Labor Day 2009

I am going to hear President Obama at Old Coney today. No, I am not in a union, but I knew someone that knew someone. I saw Obama speak when he came to Cincinnati as a candidate in February 2008 at the University of Cincinnati. My friend and I have never seen a sitting president before, so we are going to drive over to Old Coney and at least hear him speak. We might not actually get to see very much, but we will see. I went to hear Vice-President Biden this past summer when he came to my neighborhood of Northside to speak about economic development. I enjoy listening to politicians and talking heads talk about economics. What I really love is when they talk about the capital markets. I also love to hear the Chairman of the Federal Reserve Bank talk about monetary policy, and then switch gears and talk about helping the economy. I still am trying to figure out what protecting the integrity of the U.S. dollar, our currency, and helping the economy have to do with running monetary policy. The President and Congress make Fiscal Policy and that along with tax policy should take care of the economy. The Fed, our central bank, should be concerned with the integrity of the dollar and seeing that there are enough reserves in the banking system to keep the economy moving.

But, since so few really understand what the difference is between monetary policy and Fiscal policy, the two get a bit mixed up in people's minds. Monetary Policy does not get mixed up in the mind of Ben Bernanke, the Chairman of the Fed, but he has to work with a lot of people who do not understand the difference. That is namely Congress that doesn't understand the difference. Because if the members of Congress, both Senate and House, understood the difference between monetary policy and Fiscal Policy, they would not be asking the Fed to do their work. But, Congress is not equipped to understand because they have to spend all their time raising money so they can get re-elected. Now, they can blame the Fed for the fact that they did a miserable job. Put it on the other guy, not me.

I am still waiting to see what Congress and the President are going to do about putting the rules back in the investment game. From a social-intellectual perspective, I find it interesting that we have tighter controls on a professional football game on a Sunday afternoon than we have on the field of investment banking and investment management. Why in NFL football we even have instant replay to get the call right. On Wall Street, we have removed the officials and we don't care about instant replay. Does this speak to our values, or, the dumbing down of America is so complete that people are happy with their beer and their football team?

Have a Happy Labor Day.

Stay tuned.