Wall Street's Influence in White House

Often have I referred to differences in views held by me and some family members regarding the financial markets. It has been my view that the big banks and investment firms did us in by their high risk financial instruments and their low capital investments, i.e., high leverage with little of their own money. My support system includes Paul Krugman, Simon Johnson, Robert Reich as well as others.

No where were my positions better supported than last night's Bill Moyer's interview with Simon Johnson and Rep. Marcy Kaptur, a member of the House representing the Toledo area. Their views were strong and convincing (not that I needed much more convincing!).

The bottom line is that the big banks were wrong in their investment strategy and wrong in the amount of capital supporting those investments. There is no legislation passed or under consideration that will rectify the problems of the big banks and, in Simon Johnson's view, the problems with the big banks (now bigger than ever since there are only four left) will create problems again in decade or more that will be worse than those thus far experienced.

Simon Johnson added further comments regarding this interview on his blog.

Economic Stimulus

While I shared with others some ambiguity regarding the stimulus packages implemented by the United States, Europe, and China because it involves significant public debt, I have been a supporter because of those who claim that without it, we would be in a disaster.

Today, IMF convinced me that the supporters of a strong stimulus package were correct. The private sector is unable to place demands that require in increase in supply!

Thank you, the gurus who had the courage to push for a strong stimulus!