World Cup Final: Green Shoots vs. Yellow Weeds

The match was on when President Obama spoke of "green shoots" as signs of economic recovery. Nouriel Roubini quickly countered by pointing to "yellow weeds" signaling possible continued recession. In recent days the ball has been more on the Green Shoot's half of the field, with the Yellow Weeds getting somewhat the better of the play in a midfield game. No big scoring opportunities for either team over the past week.

Notably (at least for this observer) the Weeds have been unable to get their game-changing player onto the field: he's Dollar Crisis, the story of the dollar's beleagured status as the world's global reserve currency. In London he appeared for a moment with the May 12 FT story on "America's Triple A rating is at risk". But not in the U.S., where American financial media ignored (suppressed?) his brief appearance. CNBC Europe mentioned him here - but not CNBC U.S., so far as could find at the CNBC site. We've been tracking the fate of the dollar here since March 23. I'm amazed at paucity of coverage of this story in the U.S. Mainstream financial media reject it as mere chatter of the Goldbugs who yearn for a dollar bust and a gold boom. Goldbug are always talking up the immanent collapse of the dollar, yet goldbugs like Jim Willie are well worth following - just take a look at what he said in January of 2008:

The year 2008 will be the year that THINGS JUST PLAIN BREAK. It will be a truly deadly year, unavoidably lethal to the US Economy and especially to the banking sector. Nothing has been repaired. Some tangible solutions will be offered in the next section [of his post], all legitimate in a real world. However, we do NOT live in a real world, but rather in a Fairy Tale world of US Hegemony and Wall Street with a choke hold around the entire system.

Willie is a libertarian investor with a strong populist streak. He is not alone in his thinking and I suspect central bankers keep a close eye on folks like him. If and when the Weeds finally get their man Dollar Crisis onto the field - watch out. Meanwhile, or failing that, here are some notable Shoots vs. Weeds takes on the topic of economic recovery.

• Nouriel Roubini and his team dig deep and offer a region-by-region global survey in "Green Shoots or Yellow Weeds?" (Forbes 5/14)
• Maria Bartiromo interviews Nouriel Roubini and Harvard Economist Ken Rogoff in this CNBC video. Roubini sees more Weeds than Shoots; Rogoff too. At 5 min 20 sec note their responses to Maria's question about the possibility of the Obama administration's growth forecast of 4% in 2011. (5/15)
  
• The Economist's Special Report on the fat green shoots for international banking looks like yellow weeds in reader comments. (5/14)
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• Samuel Brittan at FT weighs "Green Shoots and Dud Forecasts." (5/15)
• David Brooks discusses neither Shoots or Weeds but the health care dilemma confronting President Obama: "If you . . . talk to enough experts, you come away with a stark conclusion: There are deep structural forces, both in Medicare and the private insurance market, that have driven the explosion in health costs. It is nearly impossible to put together a majority coalition for a bill that challenges those essential structures. ("Fiscal Suicide Ahead", NYT 5/14)
• In this entertaining 7-minute video, New York financial consultant Howard Davidowitz demolishes the Shoots story (rhetorically at least - and at least somewhat substantially - listen to his comments on commercial real estate). (Yahoo Finance Tech Ticker 5/15) (Thanks, Yves)
• Big one for the Green Shoots? Donald Luskin writes that Northwestern University economist Robert J. Gordon, pointing to reduced numbers of "jobless claims" - claims from the unemployed for jobless benefits - says the recession is over. (Smart Money 5/15)
• Alan Blinder, Princeton economist and former Federal Reserve chairman, likes the Green Shoots but warns against premature tightening of the economy like that of Roosevelt in 1936 that plunged a recovering America back into recession. (NYT 5/16)
• Martin Wolf of FT casts an influential if cautious vote for Green Shoots and for the future of capitalism (5/19)
  

World Cup Final? Let's go it one better. Imagine a global civic media contest with an audience of billions participating in a contest of contests to find best solutions to the world's economic plight. This contest could happen today except for resistance from the world's governments and financial elite, who seem to want it not to happen. The technology for it exists: the contest would integrate the resources of American Idol, telephony, a TV channel like Discovery or CNBC and social networks like Facebook, MySpace and Twitter.

Geithner Releases Public/Private Investment Partnership, Dow Soars 497

Feels like springtime in Obamaland today! Markets worldwide responded favorably to the Tim Geithner's Public/Private Investment Partnership to restore solvency in America's too-big-to-fail banks. But will his plan, in its author's words, get "our financial system back to the business of providing credit to working families and viable businesses, and help prevent future crises?" Here's a running list of responses PRO, CON and NEUTRAL

John Authers asks an underlieing question about bank solvency (3/23)

Bill Gross buys in (3/23 CNBC video)

Paul Krugman all but despairs over the Geithner plan (3/23)

Clive Crook asks Krugman to think twice (3/23)

Tim Geithner argues that his plan is "part of an overall strategy to resolve the crisis as quickly and effectively as possible at least cost to the taxpayer. " (3/23)

Yves Smith, riffing off a WSJ editorial, talks about Fed rescue plan exit strategies (3/23)

Mike Whitney protests the Geithner plan's 5%/95% public/private investor ratio (3/23)

Felix Salmon warns that the plan is yet another "thing-that-has-to-go right in order . . . to work." (3/23)

Wall Street Journal says the plan "isn't the worst idea the federal government has ever had" (3/24)

"NYT "Opinionator" quotes from five mainstream media takes on the plan (3/24)

NYT "Room For Debate" compares responses to the Geithner plan of Krugman, Simon Johnson, Brad DeLong, Mark Thoma (3/24)

Mike Hudson takes a broad 3,000 year view to today's financial crisis in this 10 minute video (2/20). Here's his indispensable 2006 Harper's cover story, "The New Road to Serfdom: an Illustrated Guide to the Coming Real Estate Collapse"

New York Times voices doubts about the Geithner plan (3/24)

Joseph Stiglitz says the plan robs the taxpayer (3/24)

Martin Wolf says an adequate rescue plan is still far away (3/24)

Czech President of the European Union calls the plan "A way to hell". Also, Financial Times (3/25)

Rick Santelli of CNBC asks protests "two years" of government neglect of Nouriel Roubini's warnings about dangers of government exacerbation/funding of the credit bubble. (Go to 7:30 of this 10 minute February Durable Goods Report (Alt. link: http://www.cnbc.com/id/15840232?video=1072009974&play=1. s ) (3/25)

London Economist sits on the fence (3/25)

Nouriel Roubini, "Dr. Doom," sees POSITIVES in the plan! (3/25)

Lee Brodie, of CNBC's Fast Money crew, says Geithner may have rescued America (3/25)

New York Post reporter Mark DeCambre says Geithner plan lets City and B of A "buy back laundered loans at lower rates" (3/25)

Yves Smith, finance blogger, approves Willem Buiter of F.T. taking "Fed and Treasury to Task" (3/26)

Steve Waldman, finance writer, critique New Yorker finance writer James Surowiecki (scroll down to 3/25)

Investor's Business Daily, citing Friedrich Hayek, warns against government (bureaucrat) control of the economy (3/27)

Nouriel Roubini in this 20 min. Bloomberg TV interview says the plan "won't stop bank nationalizations" (3/28)

Newsweek article says Treasury Secretary Geithner is "hitting his stride" (3/28)

Newsweek Cover Story says the White House is ignoring Paul Krugman's criticisms of the Geithner plan (3/28)

Jeffrey Sachs, Yale economist, asks "Will Geithner and Summers Succeed in Raiding the FDIC and Fed?"

Mike Whitney, finance writer, citing DeCambre, Sachs and Stiglitz says "the country will undergo the greatest period of bank consolidation in its 230 year history."

New York Times charges Congress with "bipartisan resistance to a thorough investigation of what caused the collapse" (3/29)

Richard Posner, U.C. Law and jurist, says the Geithner plan "will simplify the banks' balance sheets by removing assets of uncertain value and replacing them with cash (3/29)

Gary Becker, U.C economist and Nobelist, says "it is a strange program indeed where banks get subsidized in proportion to how many 'bad' assets they hold." (3/31)

Joseph Stiglitz, Nobelist, says government overleveraging replicates the bank overleveraging that caused the meltdown.(4/1)

Jonathan Weil , Bloomberg, "Obama Stakes His Fortunes on Failed Banksters" (4/9)

Mike Whitney examines the recent report on the Geithner bank rescue plan released by the Congressional Oversight Committee chaired by Elizabeth Warren.(4/11)

Jeff Cox at CNBC.com says "Flood of US Debt Threatens To 'Crowd Out' Other Borrowers" (4/13)

Financial Times Tarp investigator seeks evidence of book fiddling (4/13)

Nouriel Roubini coming on strong for the first time in several weeks, says "Testing the Stress Test Scenarios: Actual Macro Data Are Already Worse than the More Adverse Scenario for 2009 in the Stress Tests. So the Stress Tests Fail the Basic Criterion of Reality Check Even Before They Are Concluded" (4/13)

Elizabeth Warren, Harvard Professor and Chair of the Congressional Oversight Committee, is interviewed by John Daley at Comedy Central (4/15)

Simon Johnson, MIT economist and former chief economist for the International Monetary Fund, argues in the Atlantic Monthly that "the financial industry has effectively captured our government" and that "recovery will fail unless we break the financial oligarchy that is blocking essential reform" (5/09)

Geithner Testimony arguing for bank stability sparks Wall Street rally (4/21).

Wow. China, Backing Russia in Advance of G20 Summit, Calls for Replacement of Dollar as Global Reserve Currency

Doubtless in anticipation of the April 2 G20 meeting in London, China today joined Russia in calling for the dollar to be replaced as the world's global reserve currency by a basket of currencies managed by the I.M.F. Here's the story in the Financial Times, the International Herald Tribune, Agence France Presse and the Prudent Investor. (Question: did Nouriel Roubini see this coming? He's been saying that even though "the American Empire" is on the decline, the dollar, despite rough spots, looks secure as the global reserve currency over the next twenty years.)

The news from China strikes me as a game-changer. (My buddy Big Bill says it's just sabre-rattling.) But I don't see it mentioned on the New York Times or Wall Street Journal. Or CNBC. U.S. markets seem unperturbed. In fact, the Dow is up 300 points at the moment on the strength of a surprisingly strong housing report and positive response (including from global markets) to the Obama administration's release this morning of its $1 trillion private-public plan to save America's financial system without nationalizing the big banks. On CNBC, guest host lefty Democrat Howard Dean supported the Treasury plan in several clips and righty Republican Dick Armey opposed it one clip. While Dean is an able advocate, and although I've felt the Armey is a blowhard, I find myself feeling sympathy towards Armey's assertion that he has never thought any bank as "too big to fail". Interesting to compare his take on the Fed with those of lefty Fed critics like Matt Taibbi and Mike Whitney. Interesting similarities. Also worth reading is Mike Hudson's critique of the "house burning down" metaphor used by Ben Bernanke in his "60 Minutes" interview March 15 (at Mike's site, scroll down to "Articles").

• Jim Willie, an avowed friend of gold and foe of the dollar, reading Asia News, says the Chinese are planning to replace the dollar with the yuan as global reserve currency (3/27)
• Asia Times - good source for news and commentary on the yuan/dollar story
• Celestine Bohlen at Bloomberg says the time has not yet come for the dollar's replacement as global currency (3/31)
  
• This three part video interview of economist Anantha Nageswaran in the Financial Times argues that the dollar's days are numbered (3/31) Here's Nageswaran's Blog
• "New York Stock Exchange Runs out of Gold Bars: What Happens Next? (Market Sceptic, 3/31/09)
  
• Paul Krugman says that China’s call for a new “super-sovereign reserve currency” is a sign of troubles ahead for a global economic recovery (4/3)
• John Tamny of RealClearMarkets argues for the universal benefit (including to the U.S.) of a new global reserve currency that he says will brings a stability the dollar can no longer provide (4/7)
• "China Slows Purchases of U.S. and Other Bonds" (NYT 4/12)
• Economist Andy Xie argues "If China loses faith the dollar will collapse" (FT 5/5)
• Gwen Robinson of FT gives the views of investor Jim Rogers, Black Swan auther Nassim Taleb, and three other analysts on the possibility of a dollar collapse (ft.com/alphaville 5/12)
  
• America’s triple A rating is at risk U.S. financial media ignored story that was front-aged in FT. The gist: "Prices have risen on credit default insurance on US government bonds, meaning it costs investors more to protect their investment in Treasury bonds against default than before the crisis hit." (FT 5/13)
• Nouriel Roubini discusses the possibility of an "Almighty Reminbi" and says the US must invest "in our crumbling infrastructure, alternative and renewable resources and productive human capital — rather than in unnecessary housing and toxic financial innovation [in order to] "slow down the decline of the dollar, and sustain our influence in global affairs (NYT 5/14)
• The Economist concedes that the world's new economic order "is more likely to be made in Beijing" than in the West, given the sway of creditor nations (5/14)
• Investor Sahm Adrangi, in a thoughtful review of Richard Duncan's "The Dollar Crisis," predicts "that the dollar will collapse, and its ramifications could be as violent as when the credit markets cracked in July 2007." (Clusterstock via John Carney and Hunter at Distressed Debt Investing" 5/18)
  

If this happens, how about the chinese word for harmony - tao or tiao - as the name for the world's new global currency?

The Obama spring rally pauses as Bernanke and 60 Minutes skirt the bank solvency issue

Nouriel Roubini doesn't mince words. His March 14 post speaks of a "dead cat bounce" and a "bear market suckers rally". And of "a Ground Hog Day movie that we've seen at least six times . . . in the past year or so." Gotta say I love Nouriel even though one of my less enlightened friends jokes that I've become part of his terrorist network. But to show I haven't lost control of my affections, here's a comparison of Nouriel and Warren Buffet on the topic of bank insolvency that gives the laurel to Buffet. Then again, Kansas City Fed president Tom Hoenig here condemns Fed bailouts and calls for big banks to be "resolved [shut down] the old fashioned way."

The Dow closed down a bit today at 7,216. Yet it was fast off the blocks in early trading, up 150 points on news that Fed Chairman Ben Bernanke's comments on CBS' "60 Minutes" last night were driving gains in early trading on the Dow. So this rally isn't just a "spring rally", it's an Obama rally fueled in part by the President's concerted efforts to boost investor confidence by putting an end to fear itself. Wow. Stakes are high. There will will be much egg on many faces - and a hard fall, I should think - if this rally fails.

CBS boasted last night that no Fed Chairman had ever granted an interview like its "60 Minutes" interview with Bernanke. For the first time ever, Bernanke gave the viewing public inside glimpses into the heretofore sacrosanct Federal Reserve system: we saw the Fed Governors' 30 foot-ceiling, marble walled meeting room and a football-field sized underground vault where robot forklifts shuffled around shrink-wrapped pallets of paper money valued at $64 million each - too much for human hands to touch.

Well la di da. A key question, only glancingly addressed in the interview, was on bank solvency. CBS' Scott Pelle puts it to Bernanke at 11:35 into the interview:

Pelle: Are all the banks that you regulate solvent?

Bernanke: I believe they are, yes, but we are doing a, um, a stress test right now, where we're looking at . . .

Question: why Bernanke change the topic from solvency at present to solvency under the harsh hypothetical conditions of the stress tests? Why didn't Pelle press Bernanke on the solvency issue, which is critical not only for Nouriel and his "zombie banks" but for mainstream Republicans like Senator Richard Shelby and John McCain. What exactly is the basis for Bernanke's belief that the banks are solvent NOW? If they're solvent, wouldn't everyone benefit from knowing so now? To me, either Pelle dropped the ball or real doubts about bank solvency are keeping Bernanke (and CBS) from discussing this topic publicly.

The flipside of this question is to ask Nouriel, Shelby & McCain how they know the banks are insolvent. I'd also ask Nouriel to what extent his case for a bear market hinges on the matter of bank insolvency? If restored to solvency, could the banks lessen or possibly even resolve the problems he predicts in his March 2 post:

Of course you cannot rule out another bear market sucker’s rally in 2009, most likely in Q2 or Q3: the drivers of this rally will be the improvement in second derivatives of economic growth and activity in US and China that the policy stimulus will provide on a temporary basis: but after the effects of tax cut will fizzle out in late summer and after the shovel-ready infrastructure projects are done the policy stimulus will slack by Q4 as most infrastructure projects take year to be started let alone finished; similarly in China the fiscal stimulus will provide a fake boost to non-tradeable productive activities while the traded sector and manufacturing continues to contract. But given the severity of macro, household, financial firms and corporate imbalances in the US and around the world this Q2 or Q3 sucker’s market rally will fizzle out later in the year like the previous 5 ones in the last 12 months.

Nouriel speaks of imbalances. Does this mean solvency? Ouch! Questions, questions, questions, they keep popping up, gotta get outside for some exercise or I'll go nuts, thank goodness spring has finally hit the Midwest (where it's best).

Storm Hits Agin!

Jan. 23, 2009. 6am. Dow futures are below 8,000 at the moment and even as the CNBC gang all but begs for an Obama honeymoon rally, I myself see the Dow heading south to test its November lows of 7,400.

This week America (and the world) celebrated the inauguration of a promising new president. But the economic news was not good, for the world was sliding into the second (economic) phase of the global economic contraction whose first (credit) phase hit with gale force last summer. This time, the dangers at home included rising unemployment, consumer spending declines and a still-weakening housing market (not to mention Citigroup, Merrill Lynch and Bank of America). And abroad, they included the Chinese contraction and confirmed recessions in many countries.

Two news items for our times: The Bank of England's historic rate cut to 1.5%, lowest since its founding in 1694. And the Moody's cut of its rating of The York Times to junk status.

LESS SHOCKING

It's worth noting that Phase II, while painful, will if nothing else be less shocking than Phase I. Thanks to the miracle of modern communications technologies, our heads are at long last out of the sand. The years of ostrich denial are done. "That we are in the midst of crisis is now well understood." That was President Obama in his inauguration speech.

Well put. And important to be said. Yet not saying much! Where do we go from here? What are we learning that will help us down the road? As time permits, I'll post links to interesting responses and solutions to the crisis. Some (Wolf, Whitney, Roubini [register], Friedman) will be variations of the $800 billion Obama stimulus plan that's now taking shape in Congress. Others (Morris, Whitney) will be strategies for cleaning up the nation's broken banking system (New York Times "Room for Debate" ). And others (Farmer, The Economist) will focus on the global crisis. Still others will argue that the best course of action is no action. There are lots of good ideas out there, often in conflict, as ideas should be.

CONSCIOUSNESS. CONSENSUS. CITIZENSHIP.

Clearly the world is far from reaching anything like consensus on a way out of the crisis. And solutions pile up so fast that even keeping up with them is a full time job for several people. What's more, the solutions being implemented are coming from the small circle of experts and central planners who for the most part failed to see the crisis coming. Ordinary citizens are voiceless when it comes to generating solutions or weighing the pros and cons of solutions advanced by experts and political leaders. Yet President Obama keeps saying that America will not able to renew itself until Americans are fully engaged in the process of renewal. Here's where civic media comes in, and we are far from having an effective one at this point.

Meanwhile, the crisis seems to worsen faster than anyone can keep up with it. It has the feel of a black hole. Or of a maelstrom, the massive deep-sea whirlpool caused by tidal shifts described by Edgar Allen Poe in his Decent to the Maelstrom, a short story about a Nordic sailor who survives one by staying cool and observing, looking for way to escape. When his brother perishes by lashing himself to the mast of the sinking ship, he escapes and survives by grasping a rising empty barrel. The story was an inspiration to Marshall McCluhan - the Canadian media prophet who first spoke of a global village - and to his biographer, W. Terrence Gordon, who chose the perfect title for his book: Escape into Understanding.

Out of the Crisis, by the way, was the magnum opus of W. Edwards Deming, the American systems engineer whose philosophy of continuous improvement based on listening to and learning from employees is widely credited with bringing Japanese industry from the ruins of World War II to global preeminence in the 1990's.

Looking for an escape. Listening to employees. Listening to citizens. Listening to ourselves and others. Deming, like McLuhan, makes great good sense to me. And I'm no engineer. Once a TV interviewer asked him what one thing he would do to improve American education. "Abolish grades!" was his immediate, blunt response. His questioner about fell off her chair. "Why?" she asked, stunned. "Because grades destroy the two qualities most necessary for productive work: co-operation and creativity." He laid down the hammer. As an educator, I couldn't agree more. These qualities, along with competence, are what the world needs now.

OUT OF THE CRISIS: FROM AN ECONOMY OF QUANTITY TO AN ECONOMY OF QUANTITY AND QUALITY?

Some economists are now speaking of reinventing the economy. Will the day come the economy is no longer seen as a matter of rising or falling GDP, of material wealth-generating productivity affecting many citizens but excluding many others? Has this ingrown, ideologically-tainted notion not utterly and recently failed us? New data-gathering technologies and the dawning Obama era make it possible for economists to generate much more comprehensive ways of measuring the current and future health of the vast networks of human survival and enrichment activities that constitute the economy.

It will soon be possible to measure the health of the economy using both traditional metrics of material quantity and new metrics of non-material quality of life. Take the concept of consumer confidence , which measures how all citizens feel about spending money. As such, it is a qualitative measurement of a quantitative aspect of the economy and, as such, as a forerunner of more comprehensive ways of assessing economic health. Behavioral economists are on this track, and for my money it leads to an economics informed by measurements of citizen satisfaction with every aspect of work and life that really matters.

OK, so all this sounds like a pipedream - like John Lennon singing "Imagine". Yet I wonder if the world hasn't reached a point where it simply can't get by - "muddle on through" as folks used to say - with anything less. The storm that's hit us is NOT an act of God or an event of nature: it's entirely man-made. Is it a life-and-death maelstrom of the kind that Poe wrote about? If so, we - the human race - will survive it only by learning from it. Not just some of us, but all of us.

Finance Models for Long and Short Term Futures

Let's get down to it (as Donnie Hathaway says at the beginning of "Everything is Everything"). Let NO ONE say we aren't looking for the best answers to the toughest questions! Though this post isn't much at the moment, it will as time permits expand to include interesting answers to these questions from all corners. Civic media, after all, is a problem-solving media. Iremove ideological barriers and partisan walls - left|center|right - by seating ALL parties at the same table - call it the table of What's Best for America.

But I myself have a bias that should be obvious to readers. I beg my readers to correct it.

I feel that some experts (Paul Krugman, Nouriel Roubini, Charles R. Morris, Steve Waldman, Mike Hudson, Paul Kasriel, Mike Whitney and Jim Willie) coming from the left wing were RIGHT and that other experts (Larry Kudlow, Larry Summers, Glenn Becker, Robert Rubin, Ben Bernanke and Hank Paulson) coming from center or center-right were WRONG in their assessments of the health of Amercan and global economies in recent years. And when it comes to resolving the crisis, it seems that the guys who were wrong are closer to Barack Obama at the moment than the guys who correctly predicted the global meltdown two, three or even four years ago.

So this post and this site needs input from center and right ring orientations. Specifically, who from these orientations saw the credit crisis coming?

OK, here we go. The crisis is being resolved in two phases, short and long term. We are now in the midst of a short term triage to stabilize the economy. This will lead to some kind of long term cure to restore American and global economies to maximum health.

But there's a danger: that of stabilizing the economy today in ways that ensure future repetitions of the credit crisis. Perhaps there's no alternative to such crises: perhaps financial bubbles are inherent to the so-called virtuous and vicious phases of the business cycle, as economist Hyman Minsky argued. And perhaps none exists on the spectrum of economic options that runs from total communistic/socialistic state command economies on the far left to pure unregulated free-market consumer capitalism on the far right.

Is it necessary, then, or even possible, for professional economists and central planners to think outside the box of this spectrum? It certainly won't be easy, for this spectrum seems to have contained all economic thought since the days of David Ricardo, Adam Smith, Karl Marx, Friedrich Hayek, Joseph Schumpeter, John Maynard Keynes, Milton Friedman and of course Hyman Minsky.

SHORT TERM Getting out of the mess we're in now (weathering the storm). Stabilizing American and global economies and financial systems within the next 12 to 24 months. Getting existing credit systems to work (assuming they can work) even as Paulson, Bernanke and central bankers worldwide take extreme and untested steps to do so.

• A Path to Economic Recovery Column by Charles R Morris
• What Should Be Done? Link to a 30 min. audio presentation by James K. Galbraith
• Bernanke's plan to clean up banks
  
• Martin Wolf critiques the Obama Recovery Plan (1/14)
  

LONG TERM Designing sustainable economic futures for the United States and the world of which it is now an integral part (mastering the weather). Some of the more astute predicters of the global credit bubble argue that modern consumer capitalism is cracked beyond repair, and that something new must be invented. It means developing the production, trade, currency and governance mechanisms adequate to ensuring the functionality of these new systems.

• Economist Dean Baker proposes a tax on financial transactions (Bob Herbert op ed)
  

Hap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . py New Year!

This blog is the beginning of something. So are the four other civic media sites listed on the sidebar (I maintain the first two). Civic media, as I see it, is a dialogic and problem-solving use of media, not a kind of media. Its ongoing, problem-solving dialogs make citizens and government responsive and accountable to each other in defining and solving the problems (and maximizing the opportunities) confronting a community of any size: local, state, national and international.

Today a single problem confronts us all: the global financial crisis. Over at the sidebar you will find a library of 40 finance writers who throw light on it. Taken together, they show very clearly how the wizards of Wall Street made the world of finance go round and round for twenty years until last summer, when the entire system finally spun out of control, corrupted by Wall Street or overstressed by investor demand for higher yields.

Most of these 40 writers saw the spinout coming AT LEAST TWO YEARS before any of the Wall Street wizards - or most anyone in the central banks that manage (and manufacture) the world's money supply.

Not surprisingly, these writers have useful insights as to how the global financial crisis can best be resolved. Among the problem solvers are Jack Bogle (article and book), Charles R. Morris (articles and book) and the amazing Steve Waldman. (Additions to the library are welcome. Kevin Phillips? Joe Stiglitz? David Korten? Doug Henwood?)

I sell residential real estate for a living. The Realtors at my office are bright and honorable. In May of 2006 I showed them Mike Hudson's "The New Road to Serfdom: an Illustrated Guide to the Coming Real Estate Collapse" from Harper's Magazine (at Hudson's site, scroll down to find the title).

My fellow agents. I love 'em. But they just laughed.

How things have changed. Today the National Association of Realtors is talking about the bursting of the housing bubble and how real estate will get back on track. And not doing a very good a job of it, either. But let's not digress.

America's recovery from its deflating housing market and its deepening financial crisis calls for an unprecedented partnership of citizens and government (arms-length will do just fine.) And also (dare I say?) a similar partnership between people with money and people without.

A civic media can mediate these partnerships. Its problem-solving dialogs can convey ideas like those advanced in this library to all Americans, including the least educated. Its ongoing dialogs can give Americans the chance to talk back, for weeks and months on end, until the nation, newly informed, gives Presidential Obama the informed citizen input he needs in order to make decisions that serve the best interests of America and its people.

Does all this - a media that brings out the best in our democracy instead of the worst - sound odd or impossible? It should not. Didn't Barack Obama win the 2008 election by promising BOTH of these partnerships, or something very close to them? Doesn't America already have in place the interactive communications technologies needed to mediate these partnerships? And isn't the need for these partnerships entirely obvious? Had they been in place ten years ago, would an informed America have allowed Wall Street or uncreditworthy borrowers to put the nation and the world at risk as they have?

So these partnerships, then, are possible. Still, questions remain. Will President Obama keep his promise? Will America's print and electronic media do their part to keep citizens and government productively in touch with each other? And finally, will all Americans, rich and poor, do their part to advance these new partnerships as well?

2009 will likely give us the answers. It will be a very interesting year. Even more interesting than 2008. Think about it. For the first time in history, 300 million people are poised to think and act intelligently, as a people and as a nation, about a single problem that threatens its future and that of the rest of the world as well. Wow. The psychologist Jung talked about the collective unconscious. Here we are talking about a collective conscious, an informed and active public mind. Thomas Jefferson, Marshall McLuhan and W. Edwards Deming would be glad to be alive. Not to mention Gandhi and Martin Luther King. And Plato, who wrote dialogs. And Socrates, who never wrote, out of a mistrust of writing's ability to make foolish men appear to be wise. But perhaps not Aristotle, who wrote monologs, as if (like the quants of Wall Street) he possessed or owned the truth, which the Platonic Socrates spoke of entirely differently: as an ongoing search for something that lies ever beyond us all.

How will all this happen? Hey, it's already happening. And let us resolve here to do what we can to advance the civic dialogs that will help us weather the storm. With that,

Hap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . py New Year!

PS - I almost forgot: what should we talk about next here?