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Catching Elephant is a theme by Andy Taylor
Paul Krugman (via The New York Times)
Krugman continues his run as our most impassioned and rational voice during this crisis, increasingly criticizing the Geithner/Obama plan as the details continue to unfold. He reiterates another important piece here in a recap of post-Depression financial regulation, pointing out that financial industries used to concentrate on the simple business of attracting depositors and giving out (reasonable term) loans. Boring business, but sustainable and valuable.
Nowadays, we’re sifting through the wreckage of a financial system that was built on usurious loans on the credit side and making money out of money on the investment side. Other industries were no better, leaving us with a nation that builds very little and seems to be dominant only in advertising and increasingly tarnished financial products built around usury. GM didn’t sell cars - they sold “no money down, 0% APR loans!!!”. American Express is in the business of selling debt and collecting infinite payments, not helping people with credit (see the industry reference to those who pay every month as “deadbeats”). Insurance companies are designed to maximize the “float” and invest it in products designed to increase short term stock gains, not the health, life expectancy, or property/casualty security of their clients.
Time to take the necessary steps to dismantle these “too big to fail” zombie banks and get back to concentrating on sustainable growth and long-term goals.
Nandan Nilekani, the co-chairman of the Indian technology company Infosys (via Thomas Friedman’s NYT article, The Price Is Not Right)
When I was about nine years old, I wrote a story for my third grade class about a distant utopia on a foreign world. Most of the details of that story have faded from memory, but the one “invention” that gripped my imagination then still has a hold on me now. I wrote about a series of tubes crisscrossing the planet, shuttling people aboard trains that zipped along in airless tubes. I was undoubtedly inspired by Jetsons cartoons and the pneumatic tubes at the local bank that I would watch from the backseat of my mother’s station wagon, and what I’ve learned since then was that it was hardly a new idea: HG Wells wrote of tube connecting New York and London in the late nineteenth century, Robert Goddard’s notes revealed advanced schematics for a “vactrain” tube from about 1910, and Robert Salter of RAND proposed a network in the seventies. More recent references have integrated Maglev technology to eliminate friction with any track.
No track friction with a Maglev base: check. No air resistance in a vacuum-sealed tube: check. Theoretical speeds of up to 5,000 miles per hour, allowing travel from New York to LA in under an hour: check. Power from the existing electric grid, allowing it to become progressively greener as plants integrate renewable sources: check. Greatly reduced wait times, lessened security concerns, and optimally located transport hubs in the heart of major cities: check.
So why are we propping up an airline industry that is environmentally unsound, unpleasant and inefficient to travel with, financially unstable, and showing the effects of tightened budgets in its safety record? Or, for that matter, allowing the pathetically antiquated Amtrak to operate a monopoly on the rails?
How about a stimulus for vactrain innovation, an infrastructure project to rival and even trump the construction of the interstate system? A project that would address many of the Obama goals by creating “shovel-ready” construction projects across the nation, make gigantic strides in the efforts to stem global warming by reducing automobile and jet fuel usage, and simplify foreign policy by helping to wean us off of foreign oil dependence. Furthermore, I’m sure someone smarter than me could conceive of a system of municipal and federal bonds that would help stabilize the overall economy, perhaps by tying them to higher taxes on the ultra-rich as a special class of deduction.
But what would I know…I was just a nine-year old dreaming of a utopia, and we’re all well aware that thing are never so simple in real life.
