Sort of a cash for clunkers program. $180,000 speaking fee?
The Fed doesn't have enough power to straighten out the US economy.
They need the power to raise and lower taxes. (i.e. everything that
congress has the power to do, but won't.)
Before reading the article I was going to rejoin to the above,
"Especially now that interest rates have been set so low there is no
room for further changes to help improve the current situation." IOW,
the Fed blew their wad. Then I thought I better and read the article
Skip cited so as to see if anything intelligent was in it. Leaping out
at me is the line: "Greenspan, in his final four years as Fed
chairman, kept rates too low and regulation too light, goes the
Yet while Greenspan was the Fed Chair, only a few expressed some
concern about these practices. ISTM no one really sounded the alarms.
I think almost everyone bought in. Hence to suggest that Greenspan or
Bernanke should have gone against the tide does not seem entirely
fair. They would have to be seen as god-like and similarly obeyed as
though they were gods, all-knowing, etc. (Granted I was known to refer
to Greenspan as "President Greenspan" during his day. But it was
mostly in jest. He does not have the powers of a real leader.) We do
not have any real leaders today, though maybe this is because the
followers are so uneducated and unreasoned. These followers are
gaining traction, too. To me it adds up to a lot of frustration and
some catastrophe for several more years, until people have experienced
the worst of not working together such that, for example, even those
on the far Right see the intelligence of say universal health care and
a single payer system.
Greenspan "plays tennis" among other things today. Would that he gave
a little thought, before and after tennis, to the many people out of
work and what he could do to help them. Owning that he could have done
more to prevent this, even with the large tide against him, would be a
sure it does. Greenspan was wrong, along with a lot of other people. But
not all. I was among those who kept their powder dry during this period.
Is the Fed supposed to act based upon opinion polls? Or are they supposed
to be the experts and do the right thing, lest the country tank?
The flaw in that argument is that the stability of the WHOLE world-wide
financial system is based on trust. I trust you to follow our contract.
I trust the insurance company will pay off in case of an accident. I
trust that this piece of paper will pay for my lunch. If the opinion
polls show a lack of trust, then everybody is out of a job and we
regress to barter or caveman tactics. The Fed has to base at least some
of it's actions on opinion polls.
Define "real" job. I suppose that scientist, engineer, physician,
lawyer, accountant, pharmacist, teacher, dentist, archaeologist,
financial adviser (to keep it on-topic), quarterback are not "real"
jobs? Politicians don't require a degree and we have many in AZ and DC
that clearly show that lack of education every day.
I have always found it a curiosity of human nature that, when
something goes wrong, we seek to blame a single entity. I guess it's
not too difficult to understand. In blaming a single entity, we avoid
placing accepting any personal responsibility.
Personally, I believe that pretty much everyone had a hand in the
recession. Greenspan (i.e. the Fed) made mistakes. The government
made mistakes. The financial institutions made mistakes. The people
made mistakes. Heck, I bought my first house in 2005 - fuel for the
It's time we stop playing the blame game and realize that nearly
everyone is to blame. Clearly there's value in analyzing what went
wrong and how to avoid it in the future. But we are wasting so much
time and energy trying firmly place the blame on one entity. It's
Just having a friendly exchange here. I think it is important to
discuss the main players in this mess and try to learn from it. If we
do, then for one, when we all vote, we will be more informed and so
more likely to put in people thoughtful about history. E.g. what
happens when interest rates are lowered and one sees signs of a
bubble, and so on. Maybe it is cliché to look for a single entity. But
it is also becoming cliché, and I think not very instructive, to say
it was everyone's fault.
"Real jobs" are mostly financial in nature, ones where you have a lot
of other people's money to throw around and use to take big risks and
hope to increase the reputation of your company and your own salary and
bonuses even when the risky ventures don't turn out very well.
You have a point. I guess I was wrong about "real jobs" being in the
financial sector. As you say, they are probably elsewhere. Come to
think of it, our economy might be better off if all those gurus in the
banking business had held down real jobs before they got into banking.
But you only got it partially right, and may have confused the notions
of "real job" and "real pay." (I'm joking back with you.) The two are
apparently sets of mutually exclusive statistics. (Setting up one's
own company is not technically a "job" as the individual is not
actually "employed" by anyone who gives him orders, and the real money
is not technically "pay." One must be careful to make accurate
clinical distinctions when studying the biology of any species)
The real "job" the bankers pulled off was convincing Congress that
they were members of the same data set (i.e. "real jobs"), thereby
seducing with the mere scent and sniff of real pay, the rescindment of
the separation between real banking and de-facto hedge fund, thus
accomplishing the task of The Getaway.
But to get to the topic ... one PhD economist testifying before
Congress (about the Federal debt level) finally, I say: finally,
someone prominent, said, "LTCM" in the same sentence describing the
activities of banks that led to this recent worldwide blow up. Long
Term Capital Management was the hedge fund that ran into the Black
Swan in the middle of an otherwise rosy statistical fiction of real
pay. One could say LTCM was a once in a century event with much more
veracity than one could refer to this financial crisis as such. LTCM
blew up in 1998, you see ....
My forecast is that the phrase "individual responsibility" will be the
key words of this present century.
[There you go again, dapperdobbs, raising the intellect of this room
along with the awareness of the power language may have. Mortals need
not bother to try to imitate this kind of writing.]
snip for brevity
The Getaway presumably referring to the repeal of Glass-Steagal in
The first time I read the above, I did not get it. Now I realize you
may be talking about the longer term. We are not talking "individual
responsibility" yet, but I agree we are on the way. To me this will
paralleling to some extent the change in culture during and after the
Great Depression. Or maybe during and after any bubble, "individual
responsibility" rises for at least some factions.
Elle (email negligent while on parent duty and recreational leave to
maintain cheerful(!) attitude)
Very astute and a really good feel for the aftermath of the Great
Depression. What makes a country great is its citizenry. The feel I
get today is that we all know what happened (even without details),
and we've sucked it up to carry on. I get this from many 'ordinary
people' I've talked to over months.
I think the facts are that each individual is responsible for his
actions and whatever condition he or she may be in. Bill Woessner made
a really very fine observation about human nature in this thread, one
I've read two or three times carefully.
ISTM that pressure is being put on Congress, on various issues, to
correct the excesses that the priviledged classes have again committed
- those actions which make the wide population single them out as
irresponsible. Just my personal opinion, Reagan was an honest man with
a good head, political skill, and a freedom to speak freely. He
reached into many people's hearts with common sense and staright talk.
Today, maybe the majority are realizing in their own deliberations,
that he was spot-on right about a great many things. JFK is famous for
a similar statement he made, 'Think not what your country can do for
you; think what you can do for your country."
When the majority begin thinking like great men, we're all in good
Another important thing to bear in mind is that people who control
government, whatever their previous employment may have been, are
elected in the first place and kept in government by all those ordinary
people who have "real jobs," at least by the ones who have enough time
to get away from those "real jobs" and get to the polls.