Hyatt's Risky Gamble

I am appalled by the duplicity of Hyatt's management. No company that treats workers well lies about the people they are training.

There is also a business case not to outsource your key staff. I point this out in my Cambridge Chronicle op-ed.

Respect Your Children

The political center must have moved very far to the right if your editorial writer believes that socialism has an "evil history" (Respect your children, New York Times, September 5, 2009: A14).

The history of socialism is found in the history of the Nordic states, in post World War II Britain, and in many parts of Europe today. Nothing evil there.

Sent to New York Times

Another letter published made the same point.

Inquiry Stokes Unease Over Trading Firms That Shape Market

In your discussion about high speed computer trading you stated, "The Securities and Exchange Commission has opened up an investigation into high-speed-trading practices, in particular the ability of some of the most powerful computers to jump to the head of the trading queue and -- in a fraction of a millisecond -- capture the evanescent trading spread before the rest of the market does" (Inquiry Stokes Unease Over Trading Firms That Shape Markets, New York Times, September 3, 2009: A1, A6).

We do we need an inquiry? The SEC needs to act. Even a millisecond advantage is front running. It is not clear whether or not this type of front running is illegal. If it is then practitioners should be prosecuted; if it is not then the practice should be banned.

I wonder how much of the recently declared profits in the financial services industry were based upon this practice.

Sent to New York Times

The Obama Slide

I hope that in his next column, David Brooks will tell us how to deal with the paradox expressed in the penultimate sentence of his column (The Obama Slide, New York Times, September 1, 2009: A25). Mr. Brooks states, "... he needs to align his proposals to the values of the political center: fiscal responsibility, individual choice and decentralized authority."

The last eight years are a memorial to the benefits of individual choice accomplished through massive deregulation or failed regulation. During that time, we did not see much in the way of fiscal responsibility. Governments, corporations (especially banks and near banks), and individuals all engaged in massive deficit spending or irresponsible risk taking.

What policies does Mr. Brooks advocate that would allow freedom but curb those excesses that have brought the economy down?

Sent to the New York Times

The Foreclosure Crisis

James Surowiecki outlines several alternatives to dealing with the foreclosure crisis except one: the Shared Appreciation Mortgage (Not Home Yet, New Yorker, August 10/17, 2009: 25). Instead of throwing money at people or at mortgage servicers, the government should enter into sharing the cost of the mortgage with the distressed homeowner. Homeowners pay what they can, the government picks up the rest. When the house is eventually sold, homeowner and government share the proceeds in proportion to their contributions.

It is simple, there is no need to involve mortgage servicers and the mortgage is not written down.

The only risk is that the price of the house will remain under water; but in such cases the sharing could continue with the next owner.

Sent to New Yorker

Appointments Lacking

As a former community organizer, I would have thought that President Obama would have been keenly aware of the importance of organization (Obama Team Lacking Most of Top Players, New York Times, August 24, 2009: A1, A12). Without having your political supporters in place throughout the agencies, it is very hard to get your policies translated down the hierarchy into operational goals and into action.

Unless appointees committed to your agenda are in place, the culture of each government department will continue to be that of his predecessor. This is not a happy situation for the President or the nation.

I think this lack of successful placements has much to do with the lassitude that Paul Krugman complains about in his column (All the President's Zombies, New York Times, August 24, 2009: A7). Though I must add that choosing the very people who were instrumental in dismantling the New Deal banking restrictions to senior economic positions almost guarantees a continuing commitment to that losing course of action. There is lots of social science research to demonstrate that. The President should bring in new brooms there as soon as possible.

Sent to New York Times

A Chance to Return the Favor

A brilliant idea (New York Times, August 12, 2009).
But so naive.

Sent to New York Times