Treasury Secretary Tim Geithner has announced a new program under which the US government will join with private investors to purchase bad assets from various commercial banks, so that these banks' balance sheets can be cleaned up, enabling them to lend again. Finally, here is a program that is very likely to work well when it comes to fixing the financial system and getting banks to lend again.

Continue reading "The Public-Private Investment Program is a GREAT Idea!" »

Posted by Don Peppers | Permalink | Comments ()

Ahem. Warren Buffett (does he really need an introduction?) is one of the world's richest men and a trusted, if informal, economic advisor to President Obama. And, during a three-hour CNBC interview last Monday he made exactly the argument I first made in my October blog post on our 1to1 Media blog: One of the biggest problems behind the meltdown of our commercial banking system is that newly adopted "mark to market" accounting rules have an exaggerated and unjustified effect on banks, as opposed to other businesses.

Continue reading "Warren Buffett Agrees With Me: "Mark to Market" is the Problem" »

Posted by Don Peppers | Permalink | Comments ()

OK, I feel like I'm harping on the Obama Administration, and I really don't mean to. But Laura D'Andrea Tyson has an op-ed piece in today's Wall Street Journal that perfectly illustrates why democracies need an educated public. Ms. Tyson sits on the President's Economic Recovery Advisory Board.

Read this statement from her article and see if you can tell why it's misleading:

"Critics charge that President Obama's tax rates for high-income earners will strangle small business and stifle economic growth. Such claims are misguided or disingenuous. A full 97% of small businesses will see their rates unchanged or enjoy additional tax benefits under the Obama plan."

Continue reading "An Educated Public Is Democracy's Biggest Asset" »

Posted by Don Peppers | Permalink | Comments ()

So far, the downturn we are encountering looks like a recession. It may be one of the more severe recessions in the last 50 years or so, but it's still only a recession, and not even close to turning into a genuine "depression," if you define that as a 10% or greater decline in GNP.

We should all remember, however, that economic downturns are entirely natural events, and you can't prevent them any more than you can prevent ocean waves, or thunderstorms. The global economic system is a highly complex, path-dependent system of interacting forces. In fact, in the aggregate the economy performs very much like the weather, and will always generate unpredictable results. No one has ever successfully predicted economic cycles consistently, and no one ever will - ever. This is because the better we get at predicting them, the more opportunities we create for imaginative investors to arbitrage those predictions away with their own investments.

Continue reading "Three Steps to Turn a Recession into a Depression" »

Posted by Don Peppers | Permalink | Comments ()