Getting the GM Bankruptcy All Wrong

To read the mainstream coverage of the GM bankruptcy, you would think President Obama's main enemy--and indeed the enemy of progress for the whole country--is a unionized labor force in the auto industry.

Good thing Obama and his one-person task force on dismantling the auto industry--31-year-old Yale Law School student Brian Deese are ready to stand up to the automakers and the union, we are told.

Reagan Didn’t Do It

How could Paul Krugman, winner of the Nobel Prize in economics and author of generally excellent columns in The New York Times, get it so wrong? His column last Sunday-"Reagan Did It"-which stated that "the prime villains behind the mess we're in were Reagan and his circle of advisers," is perverse in shifting blame from the obvious villains closer at hand.

Economic Recovery is Wishful Thinking

Last week we got a whole series of bad reports on the state of the economy. New and existing home sales both remain near their lowest level for the downturn, as house prices continue to drop at the rate of 2% a month. New orders for capital goods, a key measure of investment demand, fell by 2% in April. Excluding the volatile transportation sector, new orders were still down by 1.5%.

Betting the Fed

In the banking panic of 1907, J. Pierpont Morgan personally organized a syndicate of financiers to provide $25 million to collapsing banks. It was this panic that finally persuaded Congress in 1913 to create the Federal Reserve System -- not a single central bank but 12 regional reserve banks and a weak board of governors in Washington. The New York Federal Reserve Bank, with its intimate links to Wall Street, quickly became the reserve system's most influential player.

Reagan Did It

"This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot." So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.

Goodbye, GM

I write this on the morning of the end of the once-mighty General Motors. By high noon, the President of the United States will have made it official: General Motors, as we know it, has been totaled.

As I sit here in GM's birthplace, Flint, Michigan, I am surrounded by friends and family who are filled with anxiety about what will happen to them and to the town. Forty percent of the homes and businesses in the city have been abandoned. Imagine what it would be like if you lived in a city where almost every other house is empty. What would be your state of mind?

Underlying the Economic Crisis is a Human Rights Time Bomb

Underlying the economic crisis is an explosive human rights crisis. The economic downturn has aggravated abuses, distracted attention from them and created new problems. In the name of security, human rights were trampled on. Now, in the name of economic recovery, they are being relegated to the back seat. The world needs a new global deal on human rights - not paper promises but commitment and concrete action from governments.

The US and UK Need More Stimulus

In the last week the news that has roiled financial markets on both sides of the Atlantic was a warning from Standard & Poor's, the credit rating agency, that the UK could lose its AAA credit rating, the highest bond rating and one that is held by 18 governments worldwide.

Will This Financial Crisis Lead to True Reform or Plunder without End?

NEW YORK -  It is almost axiomatic to argue that renewal comes out of chaos. And reform and change are born in crisis. 

The financial meltdown of 1907 led to the formation of the Federal Reserve Bank. The Crash of '29 ushered in the New Deal, the FDIC, the SEC, The Glass-Steagall Act, etc. Even the disaster at Enron permitted new statutes requiring more transparency like Sarbanes Oxley. And now this greatest of great recessions is leading to a new wave of financial regulation. The public is already said to believe recovery is just around the next corner. 

Stuff the Bankers, Starve the Kids

All sorts of startling conclusions are being drawn about the failure of California's ballot funding initiatives last week. Newt Gingrich hailed it as another Boston Tea Party, and New York Times columnist Paul Krugman insisted that it condemns California, one of the world's largest economies, to banana republic status. But if it was such a big deal, how come the voter turnout was so low?