In Code

8 Meaningful Quotes from Paul Krugman #4

I had hoped to mine a bunch of Krugman's early work, but recent events show that learning as much as possible about the current crisis is necessary. Krugman is blogging continuously on the subject, even over the weekend.

Today, Paul took a look at the original communique from the G7 about a global response to the financial crisis. He isn't happy. If this were a test, he would give the finance managers a C minus. He also thinks Paulson sounds terrified. Maybe we should be scared.

My initial take: it’s written in code — and that’s a bad thing. ... sounds to me as if there was some tense negotiation over language that two warring parties could live with — one (presumably the Brits) wanting a British-type recapitalization, the other (Paulson?) still hoping that the Warren Buffetts and Saudi princes of the world will come in and save the day. That’s not at all a good sign.

The Man For The Job

8 Meaningful Quotes from Paul Krugman #3

Despite constant whining by the angry guy and the prom queen about "looking back", we have to understand how we got here if we are going to not only get out of this mess, but if we are also going to make sure it never happens again. One man who played a rather large role in how the crisis has played out is Phil Gramm. He was John McCain's number one public man on the economy until Gramm's role ushering in the current crisis was revealed. McCain still refuses to say whether or not Gramm would be his choice for Secretary of Treasury if he wins the election.

On Countdown with Keith Olbermann, Paul Krugman let us know exactly what he thinks of the major players in this crisis, and in particular, Phil Gramm. You can watch the video here.

Ben Bernanke and I think Hank Paulson understand that we could manage to have another Great Depression if we work at it hard enough. I think Phil Gramm might be just the guy to do it.

Quick 8: The Financial Crisis

1. I've started this blog because I need an outlet for my thoughts, my anger and occasionally, my creativity. Like most people who can see clearly, I've been terrified with the direction that the Bush administration has taken our country. I don't think you had to be an economist to know that even when it seemed the economy was soaring, we were simply setting ourselves up for a massive fall.
2. I recognize that many of the financial devices that have accelerated this crisis came about during the Clinton administration, but I don't think anyone can seriously hang this catastrophe around his neck. Clinton spent six years in office with a hostile Congress and had to settle for making bad legislation better. Anyone who followed Clinton knows that he was not the type to stick his head in the sand and proclaim everything is alright when there were warning buzzers going on all around him. He would have been proactive rather than reactive.
3. I am by no means a financial expert and I don't proclaim to be. Honestly, when the financial devices used to build wealth have become so complicated that the average American can't understand them, perhaps they need to be rethought. Every American gets what purchasing real estate means. Every American understands the basics of stock investing. What every American doesn't understand are derivatives and the other greedy tools that the "smart" people in the financial industry use to make the rich richer. Understand this, the only people who profit from these bogus tools are the rich, and they are the ones who suffer the least when this stuff blows up in our faces.
4. There's no better source of information on the web for financial issues than the New York Times' Paul Krugman. I had started a series of posts featuring his quotes, but the severity of this crisis has sort of steered me away from his jokes. I find myself pointed more to his wisdom now. He's a rational voice in the midst of an irrational situation and I hope those in the know are heeding his advice.
5. Of course, I have no faith that they are. Secretary Paulson and Chairman Bernake are very much products of the system that has produced the economy we find ourselves saddled with. No further point here, but every action these two men take needs to be monitored closely.
6. I've also come to the realization that all Americans need to know more about the economy, myself included. Like so many mistakes in our history, a better education on the topics at hand would allow us to make more informed decisions. I understand that in the 21st century global job market we have to focus most of our educational resources on math and science but everything from the current financial crisis to the war in Iraq demands that we increase our attention to Social Studies. History, Economics, Civics and Personal Finance matter and should be treated as important cogs in the public education engine.
7. How scary is the near death of the pension plan now? Virtually every financial device that has been created for the retirement of the average American, short Social Security, depends upon the market. Of course, the Republicans want to tie Social Security to the market as well. I really don't find that these people are serious about helping anyone other than themselves.
8. The opportunity will be there for a President Obama to enact New Deal style changes for Americans early in his Presidency. He will have to act quickly if he is to take us in a new direction rather than simply help us weather the current crisis. I hope that his vision for the future of this nation is enlarging now. I hope that his view of what needs to happen has broadened. I hope that President Obama rises to the occasion the same way that President Roosevelt did in the 1930s and 1940s. Anything less and this country may be unrecognizable in 4 years.