March 2010

ECONned: Yves Smith's Book of Books

Review of ECONned, by Yves Smith

Out the gate, I was fully prepared to dislike this book (ECONNED: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism). While I occasionally peruse Ms. Smith’s excellent econ/finance site, Naked Capitalism, I have often considered some of her comments to be soft pedaling the economic crises of our times.

But, I have to admit her attitudes have been evolving to my way of thinking, and her masterful book is a stunner and a real joy to behold!

Madam Smith’s treatment of the Brooksley Born saga is the best I’ve read yet, and I humbly believe I have read them all. Ms. Born, a top notch derivatives attorney from the Washington, D.C. powerhouse law firm of Arnold Porter, was appointed to chair the Commodity Futures Trading Commission during the Clinton Administration.

How Ms. Born was halted from performing her rightful function in that position by the likes of Robert Rubin, Alan Greenspan and Arthur Levitt (the true villains and criminals, and make no mistake about that) is well worth the price of the book (and at $30 a pop, it ain’t cheap in these times we economically struggle to survive in).

And the recent mea culpa by Levitt in ignoring and circumventing Brooksley Born’s warnings of the coming debacle, is akin to the bank robber who murders a teller during his crime remonstrating that he had a bad day!

Reuters: An economic puzzle Bernanke can't solve

link to Reuters

This should be a no-brainer for Economic Populist readers...

(Reuters) - It's a mystery that has puzzled even Federal Reserve Chairman Ben Bernanke: if the U.S. economy is growing rapidly, why isn't it creating jobs?

 

Perhaps we should send Bernanke the link to the site?

 Bernanke offered two possible explanations.

Must Read Posts for March 27, 2010

Submitted by on

On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.

Sometimes though, one cannot say it better but miss those who did.

Must Read Post #1

Well, sometimes it's must watch. Below is Senator Ted Kaufman's Senate Floor speech, Ending Too Big to Fail. Sen. Kaufman does a call out on the woefully inadequate Senate Financial Reform bill.

 

State Income for 2009

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The annual state income for 2009 data was released yesterday with an annual average drop of -1.7% from 2008 and dropped in 42 states.

personal income national

State personal income declined an average 1.7 percent in 2009, according to estimates released today by the U.S. Bureau of Economic Analysis. The annual percentage change in state personal income ranged from -4.8 percent in Nevada to 2.1 percent in West Virginia (one of six states with a personal income gain in 2009). Inflation, as measured by the national price index for personal consumption expenditures, fell to 0.2 percent in 2009 down from 3.3 percent in 2008.

The per capita income is even worse, -2.6% with an average of $39,138.

New Mortgage Modification does not have mandatory principle write downs

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For all believing the Treasury's announced expansion of HAMP, the program that is a dismal failure, is really gonna do something, think again.

From the New York Times:

John Taylor, president of the National Community Reinvestment Coalition, said he was skeptical the program would work in large numbers. “I will be pleasantly shocked if investors step up for half a million borrowers,” he said. “The real acceleration in the number of foreclosures prevented will come with mandatory principal write-downs.”

Since the FHA is on the hook if principle write downs occur, it could also put the FHA in more debt, i.e. the taxpayer at risk.

Notice it's never the investors or the banks who are forced to take a hair cut, it's always the homeowners and the taxpayers upon which the losses are dumped.

A Defense of Public Sector Unionism - Part the First

Note: this is a cross-post from The Realignment Project.

 

Introduction:

There is something strange about the Democratic Party’s love of attacking parts of its own coalition. Every political party has divisions inside it, but disagreements between factions and interest groups are usually solved through negotiation, power-sharing, and the like. The Democratic Party is highly unusual in the level of existential opposition it’s willing to engage in – the infamous “Sister Soljah” moment, the bitterness of the Rainbow Coalition vs. New Democrat conflict that arguably lasted well into 2008, and so on.

However, there’s nothing quite as strange as the loathing of certain parts of the Democratic Party for the very existence of public sector unions.

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