Obama’s
economic advisory team Robert Rubin, Larry Summers, Laura Tyson, who served as
Clinton's top economic adviser; former Fed Vice Chairman Roger Ferguson; Time Warner Inc. Chairman Richard Parsons; former
Securities and Exchange Commission chairman William Donaldson and Xerox Corp. Chief Executive Officer Anne Mulcahy. Google
Inc. CEO Eric Schmidt, Michigan Governor Jennifer Granholm and Roel Campos, an ex-SEC commissioner, and Warren Buffett are also on the advisory board.
There
is not one union leader, not one university economics professor such as the over 200 who sent a petition speaking out against last month’s bail out.
Does Obama expect those who have created the collapse to find a cure that will benefit the common people first? They will propose moves that benefit banking and manufacturing first. It is more trickle-down economics. He might as well had gone
to the Economic Roundtable and asked what should be done.
The
problem is at the time, the business community, and mainly the financial sector has got us in this mess by wanting to expand
M3. Their fix is more of the same expanding of M3, viz. more debt. It is them who has abused labor by flooding the nation will illegal workers, raised the retirement age
and cut Social Security, cut pension plans, by having wage fall in comparison to buying power, cut job benefits, These advisor are part of a group that opposed the well being of workers for the sake of cutting costs. Where is labor on Obama’s Advisory Team?
- M0: Physical currency. A measure of the money supply which combines any liquid or cash assets held within a central bank and the amount of physical
currency circulating in the economy. M0 is the most liquid measure of the money supply. It only includes cash or assets that
could quickly be converted into currency.[7]
- M1: Physical currency circulating in the economy + demand deposits (i.e. checking account
deposits). This is a measure used by economists trying to quantify the amount of money in circulation. M1 is a very liquid
measure of the money supply, as it only contains cash and assets that can also be used for payments.[8]
- M2: M1 + time deposits, savings deposits, and non-institutional money-market funds. M2 is a broader classification of money than M1. Economists
also use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary
conditions. [9] M2 is a key economic indicator used to forecast inflation.[10]
- M3: M2 + large time deposits, institutional money-market funds, short-term repurchase
agreements, along with other larger liquid assets. This is the broadest measure of money commonly used and is used by economists
to estimate the entire supply of money within an economy.[11] The M3 is the best indicator of how quicly the Fed is creating new money
and credit.
http://en.wikipedia.org/wiki/Money_supply
The
foundation of a nation’s wealth is built upon two things: what the workers
are producing and its natural resources. All wealth comes from labor. It is the common worker who support through food and manufactured goods our huge structure of financing
including all those employed therein.
There
is a need for financing; it makes it possible for a young couple to buy a home and vehicle, and a factory to expand its facility. But in our country the financial institutions have been the largest and most profitable
sector of our economy. They’ve grown principally upon fractional reserve
banking, through meeting the reserve assets requirement of 10% (a billion dollars gets 10).
The ratio of tangible
assets to paper has reached the point of instability. With housing the price
was well above the replacement value of the homes. To print and loan more paper
is not to address the problem. Printing and loaning it out has a price, just
like buying with credit cards does. At some point the max is reached, and then
it collapses.
Part of the problem
is a dwindling manufacturing base. Another part is falling wages when compared
to the cost of living. A third part is the growth of the financial sector and
the interest payments that support it. At our zenith, the U.S.
was both an exporter nation and a nation that had a positive balance of payments. It
had a strong labor movement and tariffs to protect our standard of living. It
was not a debtor nation. Gradually the financial sector has changed the way we
do business.
Now we are likely going to live through a depression. It took 3 years and 4 months from the stock market crash to the run on banks (January
1933). Where will we be in January of 2012?
I fear that if the business community dictates the solutions, history will repeat itself.
