"Lords of Finance: by Liaquat Adamed

Reading about the current problems associated with the financial state of the United States and Europe is both interesting and challenging. As much as I try to understand, the complexity of the material is beyond my ability. If I think that I understand one aspect of what is happening, I soon find out that I really didn't.

"Lords of Finance" is surely a book worth reading, albeit not easily. While I link one review for anyone's reading, I share my observations.

While the issue of the gold standard is no longer relevant as it was during the period under study (1920-1944), the other issues of addressing the value of one's own currency as it impacted the currencies of other nations and vice-versa remains perennially pertinent. The balance between the need for liquidity and credit within one's own nation can never be isolated from what is happening elsewhere. The author's ability to capture the ever changing landscape of international finance following WWI through 1944 is singularly insightful and clear, given the inherent difficulty in understanding the underlying transactions occurring within and between nations.

In short, I may not be any smarter, but I am more aware of the problems in maintaining an appropriate balance among all the factors included in monetary policies.

"Future of Faith" by Harvey Cox

The "Future of Faith" is a timely book that catches the thrust of many changes occurring within Christianity (and other religions) during the last 20+ years. In essence, people are caring less about the belief system (set of doctrines) and are satisfied with a faith that is more focused on attitudes of trust and hope.

Even in the news, we read that the level of people committed to "spirituality" far exceeds those indicating the critical importance of adhering the specific doctrines. People now realize that many "essential" doctrines no longer are meaningful, even if they were true.

It is of interest that only Christianity and the more orthodox forms of Judaism focus at all on beliefs. HInduism, Buddhism, and Muslim are void of a list of beliefs.

It is also true that c'est la vie! Who cares? except for the fact that some within each of these religions use their beliefs to kill and maim others. Were religions to be a source of peace and brotherhood, no one would care what a person believes and doesn't believe. Unfortunately, the evidence is strikingly otherwise!

"Chasing Goldman Sachs" by Suzanne McGee

I have read many books and articles addressing various aspects of the financial meltdown. I thought that there could not be much more to be said of substance. As it turns out, the statement was blown away with "Chasing Goldman Sachs" by Suzanne McGee. She adds a great deal to the knowledge base of the financial disaster.

The jest of her detailed analysis is that the "problems" started when a decision was made in the 70's to discard the traditional model of standard fees for stock transactions. With that, the traditional source of revenue ceased with discount traders etc. To gain revenue, many changes were initiated. In particular, the traditional investment model of private investors as the "owners" of trading houses was changed when the investment banks went public. No longer were the "private funds" of the partners at stake. And, also, the new need to raise return of investments to the shareholders. When that happened, then comparisons were made regularly. Goldman Sachs was the head honcho and everyone was structured to "beat" Goldman, regardless of the risk. The rest of it sort of becomes history. But, it is amazing to think that it all started with such a relatively "innocent" change in the fees associated with trades.

While recognizing the need for more regulations, she knows that no set of regulations will cure the inherent problems associated with the financial industry. Her ultimate solution to the multiple layers of problems seems to be overwhelmingly simplistic, viz., "to behave in the interests of all their stakeholders ...."

"The solution is to start thinking of and treating Wall Street as the utility that it really is.... It requires that everyone from within those regulatory bodies to the most junior bankers and traders to understand in their bones that Wall Street is there not to enrich them but to serve its users".

I would be the last person in the world to disagree with the intent of her solution. However, how to generate that type of internal ethic is a huge question. Since my son-in-law is an expert in the field, I requested that he determine the best method of communicating this transformation of people in the financial industry so that they will have more appropriate standards of achievement than just money. It is one of the side benefits of having a daughter marry someone with this ability.

Critical Importance of Elizabeth Warren's Selection as Director of Consumer Agency

I recently posted my message to the President regarding the importance of selecting Elizabeth Warren as the Director of the new Financial Consumer Agency. Today, Simon Johnson raised the ante by indicating that if she is not selected, this will represent the "last straw" for this administration.

I think that he is right in terms of those who were his liberal supporters. We have seen enough of his political calculations which may, in fact, pay off with his re-election. But, he surely will not represent the leader that we wanted!

On 19 July, a very well constructed column supporting this decision was written by John Talbott. I did not realize the fear that Elizabeth Warren strikes in the hearts of both Wall Street and the administration who have bent over backwards to support Wall Street.

Critical Importance of Elizabeth

Promotion of Elizabeth Warren to head the Consumer Protection Agency

I just sent the following to the President:

I, with many others, truly appreciate your presence, even if I wish that you would side more with a much more progressive approach to policy issues, as you led us to believe you would do during the campaign.

Surely, I will be MOST disheartened if Elizabeth Warren is NOT selected to head the Consumer Protection Agency established by the new Financial Reform legislation (which did not go far enough from my point of view).

As one can gather, I am a great supporter of Elizabeth Warren (and the other women who have done some remarkable accomplishments during this terrible fiscal ordeal, e.g. Sheila Bair). Given her leadership on the issue of consumer protection, it would be fool hearty to think of someone to head this new agency.

"Contempt" for Obama

I have expressed concern that President Obama is not carrying through on his promises for change, not just change in specifics, but change in the underlying thrust of government, e.g., transparency, rule of law (especially as related to human rights of all, including those in military prisons and other related anti-terrorist measures). I have been against his continuing the war in Afghanistan, albeit I have tried to understand and support his position.

Never until today would I have thought to use the word "contempt" in reference to President Obama, considering the person who preceded him in office. Yet, I have been challenged by Andrew Bacevich to asked the question who was more contemptible, President Bush who "believed" that he was right (but clearly wrong) or President Obama who knows he is wrong but pursues a policy that inflicts death and destruction and the loss of precious resources.

Wow!

I clearly have to come down hard against President Obama!

Andrew Bacevich

I shared my appreciation to Dr. Bacevich today.

Dr. Bacevich

I wish to express my deepest appreciation for everything you write and say. You are both thoughtful and articulate. Lacking any arrogance, your insights are even more overwhelming. I cannot understand why those in the current (past) administration cannot see the wisdom of your views, as expressed today (http://www.tnr.com/blog/foreign-policy/76091/non-believer).

I write a blog (edwardjoseph.blogspot.com) that is intended for my grandchildren who are young enough that I fear that I will not live long enough to have an "adult" conversation where they would understand my views. They at least will be able to read them. In my blog I have many entries regarding your writings in books and columns. As I say, I am overwhelmed by your insights, expressed ever so gently. I admit to more anger when decisions are made that are stupid, especially when they cause death and ruin.

As a personal insight, I used to be a parish priest in your Walpole parish (1966-1969). I got into a lot of problems because of my views, e.g., my total opposition to the Vietnam War (one that you know so well). As with civil rights issues, the Vietnam War was as clear as violation of all standards to morality as was racial discrimination. I had more problems with the Church. When the pope (Paul) issued his encyclical, Humanae Vitae, which continued the historical position against birth control, I opposed the pope at the Sunday liturgy. While I may have been articulate, I lacked your peaceful demeanor. You have so many reasons for anger, including suffering the death of your son in a war you opposed, and yet, you come across as such a peaceful, reasonable man that I am in awe of you.

In closing, I am most grateful to you and hope that there will be many more years of your contributions to the national debates over issues involving our military.

Edward Toomey

45 Glades Road

Scituate, MA 02066

Dr. Bacevich responded (most don't respond to my messages!)

Dear Edward (if I may),

This is tremendously kind. Thank you.

Things are going relatively well these days at St. Timothy's. Father Culloty is a remarkable pastor, although deeply upset by the never-ending scandals.

Best wishes,

Andrew Bacevich

Mother Earth: Ours to Destroy!

I thought that Naomi Klein's book, "The Shock Doctrine", was masterful. Her writing was clear and logical. Her article on the catastrophe in the Gulf is similarly well written with a perspective that emphasizes our indebtedness to creation and our obligation to take care of it.

It is not hard to recognize how generations have plundered the earth for its goods regardless of the cost to the environment. We have not taught our children well since there is little urgency coming from their voices. Whenever the voices become urgent, there is reason to fear the outcome.

Economy is a Disaster! but not this much!

Discussions within our family and our financial advisor results often in various viewpoints. In general, I have been on a negative perspective that sees our economy, at best, doing badly, with the DOW at, below, or just above 10,000. I could see DOW at much worse, e.g., in the 8,000-9,000 range. However, my pessimism is really nothing compared to Robert Prechter who forecasts the worse depression ever, with the DOW reaching about 1,000! Were he right, we would be living in world so devastating that it will be really a trick to survive. In spare time, it will be interesting to speculate what it would be like to live with the value of all assets virtually worthless.

Jobs

Andy Grove surely is a person who is equipped to critique the destruction of US jobs in the major areas of technology and energy. He accomplished much in the creation of Intel which became a major source of jobs throughout the last 30 years.

He cites his concerns about how advanced technology created in the country produces most of their jobs in other nations, especially China. He objects strongly that we have to change our business model if we are to produce needed jobs as well as strengthening the technology skills needed for further gains.