Chasing Stiglitz

Nice article on "Chasing Stiglitz" You might want to correct the typo in the URL www.bepress.com so that people can follwo it.

The current crisis is for the most part due to the fact the economy was fueled by incurring debt largely by refinancing of homes, it will be interesting to see just how this all plays out since so many of the ARM loans were designed for ultimate foreclosure. I doubt the banks knowing they would at some point foreclose gave any thought to the possibility home values would go down so dramatically and would be faced with a loss. If you can call it a loss that is; since the taxpayers in general have more than adequately chipped in to save them to the tune of $700 billion.

With the debt now held by most American families over whelming; what fuels the recovery from this point on? the bank bail out was to make money available for loans to an already over extended population. America is unemployed, underpaid, and uncertain with no assets for collateral to borrow more as a means to fuel that all important consumerism. Too many Americans are in no position to be borrowing and they know it and if they don???t the banks will tell them should they attempt to take out a loan and they find their home is worth less than they owe now. So any help from the bail out is not going to reach main street.

Until we have economists who do not have their heads in the clouds and the weird brand of corporate capitalism they have imposed gives way to the free enterprise system that made this country what it was not so long ago; there will not be a sustainable change. The economic advisors Obama has so far chosen do not seem to be of the type who has their feet on the ground or their eye on the future of this country beyond a few years and as such represent more of the same.

Creating 3 million jobs just barely replaces the jobs lost in the last two years. Granted it will help to be sure, but still hardly a change.
It amounts to a recovery of the last few years not a recovery from 40 years of the republican war on the middle class.
It is amazing to me the average salary of today is almost exactly what I was making in 1979 and literally everything costs 300% more.

This is a good article. I'm a big Stiglitz fan (and a public finance economist), and I was also hoping that he'd get a prominent job in the new economic team. It's good to see that others have been thinking the same thing. Maybe he will eventually get invited in; I certainly hope so.

From what Mr. Hirsh wrote in his article, I would have been surprised if Obama had chosen Mr. Stiglitz, as they seem to have opposing ideologies when it comes to a free marketplace. Obama may say he wants 'dissonant voices", but this shows he doesn't really mean it.

The investment banks that failed, Lehman and Bear Stearns had no commercial banking. So Glass Steagall was irrelevant. One of the banks that failed WaMu had no investment banking and the one that did Wachovia failed because it bought the mortgage thrift Golden West. Glass Steagall repeal has been irrelevant to bank failures but it may have saved Morgan Stanley and Goldman since they were able to convert to commercial banks and bear a heavier regulatory burden.

Glass Steagall is a red herring. The real culprit has been the governments forcing of subprime loans into the market through the Community Re-Investment Act and helped by Fannie and Freddie regulatory failure. This is a government manufactured crises which has been completely mismanaged by the Democratic Congress for the last couple of years. This debacle happened on Barney Frank and Chris Dodds' watch.

Obama's personnel actions are beginning to resemble JFK's assembly of the "best and the brightest" who were too damn arrogant to even consider the possibility that the world was not as they saw it. The Viet Nam War, and the stupid manner in which it was fought was the result. One wonders what similar havoc Obama's stable of the too bright to look around will wreak on the US and its taxpayers.

I see Frank Rich has a very good column on this subject in today's New York Times. What about Robert Reich, if Obama felt he had to go with some experienced Clinton-era people? But Sumners? Rubin? My guess is two factors are at work: Obama felt the need to act very quickly (maybe more outside voices will be added after the crisis becomes less volatile), and he probably does not himself have much knowledge or experience with these economic and financial matters.

G.W.Bush during your 8 years in office, you has offer nothing but bring shame, hatred, fear, disgrace and pains to America. You resemble and replicate back the past memories of the World War II to the extends of Guantanamo bay in what Nazi torture all about ,You are just disgrace to the US constituition and any human kind who had suffers during those period.

You and Cheney and Limbaugh and O'Reilly and Hannity and Kristol and Krauthammer and the rest of them, it finally dawned on me how small and ignorant and afraid and stupid these right wingers really are fails to understand what the United States of America signified.

You fails to understood on memorial that was not only dedicated to General Clay and our military. It was in a way also dedicated to me, and to every single American who believes in peace and freedom and humanity. A Memorial that still stand tall in West Berlin, now looks disgrace and shame with you as the President, Any American that walk through that place and at the same time, think of how proud we all are of America before,now being tarnished because of you.

How proud we are of the role our military and leaders played before you in defeating Hitler, the man who brought about WWII and the horrors .This memorial was dedicated to the country, and those brave American soldiers who fought and perished for their heroic actions liberating the people of Europe from torture ,this now will forever stained.

By the way I also read and going through the Biography of your late Grandfather Prescott Bush,that reasoning with your Ideology.

And Milton is a fine name!

To HarleyisHere - You come across as a tiny-minded, mean-spirited person, via your persistent use of the word "repigs" and your insistance that absolutely nothing good came out of the White House for the last 8 years. Even the name you've chosen suggests you're full of yourself.. like "I'm here, bow down before me."
Regarding Iraq, like the general public would really be apprised of the real reasons we went in! Having studied extensively military and homeland security strategies, my beliefs would be - 1) You don't attack in a place where the terrain, government, peoples, and other factors work against you. Maybe BinLaden was in Afghanistan, but our troops would've been marching into slaughter. 2) Hussein was a known terrorist who had used chemical warfare (a type of WMD) against innocent people. Removing him would save countless lives. 3) A segment of the Iraq people desperately craved freedom and would work with U.S. troops to help overthrow the despot. 3) Past history/strategy has shown that if you defeat one madman, others back off. What's the point in carrying on against someone as strong as the U.S.? Unfortunately, we didn't count on the craziness of AlQuida and Jihaad. Just some thoughts on the situation...

Is everyone having their holiday parties to discuss how this country should fix healthcare? You might be lucky enough to have Douchle stop by at yours, take your ideas and report back to Saddaam.

oh, the market corrected itself, all right. the big problem with declaring that expert A was "right" and expert B was "wrong" is that there are only two possible guesses anyway: growth, or recession. in hindsight, someone is guaranteed to be right, and someone is guaranteed to be wrong. but if you want to change people's policies, you need a politician. and stiglitz is no politician. lieberman uber alles!

http://tommyjonq.typepad.com

It is a slowdown they are called recessions you know like the one that was gooing on when Bush took office. Although the slowdown then did not encompass the globe like this one and impact the markets like this one unemployment was exactly the same as it is now 6 1/2%. It is still a far cry from Carter's failed economy with 17% mortgage rates 10% unemployment and gas lines everywhere. There is plenty of blame to go around and I fault Bush too!! You dems however blame only the GOP while the worst congress in history sat on its hands and did nothing. Just remember your democratic congress has lower poll numbers then Bush.

Your right he became a democrat spending wildly. The dems had the house in 04 however and the whole conrss in 06. The term is not veto proof you would need a two thirds majority for that.The term is fillibuster proof and the GOP never had that even when Bush was first elected. (all the dems needed were 41 senators to stop anything and they did nothing and stopped nothing) The dems didn't try and fillibuster because they went along with his spending because he spent like them!!! The refernce to Clinton was in regard to not accepting blame and responsibility he made Bush and everyone else look like amatuers with his blame dodging and lying.

Lets see it seems to me Bush took the blame for the economy just a few days ago. and said that he was sorry for the downturn. If you want to see the master at blaming others look at Bill Clinton even sex wasn't sex according to him. The blame for this curent mess lies in Fannie and Freddie (dems) but they deny that, over valuation of homes, ARM mortgages, mortgage sell-offs,overspending (all of them) and the sudden unexpected rise in fuel prices and economic cycling all coming together at once here and abroad.

Obama is not following Bush's failed policies tax cuts are needed now but so is a reduction in spending No one seems to have the spine for doing what is needed dems or reps. Although may claim the recession is Bush's fault economic slow downs are just part of the capitalist system of economics.Obama should immediately reduce corporate income taxes to 25 to free up capital for reinvestmentin jobs and the economy.Taxi ncreases now will decimate the economy. He must also avoid another gant govt giveaway it will not work and congress must reduce spending cut their staffs and when travelling fly commercial to reduce govt costs. Washington must set the example across the board bsiness as usual going to lead to a serious economic downturn

Bush Blames everyone else excepted himself, even the tide againts him.Excuse me,Does he the Commander in-Chief in Charge? Profusely so sorry,for me having my terrible dimensia expecially on Nov 4, that happens every 4 years..The Commission of the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction, in a 600-page report, announced its foregone conclusion "that the intelligence community was dead wrong in almost all of its prewar judgments" regarding Iraq???s WMD capabilities. In the most blunt terms, the report stated: "This was a major intelligence failure." So what???s the logical solution to such "failures" in the future? Why, increased centralization and even more power!

The report identified a "stronger and more centralized management of the intelligence community, and, in general, the creation of a genuinely integrated community, instead of a loose confederation of independent agencies" as the most effective means to avert such intelligence disasters in the future. Naturally, none of these findings can be applied to Iranian and North Korean intelligence gathered by the same fragmented, loosely managed and poorly coordinated intelligence community because its ""classified"" for our own good, to protect us from evil we cannot see. I guess we cant take any chances with whatever bad-guy stuff has been found about those two bad-guy places.

By the way Obama isn't a President Yet, Why must we needs to talks & gossips about thing that we all wasn't sure ahead but fails to learn from our past mistakes,so that in future we dont have to make same mistakes again.and again.We fails to knowledge Bush 8 yrs Legacy mistakes that cause many Americans in a very deep hole or at least a honest Post-Mortem what wrongs he done to US all.?

BO is continuing the failed policies of George Bush. Everything he said to get elected he has reneged on. Nothing but Washington insiders and special interests. It is now recognized that the majority of his contributions came from big donors and he did not have any stronger turnout of young or new voters. The press once again did not do their job but printed whatever press release the BO campaign gave them as written.
Now we will have a completely inexperienced, never signed a paycheck manager running the country during a depression. What fools Americans are. Washington is even duplicating the Truman mistake that extended the depression by 3 years... and no way out for at least 4 years. The coming debacle is going to be ugly, and when the BO faithful turn on him it will be really ugly.