Rolling US Economy Into The Shitbin Thread

my concern IS about what Geithner and Treasury are or are not doing. and what they appear to be doing (at least to me) is inadequate -- and if it isn't, they aren't explaining well enough what they're doing, why they're doing it, or even if it's just too damn complicated to get it done with already in a fell swoop.

yeah, a lot of the harshest criticism of geithner is exactly on the substance (or lack of substance) of his performance to date. like, krugman, today:

At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.

This was bad analysis, bad policy, and terrible politics.

(and ok, i do not personally have in my head the name of better person to replace him. but i bet lots and lots of people do.)

I'm not sure you can replace Geithner with any plutocrat who isn't up to his elbows in enabling this shit for the last 15 years.

exactly -- and i don't want to go through some eastern european lustration shit either. not a good place to be, i admit.

You see, I think all this whining about lack of direction, or action, on either side of the Atlantic, seems pretty weird. One thing this whole mess has been characterised by is pretty forceful, imaginative actions by governments to at least not let it get as bad as it could (the do nothing approach).

The whole bonus thing, and Fred Goodwin's flipping pension, is SO irrelevant to the big picture, it's a wonder they get much coverage at all (and also so simple: yes, they are morally defensible, but they are legally enforceable, and they were written by the companies concerned - there is NO responsibility on the part of govt. Story over.)

I'd have thought Obama, with his political capital, could have just made that case and let it drop. The fact that Congress might pass this 90% retroactive tax thing is nothing short of heroic, but still kinda a sideshow.

Anyway, this is a great article about your quantitative/credit easing policy http://www.economist.com/finance/displaystory.cfm?story_id=13326779

And Bernanke sounds like a good guy!
BACK in 2002 Ben Bernanke, then still a Federal Reserve governor, declared that “under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

That's what we want to hear!

On March 15th Mr Bernanke said that the biggest risk facing the economy now is that “we don’t have the political will, we don’t have the commitment to solve this problem.” At least for the moment, it is not the Fed chief’s gumption that is lacking.

morally indefensible! soz

i nominate jamie t smith as secretary of this thread!

the krugman post is kind of what i mean it neatly sidesteps talking about tax policy to whine about aig and some bs about geithner et al's belief systems. krugman is always v. certain that current policy is bad but is pretty loathe to offer much help or even particularly concrete suggestions about why its bad with the expection of really big picture economic structure things that are beyond the scope of a treasury sec

srsly krugman we get that you hate bankers now man up with some policy suggetions or stfu

Well, he's more than hinted that he'd like to see the administration nationalize the banks.

but does the clause that the FDR administration cited to legalize their seizure (a law passed during WWI) still exist, or something similar?

There also seems to be this weird confluence of the left, who hate bankers, and the right, who hate the government, (and maybe the general public, who now hate both), in opposing the idea of bail-outs in the US.

You get plenty of criticism in the UK, but not framed in the same way (see the class war stuff Morbius quoted above).

I can see why that makes the whole bonus issue so toxic.

Anyway, ever the optimist, maybe this paves the way for a high tax rate for the super-rich (introduced everywhere, combined with the crackdown on tax evasion/avoidance already in swing).

xpost

There also seems to be this weird confluence of the left, who hate bankers, and the right, who hate the government, (and maybe the general public, who now hate both), in opposing the idea of bail-outs in the US.

haha which is why we're stuck effectively nationalizing banks but ensuring that the taxpayers arent going to get the real benefit when things rebound~~~ what is aig's stock price now anyway???

i think the treasury/obama have been pretty half-hearted and wishy-washy w/r/t to nationalization - i never thought it was a good idea but better its done and the politcal price is paid then we're left w/this tremendous uncertainty. letting them fail is a terrible idea too cf. sam jones work on lehamn bros. but as long as things remain the way they are it remains a possibilty and i think thats contributing something to the hesitancy around investment

Krugman could easily get a job in the Obama administration or at the Fed. But we all know he'll never sack up for that kind of pressure when it's easier to sit in his bulletproof echo chamber.

Nationalization of the banking system is an enormous task fraught with risk. Getting it "done" takes a massive effort, which requires a massive amount of conviction in the cause, and in this case, there's widespread disagreement not only on the concept but on the implementation. So if it's been wishy-washy then maybe the fish is rotting from the head down.

The fact that Congress might pass this 90% retroactive tax thing is nothing short of heroic, but still kinda a sideshow.

the odds of it becoming law are long

Krugman could easily get a job in the Obama administration or at the Fed. But we all know he'll never sack up for that kind of pressure when it's easier to sit in his bulletproof echo chamber.

well he did work in the reagan administration. and krugman -- and most of geithner's critics, which at this point includes most lefty economists and a lot of righty ones -- did support the bailouts as a general course of action, but thinks they were structured and implemented badly. which geithner and obama have so far not remedied. i'm not sure what the defense of geithner is supposed to be, really. he's better than paulson? ok.

Getting it "done" takes a massive effort, which requires a massive amount of conviction in the cause, and in this case, there's widespread disagreement not only on the concept but on the implementation. So if it's been wishy-washy then maybe the fish is rotting from the head down.

oh your right but i think and obv this is in hindsight that conviction was what was called for. its a neat trick of course - the situation is massively complex and requires flexible policy but at the same time the market needs some guarantee of future action - and pulling it off will continue to be difficult. my real complaint is that there have been times when the rhetoric hasnt matched the seeming intent so if you ARE going to nationalize, then admit it, and let the market internalize the situation and then go from there

tipsy i think your whole position is complete bs: geithner doesnt need defending, is the point. and save me the "implemented and structured poorly". how do you even know this?????

all anyone is doing is making educated gambles. and its way to early to tell now what bets are going to pay off.

oh come on. nobody (except you i guess) thinks geithner is doing a good job. he's TARP was implemented and structured poorly? who doesn't think that? are you defending paulson too while you're at it?

"bailouts" being necessary doesn't mean it was also necessary to make them as opaque and favorable as possible to the people running the banks (or, in aig's case, to the banks that are its creditors).

(sorry, strike that stray "he's")

Krugman's job in the Reagan administration was inconsequential compared to what he could be tapped for now.

I think the best defense of Geithner is what I gave--that he's very much hamstrung by a lack of underlings, an enormously complicated set of problems and constituents. He's better than Paulson? I'm not sure it's possible to even make that judgement at this point in the game. If Geithner goes out now, he's going to be seen as a total failure.

At least we have Obama going on the Tonight Show to make us all feel better.

i know, i just mean krugman's not constitutionally averse to public positions. but i can't hardly blame him for preferring to stay in his current roost.

tbh i thought you were talking post-TARP, which i associate w/paulson altho i guess geithner deserves to share blame for that

oh don made this post unnecessary. what he sd, pretty much.

Krugman's job in the Reagan administration was inconsequential compared to what he could be tapped for now.

exactly -- he was a staff economist at the Council of Economic Advisors when he worked in the Reagan administration. he's never run any bureaucracy (governmental, academic, or private) that i am aware of. and while krugman has knowledge about international finance, his real expertise seems to be in international trade. as much as i'd love to see some sort of role for krugman in the obama administration, i don't think that he would be the right person to take charge of Treasury if geithner is booted out.

xpost:

geithner has been part of tarp from the start, and he hasn't sufficiently separated himself from paulson's deference to the banks.

lets put my boy corzine up in that bitch

the new jersey govenor????

ya why not, hes doing a crappy job in nj

lets put my boy corzine up in that bitch

because he's doing such a wonderful job here in new jersey that he may need a new job in the near future?!?

xpost LOL

was he a fudge on the low or was that a different one?

i mean, b/w paulson and corzine i think that we CAN all agree on a ban of ex-goldman employees in ANY public office.

sayin tho if geithner really does get the boot--and tbh i think hes sort of weaselly but i dont know shit about shit so im willing to give him a couple more months--if geither really does get the boot, i guarantee corzine will be one of the names floated to replace!

yeah, that's just what I want -- a governor so inept and unpopular that he may end up turning the governor's seat in a blue state in a democratic-friendly time period over to the GOP.

we already had jim florio!

I can't hate Tim Geithner; Somehow, he reminds me of Lindsey Buckingham.

to complete my thought ... to take a governor so inept and unpopular that he may end up turning the governor's seat in a blue state in a democratic-friendly time period over to the GOP to even more high-profile politically sensitive government position. and that's not even factoring in the former goldman employee revulsion factor!!

also, jon corzine wouldn't be fit to lick the heels of jim florio's shoes after florio stepped in a pile of dog shit.

when you go insane (xp)

Haha. Just after law school.

well, tusk was only slightly less inpenetrable than TARP.

i'm curious what expectations people have. the dow dropped 6000 (?) points last year after the administration just two months past insisted for months we weren't even in a recession. is the current administration supposed to have all that fixed already? if not, then aren't calls for geithner's head somewhat premature?

Tim Geithner: Why don't you ask him if he's going to stay? Why don't you ask him if he's going away?

no, they're not supposed to have it all fixed already -- no-one except the most-doe eyed Obama groupie was expecting that. but some of us are disappointed that all that Geithner could ladle up was a further serving of TARP a la Paulson five months after Lehman Bros. went to shit (i.e., when they may have had more time to cook up something a little more appetizing).

Lovin' Tim isn't the right thing to do.

it's still sort of like the last administration took the nastiest dump ever and geithner, who went in to take a leak afterwards, is getting blamed for it (um, unappetizing, sorry). not here to defend geithner necessarily though -- more wondering how much of this remains bushco's mess, and whether the rush to condemn geither/obama is merited vs. lingering slapphappiness from the paulson/cheney crew

whether the rush to condemn geither/obama is merited

There's been a rush to condemn Obama? I've heard some criticisms, but nothing approaching a "rush."

Yeah, Geithner's getting the burden of it all. Perhaps deservedly but I admit I can't entirely get myself worked up about all this simply because my baseline reaction always seems to be a lack of actual surprise -- more like "They did that? Figures."

Cynic.

Thank god for that!

Geitner's behaved like a complete weasel so it's hard not to feel at least some of this isn't deserved. I do have sympathy to the fact that a) this is a uniquely fucked up situation and b) the Treasury is apparently understaffed.

i think Geithner's in TROUBLE

with a capital T and that rhymes with P and that stands for POOL