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Archive for January, 2013

With interest rates in the basement, why keep squirreling all that money away? Let’s take out some loans and rack up some debt!

By Sheila Bair
FORTUNE — It’s well into the new year. Have you made your resolutions yet? No? Well, I have a suggestion. This just could be the year the economy comes roaring back. The housing market is up; unemployment is down. But we all need to do our part to juice it up.

So folks, get with the program: Stop saving and start borrowing. The government is showing zero tolerance for savers, keeping interest rates near zero while targeting inflation north of 2%. Every penny saved in your 0.0005% bank accounts is a penny fast losing value. You need to go out there and spend.

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By Monica Williams
January 4, 2013

As chairman of the Federal Deposit Insurance Corporation during the financial crisis, Sheila Bair earned both fans and foes for her stance against big banks and her early warnings about the housing bubble. No longer in government, Bair remains a voice for reform in the industry. In Bull By the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself, the former regulator describes the financial crisis and its aftermath as she saw it. She also outlines her prescriptions for reform, which include breaking up the megabanks, raising capital requirements, and abolishing the Office of the Comptroller of the Currency. Bair recently spoke with U.S. News about her objections to bank bailouts, who she thinks is responsible for the financial crisis, and how America can avoid another downturn.

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Finally reaching an agreement, but barely starting to pick up the pieces, the fiscal cliff has been avoided. But, according to Sheila Bair, former chair of the FDIC and current chair of the Systemic Risk Council had some insight for Ali.

She says, “The tax system is broken, the entitlement system is broken and we haven’t even gotten to immigration reform, infrastructure. There are so many problems that need to be addressed and we need a functioning government to deal with them and it takes so long just to get really small deals like this done.”

her criticism wasn’t just reserved for America’s representatives. She had some respectful criticism for the president as well, saying, “We need to find a governing coalition in the country and the president, with all due respect, needs to reach out to Republicans instead of bashing or heckling them. […] The partisanship needs to stop. We need to govern not from the hard liners but the middle.”

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A little Democratic idealism mixed with some old-fashioned fiscal discipline could be what Republicans need to get Americans back on their side.

By Sheila Bair, contributor

FORTUNE — Over the past four years income inequality has worsened, particularly among minority groups. Continuing a long-term trend, the gap between rich and poor is the widest it has been in 40 years. Wealth inequality is even more skewed, with the upper classes enjoying increases in the prices of stocks and bonds, courtesy of the Fed’s quantitative easing, while housing — the main source of wealth for middle- and lower-income families — has been slower to recover. Credit availability is similarly lopsided, swinging from one extreme to the other: It is virtually impossible for those in minority neighborhoods to get a home loan these days

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