Yesterday's election marks the end of a string of economy-destroying ideas that stretch back to 1980. America rejected the idea that it's right to run a government of the rich for the rich. It figured out that when you cut taxes for the top 1%, run record deficits, double the national debt, and eliminate regulation, you don't get trickle down, you get meltdown. Barack Obama's election means that these ideas are history.
What will replace them? Obama has already discussed economic stimulus, middle class tax cuts, mortgage modification, a moratorium on foreclosures, infrastructure spending, wider health care coverage, and investment in alternative energy.
But the 43rd president left Obama with a challenge -- to figure out the underlying problems with the current financial system and rebuild it in a way that will work in the short and longer term. Obama must come up with new ideas on which to rebuild the crumbling ruins he's inheriting.
To do that, he will create a team of experts from both parties. That team should analyze the sources of the problems that beset the economy and financial system. And it must agree on principles which can be used to craft legislation that will rebuild the financial system. As I've posted, I believe what they'll find is the need to create a system that ends securitization. limits leverage, delivers transparency, ties compensation not to deal size but to long-term profitability, and builds firewalls between markets around the world.
The world needs fixing. And there's no time to waste.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
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Reader Comments (Page 1 of 1)
11-05-2008 @ 3:08PM
Iridium said...
Peter, the best thing would be to hang a closed sign on Wall Street.
To make it as a corporation you will need to be profitable through selling goods and services to people, not shareholders.
You need to do away with accounting loopholes and credit sweaps. You need to stop mergers and market consolidation and you need to turn the controlling interest of a company over to its employees. You need to stop all government handouts. You need to abolish all trade unions, for what was once a good idea has now become a liability.
In this new market a good CEO will be one that can build a good business plan and hire workers that can grow business from the ground level. A good CEO will no longer be someone who can hide debt and talk a good talk. Someone who knows how to leverage debt into investments to fake profit.
We need real capitalism with real government oversight that makes sure the rules are being followed.
Honesty and good ethics must become a priority. Dishonestly and the current code of ethics needs to be punished severely.
11-12-2008 @ 9:31AM
Ricky Hancock said...
President Obama,
I just wanted to write to you about some things that I think that you need to work on as Presidnt of the united states.First of all I think we need some kind of health insurancr that is free for people that can't afford to get insurance.I am a working male and I can't afford to get insurance on what I make,but it is wrong that if you are a female with kids you can get insurance.Also, I think it is wrong for people to get food stamps that are able to work.I live in Kentucky and I see it every day women keep having kids and get on food stamps and welfare so they can sit at home and don't have to work yet they are able to work.I think if they have a doctors excuse saying they are disable and can't work then thay are elegible for food stamps.It's so many people getting food stamps and having babies and drawing $500.00 to $600.00 dollares a month sitting on there butts and are able to work and someone like me works tring to keep a roof over my head and I am lucky if I can buy $50.00 worth of grocies a week.Plus I am disable and working 40 hours a week and can't even get my disability cause social security says I am working 40 hours a week and I have been working all my life and paid in socaial security and now I need it and can't draw it.Then you got these people out there drawing disability that hasn"t work any and the working people is paying there diability.I think this is wrong cause I am 52 yrs. old and worked all my life and payed taxes and now it hurts me to work and I can't even get my disability cause social security says I am able to work.I am a diabetic and have high blood pressure and a bad back and bad feet and I can't get no help from anybody to get my disability and the med. I need.I also have other disability problebs also.I guess a person like me should just give up and die cause no one wants to help me with my disability problems so I can get my med. I need and get insurance so I can see a doctor when I need to