The New York Times, Ben Bernanke:Two for One

While reading The New York Times Online ( May 14th),
I became shocked that two respected institutions could get
"it" so wrong, the causative factors leading up to the
Great Recession of 2008-2009.
To wit, heavily edited and paraphrased :

(1) NYT Interviewer: Some people ask, could you
(Ben Bernanke and the Fed)
have averted this serious recession? Mr. Bernanke did NOT
state the correct answer, which should have been "No".
Absent the controls in place for some 65 years, chiefly the
two banking acts known as Glass-Steagall, NO ONE could have
stemmed the gushing tide of red ink on balance sheets, Main and
Wall Street's, as the big banks simply ran amok,
acting out that willful child's arrogant claim,
"I can do ANYTHING I want!".
Add to that the rush to sub-prime mortgages by
those something for nothing artists,
the note sellers/holders as well as the "buyers"
who really should have known they could not afford
a house, even after being goaded/inspired
by countless ads proclaiming "You deserve it"
(this "it" being whatever someone wants)....

(2) Mr. Bernanke added to his obfuscations/misinforming statements by repeating that tired
old Wall Street saw: ......the regulations during FDR's time were primarily designed for commercial banks, not the fast-moving, innovative financial instruments in our modern interconnected markets......-Whoa! -Wait! The language of Glass-Steagall
was precisely crafted to avoid all the commingling, hiding, laissez faire fox-guarding-the-henhouse problems extant ONLY after the G-S Acts of the '30's were allowed to lapse during the Clinton/Gramm/Leach/Bliley era. Few, if any, changes in the language of Glass-Steagall are necessary; Mr. Bernanke well knows those acts covered all the zany, irresponsible, greedy behaviors of many big banks, then and now.

Renaming a thing, process, etc. is the favorite tactic of those impatient for fame/fortune/power without possessing truly new, good ideas; this happens in Medicine, Science, and even more frequently, Finance. Changing the terms of rash business practices in 1998 and after doesn't change the reality that the same phenomenon constantly reoccurs, over decades and even centuries. Read Lord Keynes' General Theory, then watch Niall Ferguson on PBS, "The Ascent of Money"--show me the profound "differences due to new instruments in this new century", please, I may be missing something important.

On May 14th, The NYT and B. Bernanke both erred,
a two for one scenario. It's vital to read, think,
tell the truth then act. Hopes for a less chaotically
painful world ride on such an approach....

It always has.

Kerry's Errors of Understanding: The American Power Act, 2010

I'm following The American Power Act, Kerry-Lieberman, May 2010. My concerned
reactions to the proposals in TITLE I, Subtitle A follow:

(1) I understand how fervently most of us Americans want to cut ourselves loose
from MiddleEast Energy Dependence, as the political realities of that area are uncertain,
to employ kind euphemisms;
(2) But Nuclear Power is NOT clean, safe, financially sound, or even strictly "local"
(confined to our U.S. borders);
(3) The entire issue is one of Physics, Geology, Geography, Reactor Technology, Storage Cask
Technology/Reliability, Proprietary Business Interests, Power and Politics....fiendishly
difficult to understand even by the finest minds without years of intensive study.
(4) I often feel that few in the U.S. Senate (or House) at any time have deeply studied
the exigencies inherent in pusuing this technology; former President Carter, having been
a Navy Nuclear Engineer, is the only top official I can recall with such expertise.

Please do not support TITLE I Subtitle A of The American Power Act when it comes
to the floor; the old arguments from the '60's and '70's still have factual relevancy, sadly.
Radwaste is still toxic after 250,000 years, and reprocessing does NOT mitigate the danger.

Concerned Americans should call, fax, wire, email or snail mail their national house and senate reps.

The consequences of inaction or apathy are long lasting and great.

Trampling on Your First Amendment Rights Again: Will We Have to Change our National Anthem?

Thank God for PBS, I often say. On Sunday, April 25th, 2010, a PBS expose', "Food, Inc. " unpleasantly reminded me yet again of the constant battering The Constitution of The United States continues to take. This time a key issue was Agricultural Product Disparagement Laws, enacted by some 13 states, which forbid public criticism of food products. In some cases,
(remember the TV star sued by the beef cattlemen?) even if the criticism comes from outside
of those 13 states, agribusinesses from any
of these 13 feel free to sue. These are attempts (nothing new) of ignorant states' righters to ignore/weaken the federal constitution, exert control favoring their interests nationwide. (If you missed this important program you can find it on pbs.org.)

The agribusiness industry, taken as a whole, currently acts like the trusts and monopolies of yesteryear.
Some of the biggest players have:
(1) Stifled books about to be published warning of unsafe foods, cruel treatment of farm animals, and filthy food factory practices;
(2) Cowed whistleblowers into not even publicly stating what foods they themselves do and do not consume;
(3) Sued small farmers not agreeing to buy and plant the agribusiness' patented seeds on specious grounds that the farmers' own private seeds have been "stolen from the corporation".

Since most of us are aware of recurring food recalls and
warnings to dispose of edible products, the risk of illness and even, though (thankfully) more rarely, death, is certainly real....but hey! the profits and pride of U.S. agribusiness uber alles.

What is more basic than the need to eat uncontaminated food or speaking out to warn others of the danger? These rights (which most of us take for granted) are being seriously compromised by, as usual, big money. The USDA itself is limited in what it can legally do, although there has been movement to increase its power significantly.

Every adult should contact their state and federal representatives to strenuously object to these
and other outrageous practices by agribusinesses. If nobody does, we will eventually have to change our national anthem.

After all, we will no longer be the home of the brave in the land of the free.

Let's Bring Back that Eye for an Eye Guy

In hallowing the First Amendment right to free speech, the Supreme Court has just struck down
the law forbidding the propagating and selling of cruel animal videos showing the torture and crushing to death of helpless small animals. All 50 states still have anti-cruelty laws on their books,
but purveyors of this distressing filth will continue circumventing them with impunity, all for mammon and sick thrills. How this over-broad interpretation of free speech rights can include such a privilege, which, by the way, seriously conflicts with all 50 states' anti-cruelty legislation, utterly escapes me. However, I'm not without suggestions:

(1) All 50 states could institute a special class-action suit against this practice,taking it to the Supreme Court.
(2) Bring back the Code of Hammurabi. You remember him, the "eye for an eye" guy, don't you? Applying such severe sentences to these monstrous cowards would please many of us, I feel sure. Yes, it's quite a sardonic, even untenably, illegal notion, yet it has the charm of implacable symmetry.... and I suspect it could be quite effective.

Since the Constitution and our culture would forbid instituting (2), I'll pin my hopes on (1).
But don't think my dark wishes for these inhumane, unfeeling monsters will go away.

Simon Johnson: When He Talks, Politicians Better Listen

Simon Johnson's new book, 13 Bankers, has just come out, an instructive primer on the serious flaws in the U.S. banking system. Johnson and coauthor James Kwak explain how "too big to fail" is a dangerously erroneous concept, because:
(1) The market does NOT efficiently, effectively, regulate itself, witness the Great Depression
of the 1930s and the Great Recession of 2008-2009. Both economic disasters occurred during
largely deregulated eras.
(2) Since it's U.S. taxpayers bailing out the banks when their high-risk practices bring them to
bankruptcy's brink, the market is NOT providing any solutions; indeed, this policy amounts to taxation without representation. (Did anybody actually agree to this, other than the bankers and politicians?)

Simon Johnson has more credentials AND savvy than anyone else around the Beltway when
it comes to economics. He was the IMF's Chief Economist, is an economist at MIT's Sloan School of Management, an author and lecturer.

13 Bankers should be required reading for Congress, the White House, and all and sundry in
Washington, D.C. As Mr. Johnson has said during frequent TV appearances, the lessons of history, ignored, inevitably return to haunt and harm. I'll reiterate it:

George Santayana must be spinning in his grave.

Blame Both Russia and U.S. for Adoption Failure

There are more questions than answers regarding the recent adoption failure which had the young Russian boy returned to Russia unaccompanied. But one thing is clear: blame goes to both countries. It's time very pointed questions are put to all the responsible parties involved:

(1) Why didn't the single American mother adopt an American child? Didn't she qualify under
U.S. adoption rules?

(2) Why didn't she take the boy to a mental health professional? Her occupation as a regular RN
does NOT equip her to function as a psychiatric professional.

(3) Did the Russian adoption agency withhold vital information from the would-be mom?
Are they lying now, expressing "outrage" at such a charge?

(4) To the three Russian families eager to adopt "Justin"--where WERE you when he was languishing in an institution? And by the way, why ARE there so many Russian children in
orphanages needing parents?

(5) What were the airlines thinking, transporting the boy on connecting flights, one ten hours
long, with no supervising adult? Were they really following the law as they claim?

More troubling questions surely exist, but I have to agree with the Russian authorities who
want to end these transatlantic adoptions. There are reasons, not particularly positive ones,
why many Americans seek overseas adoptions.

Just one thing, though: Russia could do a better job with their own in-country adoptions.

Laws, Not Regulatory Agencies, Create a Stable Economy

The Dodd bill does not have sufficient strength to effectively rein in the greedy overweening
tendencies of the big banks. Most of the current suggestions and proposals only modestly curtail the negative propensities which brought us to the Great Recession of 2008-2009. The bill leaves
reform up to regulatory agency control, a weak and largely ineffective solution. Where were the SEC and the FTC when some of the more recent outrages occurred?

But I have a simple solution: Bring back Glass Steagall! From the inception of the two acts during
FDR's administration until the Clinton era, when Glass Steagall was allowed to lapse, we enjoyed
decades of relatively stable economic growth. The recessions occurring then were milder and
were not world-wide in import. Banks were not permitted to house investment, loan and commercial activities under one proprietary roof, BY LAW.

No agency or committee will be able to control Wall Street and the largest banks: the only
practical enforcement possible is BY LAW....no meandering discussions, no delaying tactics, no blind eyes applied, just acts which become law.

Glass Steagall was well thought out, extremely effective. Despite hedge funds, derivatives, and
all the other modern financial bells and whistles ("instruments"), the world hasn't changed very much. Greed and hubris remain a permanent part of the human condition, requiring a firm hand.

Glass Steagall is the right firm hand. History has proved it; why don't we ever learn?

George Santayana must be spinning in his grave.