I was all excited about reading this until I went to the Ann Arbor Library and found that Wessel’s previous book was Prosperity : the coming twenty-year boom and what it means to you / Bob Davis and David Wessel (1998).
As William Goldman said about Hollywood, “No one knows anything.”
David Wessel’s new book “In Fed We Trust” is essential, lucid — and, it turns out, riveting — reading.
In these pages Mr. Wessel, the economics editor of The Wall Street Journal, chronicles how the Fed chairman Ben S. Bernanke, with Henry M. Paulson Jr., then the Treasury secretary, and a small group of associates, frantically worked to shore up the United States economy, capturing how this handful of people — “overwhelmed, exhausted, beseeched, besieged, constantly second-guessed” — tried to catch and stabilize one toppling fiscal domino after the next.
In this volume Mr. Wessel uses his narrative gifts and a plethora of sources to give readers a vivid, highly immediate sense of what transpired in last-minute, high-pressure, seat-of-their-pants meetings in Washington and New York while placing these events in a broader historical context. He examines the Fed’s increasingly important (and increasingly debated) role as an economic first responder, looks at how personality and personal philosophy can inform policy making and offers a concise explication of the causes of what he calls “The Great Panic.”
via Books of The Times – ‘In Fed We Trust’ by David Wessel and ‘A Colossal Failure of Common Sense’ by Lawrence G. McDonald with Patrick Robinson – Inside the Meltdown and the Race to Contain It – Review – NYTimes.com.
new unit of measure for Iraq, Katrina, bank mess, Obama budgets: the kiloDirksen, in honor of the late Senator Everett Dirksen, who is widely credited with the quip:
”A billion here, a billion there, pretty soon, you’re talking real money.”
He may not have actually said those words, but he might as well have, because it’s an essential observation that is indelibly associated with him.
All a laughable misunderstanding? that’s what the rest of the article says. But even so, very, very frightening.
As if the dollar didn’t have enough problems, Timothy Geithner took China’s bait yesterday and said he was “quite open” to its suggestion this week to displace the greenback with an “international reserve currency.” The dollar promptly fell and stocks followed, before the Treasury Secretary re-emerged to say “the dollar remains the world’s dominant reserve currency. I think that’s likely to continue for a long time.”
via China and the Dollar – WSJ.com.
This is the second time in 24 hours that I have seen a reference to the current era as “apocalyptic.”*
No. This is not the apocalpyse. “Apocalypse” means “apocalypse,” just as “literally” means “literally” and “complete” means “complete.”
In the current crisis:
- A lot of people have lost their jobs.
- A few big companies have disappeared.
- A lot of people and organizations have less money to spend.
- A lot of people are suffering extremely painful disruptions.
but …
- There have been few direct fatalities (excepting perhaps the poor guy who was friends with Bernie Madoff); compare this to World War II with 150M dead.
- Not one jot or mote of physical infrastructure has been destroyed — in fact, we are about to build a whole bunch of new infrastructure.
- No species have been made extinct, no forests have been laid waste, no crops have been sown with salt.
- Not one byte or scintilla of human knowledge has been lost.
To be sure, as the recession deepens, there will be further direct fatalities and continued real suffering. But the point is that most of the damage is not occurring in the physical layer of the world. Rather, this is a disruption in the social abstraction that v2.0 chimps use to manage resources.
This is not the end of capitalism or the beginning of socialism.
This is not The Great Disruption or the Inflection Point.
This is a period of rapid change in our social abstractions, and humans are fearful of change.
I’m not usually a fan of Paul Krugman, but this is so well stated that I must applaud.
The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.
At one level this should come as no surprise. For most of the last decade America was a nation of borrowers and spenders, not savers. The personal savings rate dropped from 9 percent in the 1980s to 5 percent in the 1990s, to just 0.6 percent from 2005 to 2007, and household debt grew much faster than personal income. Why should we have expected our net worth to go up?
via Op-Ed Columnist – Paul Krugman – Decade at Bernie’s – NYTimes.com.
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