Rising to the Challenge of Change: An Address by Prime Minister of Greece George Papandreou
Monday, March 08, 2010
10:30 AM to 12:00 PM
Washington, DC

On March 8, the Center on the U.S. and Europe at Brookings welcomed Prime Minister of Greece George Papandreou for a public address on how Greece, the United States and Europe can reinvigorate their cooperation to confront common challenges. In his remarks, Mr. Papandreou addressed Greece’s current economic situation and the opportunity it presents for Greece to modernize and revitalize its governance and for Europe to become more fully integrated.

To view the full page, go to:
http://www.brookings.edu/events/2010/0308_greece.aspx

Pre-eminent lawyer of the Open Source Movement, Lawrence Lessig attended the Roosevelt Institute’s MAKING MARKETS BE MARKETS  media event March 3rd , on the US  financial crisis .Even with so many luminaries :  Joseph Stiglitz, George Soros, Rob Johnson and  13 other men in suits and new heroine, Prof. Elizabeth Warren, Chair of the Congressional Oversight on TARP. Prof. Lessig filed the report and found he was disappointed. (see our report and video from the event  at www.EthicalMarkets.tv . – Hazel Henderson, editor

Lawrence Lessig, Professor of Law, Harvard Law School, Co-founder of Change Congress
Posted: March 4, 2010 11:07 AM
http://www.huffingtonpost.com/lawrence-lessig/systemic-denial_b_485569.html

I spent the morning Wednesday at the Time Warner building in New York City,
participating in a conference sponsored by the Roosevelt (as in FDR)
Institute titled “Make Markets Be Markets.” I don’t often — ok, ever –
have the time anymore to go to conferences that I’m not speaking at. But
the significance of this subject, and the prominence of the speakers, were
too much for me to resist. And so at the crack of dawn, I scrambled to a 6
AM shuttle to make the 8 AM meeting in Midtown. (more…)

We agree! Energy is a much better currency than much  of today’s inflating fiat money!  Watch for  the Plan for  Iceland  to turn  its ICESAVE  “debacle” into a new geothermal energy industry that can  pay Britain, The Netherlands and  supply  Europe  with free electricity  until their ROI on these  geothermal investments! A Win-Win  for all concerned  that even the bankers might understand eventually! – Hazel Henderson, Editor

By Chris Nelder | Friday, March 5th, 2010
When oil crossed $120 a barrel for the first time in May 2008, oil cornucopians knew they were in trouble…

Prices had quadrupled in just five years, yet had failed to bring new production online. Regular crude had flatlined around 74 million barrels per day (mbpd). The case for peak oil was looking stronger with every new uptick in crude futures.

The following month, prominent peak oil critic and cornucopian Daniel Yergin of IHS-CERA changed his stance: The peak oil threat would be neutralized by peak demand. Gasoline consumption had peaked in the U.S. and Europe, he argued, due to the combined effects of increasing efficiency, biofuels, and the recession. Read more…

Ellen Brown, March 1st, 2010
http://www.webofdebt.com/articles/fiscal_responsibility.php

In addition to mandatory private health insurance premiums, we may soon be hit with a “mandatory savings” tax and other belt-tightening measures urged by the President’s new budget task force. These radical austerity measures are not only unnecessary but will actually make matters worse. The push for “fiscal responsibility” is based on bad economics.

When billionaires pledge a billion dollars to educate people to the evils of something, it is always good to peer closely at what they are up to. Hedge fund magnate Peter G. Peterson was formerly Chairman of the Council on Foreign Relations and head of the New York Federal Reserve. He is now senior chairman of Blackstone Group, which is in charge of disbursing government funds in the controversial AIG bailout, widely criticized as a government giveaway to banks. Peterson is also founder of the Peter Peterson Foundation, which has adopted the cause of imposing “fiscal responsibility” on Congress. He hired David M. Walker, former head of the Government Accounting Office, to spearhead a massive campaign to reduce the runaway federal debt, which the Peterson/Walker team blames on reckless government and consumer spending. The Foundation funded the movie “I.O.U.S.A.” to amass popular support for their cause, which largely revolves around dismantling Social Security and Medicare benefits as a way to cut costs and return to “fiscal responsibility.” Read more…

The best advice on Reforming Finance yet  from inside The Economics Box. – Hazel Henderson, Editor

Make Markets Be Markets
Posted: 03 Mar 2010 07:30 AM PST
I somehow got myself invited to this conference called Make Markets Be Markets.

Its a stellar line up of speakers: Elizabeth Warren, Simon Johnson, Frank Partnoy, George Soros, Joseph Stiglitz, Jim Chanos and others. Read more…

Why a Consumer Protection Agency Is Necessary
Posted: 03 Mar 2010 04:00 AM PST
What a splendid idea: A Consumer Finance Protection Agency whose sole purpose is to provide a set of standards for the finance industry when it comes to marketing their products to otherwise naive US consumers.

The original plan was to have a standard form for major finance purchases — mortgages, cars, revolving credit. This would allow consumers to 1) Understand the amount of money the  financing would cost them; 2) Determine if they could afford this product; 3) Allow them to shop competitively for the best rates. Read more…

By Michael Hudson

Mr. Obama’s most dangerous belief is the myth that the economy needs the financial sector to lead its recovery by providing credit. Every economy needs a means of payment, which is why Wall Street has been able to threaten to wreck the economy if the government does not give in to its demands. But the monetary function should not be confused with predatory lending and casino gambling, not to mention Wall Street’s use of bailout funds on lobbying efforts to spread its gospel. (more…)

One outcome of the TARP and other bank rescue efforts following the  collapse of Lehman Brothers in September of 2008 is that the United States has essentially formalized a commitment to a “too big to fail” (TBTF) policy for major banks. This paper uses data from the Federal Deposit Insurance Corporation (FDIC) on the relative cost of funds for TBTF banks and other banks, before and after the crisis, to quantify the value of the government protection provided by the TBTF policy.
BY DEAN BAKER AND TRAVIS MCARTHUR*

http://www.cepr.net/documents/publications/too-big-to-fail-2009-09.pdf

As readers may recall, we had argued over a series of posts that the proposed Volcker rule, to bar proprietary trading at commercial banks, did not go far enough in reducing systemic risk. While the concept was so sketchy that it was difficult to be certain what it meant, it appeared to have two serious flaws. First, it defined proprietary trading as only positions booked that did not involve customer transactions, such as private equity funds. This is a spurious distinction. (more…)

New Prize in Economics to Greenspan, Summers for Dynamiting the Global Economy! Sent by our good friend Patrick Bond.
- Editor

For Immediate Release
22 February 2010

*Alan Greenspan *has been judged the economist most responsible for causing the Global Financial Crisis. He and 2^nd and 3rd place finishers *Milton Friedman *and *Larry Summers *have won the first-and hopefully last-Dynamite Prize in Economics.
(more…)

Ellen Brown
February 17, 2010
www.webofdebt.com/articles

While bank bailouts fatten Wall Street, states continue to battle the credit crisis. In the search for innovative solutions, some political candidates are proposing that states generate their own credit by setting up their own banks. (more…)

What happened to the global economy and what we can do about it
By James Kwak

Jason Paez points out this Reuters story on the claim that new banking regulations will require an additional $221 billion of capital in the industry as a whole. I would take this a little more seriously if the source for the estimate were someone other than JPMorgan Chase, or even if there were a non-JPMorgan source to back it up. Read more…

At last, we see  Yves Smith in this interview on TV!  Watch for her new book coming soon and my review. – Ed.

You can view the clip here.

Enjoy!

Brussels, 19 February 2010: (ITUC OnLine): In marking the 2nd World Day of Social Justice (on 20 February), the ITUC is calling for an end to the prevailing neo-liberal model of economic globalization, which has brought about the worst economic downturn since the great depression. It has denied social justice to millions of men and women hit by unemployment, or marginalized into the ranks of the working poor. “Social justice must mean, above all distributive justice,” said ITUC General Secretary Guy Ryder. “If anything, the global crisis has served to show up the serious fault lines in the current model of huge capital accumulation through risky, unregulated financial transactions, and its failure to spread the wealth in a fair and sustainable way, through the creation of decent jobs and livelihoods for all.”
(more…)

Senior Goldman Adviser Criticizes Greece – Without Disclosing His Goldman Affiliation
Posted: 15 Feb 2010 10:26 AM PST
By Simon Johnson

Otmar Issing, a former senior European Central Bank official, came out strongly today against any kind of rescue package for Greece (FT op ed; Bloomberg report). Read more…

The Next Problem
Posted: 14 Feb 2010 08:14 PM PST

There has been a lot of talk about the financial crisis over the past year and a half, and I obviously think that will remain an important subject, at least until we have a truly reformed financial system. Preventing the next financial crisis should be high on our society’s priority list. But as the months and years wear on, I suspect we will see more articles like Don Peck’s recent 8,000-word article in The Atlantic, “How a New Jobless Era Will Transform America.” Read more…

Goldman Goes Rogue – Special European Audit To Follow
Posted: 14 Feb 2010 06:22 PM PST

At 9:30pm on Sunday, September 21, 2008, Goldman Sachs was saved from imminent collapse by the announcement that the Federal Reserve would allow it to become a bank holding company – implying unfettered access to borrowing from the Fed and other forms of implicit government support, all of which subsequently proved most beneficial.  Officials allowed Goldman to make such an unprecedented conversion in the name of global financial stability.  (The blow-by-blow account is in Andrew Ross Sorkin’s Too Big To Fail; this is confirmed in all substantial detail by Hank Paulson’s memoir.) Read more…

For those of us who want the financial industry to serve people and the planet rather than dominate them, this is the most exciting reform under serious consideration on the world stage.

by Sarah Anderson
posted Feb 09, 2010

In London, activists projected a 10-meter-high image on the side of the Bank of England, inviting commuters to call on the government to support a tax on financial speculation.

Photo by Mark Chilvers
For decades, international activists have been pushing the idea of a tax on financial transactions. Such a tax would give us a twofer: a drop in short-term speculation that serves no productive purpose and leads to dangerous bubbles, and 2) loads of money that could be used for good things, like health, climate, and jobs programs. (more…)

Posted: 14 Feb 2010 01:00 PM PST
This chart, from a Reuters’ analysis of pay at the 18 biggest banks by market value, illustrates the massive differences in pay among the CEOs of the world’s top banks. The compensation of the CEOs of the largest U.S. banks towers above what’s paid to banking chiefs in other parts of the world. Read more…

Prof. Lawrence Kotlikoff of Boston University has some creative and viable new ideas for reforming our “too big to fail” banks and making our financial  sector much safer. We will be reviewing his forthcoming book, JIMMY STEWART IS DEAD, from Wiley Publishers on its launch . Meanwhile our thanks to Prof. Kotlikoff for this advance look: – Hazel Henderson, Ed.

Forward by Jeffrey Sachs

Larry Kotlikoff is a worried man on an urgent mission. He knows that the financial crisis that hit us in 2008 can come back with a vengeance, because our government so far is treating the symptoms, but not the underlying disease. By the time you finish this book you will be worried too. With brilliance, wit, clarity, and bravery, Kotlikoff explains how our financial system is “virtually designed for hucksters.” Yet even more importantly, he shows us how to fix it. (more…)

Important study led by our Advisory Board member Dr. Steven Waddell, in which I also participated.  Dr. Waddelll continues  with this study, and we will report on his progress. “  -  Hazel Henderson, Ed

February 10, 2010

If you were given 10 million euros and three to five years, how would you go about “changing the role of the financial system to better serve economic, social and environmental objectives”?  The EU is asking that question.  And that’s something that I’ve been answering with a consortium of more that 20 European universities. Our proposal went in last week.

For me, all this builds on the work of the Global Finance Initiative that I led.  Scaling Impact’s Sanjeev Khagram and I were convinced of the need for a multi-stakeholder Global Action Network (GAN) in the global finance arena that would take on the very issue the EU is asking with an EU focus.  Starting in January 2008 – just before the financial crisis and with $185,000 from Ford Foundation – we analyzed the global financial arena by further developing mapping methodologies and putting together a stewardship team that came up with a clear action strategy.

But we couldn’t get money for the next phase…because the financial crisis shrank foundations’ budgets and visions!

One exciting aspect about the EU Call is that they clearly want what I’d call a societal learning and change strategy…

FULL ARTICLE CONTINUED: FINANCIAL CRISIS AS A LARGE SYSTEM CHANGE CHALLENGE

Posted: 08 Feb 2010 07:39 PM PST

Although the Consumer Financial Protection Agency made it through the House more or less intact, the banking lobby is taking another, better shot at killing it in the Senate, and is planning to use the magic words: “big government” and “bureaucracy.” Elizabeth Warren wrote an op-ed for Tuesday’s Wall Street Journal that lays out the confrontation. For most of the past two decades, many Americans trusted the banking industry–not necessarily to be moral exemplars, but they trusted that the banks were basically doing what was right for customers and for the economy. Then in 2007-2008 that mood abruptly reversed, as it became apparent that unscrupulous mortgage lenders, the Wall Street banks that backed them, and the credit rating agencies had been ripping off mortgage borrowers on the one hand and investors on the other. (more…)

Posted: 06 Feb 2010 05:48 AM PST

In an interview that will air Sunday on ABC, Treasury Secretary Tim Geithner says, “”We have much, much lower risk of [a double-dip recession] today than at any time over the last 12 months or so … We are in an economy that was growing at the rate of almost 6 percent of GDP in the fourth quarter of last year.  The most rapid rate in six years.  So we are beginning the process of healing.”
(more…)