Let me take a shot at the discussion about the Henry Ck Liu article. Phil picked up on the 10 depression similarities.
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1) Too much savings in relation to consumer power due to income disparity;
2) Over capacity due to excessive investment from surplus capital;
3) Over stimulation through the growth of debt through new intricate system of inter linked debt obligations;
4) Legalized price fixing through mergers and acquisitions; big corporations maintain price and cut production instead of lowering prices, resulting in massive unemployment;
5) Economic growth too heavily dependent of big ticket durable goods that cannot sell in a depression thus slowing recovery;
6) Exhaustion of public confidence and optimism; and
7) The collapse of international trade (Smoot-Hawley Tariff Act).
8) Irresponsible foreign lending (the US was a creditor nation with a credit balance about twice the size of the total foreign investment in the US.)


I don't wanna drive this into the ground, but I'd like to frame the points in the way that I think Liu intended. Even though I don't know much about economics, I've been reading most of Liu's works as far back as 2001, and I think that some of his statements are being misread.
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1) Too much savings in relation to consumer power due to income disparity;
2) Over capacity due to excessive investment from surplus capital

In both of these statements... based on knowing Liu's philosophy,
he is NOT talking about the Nation, but the income disparity that leaves excess non working and non controlled monies of the very rich to remain underutilized. Henry Liu understands the concentration of wealth in the hands of a very few, and the quantum growth of this wealth, that occurs without risk, without management, and without direction.

He is saying that the very rich (perhaps the top 1/2 of one percent, is stashing away money and not cycling it into the economy. This is obviously true, in that the net assets of the world's billionaires grew by 35% last year alone. This was also happening in the late '20's.

The second point is a little more difficult to understand. I believe that the comment meant that an excess of capital was going in search of profit without serious management.

This probably seems like knit picking, but it's important to the whole situation with today's financial crisis. Just as the leaders of Enron placed themselves above the intent of the law, so have the leaders of the financial institutions pressed and exceeded the letter of the law, to create the phantom wealth that haunts today's economy. While liu pointed to parallels to 1929, I don't believe he intended the 10 points to be the heart of the article.









Life is Good!