Wikinvest Wire

Two very different ways to move forward

Friday, September 26, 2008

Former Fed chief Alan Greenspan and Congressman Ron Paul (R-Texas) were both in the news today describing two very different ways to move forward from the current financial market predicament. In this report at the WSJ Economics blog, Dr. Greenspan favors the "more is better" approach to fixing what's wrong.

We do not take a stand on the choice of institutions eligible for emergency assistance. Rather, we urgently advocate immediate, extensive action that would maintain the functions of credit markets and prevent a serious economic contraction.

We are deeply concerned about instituting reforms for the longer run that will prevent similar crises in the future.
Ron Paul, on the other hand, sees such heavy handed intervention as part of the same pattern that has brought us to the current juncture.

In this interview with Alex Jones, Dr. Paul's remedies are much simpler.
“It looks like from I see in Congress, that they’re opting for a decade plus of depression rather than saying let’s correct our ways, let’s balance the budget, let’s bring our troops home,” said Paul, adding that the same course of printing money would continue - prolonging the agony and preventing a necessary correction.
Paul said of the bailout, “They want dictatorship, they want to pass all the penalties and suffering on to the average person on Main Street,” adding, “We will have a depression or recession, it’s locked in place due to previous Federal Reserve actions.”
The Congressman said that Greenspan and Bernanke should be criminally charged but that such an effort would be largely symbolic. "Morally speaking, they're the culprits," said Paul.
This report in the Army Times regarding the use of active duty military for “homeland patrols” and “crowd control" is referenced in the story above and has been forwarded to me by a number of readers this week.

When asked about this, Dr. Paul replied, "The more problems that we have, the more likely it is that we’re going to have martial law, so I do think they anticipate and they plan for these things."

And you thought the last two weeks were exciting?

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fish said...

Every time I hear Greenspan say anything about correcting these issues I'm reminded of the Simpsons episode where Grampa Simpson and Jasper have been pressed into service at Springfield Elementary during a teachers strike. Somehow Jasper manages to get his beard caught in the pencil sharpener and Abe thinks that by turning the pencil sharpener crank he will somehow manage to extract Jasper from his predicament. As is expected each turn of the crank only serves to pull the beard deeper into the mechanism.

Greenspan is completely incapable of reflection..his solution is to always turn the crank just a little bit more...yeah that's sure to fix things! Alternately I'm sure that somewhere right now an experimental animal behavior researcher has managed to convince a white Norway rat to press a lever marked "LIQUIDITY" every time it receives stimulation in the form of hearing the word "Maestro" piped into its enclosure or is shown a large photo of the house banking committee!

Remember....experts seldom in doubt often in error!

Dan said...

I asked my friend who is a high ranking officer in the guard about this Army article. Here is his response:

NORCOM is a silly idea from the get go. There are, of course, several commands that have always been in existence; PACOM (pacific command), CENTCOM (central command) etc. NORCOM was created in the post 9/11 hype, with the mission of focusing solely on domestic missions/operations in the Continental US. Seemingly a good idea, but there are two basic problems 1) this has always been the perview of the National Guard, in about a million different ongoing missions 2) NORCOM was created without any units assigned to it. It is just a huge, expensive command organization, with no units to maneuver. For the last several years, the major homeland defense training missions that occur annually and involve military resources across several regions (i.e. Ardent Sentry in Indiana back in 07', Vigilant Guard in Nevada last June, both missions that several states supported, including yours truly) has had NORCOM running around, begging states to attach their units to their command structure. Why would you do that, when you already have a command structure? Several times we have heard "Warning Orders" that a Brigade sized entity from the state was going to be activated for a year long tour under NORCOM. This never happens, because of the way that the National Guard receives and accepts federal missions. The National Guard Bureau says "hey, we need an Infantry Brigade to go to Iraq in 2010. Who wants it?" Then the state Adjutant General (Sort of like the chairman of the joint chiefs, appointed by a State Governor, commanding the State's national guard only. California's Adjutant General is Major General William Wade) says, "I'll take that one..." and thus are Guard units scheduled for activation. A state is never forced to accept a mission, but you can't get away with turning them all down, either. At the end of the day, with 90% of the National Guard forces deploying regularly overseas, not just Iraq and Afghanistan, but Kosovo, Bosnia, etc., no Adjutant General is going to make his soldiers leave their jobs and families so that NORCOM can command something. This has been going on for years now, they have been begging for a National Guard Brigade to command, and nobody will give them anything. So in order to justify this huge expense, it looks like their giving them active duty units on their stabilization period. Hell, maybe that's the best idea...

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