Ch. 4: Securitization: The Insecurity of It All
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Author:  Robert Tulip [ Wed Feb 04, 2009 8:10 pm ]
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Sorry Grim, but I don't know where you got the idea I believe "that neoliberalism is... going to disappear and be replaced somehow by communism." I never said anything of the sort and do not believe that at all.

You rightly point out that politics is the art of compromise. However, here we are just talking theory. My point was that your attack on neoliberalism lacks a sound theoretical base, relying instead on the slur of guilt by association.

The logic of the following inference is invalid
1. Neoliberalism supports capitalism
2. Capitalism caused the crash
3. Neoliberalism caused the crash.

The problem is that features of capitalism separate from neoliberalism caused the crash, notably the corruption of crony herds. Hence it is wrong to attribute the crash to neoliberal theory.

You say liberalism and Obama's liberalism are "two different isms completely." This is rather hard to understand, so I am trying to disentangle the meaning of what you say. What precisely do you mean by saying "you will continue to attribute one thing to the results for everything".

Author:  Grim [ Wed Feb 04, 2009 8:29 pm ]
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When included in the very definition of neoliberalism is "Deregulation

Author:  Robert Tulip [ Wed Feb 04, 2009 9:56 pm ]
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Grim - You point out that "included in the very definition of neoliberalism is ... prudent oversight of financial institutions." The crash was primarily due to failure to prudently oversee financial institutions. So therefore do you absolve neoliberalism from blame?

I did not describe "crony capital" as a normal symptom of capitalism. From a purist neoliberal viewpoint, cronyism conflicts with the rule of law.

Author:  Grim [ Wed Feb 04, 2009 11:05 pm ]
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No the crash is a result of the failure of neoliberalism. I can't say it any clearer than that. Crony capitalism was encouraged through the deregulation of entry into the market, as the ideology leaves large loopholes, again the definition of the term modeled best in reality despite the nuance or real life contradictions of any Wikipedia description.

Actually if you want to follow the lineal argument based on the integrity of the definition it follows that your going to have to start questioning the fundamentals of capitalism!! It was either capitalism or neoliberalism that has failed here so choose your side, and it seems you have not proposed anything other than my misunderstanding of factors. You are a silly communist RT and your ideas are socialist propaganda well hidden in a capitalist attack strategy from Russia with Government Financed Liquidity. 007 gets foreclosed until the government backs his loan with tax payer dollars in this one. You revolutionary red hat hooligan.


Author:  President Camacho [ Wed Feb 04, 2009 11:30 pm ]
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:P When the insults begin you know it's the end. Checkmate.

Author:  Grim [ Fri Feb 06, 2009 11:03 pm ]
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I think you mean touche


Author:  Robert Tulip [ Fri Feb 06, 2009 11:37 pm ]
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Good one Grim. We may be closer on this than you think. In the article you link on Wall Street Socialism, Phillips says "the quarter-century suspension of anything resembling creative destruction or traditional market forces is the culprit." When people hear neoliberalism they often think of Ronald Wilson Reagan's inaugural comment that government is the problem not the solution, and of Obama's pledge to turn around the Reagan revolution. But the issue is more complicated than that. Efforts in recent times to defy gravity - 'privatising profits and socialising losses' - what Phillips calls suspending market forces - have only proved that neoliberal quantitiative economics needs to be taken more seriously. The cause of the crash, by this argument from Phillips, is that economics was not neoliberal enough.

Author:  Grim [ Sat Feb 07, 2009 12:41 am ]
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To a certain degree it matters little how you look at any particular philosophic argument of which there may be many possible theoretical nuances of definition. I think rather that the unfolding of events defines the definition better than the theory behind the word. During these particular events the symptoms of social, political and above all economic upheaval are no less than the signs of a rampant neoliberalism assuming its theoretical climax - its predestined role if you will. The role of a poorly conceived bias, strong-armed into legitimacy politically, poorly understood while favored then forgotten socially amid the backwash of prosperity as the insidious rot of it has festered economically only to be gravely underestimated retrospectively.

If neoliberalism hasn't failed completely what has? I would argue that participants in any system, in roles large or small, must to a large degree aware or not follow one interpretation or another as to the direction of the institution. There is no lack of philosophy, only a lack of knowledge as to what the interpretation of the system is in reality and a ignorance as to what the results of that philosophic manifestation may prove to be.

Certainty of the Unknown

Pointing to the faltering of regulation and social inequality inherent of the system is enough for Phillips to call into question the prevailing neoliberal attitude.

"As a further pledge of allegiance to the eighteenth-century British free market apostle, many Reaganites took to wearing Adam Smith ties...the benefit of GOP tax reductions went disproportionately to corporations...once solid institutions had been deregulated at the urging of the Reagan administration. This book's premise, now that a quarter-century's results are in hand, is that the eighties can be identified as the launching pad of a decisive financial sector takeover..."


Author:  bobby408 [ Fri Feb 20, 2009 1:49 am ]
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Securitization is just a way to rid the government of the burden of social security. Reaganite conservatism and classical "laissez-faire" economists like Morgan Friedman, are stauch supporters of deregulation, low taxes for the rich, and low government programs for citizenry to make room for their tax-cuts. This system of economy and government has been in full gear ever since the Reagan administration (no matter if its a democrat or Republican) and this system of government and economy, which is going global now by way of the WTO and globalization, is going to ruin our lives at the pleasure of the rich and powerful who have every thing to gain by this type of system.

Author:  Robert Tulip [ Fri Feb 20, 2009 8:15 am ]
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bobby408 wrote:
Securitization is just a way to rid the government of the burden of social security. Reaganite conservatism and classical "laissez-faire" economists like Morgan Friedman, are stauch supporters of deregulation, low taxes for the rich, and low government programs for citizenry to make room for their tax-cuts. This system of economy and government has been in full gear ever since the Reagan administration (no matter if its a democrat or Republican) and this system of government and economy, which is going global now by way of the WTO and globalization, is going to ruin our lives at the pleasure of the rich and powerful who have every thing to gain by this type of system.
Hello Bobby408, welcome to Booktalk. I read your intro thread and it is nice to see your interest in political history.

I would be interested if you could further explain your comment here about securitisation. The bundling of financial instruments through securitisation was intended as a way to make money by unlocking the hidden value within capital. Of course, the collapse shows that such a path is very risky when it is not regulated, as piratical individuals and firms exploited the system for personal advantage in highly destructive ways. The result is likely to be a greater social security burden for government.

Milton Friedman is of course a controversial figure. I think he has been unfairly maligned, as his central insights about the need for aggregate management of money remain a good basis for sound policy. The trouble as I see it was that Reagan and his followers abused Friedman's ideas to promote the venality of the very rich, and this has given the whole notion of a rigorous focus on economic growth a bad name in left wing circles. Friedman wanted governments to run balanced budgets, but the Reagan-Bush governments ran big deficits so can hardly be seen as Friedmanite. US public debtstarted its upward move under Reagan.

I don't agree with your comments criticising the WTO and globalisation, as global integration is essential to improve the lives of the poor. There is a really interesting World Bank article, Growth is Good for the Poor which can be read as a strong defence of Friedman's trickle-down theory.

Author:  Grim [ Fri Feb 20, 2009 2:41 pm ]
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"In 1945 or 1950, if you had seriously proposed any of the ideas and policies in today’s standard neo-liberal toolkit, you would have been laughed off the stage or sent off to the insane asylum. At least in the Western countries, at that time, everyone was a Keynesian, a social democrat or a social-Christian democrat or some shade of Marxist. The idea that the market should be allowed to make major social and political decisions; the idea that the State should voluntarily reduce its role in the economy, or that corporations should be given total freedom, that trade unions should be curbed and citizens given much less rather than more social protection — such ideas were utterly foreign to the spirit of the time. Even if someone actually agreed with these ideas, he or she would have hesitated to take such a position in public and would have had a hard time finding an audience."

"Alas, Polanyi's optimism was misplaced--the whole point of neo-liberalism is that the market mechanism should be allowed to direct the fate of human beings. The economy should dictate its rules to society, not the other way around. And just as Polanyi foresaw, this doctrine is leading us directly towards the 'demolition of society'."


Author:  Robert Tulip [ Fri Feb 20, 2009 2:44 pm ]
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Yes, and this neosocialist dominance after the war is what gave Keynes a strangle hold on the British economy, resulting in its steady decline until the election of Margaret Thatcher.

Author:  Grim [ Fri Feb 20, 2009 2:48 pm ]
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"So what happened? Why have we reached this point half a century after the end of the Second World War? Or, as the organisers ask, "Why are we having this conference right now?" The short answer is "Because of the series of recent financial crises, especially in Asia". But this begs the question--the question they are really asking is "How did neo-liberalism ever emerge from its ultra-minoritarian ghetto to become the dominant doctrine in the world today?" Why can the IMF and the Bank intervene at will and force countries to participate in the world economy on basically unfavourable terms. Why is the Welfare State under threat in all the countries where it was established? Why is the environment on the edge of collapse and why are there so many poor people in both the rich and the poor countries at a time when there has never existed such great wealth? Those are the questions that need to be answered from an historical perspective.'


Author:  Grim [ Fri Feb 20, 2009 2:53 pm ]
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" As I've argued in detail in the US quarterly journal Dissent, one explanation for this triumph of neo-liberalism and the economic, political, social and ecological disasters that go with it is that neo-liberals have bought and paid for their own vicious and regressive "Great Transformation". They have understood, as progressives have not, that ideas have consequences. Starting from a tiny embryo at the University of Chicago with the philosopher-economist Friedrich von Hayek and his students like Milton Friedman at its nucleus, the neo-liberals and their funders have created a huge international network of foundations, institutes, research centers, publications, scholars, writers and public relations hacks to develop, package and push their ideas and doctrine relentlessly.

They have built this highly efficient ideological cadre because they understand what the Italian Marxist thinker Antonio Gramsci was talking about when he developed the concept of cultural hegemony. If you can occupy peoples' heads, their hearts and their hands will follow. I do not have time to give you details here, but believe me, the ideological and promotional work of the right has been absolutely brilliant. They have spent hundreds of millions of dollars, but the result has been worth every penny to them because they have made neo-liberalism seem as if it were the natural and normal condition of humankind. No matter how many disasters of all kinds the neo-liberal system has visibly created, no matter what financial crises it may engender, no matter how many losers and outcasts it may create, it is still made to seem inevitable, like an act of God, the only possible economic and social order available to us."


Author:  bobby408 [ Fri Feb 20, 2009 2:54 pm ]
Post subject:  I Die a Little Inside...

Hi Robert,

I thank you for your frank and calm reply. I am sorry that I left out a really important piece of information in my thread. I have not read effectively "bad money" yet and I assumed "securitization," the subject of this thread, meant the "privatization" of social security. Also, I have not delved deeply into Milton Friedman's work, although I would love to. He does sound like he really has reason in his studies, and it is my mistake for assuming him to be part of the neoliberlist policies. I must remember that the neoliberalist people that have been in power for a while now pick and choose what "theories" work for them and justify their policies. Of course, they will leave out the rest of Friedman's teachings if it doesn't work for them.

About globalization, I agree with you that globalization is the right way to help the poor IF it is done the right way. What if you could look at it from a different point of view?? What if what is really going on is the "framing" and "selling" of globalization by "a certain nation" and what they are really doing is making all-out war to KEEP their domination of resources, Keep their domination of global-world hegemony, and KEEP third-world nations poor just because it benefits them? There are MANY case studies that PROVE this "certain" nation does NOT want other countries to thrive because that would not just mean a new "rival" for power, that would also mean that other third-world countries would have new hope that they could change the way things are (which is domination by U.S. interests in a new economic-colonial way) into a country that thrives and many U.S. officials call this a "virus!". What if things are that cynical and that evil in the world today??? I HATE the fact this might be true. It makes me SICK to my stomach to think that reality is this way. I DONT LIKE it this way but EVERYWHERE I LOOK, everytime I go after the truth honestly and without blinding myself to my emotions and past perspectives, I see proof of reality this way and I shake my head and I die a little more inside...

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