The Republican Thread

[NorthSideSox72]

The Obama administration has f***ed up by allowing themselves to be drawn into "discussions" with some people that don't merit the attention. That was a mistake.

 

But I also think that bmags' post here is right on...

 

Jesus Christ, this is not about assassinating the "messengers of Barack's failures" this is about media irresponsibility. You usually love this stuff. You don't even like Jim Cramer. You are defending him for really just argument sake. He's terrible at his job. CNBC is awful at analysis, and makes up for it with bells and whistles, unfortunately, this is LITERALLY BELLS AND WHISTLES. They report to a less educated financial crowd in a way that is not educational, but irrational, mob like and irresponsible.

Is anyone here after Crain's?

Is anyone out here after Bloomberg news? No, we all love them. They are just miles and miles above CNBC. Bloomberg dominates CNBC in Europe, in wire services and in business subscriptions.

 

But CNBC has TV, and they got there with sensationalism. They have more shallow coverage than headline news, except they are dealing with people's money. They just parade CEOs up there and the CEOs all just say "we're doing great" and they say "oh that's excellent" and then BUY BUY BUY, or now SELL SELL SELL WE'RE F*****.

 

Meanwhile, poor bloomberg news tried to make a network based off of no frills, all content. Bloomberg must not have researched broadcast news, people don't want quality information with context! They want a screaming man giving out information, good or bad.

 

Okay, I'll give poor poor Jim Cramer a break on Bear Stearns. How about his nationwide lectures telling people to buy Sears when they were like triple their value, or to buy google at the height of their value. He's. Not. Good. At. His. Job. And its worst for him, because he's causing people to lose money.

 

Cramer is worthless, he is just a blowhard who isn't good at his job. And while the exact quote was taken out of context, he did indeed recommend buying Bear stock even when there were concerns out there. I really am stunned that people here with the financial knowledge they have are actually defending Jim f***ing Cramer.

 

[StrangeSox]

In reality you can take any stock picker and find some glaring errors. Its an near impossible science, which is why the SP outpreforms the vast majority of stock pickers on an annual basis. Its not different than the experts in any other field. Tell me one scientist who can tell me exactly what the weather is going to be like in a week. Find me one who can tell me exactly when the next great quake is going to strike in the world and where. How about one who knows how big the universe is. You can keep going on with this, but you get my point.

 

I have to take issue with this. No "expert" in any given field is perfect, but I can't think of worse "experts" than stock-pickers, and particularly those on TV. When index funds or coin flips consistently out-perform you, no one should pay attention to a single word you say. That is different from imperfect-but-usually-accurate weather forecasts and not-fully-understood cosmology (BTW, WMAP gave us a good estimate: 156 Billion Lightyears). Stephen Hawking isn't telling you wildly different things about black holes on a week-to-week basis; Tom Schilling isn't telling you it's going to be 85 and sunny and then its 24 and snowing.

 

The difference is that other experts (like geologists wrt earthquakes) do not claim to know exactly when its going to happen and where. Stock pickers do claim to know when to buy and sell stocks and advise others when to do so.

Edited March 11, 2009 by StrangeSox

[southsider2k5]

I have to take issue with this. No "expert" in any given field is perfect, but I can't think of worse "experts" than stock-pickers. When index funds or coin flips consistently out-perform you, no one should pay attention to a single word you say. That is different from imperfect-but-usually-accurate weather forecasts and not-fully-understood cosmology (BTW, WMAP gave us a good estimate: 156 Billion Lightyears). Stephen Hawking isn't telling you wildly different things about black holes on a week-to-week basis.

 

You can't think of any worse ones, because the others aren't getting demonized on a daily basis. Has anyone gone back and found out how wrong that any other groups of experts are? You can talk about Steven Hawking, but the universe also isn't changing on the same lurching instant to instant dynamic basis that corporate valuations are, and yet scientists still disagree on many of the fundementals of the universe. Should I not trust science because of that? Should I never trust a weather man again because he screwed up my forecast last week? Should I not trust the theory of plate techtonics because no one has been able to predict a single earthquake with any real accuracy? I would hope not. The standards that are being held up here are just ridiculous when looked at under any reasonable light. Its all a part of the concerted effort to portray these people as evil and incompetent so that they can be punished. Stimulus and jobs be damned if it involves a bank or Wall Street.

[StrangeSox]

You can't think of any worse ones, because the others aren't getting demonized on a daily basis. Has anyone gone back and found out how wrong that any other groups of experts are? You can talk about Steven Hawking, but the universe also isn't changing on the same lurching instant to instant dynamic basis that corporate valuations are, and yet scientists still disagree on many of the fundementals of the universe. Should I not trust science because of that? Should I never trust a weather man again because he screwed up my forecast last week? Should I not trust the theory of plate techtonics because no one has been able to predict a single earthquake with any real accuracy? I would hope not. The standards that are being held up here are just ridiculous when looked at under any reasonable light. Its all a part of the concerted effort to portray these people as evil and incompetent so that they can be punished. Stimulus and jobs be damned if it involves a bank or Wall Street.

 

I edited the previous point to further my point. They market themselves and sell the idea that they know these things for certain and that they can make you more money. Science (in general, every field has big egos) does not do this. Balta isn't posting here every day about where the next big earthquake is going to happen and selling you some product as a result. Plate tectonics is not about predicting earthquakes; the theory is verified independent of that, so your analogy does not work. Weather forecasting is trying to predict a chaotic system, so of course they won't be 100% accurate and no reasonable person expects them to be. However, they are, on average, reliable.

 

When I can do better than the "experts" by flipping a coin or parking my money in an index fund, it that shows that they are not, in fact, experts in anything but selling the idea that they are experts.

Edited March 11, 2009 by StrangeSox

[southsider2k5]

I edited the previous point to further my point. They market themselves and sell the idea that they know these things for certain and that they can make you more money. Science (in general, every field has big egos) does not do this. Balta isn't posting here every day about where the next big earthquake is going to happen and selling you some product as a result.

 

When I can do better than the "experts" by flipping a coin or parking my money in an index fund, it that shows that they are not, in fact, experts in anything but selling the idea that they are experts.

 

All that proves is that the finace field has its quacks just like any other field. There are plenty of scientists in specialty fields out there who are saying that they know best and that we should change our lives accordingly. Many of them have way less evidence than what these stock pickers use.

[StrangeSox]

All that proves is that the finace field has its quacks just like any other field. There are plenty of scientists in specialty fields out there who are saying that they know best and that we should change our lives accordingly. Many of them have way less evidence than what these stock pickers use.

 

We're talking about the quacks, e.g. the CNBC network. I'm not slamming the finance field as a whole. Plenty of financial planners are very, very competent and make a lot of money for their clients and themselves.

 

It's more of a media-in-general issue because the loud mouths making the crazy predictions will get the coverage/ TV shows, not the even-tempered pragmatist who carefully weighs and analyzes the stock data.

Edited March 11, 2009 by StrangeSox

[southsider2k5]

The Obama administration has f***ed up by allowing themselves to be drawn into "discussions" with some people that don't merit the attention. That was a mistake.

 

But I also think that bmags' post here is right on...

 

 

 

Cramer is worthless, he is just a blowhard who isn't good at his job. And while the exact quote was taken out of context, he did indeed recommend buying Bear stock even when there were concerns out there. I really am stunned that people here with the financial knowledge they have are actually defending Jim f***ing Cramer.

 

Three things.

 

#1 Its not just about Jim Cramer. He's just an easy target because of what he does. It's about a stated strategy by the White House to target individuals and make them into scapegoats. Its about taking a conceptual false pretense and using it to further your cause, like the Bush's (well and it appears the Obama's) did with "patriotism".

 

#2 Turning one person into a reason to demonize an entire sector is BS. It would be akin to taking one guy who predicted the exact date an asteroid would hit the earth, who ended up being wrong, and using that to discredit all of work of an entire field.

 

#3 Taking things out of context and turning them into something they aren't is cheap.

[NorthSideSox72]

Three things.

 

#1 Its not just about Jim Cramer. He's just an easy target because of what he does. It's about a stated strategy by the White House to target individuals and make them into scapegoats. Its about taking a conceptual false pretense and using it to further your cause, like the Bush's (well and it appears the Obama's) did with "patriotism".

 

#2 Turning one person into a reason to demonize an entire sector is BS. It would be akin to taking one guy who predicted the exact date an asteroid would hit the earth, who ended up being wrong, and using that to discredit all of work of an entire field.

 

#3 Taking things out of context and turning them into something they aren't is cheap.

I agree that this White House has a habit of #1, that I don't like either. Also agree that #2 is bad, I wasn't doing that (obviously, since I am IN that sector), and I don't think everyone is either. Some people are. But #3 is an obfuscation, in my view. If you want to pick nits on what Cramer did or didn't do (which is a losing game), the guy did indeed recommend buying Bear stock multiple times on its way down.

 

[Y2HH]

We're talking about the quacks, e.g. the CNBC network. I'm not slamming the finance field as a whole. Plenty of financial planners are very, very competent and make a lot of money for their clients and themselves.

 

It's more of a media-in-general issue because the loud mouths making the crazy predictions will get the coverage/ TV shows, not the even-tempered pragmatist who carefully weighs and analyzes the stock data.

 

That's due to the way the finance industry works. If any of these guys ever got lucky in their past for being in the right place at the right time, it's really easy for them to spin it and show how much of an expert they are via becoming millionaires off of their luck of being in the right place at the right time. Like I said in a previous post, Cramer did a majority of his investing in the 80's, and anyone who had some cash and sunk it into almost any stock in the 80's would have ended up with massive gains if they had left it there. He took that success and spun a career of expertise on it, when in fact you didn't need much expertise to make money if you invested in the 80's and waited until the 90's when the market whet through a split/split/split/rocket phase.

 

For example, if you picked just about ANY pharmaceutical company in the 80's or even in 1990 and bought just 500 shares you'd have been rich. Take Pfizer for instance, the stock cost about 2.50$ a share in 1990. From 1991 to 1999 it split 3 times 2 to 1, and then split another time 3 to 1 for good measure. You're 500 shares were now 12000 shares. At it's peak after all of those splits it hit 45$, let's just say for this example you didn't sell at the top, but sold at 38$. You just sold 456,000$ worth of stock...and that was from 1 single 500 share investment. That's the era Cramer was in. The success some of these guys had wasn't about expertise, it was about being in the right place at the right time.

Edited March 11, 2009 by Y2HH

[southsider2k5]

That's due to the way the finance industry works. If any of these guys ever got lucky in their past for being in the right place at the right time, it's really easy for them to spin it and show how much of an expert they are via becoming millionaires off of their luck of being in the right place at the right time. Like I said in a previous post, Cramer did a majority of his investing in the 80's, and anyone who had some cash and sunk it into almost any stock in the 80's would have ended up with massive gains if they had left it there. He took that success and spun a career of expertise on it, when in fact you didn't need much expertise to make money if you invested in the 80's and waited until the 90's when the market whet through a split/split/split/rocket phase.

 

For example, if you picked just about ANY pharmaceutical company in the 80's or even in 1990 and bought just 500 shares you'd have been rich. Take Pfizer for instance, the stock cost about 2.50$ a share in 1990. From 1991 to 1999 it split 3 times 2 to 1, and then split another time 3 to 1 for good measure. You're 500 shares were now 12000 shares. At it's peak after all of those splits it hit 45$, let's just say for this example you didn't sell at the top, but sold at 38$. You just sold 456,000$ worth of stock...and that was from 1 single 500 share investment. That's the era Cramer was in. The success some of these guys had wasn't about expertise, it was about being in the right place at the right time.

 

If it was that easy, how many people did it? You make it sound like it was the most obvious thing in the world. In hindsight it is. In hindsight I would have sold any financial I could think of as of about Dec 31, 2007. It would have been being in the right place at the right time. How many people actually did that? A large part of being in the right place is having some expertease to know that this situation you are being presented with is actually an opportunity of a lifetime.

[Y2HH]

If it was that easy, how many people did it? You make it sound like it was the most obvious thing in the world. In hindsight it is. In hindsight I would have sold any financial I could think of as of about Dec 31, 2007. It would have been being in the right place at the right time. How many people actually did that? A large part of being in the right place is having some expertease to know that this situation you are being presented with is actually an opportunity of a lifetime.

 

My father did it, and made quite a lot of money doing it. But he's not on tv telling people how great he was, either, nor giving others investment advice with the slogan, "Let's make some money."

 

And being that trillions of dollars of wealth was created through the 90's, a lot of people did it. They may not have sold (which is their own fault), but the market in the 90's made a LOT of people millionaires/billionaires.

 

My point is, if you were in the stock market back then it was much easier than it is now to continue making those types of gains. The issue is, they continue to sell themselves on their past success that they can still do it, when it's obvious now to a lot of people, that they cannot.

Edited March 11, 2009 by Y2HH

[southsider2k5]

Its amazing that in two months time is has gone from being OK he is a tax evader, because he is the best man for the job, to he isn't ready.

 

http://www.forbes.com/2009/03/10/saturday-...l?feed=rss_news

 

What Democrats Really Think of Tim Geithner

Dan Gerstein, 03.11.09, 12:00 AM EDT

How bad are the Treasury secretary's political problems? Ask the pros in his own party.

pic

 

With this past weekend's edition of Saturday Night Live, which opened with a biting parody of Tim Geithner, the Treasury secretary's political problems crossed a critical new threshold. The growing grumbles from insiders that he may not be up to the job officially made the leap into the popular zeitgeist--and made the president's point man for restoring confidence in our finance system a point of national ridicule.

 

This got me wondering: How deep do Geithner's confidence troubles actually go--and how fair is to be asking that question six weeks into his tenure? Is he close to becoming, as some critics suggest, a toxic asset on the Obama administration's balance sheet and an impediment to solving their chief economic challenge? Or is this really a case of Beltway cocktail chatter gone wild and the byproduct of a few early and hardly fatal stumbles?

 

In my experience, the best measure of political situations like this is not what critics are saying, but what friends are thinking. An embattled politician can survive even the most salacious of scandals--think Clinton-Lewinsky--if his own party mostly stays behind him. But once that intraparty support cracks substantially and spills out into public view, the fall from loyalty to liability can be swift--and, in some cases, deadly.

 

In light of that, and the enormous stakes involved, I thought it might be useful to survey a broad range of Democratic players about their views on Geithner's performance. So soon after the Saturday Night Live sketch aired, I sent out a note to strategists, operatives and policy experts from across the ideological spectrum--inside D.C. and out--to see if they still had confidence in the Treasury secretary; if not, why not; and what, if anything, Obama should do about it. (To get candid feedback, I promised the respondents anonymity.)

 

What I found was more of a mixed bag than I expected. On one point there was strong consensus: Geithner has been a terrible political salesman--at a time when instilling confidence is an essential part of his job. For some--more often political people than finance types--this could eventually become fatal. At the same time, outside of a couple hardliners, most of the nearly 20 Democrats I heard from said that, despite their concerns, Geithner deserved more time to get his footing and prove himself. The policy types in particular argued that Geithner should at least have a chance to flesh out his full program.

 

Nearly everyone started from the same sympathetic vantage point: The Treasury secretary has the hardest job in the world right now. At least the president gets to dole out tax breaks and host the Chicago Bulls and Stevie Wonder at the White House. Geithner is focused solely on preventing our wobbly financial system from totally collapsing. And he carries the bulk of the responsibility for convincing a divided Congress and an angry, mistrustful populace to give about a trillion dollars more of their money to many of the same greedy daredevils who helped bring our economy to this crisis point.

 

Nevertheless, many Democrats I heard from seriously questioned whether Geithner was the right man for this largely political task. By far the most common complaint was that Geithner has yet to show he has what it takes to instill confidence in the markets and on Main Street and build the political support to do what's necessary to stabilize our financial system. (A concern, I might add, that I share as well.)

 

Geithner himself acknowledged his and the White House's failures on this will-building front in a meeting Monday night with House Democrats. He reportedly promised to "come back as frequently as he needs to," in the words of one House leader.

 

But many Democrats I heard from doubted whether that would make much of a difference. One leading communications adviser said Geithner is "apparently incapable of articulating the problems and the solutions. He comes across as weak and lacking confidence--exactly the opposite of what we need." This Democrat went so far as to suggest that Geithner think about resigning at some point because "[his] problems are not fixable."

 

Another PR specialist said Obama made a "fundamental mistake" in appointing a Treasury secretary with no experience or presence in front of the klieg lights--one who could not project the resolve and confidence Obama himself did when he trumped John McCain on steadiness during the stretch run of last fall's campaign. "I think the appointment is one that the administration wishes it could do over," this Democrat said.

 

Interestingly, only a few Democrats I heard from strongly disagreed with the substance of Geithner's program or challenged Geithner's leadership on policy and ideological grounds. They largely echoed the complaints of E.J. Dionne and other progressives that Geithner and the White House have moved too timidly and slowly in solving the toxic assets problem. For the most part, the criticisms--even from the wonks--were over how the administration's policies were framed and explained. One senior policy expert spoke for many when he said: "I thought the housing roll out and the TARP II roll out was completely botched--it felt uncertain."

 

Another slightly more sympathetic wonk, who has both Washington and financial experience, said he thought that, in part, the reason people were criticizing Geithner's delivery was because "that was the only part of the program they understood." This Democrat also wondered whether Geithner was suffering from comparisons to his more eloquent boss, "who, unlike his predecessor, actually speaks English."

 

Geithner's defenders would similarly argue that most of the criticisms were just plain overblown--the result mostly of "one bad speech," said Morgan Stanley CAO Tom Nides, referring to Geithner's widely panned address unveiling the core of the administration's financial stability plan on Feb. 10.

 

Nides, a former Clinton-Gore adviser (and campaign colleague of mine), said some perspective is sorely needed. Given the unprecedented demands that have been placed on the Treasury Department, and the well-chronicled staffing difficulties that Geithner has been forced to deal with, Nides argued that to judge Geithner a liability or failure after seven weeks "is the craziest thing I have ever heard in my life."

 

Nides has had a bird's-eye view of every major move the Treasury Department's has made, and while he disagrees with some of the policy calls, he said what Geithner and his team have been able to accomplish in under two months is "unheard of." He pointed to the passage and implementation of the second round of TARP funding, the rescue of AIG (nyse: AIG - news - people ), two interventions with Citi (nyse: C - news - people ), the release of the Obama housing stabilization plan, the auto industry bailout plan and the formulation of a groundbreaking budget blueprint.

 

"These guys are drinking from a fire hose," explained Nides, who offered to go on the record. "We have to give them an opportunity to put these programs in place and some latitude to manage through this crisis."

 

This was the one point of universal agreement among the Democrats I heard from. Even Geithner's critics were willing to concede it would be premature to render any final verdict on the Treasury secretary's viability. But they widely diverged on what, if anything, Geithner could do to puncture the caricature SNL created and improve his political standing.

 

Some were deeply skeptical of Geithner's powers of persuasion and suggested that the best remedy was for Obama to find another public face for his financial rescue efforts. Others were more sanguine about the Treasury Secretary's ability to avoid becoming a permanent political punchline. "One strong, confident public Geithner appearance describing a promising economic plan would put most of the carping to rest," said one policy expert.

 

Almost all of them, though, ruled out any talk of replacing Geithner. Some said that extreme measure was totally inappropriate. Others said that whatever their doubts about Geithner, the political costs to Obama would be too damaging. "That said," one skeptic offered, "Dow [at] 5,500? That may do it."

 

Dan Gerstein, a political communications consultant and commentator based in New York, is the founder and president of Gotham Ghostwriters.He formerly served as communications director to Sen. Joe Lieberman, D-Conn., and as a senior adviser on his vice presidential and presidential campaigns. He writes a weekly column for Forbes.

[southsider2k5]

Straight from the man himself...

 

http://online.wsj.com/article/SB123672965066989281.html

 

The Fed Didn't Cause the Housing Bubble

Any new regulations should help direct savings toward productive investments.

 

By ALAN GREENSPAN

 

We are in the midst of a global crisis that will unquestionably rank as the most virulent since the 1930s. It will eventually subside and pass into history. But how the interacting and reinforcing causes and effects of this severe contraction are interpreted will shape the reconfiguration of our currently disabled global financial system.

[Commentary] Chad Crowe

 

There are at least two broad and competing explanations of the origins of this crisis. The first is that the "easy money" policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today's financial mess.

 

The second, and far more credible, explanation agrees that it was indeed lower interest rates that spawned the speculative euphoria. However, the interest rate that mattered was not the federal-funds rate, but the rate on long-term, fixed-rate mortgages. Between 2002 and 2005, home mortgage rates led U.S. home price change by 11 months. This correlation between home prices and mortgage rates was highly significant, and a far better indicator of rising home prices than the fed-funds rate.

 

This should not come as a surprise. After all, the prices of long-lived assets have always been determined by discounting the flow of income (or imputed services) by interest rates of the same maturities as the life of the asset. No one, to my knowledge, employs overnight interest rates -- such as the fed-funds rate -- to determine the capitalization rate of real estate, whether it be an office building or a single-family residence.

 

The Federal Reserve became acutely aware of the disconnect between monetary policy and mortgage rates when the latter failed to respond as expected to the Fed tightening in mid-2004. Moreover, the data show that home mortgage rates had become gradually decoupled from monetary policy even earlier -- in the wake of the emergence, beginning around the turn of this century, of a well arbitraged global market for long-term debt instruments.

 

U.S. mortgage rates' linkage to short-term U.S. rates had been close for decades. Between 1971 and 2002, the fed-funds rate and the mortgage rate moved in lockstep. The correlation between them was a tight 0.85. Between 2002 and 2005, however, the correlation diminished to insignificance.

 

As I noted on this page in December 2007, the presumptive cause of the world-wide decline in long-term rates was the tectonic shift in the early 1990s by much of the developing world from heavy emphasis on central planning to increasingly dynamic, export-led market competition. The result was a surge in growth in China and a large number of other emerging market economies that led to an excess of global intended savings relative to intended capital investment. That ex ante excess of savings propelled global long-term interest rates progressively lower between early 2000 and 2005.

 

That decline in long-term interest rates across a wide spectrum of countries statistically explains, and is the most likely major cause of, real-estate capitalization rates that declined and converged across the globe, resulting in the global housing price bubble. (The U.S. price bubble was at, or below, the median according to the International Monetary Fund.) By 2006, long-term interest rates and the home mortgage rates driven by them, for all developed and the main developing economies, had declined to single digits -- I believe for the first time ever. I would have thought that the weight of such evidence would lead to wide support for this as a global explanation of the current crisis.

 

However, starting in mid-2007, history began to be rewritten, in large part by my good friend and former colleague, Stanford University Professor John Taylor, with whom I have rarely disagreed. Yet writing in these pages last month, Mr. Taylor unequivocally claimed that had the Federal Reserve from 2003-2005 kept short-term interest rates at the levels implied by his "Taylor Rule," "it would have prevented this housing boom and bust. "This notion has been cited and repeated so often that it has taken on the aura of conventional wisdom.

 

Aside from the inappropriate use of short-term rates to explain the value of long-term assets, his statistical indictment of Federal Reserve policy in the period 2003-2005 fails to address the aforementioned extraordinary structural developments in the global economy. His statistical analysis carries empirical relationships of earlier decades into the most recent period where they no longer apply.

 

Moreover, while I believe the "Taylor Rule" is a useful first approximation to the path of monetary policy, its parameters and predictions derive from model structures that have been consistently unable to anticipate the onset of recessions or financial crises. Counterfactuals from such flawed structures cannot form the sole basis for successful policy analysis or advice, with or without the benefit of hindsight.

 

Given the decoupling of monetary policy from long-term mortgage rates, accelerating the path of monetary tightening that the Fed pursued in 2004-2005 could not have "prevented" the housing bubble. All things considered, I personally prefer Milton Friedman's performance appraisal of the Federal Reserve. In evaluating the period of 1987 to 2005, he wrote on this page in early 2006: "There is no other period of comparable length in which the Federal Reserve System has performed so well. It is more than a difference of degree; it approaches a difference of kind."

 

How much does it matter whether the bubble was caused by inappropriate monetary policy, over which policy makers have control, or broader global forces over which their control is limited? A great deal.

 

If it is monetary policy that is at fault, then that can be corrected in the future, at least in principle. If, however, we are dealing with global forces beyond the control of domestic monetary policy makers, as I strongly suspect is the case, then we are facing a broader issue.

 

Global market competition and integration in goods, services and finance have brought unprecedented gains in material well being. But the growth path of highly competitive markets is cyclical. And on rare occasions it can break down, with consequences such as those we are currently experiencing. It is now very clear that the levels of complexity to which market practitioners at the height of their euphoria tried to push risk-management techniques and products were too much for even the most sophisticated market players to handle properly and prudently.

 

However, the appropriate policy response is not to bridle financial intermediation with heavy regulation. That would stifle important advances in finance that enhance standards of living. Remember, prior to the crisis, the U.S. economy exhibited an impressive degree of productivity advance. To achieve that with a modest level of combined domestic and borrowed foreign savings (our current account deficit) was a measure of our financial system's precrisis success. The solutions for the financial-market failures revealed by the crisis are higher capital requirements and a wider prosecution of fraud -- not increased micromanagement by government entities.

 

Any new regulations should improve the ability of financial institutions to effectively direct a nation's savings into the most productive capital investments. Much regulation fails that test, and is often costly and counterproductive. Adequate capital and collateral requirements can address the weaknesses that the crisis has unearthed. Such requirements will not be overly intrusive, and thus will not interfere unduly in private-sector business decisions.

 

If we are to retain a dynamic world economy capable of producing prosperity and future sustainable growth, we cannot rely on governments to intermediate saving and investment flows. Our challenge in the months ahead will be to install a regulatory regime that will ensure responsible risk management on the part of financial institutions, while encouraging them to continue taking the risks necessary and inherent in any successful market economy.

 

Mr. Greenspan, former chairman of the Federal Reserve, is president of Greenspan Associates LLC and author of "The Age of Turbulence: Adventures in a New World" (Penguin, 2007).

 

 

 

Please add your comments to the Opinion Journal forum.

[Balta1701]

Was going to note this here yesterday just as the site went down...the guest tonight on the Daily Show with Jon Stewart? One James Cramer.

[southsider2k5]

Was going to note this here yesterday just as the site went down...the guest tonight on the Daily Show with Jon Stewart? One James Cramer.

 

But that blows up the whole NBC media conspiracy theory!

[KipWellsFan]

So, if he does it just a little bit, as long as it's less than W, and as long as it is for the good of the people, that's ok. Yeah, It's always different. Pretty much the response I expected.

 

Actually that's not what I said at all. What I really said was, only time will tell whether Obama decides to use signing statements in a more limited way.

[kapkomet]

Actually that's not what I said at all. What I really said was, only time will tell whether Obama decides to use signing statements in a more limited way.

I like his signing statement on the earmark budget bill... Obama is scared to face anyone on this one.

 

[lostfan]

I like his signing statement on the earmark budget bill... Obama is scared to face anyone on this one.

Even if he did nothing would happen, Congress would just tell him to f*** off the same they would any president (hence my earmarks = drama queens thread).

[kapkomet]

Even if he did nothing would happen, Congress would just tell him to f*** off the same they would any president (hence my earmarks = drama queens thread).

Yea, I understand.

 

My whole point is he needs to quit being a pretty boy when none of this will change.

[southsider2k5]

Even if he did nothing would happen, Congress would just tell him to f*** off the same they would any president (hence my earmarks = drama queens thread).

 

So what. How do you actually "change" things if you are afraid to stand up for anything? That is a complete copout. Grow a set.

[southsider2k5]

We should be out of this recession in no time!

 

http://sutton.house.gov/news/floorstatement.cfm?id=56

 

I rise today in support of the underlying legislation H.R. 1262, the Water Quality Investment Act of 2009.

 

This bill provides a total investment of $18.7 billion over five years for much needed water and environmental infrastructure.

 

Not only will this bill help provide communities with improved water quality, but it must be remembered that it will create over 480 million jobs.

 

H.R. 1262 provides $13.8 billion in federal grants to the Clean Water State Revolving Fund over the next five years.

 

This fund provides low-interest loans to our communities, so they can repair wastewater infrastructure. And that is desperately needed.

 

Like much of the nation's infrastructure, wastewater systems are aging, and in dire need of repair or in some cases replacement.

 

And I am also pleased that this legislation includes a "Buy American" provision. This provision will require that steel, iron and other manufactured goods used for the construction of these water projects are produced here in the United States.

 

The economic downturn has taken a toll on U.S. manufacturing -- including the steel plants in my district in Ohio -- and we need to put Americans back to work doing work that America needs to have done.

 

This bill also contains Davis-Bacon protections requiring that the workers who do this work will be paid the local prevailing wage -- a wage that will ensure workers are able to provide for their families. Which is all they are looking to do.

 

Last year, Congress passed The Great Lakes Legacy Act to clean up contaminated, toxic sediments that are endangering families and communities throughout the Great Lakes Basin, which is an area home to approximately 40 million people in 8 states including Ohio.

 

As you recall, the House-passed version of the bill provided $150 million each year through fiscal year 2013 for cleaning up the Great Lakes.

 

However, our colleagues on the other side of the Capitol operate under different floor rules. And, one Senator was able to block action on the bill until funding levels for this program were cut by two-thirds.

 

This bill also restores the funding level for Great Lakes Legacy Act projects to the level initially - and overwhelmingly - passed by the House last September.

 

The residents of the Great Lakes Basin have been waiting far too long for these toxic sites to be cleaned up. The funding in this bill will allow for the cleanup of all contaminated sediment in the Great Lakes region by 2020.

 

For these reasons, I urge a yes vote on the rule and underlying bill.

[Cknolls]

http://www.ktul.com/news/stories/0309/603499.html

 

 

WTF???

[EvilMonkey]

Now that Obama has the controls, let's see what HE does to the US Attorneys, and how it's treated in the press. Does he fire some like Bush and get accused of playing politcs, of fire them all and be ignored by the media like Clinton.

 

WaPo wonders which it will be.

http://www.washingtonpost.com/wp-dyn/conte...9031203736.html

 

Meanwhile he has already sought to replace one of his more vocal ctitics, Missouri US Attorney Catherine Hanaway, with St. Louis County Prosecuting Attorney and Democrat Bob McCulloch, who was one of the members of Obama’s un-American threat to free political speech called the “truth squad” that made the news during the campaign. McCulloch claimed during the campaign that he thought it was a good idea to use the law to attack Obama’s political opponents.

 

http://www.ksdk.com/news/local/story.aspx?storyid=169660

[KipWellsFan]

Now that Obama has the controls, let's see what HE does to the US Attorneys, and how it's treated in the press. Does he fire some like Bush and get accused of playing politcs, of fire them all and be ignored by the media like Clinton.

 

WaPo wonders which it will be.

http://www.washingtonpost.com/wp-dyn/conte...9031203736.html

 

Meanwhile he has already sought to replace one of his more vocal ctitics, Missouri US Attorney Catherine Hanaway, with St. Louis County Prosecuting Attorney and Democrat Bob McCulloch, who was one of the members of Obama’s un-American threat to free political speech called the “truth squad” that made the news during the campaign. McCulloch claimed during the campaign that he thought it was a good idea to use the law to attack Obama’s political opponents.

 

http://www.ksdk.com/news/local/story.aspx?storyid=169660

 

I don't really understand this. It seems like Obama is legally allowed to replace these US Attorneys, but why was Bush not allowed to do the same?

[kapkomet]

I don't really understand this. It seems like Obama is legally allowed to replace these US Attorneys, but why was Bush not allowed to do the same?

This would be why Karl Rove and Harriet Miers are getting thier asses dragged in front of Congress. I don't know why Bush couldn't do the same, either, but apparently it's different for Democrats when they do the same damn thing, like fire the whole staff like Clinton did.