Being David Brooks III

Conservative columnist, David Brooks, whom I have followed for years and whose columns I often appreciate, wrote a thoughtful piece on Bernanke and the Fed that is worth considering, "Wise Muddling Through." I have written of Brooks here before.

Brooks writes:

Their decision not to bail out Lehman Brothers was based on a complete misreading of the economic psychology. Paulson was sick of doing bailouts. He seems to have had some sort of intuitive moral sense that it was time for some bank to pay for its mistakes. Bernanke and Geithner went along, and none of them anticipated the meltdown that followed.

But this is not a story of failure. It’s a story of effective muddling through. Bernanke & Co. never really got control of events. But they did avert disaster and committed only a few big blunders. In the real world, that counts as a job well done.

As I see it, there are two things wrong here:

First, it is very difficult to speak about another's moral intuition, especially when that one was over Goldman Sachs and when he and Geithner, who was over the NY Fed, have such cozy relationships with Wall Street bank executives.

Morality is shown by consistent actions and decisions. Paulson insisted that Merrill Lynch and Bank of America merge, giving the latter a pretty hefty bailout. BofA would probably be insolvent without it, as well as Goldman Sachs.

Second, it was their lack of complete oversight of these banks over many years that led to the crisis, not just merely allowing Lehman to fail, but allowing AIG to essentially become a Hedge Fund that insured Goldman Sachs, becoming too big too fail.

While Brooks is appreciated, I am with Jack Bogle, Nassim Nicholas Taleb, Arianna Huffington and Eliot Spitzer. Their words and actions have mattered most in this economic crisis.

Being Eliot Spitzer III

Having written of Eliot Spitzer here, I am increasingly impressed with his insight and his forthrightness. I think he should be listened to.

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"Let me tell you a dirty little secret. The Fed has done a disastrous job since Paul Volcker left...Look at the governing structure of the New York Fed, it was run by the very banks that got the money. This is a Ponzi scheme, it is an inside job, it is outrageous, it is time for congress to say enough of this, and to give them more power now is even crazier."

--Eliot Spitzer

Being Arianna Huffington IX

Here is Arianna Huffington as guest host of Squawk Box with two of my favorite people of late, Elizabeth Warren and Eliot Spitzer. I have written of Spitzer more than a few times here.





It is incredibly difficult to disagree with the wisdom of both Ms. Warren and Mr. Spitzer, as well as the poignant questions and prompting by Arianna Huffington.

Being Eliot Spitzer II

So, did Eliot Spitzer have to go down?

Being Eliot Spitzer

Pesonal sordid sex scandals have never really held incredible interest for me. While I am an advocate for integrity and honesty and believe that how we live our lives matter, we all have personal failures and at any time we may need to ask forgiveness from our loved ones and the community at large.

For this reason, I was not particularly interested in the Spitzer prostitution scandal. If I'm remembering correctly, his undoing was personal and did not include impropriety as the Governor of New York. What I hoped for then and now is for Eliot Spitzer and family to be made whole as they work through a most difficult time. It's been a year and they seem to be healing. Let's hope so.

Now, what does have incredible interest for me is Spitzer's appearance on "Fareed Zakaria GPS" this afternoon. During the interview, I was particularly struck by the comment that the red herrig is the AIG bonuses instead of focusing on the "12.9 billion dollars" paid to Goldman Sachs the same company where President Bush's Treasury Secretary, Henry Paulson, was CEO. The $168 billion dollar bailout to AIG was given and Bear Stearns was allowed to fail.

Timothy Geithner, as the former President of the New York Federal Reserve, is also under a cloud of suspicion. Nassim Nicholas Taleb and Noureil Roubini assert that those who were a part of the financial crisis, Geithner et al, could not possibly now manage it. Nassim Taleb and Nouriel Roubini, including Arianna Huffington, have all said that the same people who got us in this mess cannot get us out of it. It's not looking good. I am not a conspiracy theorist, but is it coincidental that the sex scandal with Spitzer came out at such an opportune time?