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Switzerland's one-man bank (video)
Clients trust him more than big banks.
Flavian Kippel manages and runs all by himself one of the smallest banks in Switzerland, the Spar und Leihkasse in the village of Leuk, in the southwest. Since the start of the global financial crisis, when Lehman Brothers went bust, more and more clients have been entrusting him with their savings.
(?? April 2009)
Advice from the one-man banker to the financial giants: "Stick to your trade and don't meddle with things you don't understand." Suggested by EB reader "Swiss-American archaeologist."
More about Switzerland at The Oil Drum: Is the 2000 Watt Society Sustainable in Switzerland?.
Survey: Americans reclassifying luxury, necessity in recession
Sharon Jayson, USA TODAY
A few years back, the list of "gotta-haves" for many Americans included a car, TV, microwave, home air conditioning and dishwasher.
Now, not so much.
A Pew Research Center survey released Thursday finds that the recession has changed Americans' minds about many items that used to seen as necessities.
In a 2006 Pew survey of luxuries and necessities, 68% said a microwave was a necessity; now that's 47%. And 52% say a TV is a necessity today, down from 64% in 2006.
"Societal conditions have changed," says James Burroughs, associate professor of commerce at the University of Virginia-Charlottesville. "In many ways, luxuries are things that are learned in response to a changing environment."
(23 April 2009)
Crisis Plunges US Middle Class into Poverty
Gregor Peter Schmitz and Gabor Steingart, Spiegel (Germany)
The financial crisis in the US has triggered a social crisis of historic dimensions. Soup kitchens are suddenly in great demand and tent cities are popping up in the shadow of glistening office towers. Even drug dealers are feeling the pinch.
Business is poor in the New York banking district around Wall Street these days, even for drug dealers. In the good old days, they used to supply America's moneyed elite with cocaine and crack. But now, with the good times gone, they spend their days in the Bowery Mission, a homeless shelter with a dining hall and a chapel.
Alvin, 47, is one of them. His customers are gone, as is the money he earned during better times. And when another dealer higher up the food chain decided he was entitled to a bigger cut of the profits, things became too dicey for Alvin. "I'm afraid," he says.
(23 April 2009)
Suggested by EB contributor Sharon Astyk.
Rates of Return
Sharon Astyk, Casaubon's Book
Well, I admit, when I wrote my “All Better Now” post, even I was thinking that it might be a week or two before it became completely clear that we weren’t better. The bad news comes in fast, faster than your local apocalyptic prophetess of doom can even keep up with ;-).
... I think Ilargi has, with his characteristic bluntness, put his finger precisely on the problem. We have spent unimaginable amounts of money, and made unimaginable commitments to get us…a couple of little bumps in the stock market. If the Government had actually wanted to alleviate the crisis, they could have done so by disbursing the same money directly to consumers, or by using it to lend directly to them, it could have done so in a host of ways that would absolutely have been more successful than this one. I didn’t love the Bush disbursements, but let me stand up here and say that sending people cash is a heck of a lot wiser than flushing it down the toilet.
... All of our assumptions - every single one of our national and collective responses to this crisis has been built upon an overarching assumption - that things *will* get better and soon. Now I don’t swear this is not true - however, as I’ve pointed out before, the last two deep and major financial crises in the US essentially lasted a decade or more - both the Great Depression and the “two recessions with inflation and no real recovery in the middle” of the 1970s and early 80s lasted a full decade. Every plan we have made assumes that will not happen to us - but not because we have good evidence it won’t, but because we don’t want it to. Well, not wanting it is insufficient.
... It is simply common sense to have a rational backup plan for an extended economic crisis without an easy recovery, or a series of ever-deeper recessions that cover a decade or more - period. And it is also common sense not to put all your eggs in one basket. We’re gearing up for a bigger crash than we needed to have. And that’s something, coming from me. There are going to be a lot of broken eggs.
(24 April 2009)
Good question - why isn’t there a rational response?
I think the reason is that we are a deeply irrational society (see the BBC documentary “Century of the Self” by Adam Curtis to see why). http://video.google.com/videoplay?docid=8953172273825999151
In this case, we don’t have a rational response because of:
1) The tremendous amount of power wielded by the banking/finance industry.
2) Lack of a real Left which is able to critique capitalism and overcome the taboo on talk of nationalization or giving money to a broad section of the population (vs to banks)
Even the mild talk of partial or temporary nationalization by figures like Steiglitz and Krugman is ruled out of bounds.
If we are not able to think clearly about economics, then we flounder about with fantastical ideas of plots, blaming particular people, etc.
If the situation continues to deteriorate, then we will see the revival of ideas from the 30s, like socialism and fascism.
US ‘Soft Power’ and the Banks
Steven Lesh, Global Research
... Could it be the world’s urgent need for developing alternative energy sources and economic restructuring to prepare for a future of dwindling natural resources has been sacrificed to the imperatives of a US geopolitical strategy founded upon the domination of the world’s remaining fossil fuels? If the underlying motivation for this is retaining the oil backing for the US dollar and the world wishes to get serious about addressing climate change, fossil fuel depletion, peace in the Middle East and the world, we need a new international monetary system.
... There are some obvious conclusions we can draw from all this:
1. if we wish to save ‘real economies’ in the US and around the world, the essential first step is repudiating (‘writing down’) the mostly fraudulent debt piled upon the world by Wall Street, the international banking community, the US Congressional-military-industrial complex and, at the bottom of it all, wealthy investors constantly seeking new opportunities to extend their debt strangle-hold over subject populations.
2. Once the ground has been cleared by debt repudiation, we must insure monetary reform based upon publicly-created money - money created by national governments from which creation the public and not private parties enjoy the benefits - and sovereign national credit. A global money, whether it takes the form of a new reserve currency from a country like China or a basket of currencies from it and other countries rich in natural or human resources, is a threat to the liberty of the entire world.
Finally, we need to base both our national monetary systems and a transformed discipline of economics upon the realization that:
“When democracy has grasped that, nowadays, the production of wealth is really an affair of scientific engineering, and not primarily one of how to make pieces of paper bring in interest, …, it will have learned something which, altogether matter-of-fact, lies about as near to the root of economic freedom as it is at present possible to get.”
The work of the Nobel prize winning CHEMIST Frederick Soddy provides an important foundation for a monetary system based upon scientific principles, a 'new economics' and the substance of a follow-on article.
(24 April 2009)
Steven Lesh is an EB contibutor.