Some crisis links (10.30.2008)

As a part of its eternal effort to maintain economic growth, the Fed lowered its benchmark interest rate to 1%, according to the New York Times (see also this, this and this).

While interest rates plunge, the curious can while away the time by reading an article by James Hamilton on the possibility of a deflating economy (via Naked Capitalism).

The American economy contracted by .3% in the third quarter according to the Commerce Department.

But, of course:

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

The government said it was giving banks more money so they could make more loans. Dollars paid to shareholders don't serve that purpose, but Treasury officials say that suspending quarterly dividend payments would have deterred banks from participating in the voluntary program.

It is clear that extortion pays, according to the Washington Post report.

Arno Mayer warns, "Predictions of the American empire's imminent decline are exaggerated: without a real military rival, it will continue for some time as the world's sole hyperpower."

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