On Demand
What Should Washington Do?
Wednesday, September 17, 2008
James Parrott, deputy director and chief economist at the Fiscal Policy Institute, and Nicole Gelinas, a fellow at the Manhattan Institute, discuss how the government should respond to the latest fiscal crisis.
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I am not sure where to put this comment, but here it is.
How the heck can the GOP continue to ride high in the presidential polls in the middle of this economic carnage? The worse it gets, the more popular the GOP becomes. What is going on here? How come Obama and the Dems can't seem to move ahead in the polls?
repeat after me:
"SOCIALIZE RISK, PRIVATIZE PROFIT"
disgusting.
btw. for anyone who was interested, this was foreseen by a number of people...Buffett, Roubini, et al
if you dare, watch this series on youTube
"Money as Debt"
it will change your life. [Fractional reserve banking and loose money policy always blows up.]
http://www.youtube.com/watch?v=ThXpjmfyiMQ
When asked to name the greatest invention in human history, Albert Einstein simply replied "compound interest."
Where is all this federal money coming from? I hear a lot of talk about the taxpayer's money, but isn't the government already spending beyond it's means? My understanding is that a lot of the rest of the money comes from Chinese banks, but where are they getting all their money from?
Also, if the government bought all of these mortgages, wouldn't the government then simply own almost everyone's homes? Is there any chance that one of the presidential candidates will support a trust company?
Why do we always let things catch on fire before we put them out. What ever happened to prevention.
Barney Frank is holding hearings on a resolution trust company tomorrow morning--watch CSPAN!
With the Federal takeover of AIG, the republicans have proven that laissez-faire economics provide a swifter path to socialism than a well-regulated private sector ever could.
is it possible that the credit card debt of the world is being securitized and sold as secure investment (as the mortgage backed instruments are)? if not, who holds this type of "paper"?
Here's a comment for your guests:
Bush just quoted and praised the FDR new deal FDIC.
I think that we also need a full
re-think of our society.
ie:
Health Insurance
Truth and Reconciliation commission (to get the TRUTH out, and pardon anyone for whatever they admit
as well as job training, education, etc.
Look at the blog.
it is funny that the bush (anti-president) says FDIC/FDR is the way!
John McCain rails against outsized "golden parachutes" while standing beside Carly Fiorina??!!
in china -- a true free market -- offending ceos would simply be executed.
look it up
Hello!
If the CEOs know that they have a golden parachute waiting for them no matter what it ENCOURAGES risk taking and falling asleep at the wheel!
John "you will know their names" McCain is absolutely, positively clueless about economics.
Listening to McCain discuss the current financial crisis is mind boggling because he sounds so breathtakingly ignorant.
I've heard high school students who have a deeper understanding of economics than McCain or Palin.
It is almost like we keep making the same mistakes over and over again. In the early 90's America pushed money into the tech industry. People thought there was going to be no end. Now we have a real estate thing that almost mimics the same process. Why are we not learning?
interesting quote of Obabma saying "it couldn't have been predicted "
Yes, I predicted it would be worse over 18 months ago when I started MY blog...
It will get worse, we're only 25% of the way in.
The consumer debt that was 'cdo'ized will be the MAIN problem just like the sub-primes were
good guests
I remember a prominent commentator (Paul Krugman?) at the time of the Enron crisis predicting exactly what has occurred.
#11 -- Amen.
What did she do to HP? And how much was she paid to leave?
Can we stop ignoring the hypocrisy of Fiorina, please.
The commercial bank analysts understood long term risk. However, with all the mergers, the investment banks took over the commercial banks, and put their own analysts in place. THey were transaction based without the knowledge of the commercial analysts, and greed overcame good credit sense. Drives me nuts when everyone says no one saw this coming. Ask the few surviving commercial bank analysts.
Ms. Gelinas just said no one foresaw Enron's collapse, but my socially responsible investment fund got out of Enron 2 years before it collapsed because it didn't like how they were conducting the energy end of their business.
There is very little Senator McCain recognizes.
Talk about Phil Gramm.
Not only should the CEOs mentioned be terminated "for cause", but the Bush Administration, the SEC and the FTC should be prosecuted. Doesn't the Constitution charge the federal government with thelstion of interstate commerce? regu
I don't believe that no one in these companies realized the risk & exposure involved. I think it is the culture & human nature to keep those opinions surpressed as naysayers. That, plus the eve-present, coersive pressure to "produce". Human nature is not to focus on the consequences but rather on relieving the immediate pressure (of one's boss, for example.) Add to that the enormous potential rewards, with little downside to them personally and you have a recipe for disaster.
What is also missing from this discussion is the question of how long the "social contract" will tolerate the income discrepancies, along with these executive malfeasance rewarded by golden paratchutes. Our society has no guarantees to last forever.
@19 Amy - I'd like to know about that socially responsible fund!
that's regulation of interstate commerce
this crisis really started to hit the political fan after the beginning of 2006 when the previous repub congress at the end of 2005 passed a law, pushed by the financial companies, to enforce the collection of the full 2% balance due on credit cards, from individuals.
housing prices started to stop going up in the next 6 mos., because people know their credit rating is more of a lifeline than their mortgage.
re: comment #4, a recent article in the NYTimes was about how the central bank of china needs an infusion; what caught my eye was the last paragraph, about how MID level chinese officials think the american gov't let bill run up on the debt so as to never have to pay the chinese back what we owe them. some of those guys might be in power in another 10 years.
I do not think housing prices are going down. I think housing prices got inflated. Now the housing prices are deflating to a realistic level. Think about $400,000 for a studio apartment condo.
What should Washington do? Two suggestions from earier comments:
Craig from Astoria
September 17, 2008 - 11:39AM
If we are buying AIG, why don't we keep it?
It would make a wonderful cornerstone for National Healthcare.
John McCain is right. Private enterprize is currupt.
We need socialized insurance, and nobody except George Bush could ever have gotten it done ;)
[25] jawbone from Parsippany, NJ
September 17, 2008 - 11:47AM
Lambert at correntewire.com yesterday asked: If the government is getting into nationalizing businesses, why don't we take over the health insurance companies while we're at it? While they're still solvent.
And, voila!, healthcare is nationalized! Problem solved. Then trim the profit part and the CEO/upper execs pay way down, and, hey, we're good. (Essentially, make them paper processing companies, with a decent revenue stream--just like a well run government agency...)
adam davidson needs to listen to this lady. what a breath of fresh air
#21 Phil Graham:
Responsible for the Clinton era repeal of the GLASS stengel act (FDR New-deal regulation) which prevented banks from owning anything but banks. (and reverse for other financial companies)
I believe that the repeal of this in the 90's is what caused the recent HUGE mergers and acquisitions banks (look at citibank as example)
#17 Carly F. (HP). her golden parachute said she is paid X if she was asked to leave
#23 we need EXECUTIVE compensation to be FIXED. This would push everything downward.
btw, if we has a LIVING wage (I define: ability for a single (1 child) single parent to be SUCCESSFULLY raise their family.
then we wouldn't have such huge disparities in income, and such bad gaps.
Nicole Gelinas is a superstar......and the Manhattan Institute, er, excuse me, the "conservative Manhattan Institute" is fortunate to have her.
#22 charging the feds with crimes?
you might be interested in this post on my blog::
markbnj.blogspot.com/2008/09/debate-treason-true-or-false.html
and continued here:
markbnj.blogspot.com/2008/09/dereliction-of-duty-treason-continued.html
Which discuss the question is: Bush guilty of TREASON to our Country:??
Answer: I wish, but Treason is out, because
(according to bob woodward)
"Bush wasn't at many of the meetings where these decisions were made"
However: Dereliction of Duty: (drats) is defendable as a crime by defendant showing "ineptitude" (well, chevy chase, move over
here comes president ineptitude"
cheers.
# 8: m. fischer: said:
is it possible that the credit card debt of the world is being securitized and sold as secure investment (as the mortgage backed instruments are)? if not, who holds this type of "paper"?
Yes, UNFORTUNATELY, all the consumer debt is
Exactly being sold fraudulenty as CDO's (collateralized debt obligations) JUST like te SUB-PRIME mortgages were.
You are the FIRST person (hint: try reading my blog...) besides me, to see that we are going to have a DOOZY of a crisis when this fact FINALLY becomes public KNOWLEDGE...
I estimate that the economic crisis so far is only 25% over.
The rest will be the 75% of the CONSUMER debt that was sold as "SAFE, and backed by INSURANCE"
cheers to all...
markbnj at excite.com
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