So i asked awhile ago if elections for president in the US could be predicted on the basis of whose campaign had the most money. I also said i didn't know whose did right now, but that a list of corporate donations was available. Critically, both presidential candidates went to the Senate to vote on a bill that had failed in the house. Both went to support the bill. Both gave speeches to endorse it.
Unlike the UK rescue package just going into effect this morning (Oct 13, 08), it seems there are no shares/stakes in the banks changing hands. There, the operator of the Fed and former head of Goldman Sachs (rival of the failed Lehman Brothers) uses his discretion to buy up bad debt from banks. In the UK, we are told, we actually *own* significant stakes in the banks that are assisted. American tax payers will be absorbing debt in exchange for what? More debt?
There's an interesting film called Zeitgeist. It actually comes in two parts, and the second part, the Addendum, focusses almost exclusively on the monetary system of the Federal Reserve (and IMF and World Bank). In that, by reading through and translating the documents that enable the Fed (a private bank), it makes clear how the current system attaches debt to every dollar created. So each dollar costs the government a dollar + something. And then interest is charged on this money. There's more about loans, inflation and so on, but at the heart of it is with the central bank, dollars are alway money+debt.
This is the system we are all in a sweat to bail out? something that immediately means that through income tax (which some in the states argue is illegal - was never appropriately passed into law) where a quarter of one's earnings goes not to hospitals and other government services, but to service the debt of the Fed - a debt that by its nature can never be repaid, since the creation of a dollar by itself incurs debt.
Whoever thought this was a good idea?
What else is compelling is that it is actually well known that various significant market and bank panics of the past were engineered by bankers in an effort to consolidate their own wealth. this is monopoly capitalism at play. It's not about diversity, is it? And what of the current "crisis"? If it were not manufactured as well, would it not, we are lead to ask, be an exception?
The above is part 1 on the Fed. The rest is on youtube, dvd and at the film's site.Ok, here's what it looks like from my not-an-economist-or-financier perspective.
Over the past year since the failure of northern rock, the news has been blasting loudly the stated government policy on bank deposits: the government only guarantees up to 32K. That's it.
Last year i was rather angered by this: why not guarantee 100%?I've only recently heard a good explanation, and we'll come back to that. But suffice it to say that many people who were in the position to have more than 32k in savings moved their money across multiple banks. The consequence of this move of funds across multiple banks is that one could not park all their savings in a place where there was the highest interest rate - like Icesave's 7%. It meant shopping around for good but not as high interest rates. It meant having to swallow that lesser interest to play by the rules.
Yesterday, the news was filled with the lament of savers who had put over 100k in savings into Icesave, and dam, when the bank froze its assets and said, as it always said that it would guarantee 16k thereabouts, and that the UK's 35K would aslo kick in, well how awful that people would lose the rest, but that was the rules within which the rest of us have been playing - and baring the cost of that caution. But it looks today like that was rather stupid.
Is it true that in US elections the presidential candidate who has raised the most campaign money won? A traditional marker of outcome for party primaries has been something called the "money primary." We saw that this past year.
During the primaries last spring when things were hot between Obama and Clinton, and i was asked by american colleagues whom i though might win i asked "who has the most money?" I recall that some of my other US colleagues from my post doc said that was far too cynical and oversimplified (i think they were the ones, a decade ago, who had drawn this connection to my attention). And while both candidates could boast about large cash balances at various points, by the end of the race, we know who was flush and who was loaning a campaign personal funds.
So that's primaries, but what about the election? What about the Presidency? Obama is ahead in many of the polls, and all things look likely, while some commentators have said well it would be over if he were white, but race is an issue. If that's the case, does that mean that funds or no longer a predictor? Where is the campaign funding barometer at?
During the primaries, we got regular updates about how much cash each candidate had brought in. These figures were particularly jaw dropping in the democratic primary with tens of millions coming in per MONTH. There hasn't been as much discussion of funds during this part of the election - i've only found one list of corporate donations and haven't fact checked it, but it will be interesting to see if it turns out to be indicative.