NYT: Don't Forget Shumer's Role in the Mess

Sunday, December 14, 2008 | 10:54 AM

“Since the financial meltdown, people have been asking, ‘Where was Congress? Why didn’t they see this coming? Why didn’t they provide better oversight?’ And the answer for some, including Senator Schumer, is that they were actually too busy pursuing a deregulatory agenda. Their focus was on how we have to lighten up regulation on Wall Street.”

-Barbara Roper, director of investor protection for the Consumer Federation of America


Today's New York Times has a damning article linking Senator Chuck Schumer to many of the radical deregulatory  policies that underlie much of the current crisis.

I have assessed a lot of blame for the crisis on several people -- Greenspan at the top of the list, followed by several others, including President Bush. Phil Gramm was a prime sponsor of all manners of ruinous legislation -- which, I hasten to add, was signed into law by one President Clinton (he sure isn't blameless in the mess).



Sunday, December 14, 2008 | 10:54 AM | Permalink
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Bush WH Ignored Mortgage Meltdown Warnings

Monday, December 01, 2008 | 03:11 PM

A brutally damning article about the warnings the Bush administration received and ignored was published this morning by AP. The AP summed up the philosophy of the Bush White House, writing: "The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s."

The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

continued here

Monday, December 01, 2008 | 03:11 PM | Permalink
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Regulation after Bush

Tuesday, November 04, 2008 | 03:00 PM

What does the future hold for regulating Wall Street?

Regardless of who wins today's election, both Barack Obama and John McCain have staked out different positions on issues involving economic regulation – and each is very different than the outgoing president.

The Economists' Voice looks at what we might expect in the post-Bush era:

While  the  presidential  candidates  have  been  diverted  by  critical  issues  ranging  from  Barack  Obama’s  taste  in  lettuce  to  John  McCain’s condo,  it’s  hard  to  deny  that,  once  elected,  serious  questions  involving  economic  regulation—everything  from  housing  finance  to  alternative  energy  mandates—will  be  front  and  center.  And  here,  at  least,  the  divisions  are  clear:  Obama  would  use  a  heavy  hand  to  push  the  economy  back on  track,  while  McCain  would  do  his  best  to  put  the  free  back in  free  markets.

Or maybe  not.

Ever  since  the  New  Deal,  Democrats  have  largely  accepted  the  label  as  the  party  of  regulation—defenders  of  the  weak  from  the  vagaries  of  soulless  capitalism.  Republicans,  for  their  part, position  themselves  as  the  nemeses  of  the  social  engineers  and  do-gooders  who  would  sap the  economy  of  vigor.  But once in office, reality bites. Thus, with  more  than  a  little encouragement  from  Detroit,  Ike  committed  the  GOP  to  the  biggest  public  works  project  in history— the  Interstate  Highway  System.  Richard  Nixon  imposed  price  controls to contain inflation, while Ronald Reagan  protected  the  swooning  steel  industry  from foreign competitors and the first President Bush championed  market  intervention  in  the  name  of  cleaner  air  and  accommodations  for  the disabled. The second Bush hasn’t stood on principle  either,  lavishing seniors  with  heavily  subsidized  prescription  drugs  and  supporting  bailouts  for  both investment  bankers  and  the  giant  private  mortgage  insurers.

Democrats,  of  course,  have  been  no  better  at  sticking  to  their  script.  Carter  deregulated  airlines  and  trucking,  while  Clinton  deregulated  telecommunications  and  nuclear  enrichment  as  well  as  opening  the  door  to  cheap  Mexican  imports.

Thus, while Obama and McCain may both lull  true  believers  with  the  bromides  of  an  earlier generation,  a  subtler  mix  of  ideology  and  interest  group  muscle  is  bound  to  drive  the  regulatory  agenda  once  elected.  Consider  just  a  few  of  the  big  choices  ahead.


"Regulation after Bush"
Robert Hahn and Peter Passell
The Economists' Voice: Vol. 5 : Iss. 4, Article 5.  (2008)


Tuesday, November 04, 2008 | 03:00 PM | Permalink | Comments (9) | TrackBack (0)
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Seven Deadly Sins of the Meltdown

Monday, October 27, 2008 | 04:00 PM

Fabulous cartoon circulating by email -- if anyone knows of the original source, please let me know --


Source: Steve Breen, San Diego Union Tribune, 10/18/08

Monday, October 27, 2008 | 04:00 PM | Permalink | Comments (33) | TrackBack (0)
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Greenspan: "I Suck"

Thursday, October 23, 2008 | 02:30 PM

That essentially was Easy Al's testimony:

Former Federal Reserve Chairman Alan Greenspan said a ``once-in-a-century credit tsunami'' has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed.

"Yes, I found a flaw,'' Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. "That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.''

Greenspan said he was ``partially'' wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected.

"We cannot expect perfection in any area where forecasting is required,'' he said. "We have to do our best but not expect infallibility or omniscience.''

Part of the problem was that the Fed's ability to forecast the economy's trajectory is an inexact science, he said.

"If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,'' Greenspan said. "Forecasting never gets to the point where it is 100 percent accurate.''

Discuss amongst your selves -- Greenspan: Bad FOMC Chair, or the Worst FOMC chair?

Greenspan Concedes to `Flaw' in His Market Ideology
Scott Lanman and Steve Matthews
Bloomberg, Oct. 23  2008

Thursday, October 23, 2008 | 02:30 PM | Permalink | Comments (153) | TrackBack (0)
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