The former vice-chairman of the Federal Reserve has said he “deeply regretted” the pain caused to millions of people around the world from the financial crisis, admitting that “the cops weren’t on the beat”.
Don Kohn’s apology for the actions of Federal Reserve in the run-up to the financial and economic crisis goes significantly further than the limited responsibility taken by his former boss, Alan Greenspan.
Speaking to British MPs at a confirmation hearing on Tuesday, Mr Kohn nevertheless said his experience would be valuable for the Bank of England, where he has been appointed to a new committee with powers to guide UK financial stability.
“I believe I will not make the same mistake twice,” he said.
Mr Kohn has been appointed to the Bank’s new Financial Policy Committee, which will soon have powers to change system-wide UK financial regulations and even limit borrowing by households and companies if it thinks there are threats to financial stability.
Having been a strong advocate of the Greenspan doctrine not to burst asset bubbles but to mop up any mess after a crash, Mr Kohn recanted much of his previous view in front of MPs. He said he had “learnt quite a few lessons – unfortunately” from the financial crisis, including that people in markets can get excessively relaxed about risk, that risks are not distributed evenly throughout the financial system, that incentives matter even more than he thought and transparency is more important than he thought.
An Interview with Platon
FEW photographers find themselves grasping Mahmoud Ahmadinejad by the hand, facing down Robert Mugabe or eliciting a grin from Binyamin Netanyahu–all within a 72-hour period, no less. Platon, a London-raised and New York-based photographer, is the keen eye behind “Power: Portraits of World Leaders” (Chronicle Books), a book of 150 photographs of world leaders, all of them taken at the United Nations.
This collection is full of surprises and affirmations alike: Hugo Chávez has all the penetrability of an Easter Island statue; Victor Yushchenko could be a friendly school principal; and Muammar Qaddafi is a villain straight out of “Star Wars”. Securing the portraits required tenacity, quick reflexes and the wiles of a fixer. More Intelligent Life spoke with Platon, a staff photographer at the New Yorker, about his adventures in assembling his portraits.
God’s Handiwork: Spring Tulips 2011
Iceland’s Approach to Bank Bailouts (They Did Not)
If you want to understand what happened in Iceland — the whole story of the crash, the banks failing, the recent signs of recovery — start at the prime minister’s office in downtown Reykjavik and continue east for a bit until you ascend a steep bluff overlooking the icy waters of Faxafloi Bay. There you will arrive at a used-car lot. Ask for the owner of this establishment, who is a short, 61-year-old man with extremely thick glasses named Gudfinnur S. Halldorsson — he goes by the name Guffi (pronounced Goofy) — and have him to tell you the story of the Porsche that kept on giving.
During Iceland’s boom years, which lasted from 2003 until 2008, a customer showed up at Guffi’s dealership wanting to buy a Porsche on credit, no money down. Guffi didn’t inquire about the man’s line of work; in fact, he didn’t care if the man paid back the loan — that was the bank’s problem, not his. Guffi sold the Porsche, and the customer drove it for a month or so until the first payment was due. The man had no interest in making the payment, and so Guffi, who always aimed to please, helped the man resell the vehicle for a profit. Guffi did the same thing a month later, and again a month after that; all told, Guffi sold the same car five times in six months, amazingly charging a higher price on each successive sale.
The Mini
Every generation seems to produce some high-profile individual who mourns to the masses that there was once a simpler and better time in America. You know the drill: People knew their neighbors, morality reigned and most everyone knew right from wrong. These elegies always end with the premise that somehow we as a nation have lost our way. Of course the simpler times that everyone seems to think we’ve gotten away from are nothing more than our childhood memories. As children, we perceived and remembered everything far more simplistically – without the freight of context surrounding situations we encounter as adults.
Still, it’s those wistful thoughts of innocent bygone days that drive the automotive styling designs we know today as retro-cars. The BMW-designed and British-built Mini is a perfect example. This modern automobile seems made to bring back fond memories of the British Invasion and the Swinging 60s. It seems to exemplify the days when Carnaby Street, the Stones, Donovan, the Beatles, Twiggy, white plastic go-go boots and all other things British were new and groovy.
Of course the original Mini was far more and much less than that. Introduced in 1959, the Mini was the British Motor Corporation’s answer to the long and successful sales career of the Volkswagen Beetle.
What is less well remembered is that the Mini’s creation in the late 50s was a direct response to a major oil crisis for the Brits. What caused it? England’s foolish war against Egypt’s Gamal Nasser, in which England tried and failed to regain control of the Suez Canal.
The People vs. Goldman Sachs
A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges.
They weren’t murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.
Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn’t leave much doubt: Goldman Sachs should stand trial.
This article appears in the May 26, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive May 13.
The great and powerful Oz of Wall Street was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma. Their unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — “a million fraud cases a year” is how one former regulator puts it. But the mountain of evidence collected against Goldman by Levin’s small, 15-desk office of investigators — details of gross, baldfaced fraud delivered up in such quantities as to almost serve as a kind of sarcastic challenge to the curiously impassive Justice Department — stands as the most important symbol of Wall Street’s aristocratic impunity and prosecutorial immunity produced since the crash of 2008.
A Wonderful Vietnamese Lunch
Delicious and $6.00. The bowl contained, from the bottom up: lettuce, cucumbers, rice noodles, carrots, nuts and grilled shrimp.
The Most Interesting Man in the Senate: Rand Paul reshapes the national debate.
“What is so great about our bloated federal government that when a libertarian threatens to become a senator, otherwise rational and mostly liberal pundits start frothing at the mouth?” the old New Left columnist Robert Scheer wrote at Truthdig. “What Rand Paul thinks about the Civil Rights Act, passed 46 years ago, hardly seems the most pressing issue of social justice before us. It’s a done deal that he clearly accepts. Yet Paul’s questioning the wisdom of a banking bailout that rewards those who shamelessly exploited the poor and vulnerable, many of them racial minorities, is right on target. So too questioning the enormous cost of wars that as he dared point out are conducted in violation of our Constitution and that, I would add, though he doesn’t, prevent us from adequately funding needed social programs.”
The dead-enders of the Beltway left, however, continued to treat Paul like a mental patient. “By nominating a lunatic,” Center for American Politics blogger Matthew Yglesias wrote after Paul’s primary victory, “Republicans have suddenly taken what should be a hopeless Senate race and turned it into something Democrats can win. At the same time, by nominating a lunatic, Republicans have suddenly raised the odds that a lunatic will represent Kentucky in the United States Senate.” Nor was this sentiment confined to the left. “Rand Paul’s victory in the Kentucky Republican primary is obviously a depressing event for those who support strong national defense and rational conservative politics,” former George W. Bush speechwriter David Frum wrote at the time. “How is it that the GOP has lost its antibodies against a candidate like Rand Paul?”
Paul parries these attacks with a bemused but direct engagement; you can see he thinks he’s going to win a long-overdue David vs. Goliath argument. A good portion of his book is spent examining and decrying how the Republican Party became “tainted by neoconservative ideology,” mistaking “national greatness” for a willingness to intervene willy-nilly into the affairs of foreign countries, while tolerating big spending projects at home. “The Tea Party,” Paul claims, “is now a threat to the old Republican guard precisely because its stated principles prevent it from being brought into the neoconservative fold.”
Liveable v lovable
Vancouver is Hollywood’s urban body double. It is famously the stand-in for New York, LA, Seattle and Chicago, employed when those cities just get too tough, too traffic-clogged, too murderous or too bureaucratic to film in. It is almost never filmed as itself. That is because, lovely as it is, it is also, well … a little dull. Who would want to watch a film set in Vancouver? To see its skyscrapers destroyed by aliens or tidal waves, its streets populated by cops and junkies, its public buildings hosting romantic reunions? Yet Vancouver (original name, Gastown) has also spent more than a decade at the very top of the charts of the best city to live in the world. Can that really be right?
No. Not at all. In fact, Vancouver’s boringly consistent topping of the polls underlines the fundamental fault that lies at the heart of the idea of measuring cities by their “liveability”. The most recent surveys, from Monocle magazine, Forbes, Mercer and The Economist, concur: Vancouver, Vienna, Zurich, Geneva, Copenhagen and Munich dominate the top. What, you might ask, no New York? No London? No LA or HK? None of the cities that people seem to actually want to emigrate to, to set up businesses in? To be in? None of the wealthiest, flashiest, fastest or most beautiful cities? Nope. Americans in particular seem to get wound up by the lack of US cities in the top tier. The one that does make it is Pittsburgh. Which winds them up even more.
The big cities it seems, the established megacities of the US, Europe and Asia are just too big, too dangerous, too inefficient. So what do these top cities have in common? How exactly do you measure “liveability”?
All the surveys use an index. But what is on it? “There’s always proximity to nature,” says Tyler Brûlé (editor of Monocle and patron saint of liveable cities and airport lounges, whose column appears weekly in the FT’s Life & Arts section). “Global connectivity is important, education and we’ve recently added chain store metrics – is there a Starbucks or a Zara?” he says.
STREET LEVEL ROYAL WEDDING
STREET LEVEL ROYAL WEDDING from David Francis on Vimeo.
Very nicely done.