Meh Culpa

Just a quickie: Bernanke on the economy

I wanted to say he’s on crack–although I still want to know what he’s smoking–but I think I’ll stick with Head in Clouds disease (because it might be kinder): Ben Bernanke, for saying the recession will be over this year, and that 2010 “will be a year of recovery.”   I actually cackled when I read that.  The guy is seriously deluded. Just like his previous boss.

Anyhow, for your consideration, an excerpt from Robert Reich’s blog:

We’re in a deepening recession, in case you hadn’t noticed.
The biggest challenge is to ramp up aggregate demand. Yes, we have to borrow lots from the Chinese and Japanese to do this, and, yes, it’s costly in terms of additional interest payments to them. But there’s no choice. In fact, if the slump gets worse — and I have every reason to fear it will because that’s the direction we’re heading in as fast as you can imagine — we’ll probably have to have a second stimulus. And if the second isn’t enough, a third. And so on. FDR’s biggest mistake was doing too little until World War II. (No one should interpret this as a recommendation for more military spending — I’m just saying Obama will probably have to think and do much bigger than the $787 billion stimulus so far.)

That post was dated yesterday.   How could all that change in a single day?

I would say Paul Volker agrees with Reich, and though we’ve never met, with me.   Yet even  Volker was surprised at how quickly the world’s economy has collapsed. Just last Friday he said, “I don’t remember any time, maybe even the Great Depression, when things went down quite so fast.”  With “shocking speed,” no less.

Maybe Bernanke has ripped a page out of Bill Clinton’s Playbook of Hope , but what he’s doing is  spreading false hope, delusion, or even a baldfaced lie.  Americans aren’t that stupid.  We all know how bad it is. (Well, except for those rich folks that represent us in Congress, we do.)   Encouraging us probably more apt at this point.  We American may not be used to exerting determination and confidence–after all, it has been a long time–but grit is in our genes.  We are pioneers and innovators from way back, and don’t you forget it.

I would like very much to talk about Israel’s deepening paranoia and belligerence, which hasn’t been working for the Israelis at all, thankyouverymuch, but  I have a paper,  fortunately my last, to write on ovarian cancer.  I will try to get a grip on my compulsion to  research everything on the planet and thensome, but that’s what I tell myself every time I write a paper and it ends up being way more knowledgeable and detailed than it has to be.  And then I revise for a day and a half, which I don’t really do here.  Meh blog is more or less a purge.

Ah, well. Drudgery calls.


February 24, 2009 Posted by | Economy, Federal Reserve, recession | , , , , , | 2 Comments

I’m not an economist and I don’t play one on TV

I’m just a mathematically challenged American, yet I,–yes, I!–have a plan for the banks.  And for that matter, the automobile industry.

I can remember way back  when the Former Husband was attending grad school for his MBA (*cough*in the 1980’s*cough*), the so-called logic of egregious salaries was gaining sway,  greed was all  good, and ethics were [possibly] questionable.*  Here we are, about 20 years later and  gone are the days when anyone can argue that executives are paid such vast sums because they’re the ones with the expertise, and if you want to keep them on the job, you need to  compensate them with astronomical salaries, bonuses, perquisites and parachutes.

Uhhh, hellooo?!


Here’s the Plan: I think we should fire all the overpaid executives at the top.   C’mon, who needs retention?  When those narcissistic fools drove their companies into the ground, they planted all of us taxpayers as well.  Then too,  the automobile moguls drove a stake into the Big Three’s collective heart, the one pumping with the lifeblood of its distressed employees.   You know, the folks who had some of that $28 an hour lifeblood siphoned to keep the bottom line from bottoming out.  If any other American employee had done such a masterful job,  he  (or she) would have been pink-slipped as soon as the ink on the annual report dried red.  Hey, not even HP’s former CEO, Carly Fiorina, was spared when she failed to produce after the merger with Compaq, so neither Wall Street nor Detroit should off the hook.  Besides, the corporate cultures could use a little fresh air.  The thing is,  you can’t open the windows without throwing out all the upper level execs.

What, we can’t do that?

Sure, we can. They aren’t the only people in the world who know how to run a business, whether it be money business or car business.  Import ’em if you have to.

Next, do away with creative accounting. Let’s see those balance sheets balance without any fancy tricks. If they don’t,  then nationalize the insolvent banks.  (I’m sure Geithner and Bernanke already know which are which. They’re just not telling.) If shareholders have to take a hit, then so be it.  Shareholders know  going in that they’re taking a risk.  We shouldn’t change the rules of the game just for them.

Merge Chrysler and General Motors.   Sell off everything  that can’t make a profit, but keep GM’s parts business for all the used cars.  That’s a market that won’t go away.  Sell a line of Light Weight Classics that make 60 mpg for starters.  (If China can do it now, why can’t we?)   Bring in new design teams and Green Teams.  Let there be independent quality control.  Educate the workers, and along with them, repair techs, in greening the fleets.  Now that’s an investment.

(If I have any other ideas, I’ll let y’all know…  :D)

* I think the Former Husband’s class was asked a rhetorical question that went something like this: “If you had the chance to steal $40,000 (or $100,00) and get away with it, would you?” When the fundage increased, ethics decreased by an equal margin.  It was a long time ago, but I’m pretty sure no one said they would resist temptation.

February 13, 2009 Posted by | automakers, bailout(s), banks, Chrysler, Economy, Federal Reserve, GM, recession, Treasury | , , , , , , , , , , | Leave a comment

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