Wednesday, October 30, 2013

"Alan Greenspan, won't you please go home"

The only thing worse than the policies pursued by the former Fed chairman is the current book tour he has embarked upon to try to convince somebody he wasn't at fault for the 2008 financial crises. Alan has appeared everywhere recently to tout his book "The Map and the Territory". Greenspan is trying to justify the enormous mistakes he committed by implementing a deeply flawed monetary policy. Like all "experts" who are found to have feet of clay Alan acts like nobody could have foreseen the crash or everybody thought alike. This is 100% wrong. He was head of the Federal Reserve for god's sake! He is equating his knowledge with the average cab driver in NYC as to what is going on in the economy. Personally I think this is unfair to the cabbies who I believe had a clearer picture than Greenspan. Alan was too busy lapping up adulation from Congress to pay much attention to his real job.

The simple facts are that Greenspan was appointed by Ronald Reagan in August 1987. This was just in time to reap the whirlwind from the stock market crash in October and the Saving & Loans crises following the implosion of the junk bond market (not his fault). That economic set back was a mini 2008 and all the lessons that remained unlearned about unregulated lending activity by financial institutions came back to bite us in 2008. He had firsthand knowledge of how these events unfolded but now wants to believe that somehow people have changed the way they behave and "nobody" could have known.

In a larger sense it is time for many of our "leaders" to move on. Just because a guy has a dark suit and speaks in a deep voice the media acts as if everything he says is solid gold. This is regardless of the abysmal record of the individual's performance. So in addition to Mr. Greenspan, Larry Summers, Robert Rubin, Dick Cheney, John Bolton etc. should have the decency to exit stage left and be heard no more. This is based on their record of being wrong in most of their decisions and policies. It clearly transcends party affiliation.

Wednesday, October 23, 2013

The Government shutdown / debt ceiling breach is behind us for now. The "leaders " in Congress indicate they get the message that this type of brinkmanship is unacceptable to the business community and the saner of their constituents. The news media is acting as if the problem has been solved and reason and compromise have prevailed. Fat chance. During the government shut down more obscure Congressmen were on national news broadcasts than ever before. This is free money as far as a politician is concerned. First term Representatives from small states were sought after by CNN, Fox, NBC, etc. to recite their party's talking points as if they actually understood what they were saying. The only thing we can be sure of is that the "shutdown" taught Congress how wonderful all the media attention is for Congressmen. The economic incentives are now aligned to motivate Congress to keep doing what they are doing.

The history of the US is filled with demigods and charlatans who make a lot of noise and are dismissed by rational people as a mere annoyance. These people are dangerous and should not be dismissed lightly. They can cause serious harm to the country or the economy. We all need to remember politicians like Senator Joseph McCarthy and Senator Huey Long.

Tuesday, October 1, 2013

The silly season is upon us. Apparently the House of Representatives flunked 6th grade civics and doesn't really understand how our system of government works. If you want to get rid of a law you need to pass the new law in both houses and send it to the President to sign and if the President vetoes it you need a super majority to overturn it. This would entail making a coherent case for the new law and working hard to convince people that this is in their best interest. It is much easier to keep shouting to people who agree with you and avoid the messy process of actually doing something constructive. I guess we get the Congress we deserve. As an aside I do not know whether the Affordable Health Care Act will be good or bad, I do know as a business owner for 30 years that the current system is too expensive and inefficient.

I think if Congress is willing to "shut" the Government they should go all the way. Close the airports, the ports, the interstate, stop funding for Congress including pay for members, don't send Social Security checks, turn out the lights in the Capitol, tell the soldiers to go home, stop the defense plants in the congressional districts, etc. The current shut down has all the sincerity of a TV "reality" show. Just when you think Congress can't sink any lower they manage to lower the bar, again.