Don't Blame Greenspan...

(paintings by Erin Crowe)

Someone I know pointed out that when Alan Greenspan stepped down as Federal Reserve Chairman a couple of years back, he did so under heavy political fire from Wall Street, the mortgage industry, and Congress--because he had been raising interest rates to slow the economy. Ben Bernanke--with the approval of Congress, Wall Street, and the press--reversed that Greenspan policy, opening the spigot to easy money that kept the bubble growing until it burst. So despite the theatrics in Congress yesterday, Greenspan can't be blamed for the mess we're in right now.

Bush can be blamed. Paulson can be blamed, Bernanke can be blamed. Wall Street can be blamed. Even Congress can be blamed.

Much easier than taking responsibility is for all of the above to scapegoat Greenspan--who presided over a tremendous period of growth in the US economy during the Clinton administration and kept things from collapsing after 9/11. In his testimony yesterday, Greenspan admitted making mistakes. That's more than I've heard anyone else do. Personally, it seems to me his biggest mistake was resigning under pressure to lower interest rates. He should have stood fast and defended the independence of the Federal Reserve against political pressure from Congress and the White House. But I'm sure Alan Greenspan, an Ayn Randian and Libertarian at heart, could not believe that business leaders would corrupt the entire system with phony bond ratings to the point where, as Anna Schwartz told the Wall Street Journal, the problem is that no one believes anything anyone on Wall Street or the US Treasury says anymore.

Businesspeople have gone from being "wealth creators" to "wealth destroyers" in the popular imagination. And honestly, if they are "wealth destroyers" why shouldn't they be heavily taxed? Of course it is time to "soak the rich." After all, they've just hosed the rest of us, haven't they? Why should they get away with it, laughing all the way to the bank? As Bob Dole used to ask: Where's the outrage?

IMHO Barack Obama has not been aggressive enough against what President Roosevelt (Republican Teddy Roosevelt, for all you McCain supporters out there who claim he's another T.R.) called "the malefactors of great wealth" (possibly because many donated to his campaign). Yet the American people are mad, and they want someone to the pay the price. This collapse did not happen on Greenspan's watch, and it is disgraceful that the media is permitting him to be scapegoated when guilty parties--including Paulson, Bernanke, Bush, Dodd, Frank, and Schumer have been given a pass...

Product Review: The New Google G1 Phone

This afternoon someone I know and I went to the T-Mobile store in NW DC to take a look at the new Google G1 phone. There was only one working model in the shop, and the salesman took a while to get it going. He didn't have one himself (he had a Nokia) and didn't seem that enthusiastic about the "cool" features. The case looked flimsy and plastic, the slide-up keyboard looked just like a Sidekick to this novice. The GPS function didn't work--the salesman said it was because we were indoors, but according to today's Washington Post, the real reason is that T-Mobile's Washington, DC 3G network is still under Defense Department control. Even without the 3G feature, the look and feel of the G1 just made me want an iPhone more...but I'll have to wait, because as a former New Yorker who grew up in the era of Ma Bell's monopoly, I still cannot buy any product that says AT&T...

Since I couldn't really use the G1, I won't rate it--and I wouldn't buy it, either. I'll wait for Apple to open up the iPhone (no hacker, I).

UPDATE: A reader comments...

I have a G1 On loan from T-Mobile. I like it. The GPS works great. The
browser loads faster than the iPhone. And it's cheaper! Someone I Know has
an iPhone, and it's nice too. To undeerstand what it's all about, read this
article in Wired:

http://www.wired.com/techbiz/media/magazine/16-07/ff_android

Product Review: The New MacBook

Someone I know just gave me a new 13-inch Apple MacBook laptop for an early birthday present. I've been using it since last Saturday--the souped-up 2.4 GHz model with extra memory. I love it! I love the keyboard that lights up in the dark. I love the built-in camera and microphone for using Skype. I love the giant trackpad that's one big button. I love the one-piece metal body. I love the look and feel of it. I haven't had a Mac laptop since 2003, when I left my old black MacBook in Tashkent. Since then, I used a Fujitsu LifeBook. It was sort of blocky, clumsy and had a Microsoft operating system that just got slower and slower and slower and slower until I'd had enough. Even though the MacBook weighs 4.5 pounds instead of 3, it is so beautiful to look at and and fun to type on that I just can't stop playing with it. And it costs less than my MacBook did in 1999...

So, my advice is run out and buy one--today.

Rating: Five Stars ***** (Our top rating)

(Full disclosure, I am an Apple stockholder.)

Wired Magazine: Quit Blogging Now!

Listening to our daily BBC Radio 4 Best of Today podcast, we heard a panel discussion about an article by Paul Boutin in Wired Magazine that says Twitter, Flickr, and Facebook--plus an invasion by professional journalists--have made blogging obsolete:

Thinking about launching your own blog? Here's some friendly advice: Don't. And if you've already got one, pull the plug...

IMHO, not yet.

Sen. Sam Nunn: Let's Not Be Beastly to the Russians...

Yesterday, I attended a panel discussion entitled "ASSESSING U.S. POLICY TOWARD RUSSIA IN THE WAKE OF THE RUSSIA-GEORGIA CONFLICT" at Georgetown University's Center for Strategic and International Studies featuring Presidential debate host Bob Schieffer of CBS News and Texas Christian University. The room was packed. Schieffer had just moderated the Presidential debates, and was in fine form. The other panelists were Jim Hoagland of the Washington Post, Andrew Kuchins of CSIS, and former US ambassador to Russia Andrew Vershbow. They all made conciliatory noises towards Russia, saying that America should understand that Russia wants money and influence as well as respect as a great power. After Georgia, this sentiment needed to be taken into consideration. Not what one usually hears in Washington...

I couldn't understand what was going on until the last minute, when Schieffer called on former Senator Sam Nunn (D-GA), who was seated in the audience a few rows behind me. At first he demurred, but when Schieffer pressed him--like Julius Caesar--he offered a detailed speech calling for US cooperation with Russia on nuclear non-proliferation and other important issues. I couldn't determine if Nunn was now working as a lobbyist for Russia, or was only speaking on his own behalf. Nevertheless, it gave me the idea that the purpose of the exercise was to signal that any future Democratic administration under a President Obama would revisit the nature of the US-Russian relationship, given that the panelists echoed Nunn's sentiments and that Nunn is among the most "hawkish" Democrats still around Washington (excluding Joe Lieberman, booted by his party in Connecticut in favor of Ned Lamont).

More on the event at the CSIS website, including audio and video.

Scott Hutchison at Georgetown University

My drawing teacher, Scott Hutchison has a show at the Georgetown University art gallery--here's his video about it from YouTube:

Carl Holzman at the Maple Avenue Gallery

Coming to Maple Avenue Gallery in Evanston, Illinois--November 21st-December 19th--Carl Holzman's "Still Lifes 2008" (should it be "Still Lives"?)

Florida is clearly in play...

Someone I know sent me a copy of this email from Barack Obama to her mother:

I'm coming to Orlando tomorrow, Monday, October 20th.

I'll be holding a rally with Senator Hillary Clinton and talking to folks about what we can all do together to change this country.

See the details below and RSVP for the event:

http://fl.barackobama.com/OrlandoChange

Hope to see you there,

Barack

P.S. -- Here's the invitation for the event:

This Monday, October 20th, please join Barack Obama and Hillary Clinton in Orlando, where Barack will talk about his vision for creating the kind of change we need.

Early Vote for Change Rally
with Barack Obama and Hillary Clinton

Amway Arena North Staircase
600 W. Amelia Street
Orlando, FL 32801

Monday, October 20th
Gates Open: 3:00 p.m.
Program Begins: 6:00 p.m.

http://fl.barackobama.com/OrlandoChange

This event is free and open to the public. Tickets are not required; however, an RSVP is strongly encouraged. Space is available on a first-come, first-served basis.

For security reasons, do not bring bags or umbrellas. Please limit personal belongings. No signs or banners permitted.

Paid for by Obama for America

Here's a link to local media coverage of the event on Channel 13.

Return to Kibbutz Na'an: A Video Documentary

After 36 years, Pierro returns to his kibbutz with this filmmaker, to show him where he spent the gap year between high school and college...

James Grant: Wall Street Lied

James Grant was on 60 Minutes last night:
.

Simultaneously Grant published this critical op-ed in the Washington Post yesterday. Inquiring minds want to know. How come he wasn't on the 60 Minutes and in the Washington Post the week before the second House vote? Do you think Grant's point-of-view might have changed some minds in Congress, even with a "sweetener" Wooden Arrow Tax Exemption included?

When, in 2006, the roof began to fall in, Wall Street was in a quandary. It held outsize volumes of triple-A-rated mortgage-backed securities (MBSs). That they were not, in fact, triple-A, had become painfully obvious. Curious analysts consulted the financial statements of the top mortgage dealers, including Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley, for clarification.

Readers, however, found no clarification and no foreshadowing of the troubles to come. Neither in Bear's year-end 2006 report (10K, in Securities and Exchange Commission jargon) nor in its March 31, 2007, quarterly filing was there a meaningful word of warning about the sagging prices of the MBSs that did so much to pull Bear down. Those seeking to learn Merrill's exposure to the mortgage contraptions called collateralized debt obligations, or CDOs, were similarly stymied. Although Merrill was to write off $23 billion worth of CDOs in 2007, the phrase "collateralized debt obligation" did not appear once in its 2006 10K.

Because there was often no market for these idiosyncratic securities, Wall Street did not have to value them at market prices. Rather, it marked them "to model." That is, it assigned them prices at which they would trade, according to one mathematical construct or another, if they could trade. Of course, these mathematical constructs tended to cast things in a cheerful, management-approved way. Only later did a telltale plunge in the value of traded mortgage indices open the eyes of the market to the full extent of the troubles.

Prices can be unwelcome pieces of information. When an especially unwelcome batch wells up after a financial collapse, governments try to quash it. So it is today. The SEC has suppressed short selling. The bailout bill will open the door to the suspension of market-value accounting. The Fed is moving heaven and earth to cheapen the value of the dollar.

Long after the crisis burst into the open, the Fed and Treasury downplayed it. It was, they insisted, "contained." Last week they asserted that, unless the House voted "yea," the wheels would come off this $14 trillion economy. President Bush himself has broadly hinted that the nation is on the cusp of disaster.

How can they be so sure? And how can they know that the unintended consequences of the radical policies they are pushing through won't be worse than the panic that they themselves are helping to foment? When the Fed insists it has no choice but to print up hundreds of billions of new dollars and when the keepers of accounting standards bend in the face of criticism that market prices hurt, what they are really saying is the that financial truth is too awful to bear. Heaven help us all if they're right

Bailout a Victory for Al Qaeda?

That's what one of the terrorist group's leaders said in a video released yesterday, according to JihadWatch. Did anyone think of the aid and comfort it would give America's enemies when Wall Street and the US Treasury Department came up with "The Sky Is Falling!" strategy? Heck of a job, Hank Paulson...

CAIRO, Egypt (AP) — An American member of al-Qaida pointed to economic troubles in the United States as proof that "the enemies of Islam" face defeat, in an English-language video released Saturday.

In a half hour video message, California-native Adam Gadahn urged Pakistanis to unite against their government and U.S. forces, and taunted Americans over their economic crisis, relating it to their military interventions.

"The enemies of Islam are facing a crushing defeat, which is beginning to manifest itself in the expanding crisis their economy is experiencing," said Gadahn, in a clip of the message distributed by the SITE Intelligence Group, a Washington-based monitor of militant Web sites.

"A crisis whose primary cause, in addition to the abortive and unsustainable crusades they are waging in Afghanistan, Pakistan, and Iraq, is their turning their backs on Allah's revealed laws, which forbid interest-bearing transactions, exploitation, greed and injustice in all its forms." [...]

Gadahn also urged Pakistanis to unite and establish an Islamic state..

Destroying the US economy was one of Bin Laden's stated goals. Blowing up the World Trade Center couldn't do it--but this bailout just might...

Arnold Kling: Bailout Worse Than You Think...

Someone I know referred me to this blog post critical of the bailout by well-known economist Arnold Kling, who coincidentally also was at Swarthmore College when we were there, a senior when we were freshmen...

No major newspaper would run any op-ed from me. I gave up and sent one to American.com, which you can see here. The bottom line:

The financial bailout isn't as bad as Main Street thinks. It's worse.

I think I'll just paste the other one below the fold.

Next, I am going for a long bike ride. You might want to look up a quote from August 1914 about "the lamps are going out all over Europe. We will not see them lit again for a long time." I'm sure a commenter will be able to locate the exact quote and the speaker, an English minister whose name eludes me.

Much of Europe was happy and optimistic when war was finally declared. Many people are happy today that war that has been declared on free markets. Looking at the bright side, it could be worse. This war does not involve sending millions of young men to fight in trenches and launch human wave assaults against machine guns.

Stop the Bailout Dot Com

from stopthehousingbailout.com

Meow! Meow! Meow! Arianna Huffington on Sarah Palin's Debate Peformance

From HuffingtonPost.com:

The only subject on which Palin displayed superior knowledge was when she corrected Biden on the proper delivery of "Drill, baby, drill!" Christie Hefner thought Palin's sex-tinged twist on the chant should be appropriated for a commercial. Perhaps for Viagra.

Other than that, Palin's grasp fluctuated between wafer thin and skin deep. The moment that most drove me to want to send her a book on Greek gods and heroes was her head-scratching response to the question about her Achilles heel. She apparently didn't know what that meant since she spent her allotted time listing all of her attributes as opposed to her most glaring weakness.

Warning: Your Cell Phone May Be Haunted...

At least, that's what I think Mark Horowitz may mean, in this post from his blog, Haunted Screens.

Biden v Palin: Biden Won on Points

No links for this, must more pure personal reaction. Palin did OK, but a little too much Energizer Bunny fembot reciting talking points to have won, goshdarnit! (wink) She really believes in that GREAT AMERICAN HERO: John McCain, David Petraeus, her brother the schooteacher, whomever. As Joe Biden once said in moment of truth (called a "gaffe" by Washingtonians), Palin's pretty, which made her easier to look at--except when her smile dropped, her lips tensed, and she seemed about to scowl, SCARY! Luckily, she usually recovered he beauty-queen poise (see below).

Biden came across as an old pol...not 100 percent credible, but, on the other hand, able to think on his feet. He looks like he had one too many Botox injections on his forehead--bring back some wrinkles please, so we can see expression on what otherwise looks like a rubber mask--but he did show some emotion in a corny "choking up" moment, which worked to humanize him. He actually seemed more real than Palin. Plus the God Bless Our Troops ending was good.

Best of all was Biden saying that McCain was not really a maverick (he really meant that the OLD John McCain was a maverick, while the NEW John McCain running for President is a Bush water-carrier). That took some wind out of Palin's sails. I also liked Biden saying he changed his mind about judicial ideology in the Bork hearings, a way of getting the abortion issue into the debate.

Nice to see that Palin supports gay rights along with Biden! That clarification during the debate should cheer the Christian base of the Republican party no end. Somehow the discomfort showing on Biden's face made him appear more conservative on this issue than Palin, at least to this observer... We'll see how this plays in Peoria--or Michigan.

Meanwhile, Biden turned out to be tall, and Palin turned out to be short! That's always interesting. Palin had a bit of a hunch. She might want to consider taking classes in the Alexander technique...

One thing missing--a discussion of prinicples. Palin was a hero-worshipper, Biden seemed a deal-maker. What's needed is an injection of priniciples into the race, rather than ideology or hero-worship. Principles are what enable people to make rational decisions and plans for new situations, and the President always faces a new situation...

On to the Presdential debates next week.

UPDATE: Snap polls seem to show that the majority of Americans feel the same way I do.

Sarah Palin's 1984 Miss Alaska Swimsuit Competition

Ann Coulter on Why Obama Supports the Bush-Paulson Bailout

From AnnCoulter.com:

Obama was not merely wrong on Fannie Mae: He is owned by Fannie Mae. Somehow Obama managed to become the second biggest all-time recipient of Fannie Mae political money after only three years in the Senate. The biggest beneficiary, Democratic Sen. Chris Dodd, had a 30-year head start on receiving loot from Fannie Mae -- the government-backed institution behind our current crisis.

The Economists' Voice: The Bailout is Bad, Paulson is Wrong

I just received an email from Nobel Prize-winning economist Joseph Stiglitz calling my attention to some items that readers of this blog might find of interest--especially given the unfortunate vampire-like undead Paulson bailout bill now in the Senate. Here's the table of contents:

Columns
PDF
Good Bailouts and Bad
David O. Beim
PDF
Please Think This Over
Edward E. Leamer
PDF
A Better Plan for Addressing the Financial Crisis
Lucian A. Bebchuk
PDF
Auction Design Critical for Rescue Plan
Lawrence M. Ausubel and Peter Cramton
PDF
What if the Median Voter Were a Failing Student?
Bryan Caplan
PDF
Questioning the Treasury's $700 Billion Blank Check: An Open Letter to Secretary Paulson
Aaron S. Edlin
PDF
Dr. StrangeLoan: or How I Learned to Stop Worrying and Love the Financial Collapse
Aaron S. Edlin
PDF
Why Paulson is Wrong
Luigi Zingales
PDF
Investment Banking Regulation After Bear Stearns
Dwight M. Jaffee and Mark Perlow
PDF
Turn Left for Sustainable Growth
Joseph Stiglitz

And here's the link to The Economist's Voice, where one may download the articles in PDF format (I wish they were in HTML to read online). I assume some Congressmen and Congresswomen should be placing these in the Congressional Record, if forced to vote on the bailout bill again, so you may be hearing more about Economists Against Paulson in the future.

For the life of me, I don't understand why Obama isn't leading the charge against Paulson and Wall Street, using the mess to campaign against Bush-McCain's handling of the economy. There should be a clear difference between McCain and Obama on this, but he's fuzzed it all up, if Paulson's "cash for trash" bill passes, Obama might have a decidedly weaker hand to play when it come to the handling of the economy...

Shanah Tovah!

We're going on holiday...so won't be reading the "Emergency Economic Stabilization Act of 2008"--which after watching Secretary of the Treasury Paulson's embarrassing sales pitch on 60 Minutes tonight might better be called "There's a Sucker Born Every Minute Act of 2008." If you want to read it, here's the link:

http://financialservices.house.gov/

Hope it doesn't pass.

With constitutent calls running 100-1 against it, you'd think someone in Congress or the Senate would realize that stopping this bill doesn't even require political courage. As Gillis Long used to say, when he wanted to stop legislation: "This is a bad bill."

You don't even have to read it to know it--because no one can explain it clearly.

Congressmen Rahm Emannuel and Barney Frank will have a lot to atone for, come Yom Kippur, should it pass, IMHO. It might even cost Obama the election...

I wish Obama would announce, instead of praising this bill: "The era of bipartisanship is over. We are going to throw the bums out, make them pay, and put those responsible for this criminal mess in jail..."

The way things have been going, that sentiment more likely to come from Sarah Palin! And she'll win the White House, riding voter anger all the way, if McCain ends up filibustering...

UPDATE: The bill failed to pass the House due to bipartisan opposition, which restores one's faith in democracy!