Yellen Into the Wind

If history tells us anything (it tells us just about everything), heavy investors in the stock market and the rest of society should be preparing for a repeat of 2007-2008 economic meltdown.

We cite none other than the chairwoman of the Federal Reserve (the FED), Janet Yellen, who said recently, “Would I say there will never, ever be another financial crisis? No, probably that would be going too far. But, I do think we’re much safer, and I hope that it will not be in our lifetimes, and I don’t believe it will be.”

Normally, we could accept that as a rather benign statement. She sits at the head of the table of the U.S. financial prognosticators, deciding when to raise interest rates and when to lower them, usually solely as a response to the threat of inflation.

But, Yellen was preceded in her job by the man widely accepted for years as a financial guru whose tortured and turbid statements probably sold more dictionaries and thesauruses than any other government official. He once said, “If I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.”

Alan Greenspan, believed the big banks didn’t need added regulation and although the already scary derivatives trading was a bubble that had to burst at some point, he believed the banks would not do anything against their own self-interests.

The guru blew it on a massive scale, the incoming Obama administration in 2008 had to deal with the massive task of re-righting not just the domestic, but the international economies.

In October of that year, Greenspan told Congress, “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.” He had sworn by “the presumption of neoclassical economics that people act in rational self-interest.”

And now, the 70-year-old woman who sits in the chair where he once presided over the economy assures us that “not in our lifetimes” will there be another financial crisis.

This, despite the efforts to repeal the regulations put in place after 2008 to prevent a repeat, and a failure to replace the regulations removed in the Reagan through Clinton administrations that originally were put in place to prevent another Great Depression.

Perhaps the mattress market would be a good investment right now.

 

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Bring Back the Old GOP

We have said before that the Republican Party of today is not the respectable and reasonable party with character and sense of ethics that it was in the past. The GOP Senate’s handling of the nomination of Sen. Jeff Sessions, R-Ala., to be attorney general showed it also has lost its soul.

This is the same party that in 1986, when it also was in the majority, had at least two members who voted for their country and not their party and joined Democrats in defeating his nomination to be a federal judge. The votes were based on the same evidence presented this time in his attorney general hearings. This year, however, Judiciary Republicans voted lockstep for their party and not their country.

That evidence showed that Sessions was a racist—once a racist, always a racist, and most racists don’t believe they are. It included statements from people who had worked for him, alleging he described the American Civil Liberties Union and the NAACP as “Communist-inspired” and “un-American” for forcing “civil rights down the throats of the people. He was said to have told a staffer that he supported the Ku Klux Klan until he found out they smoked marijuana, and that he called a black aide “boy” and warned him against criticizing whites.

That Judiciary Republicans voted unanimously for confirmation was bad enough, but It got worse when the full GOP-controlled Senate took up the nomination, led by Sen. Mitch McConnell of Kentucky, one of the weaseliest men ever to serve in the Senate that once included Joseph McCarthy. McConnell knew he had enough votes to confirm Sessions, but, in character, he couldn’t let well-enough alone.

As Sen. Elizabeth Warren, D-Mass., read from the same evidence of racism presented in 1986, including statements from the late Coretta Scott King and Ted Kennedy, who once held Warren’s seat, McConnell interrupted her and said she was violating an obscure Senate rule that bars a senator from imputing to another senate conduct “conduct or motive unworthy or unbecoming a senator.” Warren persisted and McConnell called for a vote on a formal rebuke, i.e., telling her to sit down and shut up.

McConnell’s predecessor in 186, Bob Dole of Missouri, was capable of doing some mean things, but it is hard to imagine him invoking that rule in the Sessions situation. In fact, McConnell himself has not invoked it in the recent past even when a fellow Republican, Ted Cruz of Texas, called him a liar during public debate on the Senate floor.

Nonetheless, Senate Republicans, who had planned before the day’s debate to invoke the arcane rule if Sessions was criticized (even though he was in the position of giving up his Senate seat to become attorney general), voted lockstep again to rebuke Warren and keep her from participating further in Sessions debate. (Sen. Joe Manchin, D-W.Va., voted with the Republicans when he was clear his vote would not be needed, a sop to his Trump-loving constituents.)

At least Sessions had the decency not to vote for his own confirmation. But, who knows what he would have done were there one fewer Republican in the Senate.

Apparently, today’s Republicans are lockstep okay with not only with Sessions and his beliefs, they have stomachs of iron and will take whatever Trump throws at them. No wonder he was able to steal their party.

It also may be that the party that sides with racists was still upset that the black president’s attorneys general also were black.