Here's a thought: If we are going to spend two trillion dollars (and most likely more) trying to deal with the economic crisis, shouldn't we do it right?
Yes! Yes! Finally we have someone talking some sense! Let's spend that money the right way! In other news, Ms. Huffington is anti-AIDS.
The price of getting it wrong is, after all, extremely high. Think of a patient suffering from a grave viral infection who is treated with antibiotics. Not only will the treatment be unsuccessful, it will delay the proper care dangerously long.
Yes, yes, thank you for the extra long metaphor that isn't even clear, but yes, I'm sure if we don't do it right it will be bad.
So the ways the Obama administration handles the next phase of the bank bailout and the debate over the stimulus package are crucial.
Ms. Huffington is attempting to bury the lead! Can she pull it off? We're three paragraphs in and she either has nothing to say or she's burying the lead. What will it be!?!?! I'm on the edge of my seat.
So far, the debate over the stimulus package is, for starters, getting tied up in -- and dragged down by -- the public's widespread disgust at almost every aspect of the bank bailout, from the lack of transparency to the ongoing cluelessness of the Wall Street Marie Antoinettes to the lack of any recovery bang for our billions of bailout bucks.
We live in a world were Democrats throw words like 'transparency' around like it's no big deal people. And what exactly is a Wall Street Marie Antoinette? A trader who is a teenager from Austria? A Wall Street researcher who likes to pretend that they live a peasant life in Bridgeport, CT? What does that mean? Is this a poorly written reference to something Marie Antoinette didn't say (let them eat cake)? STILL WAITING FOR THE LEAD BY THE WAY.
Even worse than all that is wrong with the original bailout, is the prospect of the new administration repeating the mistakes of the old when Timothy Geithner announces his plans for the remaining $350 billion.
Does anyone in the United States who writes for a newspaper or a on-line publication understand what capitalism is? Do they not know that capitalism needs capital (ie money) to work? With no capital, there is no capitalism. With no capitalism there is feudalism. Who's down with feudalism in the 21st century? Progressive Democrats, sure... but anyone else? That's what I thought. What's so hard about this people? For the hundredth time, without capital (money) banks can't work because they can't lend money. If banks can't lend money you don't get paid. This is a very bad thing. However, no one in the print media is capable of understanding this.
Early indications are that the next bailout tranche will be handed out from an equally Wall Street-centric perspective -- animated by the belief that all that ails us can be cured by pumping a few trillion into our financial institutions. This despite the mounting evidence that the best interests of the banks and the best interests of America are no longer aligned.
[writer stares blankly waiting for the world to end/]
As Niall Ferguson told me in Davos, "It is time to start new banks; the old banks need to be completely restructured."
Did she just name drop Niall Ferguson? And what the fuck is a new bank? Does a new bank use the gold standard or is that too old school? Can Christians work in these new banks? Will new banks not lend money? Seriously, I have no clue how a new bank would be any different from an old bank.
And this includes an end to paying dividends to shareholders -- not to mention an end to bonuses, redecorating, new jets, Super Bowl parties, and stadium naming deals.
You know a bank that doesn't pay dividends is about as good of an idea as a screen door on a submarine. I mean, this might be one of the ten dumbest things ever said. Ms. Huffington wants banks to be the biggest mattresses ever made and every stuffs their money in these huge mattresses. (The mattresses will be American made of course).
President Obama needs to make it clear that the next phase of the bailout is going to be handled radically differently than the first go round. As Bloomberg has reported, Henry Paulson invested twice as much taxpayer money in Goldman Sachs as Warren Buffett, yet gained warrants that were worth one-fourth as much. And the Goldman terms were repeated in most of the other bank bailouts. "If Paulson were still an employee of Goldman Sachs and he'd done this deal," said Joseph Stiglitz, "he would have been fired."
Well it took far too long, but I think we got to the lead. I think. And she's probably right about the Goldman stuff, but it should be pointed out that Henry Paulson worked at Goldman before he went to work for W so it really isn't all that surprising.
This is a mad-as-hell moment (see Sen. Claire McCaskill), and Obama needs to make it clear to the bankers that the American people are not going to take it anymore. And this requires more than finger-wagging -- it requires disgorging
What does this even mean? Seriously? What aren't we going to take? Should I be pissed off that banks still exist? How is averting the collapse of our economic well being a bad thing again?
The administration also needs to use the debate over the stimulus package to rethink its too-timid approach -- otherwise we are going to miss a huge opportunity to both arrest our economic free-fall and create a 21st century economy.
Giving a specific example would have been too difficult apparently.
Rick Levin, president of Yale and an economics professor... "The overall stimulus is about 6 percent of GDP. We did not exit the Great Depression without a stimulus that amounted to about 25 percent of GDP -- we called that World War II... The second problem is with the mix... Only $335 billion worth goes to job creation -- that's about 3.5 million jobs, about $100,000 a job. Three-and-a-half million jobs is only two percentage points on the unemployment rate. That's not enough. I would get rid of the tax cuts and use the entire package for job creation... There are lots of great public works projects that would be well worth supporting. And, in the near term, what about CCC-type activities that put people to work right away, cleaning up public parks, weather-stripping homes, offices, schools, government buildings?"
Okay we finally get something worth while in this piece; anyone else on the edge of their seat wondering how how Ms. Huffington messes it up?
Many experts in the key areas the stimulus package involves -- including healthcare and education -- are equally critical but reluctant to go on the record since, after all, there is something rather than nothing for them in the current bill.
Huh?
One high-ranking expert on education told me off-the-record: "We are really wasting an enormous opportunity..."
WHAT? If one told you something off the record then you don't print it! So this wasn't off the record, this was someone that someone did not want to be named.
Likewise, given the chance to rebuild America's economy, is the current system, with a few hundred billion dollars worth of patches, the one we want to build?
anovs ,m asv' qTP't4q ' ' '
[sorry I just banged my head against the keyboard]
Obama has added or talked about adding several new cabinet-level positions, such as chief technology officer, climate czar, and car czar. How about an advisory cabinet of economic thinkers who can offer the president big ideas for a 21st century economy?
It's called his economic team. I think Larry Summers is somehow involved, but that's just what I read.
Jeffrey Sachs, the Columbia University economist who was instrumental in transitioning the economic system of the former Soviet Union, is also no fan of the stimulus bill, calling it a "a fiscal piñata," an "astounding mish-mash of tax cuts, public investments, transfer payments and special treats for insiders," and "a grab bag of hasty short-run spending."
This is when I point out that the current plan has come from a Democratic House.
In October, Alan Greenspan, one of the poster children of the old system, conceded that there was a "flaw in the model." I'd say that events since then have exuberantly proven that to be an understatement. There's not a flaw in the model -- the model itself is flawed.
Yes, we all know and knew that giving people with little income half a million dollar homes was a bad idea. And yes we all knew that spending more than we make is a bad idea. This isn't anything new. The flaw isn't the model... it's the people who enable that were the problem.
And instead of bailing water out of the sinking ship, we should construct a replacement appropriate for navigating the economic seas of the 21st century -- and steer it in the right direction.
Which is?
Oh. Wait. There isn't anything more. This is it. This is what we're left with, she can't even throw us a bone? Thanks Arianna. Thanks for nothing.
And for that, you get the Idiot tag. Enjoy.
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2 comments:
Hey Policyboy, why don't you take on someone your own mental size?
"Think of a patient suffering from a grave viral infection who is treated with antibiotics"
I couldn't get past this point in her article, even with your lively comments, because the unintended irony was too much: as most 6th graders know, very few viral infections can be treated with anything other than supportive care (anti-virals, while in existence, are almost completely limited to herpes simplex infections.)
The possibility of another lightweight talking about the macroeconomic theories that support expansionary fiscal policy made my brain freeze...
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