Rolling US Economy Into The Shitbin Thread

people need to recall these guys assumed control way after the crash. there is more scrutiny aimed at what geithner/obama are up to than what bush/paulson did before, during, and after september 19, 2008 in their little plutocratic incompetence spree. rationality and patience are what matters now.

indeed -- although it should be noted that as more details emerge about the post-9/15 or 9/19 spree, it's becoming clearer (to me anyway) that bush's and paulson's activities were much less incompetent and much more a case of looting and crony capitalism (e.g., the very interesting "coincidence" about how well Goldman Sachs done relative to its one-time competitors). and the key problem for obama and geithner has been that to date their activities on bank bailouts have NOT appeared to be demonstrably different than their predecessors'. geithner's and Treasury's missteps and inactivity stands out like a sore thumb not only because correcting the bank mess is so important to getting the economy back on its feet, but also because it stands in such stark contrast to how boldly the Obama administration has acted in other areas.

in the meantime, however, let's all have a pity party for the poor beleaguered AIG execs who received those bonus checks

my favorite goldman thing is how they told the treasury they were actually going to give back $10 billion in assistance because the terms were too onerous. and then a month later it's revealed that goldman received $12 billion from AIG as a counterparty payment, footed by the us treasury.

I'm not sure anymore Eisbaer if its a good thing demonizing the AIG execs...aren't these execs supposed to be part of the solution and not part of the problem (ie unwinding the complicated and toxic derivatives)?

oh god this is turning into dictionary definition of "clusterfuck"--it seems that everyone involved (Liddy, The Obama Administration, Congress, the media) has done everything they could to obfuscate the issue. It's not a scandal until fingers get pointed...

the bonuses thing is so fucked up

however small the % of the bailout the bonuses are, what happened to nattering about "the narrative"? NY Post-style outrage is trumping the White House here.

too true. the administration needs to set the record straight here that they are dealing with a lot of provisions leftover from the crisis' culprits. it's still fine to blame bush et al. because a) it's true, and b) bo has only served two full months

One A.I.G. executive, who spoke on the condition of anonymity because he feared the consequences of identifying himself, said many workers felt demonized and betrayed. “It is as bad if not worse than McCarthyism,” he said. Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, “for their own political agenda.”

LOL

yes Einstein it's just as bad as being barred from working in your chosen profession because of what you believe

Yeah, there's a nationwide witchhunt falsely accusing people of having worked for the AIG financial products division.

geithner's and Treasury's missteps and inactivity stands out like a sore thumb not only because correcting the bank mess is so important to getting the economy back on its feet, but also because it stands in such stark contrast to how boldly the Obama administration has acted in other areas.

gtfo with this "misstep" and "inactivity" bs. replacing geithner seems pretty inevitable at this point i dont want to get into fukken digipundit blog asshole talk about "political calculus" or w/e makes this necessary - i think it sucks but its not a major thing. but seriously fuck you and fuck this post you are ruining america

because: a) the bold action you laud has drastically reduced the administrations ability to react to the economic crisis by tying fiscal recovery to a # of unrelated activites b) no one is "correcting" the banking mess like some its some dim student's math test c) the whole post reeks of narrow-minded short-term thinking that cares more about "optics" and has caused so much of the admin's reaction to be half-hearted and a little disorganzed

here's a choice line from the article:

An executive at Merrill Lynch, where bonuses have also come under fire, said that some employees had asked whether the firm would cover the cost of private security for them.

why don't you use your giant fucking bonus for that, shitbird?! i know everything everyone's been saying on this thread about misdirected anger etc - but it's seriously hard not to hate alot of these people.

oh okay that post was way more hostile than i meant it to be - its not really even directed at you eisbaer jsut general dissatisfaction w/the current wider discussion and how little debate has occured over actual policy cf. aimless's post about monetary policy

my only problem with the AIG thing is that everyone focusing all their hate on AIG prevents people from also hating goldman sachs etc. I want them all to be adequately demonized.

oh okay that post was way more hostile than i meant it to be - its not really even directed at you eisbaer jsut general dissatisfaction w/the current wider discussion and how little debate has occured over actual policy cf. aimless's post about monetary policy

― Lamp, Friday, March 20, 2009 1:02 PM (1 minute ago) Bookmark Suggest Ban Permalink

ya dude well finance and shit is hard, obama is black and tim geithner is sort of cute so why cant we talk about them

lamp: i'm every bit as concerned about actual policy substance as you are! perhaps more so than most ILXor posters -- to the point that i get derided by some as being too much of a policy wonk-wannabe -- and i find the dog-and-pony "optics" shows distracting at best. (not to mention that the presently-absent gabbneb thrives on that kinda inside-baseball shit much more than i ever will!) i don't do maureen dowd's schtick, and i most prefer aimless's and don's substantive posts and article links to the trivial dowd-esque shit.

i didn't everything spell it out in that post that you objected to, but 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. i know that a cleanup of the banks is complicated and may take a lot of time (which may be the whole purpose of these stress tests that Geithner mentioned a month ago). but as i said before, whatever action is happening at Treasury is moving really slowly compared to how quickly the stimulus and omnibus bills have been passed.

hey it's been awhile.

Code Pink appeared at the AIG hearing conducted by the House Financial Services Subcommittee, waving some signs expressing their displeasure. Chair Paul Kanjorski admonished Medea Benjamin and friends, ordering them to behave or be thrown out. So how do these "radicals" react? By meekly surrendering their signs and keeping their mouths shut. Pitiful....

These motherfuckers are robbing you in broad daylight. The political class represented by Kanjorski (and Barney Frank, who backed Kanjorski) is looking for ways to help the financial class overcome this PR debacle, and hearings are usually the best method of repair....

What the fuck happened to civil disobedience? Class war is openly being waged on us. We may not win, but at least go down fighting, and perhaps put some fear in these criminals. I wonder if Bush or McCain were in the White House, Code Pink would be so polite and obedient. It appears that Obama has liberals and some leftists right where he wants them -- to the degree that he gives them any thought, of course.

http://dennisperrin.blogspot.com/2009/03/code-mute.html

7 reasons why AIG should be allowed to die
http://www.businessinsider.com/7-reasons-why-aig-should-be-allowed-to-die-2009-3

The worst thing about the AIG thing is that it's going to get Geithner fired, a guy who's been understaffed since minute one and a guy who's arguably as good as anyone is going to be for the job. He's getting turned into a populist sacrifice, another trivial footnote in the pages of politics where the details of his missteps will never be connected to the larger picture.

It's the political element that has always frightened me most about this recession/depression, the impulsive need to appease voters in the short term with carelessness towards the future.

The worst thing about the AIG thing is that it's going to get Geithner fired, a guy who's been understaffed since minute one and a guy who's arguably as good as anyone is going to be for the job. He's getting turned into a populist sacrifice, another trivial footnote in the pages of politics where the details of his missteps will never be connected to the larger picture.

even though i've carped about Geithner, i actually agree with this assessment. i have no idea who could possibly replace him, nor do any of his critics.

i think i might do an OK job

additionally, the understaffing @ Treasury is a concern that is getting much less press than it ought to (even before the AIG bonus kerfuffle). what the hell IS the hold-up? i mean, i'm all for having people background-checked and being sure that any conflicts-of-interest are explained and minimized. but really, these positions have to be filled in order to get ANYTHING accomplished.

it's the same situation with alistair darling as chancellor of the exchequer and mervyn king as governor of the bank of england - they're vilified for not showing "leadership" but frankly no one has any idea what to do

xpost except max, obv!

well i mean i dont have a lot of ideas but i look pretty good in a suit and i can act confident to make people feel better

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.

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?!?