Global Economic Challenge

C-SPAN covered an interesting conference yesterday called Global Economic Challenge. The first guy said that when he accepted the invitation to speak a year ago, he had no idea we'd be in the middle of this mess. I thought that was quite telling because I wrote a poem about the mess at Fannie and Fred in September 2007. If I noticed it, I wonder why the economists on the panel didn't. Or maybe they did and Congress stonewalled them as they did Bush.

Paul Krugman was on the panel. He and Thomas Sowell are about the only economists I've read. His comments were interesting to say the least, in that he really had no answers. He was extremely hesitant--almost as many "ahs" and "uhs" as Barack Obama as he thought his way through his responses. There were lots of "could be" and "it's not compelling" type phrases. However, in discussing how our problem has spread world wide he reminded me of something I'd completely forgotten; the Asian economic contagion of 1997-1999. The only reason I remember it at all is that it started in tiny Thailand and spread through out Asia. A Thai PhD student came to me looking for a job. Not only had her government scholarship money dried up, but her very wealthy family had been wiped out. She had even sold her jewelry. Usually I didn't hire this type of student because they often don't do well in repetitive library routines, but I felt sorry for her and for the few months she worked for me, she was able to perform some complex jobs. Her IQ probably qualified her for Mensa. As soon as the college offered her an assistantship, she quit.

Krugman did make some memorable points, however. It isn't just the trade linkages--where we're buying less from other countries and hurting their economies. Diversity, which is recommended for the private investor, actually hurts us in the global economy. Many of our assets are foreign owned, so that affects the world economy. Krugman didn't like the Paulson Plan--he joked that it should be called "Bailey Mae" or "Hanky Panky." Capital has been destroyed he said, and Paulson has "grabbed the wrong end of the stick." (Note the complex economic jargon.) He should have injected capital, but time was wasted as well as political capital.

In conclusion, with one tiny jab at the Bush Administration (the lack of blame here I think indicates that the Bush admin is not to blame) he said, "This is amazing stuff," which I'm sure the audience found helpful, and that "We need clear thinking."

Guess I'll keep checking the blogs for links to CRA and ACORN. Good intentions run amuck, or Fox watching the hen house sounds about as useful an explanation as "stuff out of whack" and "burst housing bubble."


Freddie and Fannie
Sept. 29, 2007
by Norma Bruce

Freddie and Fannie
went up to Capitol Hill
to fawn for a bigger profit
Sticking you and me with the bill.

With help from our taxes
They'll package and resell,
a windfall for the banks and rich,
for the rest of us, economic hell.

Years ago the original aim
was to help the struggling poor.
Now they seek those jumbo loans--
Congress and Bush! Show them the door!