Two articles.
The first by Tony Judt Download Judt 2009 is a brilliant
account, or rather the lack, of social democracy in the United States of
America. He begins with the question, if most Americans want things like
health care and education and so on to be better, then why do so many of them
reject the social solution most other rich 'western' nations. Why is
there no socialism in the US? Judts' answer, and he writes this very well,
is 'discursive'. He argues that Americans (those who live below the 49th)
lack the words or language needed to pose and then answer critical questions
about the role of the state, the nature of a 'good society' and the problems
great wealth creates in a supposedly democratic society. There can be no
reasonable debate because there is no way to talk about the issues. Of
course, the answer is more complex than this, but the point is well taken and
supports his argument that regardless the left needs to stand up and protect
what is left and what is left of government... or soon that too will be
gone. For Judt what is coming is a
social democracy of ‘fear’ – that what there is of the state may be taken from
the people, just when they need it most…
The second article is by Matt Taibbi Download Taibbi Naked Swindle. Taibbi, a
writer with Rolling Stone tells an incredible tale of how basically thieving
brought down first Bears Stearn and then Lehmann Brothers in 2008. His
story is the story of naked short selling. And while there are those who
challenge Taibbi's version of events, his account is good enough to pass the
'well how do you explain it then' test.
If true, then the story shows just what ordinary folks are up against –
that the lack of language to speak of the ‘state’ not only silences those who
might believe in some greater good, but allows those whose only ‘virtue’ is
unrestrained greed to hide in wormy words about the benefits of the free
market.
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Taibbi describes short selling as follows:
One practice that had been little used before but now
began to be employed with great popularity was short- selling, a perfectly
legal type of transaction that allows investors to bet against a stock.
The basic premise of a normal short sale is easy to follow. Say you're a
hedge-fund manager, and you want to bet against the stock of a company —
let's call it Wounded Gazelle International (WGI). What you do is go out on
the market and find someone — often a brokerage house like Goldman Sachs —
who has shares in that stock and is willing to lend you some. So you go to
Goldman on a Monday morning, and you borrow 1,000 shares in Wounded Gazelle,
which that day happens to be trading at $10.
Now you take those 1,000 borrowed shares, and you sell
them on the open market at $10, which leaves you with $10,000 in cash. You
then take that $10,000, and you wait. A week later, surveillance tapes of
Wounded's CEO having sex with a woodchuck in a Burger King bathroom appear
on CNBC. Awash in scandal, the firm's share price tumbles to 31/2. So you go
out on the market and buy back those 1,000 shares of WGI — only now it
costs you only $3,500 to do so. You then return the shares to Goldman
Sachs, at which point your interest in WGI ends. By betting against or
"shorting" the company, you've made a profit of $6,500. One
practice that had been little used before but now began to be employed
with great popularity was short- selling, a perfectly legal type of transaction
that allows investors to bet against a stock. The basic premise of a
normal short sale is easy to follow. Say you're a hedge-fund manager, and you
want to bet against the stock of a company — let's call it Wounded Gazelle
International (WGI). What you do is go out on the market and find someone
— often a brokerage house like Goldman Sachs — who has shares in that stock and
is willing to lend you some. So you go to Goldman on a Monday morning, and
you borrow 1,000 shares in Wounded Gazelle, which that day happens to be
trading at $10.
Now you take those 1,000 borrowed
shares, and you sell them on the open market at $10, which leaves you with
$10,000 in cash. You then take that $10,000, and you wait. A week later,
surveillance tapes of Wounded's CEO having sex with a woodchuck in a
Burger King bathroom appear on CNBC. Awash in scandal, the firm's share price
tumbles to 31/2. So you go out on the market and buy back those 1,000
shares of WGI — only now it costs you only $3,500 to do so. You then return
the shares to Goldman Sachs, at which point your interest in WGI ends. By
betting against or "shorting" the company, you've made a profit
of $6,500.
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