Review of William Greider's The Choice of Wall Street
“The Choice of Wall Street,” is the title of the first chapter in William Greider’s 1987 book, “Secrets of The Temple: How the Federal Reserve Runs the Country.” This chapter is basically the story of how and why Paul Volcker was chosen to be the new Federal Reserve Chairman. It all started in 1979 when President Jimmy Carter took a trip to Camp David with his most trusted advisers, the purpose of which was to decide on the course of action that needed to be taken to regain popular support so that he had a chance to win the upcoming Presidential election. All of his advisers understood that the economy was his most pressing issue. Inflation was incredibly high and all attempts to curb it had been useless. The Fed Chairman position was open and Carter needed to find someone strong to fill it.
The Fed was supposed to be an entity that was separate from political persuasion. However, many Presidents select chairmen that they think they will have some control over. This is what makes Carter’s ultimate choice so interesting. After going over all of the candidates Carter ended up choosing Paul Volcker. Volcker, as most knew was a very independent person. He would not be the puppet of any President. Carter understood this quite well, but still thought that Volcker would be able to get a handle on inflation. Many said that Carter sacrificed his reelection to the Fed. This may or may not be true. What is true, however, is that Volcker did help to slow down inflation and get the economy back on track. The problem that the American people saw that President Carter did not see was that Volcker did this by helping out Wall Street and not Main Street.
Greider conveys many different points in this first chapter. This paper will analyze three of the most important.
- The competition between Wall Street, Main Street, and Pennsylvania Avenue.
- The impact of inflation on wealth and income.
- Indecision about the appointment of Paul Volcker.
The interaction between Wall Street, Main Street, and Pennsylvania Avenue can be a confusing one. Many times Pennsylvania Avenue, The Fed, has to make decisions that will either have a positive effect on Wall Street, the investment markets and it’s wealthy shareholders, or Main Street, individuals without large market investments. Also, many times the g...
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... After all, he was the President of the New York Federal Reserve and had served as the Treasury Under Secretary for Monetary Affairs for Richard Nixon. Volcker was also very strong-willed, as many put it. Most said that other than that he would be the best choice for the position.
In general Greider makes a lot of good points. His analyzation of the effects of inflation on the population is very interesting. He looks at it from a standpoint that many people would not. The idea that inflation has a different effect on different members of the population also has a profound effect on the division between Wall Street and Main Street. This further division makes the job of The Fed that much more difficult. Greider explains this quite well while describing the tightrope that The Fed must walk. It also seems that only President Carter understood the importance of keeping the Fed separate from politics. His advisers would have selected a puppet and it is quite possible they would have been so politically influenced that corrective action would not have worked. Therefore, I understand Greider saying that this was the most important appointment of the Carter administration.
There is perhaps no other political issue in our contemporary society that is more pertinent, pervasive, and encompassing than a nation’s economy. From the first coins used in Greece and the Asia Minor in the 7th century BCE, to the earliest uses of paper money, history has proven time and time again that the control of a region’s economy is absolutely crucial to maintaining social stability and prosperity. Yet, for over a century scholars have continued to speculate why the United States, one of the world’s strongest and most influential countries, has one of the most unstable economies. Although the causes of this economic instability can be attributed to multiple factors, nearly all economists agree that they have a common ancestor: the Federal Reserve Bank – the official central bank of the United States. Throughout the course of this paper, I will attempt to determine whether or not there is a causal relationship between the Federal Reserve Bank’s monetary policies and the decline of the U.S. economy. I will do this through a brief analysis of the history and role of this institution, in addition to the central banking system in general. In turn, I will argue that the reckless and intentional manipulation of the economy by the Federal Reserve Bank, through inflation and the abolishment of the gold standard, has led to the current economic crisis in the United States.
Rule of Law: Insanity must be proven under some type of mental or emotional defect caused by disease.
The Volcker Rule, named after the former chairman of the United States Federal Reserve Paul Volcker, was first publicly discussed in January 2010. President Obama had proposed the Volcker Rule as an additional ruling to the Dodd-Frank Wall Street Reform and Consumer Protection Act, a bill that was at the time already under consideration by Congress. The Dodd-Frank Wall Street Reform and Consumer Protection Act, also known as the Dodd-Frank Act, was projected to help further promote and regulate financial stability of the United States’ economy, especially during the Great Recession, which officially lasted from 2008 to 2010. The general purpose of this Act is to regulate the financial regulatory system by avoiding any excessive or unnecessary risk-taking by large, influential banks, which is one of the significant causations that initially triggered the financial crisis. One crucial piece of this Act is the Volcker Rule, as it seeks to financial regulators to reform the ways banks can invest and regulate trading in the markets. The Volcker Rule is intended to greatly reduce risks within the banking industry by setting a restriction to trading. It limits the way banks invest their money within “speculating” markets, in which are not related to or benefit their customers. The more specific banking entities the Volcker Rule emphasizes on prohibiting any investments, ownership, or sponsorship of hedge funds, private equity funds, as well as, any “proprietary” trading. Additionally, it generally prevents financial institutions from using any of the bank’s money, which is insured by the FDIC, to manage any private equity funds and hedge funds.
...d an intolerable level of systemic risk. The signing of the Volcker Rule by President Obama after much heated debate led the way for the discussion of the Lincoln Amendment. This piece of legislation proposed the idea of limiting bank derivate transactions to separately capitalized affiliates whose failure would presumably be less likely to cause a systemic crisis (pg. 198).
Clifford, A. Jerome. The Independence of the Federal Reserve System. Philadelphia: University of Philadelphia Press, 1965.
Major banks are cutting back on some of their legally permitted operations, such as- market making, and that has led to liquidity issues in the bond markets. Proprietary trading could become unregulated if more banking activities continue moving towards the shadow banking system. This would essentially defeat one of the main purposes of Volcker Rule. [d] The third major unintended consequence has been the degree by which the Federal Reserve has become the main regulator of the finance industry. In order to discourage future bailouts similar to the ones during the financial crisis, the Dodd-Frank Act limited the Fed’s emergency powers. However the liquidity and capital standards now imposed by Fed has purportedly become one of the most important regulatory developments of the Dodd-Frank Act.
Insanity is one of those words used today that gets thrown around a lot. Our society has become so numb to it because we were it on a regular basis. Albert Einstein describes insanity as “doing the same thing over and over again and expecting a different result.” Albert Einstein may have been a genius, but in this case he is wrong. There are people in this world who are mentally insane and they can’t help themselves. On rare occasions people like this become killers. In the legal system we have a defense an accused murderer can use to show they were not in their right mind when the act occurred. This is the insanity defense. This happens in 1% of criminal trials in the United States (US). A perfect example of a case that used the insanity defense was Andrea Yates v The State of Texas.
Much of my skepticism over the insanity defense is how this act of crime has been shifted from a medical condition to coming under legal governance. The word "insane" is now a legal term. A nuerological illness described by doctors and psychiatrists to a jury may explain a person's reason and behavior. It however seldom excuses it. The most widely known rule in...
“A Prospective of Four Insanity Defense Standards.” The National Center for Biotechnology Information. Ncbi.nlm.nih.gov. Jan 1991. Web. 14 Apr.2014.
The insanity defense presents many difficult questions for the legal system. It attracts attention beyond its practical significance (it is seldom used successfully) because it goes to the heart of the concept of legal responsibility. ‘‘Not guilty by reason of insanity’’ generally requires that as a result of mental illness the defendant was unable to distinguish right from wrong at the time of the crime. The many difficult and complex questions presented by the insanity defense have led some in the legal community to hope that neuroscience might help resolve some of these problems, but that hope is not likely to be realized. (Smith 475)
Insanity is a legal, not a medical definition. This makes mental illness and insanity correlate with each other, only some mental illnesses are consider as inanity. Insanity includes not only the mental, illness but also mental deficiencies. There are major problems in exactly how to apply a medical theory to legal matters. Every crime involves a physical and mental act and the non-physical cause of behavior. The mens rea is the mental element that would be required for a crime, if it is absent it excuses the criminal from criminal responsibility...
As we are moving to the end of the course, we want to present you with the Federal Reserve System (Fed), which is the central bank of the USA. We are going to explore the roles of Fed in regularizing the economy, its function, and also the tools used in doing that. We will learn how central banks regulate the banking system and how they manage money supply in economies. We will also be presented to the financial crises lessons we can be able to understand the importance of the regulatory system; and then, we answering questions such as:
In his proposal “Severe Personality-Disordered Defendants and the Insanity Plea in the United States,” George Palermo, a forensic psychiatrist, presents his thesis for the insanity plea to be reversed back to its previous definition. People who had personality disorders that could cause them to become psychotic for even a brief moment used to be eligible to receive the verdict not guilty by reason of insanity, before the United States restricted it to only people affected by mental illnesses. A mental illness is a disorder such as schizophrenia or bipolar disorder, which can cause a person to be unable to determine whether an act is right or wrong. It d...
Fourthly, that there was intense pressure by the New York Federal Reserve President Timothy Geithner and U.S. Treasury
Insanity, automatism and diminished responsibility all play a significant role in cases where the defendant’s mind is abnormal while committing a crime. The definition of abnormal will be reviewed in relationship to each defence. In order to identify how these three defences compare and contrast, it is first important to understand their definition and application. The appropriate defence will be used once the facts of the cases have been distinguished and they meet the legal tests. The legal test of insanity is set out in M’Naghten’s Case: “to establish a defence…of insanity it must be clearly proved that, at the time of committing the act, the party accused was labouring under such a defect of reason, from disease of the mind, as not to know the nature and quality of the act he was doing, or if he did know it, that he did not know he was doing what was wrong.” To be specific, the defect of reason arises when the defendant is incapable of exercising normal reasoning. The defect of reason requires instability in reasoning rather than a failure to exercise it at a time when exercise of reason is possible. In the case of R v Clarke, the defendant was clinically depressed and in a moment of absent-mindedness, stole items from a supermarket...