Regarding “Federal Reserve ‘Will Be Gone’ In 25 Years, Top Financial Mind Predicts, Despite Geithner’s Vote Of Confidence”

Regarding Dr. Nassim Taleb’s criticism of the government’s bailout of financial sector:
“This transformation from private debt … to public debt” is “bad” from a risk standpoint and “immoral” from an ethical standpoint.” (Source: http://www.huffingtonpost.com/2010/09/30/nassim-taleb-federal-reserve-will-be-gone_n_746109.html)

Dr. Taleb may be true that making financial sector’s debt as public debt through government bailout of the sector doesn’t sound right from risk and ethical standpoints.

However, from the standpoints of national economic security and anti-Possible 2nd Great Depression, bailingout financial sector was inevitable, necessary evil, not for the love of greedy financiers (who will live happily ever after, with or without bailout, with their accumulated wealth hidden in their backyard) but for the love of country and the majority of population who would have actually bore the devastating aftershock, real costs of collapsing financial sectors if there had not been government bailout. To achieve bigger goals, maybe we should sacrifice smaller goals if they are conflicting each other and cannot be achieved all together.

It seems to be a matter of right priority setting; I believe, national economic security and preventing second great depression domestically and internationally should be in higher order than risks and ethics in the hierarchy of national priority. Save big chunk first and solve smaller problems one by one.

Fed may or may not exist in next a few decades if it keeps mis-estimating its costs and benefits and continue misjudgement.

Elizabeth Warren, Finally Got There? Almost.

I am relieved to hear the following news in Prof. Elizabeth Warren’s words:

“The president asked me, and I enthusiastically agreed, to serve as an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. He has also asked me to take on the job to get the new CFPB started — right now. The president and I are committed to the same vision on CFPB, and I am confident that I will have the tools I need to get the job done.”

One step at a time. One by one.

Of course, as Prof Warren is known to be critical to Federal Government, it may not have been an easy decision for the White House to onboard its own critique as its crew. But I heard that “Big Person” has the capacity of being open, listening to it own critics, and accepting/adjusting to some of them if reasonable. Eventually, that adjustments will pay off.

The ruined US economy became the condemning ghost of previous presidency and helped the candidate Obama get his momentum high toward US Presidency. But, since then, it has turned its claws around to hunt him back down, with the same trap, in the middle of his presidency. Some differences in President’s policies may have made some, or slight differences in current political climate. But, the fundamental problem must have remained anyway and the current situation may have been inevitable for President anyway. Because few people have found any solution to the current national trauma of joblessness, ruined economy.

Making every efforts to take a right step at every endeavor into right direction. That is, I believe, the best strategy that President Obama can take on now, to wither through the tough currents of unbearably ridiculous politics. And, for the remaining part, let time heal the wounds and bring the best solutions. I believe, President should do his best to show his sincerity with honest heart to the public, make sure it is not misunderstood as his cleverness with less heart, and stick with middle class and jobs.

“Fighting to Protect Consumers,” http://www.huffingtonpost.com/elizabeth-warren/fighting-to-protect-consumers_b_720410.html

“Elizabeth Warren To Lead Search For New Consumer Chief, Could ‘Pull A Dick Cheney’”, http://www.huffingtonpost.com/2010/09/16/elizabeth-warren-could-pull-a-dick-cheney_n_720429.html

Former Wall Street Banker Supporters Turning against President

“‘how on earth”………only one matters.

The news is, ”….that the honeymoon between Washington and Wall Street has turned to bitter recriminations is not news, given that the administration had long pledged to revamp Wall Street regulation in the wake of a crisis that rattled the global financial system.”

“Why so personal? The prevailing view is that bankers, hedge fund mangers and traders supported the Obama candidacy because he appealed to their egos.” Mr. Obama was viewed as a member of the elite, an Ivy League graduate (Columbia, class of ’83, the same as Mr. Loeb), president of The Harvard Law Review — he was supposed to be just like them. President Obama was the “intelligent” choice, the same way they felt about themselves. They say that they knew he would seek higher taxes and tighter regulation; that was O.K. What they say they did not realize was that they were going to be painted as villains.”

http://www.nytimes.com/2010/08/31/business/31sorkin.html?_r=2&ref=business

It must be tough news for President Obama to hear that his former supporters of wall street are now turning against him. Although this news must be very hard for him, because of the critical timing of US politics that is in desperate need of fundamental financial reform and the incompatibility of what is needed for this country and the majority of population and what wall street wants, this breakup might have been inevitable thing to happen from the beginning of the administration. There is no way to please both main street and wall street and properly manage the work done. If President has to choose between them, definitely it should be main street from long-term perspective.

When looking back, ex-president Bush had such low rating after his inauguration. It was 9/11 event that gave him the opportunity to “Physically” work hard (not contents of his policies) in public view and recover some of public support for him. Especially when there are few ways to bring economic recovery to this country in timely manner, probably President Obama should do the same thing as Bush did. Physically working hard, showing up every possible places, and gaining people’s heart toward him even without strong economic numbers to support him.

Financial Reform and Wish for President’s Legacy: “Arianna Says Frustration With Obama Goes Beyond Left And Right On ‘Fareed Zakaria GPS’”

My Comment to Arianna: I am puzzled at why the financial reform cannot have a strong back born, claws, even when the public fully support it. The watering down of health care reform was understandable after seeing the public opinion changing like woman’s temper during period. But now, the strong financial reform, preventing further crisis are what the public want.

If the mild financial reform is passed without claws, like restoring the Glass-Steagall Act and breaking up Main Street banks from big Wall Street firms, the bill may make many people feel good to certain level “FOR NOW.” But the effect will “Last Short.”

It’s like “Three Little Pig story” who built house with “straws, sticks, and bricks.” Who wants to build a house with “straws”? If another financial meltdown strikes again, it will hurt the creators of the bill, especially President Obama most.

I respect President. This is difficult time for him when all crises are weighing down on His Shoulders. But this is also the greatest opportunity for him that doesn’t come to every president. These continuing crises offer him chance to “DISTINGUISH” Himself from the rest of others as a “Through RE-MAKER of US HISTORY.” Flipping seconds’ short-term thinking may diminish his possibly greater LONG-TERM LEGACY. When cannot have everything, it may be wise to give up minor things to achieve big things.

Once the banks are separated, they wouldn’t be as powerful as they are now. And their interest politics will also be weaken. All industries rise and fall in their power. Ms. Huffington criticizes President to be too respectful to already established entities such as military or banking industry. What President has to always remember is that he is the commanding officer, the man in charge. Not anybody else. He may listen to other people. But he should make his own decisions based on his core consciousness, not based on what other people tell him. Because nobody is in his position.

Read the Article at HuffingtonPost

Robert Reich: “Joe Barton and the Big Big Debate”

“Mr. Joe Barton created “a Hillarious National Joke,” didn’t he?“

There are two questions I’d like answer.

Question A: What do you think about the current political trend of Misleading of “Regulations on Big Corporations” as “Big Government”

My Response: Yes, definitely, we the public have noticed it. You know? Fortunately, there are two sides of everything. The tragic meltdowns of everything we have experienced for the last a few years are sad. But they became the stepping stones, engines of policy reforms to cure the chronic structural problems of this country that, otherwise, would have continued sickness of this country. Now, people don’t think about whether big government is good or bad. People are demanding stricter regulations on financial sector and oil industry and demand political leaders to get out of their ambiguous positions between corporates and people. Isn’t this great?

The deeper the pain is, the deeper, more fundamental the reforms become ! No pain, no change !

Question B. What do you think about “100% publicly financed campaigns for national office?

My Response: A good idea !

Although lobbyists will lose there current jobs, “Campaign Finance Reform,” “Publicly financed political campaigns” will definitely drive political leaders to tune on what the public wants instead of what corporates want, what’s good for the country, and improve fairness and justice in politics.

Additionally, “Campaign Finance Reform” will become a great chance to transform these lobbyests into future’s promising workers that will be far more productive and contribute to the society by working in other industries. For example, they can use their strategies, skills in either philanthropic industries, humanitarian industries (?) or in resolving world issues such as terrorism (they can lobby terrorists against terrorism), threats of nuclear arms (they can work as US diplomats to lobby, persuade the Iranian Gov. against nuclear arms in favor of superior traditional weapons or no weapon at all), the wars, moral corruptions, and AIDs in Africa (they can lobby rebels against premarital acts and impregnating single ladies with AIDs and babies and deserting them, etc)….If lobbyists’ tenacity and shrewd tactics can be used in right places for right causes, the world would be far better place !”

Read the Article at HuffingtonPost

How to Deal with “Political Bisexuals?”: “The Senate Should Debate “Too Big to Fail” On Live Television”

A Political analysist, Richard (RJ) Eskow, clearly stated what has been in everybody’s mind.

Transparency in Political Processes via Multimedia Broadcasts.

This is a simple concept, but hasn’t been followed through. In his blog post, “The Senate Should Debate “Too Big to Fail” On Live Television”, Mr. Eskow states:

“A table in a quiet room? We need the exact opposite. We need a live TV broadcast of the debates and the votes (C-SPAN will do) surrounding each key amendment, starting with the Kaufman/Brown SAFE Act that breaks up the “too big to fail” institutions. Why start there? Because, while there are a number of excellent and important amendments before the Senate, “too big to fail” is a key part of our systemic risk problem.”

Great Idea! In bright spot light, in front of public eyes, few politicians can play the tricky game of officially supporting the public’s interest, but unofficially helping big banks at public’s costs.

Orrrrr, can they still do?

Why don’t we name these politicians of dual faces as “Political Bisexuals” ! Sounds good?

Mr Eskow also says, “The bank lobby is clearly frightened of the democratic process.”

Really? Can they sometimes be scared?

Sometimes I thought they are confused themselves with GOD, who is omniscient, omnipotent, can solve anything with money. I wish them to shift their jobs from the lobbying industry to more productive industries in this country, or go offshore ! These are the jobs really worthy to be exported to foreign countries and nobody will be upset about the loss!”

Read the Article at HuffingtonPost

Regarding Prof. Robert Reigh’s “The Rebirth of Regulation.”

Professor Robert Reigh says that recent BP’s oil spill, Massey’s mine disaster, and Goldman’s alleged fraud, all are the outcomes of government deregulation of businesses and few or low penalties for business misconduct over the three decades. He states:

“When shareholders demand the highest returns possible and executive pay is linked to stock performance, many companies will do whatever necessary to squeeze out added profits. And that will spell disaster – giant oil spills, terrible coal-mine disasters, and Wall Street meltdowns — unless the nation has tough regulations backed up by significant penalties….After thirty years of deregulation, it’s time for the rebirth of regulation: Not heavy-handed and unnecessarily costly regulation, but regulation that’s up to the task of protecting the public from companies and executives that will do almost anything to make a buck.”

Full Text: http://www.huffingtonpost.com/robert-reich/the-rebirth-of-regulation_b_561962.html

In the middle of economic meltdown, though it seems to be heading toward recovery, his proposal sounds very convincing.

The problem with extreme government deregulation seems to be, as the economic history of last decades has shown, it has actually created market barriers, prevented market from functioning efficiently, smoothly, properly.

Instead of clearing barriers for market to function best, deregulation has rather caused market crashes, economic meltdowns. It is because careless deregulation has ultimately empowered human greediness over reasoning and conscience, paved ways for business corruptions and misallocated nation’s resources, instead of motivating entrepreneurs to re-invest, re-oil their business structure and helping, promoting corporations to function at their best not only for their own sake and but also for their customers.

When companies collapse, are their CEOs happy? Because they already earned enough? Hopely not. There should be the limitations of corporate joy-rides without taking responsibilities for their actions. They have been acting like children. It’s time for them to start to act like grown-ups.

Jefferson to Hamilton: Gary Hart talks about US history of banking system.

Though I do not have fond memory of Mr. Hart, he seems to have a point in his blog post at Huffington Post, “The Only Surprises are the History We Do Not Know”, regarding the history of US banking system.

Is everything in power and money destined to corrupt? Even Catholic priests have not been exception throughout history; even when those religious leaders with higher callings led politics in Europe, they turned their regime into the darkest era of human history. Is it possible to expect something better than that from people with hotter blood and lower callings from above?

“….Here again we see Thomas Jefferson and Alexander Hamilton head-to-head. Hamilton wanted a very large and powerful national bank, and banking system, to foster large-scale investment, economic expansion, and competition with older European systems. Jefferson opposed this scheme because he anticipated the inordinate political power such concentrated wealth would have within the democratic process. Jefferson saw a handful of bankers controlling vast economic power, encouraging speculation, manipulating investments and currency values, and warping the political process to its own ends….Yet, here we are now, two and a quarter centuries later, and, though Jefferson was clearly right, Hamilton has won… yet again. (full text below)

http://www.huffingtonpost.com/gary-hart/the-only-surprises-are-th_b_551903.html

Robert Kuttner: Fiscal Folly

Dear Mr. JXJASON,

I believe we wish for the same thing, something good for the country. It’s just different wording.

Based on the solid understanding on the current situation, finding out the best strategies to get back to the healthy economy, that’s what we wish for, right?

We wish to set up the right policies that don’t allow the financial sector to drain this country’s resources, which should be used for building healthy industrial/manufacturing structure, healthy middle/low-income classes, and productive infrastructure, into feeding the top financiers’ fancy lifestyles. Fattening one (or a few) sector’s welfare while the rest of other sectors going anelexic doesn’t seem to be the profile of a healthy country. I am not saying we should suppress the financial sector unconditionally. Balance, fairness for all seem to be the key here.

In Response To:

JXJASON‘s Comment to Mikyung Lim

Mikyung Lim, I disagree with you The past can be undone. You just repeal the law that deregulated the financial industry. You cannot restore prosperity when the wealthy have stolen ( legally mind you) from the less wealthy.

If you Google – Phil Davis Seekingalpha – and read some of Phil’s articles you will learn how the financial industry has conned the average, middle class citizen.

Forbes publishes a list of the 400 richest people in the world. None of them live in 1,200 square foot homes, in middle class towns like, say Scranton, PA or Detroit, Michigan or thousands of other, poor communities in the US.

Finally, your analogy is nonsense. If one is sick, and broke, you cannot borrow more money. If someone doesn’t pay for your medical bills you will get sicker and, eventually die.

I am well educated with two degrees from two, Canadian Universities. Recently, the CEO from TD bank, explained why Canada did not have the same economic crisis as the US.

Read the Article at HuffingtonPost

Dealing with Current Fiscal and Economic Troubles

Regarding Robert Kuttner‘s “Fiscal Folly”, April 4, 2010.

http://www.huffingtonpost.com/robert-kuttner/fiscal-folly_b_524760.html

My comment: Regarding the current fiscal and economic troubles that this country is facing, it is more productive to get into an action to correct them, instead of keeping contemplating on the past that cannot be undone.

Mr. Kuttner pointed out the focal point here: “we will have a national debt problem if we don’t get a return to high growth soon. But the more immediate problem is restoration of prosperity–and in the near term that will require more public outlay, not less. Once a real recovery is on track, we need to increase progressive taxation, both to moderate deficits and to pay for sustained public spending on things the economy and society need, such as 21st century infrastructure, a green economy, good jobs, as well as a national health and pension system.”

If we are sick patients with tight money problems, the wise strategy to recover from this sickness, get medical treatment first. Even by borrowing money and incurring more medical costs. And then when we get healthy, try best to earn more money to pay off medical bills. Not to spend money, to save money, being continuously sick seems to be a lose-lose strategy.”