Thursday, December 22, 2011

To create jobs, break up the too big to fail banks

It could well be that the most meaningful way to create jobs in America is to break up the too big to fail banks.

When even the conservative leaning New York Post's Charlie Gasparino calls for the too big to fail banks to be broken up, you know the time has come for a good idea to be implemented.

The monster banks are against this, of course.  They want to return to the good old days where they make scores of millions of dollars for themselves individually if their over-leveraged, hyper risky activities succeed, but stick the taxpayers with the losses if they fail.  

The regulators and rating agencies were unable to see inside the labyrinthine risky business models prior to the financial meltdown, and I have no doubt that they have the same problems today.

It seems to me that businesses that are too big to fail are also too big to manage and too big to regulate and too big to rate accurately.  

Gasparino offers the obvious recommendation: 

The obvious way to force the banks to get small and fast is to again split commercial from investment banking — that is, making it so that no bank can roll the dice in the securities markets if it wants its deposits backed up by federal insurance.

His analysis is that this would finally free up capital for making loans to small and medium sized businesses - which is where job creation comes from.

So, what can the Federal government do to create job?  Stimulus spending has only limited results, and reducing taxes adds to an out of control deficit, but breaking up the too big to fail banks might actually be very helpful.

Monday, December 19, 2011

Is Gingrich already fading?

It could be that the Gingrich surge is already over.  I hope so.  He is a very smart, articulate, persuasive, reasonable sounding (until you actually think about the consequences of some of what he says), inspiring ... lizard (who thinks he is a T-Rex).  

I think it was Bill Clinton (who has his own integrity issues) who said that people vote for whom they want to invite into their living rooms for the next four years.  I can't imagine having to watch this slimy reptile for the next four years on my living room TV.  Ultimately, it is not just issues and the glibness that elects a president.  Character counts - a lot.  And way too many people, conservative people as a matter of fact, are warning against the integrity and trustworthiness of this man.

I think the Republican primary voters are in the process of figuring that out.  

I expect that the Gingrich alternative to Romney is petering out.  I suppose we have to have a Ron Paul run up in the polls next.  

It will still probably come down to Romney, although I continue to hope that New Hampshire pushes Huntsman into the lead.

Friday, December 16, 2011

S.E.C. Charges Fannie and Freddie with Fraud

Finally, the S.E.C. is charging top Fannie and Freddie executives with fraud.  It seems pretty straightforward to me.  In 2007 Fannie told investigators that it had just 0.2 % of its portfolio in subprime loans, but it actually had 11% at the time.  Freddie told investigators in 2006 it had only $2 - $6 billion, but the S.E.C. says it was more like $141 billion, or 10% of its portfolio.

These lies were a big part of the story that led to the financial meltdown, and of course, the government had to seize control of them later to keep them from collapsing.  

I would like to see prosecutions and real consequences for these people as well as for the executives of the giant, too big to fail financial institutions.  Mainstreet has certainly paid the price for their mistakes in taking out loans they couldn't afford.  Many more in mainstreet paid even bigger prices in unemployment, lower wages, lost opportunities and the other punishments of the Great Recession.  It is time for the super powerful and politically connected in Wall Street and government to be held accountable for their creating this entire mess in the first place.

Thursday, December 15, 2011

The end of our war in Iraq

It is worth a moment to pause and be grateful that our war in Iraq is officially over. 

It looks like our objectives were met.  We drove al Qaeda out if Iraq.  We overthrew the dictator, Saddam Hussein.  We satisfied ourselves that they would not threaten the world with nuclear and other weapons of mass destruction.  And we kept the country together long enough for it to establish some form of representative government that has a chance of being able to keep relative peace in the country and stand on its own internationally.

I wish the people of Iraq the best of luck as they stumble along the path of democracy.  I hope that they present an inspiration to surrounding Muslim nations.  And, most of all, I strongly desire that they do not become the home of terrorist threats to the U.S. and the West.

I know that the Middle East has huge problems ahead, and the tangle of forces make things very complicated there, but this is a day to be grateful and hopeful.

Good luck to them and to all of us.

Wednesday, December 7, 2011

Can Obama be the new Teddy Roosevelt?

Over a month ago, I asked "Where is Teddy Roosevelt When We Need Him".  It looks like Obama has been thinking the same thing.  He just gave a speech in Osawatomie, Kansas, the same place TDR gave a defining speech 101 years ago.  Like TDR, Obama laid out a progressive message, which is at its essence that capitalism today has been stolen by the super powerful, just as it had back in TDR's day, who have eliminated the essence of capitalism itself - competition and the growing of the economy.  

Roosevelt was famously the "Trust Buster", who restored competition to the capitalist system.  But, Teddy Roosevelt was temperamentally suited to take on the oligarchy of his time.  He wasn't called the "Bull Moose" by accident.

Obama seems to understand that the country is in the grips of a new anti-capitalist oligarchy today.  He seems to have the right ideas about what is wrong.  I'm not sure he has the right ideas about what the solutions are, and I am even less sure that he has the temperament to confront and defeat today's oligarchy.

TDR wanted to give the people of America a "Square Deal", FDR wanted to give the people of America a "New Deal", Obama just said he wants to give the American people "Fair Play, a Fair Shot, and a Fair Share".  I expect this will morph into a campaign slogan of giving the American people a "Fair Deal".

I have been wondering how Obama could run for re-election.  He certainly can't run as a post-partisan, reach-across-the-isle president because he has proven that he is incapable of pulling that off.  The only thing left is for him to run as the president who can force the Republicans to buckle under to his will and leadership.  As a result, we have this excellent kick-off speech.  

He will have to follow up with actual, strong willed, confrontational executive action opposing the Republicans in 2012 to prove to the people that he is up to that job.  And he will have to convince more than just a slim majority to re-elect him.  He will have to win a substantial victory in November and create substantial increases in the House and the Senate.  

Of course, he may have an ally in this impossible task - the Republican Party - who may accommodate the president by running an un-electable nominee like Gingrich.

Tuesday, December 6, 2011

Gingrich and the re-election of Obama

As the Republican right wing activists continue their search for anybody-but-Romney, they have now landed on Newt Gingrich.  The Republican campaign so far has been ideal for Gingrich since it has been an endless parade of debates, and Gingrich's main strength is his ability to speak with apparent authority and expertise.  

But, there is so much more needed from a president, and from a presidential candidate, than good communication skills.

If the Clinton presidency taught us anything, it is that character counts.  And Gingrich's character is highly suspect.

One thing the Obama/McCain campaign taught us is that managing a campaign organization matters.  It matters as to how well the campaign progresses, and it shows something about how the candidate will run the executive branch when elected.  And, by all accounts, management and organizational skills are pretty low on Gingrich's talent list.

Ultimately, though, it comes down to a question of what the campaign in 2012 will be about.  If the campaign ends up being a referendum on Obama's performance in the White House, Obama loses.  But, if it becomes about the Republican challenger, then Obama wins.  And if Gingrich runs, the vast majority of the campaign will be about Gingrich:  his character, his opportunism, his insincerity, his lack of moral substance, his inevitably exaggerated claims of importance, his predictably ideologically extreme and unrealistic proposals, etc. etc. etc.  I believe Gingrich is much like Trump in that they are both narcissistic megalomaniacs too filled with their own grandiosity to be anything but off-putting to a very large majority of voters.

So, ultimately, I think it will come down to Romney, although I really do hope that Hunstsman can do well enough in New Hampshire that he can ultimately take the nomination.  Then I think we would have a real campaign between two substantive candidates who are not extremists. 

And, beyond that, I have real hopes that Americans Elect can offer a third party centrist candidate that can take the election away from the extremist wings of each party and give the country a new way of getting good candidates on the ballots of all the states.