This is not the '30s.

American corporations are flush with capital and relatively free from debt. We are approaching genuine, permanent shortages in food and oil that have more to do with population size than financial manipulation. Parts of the third world may continue to grow while out economy collapses. I don't think we'll be able to repeat the mistake of the '30s and bring world trade to a halt.

How do you see this playing out?

Mr. Phillips - you're the man! You definitely earned your place in the Intellectual Honesty Hall of Fame, if they ever build one (not too likely).

A question for you, and other readers: when I was a kid in the 60's and 70's, I believe there were Usury laws that capped the amount of interest that could be charged on consumer debt. I understand that one state perhaps Nevada, abolished it's laws, rendering all other state laws invalid.

Is this true?

Definitely, a whole "industry" has grown up charging working Americans 20-30% interest on credit card debt- debt often used to finance emergency health care, heating oil, and other necessities.

In 2006, Joe Biden (I think) championed lending "reform" that made it harder to declare bankruptcy, and easier to force homes into foreclosure in the event of bankruptcy (whereas previously, I understand that depression era laws protected people in bankruptcy from losing their homes).

Do I have this right?

If my two propositions are true, do you think it's fair to say that there is a multi-billion dollar "industry" dedicated to forcing middle class Americans into debt, draining their prosperity, and siezing their homes?

To the extent that this is true, can you outline the persons/parties/policies that helped bring this "industry" about?

How to characterize my situation? As a good earner, my children were not eligible for college grants beyond trivial (10% of tuition at best), so I am carrying roughly a small-house mortgage for the two, against zero real estate or other assets or equity (divorce).

To avoid this large debt would have meant that the children of a six-figure earner would have been attending community college, or small state schools. (Forget making those useful connections for future earning.)

I'm almost free of short-term debt, car payments, but will be paying off colllege loans for the kids until 2017 or so. The question is: Does this debt help or hurt society as a whole? It's not easy for me, but I'll live.

I often recall the saying "Bad money drives out good." I see instances of this happening everywhere. The lack of regulation supports and even creates this situation. That is going to be a huge legacy of Bush43.

The decline of manufacturing hurts badly but what are our real options? Sure, making labor and environmental standards a basis for trade agreements can increase offshore manufacturing costs a bit but a China with better labor and environmental standards (if the Chinese would ever honestly enforce them) could still produce parts for GM cars more cheaply that Delphi or Dana can in our Midwest.

Plus, pissing China off would be momentarily satisfying but their revenge on the dollar would be devastating. So ... what to do?

Health care looms ever large. Now health care companies are not allowing co-payments for costlier and risky illness medications, they are charging a percentage of the total cost of the prescription. This is new since 2008 (Jan.) and I believe will once again add to the unbearable debt load of the average household. MS is just one example of an illness this "new" method of averting cost for health care plans falls under. Watch it trickle down to depression, cholesterol, heart meds, thyroid, etc. This started due to the "Republican" plan passed as Medicare Part D, and the health insurance industry ran with it.

The Chinese? Wait and watch what happens after the Olympics are held. American military and financial forces are so constrained that only the threat of lobbing nuclear bombs will dissuade them from doing anything that they want.

I have bought Mr. Phillip's new book and its next on my "to read" list, so I can't speak to it specifically, but I have read 2 of his other books in the last year(American Theocracy and Wealth and Democracy, and I have American Dynasty sitting on the shelf waiting to be read) and they were 2 of the best books I have read in a long time, so I feel safe saying that this new book almost certainly should be of great interest to anyone who cares about politics and economics in the US. They were both wonkish and heavily laddened with facts, but done in a very easy to read and follow style. I look forward to reading Kevin's and others postings on this this week.

To ask, as I did earlier, whether an issue is one of morality (or ethics if you prefer) is, at least to me, to ask whether particular behaviors are subject to and tested by a set of rules which a society accepts.

In judging the actions of all of us under the set of rules applying to finance-capitalism we should ask first whether we know what "money" is and what the social rules in respect to its "getting and spending" are. And I don't think we any longer know what the answers to those two questions are.

A few years ago Greenspan admitted that he -- and that means the Fed and economists in general -- no longer, if they ever did, knew what "money" was. He could have, and probably did, add that he didn't know how to compute the size of the money supply, of the multiplier effect, of the effect on interest rates or on unemployment of trade and budget deficits, and of a whole host of other effects of the decisions of the financial elites.

The problem isn't that we've substituted "bad money" for "good money." The problem is that we don't know what "money" is. Thus, we have lost any connection we once may have had to the rules for its "getting and spending."

wyt wonders "what are our real options?"

Just last month, the American Society of Civil Engineers released its most recent Report Card for America's Infrastructure, and estimates that simply bringing our physical infrastructure up to a level of safe performance requires $1.6 trillion. See http://www.asce.org/reportcard/2005/index.cfm

Popular Mechanics recently posted a special report on infrastructure on its web site, entitled Rebuilding America. See http://www.popularmechanics.com/rebuildingamerica

It includes a list of the ten most urgent infrastructure repair projects we face, such as stabilizing the Brooklyn Bridge, and repairing the deteriorating levees along the Sacramento River in California. See http://www.popularmechanics.com/technology/transportation/4257814.html?page=1

This is just to REPAIR our infrastructure. No one is even looking at building NEW infrastructure. For example, I have calculated that building urban rail mass transit systems to the same density as New York City in the next 28 largest urban areas would require building 70,927 kilometers of rail transit lines at a cost of $4.433 trillion. My calculations are based on information from the public relations office of the Los Angeles Metro on the 2004 Metro Gold line 9.6 km extension in Los Angeles. Such a program would require 184.7 million tons of steel, about two to three years of current U.S. steel production.

Of course, these are exceedingly rough estimates, but I think it gives a good idea of inadequate and paltry a “stimulus” program in the mere hundreds of billions is.

It is also interesting to note that more than $4.433 trillion is traded in U.S. financial markets in one single day.

Every one billion dollars spent on building infrastructure and its spill-over creates an estimated 40,000 jobs. So just a massive urban rail mass transit project like this would create 177.3 million jobs. Let’s say we spread that program out over ten years, that’s still 17.7 million new jobs created. And there is no reason to import anything that would be needed for such a project.

Now think of what is being put at risk to bail out the financial system. Every single one of those 4.433 trillion dollars will go into the financial system anyway. Isn’t it better to end up with new infrastructure built, rather than just giving any amount of money directly to the financial system to bail it out.

Of course, if the money goes through the hands of working people first, the big boys on Wall Street won’t see much of a market boost for their complex derivatives products. But guess what – contrary to the marketing of Wall Street, those derivatives do NOT result in more lending and more credit, as I show here, using documents from the New York Federal Reserve Bank, the Office of the Comptroller of the Currency, and the FDIC:
http://www.eurotrib.com/?op=displaystory;sid=2008/4/14/234335/523

In fact, only five commercial mega-banks - J.P. Morgan Chase, HSBC, Citibank, Bank of America, and Wachovia - account for well over 95 percent of derivatives activities by commercial banks.

So, in the next crisis point of the financial meltdown, as I explain, the goal should be to ruthlessly euthanize the biggest institutions on Wall Street. They are subtracting value from the economy, not adding any. Their operations should be sliced and diced and given to the 5,000 or so smaller banks around the country that are not involved in useless derivatives transactions.

Actually, when you look at it, we only have ONE option: annihilate the political power of Wall Street and force the credit mechanism of the economy - the financial system - to be a servant to the need to build a new, green economy.

Thank you, Ellen, for confirming my point. You've got nothing.

I should go read 6 links & however many that leads to & get back to you in a few weeks? Thanks for being so sympathetic.

Ellen, got something?

English, Ellen... speak to me.