Policy

Back in the 1980s, Citibank CEO John S. Reed looked at the bank’s earnings and said, more or less: This is really a credit card company with six other lines of business. That is, the card portfolio was making lots of dough, and carrying the rest. Commercial lending, real estate lending, clearing, foreign exchange, branch banking — all of them were flat or losing money, while the card business was cooking.  read more »

Every downturn comes to an end. Recovery has followed every recession including the Great Depression. In 1932, John D. Rockefeller said, "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again." The question is not ”IF”, rather it is “WHEN” recovery will begin. The age-old question remains: what can government do to get the nation out of recession?

Government can act wisely. In the past, it used tax legislation (the mortgage interest deduction) to create the highest home ownership rate in the industrialized world. It can also act stupidly by promoting “Sub-Prime” mortgages, “105%” financing and the “No-Doc” loan that got us into this financial mess. As many as 4.4 million more Americans could lose their homes – unless drastic action is taken to stop the process.  read more »

Economic forecasts today reflect a remarkable variation. Some economists are predicting a rapid increase in economic activity within just a few months. Some are forecasting an economic decline that persists for years.

At the root of the debate lies the question: where is the heart of darkness? Primarily, forecasters are focusing on the impact of the fiscal stimulus and the efficacy of monetary policy. Yet they have been less forthcoming to center on the real problem, which is fixing the banks.  read more »

As most recently spelled out in The Economist , one of America’s most potent advantages – even in the current economic crisis – lies in its entrepreneurialism. America’s entrepreneurs are the proverbial wellspring of innovation and creators of most of the country’s new economic opportunities. Entrepreneurs, or global heroes as The Economist calls them, are not only important here in this country but are the best hope for creating the innovations that will get sufficient traction to resuscitate the world economy.  read more »

General Motors' reorganization and contemplated bankruptcy represents one possible – and dismal – future trajectory for American manufacturing.

Unlike highly favored Wall Street, which now employs fancy financial footwork to report a return to profitability, the nation's industrial core is increasingly marginalized by an administration that appears anxious to embrace a decidedly post-industrial future.  read more »

Much of the debate about ways to create a landscape of green homes today has focused on the new tax credits for residential energy efficient windows, solar panels and geothermal options. Passive solar and other design methods which make more sense have yet to qualify for tax credits. If history is any guide, this is an error that may take us down the wrong path.

Yesterday And Today  read more »

Americans have their “American Dream” of home ownership. Australians go one step further. They have a “Great Australian Dream” of home ownership. This was all part of a culture that celebrated its egalitarian ethos. Yet, to an even greater degree than in the United States, the “Dream” is in the process of being extinguished. It all started and is the worst in Sydney.

Sydney is Australia’s largest urban area, having passed Melbourne in the last half of the 19th century. With an urban area population of approximately 3.6 million, Sydney leads Melbourne by nearly 300,000.  read more »

More than a century ago, Rudyard Kipling, in his American Notes, shared his views on the character of the US. Along with remarks about the American penchant for tobacco spitting, Kipling recounted the near heroic ability of Americans to govern themselves, especially in small cities and towns. Traveling through the town he called “Musquash” (a pseudonym for Beaver, Pennsylvania) in 1889, Kipling described “good citizens” who participated in “settling its own road-making, local cesses [taxes], town-lot arbitrations, and internal government.”  read more »

In remarks on Friday following a meeting with Fed Chairman Ben Bernanke and Sheila Bair, Chair of the Federal Deposit Insurance Corporation, President Obama pointed to some “glimmers of hope” in the economy, and indeed a few green shoots – rising mortgage refinancings and a slight uptick in durable goods orders – have appeared in recent weeks.  read more »

The U.S. Treasury took enormous powers for itself last fall by telling Congress they would use it to “ensure the economic well-being of Americans.” Six months after passage of the Emergency Economic Stabilization Act of 2008 Americans are worse off. Since it was signed into law on October 3, 2008, here are the changes in a few measures of our economic well-being:  read more »