The Unsinkable brian cork™

Brian Patrick Cork is living the Authentic Life

Question everything and accept nothing

December24

I have decided to regale you with my current thoughts for anyone interested in the short-term causes of this financial crisis. 

The long-term buildup of debt guaranteed problems for America, but a long series of public policy errors produced a severe crisis.  

In a forthcoming article in Vanity Fair slated for January 2009 (yes – I have both the power and will to do this), entitled “Capitalist Fools”,  Joseph E. Stiglitz will write:

“Behind the debate over remaking U.S. financial policy will be a debate over who’s to blame. It’s crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes-under Reagan, Clinton, and Bush II-and one national delusion.”

You can learn more about Mr. Stiglitz by reading this summary from Wikipedia:  He has credibility and my attention. Mr.  Stiglitz  is an American economist and a professor at Columbia University. He is a recipient of the John Bates Clark Medal (1979) and the Nobel Memorial Prize in Economic Sciences (2001). He is also the former Senior Vice President and Chief Economist of the World Bank.

In any event…

There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history; at issue – the causes of our current situation. The battle over the past will determine the path for the present. So it’s crucial to get the history straight.

What would Thomas Jefferson and Ayn Rand say?

I believe Mr. Jefferson would advise us to keep asking questions.  And, Ms. Rand would encourage not to accept any answers.

I Blog about both quite a bit.  Go indulge yourself when you have some time. NOTE: See below for some quick links.

What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road.  We had what engineers call a “system failure – when not a single decision, but a cascade of poor judgment calls, produced tragic results. 

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal./1 Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud:

“I have found a flaw.”

Congressman Henry Waxman pushed him, responding:

“In other words, you found that your view of the world, your ideology, was not right; it was not working.”

Greenspan responds:

“Absolutely, precisely,”

Such a simple rsponse to a tragic and enormous result.

The embrace by America, and much of the, of the world, of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.

The administration talked about confidence building, but what it delivered was actually a confidence trick. If the administration had really wanted to restore confidence in the financial system, it would have begun by addressing the underlying problems-the flawed incentive structures and the inadequate regulatory system.

Was there any single decision which, had it been reversed, would have changed the course of history? Every decision including decisions not to do something, as many of our bad economic decisions have been (eg the SEC and the IRS regarding Bernie Madoff), is a consequence of prior decisions, an interlinked web stretching from the distant past into the future. You’ll hear some on the right point to certain actions by the government itself-such as the Community Reinvestment Act, which requires banks to make mortgage money available in low-income neighborhoods. (Defaults on C.R.A. lending were actually much lower than on other lending.) There has been much finger-pointing at Fannie Mae and Freddie Mac, the two huge mortgage lenders, which were originally government-owned. But in fact they came late to the subprime game, and their problem was similar to that of the private sector: their C.E.O.’s had the same perverse incentive to indulge in gambling.

More later – to include historical foundation, root cause and relevance. And, potential solutions.

Meanwhile… Please go listen to “In The Sun” by Michael Stipe with Coldplay.  The original song was by Joseph Arthur. Both are brilliant. But, I think I like Arthur’s version better. It’s raw – like my feelings so often are.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

______________________

1/ Ayn Rand might agree with this.  But, it neglects the sophism that everything is likely manipulated at some point.

NOTE: I also have a business Blog that apparently fascinates world leaders and decision-makers alike (but, few others). It can be viewed and relished at: The Human Capital Blog.

Blog Posts with references to Thomas Jefferson – and, certainly Ayn Rand:

2 Comments to

“Question everything and accept nothing”

  1. Avatar December 31st, 2008 at 1:42 am Full of Magic Beans « The Unsinkable Brian Cork Says:

    […] any event… As promised in my prior post “Question everything and accept Nothing”, here is some critical thinking, and potential economic […]


  2. Avatar April 22nd, 2009 at 2:49 pm information is Not always power « The Unsinkable brian cork Says:

    […] hear. We need to be informed. But, don’t just take my word for it. Relish any opportunity to question everything and accept nothing. God gives us discernment. It’s a fascinating, vital […]


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"What am I looking at?", you might wonder.

Lots of stuff.

Meanwhile, here, I discuss events, people and things in our world - and, my (hardly simplistic, albeit inarticulate) views around them.

You'll also learn things about, well, things, like people you need to know about, and information about companies you can't find anywhere else.

So, while I harangue the public in my not so gentle way, you will discover that I am fascinated by all things arcane, curious about those whom appear religious, love music, dabble in politics, loathe the media, value education, still think I am an athlete, and might offer a recipe.

All the while, striving mightily, and daily, to remain a prudent and optimistic gentleman - and, authentic.

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