument in support of capitalism. In Civilization: The West and the Rest , Ferguson‘s argument however is much more blatantly ideological than that of Applebys. Capitalism, for him began earlier than the 17th century. Capitalism rose in an earlier period, “beginning in the fifteenth century.” For him, it was not so much what the English had done singularly, but rather what the West (Europe) had developed jointly in contradistinction to the East. The West, by the end of the Middle Ages, had “six powerful new concepts that the Rest lacked: competition, science, the rule of law, consumerism, modern medicine, and the work ethic.” These were the “killer applications” that allowed “the West to leap ahead of the Rest, opening global trade routes, exploiting newly discovered scientific laws, evolving a system of representative government, more than doubling life expectancy, unleashing the Industrial Revolution, and embracing a dynamic work ethic.” Civilization shows just “how fewer than a dozen Western empires came to control more than half of humanity and four fifths of the world economy.”
Like Applebys, Ferguson‘s ethnocentric argument discounts conquest, thievery, brutal exploitation, genocide, world wars, a nuclear holocaust, and the immoral concentration of wealth among a few. His Eurocentric view of the world refuses to account for white supremacist views and global humanitarian disasters brought about by capitalism while he argues the moral and cultural superiority of the West. The Trojan gift of the West may bring about the end for us all by its poisoning of the air, the water, our foods, nuclear accidents, and the continuous promotion of conflicts over the resources of other peoples. Western hypocrisy seeming is without measure and seemingly without end. From what I have been able to discern, Smiths invisible hand is a Rip Van Winkle, dead and buried.
Guided by An Invisible Hand Make no mistake: we are witnessing the biggest crisis since the Great Depression. . . . There are several reasons for my pessimism. The extreme credit crunch is a result of the banks having lost a lot of capital. And there is still uncertainty about the value of the toxic mortgages and other complex products on their balance sheets. The US economy has been fuelled by a consumption binge. With average savings at zero, many people borrowed to live beyond their means. When you cut off that credit you reduce consumption. This, in turn, will dampen the US economy, which helps keep the global economy growing. The American consumer has not only sustained the US economy, he has sustained the global economy. The richest country in the world has been living beyond its means and telling the rest of the world it should be thankful because America fuelled global economic growth. . . . Adam Smith (photo left)
This crisis is a turning point, not only in the economy, but in our thinking about economics. Adam Smith, the father of modern economists, argued that the pursuit of self-interest (profit-making by competitive firms) would lead, as if by an invisible hand, to general well-being. But for over a quarter of a century, we have known that Smith’s conclusions do not hold when there is imperfect information – and all markets, especially financial markets, are characterised by information imperfections. The reason the invisible hand often seems invisible is that it is not there. The pursuit of self-interest by Enron and WorldCom did not lead to societal well-being; and the pursuit of self-interest by those in the financial industry has brought our economy to the brink of the abyss. New Statesman
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Wealth of Nations
Chapter II Of Restraints Upon Importation from Foreign Countries of Such Goods as Can Be Produced
Excerpt by Adam Smith
But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it.
By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
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The Theory of Moral Sentiments (1790)
Excerpts Adam Smith
The rich select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labour of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessities of life, which would have been made, had the earth been divided into equal proportions among all its inhabitants, and thus without intending it, without knowing it advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. . . .
Part IV: Of the Effect of Utility upon the Sentiment of Approbation Consisting of One Section Chap. I: Of the beauty which the appearance of Utility bestows upon all the productions of art, and of the extensive influence of this species of Beauty
The homely and vulgar proverb, that the eye is larger than the belly, never was more fully verified than with regard to him. The capacity of his stomach bears no proportion to the immensity of his desires, and will receive no more than that of the meanest peasant. The rest he is obliged to distribute among those, who prepare, in the nicest manner, that little which he himself makes use of, among those who fit up the palace in which this little is to be consumed, among those who provide and keep in order all the different baubles and trinkets, which are employed in the oeconomy of greatness; all of whom thus derive from his luxury and caprice, that share of the necessaries of life, which they would in vain have expected from his humanity or his justice. The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining. The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them. In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.
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Clinton Proposes Banking Reforms27 February1995The Clinton Administration proposed sweeping changes in the nation’s banking system that would permit commercial banks to sell insurance and underwrite securities. Treasury Secretary Robert Rubin outlined the new proposal, which would allow banks to “affiliate” with Wall Street firms, insurance companies and other financial service providers. It would repeal several federal restrictions, including the Depression-era Glass Steagall Act, which forbids banks from underwriting securities or selling insurance. Banks for years have been seeking a repeal of Glass-Steagall. Their efforts were blocked by Rep. John Dingell (D-Mich.), who chaired the House Energy and Commerce Committee until the Republicans took control of Congress last month. A Dingell staffer told TIME Daily that the congressman’s top concern is to make sure any reforms include protective “firewalls” to prevent federally insured deposits from being used for risky stock investments.
Clinton Signs Legislation Overhauling Banking Laws13 November 1999President Clinton signed into law today a sweeping overhaul of Depression-era banking laws. The measure lifts barriers in the industry and allows banks, securities firms and insurance companies to merge and to sell each other’s products. ”This legislation is truly historic,” President Clinton told a packed audience of lawmakers and top financial regulators. ”We have done right by the American people.” The bill repeals parts of the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act to level the domestic playing field for United States financial companies and allow them to compete better in the evolving global financial marketplace. Analysts and industry leaders say the measure will probably fuel a wave of mergers as companies compete to build financial supermarkets offering all the services customers need under one roof. Financial stocks were winners on Wall Street today, with J. P. Morgan & Company, Citigroup, American Express and Merrill Lynch all posting big gains. That helped the Dow Jones industrial average end up 174.02 points, at 10,769.32.
Clinton Signs Financial ReformMarcy GordonPresident Clinton signed into law Friday a sweeping measure that knocks down Depression-era barriers and lets banks, investment firms and insurance companies sell one another’s products and provide one-stop shopping for financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. “This is a day we can celebrate as an American day,” Clinton said at the signing ceremony. Modern-day signing ceremonies are derived from ceremonies that occurred when the British monarch gave Royal Assent to acts of Parliament. in a White House auditorium. The audience of lawmakers and senior government officials included Federal Reserve Chairman Alan Greenspan. Praising Congress’ bipartisan support for the legislation, Clinton said it is a victory for both free markets and consumer protection. The law will help “make sure that the 21st-century economy really works for our country,” the president said. Clinton opposed similar legislation for years but recently dropped his veto threat after changes were made. Congress passed the law Nov. 5 to open the way for a blossoming of financial “supermarkets” that will sell loans, investments and insurance. Proponents pushed the legislation in Congress for two decades, and Wall Street and the banking and insurance industries poured millions of dollars into lobbying for it in the past few years. At stake is an estimated $350 billion that Americans spend annually on fees and commissions for banking, brokerage and insurance services. Proponents say the legislation will save customers $15 billion a year, offering them greater choice and convenience and spurring competition. Consumer groups and other opponents maintain it will bring higher prices and jeopardize people’s financial privacy.
Phil Gramm wrote the bill to deregulate banksBut it was signed into law by Clinton. . . . Both Republicans and Democrats were complicit in getting rid of FDR’s regulations that kept our economy stable. The chief aim of the money men (assisted by both Republicans and Democrats) for decades was to roll back FDR’s New Deal. Anti-government rhetoric (distracting labeling) has hidden this from public view. The ‘Banking Act’ of the New Deal was a priority by vested interests in being repealed. The undoing of this Act took decades and approximately $200 million in lobbying funds to accomplish.
“Billionaire Sanford Weill made ‘Citigroup’ into the most powerful financial institutions since the House of Morgan a century ago. A major trophy of Sanford’s is the pen Bill Clinton used to sign the REPEAL of FDR’s Banking Act – a move which allowed Weill to create Citigroup. ” Sanford Weill called President Clinton to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup LOBBYIST Roger Levy that Weill has to get the White House moving on the bill or he would shut down the House-Senate Conference. A deal was announced at 2:45 a.m.
Just days after the Clinton administration (including the Treasury Department) agrees to support the REPEAL, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill’s chief lieutenant. The previous year, Weill had called Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, “You’re buying the governmen.” (Progressive Historian).
With the stroke of a pen, Bill Clinton ended the long saga of Republicans and Democrats, working in concert, for their puppet masters (the bankers) with his signing of the ‘Financial Modernization Bill’ (Nov 12, 1991). Clinton ended an era that stretched back to William Jennings Bryan and Woodrow Wilson and reached fruition with FDR and Harry Truman. As he signed his name, William Jefferson Clinton symbolically signed the death warrant of a level playing field that had guided the Democratic Party. Clinton (both parties) knew better than FDR and our Supreme Court. Nov 12-1999, President Clinton stated, ” Glass- Stegal (FDR Banking Bill) is no longer appropriate for our economy. This was good for the industrial age. The (1999) Financial Modernization Bill is the key to rising paychecks and great security for ordinary Americans.”
Tell this to Michigan – NH – California – Georgia etc. The public was distracted from one of the most important pieces of legislation in this nation’s history being signed by Bill Clinton, with round the clock coverage, of the Monica debacle. Seeing how Clinton came out of this shameful episode lauded as heroic – super stud – and a multi-millionaire, why one one would almost think that the whole sordid affair was contrived? Most especially with Lieberman acting as the holier than thou apologist ! Missed was Clinton’s reason for the undoing of FDR’s landmark bill Press release: http://Treas.gov/press/releases/ls241.ht What does this repeal mean? The hedge fund industry and subprime mortgage market is out of control. The New York Times in a June 2007 profile of Goldman Sachs: “While Wall Street still mints money advising companies on mergers and taking them public, real money – staggering money – is made trading and investing capital through a global array of mind bending products and strategies unimaginable a decade ago.” Goldman Sachs head Lloyd Blankfein paints the perfect picture of what has happened: “We’ve come full circle, because this is exactly what the Rothschild’s or J.P. Morgan the banker were doing in their heyday. What caused an aberration was the Glass-Steagall Act (FDRs – Banking Act).” Blankfein, like his cohorts in corporate greed, sees the New Deal as an aberration and longs for a return to the Gilded Age.
Source(s): Foreclosures – The Untold Story By Judith Moriarty
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The Three MarketeersJoshua Cooper Ramo15 February 1999Rubin, Greenspan & Summers“Although the U.S. economy has been nothing but sunshine, it has been a terrifying year in world markets: famed financier George Soros lost $2 billion in Russia last summer; a hedge fund blessed with two Nobel prizewinners blew up in an afternoon, nearly taking Wall Street with it; and Brazil’s currency, the real, sambaed and swayed and then swooned. In the past 18 months 40% of the world’s economies have been tugged from robust growth into recession or depression.”
25 People to Blame for the Financial CrisisThe good intentions, bad managers and greed behind the meltdown
Phil GrammAs chairman of the Senate Banking Committee from 1995 through 2000, Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. Credit-default swaps took down AIG, which has cost the U.S. $150 billion thus far.
Alan GreenspanThe Federal Reserve chairman an economist and a disciple of libertarian icon Ayn Rand met his first major challenge in office by preventing the 1987 stock-market crash from spiraling into something much worse. Then, in the 1990s, he presided over a long economic and financial-market boom and attained the status of Washington’s resident wizard. But the super-low interest rates Greenspan brought in the early 2000s and his long-standing disdain for regulation are now held up as leading causes of the mortgage crisis. The maestro admitted in an October congressional hearing that he had “made a mistake in presuming” that financial firms could regulate themselves.
Chris CoxThe ex-SEC chief’s blindness to repeated allegations of fraud in the Madoff scandal is mind-blowing, but it’s really his lax enforcement that lands him on this list. Cox says his agency lacked authority to limit the massive leveraging that set up last year’s financial collapse. In truth, the SEC had plenty of power to go after big investment banks like Lehman Brothers and Merrill Lynch for better disclosure, but it chose not to. Cox oversaw the dwindling SEC staff and a sharp drop in action against some traders.
American ConsumersHousehold debt in the U.S.the money we owe as individualszoomed to more than 130% of income in 2007, up from about 60% in 1982. We enjoyed living beyond our means no wonder we wanted to believe it would never end.
Hank PaulsonWhen Paulson left the top job at Goldman Sachs to become Treasury Secretary in 2006, his big concern was whether he’d have an impact. He ended up almost single-handedly running the country’s economic policy for the last year of the Bush Administration. Impact? You bet. Positive? Not yet. The three main gripes against Paulson are that he was late to the party in battling the financial crisis, letting Lehman Brothers fail was a big mistake and the big bailout bill he pushed through Congress has been a wasteful mess
Joe CassanoBefore the financial-sector meltdown, few people had ever heard of credit-default swaps (CDS). They are insurance contracts or, if you prefer, wagers that a company will pay its debt. As a founding member of AIG’s financial-products unit, Cassano, who ran the group until he stepped down in early 2008, knew them quite well. In good times, AIG’s massive CDS-issuance business minted money for the insurer’s other companies. But those same contracts turned out to be at the heart of AIG’s downfall and subsequent taxpayer rescue. So far, the U.S. government has invested and lent $150 billion to keep AIG afloat.
Homebuilders had plenty to do with the collapse of the housing market, not just by building more homes than the country could stomach, but also by pressuring people who couldn’t really afford them to buy in. As CEO of Beazer Homes since 1994, McCarthy has become something of a poster child for the worst builder behaviors. An investigative series that ran in the Charlotte Observer in 2007 highlighted Beazer’s aggressive sales tactics, including lying about borrowers’ qualifications to help them get loans. The FBI, Department of Housing and Urban Development and IRS are all investigating Beazer. The company has admitted that employees of its mortgage unit violated regulations like down-payment-assistance rules at least as far back as 2000. It is cooperating with federal investigators.Time
Frank RainesThe mess that Fannie Mae has become is the progeny of many parents: Congress, which created Fannie in 1938 and loaded it down with responsibilities; President Lyndon Johnson, who in 1968 pushed it halfway out the government nest and into a problematic part-private, part-public role in an attempt to reduce the national debt; and Jim Johnson, who presided over Fannie’s spectacular growth in the 1990s. But it was Johnson’s successor, Raines, who was at the helm when things really went off course. A former Clinton Administration Budget Director, Raines was the first African-American CEO of a Fortune 500 company when he took the helm in 1999. He left in 2004 with the company embroiled in an accounting scandal just as it was beginning to make big investments in subprime mortgage securities that would later sour. Last year Fannie and rival Freddie Mac became wards of the state.
Kathleen Corbett By slapping AAA seals of approval on large portions of even the riskiest pools of loans, rating agencies helped lure investors into loading on collateralized debt obligations (CDOs) that are now unsellable. Corbet ran the largest agency, Standard & Poor’s, during much of this decade, though the other two major players, Moody’s and Fitch, played by similar rules. How could a ratings agency put its top-grade stamp on such flimsy securities? A glaring conflict of interest is one possibility: these outfits are paid for their ratings by the bond issuer. As one S&P analyst wrote in an email, “[A bond] could be structured by cows and we would rate it.”
Dick FuldThe Gorilla of Wall Street, as Fuld was known, steered Lehman deep into the business of subprime mortgages, bankrolling lenders across the country that were making convoluted loans to questionable borrowers. Lehman even made its own subprime loans. The firm took all those loans, whipped them into bonds and passed on to investors billions of dollars of what is now toxic debt. For all this wealth destruction, Fuld raked in nearly $500 million in compensation during his tenure as CEO, which ended when Lehman did.
Bill ClintonPresident Clinton’s tenure was characterized by economic prosperity and financial deregulation, which in many ways set the stage for the excesses of recent years. Among his biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. It is the subject of heated political and scholarly debate whether any of these moves are to blame for our troubles, but they certainly played a role in creating a permissive lending environment.
George W. BushFrom the start, Bush embraced a governing philosophy of deregulation. That trickled down to federal oversight agencies, which in turn eased off on banks and mortgage brokers. Bush did push early on for tighter controls over Fannie Mae and Freddie Mac, but he failed to move Congress. After the Enron scandal, Bush backed and signed the aggressively regulatory Sarbanes-Oxley Act. But SEC head William Donaldson tried to boost regulation of mutual and hedge funds, he was blocked by Bush’s advisers at the White House as well as other powerful Republicans and quit. Plus, let’s face it, the meltdown happened on Bush’s watch.
Stan ONealMerrill Lynch’s celebrated CEO for nearly six years, ending in 2007, he guided the firm from its familiar turf fee businesses like asset managementinto the lucrative game of creating collateralized debt obligations (CDOs), which were largely made of subprime mortgage bonds. To provide a steady supply of the bondsthe raw pork for his booming sausage businessO’Neal allowed Merrill to load up on the bonds and keep them on its books. By June 2006, Merrill had amassed $41 billion in subprime CDOs and mortgage bonds, according to Fortune. As the subprime market unwound, Merrill went into crisis, and Bank of America swooped in to buy it.
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#1 – Justify My Thug by Wahida Clark #2 – Flyy Girl by Omar Tyree #3 – Head Bangers: An APF Sexcapade by Zane #4 – Life Is Short But Wide by J. California Cooper #5 – Stackin’ Paper 2 Genesis’ Payback by Joy King #6 – Thug Lovin’ (Thug 4) by Wahida Clark #7 – When I Get Where I’m Going by Cheryl Robinson #8 – Casting the First Stone by Kimberla Lawson Roby #9 – The Sex Chronicles: Shattering the Myth by Zane
#10 – Covenant: A Thriller by Brandon Massey
#11 – Diary Of A Street Diva by Ashley and JaQuavis
#12 – Don’t Ever Tell by Brandon Massey
#13 – For colored girls who have considered suicide by Ntozake Shange
#14 – For the Love of Money : A Novel by Omar Tyree
#15 – Homemade Loves by J. California Cooper
#16 – The Future Has a Past: Stories by J. California Cooper
#17 – Player Haters by Carl Weber
#18 – Purple Panties: An Eroticanoir.com Anthology by Sidney Molare
#19 – Stackin’ Paper by Joy King
#20 – Children of the Street: An Inspector Darko Dawson Mystery by Kwei Quartey
#21 – The Upper Room by Mary Monroe
#22 Thug Matrimony by Wahida Clark
#23 – Thugs And The Women Who Love Them by Wahida Clark
#24 – Married Men by Carl Weber
#25 – I Dreamt I Was in Heaven – The Rampage of the Rufus Buck Gang by Leonce Gaiter
#1 – Malcolm X: A Life of Reinvention by Manning Marable #2 – Confessions of a Video Vixen by Karrine Steffans #3 – Dear G-Spot: Straight Talk About Sex and Love by Zane #4 – Letters to a Young Brother: MANifest Your Destiny by Hill Harper #5 – Peace from Broken Pieces: How to Get Through What You’re Going Through by Iyanla Vanzant #6 – Selected Writings and Speeches of Marcus Garvey by Marcus Garvey #7 – The Ebony Cookbook: A Date with a Dish by Freda DeKnight #8 – The Isis Papers: The Keys to the Colors by Frances Cress Welsing #9 – The Mis-Education of the Negro by Carter Godwin Woodson
#10 – John Henrik Clarke and the Power of Africana History by Ahati N. N. Toure
#11 – Fail Up: 20 Lessons on Building Success from Failure by Tavis Smiley
#12 –The New Jim Crow: Mass Incarceration in the Age of Colorblindness by Michelle Alexander
#13 – The Black Male Handbook: A Blueprint for Life by Kevin Powell
#14 – The Other Wes Moore: One Name, Two Fates by Wes Moore
#15 – Why Men Fear Marriage: The Surprising Truth Behind Why So Many Men Can’t Commit by RM Johnson
#16 – Black Titan: A.G. Gaston and the Making of a Black American Millionaire by Carol Jenkins
#17 – Brainwashed: Challenging the Myth of Black Inferiority by Tom Burrell
#18 – A New Earth: Awakening to Your Life’s Purpose by Eckhart Tolle
#19 – John Oliver Killens: A Life of Black Literary Activism by Keith Gilyard
#20 – Alain L. Locke: The Biography of a Philosopher by Leonard Harris
#21 – Age Ain’t Nothing but a Number: Black Women Explore Midlife by Carleen Brice
#22 – 2012 Guide to Literary Agents by Chuck Sambuchino #23 – Chicken Soup for the Prisoner’s Soul by Tom Lagana #24 – 101 Things Every Boy/Young Man of Color Should Know by LaMarr Darnell Shields
#25 – Beyond the Black Lady: Sexuality and the New African American Middle Class by Lisa B. Thompson
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By Niall Ferguson
The rise to global predominance of Western civilization is the single most important historical phenomenon of the past five hundred years. All over the world, an astonishing proportion of people now work for Western-style companies, study at Western-style universities, vote for Western-style governments, take Western medicines, wear Western clothes, and even work Western hours. Yet six hundred years ago the petty kingdoms of Western Europe seemed unlikely to achieve much more than perpetual internecine warfare. It was Ming China or Ottoman Turkey that had the look of world civilizations. How did the West overtake its Eastern rivals? And has the zenith of Western power now passed? In Civilization: The West and the Rest, bestselling author Niall Ferguson argues that, beginning in the fifteenth century, the West developed six powerful new concepts that the Rest lacked: competition, science, the rule of law, consumerism, modern medicine, and the work ethic.
These were the “killer applications” that allowed the West to leap ahead of the Rest, opening global trade routes, exploiting newly discovered scientific laws, evolving a system of representative government, more than doubling life expectancy, unleashing the Industrial Revolution, and embracing a dynamic work ethic. Civilization shows just how fewer than a dozen Western empires came to control more than half of humanity and four fifths of the world economy.
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Soldiers Slavery and the Civil War
By Chandra Manning
For this impressively researched Civil War social history, Georgetown assistant history professor Manning visited more than two dozen states to comb though archives and libraries for primary source material, mostly diaries and letters of men who fought on both sides in the Civil War, along with more than 100 regimental newspapers. The result is an engagingly written, convincingly argued social history with a pointthat those who did the fighting in the Union and Confederate armies “plainly identified slavery as the root of the Civil War.” Manning backs up her contention with hundreds of first-person testimonies written at the time, rather than often-unreliable after-the-fact memoirs. While most Civil War narratives lean heavily on officers, Easterners and men who fought in Virginia, Manning casts a much broader net. She includes immigrants, African-Americans and western fighters, in order, she says, “to approximate cross sections of the actual Union and Confederate ranks.”
Based on the author’s dissertation, the book is free of academese and appeals to a general audience, though Manning’s harsh condemnation of white Southerners’ feelings about slavery and her unstinting praise of Union soldiers’ “commitment to emancipation” take a step beyond scholarly objectivity.Publishers Weekly
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from the Lost Culture of Wall Street
By John Taft
John Taft comes from a distinguished political family well known for its commitment to integrity. In Stewardship: Lessons Learned from the Lost Culture of Wall Street, John Taft builds on that legacy and presents an intelligent, thoughtful argument for the importance of establishing service to others as the key to saving ourselves from the ongoing financial crisis, and creating a more stable and more compassionate financial system. When the financial crisis hit in 2008, Taft was on the front lines with investors and employees, and experienced their extreme turmoil. Driven by a conviction that purposefulness, accountability, humility, integrity, and foresight are our duty, and that making the world a better place is our calling, he outlines in this book his belief in stewardship’s core principles. These principles are the answer not only for minimizing the scale and impact of future financial crises, but also for addressing the major societal challenges facing us today. Wide-ranging in its coverage, the book looks at the ways in which a lack of stewardship contributed to the financial crisis, how to strengthen banking regulation, and much more.
Including an in-depth analysis of the ways in which Canadian banks responded to the crisis with integrity and established themselves as models of fiscal responsibility, it looks to the future with optimism.
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By Charles C. Mann
Im a big fan of Charles Manns previous book 1491: New Revelations of the Americas Before Columbus, in which he provides a sweeping and provocative examination of North and South America prior to the arrival of Christopher Columbus. Its exhaustively researched but so wonderfully written that its anything but exhausting to read. With his follow-up, 1493, Mann has taken it to a new, truly global level. Building on the groundbreaking work of Alfred Crosby (author of The Columbian Exchange and, Im proud to say, a fellow Nantucketer), Mann has written nothing less than the story of our world: how a planet of what were once several autonomous continents is quickly becoming a single, globalized entity.
Mann not only talked to countless scientists and researchers; he visited the places he writes about, and as a consequence, the book has a marvelously wide-ranging yet personal feel as we follow Mann from one far-flung corner of the world to the next. And always, the prose is masterful. In telling the improbable story of how Spanish and Chinese cultures collided in the Philippines in the sixteenth century, he takes us to the island of Mindoro whose southern coast consists of a number of small bays, one next to another like tooth marks in an apple.
We learn how the spread of malaria, the potato, tobacco, guano, rubber plants, and sugar cane have disrupted and convulsed the planet and will continue to do so until we are finally living on one integrated or at least close-to-integrated Earth. Whether or not the human instigators of all this remarkable change will survive the process they helped to initiate more than five hundred years ago remains, Mann suggests in this monumental and revelatory book, an open question.
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From The World and Africa, 1965
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posted 6 March 2012