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HomeWhy I Do Not Trust Washington
Posted by Larry Doyle on May 25th, 2010 11:47 AM |
People can debate the relative strength of the economy all they want. I firmly believe that from a macro-level, our economy has years to go before it has a real chance to recover. Why years?
1. The banking system overall remains loaded with an excessive amount of delinquent loans. Uncle Sam will continue to siphon money from the American public and deliver it to the banks. In the process, these “earnings” will be utilized to write down the values of loans and securities it holds at inflated levels.
2. Credit will not truly flow until the health of banks, especially the smaller and community based banks, is substantially stronger. (more…)
Keep Pressuring the Wall Street-Washington Incest
Posted by Larry Doyle on April 20th, 2010 9:17 AM |
Incestuous relationships can last a long time. When two willing consorts are engaged in incest without it being exposed, the incest can grow and ultimately become cancerous. Incestuous partners may believe they are pleasing each other at little expense to other family members. What a lie. Make no mistake, there is always a third party involved in incest. Who is that? Collectively, the family. In the case of our financial crisis circa 2010, the incestuous relationship between Wall Street and Washington has badly damaged the American family. Let us not allow either of these incestuous partners to define our current turmoil by asking family members to pick sides.
Why am I writing this? (more…)
Finger Pointing and Payoffs
Posted by Larry Doyle on April 9th, 2010 9:12 AM |
Who in America is going to stand up and accept appropriate culpability for his/her contribution to our current economic crisis? Who in America is also willing to expose the incestuous nature of the Wall Street-Washington relationship which provided the cover for the activities which have debilitated our nation?
Let’s review what we have learned so far:
1. Blame has been directed at bank executives…but they got paid handsomely, and have not accepted full responsibility.
2. Blame has been directed at ratings agencies….but they also got paid handsomely to provide ratings, while not really knowing what they were doing. (more…)
Do You Trust Uncle Sam to Deliver on Healthcare?
Posted by Larry Doyle on March 23rd, 2010 6:11 AM |
Sifting through all of the pros and cons of healthcare reform, I strongly believe the greatest fear for the majority of Americans is that Uncle Sam will screw up the delivery of healthcare itself. Healthcare is the equivalent of the third rail for Americans. Uncle Sam can go ahead and touch almost every other aspect of our lives, but when it comes to our health and access to our physicians, now that is truly personal.
Can Uncle Sam deliver? I guess it is possible, but regrettably Americans increasingly do not trust the “old man” on this topic. (more…)
Who’s The Boss?
Posted by Larry Doyle on December 28th, 2009 12:04 PM |
I almost vomited this morning upon reading the lead article in The Wall Street Journal. The principles and values I cherish and which I believe are the keys to our long term economic prosperity are under continual siege. The American dream is under siege, as well. Our nation’s economic future has never looked so cloudy and uncertain. Why? As The WSJ writes, After the Bailouts, Washington’s the Boss:
Only as the recession recedes will it become fully evident how permanently the state’s role has expanded and whether, as a consequence, a new, hybrid strain of American capitalism is emerging.
One thing is clear: The government is a much bigger force in today’s U.S. economy than it was before the financial crisis. “The frontier between the state and market has shifted,” says Daniel Yergin, whose 1998 book “Commanding Heights” chronicled the ascent of free-market forces starting in the 1980s. “The realm of the state has been enlarged.”
Why am I so concerned? For the following reasons: (more…)
A Question of Competence
Posted by Larry Doyle on November 23rd, 2009 12:27 PM |
Band-aids, quick fixes, partisan posturing, and the like will do little to address the structural and cultural deficiencies which played into our current economic crisis.
High five to SH for sharing a report (a link to the full report is provided at the end of this post) by Harvard Business School’s William A. Sahlman entitled “Management and the Financial Crisis (We have met the enemy and he is us…).” Sahlman does an outstanding job of pinpointing five critical components of firms and institutions that failed during this crisis. At the end of this post I have provided a link to Mr. Sahlman’s 35-page report, but allow me to provide some highlights. Sahlman writes:
I assert that most of the problems evidenced so prominently during this financial crisis can be traced to failures in five related managerial systems inside each major private and public actor in the financial markets:
Incentives – how risk and reward are shared; how people behave if they act in their own perceived best interests given the structure of pecuniary and non‐pecuniary payoffs
Control & Information Technology – how limits are placed on behavior; how information is captured and shared; how risk and reward are measured and how those assessments affect tactics and strategy
Accounting – how managers choose accounting policies; how managers measure economic profits & losses, as distinct from GAAP profits and losses
Human Capital – the process by which people with certain characteristics (skill, experience, networks, character, and attitude) are attracted and managed or encouraged to leave any organization
Culture – the values that guide individual and group decisions
While Sahlman thoroughly reviews these five factors and how they misfired in a number of failed institutions, he goes one step further in addressing why they misfired. I commend him for it. He writes: (more…)
Geithner and Congress Take the Gloves Off
Posted by Larry Doyle on November 19th, 2009 2:23 PM |
Do you get the sense that Americans are increasingly fed up with the incestuous nature of the Wall Street-Washington relationship? How so? The gloves came off from both sides of the aisle today in the midst of Congressional testimony from Treasury Secretary Geithner to the Joint Economic Committee.
Despite what you may think about the policy and programs of the Obama administration, the sentiments shared by selected Congressmen are clearly reflective of the mood in the nation today.
No jobs on Main Street combined with massive bonuses on Wall Street is a surefire recipe for an enraged electorate. Washington can spin it however they want and attempt to deflect blame to the prior administration, but real leaders and real leadership are defined by the saying embraced by Harry Truman, “The buck stops here.”
Leaders who accept credit but redirect blame aren’t leaders.
LD
Liu Mingkang Provides Sense on Cents
Posted by Larry Doyle on November 16th, 2009 8:21 AM |
Liu Mingkang, Chairman of China Banking Regulatory Commission
With friends like this, who needs enemies?
That trite saying is far too simplistic in defining the diverse and convoluted nature of U.S.-Chinese relations. That said, as President Obama prepares to arrive in the People’s Republic of China for the first time during his Presidency, he is faced with an extremely aggressive overture from Liu Mingkang, China’s chief banking regulator.
What does Mr. Mingkang have to say? Well, let’s just say he has a drastically different opinion on U.S. monetary and fiscal policy than his counterparts in Washington. While our wizards in Washington, Messrs. Bernanke, Geithner, and Summers would lead us to believe that the rebound in markets is a precursor to a rebound in our economy, Mr. Mingkang has a decidedly different take. The Financial Times sheds light on this topic in writing, China Says Fed Policy Threatens Recovery:
The US Federal Reserve is fueling “speculative investments” and endangering global recovery through loose monetary policy, a senior Chinese official warned just hours before President Barack Obama arrived in China for his first visit.
Liu Mingkang , China’s chief banking regulator, said the combination of a weak dollar and low interest rates had encouraged a “huge carry trade” that was having a “massive impact on global asset prices”. (more…)
Health Care Reform or Merely Another Redistribution Program
Posted by Larry Doyle on November 9th, 2009 8:49 AM |
Why is an ever increasing percentage of the American public getting angry?
In my opinion, more and more Americans are not only questioning but now realizing that they are largely disenfranchised. How so? Seemingly each and every program emanating from Washington is merely another form of income and wealth redistribution.
Make no mistake, the redistribution is running in both directions; that is, to the large monied interests on Wall Street and those who are increasingly dependent on Washington’s welfare and largesse. While funds are flowing in both directions, America’s great middle class feels more squeezed and screwed than at any point in their lifetime. We witness this reality again in Congress’ passage of its health-care reform legislation late on Saturday night.
While the health-care legislation will continue to be hotly debated, I view it as another government program imposing on the lives of those who have worked tirelessly to make this country great. Clearly, people are passionate on both sides of the health-care debate but ultimately this so called reform is merely another form of rationing and redistribution. Is that what America truly wants? I think not. Washington’s Democratic establishment will pass this bill at their political peril. They know it.
Arrogance comes in many forms, but ultimately I believe the height of arrogance is willful blindness. I see a lot of that in Washington these days.
LD
What Did We Learn Last Night in NY, NJ, and VA?
Posted by Larry Doyle on November 4th, 2009 8:30 AM |
Off year elections are always interesting in terms of getting a pulse on the American public. Yesterday’s elections, with the primary focus on the gubernatorial elections in VA and NJ, the mayoral race in NYC, and the Congressional race in upstate NY, strike me as having some similar themes. What were they?
1. A rising tide of discontent with incumbents.
I sense that not only in the NJ gubernatorial election but primarily in the mayoral race in NYC. Michael Bloomberg spent over $100 million, was estimated to hold close to a 20 point lead, and won by only 5 points.
I definitely sense this anti-incumbent discontent in Connecticut, as well. Both Senators Dodd and Lieberman are under real pressure.
2. An inability of the Obama administration to turn out the vote that brought him to Washington. (more…)
