Dexter Graphic writes: When I saw this on TV the other day I felt greatly cheered, so I found
the written transcript to share with you. Barack Obama makes at least three
key points which I think you will agree are quite a positive change of
direction. …

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Ellen Brown writes: On February 19, 2009, California narrowly escaped
bankruptcy, when Governor Arnold Schwarzenneger put on his Terminator hat and
held the state senate in lockdown mode until they signed a very controversial
budget. If the vote
had failed, the state was going to be reduced to paying its employees in
I.O.U.s. California avoided bankruptcy for the time being, but 46 of 50 states
are insolvent and could be filing Chapter 9 bankruptcy proceedings in the next
two years.

One of the four states that is not insolvent is an
unlikely candidate for the distinction – North Dakota. As Michigan management
consultant Charles Fleetham observed last month in an article distributed to
his local media:

“North Dakota is a sparsely populated state of less than
700,000, known for cold weather, isolated farmers and a hit movie – Fargo. Yet,
for some reason it defies the real estate clichÈ of location, location,
location. Since 2000, the state’s GNP has grown 56%, personal income has grown
43%, and wages have grown 34%. This year the state has a budget surplus of $1.2
billion!”

What does the State of North Dakota have that other states
don’t? The answer seems to be: its own bank. In fact, North Dakota has
the only state-owned bank in the nation. The state legislature established the
Bank of North Dakota in 1919. Fleetham writes that the bank was set up to free
farmers and small businessmen from the clutches of out-of-state bankers and
railroad men. By law, the state must deposit all its funds in the bank, and the
state guarantees its deposits. Three elected officials oversee the bank: the
governor, the attorney general, and the commissioner of agriculture. The bank’s
stated mission is to deliver sound financial services that promote agriculture,
commerce and industry in North Dakota. The bank operates as a bankers’ bank,
partnering with private banks to loan money to farmers, real estate developers,
schools and small businesses. It loans money to students (over 184,000
outstanding loans), and it purchases municipal bonds from public institutions.

Still, you may ask, how does that solve the solvency
problem? Isn’t the state still limited to spending only the money it has? The
answer is no. Certified, card-carrying bankers are allowed to do something
nobody else can do: they can create “credit” with accounting entries on
their books. (03/13/09)
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Robert Kuttner writes: This economic crisis doesn’t have to be a second Great Depression - if government does nearly everything right, and soon. But if government doesn’t do more, and fast, this could be worse than the 1930s. Why? Three big reasons:

Finance: A Doomsday Machine. The financial system is in far worse shape than it was when the stock market crashed in October 1929. In the 1920s, there was a stock market bubble, mainly because people could play the market “on margin,” borrowing to invest in stocks. There were also scams like the original Mr. Ponzi’s. Like in the present decade, the Federal Reserve helped to enable the game, with low interest rates and few rules.

But today, thanks to “securitization” of loans and the ability of insiders to create exotic and unfathomable financial instruments, the speculative system makes buying stocks on margin look like child’s play. In the aftermath of the crash of 2008, the process of sorting it all out and getting banks functioning again is something that markets simply cannot do. …

Wealth, Deficits, and Demand. The economy now bears all the hallmarks of a depression. Between the housing collapse and the stock market crash, American households are out several trillion dollars (in the 1920s, there were no 401(k) plans and less than 2 percent of Americans owned stock).

When people are suddenly out a lot of money, they spend less. Weak demand in one sector is cascading into other sectors. People spend less on autos, air travel, hotels, restaurants, clothing - any optional purchase. Business sales and profits are down, which causes other layoffs, and the cycle deepens. …

A Debtor Nation. America in 1929 was a major international creditor. Today, we are the world’s biggest debtor. The financial bubble created the illusion of prosperity.

During the bubble years, the foreign borrowing disguised domestic weaknesses, such as our much-diminished manufacturing sector. For now, foreigners are still willing to lend us vast sums, but that may not continue indefinitely. …

This crisis doesn’t yet have a name. It has all the hallmarks of a depression, but people are understandably reluctant to use the D-word. So let me suggest one: The Great Collapse, since this was both a financial collapse and an ideological one.

Can America recover from a Great Collapse? Can we avert a second Great Depression? To coin a phrase, yes we can. But we need the right strategies and we don’t have much time. (03/13/09)
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Ilrargi writes: I’m going to let the quotes do the talking one more time. …

ï First-time claims for U.S. unemployment benefits [..] increased by
9,000 to 654,000 in the week that ended March 7, more than
anticipated…

ï There is perhaps no more telling snapshot of
the current pronounced U.S. recession than continuing jobless claims,
which measures how long it takes to find new employment. This week
continuing claims rose another 193,000 to yet another record — 5.3
million adults — the U.S. Labor Department announced Thursday….

ï
U.S. unemployment will approach 10 percent as the country endures its
worst recession since World War Two, leaving more than 13 million
Americans jobless, according to a Reuters poll of economists.

ï European Union businesses said Thursday that some 4.5 million workers may lose their jobs this year as company profits plunge.

ï
Hit by a double whammy of declining home prices and a falling stock
market, U.S. households saw their net worth fall by $11.2 trillion, or
18%, to $51.5 trillion at the end of 2008, wiping out four years of
gains, the Federal Reserve reported Thursday. In the fourth quarter alone, household net worth fell by $5.1 trillion, a record 31% annualized decline.…

ï
Foreclosure filings in the U.S. climbed 30 percent in February from a
year earlier as the worsening economy thwarted efforts by the
government and lenders to prevent homeowners from losing property,
RealtyTrac Inc. said. A total of 290,631 homes received a default or
auction notice or were seized by the lender….

ï House prices
may fall by a further 55 percent and there is a “very real probability”that Britain will be bankrupted, a leading investment bank has warned
in a private note to clients….

ï “I think this is actually the
first phase of a major, major problem that will play out to the rest of
2009 and beyond. What we’re seeing is money to emerging market get cut
off but a primary reason for that is the major developed nations, like
the United States, Great Britain and so forth have to raise somewhere
between US$3-trillion and US$4-trillion. The US alone has to raise
US$2-trillion, and they have never raised more than about 500, a
billion dollars, so that’s four times their normal borrowing need.
They’re squeezing everybody else out of the market.”

ï … if a
conservative assumption were made that only some 2% of derivatives
fail, it would still amount to some $14 trillion. The US share would be
about $8 trillion, or almost one year of GDP once that figure declines
to a sustainable level. The estimated total capitalization of all US
banks is some $1.6 trillion. But, this amounts to only 20% of the
potential American liability. So far, US citizens have been forced to
provide financial institutions with nearly $2 trillion in additional
bailouts. This brings the total of current US banking capital to some
$3.6 trillion, still less than half of the potential problem, leaving a
massive $4.4 trillion shortfall.

ï ‘Our estimates are that
because of the drop in growth, another 200,000 to 400,000 children will
die each year. So that is certainly the wrong direction. ‘Trade will
probably fall the greatest amount in 80 years.’ …

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