Political Cortex: Brain Food for the Body Politic

"Mr. Wen made scathing comments about the `inappropriate macro-economic policies of some unnamed countries' and the `unsustainable model of development characterized by low savings and high consumption.'"

Alan Greenspan, of course, led the way for low savings by lowering the interest rate to a 40-year low.  Certificates of deposit during Greenspan's run as fed chief, got as low as 2 percent less than inflation.

This helped the stock market as people were not often willing to be literally robbed of a fair return on their hard earned cash.  It helped exporters, it helped U.S. businesses like real estate.

It set home and condo sales into a real estate frenzy, generating tremendous inflation.  In the Wall Street Journal January 29 Putin is quoted by writers Marc Champion in Daos and Andrew Batson in Bejing:

"Like other Russian officials recently, Mr. Putin sent a conciliatory signal to the new U.S. administration.  'We wish the new team success,' Mr. Putin said.  The Russian and Chinese leaders both called for cooperation with U.S. President Barack Obama.

"At the same time their speeches reflected growing anger in economies that are now getting hit hard by a financial crisis that began with subprime mortgages sold in the U.S.

"Characteristically blunt, Mr. Putin called for the development of multiple regional reserve currencies in addition to the dollar.  'Excessive dependence on a single reserve currency is dangerous for the global economy,' Mr. Putin said."

In Financial Times, the Chinese premier summed up the entire economic collapse succinctly, when Wen Jiabao was quoted:

"He attacked financial institutions' 'blind pursuit of profit' and their 'lack of self discipline'".

The Seattle Times December 28 had an article on how the subprime loan debacle at the U.S.A.'s largest bank, Washington Mutual, had helped generate billions in losses.

Under a photo of Kerry Kellinger, a caption read:

"During the tenure of Chief Executive Officer Kerry Killinger, Washington Mutual pressed sales agents to pump out loans while disregarding borrower's incomes and assets, according to former employees."

Before Washington Mutual was taken over by federal authorities, and then taken over by J.P. Morgan and Chase, "bad loans had reached $11.5 billion."

Feverish Republicans like Phil Gramm were instrumental in getting the vital protective bank regulatory measure, the Glass-Steagall act of 1933, repealed.

As banks all around the U.S. collapse, we can see what lack of close oversight and regulation has accomplished worldwide.

Robert Frank in his book "Luxury Fever" explains the false line of reasoning mainstream economists are deluded by.  Their core doctrine:  Inequality benefits the system.  The second delusion is the belief that the top people in the hierarchy are the producers and taxing them would stifle risk and effort.  They fantasize that they do good for everybody when wealth trickles down.

This wealth-trickles-down theory prompted Reagan to drastically cut taxes for the wealthy, a policy embraced by George W. Bush.

Between this false philosophy and bank fraud along with investment schemes like Mark Madoff and his $50 billion fraudulent Ponzi scheme, millions are now losing their jobs worldwide, with some estimates rising as high as 50 million in job losses.

Obama has correctly used his "bully pulpit" of the presidency to blast vulture-like bankers seeking bonuses in 2008 at the same time that they receive federal bailout assistance from none other than U.S. taxpayers.

A hard-hitting Vice President Joe Biden struck the right note when he stated angrily that these rapacious, money-glutted bankers "should be taken to the brig."