Reclaiming America’s Soul

"Nothing will be gained by spending our time and energy laying blame for the past." So declared President Obama, after his commendable decision to release the legal memos that his predecessor used to justify torture. Some people in the political and media establishments have echoed his position. We need to look forward, not backward, they say. No prosecutions, please; no investigations; we’re just too busy.

And there are indeed immense challenges out there: an economic crisis, a health care crisis, an environmental crisis. Isn’t revisiting the abuses of the last eight years, no matter how bad they were, a luxury we can’t afford?

No, it isn’t, because America is more than a collection of policies. We are, or at least we used to be, a nation of moral ideals. In the past, our government has sometimes done an imperfect job of upholding those ideals. But never before have our leaders so utterly betrayed everything our nation stands for. "This government does not torture people," declared former President Bush, but it did, and all the world knows it.
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The real crisis? We stopped being wise

By : Barry Schwartz
Barry Schwartz makes a passionate call for "practical wisdom" as an antidote to a society gone mad with bureaucracy. He argues powerfully that rules often fail us, incentives often backfire, and practical, everyday wisdom will help rebuild our world.

Watch the video: Loss of wisdom

The paradox of choice

By : Barry Schwartz

Psychologist Barry Schwartz takes aim at a central tenet of western societies: freedom of choice. In Schwartz's estimation, choice has made us not freer but more paralyzed, not happier but more dissatisfied.

Note:
When there is only one jean and it is not good who is responsible? The world
When there are hundreds to choose from and what you chose is not good who is responsible? You.

Why choice make people miserable?

• Regret and anticipated regret
• Opportunity Cost
• Escalation of expectations
• self blame

Watch the video..

Making Banking Boring

By: Paul Krugman
Thirty-plus years ago, when I was a graduate student in economics, only the least ambitious of my classmates sought careers in the financial world. Even then, investment banks paid more than teaching or public service — but not that much more, and anyway, everyone knew that banking was, well, boring.

In the years that followed, of course, banking became anything but boring. Wheeling and dealing flourished, and pay scales in finance shot up, drawing in many of the nation’s best and brightest young people (O.K., I’m not so sure about the “best” part). And we were assured that our supersized financial sector was the key to prosperity.

Instead, however, finance turned into the monster that ate the world economy.

Recently, the economists Thomas Philippon and Ariell Reshef circulated a paper that could have been titled “The Rise and Fall of Boring Banking” (it’s actually titled “Wages and Human Capital in the U.S. Financial Industry, 1909-2006”). They show that banking in America has gone through three eras over the past century.

Before 1930, banking was an exciting industry featuring a number of larger-than-life figures, who built giant financial empires (some of which later turned out to have been based on fraud). This highflying finance sector presided over a rapid increase in debt: Household debt as a percentage of G.D.P. almost doubled between World War I and 1929.

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Awake and Sing

By FRANK RICH
“I am pronouncing the depression over!” declared CNBC’s irrepressible Jim Cramer on April 2. The next day the unemployment rate, already at the highest level in 25 years, jumped yet again, but Cramer wasn’t thinking about the 663,000 jobs that disappeared in March. He was thinking about the market. Mad money. Fast money. Big money. The Dow, after all, has rallied in the weeks since Timothy Geithner announced his bank bailout 2.0. Par-tay! On Wednesday, Cramer rang the opening bell at the New York Stock Exchange, in celebration of the 1,000th broadcast of his nightly stock-tip jamboree.

Given Cramer’s track record on those tips, there’s no reason to believe he’s right this time. But for the sake of argument, let’s say he is. (And let’s hope he is.) The question then arises: What, if anything, have we learned from this decade’s man-made economic disaster? It wasn’t just trillions of dollars of wealth that went poof in the bubble. Certain American values also crumbled and vanished. Making quick killings by reckless gambling in the markets — rather than by investing long-term in new products, innovations, technologies or services that might grow and benefit America and the world — became the holy grail in the upper echelons of finance.

This was not an exact replay of the preceding dot-com bubble. As a veteran of the tech gold rush recently observed to me, in Silicon Valley “the money comes later” and “the thing you make comes first, however whimsical, silly, microscopic, recondite it may be.” On Wall Street over the past decade, the money usually came first, last and in between. There was no “thing” being made at all unless you count the slicing and dicing of debt into financial “products,” the incomprehensible derivatives that helped bring down the economy, costing some five million Americans their jobs (so far) and countless more their 401(k)’s.

On the same Friday that the Labor Department reported the latest jobless numbers, the White House released (in the evening, after the network news) some other telling figures on the financial disclosure forms of its top officials. From those we learned more about how much the bubble’s culture permeated this administration.

We discovered, for instance, that Lawrence Summers, the president’s chief economic adviser, made $5.2 million in 2008 from a hedge fund, D. E. Shaw, for a one-day-a-week job. He also earned $2.7 million in speaking fees from the likes of Citigroup and Goldman Sachs. Those institutions are not merely the beneficiaries of taxpayers’ bailouts since the crash. They also benefited during the boom from government favors: the Wall Street deregulation that both Summers and Robert Rubin, his mentor and predecessor as Treasury secretary, championed in the Clinton administration. This dynamic duo’s innovative gift to their country was banks “too big to fail.”

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Lawrence summers and conflict of interest..

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Obama’s Ersatz Capitalism

By : JOSEPH E. STIGLITZ

THE Obama administration’s $500 billion or more proposal to deal with America’s ailing banks has been described by some in the financial markets as a win-win-win proposal. Actually, it is a win-win-lose proposal: the banks win, investors win — and taxpayers lose.

Treasury hopes to get us out of the mess by replicating the flawed system that the private sector used to bring the world crashing down, with a proposal marked by overleveraging in the public sector, excessive complexity, poor incentives and a lack of transparency.

Let’s take a moment to remember what caused this mess in the first place. Banks got themselves, and our economy, into trouble by overleveraging — that is, using relatively little capital of their own, they borrowed heavily to buy extremely risky real estate assets. In the process, they used overly complex instruments like collateralized debt obligations.

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Life Lessons From the Family Dog

By Dana Jennings

Our family dog started failing a couple of months ago. Her serious health problems began at about the same time I was coping with my own — finishing my radiation and hormone therapy for prostate cancer.

Since last summer, I’ve learned that my cancer is shockingly aggressive, and the surgery, radiation and hormone treatments have left me exhausted, incontinent and with an AWOL libido. These days I’m waiting for the first tests that will tell me the status of my health.

Even so, as I face my own profound health issues, it is my dog’s poor health that is piercing me to the heart. I’m dreading that morning when I walk downstairs and … well, those of us who love dogs understand that all dog stories end the same way.

Her full name is Bijou de Minuit (Jewel of Midnight) — my wife teaches French. She is a 12-year-old black miniature poodle, and she is, literally, on her last legs. Her hind quarters fly out from beneath her, her back creaks and cracks as she walks, she limps, she’s speckled with bright red warts the size of nickels, her snore is loud and labored (like a freight train chugging up some steep grade) and she spends most of the day drowsing on her pillow-bed next to the kitchen radiator.

Bijou’s medicine chest is impressive for a 23-pound dog: A baby dose of amoxicillin for chronic urinary tract infections; prednisone and Tramadol for pain; phenobarbital for seizures; Proin for incontinence – all of it wrapped in mini-slices of pepperoni.

She is, I realize, “just” a dog. But she has, nonetheless, taught me a few lessons about life, living and illness. Despite all her troubles, Bijou is still game. She still groans to her feet to go outside, still barks at and with the neighborhood dogs, is willing to hobble around the kitchen to carouse with a rubber ball — her shrub of a tail quivering in joy.

I know now that Bijou was an important part of my therapy as I recovered from having my prostate removed. I learned that dogs, besides being pets, can also be our teachers.

Human beings constantly struggle to live in the moment. We’re either obsessing over the past (”Gee, life would’ve been different if I’d only joined the Peace Corps.”), or obsessing over the future (”Gee, I hope my 401K holds up”). We forget that life, real life, is lived right now, in this very moment.

But living in the moment is something that dogs (and cancer patients) do by their very nature. Bijou eats when she’s hungry, drinks when she’s thirsty, sleeps when she’s tired and will still gratefully curl up in whatever swatch of sunlight steals through the windows.

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China’s Dollar Trap

Back in the early stages of the financial crisis, wags joked that our trade with China had turned out to be fair and balanced after all: They sold us poison toys and tainted seafood; we sold them fraudulent securities.

But these days, both sides of that deal are breaking down. On one side, the world’s appetite for Chinese goods has fallen off sharply. China’s exports have plunged in recent months and are now down 26 percent from a year ago. On the other side, the Chinese are evidently getting anxious about those securities.

But China still seems to have unrealistic expectations. And that’s a problem for all of us.

The big news last week was a speech by Zhou Xiaochuan, the governor of China’s central bank, calling for a new “super-sovereign reserve currency.”

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