March 08, 2009 03:21 AM UTC
My lunch with Jared
29 Comments- by: DavidThi808
( – promoted by Colorado Pols)
Jared is happy. No that doesn’t convey it accurately – he’s on the bow of the Titanic, with his arms outstretched, on top of the world. I talked with him for over an hour and he is clearly loving every bit of his job.
So topic #1 was the economy. I asked him about taking the country further in debt, leaving that for future generations. Really interesting on his first point – that the fed can presently borrow long term (20 years) at 3 points. This is incredibly low. So any investment the government makes that has an ROI greater than 3 points will pay for itself. This is a businessman looking at investments in the future.
He then immediately discussed how these are temporary investments to get the economy turned around, not permanent ongoing appropriations. And once we have the economy booming we need to pay down the debt. Jared is not looking to permanently expand the scope of the federal government but rather just to step in now while needed.
He also said that the responsibility for how it is handled ultimately rests on Obama’s and Geithner’s shoulders. That Congress can allocate and watch what is done, but that the administration is the one that is making the specific decisions with the money. I asked didn’t he see value in providing full transparency so that for example we see not just what we pay to AIG, but where they then pay it out to as AIG is really just a transfer agent for the hundreds of billions we are giving them. He agreed that there is value in that and promised to look at what Josh Marshall has written on this.
He was also adamant that we need to insure that this does not happen again. In the case of the banks he discussed both breaking the large ones up so that they are not too big to fail or to have additional requirements and oversight for those that are that large. He also discussed how the market prices in the assumed government guarantees for these gigantic institutions which then pushes their risk on to the taxpayers.
He discussed getting us out of this mess. He sees this as several different problems, the credit crisis being the significant one. He sees the remaining problems – the depression in housing prices, drop in employment, etc as business cycles that naturally occur and the government can moderate them – but they are going to occur. But he correctly sees the credit crisis as the problem that can leave us permanently screwed. And the one the government needs to get fixed.
He talked at some length about what needs to be done. He did not have any brilliant new ideas but what he said was all very good. He said that the banks and their toxic assets needed to get cleaned up one way or another and if that included nationalization – so be it. He did then add that he did not want the federal government owning banks 20 years from now, that nationalization was a temporary measure. I suggested that he instead say receivership and just say that it’s the FDIC taking over banks “a bit” larger than they usually did. He replied that they were more than a little larger J. Jared is definitely in the camp of figure out the best approach – and do it.
He also made a very good point that he sees this action on the banks as being limited to what is needed to get the financial markets moving again, including the fact that he opposes the money going to the car companies. The first is getting the economic system working again, the second is stepping in to the market to create government controlled & subsidized industries. Jared is clearly someone who is trying to salvage our existing system, not create a different economy with a heavier government hand.
We then talked about the rules committee. Jared spent his time from winning the primary to the general election helping other Democrats in close races, primarily by raising money for them. As he said, the party appreciates those who help the party succeed. Jared’s ability to effectively fundraise for other candidates helps him have a noticeable impact even though he is just a freshman.
He also is very impressed with the job Nancy Pelosi is doing (I agree with him on this). He sees her job as one of keeping the house operating and the party effectively running the house and on that measure she is very effective. He also sees the role of speaker not including being a spokesperson for the party, and that concentrating on that too much then detracts from the essential parts of the job. I think this is a house-member centric view of the job and the spokesperson part was critical when Bush was still in office.
He is very appreciative that Speaker Pelosi meets once a week with all the freshmen for 1 – 1½ hours to talk with them and answer their questions. As the freshmen are usually ignored in the house where seniority is supreme, this is major for them. Pelosi is apparently the first speaker to ever do this. Another sign of how she is doing a good job.
Jared then talked about what he is doing. As he said, a house member has to specialize because otherwise they would be spread too thin and would get nothing done. He also has to look for places where he won’t step on more senior toes with his efforts. He said he lucked out in that he is on the Labor & Education committee and most everyone on it is focused on Labor. So he can focus on education and fills a void in Congress, which gives him the opportunity to effect change. He also says there are no Democrats in Congress working on charter school issues so he has that fully to himself.
I asked him if he thinks we will soon have college education publically funded. He definitely sees the need for it and discussed how a High School diploma used to be enough for a comfortable middle-class union job – but no more. Jared discussed numerous times how we need to provide people with the education required for a good life. This runs the gamut from retraining for those who had jobs that have disappeared to those that want a better job to those in K-12 who need to continue.
He thinks we will see the first 2 years of high-ed covered pretty soon. (My guess is in 3½ years – when my youngest hits her junior year in college so it’s no help for meL.) Jared will clearly work diligently for this and this effort of his may do more for our economy than everything else put together. I’m glad to see this will be getting a lot of his time. A society that does not provide the education required to succeed does not offer equality of opportunity and sentences the country to a life of economic poverty.
The second issue he is concentrating on is immigration. He clearly is charged up about this – both that we need to intelligently address the 18 million undocumented workers presently in the country and that we need to have an intelligent policy on bringing and keeping educated workers here. He brought up the stupidity of forcing foreign college graduates to leave upon graduation rather than getting them to work here. And the issue of companies opening research centers overseas because they cannot bring people here. I asked him about H-1B workers being locked to the company that initially hired them and he agreed that that was bad for the individual and bad for the economy (the individual is not working where they are most productive).
Jared brought up the fact that being in a relatively safe district means not only that he can handle those issues that cannot be led by representatives in competitive districts, but also the responsibility to do so. However, while I think that is true, I think Jared also welcomes taking on the hard jobs. (If the populace ever converges on his home with pitchforks & torches, he’s going to be running out there to talk with them.)
I asked Jared if we would see him running for Governor in 5 years. His response made it clear that this was not something he had even thought about. And he added that he sees this job as one that requires at least 10 years to get the seniority and positions to accomplish a lot – and then to use that position to effect some major improvements. So he’s clearly in there for the long haul. I wouldn’t be shocked to see him as speaker some day.
He also brought up a way to measure if someone is positioning themselves for governor, look at the legislation they are introducing. If it’s issues important to Colorado, and generally specific to Colorado, they’re considering it. If it’s issues critical to the country, they’re staying put.
At the end he showed me his schedule for the day. It’s Saturday – and he’s booked all day long. Four different events after our lunch ending with the Jefferson-Jackson dinner tonight. This says a lot about Jared – he could pretty much ignore everyone and still get re-elected in this district. Instead he’s out there working his okole off 24/7. And he’s flying back here every week. Like most representatives, Jared puts in an immense number of hours each week.
We all saw Jared as a wild-card when we elected him not knowing for sure what we would get. What we have is a very pleasant surprise for even the most optimistic of us.
First published at Liberal and Loving It
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from some bratty rich kid who wanted to buy a congressional seat. Man, he really is a disaster. 🙂
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Thanks as always, Dave.
I’ve always found Jared impressive, especially regarding his understanding and easily comprehended fluency in discussing complex issues. Out of deference for the reputation he has established in my eyes, I’ll give him the benefit of the doubt for now on this bill he is supposedly co-sponsoring with Coffman, Lamborn, and Pence to prevent the FCC from reestablishing the “fairness doctrine” (see Dabee’s post on the weekend open thread).
When they show a grasp of complex issues and are willing and able to discuss them on a layman’s level. He also seems generous with his time as well, which is a big plus in these times of more open government.
I’ll wait to get more information on the fairness doctrine issue before making my own decision on it, but Rep. Polis seems to be very thoughtful in his decision-making, so I’ll also give him the benefit of the doubt.
You don’t even need to use people’s last names.
I met Jared at the Bo
oulder Creek Festival….where he had positioned himself perfectly to get maximum exposure…and we discussed issues large, small, safe and dangerous. He was always well informed, articulate, and passionate….with a bent towards the progressive.
Watching him on C-Span was a bit more difficult, because he has yet to grow into his role. My bet is he will…in spades!
He’s a great human being. Run Jared, run!
I hope that he doesn’t run for anything other than re-election for quite a while now. And it’s not like an incumbent Dem in CD-2 really needs to run. If Jared can handle working the House for 15 years or so, he could very well be speaker of the house, which would be s-a-weet!
Only criticism of him from this interview that I can see is on the current crisis. Maybe I’m just reading what Dave wrote wrong, but if Jared actually thinks that the credit crisis is somehow separate from the collapse of the housing market, that’s nutso. Especially if he/congress tries to handle them separately. So long as the housing market continues to deteriorate, so will the balance sheets of the banks. Rinse, lather, repeat, and the cycle will continue downwards.
So I’d be interested to hear what JP wants to do about the housing market, if anything at all. I’m not suggesting that the government should artificially lower the price of housing such that we get another housing bubble, but something needs to be done to stabilize that market. It seems like everyone (and from this, Jared too) think that the banks are at the bottom of this, which is true in a way, but not complete — collapsing housing = collapsing banks, not the other way round.
Also, seeing as Jared is mister investor-extraordinaire, I’d be interested to hear if he thinks we should ban securities again (they weren’t legal until the Reagan banking deregulation orgy).
All in all, though, nice interview Dave.
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a little help, please.
I really don’t understand what you said about securities being illegal before Reagan. Total ignorance. Can you elaborate ?
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So a lot of this current mess is a result of securitization. Basically, this is a process where a bank, or another lending institution, makes a very high risk loan and repackages it in such a way that it is able to get a very high credit rating. That is how all the sub-prime mortgages were able to get AAA ratings, even though any one of these individual loans was at a very high risk of default. It was thought that this would allow for greater lending as it would lessen the risk of lending to people who otherwise couldn’t qualify for a loan big enough to buy a house or something. However, really what it did was infect a huge number of otherwise stable assets (hence the term “toxic”), dragging down their value, and banks’ balance sheets when people — predictably — defaulted on their high risk loans. Currently, these toxic securities are up to $2 trillion, minimum, and until banks are somehow able to get them off their balance sheets they are going to continue to hoard credit and perpetuate the recession.
Ok, so but what does this have to do with Reagan and regulation I guess was your actual question. As I noted above, this whole process started with banks, and other lending institutions, repackaging high-risk loans into securities. Ok, that was illegal before Reagan, I think in 1984, maybe ’86, deregulated the banking industry. Before Reagan only the government and government institutions (namely Fannie Mae and Freddie Mac) were allowed to repackage loans, and under the government, it was a rarity. This was one of the reforms that came out of Roosevelt’s banking reform spree in the ’30s, and for 5 decades (roughly), the financial system operated under this (and other) restraints. This meant there were less high-risk loans, and where there were “sub-prime” loans they were either a) under government oversight or b) in private hands, but not in a position where they could bring down the entire sector. I think this is one of the clearest, easiest, and most needed things Obama and Congress could do to reform the financial sector.
And since Jared has been such a big-time investor, I was wondering how he would feel about enacting such a reform.
There may be some hope for him, because he clearly has brain-power possibilities, but with his inexcusable comments about why the Rocky went down, he has a long way to go.
The squish-heads in Boulder will love him. If he runs for statewide office he’s done.
So let’s hope for the best.
You’re zinging him for one stupid comment. Wow! Since Jesus Christ is not running, who are you going to find acceptable?
Think Jared’s message about the real cost/ benefit of present borrowing to bring back the economy is as smart as his comments on the demise of the Rocky were stupid. And which is more important in the larger scheme of things? That’s a no-brainer
His is a great, easily understood argument that should be widely used by Dems in explaining how, if properly done, stimulus spending now, in spite of the price tag and level of new debt, is very sound investing, not out of control borrowing and spending.
Seemed to me to be more about the rise of “citizen journalism” and the fall of single-source journalism more than a celebration of the Rocky’s demise. I think it was a misstatement that was quickly clarified when he saw that it wasn’t taken as he’d meant it.
I agree that if explained the way he has, the stimulus package would be better understood by the taxpayers and more acceptable to the moderate Republicans, if they can unglue their lips from Rush Limbaugh’s ass long enough to listen.
The man’s been in office a very short time. He does have excellent buisness experience.
I’ll need to review his views on the banks before making any comment othwer than the banks and housing are clearly the bull’s eye for solving things.
Off hand I believe that a review of mark to market, and the uptick rule needs serious
attention. A stronger SEC enforcement on credit default swap manipulation needs attention,too.
I’m proud to be represented by Jared – keep up the good work Congressman Polis!
because it is very early. But, I am very impressed with how engaged he is and how often he is right. I also think he is absolutely correct that he needs to stay where he is for 10 years.
I think many expected (or hoped) that all that Jared would be concerned with would be GLBT issues. Hasn’t been the case at all. Engaged across the board.
how Obama has been engaged in a variety of issues and not just “black” ones?
or is that a metaphor for his career, or maybe the country? Jeez, DavidThi, try a little optimism. 🙂
But hopefully under Democratic management we will get the ship to port, repaired, and back sailing better than ever.
He brings a different level of energy to the House, something it sorely needs these days. I have to say that I was opitimistic when he was elected, and I’ve been surprised at what he’s been able to learn and accomplish in such a short time.
I think he has a very bright future in Congress.
I am thrilled that we have somebody so intelligent working the aisles on the House floor, because god knows half that chamber doesn’t fit that descrition. But as far as this quote from your post Dave:
Jared, before you go too far down that path, please read Normal Accidents by Charles Perrow and then Black Swan by Nassim Taleb. The take-away point I’d like you and every other policymaker to get is that there is no ensuring that black swan events “don’t happen again” because these kinds of events are normal parts of exceedingly complex, coupled systems. We need to operate in a world where we prepare for inevitability of ugly accidents, seeing them as normal, not blissfully thinking we’re smart enough to prevent them.
Perrow’s book in particular is amazing for illustrating how after every major accident (he keys in on nuclear power plants, but discusses other systems), the looking-backwards investigative reports always blame human/operator error, and always pin down blame for the entire accident on a few people. In reality, the operators are rarely to blame, because they can rarely see the big picture, which in a sense makes catastrophes “normal.”
There are many occasions when the response to already past normal crises either serve no positive purpose, or are affirmatively dysfunctional. But in the response to the not-already-past crisis most similar to the one we are currently in, the infrastructure that was put in place helped ensure that, in fact, the business cycles which had reproduced similar events every generation or so had been disrupted for about three, and formed the foundation for post-WWII skyrocketing economic growth and expansion of the middle class.
There were fundamental problems in how we managed our economies that led to the Great Depression, and there are both new and old fundamental problems in how we had been managing our economy prior to this melt-down that led to it. Blaming the “operators” doesn’t help: Fixing the problem does.
apologies if you have, but your response makes me wonder, since you’re going down a road nowhere near Perrow’s points.
I was responding to your summary rather than to the book itself, which I haven’t read. I should have said, “the dynamic you identify sometimes is salient, and sometimes is not,” and then continued from there.
I read Taleb (even had a couple of conversations with him), but am unfamiliar with Perrow.
While Taleb is a smart guy (although a little overconfident, just like the risk managers he castigates), he is not right about everything.
Risk management is not about eliminating risk, it is about managing it. One of the failures of modern risk management techniques is that it favored low frequency/high loss events over high frequency/low loss events. The bias in the risk management system led us into our current situation.
You can never get rid of risk, but Taleb’s overstatement of his position verges on Nihlism. While there are plenty of things that are unknowable and therefore not quantifiable, there are plenty of things that are known and risk management should begin there–one of the things we do know is that a confidence interval is not a prediction and risk managers should not be allowed to ignore risks that exist in the tails.
If we simply addressed “tail risk” it would go a long way, in Jared’s words, “insure that this does not happen again.”
That and making sure everyone has skin in the game (i.e. covered bonds as opposed to pure securitization).
i agree on Taleb. dude is seriously full of himself.
the point I think is salient is more Perrow’s than Taleb’s, but basically the point is, you can worry about tail risk all you want, but you’re still dealing with a highly complex, tightly-coupled system and in every such system, catastrophes are normal parts of the system and therefore should be expected. You can work toward mitigating the risk by being aware of the nature of the system, by reducing the couplings, but also you better work toward adaptation to the risk.