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May 25, 2012
Mark Clayton: Is Hillary's State Dept. hacking Al Qaeda? Not quite
Erika Bolstad: Temple cancels Wasserman Schultz speech
The Kosher Gourmet by Ethel G. Hofman: The former president of the International Association of Culinary Professionals, whose members included the likes of Julia Child, is back with contemporary Shavous cuisine: Ruby Fruit Soup, Sweet Noodle Kugel with Cheese, Key Lime Curd, Calsone Casserole Frittata with Wild Mushrooms, Sun-dried tomatoes and Olives, Baked Tilapia with Pepper Cheese Cream and Brown Sugar Shortbread
May 24, 2012
Jeff Jacoby: The peace process battered Israel's reputation
Michael Muskal: 'Pro-choice' position hits record low, according to poll
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The Kosher Gourmet by Penelope Wall: PHILLY CHEESE STEAKS --- hold the steak!
May 23, 2012
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The Kosher Gourmet by Emma Christensen:A simple way to do fish right
May 22, 2012
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Thomas M. Anderson: Walking Away From a Mortgage
The Kosher Gourmet by Megan Gordon: Enjoy a celebration of the most rich and layered flavors: Black bean, sweet potato and quinoa chili
May 21, 2012
Mark Clayton: Cybersecurity: How US utilities passed up chance to protect their networks
Howard LaFranchi: NATO summit: Who will foot the bill for long-term Afghanistan security?
Chris Farrell : Earn Dividends in Emerging Markets with This WisdomTree ETF
Stephen Whiteside, Ph.D. : Mayo Clinic Medical Edge: Social anxiety disorder --- or just shy?
Guy Jackson : Victim's father regrets death of Lockerbie bomber
The Kosher Gourmet by Mario Batali: Famed chef's veal shoulder farsumagru: A festive meat course for late spring
May 18, 2012
Rabbi Berel Wein: Striving: The People of the Book's Book for (All of) the People
Steven Goldberg: 5 Great Stock Picks and the Exchange-Traded Fund that Owns Them
Mary Pickett, M.D.: Ask the Harvard Experts: Don't be forced into gluten-free lifestyle based merely on a doctor's false-positive test
The Kosher Gourmet by Carolyn Malcoun: DIY healthy lunchbox treats: HOMEMADE FRUIT BARS for kids and brown-bagging adults alike
May 17, 2012
Warren Richey: Teacher fired for being unwed and pregnant can sue religious school, court rules
Josh Mitnick: Netanyahu's 'centrist' coalition is already proving it's anything but
Steven Goldberg: Earn Dividends in Emerging Markets with This WisdomTree ETF
Amina Khan: Research links coffee to lower death rates
The Kosher Gourmet by Faith Duran : Cheesy Potato Breakfast Casserole with Cheddar and Sun-Dried Tomatoes
May 16, 2012
Carmen Terzic, M.D., Ph.D. : Mayo Clinic Medical Edge: A variety of exercises can help improve balance
Melissa Healy: National strategy on Alzheimer's disease aims to halt it by 2025
The Kosher Gourmet by Joyce White : GOODNESS GRACIOUS: GREENS! 4 winning recipes that are no longer just for down-home folks (Includes expert tips & techniques)
May 15, 2012
Kristen Chick: Obama administration resumes arms sales to Bahrain despite serious unresolved human rights issues. Activists feel abandoned
Pat Mertz Esswein: Homes are now affordable again and mortgage rates are low. What you need to know before you buy
Kathy Kristof: Our Practical Investor Fights Inflation with These 6 Investments
Sue Hubbard, M.D.: The Kid's Doctor: Lactose intolerant young child? Check again
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May 14, 2012
Lisa Gerstner: How to Protect Your Identity, Finances If You Lose Your Phone
Harvard Health Letters: Heart disease and dementia
The Kosher Gourmet by Megan Gordon: MANGO COCONUT OAT MORNING MUFFINS are a bright but hearty delight
May 11, 2012
Jessica L. Anderson: Get the Best Deal on a Used Car
Jett Stone: Forget face-lifts and fake knees. Scientists have seen the fountain of youth --- and it's broccoli
The Kosher Gourmet by Chef Mario Batali: The famed chef's vegetable dish that tastes true to the season: FAVAS AND SUGAR SNAP PEAS WITH POTATOES AND TARRAGON
May 10, 2012
Sergei L. Loiko: Putin sends warning to U.S., NATO in Victory Day speech at Red Square
Mary Rourke: How being a 'mentch' got Vidal Sasoon his start and fighting in Israel's War of Independence provided him with confidence and a strong sense of his own identity
Jeff Bertolucci: Get Home Phone Service for Less Than $10 a Month
The Kosher Gourmet by Betty Rosbottom: Gleaming with its golden, crimson, and snowy white hues, this silken smooth and creamy STRAWBERRY ORANGE TRIFLE looks impressive, but is easy to prepare
May 9, 2012
Sharon Palmer, R.D. How you can reduce your risk -- or delay -- chronic diseases associated with aging
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Jewish World Review
Dec. 16, 2008
/ 19 Kislev 5769
To fix economy Obama needs someone fluent in banks
By
Jonathan V. Last
http://www.JewishWorldReview.com |
"You can take Hollywood for granted like I did, or you can dismiss it with the contempt we reserve for what we don't understand. It can be understood, too, but only dimly and in flashes. Not half a dozen men have ever been able to keep the whole equation of pictures in their heads." - F. Scott Fitzgerald, "The Last Tycoon"
On Jan. 20, the day of President Obama's inauguration, the Dow Jones industrial average stood at 7,949. Since then it has dropped roughly 9 percent. If you look back to Nov. 4, when the market first began reacting to Obama's election, the Dow has dropped almost 25 percent. Correlation is not necessarily causation. But it would be difficult to deny that Obama's failure to address successfully the banking crisis has been a large factor in the collapse of the stock market.
At the heart of the current turbulence is the mortgage meltdown, which created a number of problems for the economy: a weakened housing sector, declining consumer confidence, enormous destruction of personal wealth for many homeowners. But the biggest problem is that the bad debt from the subprime mess had been leveraged - that is, separated into tranches, regraded, and then sold and resold - so that it contaminated a large portion of the banking system, upon which credit and the rest of the financial markets are entirely - not partly or mostly - dependent.
So why has Obama babbled away about health care and energy reform instead of fixing the banking industry? There are only two possible explanations, neither of which is reassuring.
The first - and unlikely - possibility, is that Obama does not actually understand the centrality of the bank problem. He has no experience in finance or economics and his few stray attempts to grapple with the subjects - "the stock market is sort of like a tracking poll in politics" - suggest a deep unseriousness.
Again, this seems unlikely because whatever Obama's intellectual blind spots might be, he is (I hope) listening to the wisdom of people outside his administration. And every economic observer in America, from David Smick to Andrew Grove to Warren Buffett, has been shouting from the rooftops about the need to put the banks in order.
So the alternative is that the administration is paralyzed because it is confronted with what Donald Rumsfeld would call a "known unknown": The global financial system is so big, and complex, and opaque that no one - literally, not one single person on the planet - knows for certain how it works.
Which means that fixing the banks isn't a question of simply finding the political will to push Button A. Rather, no one knows if pushing Button A - or flipping Switch B or pulling Lever C - will remove bad debt from troubled banks. Or cause a cascade of credit default swaps. Or trigger a run on the FDIC. Because the entire system has essentially become a black box.
It sounds slightly preposterous from a systems-engineering point of view. How could a thing built by human hands be beyond human understanding? Well, it turns out that institutional knowledge can be fleeting.
Consider the programming language COBOL. Developed in 1959, COBOL was used in mainframes and large institutional computers. Over the years it was replaced by other languages. The thing is, COBOL is still out there, running billions of lines of background code, like one of those archaeological sublayers underneath a modern city block. It supports things going on above it, but no one is quite certain exactly how. Some specialized programmers still study it, but it's something of a lost language.
Then there's the Trident missile. Built in the 1980s, the Tridents are submarine-based nuclear missiles. Recently the Navy tried to refurbish the missiles, but ran into a slight problem: The Trident contains an essential component code-named "Fogbank" (the New Scientist speculates that Fogbank is a type of foam) which nobody knew how to manufacture anymore. The refurbishment plans were put on hold; teams of experts are trying to reverse-engineer the stuff. Imagine that: a key piece of strategic weaponry and nobody really understands how to make it work.
The NSA charmingly refers to the Fogbank dilemma as "lost knowledge." But knowledge gets misplaced more often than you'd think. How long, for instance, would it take NASA to put another man on the moon, something we did as a matter of routine 35 years ago? When President George W. Bush called for a new moon shot five years ago, the space agency wasn't even sure it could make a Saturn V rocket anymore.
In the end, we may be lucky if the banking system is only as complicated as Fitzgerald's Hollywood, because that would mean that somewhere out there are a half-dozen men who can grasp the workings of this contraption. Let's hope they exist and that Obama finds them.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
Jonathan V. Last is a columnist for the Philadelphia Inquirer. Comment by clicking here.
Previously:
12/16/08 This is bigger than Barbie
12/11/08 Creative destruction: Some businesses deserve to die and we're better for it
11/20/08 Time for perspective on election's numbers
11/13/08 Climbing back from calamity
11/03/08 Put aside candidates' faults and ponder their qualities
10/09/08 Regrettably, neither of the presidential hopefuls has a grasp on economic theory
09/22/08 Anti-abortion Democrats and global-warming Republicans are becoming increasingly important
09/09/08 On both sides, this year's political gatherings marked the start of changed strategies that have transformed the race
07/23/08 With policy shifts, Obama now seen as an ordinary pol
06/26/08 Bush failed to hold others responsible for their mistakes, and he let his admirable vice president do too much
02/18/08 GOP will unify as Obama and Clinton continue to vie
12/13/07 Fun begins as races tighten and shift
12/05/07 Iran's future: Would lower fertility rates lead to stability?
11/01/07 Nobel Prize in Economics — where Team USA still dominates the game
10/25/07 Handicapping the GOP's presidential horse race
10/11/07 Germany's Turks provide a lesson on immigration
09/13/07 British battle can offer us a perspective on casualties
09/12/07 Alas, GOP seems set to take hit in Senate
08/30/07 Europeans have supplanted backbones with capitulation
08/24/07 Politics holds the key to ensuring a healthy growth in population
08/17/07 Finessing the Democratic center
08/10/07 Woohoo! Satire seeing a revival
07/31/07 Historical model: For Obama, it's Carter
07/26/07 Baseball, apple pie, a 2nd chance
07/24/07 Harry Potter and the alchemy theory
07/06/07 Life is hard — and often short. The perils of professional wrestling
06/21/07 After Bush: Gingrich and others worry that his shortcomings could have a far-reaching effect on the GOP
03/09/07 Why the British outclass us in acting
01/23/07 Romney: Seriously great, but with baggage
12/23/06 When truth is transpicuous
12/05/06 A realistic plan: Split the country in two
11/08/06 We could easily pull out of Korea and let China have regional hegemony. But would it be the right thing?
10/24/06 The decline of revolution
10/18/06 Why the free market is king
08/07/06 Democracy, of itself, not solution to all problems
08/01/06 We get the movies we deserve
07/27/06 How long will U.S. empire last?
© 2006, The Philadelphia Inquirer. Distributed by McClatchy-Tribune Information Services.
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