Deregulation and conflict of interest juxtapose in very dangerous territory. News is slowly coming out that the credit raters knowingly gave their best rating to securities that didn’t deserve it. Bond and securities issuers pressured rating agencies like Standard & Poor, Moody’s and Fitch, Inc. into issuing AAA ratings that they shouldn’t have. Not surprisingly, those corporations made very large profits, in no small part because with excellent ratings, securities rose in value and more could be issued … with excellent ratings. It was but one positive, though artificial and unethical, feedback cycle that kept driving housing prices through the roof in the 1990s and 2000s. Also in the article: a severe admonishment from Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee. I had a lot of respect for Rep. Waxman coming out of the 2006 election cycle. The past two years has shown me that he’s too ready to issue his rebukes but he hasn’t really exercised the oversight for which his committee is responsible. I suppose getting beat up by the right-wing for decades will do that to you. Will Waxman push for enforcement of regulations under an Obama presidency? Time will tell.
Have people really adopted more efficient driving habits? Will the money saved on falling gas prices go instead to reducing household debt, which runs into the trillions of dollars? Here again, time will tell.
More economic stimulus is being discussed within Washington. Should taxpayers get more cash or should the money instead be spent on infrastructure projects? I vote projects. They’re not as quick to enact, but they will deliver longer-lasting and more substantial economic growth. Make a good portion of the projects related to renewable energy development and you’ll knock a whole bunch of birds down with one stone. A more sane energy policy, mitigation of human forced climate change, improved domestic security, more jobs, a stronger economy. Giving people checks that they spend once is the weaker solution. Adding to the already enormous national debt with no medium- to long-term plan just doesn’t make sense.
Comcast is going to start making even more money to provide internet service … that might be only 3rd best in the world … in up to 10 U.S. markets. Comcast is going to roll out service that will offer speeds up to 50 Megabits per second (Mbps). At that speed, a movie could be downloaded in 5 minutes. It takes 2 minutes to download the same movie in Japan right now. Oh, the Japanese pay the same amount every month that we in the U.S. do for service that is 30 times as fast. To get the better service, customers will be required to also subscribe to Comcast’s cable service. What a joke.
India launched its first mission to Earth’s moon. Chandrayaan-1 will map the moon in greater deatil than what was done by the Apollo missions in the 1960s, by the Japanese Kaguya spacecraft (launched last year), or by China’s Chang’e-1 spacecraft (also launched last year). Chandrayaan-1 cost $80 million. The U.S. is planning on sending the Lunar Reconnaissance Orbiter to the moon next year. That spacecraft will cost $500 million, but will provide even greater mapping resolution than Chandrayaan-1.
Former Federal Reserve Chairman Alan “Bubbles” Greenspan finally admits he was wrong to think banks could regulate themselves. Too bad his little experiment is set to weaken the U.S. economy to levels not seen since the 20th century Great Depression. Greenspan’s economic theories helped cause the last three recessions. Not a bad legacy for a “free-marketeer”. Rep. Waxman also cited the SEC and the Treasury as holding some level of responsibility for our current problems. I’ll point out once again that simply giving these irresponsible banks taxpayer money isn’t the answer. If a bank wants to be saved, they can temporarily sell controlling stakes to the government. Once they’re back on more solid footing and taxpayers haven’t been fleeced, they can buy those stakes back.
Over 12 million U.S. homeowners owe more on their mortgages than their houses are worth. That’s almost 1 in 6 homeowners. The housing crisis is far from over. It will take a President and a Congress that understands what the American people are going through to work toward responsible solutions. Presidents that own 7 houses or get $150,000 in clothing bought for them cannot and will not work toward those solutions.