In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Jan. 28, 2009 / 3 Shevat 5769

Getting the financial fix right

By Robert Robb

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http://www.JewishWorldReview.com | The Bush administration clearly botched the effort to shore up the country's financial institutions.

Unfortunately, the Obama administration and the Democratic Congress have not learned the mistakes that were made and are poised to make the situation worse, not better.

The problem the Bush administration purported to be addressing was the uncertain value of certain assets held by financial institutions, mostly mortgage-backed securities, due to the burst of the housing bubble. As a result, the capital against which they lent declined and became shaky.

To address that problem, the Bush administration asked Congress for up to $700 billion to buy those assets and take them off the books of the financial institutions. Congress agreed, set up the Troubled Asset Relief Program, and released the first $350 billion.

But instead of using the money to buy up the distressed securities, the Bush administration decided to inject public capital into the banks.

In fairness to the Bush administration, the consensus among economic experts at the time was that injecting public capital was preferable to buying distressed securities. But it turned out to be a colossal mistake.

The TARP investments increased the capital of the financial institutions, but made it no more certain. Moreover, it put the federal government into the banking business, and that scared off private capital.

Ideally, the existing capital for financial institutions would become more certain and they would be recapitalized with private investment. But no sensible private investor wants Uncle Sam as a senior partner.

When injecting public capital, the federal government gave itself a preferred position, with a 5 percent to 9 percent return off the top. It also assumed the right to tell the financial institutions how to run their business, how much they could pay their executives and what they could distribute to other investors in dividends.

Uncle Sam is, of course, ultimately a political beast, with an army of regulators and bureaucrats and 535 would-be CEOs in Congress. Reports are beginning to trickle out about members of Congress trying to influence the allocation of TARP monies and the decisions of the financial institutions that received them.

Moreover, Uncle Sam has treated shareholders roughly in previous bailouts, requiring that shareholder equity be severely diminished or extinguished in the forced sale of Bear Stearns and the takeovers of Fannie Mae, Freddie Mac and AIG.

Now the market fear is of a more formal nationalization of the banks. Given the situation and the track record, private capital is going to stay on the sidelines so long as Uncle Sam haunts the boardroom.

The Obama administration and the Democratic Congress want to make the situation worse. Members of Congress are clamoring for more lending at the same time as the regulators are urging greater cushions due to the continuing uncertainty about capital.

The Obama administration says any additional TARP investments will come with more strings. The House passed a bill that contained several, including diversity monitoring in management, employment and business activities.

A sensible approach would be designed to increase the likelihood of new private capital flowing into the country's financial institutions.

This would require, first of all, a firm commitment to unwind the federal government's current position in these institutions, including selling its preferred stock at a loss if necessary. While being unwound, the stock should be turned over to a trustee with instructions not to interfere with the management decisions of the institutions in the interim.

Second, the federal government should guarantee, for a premium, the value of mortgaged-backed securities held by financial institutions. About 90 percent of all mortgages remain current. Even two-thirds of subprime mortgages are still current. A guarantee of somewhere between 65 percent and 75 percent of face value should provide a floor on the value of these securities without taxpayers running great risks.

I am loathe to suggest special tax breaks. But in this circumstance, freeing new investments in financial institutions from capital gains taxation for a period of time would be less offensive and far more effective than what the federal government is doing and contemplating.

This is a way out, if anyone in Washington is truly interested in one.

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