Thanks to column width I was unable to post this link in the comments part of our discussion of John McTasty.
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/01/AR2008040102860.html?referrer=emailarticle
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Good find, Kris in Vladivostok.
ReplyDeleteThree comments from me:
“That culminated in passage in 1999 of a sweeping financial services law that tore down the Depression-era Glass-Steagall wall separating regulated commercial banks from largely unregulated investment banks.”
Some have argued that this reform was partially to blame for the Enron et. al. debacle. Investment banks make fat profits off of share issue underwriting, and firms like Enron (whose executives were paid in stock options) did everything they possibly could, including fraud, to pump up the stock price. This meant that investments banks, post Glass-Steagall, would extend credit to firms like Enron even if their finances did not warrant it in order to maintain their underwriting business. This made the eventual downfall of house-of-cards firms all that more damaging to the overall credit markets. While Glass-Steagall was in effect, a single financial institution could not engage in both underwriting and commercial banking, so this could not happen.
“And, said James K. Galbraith, a University of Texas economist, investment banks helped create the exotic financial instruments that turned subprime mortgages into tradable securities.”
So true. Without the “securitization” movement, banks and lenders would have had much more incentive to be careful about the loans they extended. As it happened, lenders could issue a mortgage, charge fat fees for processing (and maybe take a nice kickback from the title insurer), and then get the mortgage off their books by selling it as a security to a goofy hedge fund like the one Bear Sterns ran. That worked out real well.
Finally, what is with this whole making CEO’s economic advisors thing? So far as I can tell, Carly Fiorina’s “expertise,” if you want to call it that, is in business management, not economic policy. (http://en.wikipedia.org/wiki/Carly_Fiorina) What possible argument is there that the two have any particular connection? Not to mention, Fiorina was a failed and arguably unethical CEO. (“she battled the company's founding families to push forward with a $19 billion purchase of Compaq Computer in 2002, then failed to create the profitable computer giant she had promised. In February 2005, she was publicly ousted by HP's board, but not before she ordered the first of a series of leak investigations that would spin into a highly publicized scandal.”)
All of this is to reinforce the conclusion: Robbie WacArnold sucks. Hard.
"Finally, what is with this whole making CEO’s economic advisors thing?"
ReplyDeleteAre you kidding? Making a CEO an economic advisor makes perfect sense to me. Especially if you are also a fan of:
-making a shoddy lawyer and electricity big whig the leader of the Federal Emergency Management Agency
-making a corrupt jerk with an econ degree a head of the Environmental Protection Agency and later Secretary of Health and Human Services
Don't get me wrong, I didn't mean to sound so partisan.
ReplyDeleteAdvisors and cabinet appointees often seem to be ill-fitting jerkweeds, regardless of which party is in the White House.
Most of our ambassadors don't even speak the language of the country to which they are sent.
And it's rumoured even Obama is getting geopolitical advice from ultra-hawk and Johns Hopkins Paul H. Nitze School of Advanced Muslim Skinning, Zbigniew Brzezinski.
...and economic policy advice from Wall St. crony and distinguished JHU alum, Michael Bloomberg. If you ask me, B.O'B's awesomeness rating is grossly overstated.
ReplyDeletePS Are you sure Brzezinski is a hawk? I thought he wasn't. I'll have to look it up.
According to Wikipedia, he has gone back and forth. It seems like he had periods of dovishness and periods of hawkishness. Apparently he opposed the Iraq war.
ReplyDeleteI'm sorry but anyone who has spent their entire life observing the human toll of international relations and then goes on to write a book about it called "The Grand Chessboard" is a fucking cockrocker, plain and simple, whether or not he at times showed a softer side while working for Obama or Amnesty International or Buddha himself.
ReplyDeleteAnd one's Iraq War position (pre or post) should probably be less of a litmus test than we've grown accustomed to using it.
Zbigniew Brzezinski was probably was against invading Iraq not to save 500,000 lives but because he wanted to keep his bishop in good position to seriously fuck up Iran.
"The Grand Chessboard" indeed.
I also can't abide by a man whose first and last names are routinely used by Blogger for word verification.
You are quite right, the chess metaphor is distasteful.
ReplyDeleteI would much prefer, "The Humongous Connect Four Rack." I think that better reflects the gravity of the issue.
The Global Hungry Hungry Hippos Gameboard
ReplyDelete...or, "The Rather Larger Than Usual Tic-Tac-Toe Box."
ReplyDelete...hahaha you win. Hungry Hippos! Tremendous reference.
ReplyDeleteCheck out this video interview with Brzezinski where he details some of his experiences in the international face-off that is geopolitics.
ReplyDeleteKissinger is looking yellower and more plastic than usual.
I don't find the chessboard reference all that distasteful. It is a realistic way of how international diplomacy tends to work. (That's not to say that is how it SHOULD work, of course.)
ReplyDeleteChessboard? I thought is was the Bigger-Than-All-Outdoors Crossfire Rink.
ReplyDeleteThe "How Socialism Could Work" team on international diplomacy:
ReplyDeleteExhibit A
Number B
Letter C
hahaha. That is freaking amazing.
ReplyDelete