Archive for the Greenspan Category

One Book Wonders: Scan Another Book (September 29, 2014)

Posted in Awards / Incentives, Banks and Banking System, Bernanke, Book Reference, Economics, Economics Nobel, Education, Greenspan, Minimum Wage, Monopoly on September 29, 2014 by e-commentary.org

. . .

1          “Two books do offer more insight.  But that is just me.”

2          “Three if you have a spare three-day weekend.”

. . .

1          “Former Chief Justice William Rehnquist often said that his world view was strongly influenced by a book he read as a young man, The Road to Serfdom, by Friedrich von Hayek.  The best-seller was published in 1944 during the last days of World War II.”

2          “I can see why Fred’s missive captivated the young private from Milwaukee.  He was conscripted by Big Government to fight other privates conscripted by other Big Governments.  Fred warned of the dangers of what he called collectivism and big government and predicted that the path to socialism, the ‘road to serfdom’ of his title, would eventually collapse.  The world sure looked like it was collapsing.”

1          “My original edition notes that the printing has been redesigned by the publisher to conform to the government’s request to conserve paper during that War.  Government making reasonable requests?”

2          “The government was right, we tattoo far too many fallen trees.  My copy warns the reader right on the cover that Fred may not have any idea what he is talking about.  The publisher warns the prospective purchaser that Hayek got the Nobel Prize in E-con-omics.”

1         “What if Rehnquist had stumbled on a book that warned of the dangers of raw selfishness and big corporations and predicted that the path to corporatism and kleptocracy, the ‘road to serfdom’ of the new publication, would eventually collapse.”

2          “Fred lived during a period of time when the governments of many world powers, at the direction of their military and financial elites, marketed much evil and inflicted great pain, grief, and violence on the world.  His distrust is not unfounded but myopic.”

1          “He intuits that big is often bad, but he only got half the story right.  We do not have a market economy.  Today, Big Government is Big Business; Big Business is Big Government.  Sit down and analyze the major industries in America.  Each one of them is monopolized.  The business is the industry; the industry is the business.  In this Internet era, when someone concocts a new application or gizmo, that person has a monopoly on the application or gizmo.”

2          “We are racing down the road to serfdom.  Yet the guvmit, not the private sector, has always enforced speed limits.”

1          “The government is a wholly-owned subsidiary of the monopoly corporations.  There are now no limits and no governors.”

. . .

1          “Let’s say that someone is deeply and genuinely concerned about the road to serfdom.  Would the concerned citizen support a higher minimum wage or not?  The folks who have minimum wage jobs today are serfs.  They are at the end of the road to serfdom in a hopeless cul-de-sac.  If the rate is raised, some folks will lose some of their serf status and yet a few may lose their job.”

2          “What I have noticed is that the opponents of a minimum wage increase do not give a hoot about the workers and only seek to do everything to cut the costs for the Owners.”

1          “Now that you mention it, Fred surely would support an increase in the minimum wage to avoid the nefarious road to serfdom.”

2          “What happened to Bill along his journey?”

. . .

1          “In The Age of Turbulence, Alan ‘Easy Al’ Greenspan describes the influence that Ayn Rand had on his intellectual development.  So many young men are distracted by shiny objects.”

2          “So many things in life just are not a surprise.”

1          “Raw self-interest is not genius, but it sure does appeal to our baser instincts.”

2          “And it advanced her and his financial interests.”

1          “But not ours.  I do not hold her exclusively responsible for the economic violence that he unleashed on the world, yet she is at the top of the list.”

. . .

1          “Think about the folks who look to the Good Book and only the Good Book for insight and inspiration.  At one time, a person could only carry one gun, one knife, one bed roll and one book.  That book was dubbed the Good Book.  The struggle to exist limited one’s time to contemplate one’s existence.  Space only allowed for one book and time only allowed for reading one book that had to provide all the answers.”

. . .

1          “Those who have access to more resources need to get a life.  And scan a second book.”

2          “Asking someone to read two books is a lot to ask.  Life is short.”

. . .

1           “When the smarter gender takes over, Nancy Drew will reign supreme.”

. . .

[Banned Book Week – September 21 – 27]

[Search the name “Carmen Segarra” on the Internet.  She should receive the Profile in Courage Award for 2014, but it will likely go to someone like Greenspan or Bernanke.  See the previous e-ssay at Profile In Cowardice Award (May 12, 2014).]

Bumper stickers of the week:

Scan a book, don’t ban books.

Read a second book; get a second opinion.

What we really need is a moment of science in the public schools.

Debasing The Dialogue (April 14, 2014)

Posted in Federal Reserve, Foreign Policy, Greenspan, Journalism, Newspapers, Press/Media, Yellen on April 14, 2014 by e-commentary.org

. . .

C          “Too much commentary today is an ‘elbow-jerk’ cut and paste operation.  The citizen who questions whether the government should subsidize and encourage the crimes of the bankers and financial brigands is branded a ‘populist’ and a promoter of ‘populism’.”

D          “Populist notions should be more popular.  The dismissive missives also include a subtext that the person does not really understand economics, business and finance.  Just trust that the emperor is sporting natty attire and doing good and go on your way.”

C          “The blue serge suit hides the red devil.  Time magazine published a fawning piece in February, 1999 about three brigands – Summers, Greenspan and Rubin – and failed to warn the reader let alone even acknowledge the fraud these characters were fomenting on the public.”

D          “At least Yellen is a gal.  God and others know that the boys just do not get economics, business and finance.  They know how to exploit and plunder, but not how to contribute and develop.”

C          “She is doing things the same old way without acknowledging the fundamental problems.”

D          “The same old, same old is getting old.”

. . .

C          “The citizen who questions whether the United States should be aggressively engaged in a variety of wars with no real goal or strategy is dismissed as an ‘isolationist’ and a promoter of ‘isolationism’.”

D          “And of course not a realist or a highly coveted Realpolitiker.  And not someone whose contentions should be considered by reasonable folks.”

C          “Some people want to drop bucks and some people want to drop bombs.”

D          “We dump bucks and bombs.  Some folks are troubled that we finance dictators and then in time attack them.”

. . .

D          “Kill ‘em all and let God sort ‘em out seems to be the policy.”

C          “For some characters, blind ideology controls.  The issue turns on whether God is in the public sector or in the private sector.”

D          “Now there is one for you. God qua contractor.  Miller Act bonds and Davis-Bacon wage scales would drive God batty.  I can see the headline now: ‘God Overbills For Sorting Them Out: Congressional Inquiry Scheduled.’”

. . .

Bumper stickers of the week:

Kill ‘em all and let God sort ‘em out

Keep calm and panic

The Kids (At The Fed) Are Not Alright (January 30, 2012)

Posted in Banks and Banking System, Bernanke, Federal Reserve, Greenspan, Kleptocracy, Prison/Criminology, Society on January 30, 2012 by e-commentary.org

. . .

K          “They sound like a bunch of seventh graders snapping their towels in the locker room and squealing at each other.”

J          “Seems that the model of adult life as ‘high school writ large’ has degenerated into ‘junior high school writ large.’”

K          “Civilization may be on the retrograde as our society slides into collapse.  Our national destiny may be heading toward a state of ‘kindergarten writ large.’  Too many of our politicians have problems ‘playing well with others.’  At least at the Fed, the clowns were all playing ‘Ring Around The Rosie’ with each other while disregarding the decline outside.”

J          “The Fed should be required to release transcripts every year rather than after five years.  What is transpiring and conspiring is too important to wait.”

K          “Years ago, the notion of ‘Groupthink’ was trendy.  The idea is that a group may be more concerned about maintaining harmony that developing a realistic perception of the situation they confront.  You wonder if even one of the Fed economists was writing internal e-mails warning of what was obvious to anyone who looked outside.”

J          “And got together after work with a friend over a beer and despaired about the situation.”

. . .

K          “Grab a sheet of paper and jot down the names of three individuals, trained as economists or not, who have a clue about what is going on in the economy.”

J          “. . .  How about two?”

K          “Two will do.”

J          “. . .  I am working on it.  . . .  How about one?”

K          “One is a start.”

J          “. . .  Can I have until tomorrow?”

K          “Take your time.  Larry Summers’ statement about women in scientific disciplines may be 180 degrees from the truth.”

J          “Summers is reliable because he is reliably wrong especially about the ‘dismal science.’”

K          “The only individuals who have a clue in our society about our economic circumstances are women – Brooksley Born, Sheila Bair, Elizabeth Warren, Yves Smith, Nicole Foss, Gretchen Morgenson, Terry Gross, Christine Lagarde, etc.”

J          “That is because women care.  When you think about it, the forte of our fellow males is starting wars and filling prisons.  When you get right down to it, the males who start the wars should fill our prisons.”

K          “Talent is a mix of a tutored and sage intellect, personal and intellectual integrity, and good old-fashioned courage.  America simply does not have talent at the top.  The élite is not élite.  And the current feeder system of universities, foundations and fellowships is designed to ferret out the same charlatans and promote them into positions of power in America.”

. . .

[See the article and comments in “The Washington Post” discussing the delusions at the Federal Reserve Bank six years ago at http://www.washingtonpost.com/business/economy/greenspan-image-tarnished-by-newly-released-documents/2012/01/12/gIQAvh0mtP_story.html.]

[See the “Frontline” program titled “The Warning” discussing the shenanigans of Greenspan, Summers, Rubin and their ilk and the courage of Brooksley Born at http://www.pbs.org/wgbh/pages/frontline/warning/.]

[See the “e-ssay” uploaded exactly six years ago to the minute titled “Greenspan’s Legacy – Apres moi, Le Meltdown (January 30, 2006).”]

Bumper stickers of the week:

The nerds won, but not the smart or courageous ones.

What clothes is the Emperor not wearing today?

Plus ca change . . .

Rational Fear: Still “Unusually Uncertain” (November 8, 2010)

Posted in "L" Shaped Economy, Bailout/Bribe, Banks and Banking System, Bernanke, Depression, Federal Reserve, Greenspan, Kleptocracy, Technology, Unemployment, Volker with tags on November 8, 2010 by e-commentary.org

. . .

K         “Think about it.  Some maintain the blind conviction that the business cycle is ordained by nature like the tides to rise after it falls.”

J          “Faith in nature.  This season is bad so that the next season will be good because that is the way it is.  Good luck.”

K         “Some desire to return to unrestrained personal consumption and unbridled economic growth.  Even if it is attainable at this time it is not sustainable over time.”

J          “Faith in unchecked consumption.  With oil peaking and a world population that has not peaked, the prospects are not promising.  America had its opportunity to consume.  Other countries, particularly China and India, now want and have earned their opportunity to consume.  If the oil holds out.  And if the coal does not kill us.”

K         “Some believe that new technology will be pulled out of the hat and pull us out of this mess.”

J          “Faith in technological salvation.  The technology sector likely will continue to grow but not enough to propel the entire economy.  The tech world is producing some sexy developments and neat gadgets.”

K         “I’ve always supported free trade when it is truly free.  Decades ago, I could see that globalization would shift massive numbers of American jobs overseas.  They said the solution is to train and retool the America workforce.  The workforce is not retrained and retooled and may not be retrainable and retoolable.  Not many commentators in academic economics or in the financial press have a clue.”

J          “It is one thing to listen to Greenspan and know that everything he says is wrong, yet who is getting it right.  Knowing which way not to go in a maze is not the same as knowing which way to go.  Volker has a clue, yet he is on the sidelines.”

K         “Bernanke* has a clue.  Now that monetary policy has effectively failed, he is enacting what is effectively fiscal policy.  Fiscal policy is the province of the legislature, the Congress.  But Congress is broken.  The Humphrey-Hawkins Full Employment Act, an act of Congress, requires the Fed to promote full employment.  Perhaps he is actually trying to stimulate employment.”

J          “But there are no jobs, now or in the future.  Quantitative Easing II is nothing more and nothing less than TARP II implemented by the Fed rather than Congress.  The Fed’s purchase of bonds is nothing more and nothing less than a slick way to provide another bribe and bailout to Wall Street.”

K          “That is hard to dispute unless there are a few random hires here and there.  And he continues a tradition at the Fed of lying or at least deceiving the public.  He can do something.  He and the Fed regularly issue ‘Remarks’ and ‘Speeches’ on all manner of topics.  He should direct the Fed to issue a finding that a single bank with deposits and assets of more than 100 billion is a clear and present danger to the American economy and to the security and well-being of the Republic.  If a bank or other financial institution does not enter into an Enforcement Action with the Fed, close the resources of the Federal Reserve to the bank or financial institution.  In effect, require banks to downsize to manageable sizes.  They must be small enough to fail and to play well with others.”

J          “Won’t happen.  Our democracy is now a kleptocracy.”

K         “That won’t help employment, however.  But he could pull it off.  He can be bold.  He would have to play all his capital.  But for us citizens, however, the only things we have to fear are so many very real fears.”

. . .

Bumper stickers of the week:

The only things we have to fear are so many very real fears.

Don’t end the Fed, mend the Fed.

“And as things fell apart/Nobody paid much attention.”  “(Nothing But) Flowers” – Talking Heads

“This country’s hard on people, you can’t stop what’s coming.”  No Country for Old Men movie (2007)

The Double Ought (00) “Decadent Decade” (January 4, 2010)

Posted in Afghanistan, Bailout/Bribe, Bernanke, Bush, China, Congress, Debt/Deficits, Economics, Federal Reserve, Foreign Policy, Greenspan, Health Care, Housing, Iraq, O'Bama, Presidency, Supreme Court on January 4, 2010 by e-commentary.org

1999:  No major wars yet percolating problems in a dozen venues; budget deficit surplus of about 236 billion dollars, although Bush inherited about a 5.7 Trillion dollar National Debt; and a boiling but unstable and slowly cooling economy.

The decade that threatened to come in with a bang sauntered in with only the traditional fire works.  Y2K may have been such an epic universal non-event because everyone realized that it was a real deadline that could neither be disregarded nor overlooked.  It was not Y2.001K.  Problems were timely addressed in a timely manner in time.  That was not the attitude for the remainder of the decade.

An outwardly non-descript and largely unknown bumbling scion who had been shepherded by others for their own purposes through an uneventful life was appointed by the Supreme Court to run things.  The ship of state sailed uneventfully for a time.  A written invitation to impending disaster delivered to and disregarded by the White House in August, 2001 was honored in September, 2001 by a quartet of airships.  The course of action was simple.  Know who we are and remain faithful to who we are.  Stay our course.  Redouble our vigilance and redouble it again (and redouble it one more time).  Too many in power and influence in the country lost their heads.  Leadership was non-existent.

A perfect storm.  An obscenely incompetent President, a flagitious and arrogant vice-President, a smug, bungling and petulant Secretary of War/Defense (Rumsfeld), hamstrung Secretaries of State (Powell and Rice), a mendacious Secretary of the Treasury in the second term (Paulson), a marginal Attorney General (Gonzales) and their ilk were not the Dream Team.  The damage they inflicted in the decade will take decades to repair.

Bush proclaimed that WeMaD (Weapons of Mass Destruction) and almost everyone joined in the madness.  No one ever made a compelling case for the invasion of Iraq.  The national press (WP, NYT and so many others) yearned for war, any war, just give us a war with photo ops and film at eleven.  The major television networks (NBC, CBS, ABC, Faux) were thrilled and went wild with glee.  It was a time, the only time, to watch their coverage non-stop to bear witness in real time to the folly and the madness.  The few dissenting voices (Warren Strobel and Jonathan Landay with Knight Ridder’s Washington Bureau, Terry Gross and guests with NPR/Fresh Air, Walter Pincus with the WP and a few dozen other courageous individuals) did not reach a wide audience.  They were voices in the darkness.  The Iraq quagmire is the greatest foreign policy blunder in American history.

Deficit spending and economic looting became the national pastimes.  Almost everyone involved in directing and controlling the economy (Reagan, Gramm and Rubin in earlier decades with the assistance of Bush, Greenspan, Paulson, C. Cox, Geithner, Summers and others in this decade) almost without exception (Brooksley Born and a few others) were committed to undermining the American economy at every opportunity for the benefit of a few.  One must concede that they succeeded handsomely.  Although they are domestic economic terrorists, their activities never became the subject of the vaunted “war on terror.”  No one ever made a compelling case for the bribery and bailout of Wall Street.  Bernanke* remains the enigma, the outsider and the ultimate insider, who did not recognize what was obvious before and after he became Chairman in February, 2006 and disregarded the advice of his colleague Edward Gramlich.

The first African-Irish-American was elected President.  There were a few things they did not tell him before he got elected that he learned quickly after he got elected.  He re-nominated Bernanke* to run the Federal Reserve which may be the only option given the limited economic talent in America.  His appointments to date are adequate, yet the administration is still seeking traction and direction.  Health care is becoming his domestic economic quagmire.  Although it is not really the job of the government to provide jobs and/or homes, the populace wants a job to go to during the day and a house to come home to at night.

About the House.  And the Senate.  Congress could be declared a natural disaster area.  The Republicans are useless, the Democrats are not particularly useful.  Forty-five percent of Americans respond to and are motivated by fear and loathing; the Republicans know and stoke their base.  The Republicans may make great strides in the November elections.  The party committed to destroying government may again be given that opportunity.

The nine members of the Supreme Court are more myopic and narrow-minded than just about any other Court in the history of the Republic.  The Court sports two religions (with one exception), two schools (with one exception), and two (mas o menos) schools of thought (with a few exceptions), yet it has two women, too.  The war at the Court and for the Court continues.  O’Bama may have an impact, although the impact of the economy on O’Bama’s future will greatly impact his impact on the Supreme Court.

The profit-maximizing universities in America should be part of the solution, but they are part of the problem; they may be more accurately described as part of the process and the processing.  They recruit, train and drill the next McNamaras and Rumsfelds.  To their credit, they adhere to a thirty-year business plan rather than the three-month strategy pursued by other businesses.

The information made public in the National Intelligence Reports over the decade patiently and exhaustively chronicles the decline of America’s role in the world after six decades of preeminence.  America has done much wrong during that time, yet America has done far, far, far more good, often with resentment and usually without thanks.  On balance, everyone is better off with the United States as the dominant superpower.  This is China’s century.

Now:  Multiple wars, battles, skirmishes and police actions with two major foreign base camps (Iraq and Afghanistan); massive and growing deficits and about a 12.3 Trillion dollar National Debt; zero private-sector employment gain and zero economic gain for the average family over the decade; and no industry to inflate other than the federal government industrial complex.

[See the “e-ssays” dated Jan. 5, 2009 titled “The Millennium to Date”; dated October 6, 2008 titled “A Bleak Day:  The Trillion Dollar Tragedy”; dated September 29, 2008 titled “Futile Efforts”; dated May 4, 2009 titled “Picking the Supreme Beings”; dated May 14, 2007 titled “Term Limits”; and dated Jan. 30, 2006 titled “Greenspan’s Legacy:  Apres moi, Le Meltdown.”]

Bumper stickers of the week:

The Recession is Over.

The Recession is Over; Let the Depression Begin

Halcyon Ano Nuevo

Bernanke 2.0 (August 31, 2009)

Posted in Bernanke, Economics, Federal Reserve, Greenspan, Volker on August 31, 2009 by e-commentary.org

Bush’s best appointment is one of O’Bama’s better reappointments.  Bernanke is not the best choice yet is the right choice at this time.  Yet there should be some reservation about and reflection on the entire Federal Reserve scheme.

The Founding Fathers as they are known could not agree on the creation of a central bank.  The issue was at the heart of many early presidential elections.  Every sovereign nation needs a central bank.  The bankers created a central bank in 1913 and filled the vacuum.  America must examine the role of the Federal Reserve and incorporate it into our constitutional system characterized by a separation of powers and accountability to the populace.

The central bank has a history of competent and independent chairmen such as Paul Volker who pursued some harsh policies with painful but necessary consequences without any significant political intervention.

Alan Greenspan, a conservative Republican, acted as the “central planner” of the economy for far too may years with devastating consequences.  At least he has enough integrity and self-awareness to admit some mistakes.  Some thoughtful political intervention was appropriate and necessary during his tenure.

Faith in the Fed. has dissuaded Congress from taking more direct control and dictating policy.  Legislation such as the Humphrey-Hawkins Full Employment Act does set some guidelines and parameters.  However, the Fed cannot and should not attempt to establish full employment.

At this time, Ben Bernanke is determining both “monetary policy” and “fiscal policy.”  Fiscal policy has been and should be the province of Congress.  Monetary policy should focus on price stability.

Who should address these matters?  The politicians.  That should give one pause and yet motivate us to act.

Bumper sticker of the week:

Price stability

Housing Revisited (June 22, 2009)

Posted in Case-Shiller/S&P Index, Depression, Economics, Greenspan, Housing, Recession on June 22, 2009 by e-commentary.org

Four years have past, four summers, with . . . the housing market continuing to deteriorate.  The cover of the June 18 – 24, 2005 edition of “The Economist” depicts a falling brick with the words “House Prices” on it and leads with an article entitled “After the fall.”  The article and earlier articles in the magazine were prescient in warning about the explosive rise and pending collapse of house prices.  In conclusion, the article notes:

“Of course, by the time American prices begin to fall, probably sometime next year [2006], they will not be Mr. Greenspan’s headache.  He will have retired and someone else will be in his job.  If weaker house prices push the economy towards recession, the awkward truth is that America’s policymakers will have much less room to manoeuvre than they did after the stock market bubble burst.  Short-term interest rates of only 3% leave less scope for cuts.  In 2000, America had a budget surplus.  Today, it has a large deficit, ruling out big tax cuts.

The whole world economy is at risk.  The IMF has warned that, just as the upswing in house prices has been a global phenomenon, so any downturn is likely to be synchronized, and thus the effects of it will be shared widely.  The housing boom was fun while it lasted, but the biggest increase in wealth in history was largely an illusion.”

In the last few weeks, when someone applied for a building permit to construct a 12 by 16 foot shed, too many commentators were ready to proclaim the housing crash ended.  Few seem to realize that the housing market is just starting to crash.  The infection is now impacting families with reasonable fixed-rate 30-year mortgages and long-term ties to their communities who are losing their jobs and will soon lose their homes.

Until housing prices drop to at least the extrapolated historical levels of a bench mark such as the S&P/Case-Shiller Home Price Indices, the decline in prices will continue.  The Federal Funds Rate is zero which eliminates the primary tool to shape economic events.  The Fed is creating other gimmicks to stimulate the economy that are unwise, unwarranted and unfounded in law.  More later.

Bumper stickers of the week:

Still pushing hard on a string

Everything that goes down does not necessarily go up