Financial Crisis

Why We Need A New Works Progress Administration


As the financial bailout fiasco worsens, President Obama may want to consider a do-over of his whole approach towards economic stimulus. Instead of lurching haphazardly in search of a "new" New Deal symphony, perhaps he should adapt parts of the original score.

Nothing makes more sense, for example, than reviving programs like the Works Progress Administration (WPA), started in the 1935, as well as the Civilian Conservation Corps (CCC), begun in 1933. These programs, focused on employing young people whose families were on relief, completed many important projects – many still in use today – while providing practical training to and instilling discipline in an entire generation.  read more »

Anger Could Make Us Stronger


The notion of a populist outburst raises an archaic vision of soot-covered industrial workers waving placards. Yet populism is far from dead, and represents a force that could shape our political future in unpredictable ways.

People have reasons to be mad, from declining real incomes to mythic levels of greed and excess among the financial elite. Confidence in political and economic institutions remains at low levels, as does belief in the future.  read more »

Story of the Financial Crisis: Burnin’ Down the House with Good Intentions and Lots of Greed


Last week, the Chairman of the Federal Reserve, Ben Bernanke, told Congress that he didn’t know what to do about the economy and the repeated need for bailouts. This week, the Oracle of Omaha Warren Buffett, Chairman of Berkshire-Hathaway told the press that he couldn’t understand the financial statements of the banks getting the bailout money.  read more »

Cash, Not Pretense: An Entrepreneur's Guide to the Credit Crisis.


Compared with most businessmen, 41-year-old Charlie Wilson has some reason to like the economic downturn. President of Salvex, a Houston-based salvage firm he founded in 2002, Wilson has seen huge growth in the bankruptcy business over the past year. It is keeping his 10-person staff, and his 55 agents around the world, busy.  read more »

Compensation Confidential


The salary of the chief executive of a large corporation is not
a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.

John Kenneth Galbraith

What would Galbraith have said about the AIG bonuses?  read more »

We Need a New Oracle


Warren Buffett was on CNBC for three hours on March 9, 2009, dishing out his wisdom. All this fanfare despite having lost $24 billion in value last year, and handing the title of Richest Man in the World over to Bill Gates. Buffett made multiple references to “war” in describing the current financial crisis.  read more »

Why The Stock Market Matters

Wall St sign;flag, iStock_000007320216XSmall.jpg

My father was a career enlisted man in the United States Air Force. I was in the third or fourth grade when he graduated from high school. My mother graduated from high school after I was married. My dad worked for several companies after his Air Force career. He was working for Disney when he died. My mother worked part time in child care from time to time.  read more »

How the Financial Crisis Threatens Localism


By Richard Reep

As in many places, the poor economy is forcing many families in affluent Winter Park, Florida to make some necessary adjustments. One of the most basic adjustments relates to shopping for food and staples. In better times, Winter Park was ruled by two Publix supermarkets and a Whole Foods. Grocery-cart conversation among friends became a common event; now this smooth, middle-class lifestyle pattern has been disrupted.  read more »

How Houston Will Weather The Recession


In the past year or so, traveling the various geographies of this country has become increasingly depressing. From the baked Sun Belt suburbs to the green Valhallas of Oregon and the once luxurious precincts of Manhattan, it is hard to find much cheer--at least from entrepreneurs--about the prospects for the economy.

Until recently Texas, and particularly Houston, has been one of the last bastions of that great traditional American optimism--and for good reason. Over the past few years, Houston has outperformed every major metropolitan area on virtually every key economic indicator.  read more »

One Fundamental Problem: Too Many People Own Homes


Ben Bernanke made the following statement as he attempted to justify bailing out bad borrowers:

“…from a policy point of view, the large amount of foreclosures are detrimental not just to the borrower and lender but to the broader system. In many of these situations we have to trade off the moral hazard issue against the greater good.” – Ben Bernanke, February 25, 2009

I think he is wrong on this, and the moral hazard issue is only a small part of my objections.  read more »