Nouriel Roubini, Prescient Economist Known as “Dr. Doom,” Says Bailout Process Is a Disgrace

Two years ago an economics professor at New York University, Nouriel Roubini, made stark predictions about the future unraveling of the U.S. economy.  For his efforts, he was nicknamed, “Dr. Doom.”  His predictions now all seem to be coming true, and the writings and opinions of Dr. Roubini are now urgently listened to.

It is disturbing that Dr. Roubini, on his web-site today, says, “It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan.”

Roubini says, “The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan.”

The growth of debt as a fraction of Gross Domestic Product (GDP) is higher now than during the Great Depression

The amount of debt in the U.S. continues to grow. Total Debt on the U.S. -- as a fraction of Gross Domestic Product (GDP) -- is higher now than during the Great Depression

Roubini has advanced his own plan, he calls “HOME (Home Owners’ Mortgage Enterprise): A 10 Step Plan to Resolve the Financial Crisis.”  Roubini writes, “I have also argued that, in order to resolve this financial crisis it is not enough to take the bad/toxic assets off the balance sheet of the financial institutions (a new RTC); it is also necessary and fundamental to reduce the debt overhang of millions of insolvent households via a significant debt reduction on their mortgages (an HOLC program like the one that was implement during the Great Depression); and also recapitalize undercapitalized banks with public capital in the form of preferred shares (as the RFC did with 4000 banks during the Great Depression). An RTC scheme without an HOLC and RFC component would not resolve two fundamental problems: millions of households are insolvent and unable to service their mortgages; the financial system is vastly undercapitalized and needs capital to avoid an ugly credit crunch and to foster new credit creation that is needed for future growth.”

Here are some helpful definitions by Wikepedia:

  • The Home Owners’ Loan Corporation (HOLC) or Home Owner’s Refinancing Act, was a New Deal agency established in 1933 under President Franklin D. Roosevelt. Its purpose was to refinance homes to prevent foreclosure
  • The Resolution Trust Corporation (RTC) was a United States Government-owned asset management company charged with liquidating assets (primarily real estate-related assets, including mortgage loans) that had been assets of savings and loan associations (S&Ls) declared insolvent by the Office of Thrift Supervision, as a consequence of the savings and loan crisis of the 1980
  • The Reconstruction Finance Corporation (RFC) was an independent agency of the United States government chartered during the administration of Herbert Hoover in 1932. It was modeled after the War Finance Corporation of World War I. The agency gave $2 billion in aid to state and local governments and made loans to banks, railroads, farm mortgage associations, and other businesses. The loans were nearly all repaid. It was continued by the New Deal and played a major role in handling the Great Depression in the United States and setting up the relief programs that were taken over by the New Deal in 1933.
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Effectively Using the Internet Is Key to Jane Mitakides Defeating Congressman Mike Turner

Jane Mitakides this morning at Oakwood Starbucks

I enjoyed meeting with Jane Mitakides this morning for coffee.  Jane is the Democratic candidate seeking election to the office of U.S. Representative for the 3rd District.  She is opposing the incumbent congressman, Republican Mike Turner.

I told Jane that DaytonOS wants to post short videos from candidates in the Dayton area, and Jane said that this very afternoon she has a video production meeting and that she soon would post a video on Youtube.

It seems to me that Jane should not stop with one or two videos, but should consider using the internet to make her campaign very visible — like a Reality TV type show — and make it her goal to every day, or at least several times a week, to make a Youtube posting.  Jane is a very warm person — personable, interesting, a good listener, a good conversationalist — and, the more voters get to know her, I feel, the more they will support her.  I am urging Mitakides to give more effort to the internet, and believe that, with more effort, Jane could create an internet following  that could become a core community of support for her.

Everyone who seeks to become an elected representative must answer, “How will you be effective as a representative?”  I think it important for a representative to show ways that he or she will engage in a meaningful community.  The internet empowers social connections and an elected representative should show how he or she will use the internet to be effective at engaging and communicating with citizens.  Jane should use her campaign to develop such an internet community, and show how this internet community could grow, when she is elected, to help her effectiveness.  Posting a lot of Youtube videos, I feel, is one strategy to get the ball rolling.

In order to win the gerrymandered 3rd District, Jane needs to persuade a core group of Republicans and Independents, who have habitually voted for Mike Turner, to switch their vote.  If Jane could meet every interested voter at Starbucks, I’m sure that Jane would win the election.  If Jane had been accompanied by a videographer this morning, who would produce and post a short video, anyone interested in the 3rd District race Video would have had the chance to participate in our Starbuck conversation, via viewer comments, etc.

The key phase is “interested viewers.”  The internet is great at sifting out those who are interested and those who are not interested.  Unlike TV broadcasting, where commercial messages falls on many deaf or uninterested listeners, in the internet, it is the one who is interested who searches — using “search engines” — to find the focus of his or her interest.

It is content that drives internet activity.  The more interesting the articles that DaytonOS posts, the more people who visit the DaytonOS web-site.  People seek information and if the information is anywhere on the web, they find it.  There is a block of people in the 3rd District who are constantly looking for information on the web and some of these people are specifically looking for information to help them decide who to vote for in the 3rd District race.  Right now, there is insufficient information on the web to really engage these “interested viewers” in the 3rd District race.  Jane needs to fill this gap.

Yesterday, Jane met with a fourth grade class.  A skillful videographer, I’m sure, could have produced an interesting five minute video of the event.  As it is, there is no record of the event, and Jane’s communication with these children is now lost.  Parents or grandparents who might be interested in what a candidate to the U.S. Congress told their children, because there is no record, have no way to experience that event.  This lack of record is a lost opportunity for Jane to expand her message and her campaign.  It seems to me, it would be money well spent, if Jane’s campaign were to pay an aspiring videographer, say, $100 every day simply to follow her around, and, every day or so, produce at least one five minute video.

In addition to videos covering the campaign, I think Jane should make a whole series of videos to post on Youtube explaining key issues.  The issue I would give most attention to is the national debt.  Under George W. Bush and the Republican Congress, our national debt has increased over $ 3 Trillion.  And, the fact that $750 Billion, evidently, is soon to be added to the mountain of debt already in existence is pretty breathtaking.  The implications for this growing debt is enormous and it deserves to be studied.  The next congress has a lot of work to do.  Jane should use the internet to educate the public.

Jane, at our coffee today, made the point that because of the mess created by a Republican president and a Republican congress, and because Mike Turner has been overwhelmingly supportive of Republican policies, that Turner deserves to lose.  Yes.  But Jane needs to make the case.  And the place to make the case in the most thorough way possible, and the least expensive way possible, is on the internet.  Jane needs to put a lot more information on the web.

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Kucinich Says $700 Billion Bail Out Should Give Every American a $2300 Ownership Share

Dennis Kucinich

Dennis Kucinich

Congressman Dennis Kucinich (D-OH) today called for the $700 Billion Wall Street bail out to be designated as an investment in which every American would receive an ownership share of $2300.  Kucinich posted this statement on his web-site:

“The Wall Street financial disaster is an opportunity to create a genuine ownership society.  If Congress invests $700 billion in the market, then the American people must get something of real value for their investment.

“Simply purchasing bad debt, “cash for trash” and not receiving anything of value or giving $700 billion and not having a commensurate equity interest in Wall Street firms is unacceptable.  No “cash for trash”.

“Since the bailout will cost each and every American about $2,300, tomorrow I will offer legislation to create a United States Mutual Trust Fund, which will take control of $700 billion in stock assets, at market value and not higher, convert those assets to shares, and distribute $2,300 worth of shares to new individual savings accounts in the name of each and every American.”

Kucinich arrived at the $2,300 figure by dividing the cost of the bailout ($700 billion) by the US population (over 300 million).

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