“This (economic) model’s estimations aren’t fact. Moreover, these models completely missed the serial financial bubbles we have experienced in the last decade and failed to anticipate the anemic recovery we remain embroiled in at present…

…What is clear is that our national debt more than doubled and that simply wouldn’t have been politically or financially possible without quantitative easing. What is wrong is that a debt-free saver, who lives within his hard-earned means, must indirectly fund the continued profligacy of dysfunctional governments and reckless borrowers through artificially suppressed interest rates.”, James Lovely, Lakeland, Fla.

October 21, 2015, The Wall Street Journal

Opinion

Anger, No, but Look Back With Clear Vision

Alan S. Blinder and Mark Zandi’s model’s estimations aren’t fact.

In “Don’t Look Back in Anger at Bailouts and Stimulus” (op-ed, Oct. 16), Alan S. Blinder and Mark Zandi miss the mark. They cite a new study to claim all manner of improved metrics after Wall Street’s bailout based on their econometric modeling. This model’s estimations aren’t fact. Moreover, these models completely missed the serial financial bubbles we have experienced in the last decade and failed to anticipate the anemic recovery we remain embroiled in at present. What is clear is that our national debt more than doubled and that simply wouldn’t have been politically or financially possible without quantitative easing. What is wrong is that a debt-free saver, who lives within his hard-earned means, must indirectly fund the continued profligacy of dysfunctional governments and reckless borrowers through artificially suppressed interest rates.

James Lovely

Lakeland, Fla.

Messrs. Blinder and Zandi tell us that Ben Bernanke was a genius and savior of the economy with the 2008-09 crisis measures. Then we hear the litany of what might have happened had we not taken those drastic measures—16% unemployment, 17 million jobs lost, lower GDP.

What about opportunity costs? TARP bailed out Wall Street, but what if instead the federal government helped companies with a structured bankruptcy, including GM and Chrysler? They could then get rid of some legacy costs that hampered their competitiveness. Instead of Dodd-Frank, why didn’t we just raise capital requirements? The rules for Dodd-Frank are still not finished five years later, and companies are struggling to figure out where they stand. And regarding the $800 billion in stimulus, I recall this was supposed to be for jobs, but it became a slush fund to shore up public-sector retirement plans which are still grossly underfunded. Had these drastic measures not been taken and had we worked to lower corporate tax rates, helped municipalities and companies in bankruptcy and lowered other business regulations instead, our economy would be roaring six years after the crash instead of just outperforming the anemic European and Japanese economies.

Ken Nelson

Chicago

Short-term government spending doesn’t create long-term demand or jobs. That requires programs to reduce business costs, regulations and risks. The Dodd-Frank handcuffs of the banking system along with the unsupervised authorities of the Consumer Protection Act and dozens of other regulations have worsened business conditions and delayed a recovery, instead of supporting it.

George Hamilton

St. Michaels, Md.

It is easy to cite big, bad Wall Street as the guilty party for all our problems. How refreshing it would be to have a little honesty and humility from our government in shouldering its share of the blame for the Great Recession. The government imposed the mark-to-market accounting rule. To its credit, it rescinded the rule on March 9, 2009. It is no coincidence that the recovery began that day.

Joseph B. Galloway

Greenville, S.C.

While the programs cited may have benefited the recovery, the authors avoid mentioning the Fed’s zero-interest program that for years now has quietly picked the pockets of middle class and retired savers. When inflation, low as it is, exceeds return on savings, the little guy gets burned. For those who count on savings to augment income with reasonable interest rates, the program has been a disaster. No wonder the authors failed to mention it.

Jolie Arsenault

Draper, Utah

Posted on October 22, 2015, in Postings. Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: