25 thoughts on “Professor Danger”

  2. Kurt

    John McCain MUST seize this opportunity to get on the phone with house democrats and republicans and get this bill passed. if he can do that he will win this election EASILY.
    If he can’t do that it will be tougher but still doable. the election is still 3 debates + many more ads and appearances away.

  3. Elliot

    O. K. All you house democrats that are sitting by the phone waiting to get persuaded by John McCain raise your hand……(pause) C’mon there don’t be shy there’s got to be at least one of you…..(pause) Nobody????

    I’m sure that everybody in congress is going to listen to the guy who said the economy was strong less than two weeks ago..

    e.

  4. Ben

    If we sent John McCain up to fix Hubble on the shuttle flight as previously scheduled and negotiated a bailout deal in the interim, that might solve several problems at once. Except the LHC, but that is Old Europe’s fault.

  5. Kurt

    McCain needs to reach out to house democrats and republicans.
    If he can’t reach out to dems then he can at least reach to repubs.
    At the same time Pelosi needs to reach out to the 95 dems who voted against the bailout. She just needs about a dozen of them to come on board and this thing will be a done deal. Why aren’t the dems listening to Pelosi? Why didn’t Obama do anything to try to convince even one of the 95 dems to come on board???
    He only criticizes, blames and profits because he has a D after his name. That is worse than the same old politics.

    Harry Reid needs McCain to tell him what to do:
    http://www.youtube.com/watch?v=j3f0BwyZKMw

    Obama is “monitoring the situation by phone” he says on CNN. Yeah he gets paid like 200,000 per year to be a senator and he is monitoring the greatest economic crisis to hit the USA ever by PHONE.

    Then he goes on to say “if they need me they’ll call me”. Way to go! That is real change! When all goes to hell they need to CALL HIM.

    Obama knows nothing about the economy. he doesn’t inspire confidence.
    Frankly, neither of them do. Only Hillary did. This election would be a landslide if she was the candidate. It’s still way too close for comfort. Expect the polls to tighten again in a week or so.

  6. spyder

    the most dangerous times need the professor, and he has risen to the challenge. everything feels somehow better already.

  8. Michael Bérubé

    Yeah he gets paid like 200,000 per year to be a senator and he is monitoring the greatest economic crisis to hit the USA ever by PHONE.

    Wow, this is hardcore. Thank god your guy is completely on top of this one! He inspires confidence, and that Palin was an inspired pick. Whereas Hussein al-Obama’s advisors stay on the sidelines and tell reporters that he doesn’t need to be on Capitol Hill because “he can effectively do what he needs to do by phone.”

    Oops, that was McCain advisor Mark Salter. Oh, well. We’ll get better regurgitated GOP talking points in blog comment sections soon, probably when McCain suspends his campaign again.

  9. Kurt

    Obama is all for deregulation (except when it’s politically expedient)
    Nobody knows what Obama stands for:

    WALLACE: Over the years, John McCain has broken with his party and risked his career on a number of issues — campaign finance, immigration reform, banning torture.

    As a president, can you name a hot-button issue where you would be willing to buck the Democratic Party line and say, “You know what? Republicans have a better idea here?”

    OBAMA: Well, I think there are a whole host of areas where Republicans in some cases may have a better idea.

    WALLACE: Such as?

    OBAMA: Well, on issues of regulation. I think that back in the ’60s and ’70s a lot of the way we regulated industry was top-down command and control, we’re going to tell businesses exactly how to do things.

    And you know, I think that the Republican Party and people who thought about the markets came up with the notion that, “You know what? If you simply set some guidelines, some rules and incentives, for businesses — let them figure out how they’re going to, for example, reduce pollution,” and a cap and trade system, for example is a smarter way of doing it, controlling pollution, than dictating every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and oftentimes is less efficient.

  10. Michael Bérubé

    Uh, Kurt, when the subject is regulation of the financial industry, you should look for something Obama has said about, you know, regulation of the financial industry. Like this speech from March of this year, for example. Full text available on an Internet near you, but you can start with this excerpt right here:

    Let me be clear: the American economy does not stand still, and neither should the rules that govern it. The evolution of industries often warrants regulatory reform – to foster competition, lower prices, or replace outdated oversight structures. Old institutions cannot adequately oversee new practices. Old rules may not fit the roads where our economy is leading. There were good arguments for changing the rules of the road in the 1990s. Our economy was undergoing a fundamental shift, carried along by the swift currents of technological change and globalization. For the sake of our common prosperity, we needed to adapt to keep markets competitive and fair.

    Unfortunately, instead of establishing a 21st century regulatory framework, we simply dismantled the old one – aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. In doing so, we encouraged a winner take all, anything goes environment that helped foster devastating dislocations in our economy.

    Deregulation of the telecommunications sector, for example, fostered competition but also contributed to massive over-investment. Partial deregulation of the electricity sector enabled market manipulation. Companies like Enron and WorldCom took advantage of the new regulatory environment to push the envelope, pump up earnings, disguise losses and otherwise engage in accounting fraud to make their profits look better – a practice that led investors to question the balance sheet of all companies, and severely damaged public trust in capital markets. This was not the invisible hand at work. Instead, it was the hand of industry lobbyists tilting the playing field in Washington, an accounting industry that had developed powerful conflicts of interest, and a financial sector that fueled over-investment.

    A decade later, we have deregulated the financial services sector, and we face another crisis. A regulatory structure set up for banks in the 1930s needed to change because the nature of business has changed. But by the time the Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework.

    Read the whole thing, as they say on blogs.

  12. Lawrence B. Crowell

    Let’s see. The bailout bill was scuttled.

    The global amount of derivates is estimated at around $300-400 trillion, which is about 10 times the total annual global economic output. The sub-prime crisis is a cause of the current meltdown in the same way a match can cause a forest fire. The entire investment system was in trouble and the mortgage problem was the small perturbation which touched off the avalanche. The entire investment world involves some $2 trillion in trades daily with > 100 times that much in claimed “value.” Of course all of this is “funny money,” for there is really nothing there at all. When a “real money problem” begins to percolate through the system some of this funny money can be used to try to repair the problem, but if that fails and the problem begins to require more real money the vacuous status of the funny money becomes apparent. Often what starts the problem is that traders in this game begin to pocket as much of the real money as they can before the whole house of cards collapses. Now they run crying to Cnngress for a bailout to try to shore up the sinking ship, or might it really in the end be a burning Hindenburg? If so this $600B bailout will amount to pissing on the burning airship.

    Folks, I might be wrong, but we could be in for a whole lot of really serious trouble here. In our cockeyed sort of Republican designed economy 1$ of actual economic production or services is backed by a $10-$100 of funny money investment schemes. When the game fall down it takes everything with it.

    Lawrence B. Crowell

  15. Lawrence B. Crowell

    No the Republicans are soley to blame, but they have been the biggest players. Clinton was also nearly a Republican himself, and if anything he concretized the Reagan agenda in the Democratic party in much the same way that Eisenhower brought FDR’s new deal into the Republican party.

    Lawrence B. Crowell

  16. Sean_M

    Well Lawrence, I’m glad you are at least open minded enough to admit it’s not “completely” the Republicans fault…
    😉

    It seems that the partisanship has been steadily escalating in the U.S. for some time now. In my opinion, it has reached a point where people cannot and will not even try to see the other side’s point of view. I think both parties have been able to find issues that resonate to a high degree with their constituents and have convinced them that the other side will bring certain doom to the country. Both sides are to blame and until the American people step back and take a breath, it won’t end.

    When I see so many intelligent people holding such widely opposing views, it’s hard to even trust my own judgment. I’m not sure that isn’t a healthy thing because I know very very very few people who are not absolutely sure that their political point of view will bring utopia on earth.

    It’s as if most Americans have either replaced their religion with or integrated it into their politics. People seem to approach it with that kind of fervor. They even have different apocalyptic prophesies and claim to be the salvation of the country while the opposing party is pure evil. Will it come to religious/civil conflict like that between catholics and protestants in Europe? The two parties have virtual monopolies against which any third party cannot stand. The parties have their own media machines and outlets. I guess after they drive the country into the ground we may decide to be rid of them.

  17. Lawrence B. Crowell

    Sorry, I meant to say the Republicans are not soley to blame.

    The French found a marvelous instrument to take care of politicians — called the guillotine 🙂

    L. C.

  18. Sean_M

    I would like to make a few points regarding free markets, capitalism, and financial institutions…

    1. There is no economy in the world that is a pure free market. Virtually all economies are mixed economies. Capitalist economies, like our own, are mixed economies where free markets are predominant.

    2. Capitalism appears to be superior at building wealth and maintaining growth in countries when compared to planned economies. This conclusion is based on the outcome of the cold war and it’s successful application in places such as China. The amount of market freedom and regulation will always be a point of debate but I don’t think there will ever be a successful economy that is purely planned nor purely free market. We just have to decide what amount and type of regulation is necessary.

    3. It seems to me that the recent financial fiasco is less a failure of capitalism, and more of an indication that we need to seriously reconsider the system relating to regulation of financial institutions. Free markets require transparency and proper regulation of financial institutions should provide that transparency.

    Regardless of the action taken, our economy is correcting, and hopefully regulation will be enacted to prevent this type of collapse from occurring again. Of course, memory is short and I’m sure in another generation something similar will happen again… Life just isn’t easy and nothing runs perfectly with 100% efficiency!

  19. Sean_M

    Hum, did a little research…
    How does the failure of a government created and ran entity “Federal National Mortgage Association (FNMA), commonly known as Fannie Mae” reflect poorly on free enterprise and not the government. Is it possible that FNMA failed because of liberal policies being forced on it since the Carter Administration. By liberal policies I mean the government coercion and requirements to provide high risk loans to lower income buyers. Econ 101 would say that increasing demand for homes will inflate house prices (the bubble). Common sense says that when the bubble bursts and FNMA is sitting on a bunch of high risk loans that there will be trouble. Maybe Bush and Clinton have more common sense than all of the knuckle heads in Congress!

  21. Chris W.

    Is it possible that FNMA failed because of liberal policies being forced on it since the Carter Administration. By liberal policies I mean the government coercion and requirements to provide high risk loans to lower income buyers.

    Oh yeah, Sean_M, I can picture all those grim-faced subprime lenders grudgingly approving those documentation-free loans to undeserving low-income home buyers. They really didn’t want to do it, but the government made them. I guess we owe them an apology.

    If y’all haven’t heard it before, listen to This American Life’s The Giant Pool of Money. Investors were looking for a “safe” alternative to low-yielding U.S. Treasuries (under Alan Greenspan’s Fed) and Wall Street delivered, and delivered, and delivered…

    (TAL has a follow-up coming this week.)

  22. Sean_M

    Chris W., If it were my bank, I would not want to lend money to high risk borrowers… You seriously aren’t gonna place any blame on crappy government regulation and Congress for this???

  23. Reed Miller

    Blaming a failure of capitalism and free-market economics is not mutually exclusive with blaming the government for a failure of regulation. You’re absolutely correct with your earlier comments regarding a proper balance of intervention and noninterference, however it does not mean that we should accept the predatory nature of capitalism and the irresponsible behaviors of lenders and financial institutes on the basis of “the government should have done a better job regulating them”, regardless of how true the statement is.

  24. Sean_M

    Reed Miller, I’m all for discouraging predatory lending practices. However, we need to be sure that we get to the true root of the problem be that lack of regulation and transparency or enabling and encouragement as a result of legislation. In fact, objectively determining the cause of the crisis and fixing it is more important long term than the bailout passing or not.

  25. Sean_M

    This is one of the best overviews of the financial crisis I’ve seen yet:
    http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html

    It makes the more believable statement that there is plenty of blame to go around. Here is a list:
    # The Federal Reserve
    # Home buyers
    # Congress
    # Real estate agents
    # The Clinton administration
    # Mortgage brokers
    # Former Federal Reserve chairman Alan Greenspan
    # Wall Street firms
    # The Bush administration
    # An obscure accounting rule called mark-to-market
    # Collective delusion

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