Dr. Mike "Wonderland" Walden of NC State and Locke Foundation

And he gets paid to teach economics to children?

I couldn't let this go by without posting.


Locke Foundation hack-on-the-side Dr. Mike Walden "assesses" that BB&T is cutting jobs because of a "lack of lending opportunities."

Any business folk out there want to tell Dr. Walden and BB&T where to find a "lending opportunity" to use the bajillions they've taken from the government?

Apparently they can't find anywhere to lend money, so they have to cut jobs.



What bs

The bailout was passed because people couldn't get loans. That isnt opinion, its what actually occurred. So now just a few weeks later no one wants any money? This guy is insane

"Keep the Faith"

To my knowledge

The Pope Foundation basically owns the NC State Economics Department. Every faculty member I've heard speak from there is a reliable voice for free-market extremism.

Basic Economics

I realize it's hard to understand why there would be a "lack of lending opportunities" when all you hear from mainstream media hacks (the same ones that were telling us the sub-prime crisis would subside about a year ago, and claimed that the economy was "great" in 2006) is that there is a "credit crisis" and that lack of consumer loans and business loans is what is driving the downturn. The real credit crunch was one between banks - investment and commercial banks along with others in the financial services industry were taking heavy losses. These institutions stopped lending to one another in the fear that they would not be paid back. If lending to consumers and businesses was really that tight, interest rates wouldn't be at all time lows, because interest rates effectively measure the price of money at a certain level of risk. The bailout was designed to bring confidence back to Wall Street so that financial institutions would feel secure in loaning each other money. The Treasury didn't even bother to buy up the bad debt, it simply bought bank stocks directly.

The average consumer or small business owner, on the other hand, is not clamoring for credit. Instead, they are having difficulty paying off their current debts. Do you really think car dealerships need to be taking out loans to expand their operations at this point? People are scaling back their consumption, streamlining their business operations, and saving money once again. That's precisely what should happen following a speculative boom in order to ensure long-term growth and stability in the economy. It's the natural, healthy, and intelligent reaction to a period of gross excesses. They shouldn't be seeking out more debt (the American consumer has already racked up over $14 trillion) and public policy shouldn't encourage more debt or consumption. Which is precisely why these stimulus plans of sending people checks in the mail, or borrowing/printing more money to build roads is only going to make the problem worse. Same with interest rates. Interest rates, like other prices, send signals to credit consumers. When they are high, they say: don't go into debt, save your money, operate on a short term basis and be ready to change. A high interest rates encourages savings and thus total wealth within an economy. As savings begin to rise, and wealth is accumulated, interest rates thus begin to fall as the supply of money ready for lending has increased. This starts to send a different signal: take out loans for long-term investment, expand your business in anticipation of economy that continues to be wealthy and growing, make cash savings a smaller proportion of your assets as interest rates fall. As interest rates fall, people save less and the supply of credit diminishes which puts upwards pressure on interest rates once again.

Or, you can have a system where a small group of banking insiders who are virtually free of all political accountability are given the power to effectively set interest rates at whatever they think is best (PS: for Wall Street/Washington). And that's how you get speculative booms, and 1% interest rates at times when household savings rates are almost negative.

Are you thinking about buying a new car or a new house right now? Or are you thinking about saving up and cutting your living expenses? Are most businesses desperate to open up a new location or expand their payroll right now? No, they are struggling to get by as it is. A lack of credit is not the problem, and more government or private debt is not the solution. We are feeling the long-term consequences of living in an economy which has, for many years, been operating at an unnatural pace due to easy access to credit just as housing prices were disconnected from the realities of supply and demand. Unfortunately, reality catches up to monetary interventionism, and reality caught up with the housing market in August of 2007. The solution is to learn to live without this unstable and artificial stimulus of cheap credit.

Many topics, not one that bails out Walden idiot defense of BB&T

The worldwide lesson on credit spreads hasn't ended yet. I'm with you on sustainable growth and the inevitable deflation of speculative bubbles caused by supposed free marketers.

The point of the article is that Walden tries to defend John Alison and BB&T's employee cuts while at the same time praising Johnny-boy for supposedly not being in the same bad position as other banks -- but still taking guvment money.

As you say, if BB&T practiced what Alison preaches so much, why aren't they expanding rather than contracting? BB&T's no car dealership (your example).

Likewise, I don't do debt, and I am sitting pretty this very day should I walk onto a lot with a glut of cars and more waiting behind them at the port.

So yes, some people are using this opportunity to expand - without government money.

Some of us don't have a lightweight economist defending our business while we have employee layoffs AND when we're on the government dole.

And John Alison wanted Ayn Rand mandatory in every NC college. Grrrrr....


In all fairness...

I think PaulM's point is that there really aren't too many areas for BB&T to expand into right now.

On the personal side of banking, people just aren't borrowing too much these days. On the business side of banking, a lot of businesses are contracting and aren't using BB&Ts business or institutional services as much. As such, As such, BB&T doesn't need to keep large numbers of mortgage brokers to service demand that isn't there. So, it "trims the fat" that it collected during the good times. No need for 100 people when 95 can do the job.

You could argue that BB&T should loan more of its money (or the taxpayer's money), but given the low interest rates and the general problems with liquidity in the market, I'm sure the bank is content to sit on the money until there are better options.

Or you could argue that BB&T shouldn't be tightening its belt during these tough times, but then you're saying that the cash injection from the government should go to support the extra headcount.

Don't let your distaste for Alison or for the professor's leanings cloud your common sense.

Where are the legitimate arguments to this, Paul M??

PaulM...that's just a SUPER presentation.

On this particular venue (being lib/dem and believing that govt. can and will correct all ills)...it's not gonna be popular.

But hey.......

The best thinking is independent thinking.

Not for nothing, Smitty,

but you seldom miss a chance to make a comment about what things the liberals here at BlueNC will like, or not like, or how you're a minority that's always jumped on, yada yada.

Just give it a rest, man. Make your points, ask your questions, jump in and splash around, but you don't need to constantly say things like, "I know you liberals won't agree with what I'm about to say, except for the few here who aren't brainwashed, but blah blah blah."

And then:

"By the way, this place is great! A lotta smart people here exchanging ideas, smooch smooch hug hug."

You're like a fucking cat, Smitty. One minute you're rubbing on my leg purring, the next minute I'm looking at the bleeding scratch on my hand, wondering what the hell happened.

Proves my point, doesn't it?

"Mutual admiration society"

Sad..guys....just V E R Y sad.

The best thinking is independent thinking.

Gee....I'm surprised you hate what I say

Hate it that anything....ANYTHING...not liberal/democrat upsets ya.

Bash the poster...that's the ticket.

Scharrison...you disappoint me.

But, you'll most certainly get kudos from your fellow posters here.

Oh...I'll just find another venue.

Sorry you are THAT one-sided. It surprises me. But...today, I should know that nothing should surprise me.

Y'all just hold hands, sing songs together, think you're gonna now control govt. forever and be happy with yourselves.

Good luck to ya.

The best thinking is independent thinking.

One more thing

I have tried to help you, Scharrison....I didn't consider your political affiliation...just considered you being another fellow human being.

I regret that now.

The best thinking is independent thinking.

You shouldn't regret it, Smitty

A gift is only a gift if it's freely given. No strings attached, no expectations of future goodwill, etc. If you'll remember, I thanked you for your concern. And that thanks was genuine. But you didn't buy a pass for me to hold my tongue while you drop insult and innuendo towards the people here.

Tell you what, I'll make a deal with you. You can call me anything you want and I won't get mad, as long as you stop stereotyping and marginalizing everybody else here. No more "brainwashed" or "mutual admiration society" or whatever, just talk about the issues.

I didn't even get a chance to decide if I agreed with PaulM

Granted, I rarely do, but it would be nice if smitty would give me a chance to see if I agree with something before telling me what I feel.

What are you smitty, my wife! : )

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

Smitty and Robert

sitting in a tree. K I S S I N G!