John Block Reports from Washington

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This week, I spoke to the Global Financial Leadership Conference presented by the Chicago Mercantile Exchange. The featured speakers on the program were Tony Blair, former Prime Minister of Great Britain, and Paul Volcker, former Chairman of the Federal Reserve Board.

Amazing timing to listen to Paul Volcker react to the Wall Street crash of 500-plus points and the end of Merrill Lynch and Lehman Brothers. A few points that he made --

Our lending system has gotten too complex.

The companies in trouble got way over extended. They gambled too much.

The companies got into this mess in part because compensation practices encourage excessive risk-taking.

He praised our export business and reminded us that exports are much bigger in our economy than housing.

Finally, he concluded that the loss of those companies should not seriously impact our broad economy. Let's hope he's right.

Tony Blair focused on the challenge that the U.S. and Europe face in dealing with radical Islam. He stressed that --

U.S. and Europe need a comprehensive joint plan. The alliance must be strong and determined and united.

We should understand that Islam has competing visions of the future. Most Muslims want to join the modem world. However, the reactionaries are mired in the past and do not accept the way the West lives.

I asked the Prime Minister a question that has been on my mind for a long time. I said, "It seems to me and a lot of people in the U.S. that most of the European countries are not willing to help very much in fighting the terrorists. We're spending all the money and doing all the heavy lifting. Europeans are not doing their share. What is your reaction and what must be done to correct the imbalance?"

He agreed that Europe has been reluctant to step up. He advised the next President of the U.S. to sit down with the Europeans and put together a joint plan.

O.K. Worth a try.

We should do that, but it isn't as if President Bush has not tried to engage the Europeans. I'm just not very optimistic.

Next week, I'll tell you a little bit about the message I gave to the Conference.

Until next week, I am John Block from Washington.