Sample II – Additional excerpts from my book. I started the book in 2008.
An example of how greed and extravagance develops, the London based Economist published in May of 2002 a Survey on international finance titled “Capitalism and its Troubles.” I repeat; this article appeared in 2002 six years before the asset bubbles burst. Among the various topics of the Survey, it cited a then recently published piece by two British economists, Andrew Smithers and Stephen Wright. These two gentlemen stated, “Mr. Greenspan has allowed the creation of a potentially disastrous financial bubble.” They went on to recall that it was December of 1996, when commenting on the performance of the stock market, Alan Greenspan coined the phrase that the markets were exhibiting signs of “irrational exuberance”. The track record shows that he did nothing to rein in “irrational exuberance” and the possibility of a stock market bubble. Interest rates remained low and credit was easy to get. Unfortunately, looking back, the asset bubble not only fed the stock market bubble but dangerously expanded into the real estate market. The bright lights on Wall Street were making lifetime fortunes in one year while Joe Blow on Main Street was flipping houses. People felt unrealistically wealthy. Saving money was out. Why save, I’ll make it in the stock market next month. …Spending went out of control.
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life. – Teddy Roosevelt
But Mr. Greenspan was not finished…… He teamed up with Robert Rubin, Larry Sommers, Arthur Levitt and to a lesser extent Timothy Geithner the current Secretary of the Treasury Department. This team of rocket scientists put all their strength to block a proposal being considered by the Commodities Futures Trading Commission to regulate the Over the Counter derivatives market……. These five stalwarts of Wall Street and government stood up against a very intelligent, wonderful and extremely strong woman Brooksley Born who as Commissioner of the Commodities Futures Trading Commission initiated the proposed regulation……… Six weeks after Congress shut her down, Long Term Capital Management blew up due to international turmoil stemming from problems in the Russian financial markets. This situation and this company, a hedge fund, came extremely close to collapsing the entire financial system in 1998 because of the exact concerns about the OTC derivatives swaps that Congress was warned about by Brooksley Born and the CFTC. Brooksley Born, it turned out, was very right. This problem to this day still exists.
These capitalists generally act harmoniously and in concert, to fleece the people. – Abe Lincoln
A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad. – Teddy Roosevelt
But it was not only the Central Bank under Mr. Greenspan that advocated non- intervention and avoided enforcing any kind of regulations on the financial institutions because the attitude in Washington was that the markets will “figure it out.” That attitude or mantra was also in effect at the Securities and Exchange Commission under Mr. Levitt, the Chairman of the SEC. How else could anyone explain that Bernie Madoff was never exposed by a SEC audit? The philosophy was do not meddle, do not interfere, do not regulate…..
And in retrospect, President Clinton sat back and rode the wave of these two defunct Federal Commissions because it was the legacy he wanted to establish for his Presidency: that the economy and markets were thriving under his tenure.
“How did this happen?” The answer is symptomatic of the Mayan “tendencies” that are present at cycle or long wave tops or turning points. And the answer has Greek origins and Greek tragedy. So the answer has been around for a long time and is based in human nature. It is a topic that is not discussed much. The answer is Hubris. In Greek terms, hubris is when someone is so full of pride and confident of himself or herself that they act in defiance of the gods and laws. In today’s world, it is when public servants, state officials and corporate executives act in defiance of their mandated charter, or act in defiance of their shareholders and the public, or individuals who act in defiance of reality. Hubris, again in Greek terms, leads to nemesis, which is one’s downfall. Alan Greenspan did act in defiance of his mandates. His personal philosophy stopped him from respecting his mandates. Bill Clinton acted in defiance of the American people and his duties as President when he chose, as a married man, to have “fun” with a female government employee in our historic Oval Office rather than track an individual, who was clearly on his radar screen, Osama Bid Laden. He consciously decided that he did not want problems like Osama Bin Laden to be part of his presidential legacy. He had no regard for his presidential responsibilities. And so, eventually, eventually, the planes came. And then, with a bold face, he lied to our children.
I hope I shall always possess firmness and virtue enough to maintain what I consider the most enviable of all titles, the character of an Honest Man. – George Washington
Every man is said to have his peculiar ambition. Whether it be true or not, I can say for one that I have no other so great as that of being truly esteemed of my fellow men, by rendering myself worthy of their esteem. – Abe Lincoln
The one thing I want to leave my children is an honorable name.- Teddy Roosevelt
I did not have sex with that woman. – Bill Clinton
How low our country as come. The start of poor leadership – another tendency at a long wave top.
At some point in this book, I have to call on all of us to give a rousing standing ovation for all the great achievements brought to us by Harvard, MIT, Yale, Stanford and Princeton. What a track record of disaster in business and government by those institutions. These outstanding institutions of learning screen applicants to accept and take our best and brightest students and turn many into very influential idiots. Poor leadership is a “tendency” of a long wave or cycle top. We have had more than our fill of poor leaders in government and business.
Not one MBA picked up on Enron. An analyst at a small firm in Texas did pick up on Enron and subsequently was fired. A number of MBA’s worked at Enron or on Wall Street where they benefited from these schemes that were undetectable to Main Street.
Be a dreamer. If you don’t know how to dream, you’re dead. –
Jim Valvano, North Carolina State, basketball coach.
Here are some dreams from others:
My dream is of a place and a time where America will once again be seen as the last best hope of earth. – Abe Lincoln
Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed. –
D. D. Eisenhauer