Forbes: How Capitalism Will Save Us

By Steve Forbes (Forbes Magazine) |We are experiencing the devastating consequences of a chain of major economic policy errors, which, to use a current cliché, created the perfect storm. These government blunders temporarily paralyzed the global credit system and are now sending the U.S. and Europe into recession, while sharply cutting back Asia’s growth rates.

Left to its own devices, the credit crisis, which began in August 2007, would have crushed economies as severely as did the Great Depression.

Belatedly, but thankfully, governments recognized that the only way to get credit flowing again was for them to make quick and direct massive infusions of new equity into beleaguered banks, as well as commit to other emergency measures hitherto unimaginable.

If sensible rescue efforts continue–and they will–the immediate crisis will quickly pass. Shell-shocked businesses and consumers won’t recover rapidly from the trauma of recent months, especially as we now cope with recession. But the downturn shouldn’t be prolonged: The economy here and those overseas should start to pick up no later than next spring.

That soon? Despite the crisis, the global economy still retains enormous strengths. Between the early 1980s and 2007 we lived in an economic Golden Age. Never before have so many people advanced so far economically in so short a period of time as they have during the last 25 years. Until the credit crisis, 70 million people a year were joining the middle class. The U.S. kicked off this long boom with the economic reforms of Ronald Reagan, particularly his enormous income tax cuts. We burst from the economic stagnation of the 1970s into a dynamic, innovative, high-tech-oriented economy. Even in recent years the much-maligned U.S. did well. Between year-end 2002 and year-end 2007 U.S. growth exceeded the entire size of China’s economy. Obviously China’s growth rates were higher, but China was coming off a much smaller base.

The world is flush with cash. It’s frozen because of fear, but the cash is there. Productivity gains are burgeoning.

So, will this global boom resume next year, slowly at first and then with increasing momentum? It should. Whether that happens, however, depends on the next, highly dangerous phase: <<<Read the Full Story>>>

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Mystery? SEC Not Effective at Stopping Fraud

By Stephen Labaton (International Herald Tribune) |  WASHINGTON: The U.S. Securities and Exchange Commission, a once-proud agency with an impressive history as the top cop on Wall Street, finds itself increasingly conducting autopsies of leading financial institutions after failing, in the first instance, to perform adequate biopsies.
The latest black eye for the commission came when it was disclosed that inspectors and agency lawyers had missed a series of warning signs at Bernard L. Madoff Investment Securities. If it had checked out the warnings, the commission might well have discovered years ago that the firm was concealing its losses by using billions of dollars from some investors to pay others.  The firm was the subject of several inquiries over the years, including one last year that was closed by the agency’s New York office after it had received a referral of potentially significant problems from the Boston office.  Similarly, the SEC chairman, Christopher Cox, assured investors nine months ago that all was well…<<<Read the Full Story>>>.

Britain: joining Euro?

AFP (BREITBART.COM) | Britain is considering joining the eurozone as a direct consequence of global financial turmoil, European Commission President Jose Manuel Barroso said Sunday.

“We are now closer than ever before. I’m not going to break the confidentiality of certain conversations, but some British politicians have already told me: ‘If we had the euro, we would have been better off’,” Barroso told a weekly French news programme, referring to the fall in the pound’s value since markets and liquidity meltdown earlier this year.

“The British have an enormous quality, one of many, that is they are pragmatic,” he said on the panel of a joint RTL-LCI radio and television broadcast. “This crisis has emphasised the importance of the euro, and also of Britain,” he added.

“I don’t mean this will happen tomorrow, I know that the majority (of British people) are still opposed, but there is a period of consideration underway and the people which matter in Britain are currently thinking about it,” the former Portuguese prime minister said.

Barroso pointed to the case of Denmark, another EU state which has so far refused to accept the euro but is now planning another referendum on the single currency. The Danish voted against joining in 2000.>>>>Read the Full Article

Schwarzenegger declares fiscal emergency

By Juliet Williams – Associated Press Writer | SACRAMENTO, Calif. (AP) – Gov. Arnold Schwarzenegger declared a fiscal emergency Monday and called lawmakers into a special session to address California’s $11.2 billion deficit.

The state’s revenue gap is expected to hit $28 billion over the next 19 months without bold action. The emergency declaration authorizes the governor and lawmakers to change the existing budget within the next 45 days.

Without quick action, the state is likely to run out of cash in February.

Schwarzenegger and Democrats have proposed a combination of tax hikes and spending cuts, but Republican lawmakers are steadfast in their refusal to raise taxes.

Lawmakers failed to reach a compromise during the special session Schwarzenegger declared last month, pushing the problem to a new Legislature that was being sworn in Monday.

The crisis worsens each week, so the Republican governor did not want to waste any time in declaring a special session, said his spokesman, Aaron McLear.

“It’s important that we start on Day One so the new Legislature can start immediately to solve our fiscal crisis,” he said.

There appeared to be little reason to believe that Republican lawmakers would budge on their opposition to tax increase.

“If anything, I think our resolve (against raising taxes) is deeper than it has ever been because of the economic realities,” Senate Minority Leader Dave Cogdill said Monday.

Democrats don’t have the two-thirds majority in either the Assembly or Senate that is required to pass tax increases or a state budget.>>>>Read the Full Article

Bernanke; ‘no comparison’ to Great Depression

AFP, (BREITBART.COM) | Federal Reserve chairman Ben Bernanke said Monday the current economic situation bears “no comparison” to the much deeper crisis of the 1930s Great Depression.

“Well, you hear a lot of loose talk, but let me just … say, as a scholar of the Great Depression — and I’ve written books about the Depression and been very interested in this since I was in graduate school, there’s no comparison,” Bernanke said in a question period after an address in Austin, Texas.

Bernanke cited “an order-of-magnitude difference” in the current situation compared to the 1930s.

“During the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war,” he said.

“During that time, the unemployment rate went to 25 percent, at least, based on the data that we have. The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent.”

Bernanke said the situation at that time represented “very difficult circumstances,” because “we didn’t have the social safety net that we have today. So let’s put that out of our minds; there’s no — there’s comparison in terms of severity.”

He added, “We’re very lucky to live in a country as rich and diversified as the one we have. And I hope that we will have a quick and rapid recovery from the current slowdown.”

Still, the Fed chief said lessons learned from the Depression may still apply today>>>>Read the Full Article

17 Kids and Debt Free!

TODAY staff | Jim Bob and Michelle reveal secrets to managing more and more with less.  Readers have a lot of questions about how Jim Bob and Michelle Duggar manage to raise their 17 kids without going broke. Here, the busy couple fields questions about living debt-free, preparing for grandkids and more (including a crowd-pleasing recipe!).

Q: [How have you] made ends meet (feeding, clothing, diapering, entertaining, etc.) while still being debt-free? Also, how do [you] pay for everything without credit, and still have money in the bank every month? — Marni, Kings Mountain, N.C.

Jim Bob: How do [other] people pay interest for the debt on top of making ends meet? What we’ve done is something that a lot of people don’t want to do. It’s not keeping up with the Joneses. We’ve always driven older vehicles; we’ve never bought a new vehicle.

In the past, Michelle’s gone to garage sales and bought shoes for a dollar. We probably spend less on clothing than what a family of four would spend. We spend a lot of money on food — $3,000 a month on food and diapers and that type of stuff.

We saved up and paid cash for our second house 18 years ago, then spent a year remodeling to get it fixed up to be livable. But then we didn’t have house payments. We don’t have any debt, so it makes it easier to live.

Michelle: We went to a financial freedom seminar when we were young. It was about getting out and staying out of debt. It really is freedom when>>>>Read the Full Article

Report: US Decline, Wealth Shift

By VOA News | A new U.S. intelligence report predicts that by 2025, China and India could join the United States as top powers in a multipolar global order.

The National Intelligence Council’s “Global Trends 2025″ report released Thursday, says the U.S. will become less dominant in the next two decades and the U.S. dollar will fall in power, sinking to a so-called “first among equals” in world currencies.

It also predicts a decline of al-Qaida, saying the terrorist network has not achieved broad support in the Islamic world.

The council represents all 16 American intelligence agencies.

The report says the concentration of wealth in the world will continue its shift from West to East. It says continued economic and population growth will put more pressure on supplies of energy, food and water.

In the report, the experts say the pressures of climate change may also contribute to shortages, fueling conflicts over resources.

They also say it is unclear whether China and Russia will continue advances toward democracy and what impact Iran’s nuclear program will have on its neighbors.

The National Intelligence Council publishes a report about key global trends every four years, in an attempt to project how the trends might influence world events.

The council, which describes itself as the “center of strategic thinking” within the U.S. government, reports to the director of U.S. National Intelligence. The council says it provides the president and senior policymakers with analyses of foreign policy issues that have been reviewed and coordinated throughout the intelligence community.

US Collapse into Six States: Former Soviet Predicts…

By Matt Drudge (DrudgeReport.com) – A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily IZVESTIA published on Monday: “The dollar is not secured by anything. The country’s foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse.”

The paper said Panarin’s dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year’s events.

When asked when the U.S. economy would collapse, Panarin said: “It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world’s financial regulator.”

When asked who would replace the U.S. in regulating world markets, he said: “Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia.”

Asked why he expected the U.S. to break up into separate parts, he said: “A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles.”

He also cited the “vulnerable political setup”, “lack of unified national laws”, and “divisions among the elite, which have become clear in these crisis conditions.”

He predicted that the U.S. will break up into six parts…>>>>Read the Rest of the Story

Romney: Let Detroit Go Bankrupt

By Mitt Romney (Boston)-The New York Times | IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school>>>>Read the Full Article

Iran: World Financial Crisis is ‘End of Capitalism’

AFP | Iranian leaders say the world financial crisis indicates the end of capitalism, the failure of liberal democracy and divine punishment — marking the superiority of the Islamic republic’s political model.

“The school of Marxism has collapsed and the sound of the West’s cracking liberal democracy is now being heard,” supreme leader Ayatollah Ali Khamenei said on Monday, recalling the fate of the Soviet Union.

Hardline President Mahmoud Ahmadinejad, who is backed by Khamenei, said on Tuesday that “it is the end of capitalism.”

Such convictions can be traced back to the ideals of the 1979 Islamic revolution, which Ahmadinejad has sought to revive since he rose to power in 2005.

The firebrand president, who has not missed a chance to denounce Western “decadence” since his election, has exploited the scale of the global crisis to play up his argument.

He benefits from the luxury that the Tehran stock market has been unaffected by the losses that bourses in neighbouring Gulf states have suffered. That stability is attributable to the absence of>>>>Read the Full Story

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