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In The News:
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5 March 2010

Humanitarian Resource Institute
Phone: (203) 668-0282
Url: www.humanitarian.net

United Nations Arts Initiative
Arts Integration Into Education
Url: www.unarts.org
Twitter: unarts

Arts Integration Into Education

Youth Called to Action:

As the twenty-first century waxes into its second decade, clouds are gathering over the American Republic. A faltering economy, stymied foreign policy, and rising specter of corporate domination of life at home and authoritarian domination of nations abroad has put the public in a state of dissatisfied disillusionment. We need leaders to step forward with a straightforward elaboration of the principles that unite our interests across party lines, but the collected inertia of the two-party oligarchy and the sensationalistic media manages again and again to steamroll over the voice of the individual in favor of the talking head, the rehearsed and scripted speech, and the ten second sound-bite. -- When will this generation stand up?: Harvard Law Record, 1 March 2010. [1]

Bogle/Stiglitz: Economic Crisis Dialogue

World leaders remain in a state of panic, two years into an economic emergency following the global market crash of 2008.  It is now clear that the 1999 repeal of Glass-Steagall and deregulation of OTC derivatives [2] facilitated both the 2001-2002 and 2007-2008 market crashes.  

The humanitarian toll attributed to hyperinflation and devastation of relief operations, remains a background statistical discussion [3,4,5,6].  Widespread suffering and deaths among the worlds most impoverished populations, normally viewed as an acceptable price for short term gain, is not acceptable when these activities devastate the worlds most wealthy countries.  Today, US cities and states along with G-20 countries continue to embrace the meaning of fiscal emergency. [7, 8]

If the bankers, financiers and brokers who gave the world's economy its near-death experience in 2008 want to finish the job, there isn't much to stop them. The dumb and greedy things they did that were not illegal then are not illegal now..... We have a system that supposedly couldn't fail. It delivered salvation to the guilty and made the innocent do penance for them. Apparently, 8 million lost jobs and counting, and a third of the mortgages in the United States under water was not enough to shock the public into demanding and supporting reform. -- Parties united to ruin economy, Now, they won't work together to save it. Palm Beach Post, 28 February 2010. [9]

While riots continue in countries such as Greece, devastated by financial crimes, 2] world leaders as calling for an immediate emergency restoration of the Glass-Steagall Act [10] in conjunction with bankruptcy protections for sovereign nations. [11]  The Glass-Steagall act should have been implemented in 2001-2002 when markets declined by US$13 trillion or US$2,000 for every man, woman, and child on the planet according to ABN AMRO’s Global Investment Returns Yearbook (a study of long-term investment returns by Elroy Dimson, Paul Marsh and Mike Staunton from London Business School). Instead banking regulatory controls were removed in the United States, allowing predatory lending, mortgage and appraisal fraud to facilitate a short term fix, increased consumer spending and economic recovery. [12, 13]  Five years later, we watched the 2008 market crash take down the entire global financial system.  Instead of containment, countries provided immediate emergency access to zero interest central banks loans that immediately transitioned into investment banks and speculative trading (the cause of the 01-02/07-08 crashes).  

Restoration of the Glass-Steagall Act, within an international regulatory framework would have separated commercial banks, investment banks and insurance corporations, that today function under the auspices of one unregulated entity.  Systemic risk remains at pre-crash levels [14] with market distortions proportional to the size of the $1.4 Quadrillion (2006) [15] unregulated shadow banking system. [16]

Nobel winner Joseph Stiglitz:

You call for regulations. Should the Glass-Steagall Act (a law that prevented commercial banks from providing brokerage and investment services) come back, as Sen. Maria Cantwell, D-Wash., advocates?

She's exactly right. I was very opposed to the repeal of Glass-Steagall when I was chairman of the Council of Economic Advisers. It'll need updating, but the spirit of Glass-Steagall is let's return core payment mechanisms to the commercial banks, to boring banking. -- Q&A: Nobel winner Joseph Stiglitz says hubris and ideology are to blame for the economy's woes: Oregon Line, 26 February 2010. [17]

John Bogle, founder of mutual fund giant Vanguard Group, told CNBC on Tuesday:

“I would be cheering for the return of the Glass-Steagall Act,” Bogle said, referring to the Depression-era law that banned banks from owning brokerage firms and other financial firms, among other restrictions. “It’s pretty much common sense that if you’re in the business of taking deposits, you shouldn’t be speculating on your balance sheet.” -- Bring Back Glass-Steagall Curbs for Banks:  Bogle: CNBC.com, March 02, 2010. [18]


References:
  1. When will this generation stand up?: Harvard Law Record, 1 March 2010. Url: http://www.hlrecord.org/opinion/when-will-this-generation-stand-up-1.1179153
  2. The Warning: PBS, Frontline. Url: http://www.pbs.org/wgbh/pages/frontline/warning/
  3. Global Food Crisis: Reliefweb. Url: http://www.reliefweb.int/rw/rwb.nsf/GlobalFoodCrisis?Readform
  4. Conflict, economic crisis and drought: a humanitarian emergency out of control: Humanitarian Policy Group. Url: http://www.odihpn.org/report.asp?id=2944
  5. SARS: Human Fecal Animal Fertilizer/Feed as a Source of Coronavirus Infection of Animals: Humanitarian Resource Institute. 25 May 2003. Url: http://www.humanitarian.net/biodefense/fazdc/sars_sanitation.html  Why analysis of humanitarian emergencies omit 2.5 billion people severely impoverished in China and India?
  6. Countries and Emergencies: Reliefweb. Url: http://www.reliefweb.int/rw/dbc.nsf/doc401?OpenForm
  7. Cities’ Recession Deficits: Belated Blow to U.S. Economy?: Neal Peirce, Washington Post Writers Group, December 6, 2009. Url: http://citiwire.net/post/1526/
  8. Insolvent European vs American States: The Big Picture. Url: http://www.ritholtz.com/blog/2010/02/insolvent-european-vs-american-states/
  9. Parties united to ruin economy, Now, they won't work together to save it. Palm Beach Post, 28 February 2010. Url: http://www.palmbeachpost.com/opinion/columnists/parties-united-to-ruin-economy-now-they-wont-302475.html
  10. Davos: World Leaders Called to Emergency Action: Humanitarian Resource Institute, 20 January 2010. Includes Nobel Laureates asked to request financial market intervention by leaders in UN countries: Humanitarian Resource Institute, 13 January 2010. Financial Market Legitimacy Critical for Sustainable Global Recovery: Humanitarian Resource Institute, 5 January 2010. Url: http://www.unarts.org/news/gsteagall_152010.html
  11. IBAHRI: Government Debt: Default Projections: Humanitarian Resource Institute, 18 February 2010. Includes IBAHRI: G-192: Scope of Global Debt Crisis in Focus: Humanitarian Resource Institute, 10 February 2010.Url: http://www.unarts.org/news/ibahri_2102010.html
  12. Protecting  America's Families:  Predatory Lending: Humanitarian Resource Institute. Url: http://www.humanitarian.net/law/assistance/predatory_lending.html
  13. Communities in Crisis: Pushed Beyond the Economic Limit: Humanitarian Resource Institute, November 2007. Url: http://www.humanitarian.net/law/assistance/senior_crisis.html
  14. HRI:UNArts: Biodefense: Atlantic Storm in Focus - Geoeconomics: Humanitarian Resource Institute, 25 February 2010.  Url: http://www.unarts.org/news/atlanticstorm_2252010.html
  15. Remarks by Jill Considine: At the joint European Central Bank/Federal Reserve Bank of Chicago Conference on “Issues Related to Central Counterparty      Clearing” Frankfurt, Germany, April 4, 2006. Url:   https://www.ecb.int/events/pdf/conferences/ccp/Considine.pdf 
  16. Shadow Banking System: Wickpedia. Url: http://en.wikipedia.org/wiki/Shadow_banking_system
  17. Q&A: Nobel winner Joseph Stiglitz says hubris and ideology are to blame for the economy's woes: Oregon Line, 26 February 2010. Url: http://www.oregonlive.com/business/index.ssf/2010/02/renowned_economist_on_bust_tol.html
  18. Bring Back Glass-Steagall Curbs for Banks:  Bogle: CNBC.com, March 02, 2010. Url: http://m.cnbc.com/us_news/35661828/1

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