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10 Economic Challenges For New President

Publication Date: 
November 02, 2008
Source: 
San Francisco Chronicle
Author: 
Kathleen Pender

Professor Joseph A. Grundfest is quoted in a San Francisco Chronicle article commenting on the financial challenges a new President would face and actions he would have to take:

"You have to get credit moving. It's not enough to recapitalize banks if the banks sit on their capital and don't lend. More of that has happened than active lending," says Stanford Law School Professor Joseph Grundfest.

...

"We need to stimulate the economy in a way that creates dividends - something smarter than dropping helicopter money," Grundfest says. Rebates "are like a sugar rush. You feel good for a while, but it doesn't build strong bones or better minds."

Grundfest prefers "investing in clean technology that supports our energy independence, rebuilding the part of our infrastructure that needs to be renewed or investing in education in a way that makes students smarter."

...

"The financial system needs to be subjected to effective risk management," Barbara Roper, director of investor protection for the Consumer Federation of America says.

Grundfest agrees. When financial institutions "have an expressed or implied government guarantee, we have to be candid it exists, charge them for the guarantee and regulate them."