I was on my way to pick up a Borrelli’s pepperoni pizza before the Houston/Boston game when I heard the funniest story on NPR via the BBC news service. According to the report, Alan Greenspan was in England and being severely questioned about the current credit crisis in the US. The reporter said that according to Greenspan the problem may have been caused by the use in many companies of teenage programmers who’s computer models were not really reliable in economic terms.
Teenagers. Damn, and I was so eager to blaim it on the neoliberals and the free market that apparently can’t really adjust itself the way that the economists claim.
Meanwhile, the fix which over the weekend seemed secure now is apparently not. And while JP Morgan Chase’s offer of $2 a share is on the table, the stock is actually trading this morning in the $6 range.
As I was discussing yesterday, this solution, the $30 billion buyout that uses tax payers funds to rescue one financial institution, is not the correct solution. But we are stuck in a top down model, Daddy Fed, or Mommy Central Bank, or Uncle Sucker, however you want to call it, will solve the problem it has caused by doing the same thing it has been doing. Borrow money to pay off borrowed money. This is wrong. We need some new thinking and different people doing the thinking.
And meanwhile, England, please keep Mr. Greenspan there.