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Paul Krugman hit the nail on the head today with his Op-Ed. It reminds me why I like him in the first place. For those of you too lazy to click through to the essay and read it, I’ll give you a summary. Krugman says that our policy makers continue to be blinded by the mythology developed by Milton Friedman and others and popularized by Reagan. They think the financial system is fundamentally sound, and the recent collapse is wholly due to public misperception. That is why the Summers/Geithner plan rings hollow in a progressive’s ears. A progressive knows we have to move past the culture of greed and bonus, of growing wealth disparity and opt-out attitudes, but Summers and Geithner don’t get it.
Jake Desantis’s (public) letter to Edward Liddy in today’s New York Times is just one more attempt by the the real media elites — the conservatives of both parties — to quash public outcry over the legacy and abuses of Reaganomics.
This is CNN’s headline for a story in which Obama responds to Cheney’s tale that he has made America unsafe and prone to another terrorist attack: “On ’60 Minutes’ Obama rebukes Cheney criticism.'”
I know that newsmen are not as smart as they like to think they are, but come on! It should be “Obama rebuts Cheney criticism.” To say Obama “rebukes” Cheney criticism is to say that he chides those who criticize Cheney. I sense a right-wing conspiracy — of dunces.
UPDATE AT THE BOTTOM OF THE PAGE!!!
I know the readers of Cultural Capitol are probably sick of hearing me rant on this subject, and for your sake this will be my last post on the topic. The Editor has counseled moderation, and I know in my heart of hearts he’s right. But I can’t leave it without saying just this one more thing about the “popular” reaction to A. I. G.’s bonuses.
James Barron and Russ Buettner write in a human interest piece in today’s New York Times that “many [A. I. G.] workers felt demonized and betrayed. ‘It is as bad if not worse than McCarthyism,’ [an anonymous A. I. G. exec] said. Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, ‘for their own political agenda.'”
Bless Barron and Buettner for trying to put a human face on this mess. But the execs who cry “I didn’t have anything to do with those credit problems” (James Haas) still don’t understand why their fellow citizens want to lynch them. Let me attempt to put a face on populist outrage.
The story in the Times today trying to defend Geitner puts the blame for his bad judgment (really, a complete lack of political common sense) on faceless “government lawyers” who told the Treasury secretary exactly what he wanted to hear:
On Tuesday last week, as he prepared for a meeting in London of the finance ministers of the Group of 20 nations, Mr. Geithner learned that A.I.G. by Sunday would send out the bonuses to employees at its financial products unit, which developed the risky derivatives now blamed for the global credit crisis.
With few senior political appointees on hand, the word came from one of the numerous career civil servants who keep the Treasury functioning through changes of administration, according to an official.
Mr. Geithner consulted lawyers. They told him the government could not override the contracts that the insurance conglomerate had signed in early 2008, when its financial products unit was fast losing money.
The Times piece tries hard to justify Geiter’s naivete, blaming his lapse on his “crushing workload,” and telling us he is “shouldering more crises on his slight frame than most Treasury secretaries ever have.” But that’s no excuse — either for him or for Obama. Geitner, whose instincts as the Times says “are that government should not dictate compensation issues to businesses,” suffers from the same free market fundamentalist dementia as a recent respondent to my earlier post. Let’s look at this pathology more closely in order to better understand it.
The plaque outside AIG's downtown HQ
I was going to write an angry piece on the AIG bonuses, the kind that uses a flamethrower to incinerate the subjects of my wrath. Then I took a walk down to AIG headquarters on Pine St. in Lower Manhattan. Unlike the offices in Greenwich, CT where the financial products guys reportedly work, an office which was receiving death threats, the main office downtown didn’t have any gawkers or thrill seekers (other than me).
I find this surprising. After all, to hear the internets tell it, people are spitting mad over the legalized Madoff make-off with tax payer money. (MoveOn cites the NY Times to estimate the AIG bailout is $500 from every tax payer in the USA.) And yet no one was storming the castle in downtown Manhattan. If anything, the corner of Wall and Broad, the place where a statue of Washington looks out on the NYSE, was buzzing with happy tourists.
He looks so serene.
By J.D. Oxblood
As a card-carrying member of Our Bitter Lady’s Church of the Pessimist, I hate to be right, but I totally called this one.
Quote: How long before Levi Johnston totally bails on his wedding plans?
Answer: About 4 months.
The following is from the AP by way of the Huffington Post:
Levi Johnston and Bristol Palin, the teenage daughter of Gov. Sarah Palin, have broken off their engagement, he said Wednesday, about 2 1/2 months after the couple had a baby. Johnston, 19, told The Associated Press that he and 18-year-old Bristol Palin mutually decided “a while ago” to end their relationship. He declined to elaborate as he stood outside his family’s home in Wasilla, about 40 miles north of Anchorage.
Apparently I was a little off in my prediction, as I assumed it would be Levi calling Bristol “trailer trash.” According to Levi’s sister, it’s Bristol calling Levi “white trash.” Details, details. Not that I believe Levi’s sister, who claims that Bristol has cut Levi off from his kid, and that Bristol is “just crazy.” I mean, how could Bristol have turned out crazy? Her mother is completely level-headed, she was instilled with good, American, Christian values, and waited until she was 17 to get knocked up out of wedlock—which is, like, totally kosher since the age of consent in Alaska is 16.
The good news for Levi is that he only tattooed Bristol’s name on his ring finger—a digit easily severed, especially since he won’t be needing it any more. What better reminder to never get engaged—especially not in support of a future in-law’s bid for power—than not having a ring finger?
xx,
JDX
Wall Street
The New York Times is reporting that some banks are balking over the strings attached to their bailout cash.
Good! That is the right response, and it shows that the Obama policies are right on. This is not a Republican or a Democrat issue — it’s a good government issue. If the banks are willing to take on the risk of failure in order to maintain the possibility of future, outsized profits, let them do it. If they fail, they do so on their own merits. On the other hand, if a bank wants money to stay alive, they have to know they are entering a period of indentured servitude to the American people. They will not be free until they have paid their debt to society, and in this case that debt comes in an easily recognizable dollar amount.
Hypocrites like John Boehner and Richard Shelby argue that some banks should fail because that’s good fiscal discipline, confusing once again the role of markets and the role of government. Markets reflect the sentiment of its local population (i.e. whoever comes to the market). Government has the power to coerce or incentivize behavior when necessary. In times of crisis markets should not be allowed to make decisions because they will make panic driven, emotional decisions. In those cases it is the government’s job to set parameters for acceptible behavior. In this case it means righting financial malfeasance while containing the damage inflicted on the innocent by the crime. No-government Republicans would have the innocent pay along with the guilty. Strings on a bank bailout make sure that the innocent are protected while the guilty work off their guilt.
I’m not sure what this dude is selling. He stands on the little peninsula of pavement where Broadway bifurcates downtown. But there he/she is, every day, in the freezing cold or boiling heat, not selling or soliciting, just hanging out with his little panda painted trash pail (pictured at bottom left).
😦
courtesy of the New York Times
As any of you who are my consistent readers know, I think Paul Farrell over at Marketwatch.com is a hoot. His recent essay on the 13 tipping points that will lead to Great Depression II is a fun read.
When the economy was on the way up, up, up! we couldn’t get enough stories about how technology was going to change our lives for the better, and Utopia was finally just around the corner. Think of Francis Fukuyama’s neo-Hegelian “End of History” thesis, free market globalizers from Bill Clinton to George W. Bush, and lefty internet entrepreneurs who assured us hyperlinks would cure cancer. (Ok, I exaggerated that one a bit.) My favorite send up of this idealistic nonsense is from that gem of a movie Talladega Nights when Ricky Bobby (played by Will Farrell) is reprimanded by Lucius, his crew chief, for criminally reckless driving:
Lucius: Ricky Bobby! You can’t drive like that! You’re not going to live forever you know.
Ricky Bobby: I know. But with the way medical science is going, and my level of income … I figure three, four hundred years.
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