What if record companies hadn’t been asses?

At Truthdig.com, Danny Goldberg has reviewed Steve Knopper’s book, Appetite for Self-Destruction. According to Goldbert, Knopper asks asks some good questions. Was it really necessary that the record companies had to suffer their massive economic collapses? Here are many of the excuses you hear:

If only they hadn’t charged so much for CDs even after the per-unit manufacturing cost went down; if only they hadn’t abandoned the commercial single when it ceased to be sufficiently profitable; if only they hadn’t cooperated with Best Buy and Wal-Mart at the expense of indie stores; if only they hadn’t sued customers for illegal downloading, etc. etc. Referring to the fact that some of Sony/BMG’s ill-fated watermarked CDs damaged some computers, Knopper writes: “This lack of empathy reinforced Napster-era beliefs that the music industry was more interested in suing and punishing its customers than catering to them.”

Goldberg disagrees with all of this. He points to the newspaper industry, which made none of these mistakes, but is also suffering massive economic losses.

This litany of real and imagined insults to the consumer [caused by record companies] ignores the central reality of what caused the decline of record sales: the ability of fans to get albums free.

Continue ReadingWhat if record companies hadn’t been asses?

Nothing about our economic system has really been fixed, or even diagnosed, and time is running out.

According to SANDY B. LEWIS and WILLIAM D. COHAN, nothing about our economic system has really been fixed or even diagnosed, and time is running out. This is the theme of a powerfully and clearly written Op-ed piece in today's New York Times, entitled "The Economy Is Still at the Brink":

We’re concerned that nothing has really been fixed. We’re doubly concerned that people appear to feel the worst of the storm is over — and in this, they are aided and abetted by a hugely popular and charismatic president and by the fact that the Dow has increased by 35 percent or so since Mr. Obama started to lay out his economic plans in March. But wishing for improvement and managing by the Dow’s swings are a fool’s game . . .The storm is not over, not by a long shot.

Lewis, who owns a brokerage house and Cohan, a Wall Street banker, succinctly present the problem and some solutions:

Six months ago, nobody believed that our banking system was well designed, functioning smoothly or properly regulated — so why then are we so desperately anxious to restore that model as the status quo? . . . Instead of hauling out the new drywall to cover up the existing studs, let’s seriously consider ripping down the entire structure, dynamiting the foundation and building a new system that rewards taking prudent risks, allocates capital where it is needed, allows all investors to get accurate and timely financial information and increases value to shareholders and creditors.

The authors lay out numerous areas of concern, many of them in the form of pointed questions. Why, indeed, haven't we taken steps to change the system? As Einstein once said, insanity is "doing the same thing over and over again and expecting different results." Lewis and Cohan urge President Obama to take these real steps, to get serious about the faux solution so far imposed (the massive injection of federal money in the absence of any systematic fix).

Instead of promising the imminent return of good times, why isn’t Mr. Obama talking more about the importance of living within our means and not spending money we don’t have on things we don’t need? . . . We are 139 days into his presidency, and while there is still plenty of hope that Mr. Obama will fulfill his mandate, his record on searching out the causes of the financial crisis has not been reassuring.

Lewis and Cohan's Op-ed is must-reading and disturbing reading.

Continue ReadingNothing about our economic system has really been fixed, or even diagnosed, and time is running out.

Jeffrey Sachs trashes the Geithner-Summers plan

Economist Jeffrey Sachs has trashed the Geithner-Summers plan.

Two weeks ago, I posted an article showing how the Geithner-Summers banking plan could potentially and unnecessarily transfer hundreds of billions of dollars of wealth from taxpayers to banks. The same basic arithmetic was later described by Joseph Stiglitz in the New York Times (April 1) and by Peyton Young in the Financial Times (April 1). In fact, the situation is even potentially more disastrous than we wrote. Insiders can easily game the system created by Geithner and Summers to cost up to a trillion dollars or more to the taxpayers.

Credible experts from every direction are trashing the Geithner-Summers plan. And for good reason. The "plan" is opaque and its foundation consists of "hide the ball," "trust us" and too much "business as usual" by too many too big corporations whose main function is to game the system, rather than creating necessary goods and services to Americans. Barack Obama has been getting terrible advice from his economic team, I believe. It's time to switch teams. More to come . . .

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Failed bailout bill may have authorized privatizing social security

Unlike some in Congress, I took the time to read the House version of the proposed bailout of Wall Street.  It failed and I believe that was the right thing. In Section 118 of the House bill under “funding” the bill said "the Secretary [of Treasury] may use any authority…

Continue ReadingFailed bailout bill may have authorized privatizing social security