There are several kinds of shock(Cardiogenic, septic, anaphylactic, hypovolemic, etc)The treatment is different for each of them.

Economics is analogous to animal physiology. The cardiovascular system furnishes blood to muscles (analogous to our manufacturing sector which produces goods) and our brain (analogous to our service sector) Our financial institutions furnish money in the same way the cardiovascular system furnishes blood.

Basically the bailout package is trying to treat cardiogenic shock with the treatment for hypovolemic shock. Instead of attending to cardiac function, they are assuming the patient lost blood and are transfusing the patient.

When you do that , you get congestive heart failure.

A Neoconservative think tank called The Project for the New American Century (PNAC) propped up an inexperienced, uninformed failed businessman as their standard bearer. Members of PNAC were embeded throughout the government including the Vice Presidency, his Chief of staff, Defense Secretary, Undersecretary of Defense for Policy, Deputy Secretary of Defense, Chairman of Defense Board Advisory Committee.

PNAC’s mission was to establish the USA as the undisputed dominant country in the world in the 21st century through a massive military buildup and agressive foreign policy. In a white paper entitled “Rebuilding America’s Defenses” written and published by Robert Kagan in August 2000 it was stated that the PNAC agenda would take years unless there were to be a “catastrophic catalyzing event- a new Pearl Harbor. “

9/11 was that event and it enabled the PNAC agenda to go ahead. It made possible the invasion of Iraq.

The members of PNAC were in a position to tamper with our defenses for 8 months prior to 9/11. With the exception of the Vice President, all those PNAC members have left the present administration. The PNAC website is no longer on the Intenet.

The top foreign affairs advisor for the GOP candidate for President in 2008 was a member of PNAC and with Ahmad Chalabe pushed for the Iraq invasion. More recently he was a lobbyist for the Republic of Georgia while being a paid advisor to the GOP candidate for President, who was rather vocal about the dispute between Russia and Georgia.

Thank God that the long national nightmare is over and we can start cleaning up the mess created by the Project for the New American Century. For a while it was ruthlessly efficient but it certainly was not effective in the mission which carries its name.

PNAC members in order of their appearance

Vice President …. Dick Cheney
His chief of staff ….Scooter Libby
Defense Secretary…. Donald Rumsfeld
Undersecretary of Defense for Policy…. Douglas Feith
Deputy Secretary of Defense… Paul Wolfowitz
Chairman of Defense Board Advisory Committee…. Richard Perle.
Advisor for foreign affairs for McCain….Randall Scheunemann
Lobbyist Republic of Georgia….Randall Scheunemann

2. Former Senator and present lobbyist Phil Gramm , a PhD in economics, could talk about economics in simple terms and in an interesting way. If he had stayed at Texas A&M teaching Economics 101, he would have made a positive contribution to society.

3. In Congress and as a lobbyist, he used his didactic gifts to push deregulation resulting in the S&L failures in the ’80s and ’90s, ENRON (his wife was a Director), harmful oil futures trading and the subprime mortgage meltdown.

4. This is the same Phil Gramm who said Americans were a nation of whinners.

While George Bush ran for President as a born-again Christian and “compassionate conservative,” his behavior indicated he was guided not by the principles of Jesus but rather by a narcissistic morality of personal advantage. While making a revealing documentary about the 2000 Bush campaign, filmmaker Alexandra Pelosi asked the candidate why she should vote for him; Bush replied. “It’s in your interests.” Pelosi observed, “He didn’t push my country’s interest – but rather, my own.” Bush’s primary consideration was what’s in it for me?

As President, Bush conflated his personal interests – strengthening his power – with those of the United States and political considerations governed all White House decisions. In late 2001, after leaving his appointment as head of the White House Office of Faith-Based and Community Initiatives, John DiLulio observed: “There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus. What you’ve got is everything, and I mean everything, being run by the political arm.”

Presidential decisions were determined by the toxic alchemy of power and greed. Major legislative initiatives – energy and healthcare – were written by corporate lobbyists to benefit their interests at the expense of average Americans. And the President’s self-centered attitude influenced both Main Street and Wall Street.

Bush promoted a national culture of profligacy. After 9/11, when asked how Americans should respond, he advised us to “go shopping.” Rather than call on our patriotism, the President appealed to consumerism; citizens responded by running up huge credit card debts and dipping deeply into their home equity. During the Bush Administration, Americans borrowed $6.2 trillion, doubling their debts and causing the U.S. to have a negative savings rate.

At the same time, the President expressed absolute confidence in the wisdom of the free market and expanded the dangerous deregulation begun during the Clinton era. Among the consequences of Bush’s extreme laissez-faire ideology were the accelerated flight of decent-paying jobs from the U.S. and pillaging of the environment. As Americans shopped until they dropped, financial-sector profits surged: by 2007 the finance industry represented a record 25 percent of US stock-market capitalization.

Aided by the loosening of regulations, banks such as Citgroup, broadened their scope of business and began to engage in a wide variety of financial activities. With this expansion came problems of control and oversight. The increased size of financial institutions made them more difficult to manage as executives were pressed to make profits beyond the range historically associated with banks.

At Citigroup, earning pressure caused bond traders to increase their participation in risky markets, particularly collateralized debt obligations (CDO’s), which repackaged mortgages – notoriously sub-prime mortgages – for resale to investors. The expansion of this niche business was fueled by its profitability – fees were unusually high and, therefore, traders made million in bonuses – and the lack of oversight. Because of deregulation, there was no Federal oversight of the CDO marketplace. Financial industry supervision supposedly came from rating agencies, such as Moody’s and Standard and Poor’s, but they failed to exercise the required due diligence. So did internal auditors, such as Citigroup “risk managers;” who were impeded both by the Byzantine nature of CDO’s and their perceived value as major earnings generators.

As the credit bubble grew, two pernicious moral propositions blinded top managers at Citigroup and other greedy banks to the ever-increasing probability of calamity: everyone else is doing it, so it must be okay and the ends justify the means . Over the course of the Bush Administration, the worldwide CDO market grew to near $500 Billion, resulting in gigantic executive bonuses and corporate earnings. Understandably, none of the participants was eager to jump off the gravy train.

Lurking behind this frenzied momentum was a naïve faith in the wisdom of the marketplace: the belief that whenever excesses occurred, the market would gracefully adjust. Recently, financier George Soros criticized “the prevailing theory of financial markets, which… holds that financial markets tend toward equilibrium and that deviations are random and can be attributed to external causes.” He observed: “This theory has been used to justify the belief that the pursuit of self-interest should be given free rein.”

The President of the United States has a dual responsibility to make key decisions and set a moral tone. By promoting a climate of unfettered self-interest, George Bush precipitated the current economic meltdown. American’s eagerness for the onset of the Obama presidency indicates our need for a leader who will establish a public morality that emphasizes the common good.

BUT THEN IN 2008,THEY GOT IT RIGHT.

Sitting on Top of the World
Garrison Keillor
November 12, 2008

Be happy, dear hearts, and allow yourselves a few more weeks of quiet exultation.
It isn’t gloating, it’s satisfaction at a job well done. He was a superb candidate, serious, professorial but with a flashing grin and a buoyancy that comes from working out in the gym every morning. He spoke
in a genuine voice, not senatorial at all. He relished campaigning. He accepted adulation gracefully. He brandished his sword against his opponents without mocking or belittling them. He was elegant, unaffected, utterly American, and now (Wow) suddenly America is cool. Chicago is cool. Chicago!!!
We threw the dice and we won the jackpot and elected a black guy with a Harvard degree, the middle name Hussein and a sense of humor-he said, “I’ve got relatives who look like Bernie Mac, and I’ve got relatives who look like Margaret Thatcher.” The French junior minister for human rights said, “On this morning, we all want to be American so we can take a bite of this dream unfolding before our eyes.” When was the last time you heard someone from France say they wanted to be American and take a bite of something of
ours? Ponder that for a moment.
The world expects us to elect pompous yahoos, and instead we have us a 47-year-old prince from the prairie who cheerfully ran the race, and when his opponents threw sand at him, he just smiled back.
He’ll be the first president in history to look really good making a jump shot. He loves his classy wife and
his sweet little daughters. At the same time, he knows pop music, American lit and constitutional law. I just can’t imagine anybody cooler.
It feels good to be cool, and all of us can share in that, even sour old right-wingers and embittered blottoheads. Next time you fly to Heathrow and hand your passport to the man with the badge, he’s going to see ” United States of America” and look up and grin. Even if you worship in the church of Fox,
everyone you meet overseas is going to ask you about Obama, and you may as well say you voted for him because, my friends, he is your line of credit over there. No need anymore to try to look Canadian.

Individuals in lending institutions got rich building houses of cards with mortgages are now holding the US economy hostage as they show up in Washington holding tin cups.

Money and capital markets have a necessary function in an economy but I have always questioned the fact that they have taken on lives of their own.

Maybe government IS the problem. A goverment that allows unrestained mischief and greed and profiteering to take place is problematical.

If the justification for financial types making huge profits is because they take great risks in order for free enterprise to take place, then the risk must be real.

What I am seeing here is a perversion of Capitalism, which is just as unworkable as Communism.

Some part of Wall Street needs to die a natural death. We have forgotten the lessons learned from The Great Depression. Maybe we have learned from the experience from our fathers but not from our grandfathers.

I have some big problems with a Washington bailout of financial institutions and the automobile industry. Bankrupcy is a time tested remedy. Maybe we need to create a chapter 15.

If Detroit does not know how to make cars ,maybe they should be making windmill blades and solar panels.

If we are worried about unemployment, would it not make more sense to give them unemployment payment rather than to support a system that only knows how to make junk.

Some of the he finanncial sector needs to die a natural death. too much of out effort and talent goes to pushing money around.

Risk is involved. The lender is entitled to charge interest in proportion to that risk. Some of those loans will default. If the lender has done his job properly, he (she) will have the principle repaid with interest. If the lender has been astute, relatively few loans will default and he has set the interst rate optimally, he will make a fine profit.

Now that lender is in competition with other lenders. Whichever lender has more skillfully lent money, that lender would be rewarded proportionally. CAPITALISM AND FREE ENTERPRISE AT ITS FINEST!

In 1938, Fannie Mae (FNMA) was established to create a secondary market for mortgages so that banks could sell those morgages to other financial institutions.

The good news was the risk could be spread around. The bad news is that the lender would no longer know the borrower.

Bankers are no different from a barber who is aked “Do I need a haircut?”. If banks can lend money for a mortgage and then sell that mortgage to some other financial institution, that bank can start “selling pigs in a poke” and no longer is kept from making bad loans.

Therefore goverment oversight became necessary to compensate for the effect of the creation of that secondary market.

Under banners of :”The government is the problem”, “Let the market work”, “Get the government off our backs” , “Free Enterpise”, etc, lobbyists descended upon Congress. Most Congressmen and Senators are not PhDs in economics and some of those who are, like Phil Gramm have their own agenda.

If banks that set up mortgages had to assume the risk of that morgage, goverment oversight would not have been necessary.

Imagine if you could lend money to people around town collecting I.O.U.s and then then split them up, rebundling them and selling them to others who in turn would resell them, you would be less concientious of risk assessment.

Does any of this make sense?