David Rodeback's Blog
Local Politics and Culture, National Politics,
Tuesday, October 14, 2008
Listening to Smart People
Three little morsels I've heard lately while listening to smart people I know.
I like to ask questions of smart people, then listen to what they say. Here are a few small, recent fruits of that pursuit.
I was talking the other day with a man I know who is near retirement. He has lost over $100,000 in the stock market in the last two weeks. That's not a lot for some people, I suppose, but it's a lot for him. The first thing to note is that he's staying in the market, because he expects it to recover gradually. The second thing to note is that he's angry at a televised expert or two for panicking and telling people to sell all their stock immediately, which has only made matters worse. And he's very angry at both parties on Capitol Hill, but especially the Democrats, for not having the sense and exerting the power to rein in Fannie Mae and Freddie Mac before disaster struck, and for forcing banks to make unwise loans.
Second, I know a guy who is very concerned about US energy independence, and acutely aware that we subsidize our dependence on foreign oil with foreign aid and defense dollars, not to mention our soldiers' lives. Though he is aware of the negative economic effects of high oil prices, he's concerned that if prices fall significantly, we'll lose our momentum and stop working seriously toward energy independence. (Or, more fairly, we'll stop even talking about possibly removing the current regulatory obstacles to working seriously on energy independence.) This gentleman also knows enough economics to appreciate that wars in the Middle East are part of the price of energy dependence. He'd like to see the government slap a 50 percent tariff on oil imports, to help defray the cost of those wars, to connect the price with the product more completely, and to encourage domestic oil production.
Finally, someone I know with a PhD in matters financial assured me that it's much more important for a Secretary of the Treasury to know the markets than to know business. Henry Paulson, the incumbent, knows the markets, unlike former eBay CEO Meg Whitman, who knows business, and whom Senator McCain has offered as a possible Secretary of the Treasury in his adminstration. Paulson also knows the Chinese very well, which seems likely to be an advantage. And he comes from Goldman Sachs, where his years as CEO were preceded by years as COO. Goldman Sachs, she said, is rock solid even now, unlike certain other large banks whose names have been in the news -- some of which no longer exist, because they did not exercise the wisdom Goldman Sachs did.
I don't always agree with what smart people tell me, in the end, but I nearly always find it interesting and worthy of further thought.
Copyright 2008 by David Rodeback.