
Saturday, October 24, 2009
Chickens Coming Home

Thursday, October 22, 2009
One too many calories
Wednesday, October 21, 2009
Correcting the Credit Rating Agency Problem
Image by Getty Images via Daylife
- there is no independent due diligence with regard to a proposed offering
- the position of compliance officer needs to be strengthened considerably
- the SEC should work with the compliance officer.
Bring Back Glass-Steagall
Tuesday, October 20, 2009
Listen up, Geithner
Obama needs a Plan B
That's what Stephen Walt thinks because the current foreign policy is just not working. And, of course, Walt has the beginnings of such a plan. And it's not a bad start!
So what's Plan B? I'm still wrestling with that issue myself, but here's a quick sketch of some of the fundamental ideas. Plan B begins by recognizing that the United States remains the most secure great power in modern history and that most of damage we have suffered recently has come from scaring ourselves into foolish foreign adventures. It means rejecting the belief -- common to both neoconservatives and liberal internationalists -- that virtually every global problem requires an American solution and "American leadership." It acknowledges that social engineering in complex traditional societies is something we don't know how to do and probably can't learn, but it takes comfort from the fact that it is also a task that we don't have to do. It accepts that there are a few bad guys out there that do need to be confronted, captured, and sometimes killed, but understands that the more force we use and the heavier our footprint is, the more resistance we will ultimately face. And yes, Plan B understands that sometimes bad things will happen to Americans, and there is nothing we can do to completely eliminate all foreign dangers. Get used to it.
Plan B means playing "hard to get" more often, so that other states don't take us for granted and so that they bear a greater share of common burdens. It means exploiting balances of power and playing divide-and-conquer, instead of trying to impose a preponderance of U.S. power on every corner of the globe. It prizes the individual freedoms that are the core of American democracy -- freedoms that are threatened by a steady diet of foreign wars -- and it recognizes that other societies will have to find their own way toward more pluralist and participatory forms of government, and at their own pace. It seeks to maintain armed forces that are second to none but eschews squandering lives or money on peripheral wars that are neither vital nor winnable. It rejects "special relationships" with any other state, if by that one means relationships where we support other states even when they do foolish things that are not in our interest (or theirs).
And Plan B proceeds from the belief that other states will be more likely to follow America's lead if they look at us and like what they see. America used to dazzle the world by offering up a vision of opportunity, equality, energy and competence that was unimaginable elsewhere. The danger now is that America is increasingly seen as a land of crumbling infrastructure, mountainous debt, uninsured millions, fraying public institutions, and xenophobic media buffoons. Over the longer term, getting our house in order back home will to a lot more to shore up our global position than conducting endless foot patrols through the Afghan countryside.
Fly me to the moon

The chart to the left is from the Washington Post analysis of perquisites given to the CEOs of the twenty-nine largest public financial companies that we bailed out. The bailed-out increased their perquisites by 4% in 2008; other Fortune 100 companies decreased their perquisites by 7%.
Two particularly egregious examples, as shown here, are GMAC, which gave their CEO $2,500,000 to help pay his taxes, and Comerica, which paid the boss' country club $200,000 for initiation fees and dues.
Sunday, October 18, 2009
Greed
Hall asserts that Moody's "purg[ed]analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression." All for the sake of increasing revenues and, ultimately, profits; revenues went from $800,700,000 in 2001 to $2.037 billion in 2006.
Systematically Timed
Granted it's an academic study that has yet to be published. But one should remember the furor about backdating options that was started by another WSJ article. Plus, the Journal has given some form of imprimatur by saying that it has reviewed a number of company filings and agrees with the professors.
Triple the Workload But Don't Increase the Staff
Image via Wikipedia
The FHA did not have sufficient controls in place to ensure that regulations were being met. They did not check with other offices about their experience with the lenders. Nor did they collect all fees that were due. Or make sure that all supporting documents were obtained. Or that lender certifications were appropriate.
"If they're too big to fail, they're too big"
And a few more comments from a talk given last week at the Council of Foreign Relations.
“If you don’t neutralize that (i.e., the too-big-to-fail issue), you’re going to get a moribund group of obsolescent institutions which will be a big drain on the savings of the society,” he said.
“Failure is an integral part, a necessary part of a market system,” he said. “If you start focusing on those who should be shrinking, it undermines growing standards of living and can even bring them down.”
Can you guess the speaker? Alan Greenspan! If he's on the bandwagon, why can't Geithner and company move faster and smarter on the issue?
Saturday, October 17, 2009
If you keep calling me a murderer, I'll kill you.
A Pakistani Taliban group is apparently worried about how the media perceives them. The group does not like to be portrayed as terrorists by the media. They sent a letter to the Lahore Press Club warning that if the media “does not stop portraying us as terrorists ... we will blow up offices of journalists and media organisations”.
Thursday, October 15, 2009
Monday, October 12, 2009
Two Views of Afghanistan
Helena Cobban brings up the question of China as it relates to Afghanistan. In her view China has benefited enormously from our dalliances in both Iraq and Afghanistan. She quotes from a recent article by someone fairly high up in the Chinese government. The writer thinks the UN is much better able to handle the situation than the Western coalition is.
Sharing the wealth

Changing his mind
Sunday, October 11, 2009
A Pivotal Moment?
Stalling the Investigation into the Gaza War
Helena Cobban, who is a pretty astute observer, reports on two rumors circulating in Palestine as to why Abbas and Fatah may want to go slow with any action on the Goldstone report:
- Israel has offered money to a Palestinian company that is tight with Fatah and wants to start a cell-phone service.
- There are tapes clearly showing Abbas urging Israel to continue its attack on Gaza.
Saturday, October 10, 2009
What if?
Walt concludes by quoting Robert Kaplan, who, despite being in favor of staying the course, writes "history suggests that over time we can more easily preserve our standing in the world by using naval and airpower from a distance when intervening abroad. Afghanistan should be the very last place where we are a land-based meddler, caught up in internal Islamic conflict, helping the strategic ambitions of the Chinese and others."