I listen to NPR almost every day, and I like the show On Point with Tom Ashbrook. There is usually a good discussion about current events, and there’s a minimum of commercials which is a trademark of NPR. However, Ashbrook’s coverage of the recent financial crisis has been biased in my opinion. He approaches the topic with the presumption that deregulation and capitalism running wild were the root causes of the whole mess, and that the economic experts of the world have reached a unanimous consensus that we need to have more, smarter regulations. It is as if the debate is over, if there ever was one.

As a further example, today Ashbrook had a guest on (I’m not sure who), and they were discussing Bernard Madoff, the investment firm manager who was recently charged with securities fraud which led to the collapse of his $50 billion dollar alleged Ponzi scheme. A caller told Ashbrook that he was an investment manager, and said that his biggest problems were the regulations. He was basically drowning in paperwork and legal overhead, and his business could be much more efficient if there were fewer regulations. Ashbrook replied (I’m paraphrasing from memory),

“Ha, what?! Less regulation?! That doesn’t really jive at all with what we’re seeing here caller!”

The caller continued to explain his point very well. He said that all firms have to be diligent in filing their paperwork, or else the SEC and other overseers will be on them. So they have a big incentive to do those things on time. But the problem is that while the government is checking that you filed your forms, nobody is checking to see whether you are telling the truth on those forms. There is really no way for anyone to know. Hence, everyone is burdened by the regulation overhead, but the liars still lie. I thought it was a really interesting point, but Ashbrook basically laughed him off the phone.

I think part of what happened in the Madoff case is that people believed that as a stock broker/dealer, he was operating under strict regulations, and that made them feel their investments were safe. After all, how can one commit fraud when there’s all that government oversight? Maybe the regulations created a moral hazard.

I guess you would say that Tom Ashbrook was defending a liberal position while I may be defending a conservative, or libertarian, or free-market position. And some may say that I shouldn’t be surprised that NPR is showing favoritism toward the liberal idea. Well, at least they don’t get any government funding.

I was not at home this weekend, but the first thing I did when I got home was watch two programs that I record weekly on my DVR: This Week with George Stephanopoulos and Meet the Press with Tom Brokaw (Brokaw has taken over temporarily after the sudden death of long-time host Tim Russert).  They are phenomenal shows, and when the government needs to talk to the people, it often does it through these two broadcasts.  Some people say that the hosts are too partisan – Stephanopoulos was a high-ranking adviser to Bill Clinton and Brokaw has shown some liberal leanings during his career – but I think they both do a good job of being neutral and usually ask the questions that I want to have answered.  Though Meet the Press is really the more prestigious show, I tend to like This Week better, because of the roundtable analysis portion.  I’m a big fan of George Will, who’s a regular at the roundtable, and Stephanopoulos does a great job of mediating the discussion between Will and a rotating cast of other analysts.  Meet the Press tends to get higher profile guests, but often they forgo their roundtable analysis segment.

This morning, Treasury Secretary Henry Paulson appeared on both shows to talk about the current financial crisis.  If you get a chance, watch the interview of Paulson on This Week, and the ensuing roundtable discussion – it’s the best reality TV there is.  You can also watch Paulson’s Meet the Press interview.

Over the last couple of weeks, I have been captivated by the happenings on Wall Street. It truly does seem like a critical time for our great nation, and one can only hope that the people handling this crisis will make the right decisions. I do feel that we’re in good hands, because Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are well-respected across the board and are by all accounts two of the smartest people in the financial world. I think we all just have to trust them. It’s going to be hard for me or anyone to second-guess those guys in 5-10 years, because most economists say there is nothing close to a historical precedent for the current crisis. In any case, I wish I had a more formal education in finance and economics, so I could better understand what’s going on. But I don’t, so I’ve just been reading as much as I possibly can. Here are the best articles I have run across, in no particular order:

• Freddie Mac and Fannie Mae: An Exit Strategy for the Taxpayer – from the Libertarian think tank the Cato Institute; includes a timeline of the history of Fannie Mae and Freddie Mac.
• AIG’s Troubles and Why They Matter – New York Times Illustration.
• New Agency Proposed to Oversee Freddie Mac and Fannie Mae – from Stephen Labaton at the New York Times. Notice that this article was written five years ago – of course the proposal never came to fruition.
• Who Is To Blame For The Subprime Crisis? – from Investopedia.
• The Social Imperative of Sound Money – opinion piece from the Ludwing von Mises Institute, a Libertarian academic organization; it is a bit critical of Henry Paulson.
• Seven Deadly Sins of Deregulation — and Three Necessary Reforms – opinion piece by Robert Kuttner, a liberal economist. Though I don’t agree with his stance on this issue, it’s important to include an opposing viewpoint.