Capitol Hill Blue Forums Political Issues Finance, the economy & Economics How will the financial crisis develop?

Today on Bob Brinker, Bob's fill-in host John Flannigan blamed the repeal of Glass-Seagull in 1999 on "Clinton and his buddies."

I wanted to reach thru my radio and grab that guy by the throat and make him admit there was a Republican Congress at the time.

So who did away with the Chinese Wall of safety that Glass-Stegall provided for two-thirds of a century? Republican Phil Gramm was the primary sponsor of the bill but almost every legislator voted in favor and then-President Clinton was only too happy to sign it. Within a month of the abolition of Glass-Stegall, then-Treasury Secretary Robert Rubin, the former co-chairman of Goldman Sachs, became Sandy Weill’s top lieutenant at Citigroup (C), the bank that led the charge into using depositors’ money to speculate on sub-prime mortgages, algorithmic trading, and six-sigma derivatives.

. . . without jobs there is no economy

What's so great about an economy? People want enough to eat, not to freeze, not to fry, and something to do with their time. While capitalists have certainly built an economy around those wants or needs, is an economy the only way to provide those things?

If Eco-aliens flew down in their flying saucer and offered to provide us all those things in exchange for us giving up our "economy" because it is killing the long-term livability of our planet, what should our answer be?

Yes, thank you for saving the world.

or

You can have our economy when you pry our melted credit cards from our crispy roasted hands.

The idea that the U.S. economy is going to recover in the next six months is given little credence at a gathering of top academic economists here over the weekend.

A pickup sometime after June is still the Federal Reserve's quasi-official forecast. And leading institutional forecasters surveyed by the Blue Chip Economic Indicators are optimistic.

But that forecast seemed woefully out of touch to many experts who spoke at the annual meeting of the American Economics Association.

[SNIP]

Despite all these efforts, the U.S. economy, hit by an oil shock, a credit crunch and the global downturn, seems to be on a steep slide.

Some argue that the recession has just begun, despite the formal ruling by the business-cycle-dating committee that it began in December 2007.

Alan Blinder, a former vice chairman of the Federal Reserve, said the recession began only in mid-September when Lehman Brothers collapsed.

"We are in a horrible mess. I believe it is very young and it is going to be long and deep," he said.
Even in the first quarter of 2010, the economy will likely be weak enough to need macro stimulus, he said.

Martin Feldstein, the prominent Harvard University economist, said there was no longer any basis for believing the recovery could start in the third quarter.

"I think we'll be lucky if by this time next year we see the economy hit the bottom and start turning up," Feldstein said.

"In terms of the level of activity, the end of 2009 is going to look lower than it is today," he said.

Looks like the $54 trillion derivatives bomb may explode in our face this week.

Somehow I find numan's link a tiny bit more credible than yours, Ardy.