Because of the retirement funds of the middle class.
"Taibbi actually called that half a year ago. He also explained in considerable detail why the TARP payback is a red herring."
That's fucking brilliant - he predicted something that was already happening! July is not January. His analysis is otherwise frankly stupid. It's as if he's surprised that the banking system is deeply tied to the state, a fact that socialists have been loudly explaining for 150 years. OMG! The free market doesn't work like Ayn Rand said it did! Stop the fucking presses. Taibbi even gets the facts wrong ". Much discussed, no need to really review here. Goldman got its $10 billion. It paid off its $10 billion." No. Goldman also paid interest and repurchased the warrants. Then Taibbi makes the stunning discovery that banks are subsidized by Federal Reserve! No kidding! Nobody knew about the discount window before this poor son of a NBC news correspondent managed to break the news. But in January and up till June, the leftie blogs were insisting that TARP money would not be repaid. Taibbi's brilliant ability to predict that GS would pay, after GS paid, is not impressive.
It's not just nonsense, it's egregious nonsense which has no connection to reality.
Since when are these issues connected? Where have you seen anyone on the left saying 'Aw hell I just watched a cop beat someone up - but in the the light of our new constitution and the strength of corporate personhood, I'll write an angry diary on dKos instead.'
I mean - what on earth are you talking about here?
and the response was -- Starting with granting total impunity to the telcos that collaborated with Bush the Lesser's criminal eavesdropping activities...
Oh, and what happened to closing Gitmo? -----
My interpretation is that the argument is that the civil rights enforcement actions of the justice department are to be considered unimportant.
By refusing to "look back", as Obama likes to call it, he has tacitly approved of some of the most egregious abuses committed by his predecessor. Absent even token prosecutions for disdainful abuses of wiretap laws by government agencies and Bush Administration officials and absent vigorous investigation and prosecution of fraud on Wall Street and the condonment and involvement, if not orchestration of this fraud by the Federal Reserve, why should anyone not expect this behavior to resume and then exceed what was done under Bush when we get the next government elected upon a "national security" platform--probably in three years. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
Why indeed? It took 3 years after the prosecutions of Nixon's henchmen for Ronald Reagan to put many of them and their protegees back in business. If you relinquish power, precedents make no difference.
Why? Because they were not prosecuted hard enough, or high enough.
The precedent that was set (rather, reinforced) in the Nixon case is that current or former cabinet members will never see the inside of a prison cell.
And yes, precedents do matter.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
What the other half might have though in that event is, of course, speculation.
http://www.queerty.com/shock-obamas-doj-jumps-into-effeminate-teen-boys-school-bullying-case-2010011 8/ http://www.thedailybeast.com/blogs-and-stories/2009-09-02/civil-wrongs/?cid=hp:beastoriginalsR2
http://www.conservativenc.com/index.php/conservativenc-voices/Charlotte-Federalist-Society-Has-Obama -Politicized-the-DOJ-Civil-Rights-Division.html (HA HA )
http://www.acslaw.org/node/15066
http://www.dailykos.com/story/2009/3/11/173258/057/509/707341
And just read this back over the last few months
http://www.justice.gov/opa/pr/2010/Month/index.jsp
I'm not seeing any game plan for how supporting Obama and the rest of the blue dogs will do any good. I can see a game plan where primarying the lot of them will do some good.
Now, primarying people carries a certain inherent risk, as does all forms of factionalism. So if you can point me to an actual game plan that doesn't involve factionalism, I'd be happy. I like low-risk operations as much as the next guy.
But "wait and hope" is not a plan, just as "I'm not Bush" is not a programme.
I'm for primary challenges for blue dogs. How one gets to that by calling Obama a fuckup is the part that eludes me.
Obama is a blue dog?
Geithner, Clinton, Summers.
Prosecution rests.
This is not blue dog http://detnews.com/article/20100108/BIZ/1080414/White-House-announces-green-job-tax-credits
You sound like the idiots like me who said Humphrey was the same as Nixon. Some of us learned better though.
So I hope you'll excuse me if I take his heel face turn with a rather heavy dose of salt.
Even Marx distinguished between the interests of finance capital and production capital. All these people are not the same.
Summers is not a dummy or a tool either. Just was very wrong on some very big things, like most of those in his trade. Not sure he's so much of an indictment of Obama as of his trade.
Geithner is a tool and, apparently, an idiot, on the other hand. The best and the brightest economists and finance professionals of his generation did not go into public service. He did. Case closed. Fai de bèn a Bertrand, te lou rendra en cagant
As for Summers... if this had been an academic discussion where he had to eat crow (not that he ever did eat any crow, mind, in the official version of history it was all Yeltsin's fault), that would be one thing. But it wasn't. For that matter, if he had yanked the emergency brake on his little experiment when things started going apeshit, it would have been a different matter. But he stayed the course, until he'd accomplished in the space of less than a decade for Russia what it took his friends on the other side of the Pond three full decades to do.
And it's simply not the case that these people are the best Obama could have picked. Just off the top of my head, Bair and Stiglitz have a distinguished history of public service - if not precisely one of stellar accomplishment, then at least one of not fucking things up with such dreary regularity.
No debate from me on Summers, he is detestable for the reasons you have mentioned. Obama went for the safe, Democratic establishment hands, with him. One gets the sense economics is not Obama's strong suit and he probably relied on Emanuel (the other stiff who isn't mentioned here) to help him through those ill-considered appointments.
But Geithner is in another league. A full-on Wall Street catamite.
Personally I step away from this a bit perhaps, because I am not a democrat, so I think more in terms of the democrats looking out for their party interests, not mine. In that sense, Clinton's appointment still makes sense. Summers no longer does. Geithner and Emanuel never did. The latter three are, today, huge political liabilities to the president.
All four are moral liabilities to me, of course, but then, the party they represent isn't mine...
Fai de bèn a Bertrand, te lou rendra en cagant
Congresspeople are infinitely more vulnerable, and state legislators even more vulnerable than congresspeople. City councilpeople are still more vulnerable, as are a whole plethora of other non-legislative local and state positions like school board members.
Attacking the low-hanging fruit, while still bitching about the president, will have a heck of a lot more influence than will simply bitching at the president. Obama might not be the most progressive person around, but it would sure help if congress was pushing him to be more progressive, rather than less.
No comments though, assume that's what the Ha Ha is for... Fai de bèn a Bertrand, te lou rendra en cagant
In other news the expected TARP shortfall is still expected to be around $120bn - and that's assuming there's no double dip.
Perhaps you consider a government handout of $120bn 'full repayment'?
Most of the money sent to the banks has come back. And the discount window is not a new idea. If you are going to be shocked that the banking system depends on government, I'm afraid I cannot affect surprise but I should note that it is also true that the rich receive favorable tax and legal treatment!
You are entirely correct of course that banking systems depend on state support and that the rich get better tax and legal treatment in general
The problem is that a certain party in the US was elected on a change programme, and a large part of that change was expected to come from changing certain economic relationships and structures the near impossibility of which it's probably safe to say neither you nor I are surprised to see. Were expectations absurdly high given the structure of economic and political power in the US? Probably. But, that doesn't change the dynamic of disappointment. In any event, in other parts of the developed world, the fact a system of generating credit depends on a state charter necessarily pre-supposes the state ensure that said credit is efficiently allocated and the practises of credit institutions properly regulated.
(And, not being surprised does not mean not being disgusted, as I think you will agree.) Fai de bèn a Bertrand, te lou rendra en cagant
When we've seen reform of any sort, (and I have my doubts that we'll see any such thing, partially because of the Obama administration's tactical miscalculations) we can debate what all of this means. Fai de bèn a Bertrand, te lou rendra en cagant
I'm certainly not as impressed as you seem to be of his current financial reforms proposals. Geithner being against them isn't enough for me to be for them (though it is a good sign.) In fact though, very few people are impressed, and if you can link to an independent, favorable review of what is currently proposed, I'd surely like to see it.
He may have wanted to be a mild reformer but, if that's all he is about now, he will be a failed President like Clinton was. And, he won't have the magic of a bubble market to cover up the mess like Clinton had. Fai de bèn a Bertrand, te lou rendra en cagant
There is nothing wrong with insolvent private pension funds that cannot be cured with better Social Security.
But in January and up till June, the leftie blogs were insisting that TARP money would not be repaid.
And then it was repaid... with the quantitative easing money.
Where I come from, we call that a "shell game."
That's the same kind of game some EU governments play when they write off patently worthless third-world debt that, were it sold on the open market, would fetch at most cents to the €... and then proceed to book it as foreign aid to the tune of the full face value of the debt.
Smoke and mirrors.
In other words, a successful government policy that rescued the retirement funds of millions could in theory have been replaced by a more successful program that would have required the intervention of the Magic Pony to accomplish.
"And then it was repaid... with the quantitative easing money."
Big fucking deal. To predict that banks would depend on the generosity of governments is to predict water will be wet. The reality is that last year the leftie blogs were all explaining to us that TARP money would never be repaid. Atrios trotted out his "lucy/football" line a number of times to general applause. And yet, most of the TARP money is back, a bunch went to save UAW jobs and now Obama is pushing a tax to take the rest back. Good management of the people's money.
You're the one who likes to pretend that you're framing-savvy. Tell me, how does the frame "the stock market is going up - score one for Blue Team" work? Does it increase or decrease the political clout of Wall Street? Does it support or diminish the notion in people's minds that profits are more important than wages? Does it favour the private sector over the public sector as the fountainhead of social progress? Does it increase or decrease the bargaining advantage of capital over labour? Does it increase or decrease Wall Street's ability to take the economy hostage?
Now, if your frame had been "rescued the ill-advised pension schemes that many Americans have unfortunately been forced to depend on by the gradual destruction of social security," you could have pulled the gradualist vs. radical card, and we could actually have had a discussion about the desirability or lack thereof of primarying every single fucking blue dog - Obama included - next election.
But if you adopt the enemy's framing right off the bat that there is only one God, the stock market, and Dow Jones is His prophet... then I'm not sure that there's a point in having that discussion.
The reality is that last year the leftie blogs were all explaining to us that TARP money would never be repaid.
The money has not been repaid. It has been renamed. On the substance, this is not a victory - the American taxpayer is still on the hook for Wall Street's bad bets. On the narrative level, it is not a victory either - Wall Street now has plausible deniability. Which means that the taxpayer is gonna stay on the hook for Wall Street's bad bets.
So how is this a victory, again? I mean, except for the fact that it gave Obama a chance to look like he turned the heat up on some fatcats. Which, y'know, is a victory. Of sorts. Specifically, of the same sort that NuLab enjoyed until it went into a burning tailspin.
Permit me, for a moment, to recapitulate the European experience with the proponents of the "third way" (Bliar, Schröder, Nyrup, you name them): They all whiled away a decade or so where on the substance they accomplished precisely nothing more than treading water, and they managed to shift the Overton window to the right while not doing all the things they didn't do.
Right now, Obama looks rather a lot like Tory Bliar with better makeup.
And just to be perfectly fucking clear, "the banks have always been corrupt and always will be corrupt" is not an excuse. For two reasons: First, it's clearly untrue - Roosevelt, to take just one bleedingly obvious example, cut the banks' balls off and had them for lunch. Second, even if it had been true, it would no more be a valid excuse than "well, rednecks have always beaten up homos and strung up black dudes, and they always will beat up homos and string up black dudes."
If you want this to be a debate between gradualism and radicalism, you have to have some kind of game plan for how the kind of gradual change that we are seeing right now can lead to the kind of outcomes we'd eventually like to see. Because not being Bush is not an agenda.
Follow the Dow, Jake. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
All I said was that the market is up. Krugman and Atrios and others, confidently predicted last year that the Geithner plans would fail and we would be now nationalizing the banks at enormous expense. Instead, Obama has bought time, rescued IRAs, and improved his tactical position.
"The money has not been repaid. It has been renamed"
I'm sorry, but that's a weak reed indeed. The money has been, in actuality, repaid. If you want to claim that the subsidy of cheap fed window loans has permitted that repayment, I'm happy to agree, but it doesn't matter. The whole finance system is a mix of fraud and illusion and political chicanery anyways, but at this point the books show the money back in the hands of the government and available for spending on actual work like energy and industrial policy. If Krugman/Atrios/Taibbi had argued back in March 2009 that the Feds were going to artificially inflate the artificial finance market with artificial credit, everyone would have agreed that that was exactly what the Feds said they were going to do.
And just to be perfectly fucking clear, "the banks have always been corrupt and always will be corrupt" is not an excuse. For two reasons: First, it's clearly untrue - Roosevelt, to take just one bleedingly obvious example, cut the banks' balls off and had them for lunch.
I can only laugh at that. The existence of low cost government loans to banks so that they can lend the money to the public at a higher rate, the ridiculous anti-democratic structure of the Federal Reserve, all of that was created under FDR. FDR created a reformed state capitalism, not a post-capitalism. In 1939, nearly a decade into the new deal, while Grapes of Wrath was published and the oakies were begging for jobs picking grapes, Harriman and Morgan and Prescott Fucking Bush were still wielding enormous political power.
"Because not being Bush is not an agenda."
For me it is an agenda in just the way that not being Hitler should have been an agenda in Germany in 1929. The US was inches from full fascism in 2006 and we are still damn near the brink. Stopping the Powell Memo plan, the evangelicals, and the militias is a pretty damn good plan as far as I am concerned.
FDR created a reformed state capitalism, not a post-capitalism.
Now who's letting the perfect be the enemy of the good here?
I'll reiterate what I've said before: If Obama during his first year in office had done half of what Roosevelt did in his first month in office, we would not be having this discussion.
People forget that Grapes of Wrath was 1939.
Arise you prisoners of starvation arise ye wretched of the earth it's time to audit the banks
That created a lot of jobs, didn't it? No?
Unlike the US national anthem. Fai de bèn a Bertrand, te lou rendra en cagant
There's a stirring revolutionary accomplishment
No. But the fact that it looks impressive by comparison to the current situation should tell you something.
OOOH! He audited the banks! There's a stirring revolutionary accomplishment if I ever heard one.
The Federal Reserve System was created in 1913 under Woodrow Wilson as a federally chartered collection of private banks with a public purpose--to deal with problems of recurring financial panics, such as that of 1907 by being able to supply "liquidity" in times of financial stress and to control the interest rates and money supply. It failed in its mandated mission in a spectacular fashion from 1929 to the mid-30s. Were Obama's Administration to have been even so bold as was FDR in auditing the banks and closing those in default, creating the FDIC and SEC, etc. or even being seen as making a serious attempt he, and progressive prospects, would be in much better shape.
Obama's problems do not arise mostly from the Progressive Left, who will at least vote for him in preference to most likely opposition candidates. The arise from the revulsion of the independents and the moderate Democrats against the current situation. This revulsion will be seized by the right wing and ridden to victory unless someone more progressive can make a clear and convincing case as to who will do what and grab control of events. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
Five days later he had the legislation he wanted. But then, FDR was all about action.
He didn't let his Fed Reserve determine policy...back then, the Fed Chief wasn't "independent" (code word for "beholden to monied interests, they understood this back then). It was an exec order which got the US off the gold standard.
On social issues, they almost immediately repealed the bible-thumpers Prohibition laws and got a constitutional amendment to that effect through.
And the aid to rural areas with the farm bill he rammed through was nearly immediate too.
Of course, Obama got elected in the equivalent of 1930, not 1932. But, it will be a measure of his fortitude to see how he responds to the obvious challenges facing him now that the US economic recovery begins to falter and the unemployment rate edges ever upward. Fai de bèn a Bertrand, te lou rendra en cagant
1933, interregnum or first 100 days
March 9. Emergency Banking Act March 20. Economy Act March 31. Civilian Conservation Act April 19. Abandonment of gold standard via RFC May 12. Federal Emergency Relief Act May 12. Agricultural Adjustment Act, inc. Thomas amendment May 12. Emergency Farm Mortgage Act May 18. Tennessee Valley Authority Act May 27. Truth-in-Securities Act, requiring full disclosure in the issue of new securities June 5. Abrogation of the gold clause in public and private contracts June 13. Home Owners' Loan Act June 16. National Inudstrial Recovery Act, inc. $3.3B appropriations for public works program e.g. WPA June 16. Glass-Steagall Banking Act June 16. Railroad Coordination Act
Source: Schlesinger Jr, Arthur M., The Coming of the New Deal. 1958. You might want a copy for reference. Diversity is the key to economic and political evolution.
citations
One never knows what one could miss, do one? Diversity is the key to economic and political evolution.
Facts contradict your recollection of fiscal policy ex War Production Board.
whatevs. Diversity is the key to economic and political evolution.
there's no need for this sort of confrontational crap, Cat. He's not 'shuffling shit' or ignoring your facts, he's having a good faith disagreement with your presentation of them and what they mean. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
He's not 'shuffling shit' or ignoring your facts, he's having a good faith disagreement with your presentation of them and what they mean.
If you could stick to the arguments that would be nice.
I'm not seeing any bad faith here. I'm seeing a clash of frames and a marked difference in tactical and perhaps ideological analysis.
But yeas, the stock market is up and bonuses are back to normal. A collapse was averted, for some, yes. In the long run, we're all dead. John Maynard Keynes
Let us revisit in 2012... Fai de bèn a Bertrand, te lou rendra en cagant
15th US census, pdf page images and *.gov source links.
In The Politically Incorrect Guide To The Great Depression And The New Deal, economist Robert P. Murphy, Ph. D., gives us a very useful comparison of what happened in another recession that occurred in the 1920s when so-called laissez-faire economics was practiced and the more famous economic collapse when it wasn't. "The annual unemployment rate peaked at 11.7 percent in 1921 [the other Great Recession year], but it had fallen to 6.7 percent by the following year, and was down to an incredible 2.4 percent by 1923," Murphy writes. "That is how a market with flexible wages and prices quickly corrects itself after a Fed-induced inflationary boom."... "From an estimated annual rate of 3.3 percent during 1923-29, the unemployment rate rose to a peak of about 25 percent in 1933," two U. S. Bureau of Labor economists reported in 2001. "The economy reached its trough in 1933; but although unemployment had reached its peak, economic recovery was slow, hesitant, and far from complete." "As shown below, the unemployment rate was still nearly 15 percent in 1940 [16th US census]. Read more...
"The annual unemployment rate peaked at 11.7 percent in 1921 [the other Great Recession year], but it had fallen to 6.7 percent by the following year, and was down to an incredible 2.4 percent by 1923," Murphy writes. "That is how a market with flexible wages and prices quickly corrects itself after a Fed-induced inflationary boom."...
"From an estimated annual rate of 3.3 percent during 1923-29, the unemployment rate rose to a peak of about 25 percent in 1933," two U. S. Bureau of Labor economists reported in 2001. "The economy reached its trough in 1933; but although unemployment had reached its peak, economic recovery was slow, hesitant, and far from complete."
"As shown below, the unemployment rate was still nearly 15 percent in 1940 [16th US census].
Read more...
The Second World War.
Massive infusion of cash into the economy, lots of things destroyed. Labor force of the industrial countries cut by about 45 million out maybe about 400 million at the start of the war. So roughly 12%.
So we have: 1) lots of broken things, 2) fewer people to fix them.
Not so creative destruction but it did the trick.
I'd like to think that we'll find another way out, but I have the sinking feeling that this is at least a possibility.
The second more limited one being that growth in China collapse, and it descends into another period of internal disorder like 1911-1949.
If companies can no longer get product from China, that's the same as taking a huge portion of the global labor force off the market. With the downward pressure on wags relieved, you can have growth in demand as wages start to pick up globally. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
However, I still cannot foresee how, in the immediate future or my lifetime, Keyesian prescriptions for Chinese domestic market or Friedman prescriptions for Chinese capital market will relieve OECD deflationary wage trends. Montary inflation over all simply discounts every investment metric I can think of.
Not that that standard says alot. Diversity is the key to economic and political evolution.
Part of the reason that China isn't developing the same way that Taiwan or Korea did is that those countries had much, much smaller populations.
Remove those workers from the global labor force because there's internal disorder in the country (which is likely if growth slows, which is probable in the next few years) and suddenly you have a lot less workers to do the same amount of work. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
China's total population is an outlier relative to that of any other OECD member. Also, total factor producitvity (TFP) immediately discounts estimated transaction costs of collective and disaggregate labor market bargaining power given automated technology transfers and "leakages." Moreover, Taiwan's and S.Korea's industrial growth (or GDP) have enjoyed ("profited" from) decades of US FDI and favored-nation trade status for decades more than China's WTO-sanctioned participation in integral OECD economic policy/capital formation.
I don't think this line of reasoning will take you where you want to go, presumably labor market reconciliation. Diversity is the key to economic and political evolution.
Sorry - that's right-wing spin. Sure, it created a booming war economy, but FDR's policies ended the depression. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
My original point still stands -- what we're currently witnessing is NOT a collapse equivalent to the depression; and the political environment Obama stepped into is different from the one FDR stepped into. Everything else remains to be seen as they also say. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
On the latter, I think it is wrong to interpret the recent rise in government bond yields as a sign that the sustainability of public finances is at risk. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Of course, 15 years of banks accummulating treasury bonds with very limited private investment due to strong war economy regulations of private industry also left the banks with a huge ability to lend and the private sector with a huge ability to borrow, leading to massive credit to fuel the boom. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Exactly. FDR took office in 1933. Do not underestimate what three years of suffering can do to people's attitudes. As I said - he had a very different political environment from the one Obama inherited. And Obama is taking steps to avert COMPLETE collapse, such as what happened after 1930. Seems to me to be working, but as you say, only time will tell. Perhaps we still do have a 25% unemployment rate, several million homeless, and whole towns having armed standoffs with authorities to keep their property in our future, but I doubt it. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
Even now, the political climate is much different from what it was 3 years ago, even 1 year ago. And how many percentage points has unemployment changed? I just don't think there's any way anyone who's read about conditions during the depression can possibly argue in good faith that conditions in 2009 are comparable to conditions in 1933. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
But if Obama indeed gets behind this new policy with all his ability I think he can make a real difference. Perhaps the most important thing he could do would be to conduct a series of tutorials from the oval office that serve to educate the population as to how the economic system really operates. how the theories currently being used obscures that operation and to whom the benefit accrues. The other thing is to make the argument for public financing of federal elections. Even the business people are making that plea now. Even if such a policy has to be pushed through in budget reconciliation it could save the country from perpetual corporate rule. Else, the concern is that business contributions for Democrats, let alone progressives will dry up. And the vast majority of that corporate money will not be supporting Obama or the Democrats. But the hour is late. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
I believe you are in California, so you perhaps have noticed that there are whole towns which sit empty. And, you probably know this as well, the number of homeless has grown, and sits at around 3.5 million in the US (and growing) while thanks to Clinton's Welfare "Reform," about 6 million folks get no aid from the Federal government other than foostamps.
The Obama administration's solutions to these frankly morally rotten problems was advertised as the stimulus plan, which his Council of Econ Advisors chair now admits was only an insurance policy to "avoid a catastrophe," not a policy necessarily to get people back to work, so this is why, at least on the left, the stimulus plan has been criticized as too little, a tactical mistake. I mean, when you're historic first black President of the US and you lose Bob Herbert after only a year, it's saying something. And not that you're doing a good job.
See, unfortunately, these millions of Americans living from hand to mouth and in highly precarious housing situations have no one looking out for them. Many thought this would change, and are unhappy to see that they haven't, and I can't say I blame them, though I certainly did not expect changes, which is why I live where I live. Fai de bèn a Bertrand, te lou rendra en cagant
Too early to say. Technically speaking, it's still only 1930. Exactly. FDR took office in 1933.
Exactly. FDR took office in 1933.
That wasn't the point of the comment. The point was that the environment Obama inherited wasn't the same one FDR inherited. Maybe we can eventually make language a complete impediment to understanding. -Hobbes
Given that Obama's economic team are, while guided by false lights, not total fools and must have seen the same charts, it is hard to see optimism about a recovery as other than disingenuous happy talk and spin--which is blowing back on them and Obama. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
omg - that was my POINT! Maybe we can eventually make language a complete impediment to understanding. -Hobbes
He bought time, sure, but the time is up. Politically it's been up for a while, they just didn't care to notice until they lost an extremely safe Senate seat in a special election and finally people on the left other than Bernie Sanders started asking for Bernanke's head.
Economically, I'd rather doubt they have any time left, either, but we'll see, unfortunately my crystal ball only works for hockey (and no, the Habs will not make the playoffs this year, though spanking the Rangers like last night still is a pleasurable experience).
End of day, the Krugman/Black position has been to emphasize the solvency crisis aspect of the financial meltdown. The Geithner/Summers/Bernanke position has been to hope that the meltdown is more due to a liquidity crisis. The jury is still out, but my own view is that the latter position is as weak an equity position as all of those millions of homeowners whose mortgages are, in increasing numbers rounded to the million, underwater. Of course for this central issue, there is no credible plan... Fai de bèn a Bertrand, te lou rendra en cagant
I don't think there is a credible independent person in the US who would argue that the HAMP is anything but a big failure, all the serious finance and econ blogs (Krugman, Calculated Risk, Delong, et c.) agree on this but if you've got a cite to the contrary I'd love to see it. Fai de bèn a Bertrand, te lou rendra en cagant
Krugman has been warning since before Obama was elected that his stimulus plan was too small and that its likely failure would be interpreted as a failure of the concept of stimulus, not a failure to make it the right size... And here we are, a year after inauguration. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Could we get control of Goldman Sachs, Morgan Stanley, Wells Fargo, Citi and Bank of America in return for annual pensions of $1billion/year each for perpetuity and thereby be in the position to wind them down at minimum damage and spin off their useful functions into bite sized entities that would be such a deal as we cannot imagine. But they would want $50 or $100 billion each per year and that is not sustainable.
But their ongoing risk taking activities could end up costing even more than that for a few years. That is the scale of the problem. The above are top of the head estimates based on my sense from the reading I have been doing over the last years but I believe they are in the ball park. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
It isn't over, and the Tarp is just part of it.
I'd say neither side on this issue could be said to have had their case proven. The Tarp guarantees and the Fed's unconventional easing have potential effects downstream that could be rather negative.
And the repaid Tarp funds to date are only a small part of the story. Fai de bèn a Bertrand, te lou rendra en cagant
So the stock markets are leveraged with massive amounts of almost free QE money. Instead of "a hair of the dog" they shaved the dog and fed all the hair to Wall Street. Wall Street, meanwhile, has done NOTHING positive for Main Street. Wall Street's profits, instead of revitalizing the economy, are exacerbating the already massive mal-distribution of wealth that is already choking the economy. The consumer has been sucked dry, so first Paulson and Bernanke under Bush took out a $700 billion mortgage on future generations to prop them up and restore them to profitable operation and then under Obama Geithner and Bernanke doubled down on the policy.
Keep in mind that while this is going on retirees, many of whom had depended on interest income for much of their living, have gotten ZIP, as in Zero Interest-rate Policy, which has translated into 1% returns or less unless they put their money back in the Wall Street shark tank. They were used to 3-4% relatively risk free. Real recovery is unlikely unless and until consumers have more money to spend. Continuing policies that further concentrate profits in Wall Street firms does not further that end. And people have noticed.
Wall Street is the problem. Had Obama taken down the big banks a year ago, things might have gotten worse for a while, but debt would have been written down and the basis for a recovery would have been put in place. The debts that are being protected are mostly counterfeit gains from mortgage scams orchestrated by Wall Street to begin with. But Obama is supporting Wall Street in their efforts to get our grandchildren to make good on their fraudulent gains. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
I think the stock market is bogus in any case. It is, as Keynes noted the action of people attempting to guess what other people are attempting to guess and so on, ad infinitum. What Obama has done, deftly, is postpone the banking collapse by tossing money at the banks, while making an investment in new manufacturing and energy. He may not have done enough, there may not be time to do enough. But, to me, the flim-flam nature of the banking rescue is an essential feature of any banking rescue.
From the magic pony?
Here's a secret. A head of state acting at the behest of the military/corporate elite can act more forcefully and mobilize the power of the state more easily than one acting to limit the power of those elites.
...and when has that ever ended well? ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
And it will only get worse for the foreseeable future. The next 12 months will show if Obama has it in him. Fai de bèn a Bertrand, te lou rendra en cagant
Oh please. (A) The government did not have the legal authority to break up the banks.
FDR faced a crisis of failing banks. He declared a bank holiday by executive fiat and let it be known that the banks would not be re-opened until they were sound and regulations were in place to insure they remained sound. The legislation sailed right through Congress. On this there was and is similarity between then and now.
There was and is great public anger at the big banks. The TARP, all of the trash the Fed has taken onto its books and throwing the full faith and credit under obligations such as Freddie and Fanny, Citi and AIG, etc. that total $13 trillion or more, many of which, arguably, are the result of un-prosecuted fraud, are a large part of the reason the public is concerned about Federal debt and obligations. And all of this was done without extracting any concessions from the banks.
To me, hamstringing economic and social policy by giving the big banks unlimited, unconditional support scarcely qualifies as "deftly propping up the banks". Instead, it leads people to wonder for whom he is working and undermines his administration's support from moderates and independents while alienating many of those who were genuine supporters.
Somewhere, in this thread I believe, you noted that you have been accused of being an Obamabot. Were you bragging or complaining? Or a little of both? Continual disparagement of opponents with terms such as "delusional", phrases such as "Oh please" and accusations of following various right wing memes, as though we could not possibly have come to that conclusion on our own I find annoying but unworthy of routine response and at least as objectionable as my referring to Obama's putative Idol status. It is better to counter the substance of the argument, as I try to remind myself. I too am often tempted to pick up the rhetorical sledge hammer, as, like yourself, I feel strongly about current events. But we have different focuses, histories and personal styles, though we are both concerned about the future of the country. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
Um, no, by act of Congress. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
The Emergency Banking Act was introduced on March 9, 1933, to a joint session of Congress and was passed the same evening amid an atmosphere of chaos and uncertainty as over 100 new Democratic members of Congress swept into power determined to take radical steps to address banking failures and other economic malaise. The sense of urgency was such that the act was passed with only a single copy available on the floor and most legislators voted on it without reading it.
