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LQD: "The Real Economy"

by ThatBritGuy Tue Mar 18th, 2008 at 11:24:15 AM EST

A slippery little gem from Paulson, being interviewed on a round of US breakfast shows and quoted by the BBC.

BBC NEWS | Business | US admits economy is in downturn

"We know we're in a sharp downclimb and there's no doubt that the American people know that the economy has turned down," he said.

He said that policy was focused on calming the financial markets.

"The big focus on the part of all policy makers is to minimise the spillover to the real economy," he added.


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Poulson and the rest of them are motivated by the narrative that it was "spillover" from the financial markets to the "real economy" that caused the Great Depression. But that doesn't seem to be borne out by facts.
As noted, the Federal Reserve indexes of industrial activity and of factory production, the most comprehensice monthly measures of economic activity then available, reached a peak in June [1929]. They then turned down and continued to decline throughout the rest of the year. The purning point in other indicators--factory payrolls, freight-car loadings, and department store sales--came later, and it was October or after before the trend in all of them was clearly down. Still, as economists have generally insisted, and the matter has the high authority of the National Bureau of Economic Research, the economy had weakened in the early summer well before the crash. -- John K. Galbraith in The Great Crash 1929
In addition, Poulson and the rest of them are motivated by not having the "spillover" happen under their watch. They might just manage to keep the economy teetering on the brink until a Democrat is elected in November or takes office in January.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Tue Mar 18th, 2008 at 11:45:14 AM EST
In addition, Poulson and the rest of them are motivated by not having the "spillover" happen under their watch. They might just manage to keep the economy teetering on the brink until a Democrat is elected in November or takes office in January.

Doubtful.  I think it's pretty much a guarantee that we're in recession officially with the Q2 growth figures, at the latest.  Three-fourths of the country already believes we're in a recession.  Their little rebates aren't going to hit our mailboxes until May or June anyway.  Really, they've got nothing left, and Helicopter Ben's just throwing fuel on the fire right now by looking so panicked.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Mar 18th, 2008 at 03:04:26 PM EST
[ Parent ]
But the stock market just went up!

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Tue Mar 18th, 2008 at 03:10:04 PM EST
[ Parent ]
That fits right in with other mysteries, like:
How could Elliot Spitzer have been that stupid?

Greg Palast:

While New York Governor Eliot Spitzer was paying an `escort' $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there's a BIG difference. The Governor was using his own checkbook. Bush's man Bernanke was using ours.



Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Tue Mar 18th, 2008 at 04:27:41 PM EST
[ Parent ]
I'm trying to think of the last time the American public called for a politician's head based on a sex scandal due to moral outrage rather than partisanship. I'm guessing there aren't many examples. Political life revolves entirely around the 25% of the population that identifies as hard-right nationalist / fundamentalist. No one else gets attention. Look at Obama's recent speech - you don't say those words to leftists. Not even American leftists.

I caught both MSNBC and Fox News yesterday. Both were presenting Bernanke's recent actions as what they were - a direct transfer of wealth from the middle class to the ultra rich. Fox News was channeling Eurotrib. I'm not joking. Not that it matters - we're not willing to go to jail or die to fight against this. I'm certainly not.

you are the media you consume.

by MillMan (millguy at gmail) on Tue Mar 18th, 2008 at 08:23:41 PM EST
[ Parent ]
I'm trying to think of the last time the American public called for a politician's head based on a sex scandal at all

It was probably sometimes in the fifties or so. May be a bit more recently in the preacherous states.

I'm not convinced the public gives a wit about the sexcapades of its politicians, nor even about the eventual hypocrisy associated with them, otherwise Vitter and Craig would have resigned a long time ago.

It's a media and political class thing. If a situation like that gives an opening to internal competitors within the system, the power base evaporates instantly and your career is over.

Spitzer probably looked at the situation and decided it wasn't worth the pain of going through the circus. He's very wealthy. He doesn't need the job. He probably weighted the situation against his long term ambitions for the White House. He's not so wealthy that he can ignore the highly-moneyed common wisdom for the race to the WH and the prostitute thing cannot fly with that crowd. So, if it's fucked for the White House, why stick around Albany and carry on in an otherwise very unpleasant job in a very unpleasant little town? (Being governor of New York is only for the very ambitious or the truly desperate).

But I'm pretty sure that he could have taken a completely different approach and stick it to the media "Yeah I did it, I did it with my money and my dick and I enjoyed every single fucking minute of it! So now, what's your fucking problem?". He could have played it populist / embattled / stick-it-to-the-man-and-the-effete-elites and I'm sure he would have won the public to his side, especially in New York. They have a special fondness for big swinging dicks with very loud mouths and no sense of shame.

by Francois in Paris on Tue Mar 18th, 2008 at 10:05:36 PM EST
[ Parent ]
Minor point, I think the feds were actually lining up to indict him under federal law, because the prostitute had at least once traveled to another state to meet him and that's prosecutable by the feds.

Were it "merely" a prostitution scandal it would be one thing, but it's hard to continue when indicted for one of these things, especially if one ends up doing jail time.

by Zwackus on Wed Mar 19th, 2008 at 12:55:52 AM EST
[ Parent ]
The main problem is that he prosecuted prostitution rings himself, so he comes across as just as much a hypocrite as the Republicans you mention.

If it wasn't for that, I would have loved watching him taking your approach. Forcing journalists to discuss "boring" things like the banking crisis in his press conferences, while refusing to answer questions about when he'll resign. Even better: "I'll resign as soon as Vitter does". As ex-AG he may even have knowledge of what other Republicans have been up to (and they would know that...), so he might even have had some ability to implicitly blackmail the feds...

by gk (gk (gk quattro due due sette @gmail.com)) on Wed Mar 19th, 2008 at 05:57:16 AM EST
[ Parent ]
MillMan:
Political life revolves entirely around the 25% of the population that identifies as hard-right nationalist / fundamentalist. No one else gets attention.
Sounds just like Spain!

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Wed Mar 19th, 2008 at 03:31:47 AM EST
[ Parent ]


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