Dear William,

By now we have identified the primary causes of the financial crisis: unregulated and hyper speculative derivatives trading between financial institutions, poor risk analysis by ratings agencies and irresponsible lending practices by loan originators. We're also familiar with goverment policies to curb the aftermath, but the real question is why are we still stuck in the river tick? Well, we know Ben Bernancke, Henry Paulson and Timmy Geithner due to their proximity to the financial sector decided to subsidize banks, allow them to consolidate their interests and return within a matter of months, incredibly back to profitability.  The reason given then and even more incredibly now, was that if we didn't the "economy" would be at risk of further contraction.  Meanwhile, individuals and families, if they were lucky and haven't lost their job or house, or both,  are merely strapped with so much debt they can't hope to pay i...

My first memory of Jimmy Carter occurs in a story my grandfather told me about when he was asked to be president of WFFSA, a floral industry organisation, a sort of governing body for the industry.  Originally disinclined to seek the post from feeling less than confident that he had anything of significance to bring to the position.  As he tells the story, he sat one night considering the role when upon the television came the then President of the USA, Jimmy Carter.  In that moment before a word came out of his mouth he had made up his mind.  Having built up the story with the larger than life personality and flair for dramatic story telling that makes him a truly unique and special man.  He gets on the edge of his chair, rubs his hands together and says, "If that peanut farmer can be President of America, I can be President of WFFSA!" Since that time President Carter has continued to do so...

Trying to make some peace with this long, distasteful and in time ultimately sad, distracting disaster this summer of debt crises has bestowed upon us.  Fortunately my subconscious has led me to a few fallback leaders for inspiration and clarity. This feeling is a new phenomena for me. Historically, I suppose the Bible has served the masses well in these times of foggy uncertainty.  For many of the closest people in my life the community of believers that gather to love and share, inspire and appreciate follows directly from their faith.  It works. As a parent one of the greatest blessings you can provide is the knowledge of the safe places and religion is sincere and righteous when that is the objective.  However, these days it doesn't speak to me, provide the clarity and hope, the necessary immediate or directly tangible goal and objective results oriented perspective I seek and desir...

Brad DeLong in a piece titled The Sorrow and the Pity of Another Liquidity Trap  writing for Bloomberg provides some much needed perspective on the current head scratching situation in the bond market.  Specifically, what accounts for the absence of the much dreaded and hyped bond vigilantes.  Ends up they are happy to take their better than a kick in the face returns on T bills so long as prospects for the economy and reasonable alternative investments continue to be scarce.  In effect begging the government to take their money at whatever return they can get so they can do something productive and get us out of this mess.  If only the Roosevelt's were around to provide the leadership and determination to actually take them up on it.  The once in a generation opportunity to reset the balance while establishing the foundations of long term growth and sustainability in the 21st cen...

Thinking recently about who, if asked, I might identify as someone whom I admire most in the world.  There are few: James Galbraith, JM Keynes, my mom and maybe Mark Cuban for sheer determination.  But none that I admire more than Noam Chomsky.  Whenever I hear him speak an awed sense of inspiration comes over me.  Given his generally monotone speaking style and critical outlook is surprising.  No idealistic words of inspiration ever crossed his lips.  Clear eyed view on reality that is the Chomsky realm. Checking in on him periodically for clarity and perspective,   following this lecture  a sense of loss came over me, partly resulting from the late hour, but picturing his frail aged face I couldn't help thinking some day his vast intellect, incredibly researched mind would be gone.  The good news is that he's not and despite his age continues to be an incredibly prolific speaker and wr...

The NPR program Intelligence Squared US held one of their Oxford-style debates raising the question    Can Clean Energy Drive The Economic Recovery?   Incredibly, the notion in the affirmative lost.  Feeling compelled to give it a shot hopefully I will succeed. This notion is so matter of fact,  so self evident  in our daily lives and confirmed by the laws of economics we take its truth for granted.  In order to come to a solution we must clarify the argument with a few simple questions. Well, remember the typewriter?  Or the personal computer? Life before Microsoft Office or the Internet?   Hard to imagine right.  How do we define these things generally?  What sector of the economy do they represent?  Technology.  What we know about technology is that it improves our lives as resources that save time and money and improve our quality of ...

Raghu Rajan in a blog post and Project Syndicate column titled Money Magic  raises the other important issue with respect to low interest rates.  The first, as I have been harping on, is that cheap money for banks is hurting the economic recovery by the resurgence of a new bubble in commodities that lowers discretionary income.  Arguing in the same manner as Bill Gross that extended low interest rates work as a tax on savers, especially elderly risk averse bond holders, and thus reduce their income without providing any positive economic impact in return.  Companies are sitting on cash and individuals are still deleveraging.  Just goes to show what a confused mess we are in.  I know why don't we borrow the money from ourselves, or just conjure it up like the banks, and invest it by providing public goods, jobs, training and infrastructure improvements and the basis for long term growth.  Wait we can't do that the...

The development of comment posting as a useful tool for post column or article discussion is theoretically a very good development as a communal tool for an extended conversation.  On occasion links to outside research areas or topics outside of my general purview have been really useful to aid in the understanding of a given subject area.  However, for some reason I have noticed recently that what passes for comments after most articles that seem reasonable enough to warrant a sensible discussion are filled not only with awful English but nonsensical arguments or argument-less positions, name calling and worse intent on the disruption of what would otherwise by sensible communication.  As we celebrate our nations founding I feel the need for a public service announcement to those people, you know who you are, to cease and desist, you are ruining America.  Now there is a point to be made about...

Office of the Comptroller of the Currency is out with a new report the only one that identifies the commodity betting activities of banks. According to reporting by Reuters:                  "U.S. bank holding companies including Goldman Sachs ( GS.N ) and JP Morgan ( JPM.N ) raked in $2.7 billion in commodity   and other trading revenue in the first quarter, the highest in at least two years, data showed. Revenues surged 67 percent versus the fourth quarter of 2010 and rose by a third from the first quarter a year ago, according to a quarterly derivatives report by the Office of the Comptroller of the Currency (OCC). The total was the highest since the OCC, an arm of the U.S. Treasury that supervises all national banks, began breaking out the holding company data in early 2009. The report is the only public gauge of the earnings of commodity trading operations among the big bank holding firms, whi...