"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister
"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."
- Daenerys Targaryen
"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"
- Tyrion Lannister
"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."
- Jorah Mormont
"These bad people are what I'm good at. Out talking them. Out thinking them."
- Tyrion Lannister
"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."
- Michael Barone
"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker
Friday, February 13, 2009
Thursday, February 12, 2009
Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th.We should probably follow their example regarding how they set up their healthy banking system and while we're at it take a look at their health care system.
I vote we skip right to the Swedish Model
Brad DeLong has some notes on the Geithner Financial Rescue Plan:
7. The net effect might be that fears that banks are insolvent or will become illiquid will ebb.
8. And the financial crisis and the Bush depression will come to an end.
9. But Geithner said this is not the end--that if the TARP money is expended and if banks still fail their stress tests, then what...
10. This plan does not foreclose a resort to the Swedish model, it is instead an attempt to use the TARP money to escape the necessity for adopting the Swedish model.
Executives from the financial institutions who received funds from the $700 billion banking bailout faced their critics on the House Financial Services Committee yesterday in Washington. The chief executives at the hearing were: Kenneth D. Lewis of Bank of America, Robert P. Kelly of Bank of New York Mellon, Vikram Pandit of Citigroup, Lloyd C. Blankfein of Goldman Sachs, Jamie Dimon of JPMorgan Chase, John J. Mack of Morgan Stanley, Ronald E. Logue of State Street, and John G. Stumpf of Wells Fargo - CEOs from the too-big-to-fail banks essentially.
Instead of facing a firestorm, as the regulators at the SEC recently did, they got a "slow burn." One wonders if this happened because the banks are about to endure a "stress test" or because the critics have major employers in their districts who are on the hook to these banks. Maybe they even get campaign contributions from employees of these banks. Even though they were part of the problem, no doubt these CEOs will have to be part of the solution, so perhaps the critics were "looking foward" as Obama would say. Probably it's all of the above.
Robert Reich writes about perp walks at Congress at his blog:
When in 2005 Yahoo surrendered to Chinese authorities the names of Chinese dissidents who had used Yahoo email, and Google created for the Chinese a censored version of its search engine (removing such incendiary wordsa s "human rights" and "democracy," many Americans were outraged. Executives of both companies were summoned to appear before the House Subcommittee on Human Rights. Christopher Smith [(R-NJ)], its chairman, accused Yahoo of entering into a "sickening collaboration." He ridiculed the firm’s avowed justification for revealing the names of dissenters, saying if Anne Frank had put her diaries on email and Nazi authorities wanted to trace her down, Yahoo might have complied if Yahoo’s email system had exposed Nazi Germany to American culture. The late Tom Lantos, a leading Democrat on the committee and the only Holocaust survivor in Congress, asked the assembled executives "are you ashamed? Yes or no?" He called their behavior a "disgrace" and asked how they could sleep at night. James Leach, a Republican from Iowa, accused Google of serving as "a functionary of the Chinese government," adding that "if we want to learn how to censor, we’ll go to you." Smith subsequently introduced a bill to prevent American companies from, among other things, cooperating with censorship, but no one expected it to pass, and neither Smith nor any other member of congress pushed for it.You have to wonder if Yahoo and Google helped John Poindexter with his - now defunct - Total Information Awareness Program. Hopefully Obama and the new Congress will get tough with laws and penaltites.
Perp walks like these may serve a useful public function. Rituals of public shaming are not inconsequential. But they're no substitute for laws and penalties that prevent the conduct in question from recurring.
Another intelligent guy I would include in my economic crisis rogues gallery along with Robert Samuelson is the blogger Mickey Kaus. He's on a permanent jihad against things like unions, welfare, immigration reform - you know, stuff that would help out the little people suffering during a global economic downturn.
Avigdor Lieberman, the ultranationalist, did well on a weird platform, combining a secular attack on the religious - proposing civil marriage for instance - and a vigorous scapegoating of Arab Israelis, the "enemy within."
I believe the first time I read this fact was in Hitchens's bestseller God Is Not Great: How Religion Poisons Everything. Adam Gopnik recently had a book come out on Darwin, Lincoln, and Modern Life.
To honor this happy coincidence I'm having a super blogfest.
Tuesday, February 10, 2009
Robert Samuelson comes to mind as someone who's usually either picking on old people over Social Security or picking on "pampered" European workers or ginning up generational warfare on behalf of the well-to-do. But the economic crisis has him writing some relatively decent columns here, here, here, and here which contradict much of what loony-tunes GOP politicians are arguing.
In his columns, Samuelson "talks the economy down" and engages in much-derided "fear mongering":
This democratic (with a small "d") despondency has many causes. As more Americans invested in stocks, more became exposed to the market's wild psychological and financial swings. The plunge in home values has made many workers with secure jobs poorer. And, of course, layoffs themselves have become more democratic. Once, the young and blue-collar workers bore the brunt of firings. Now, managers, investment bankers, journalists, scientists - almost anyone - can be canned. Age confers little security. In December, almost a third of the jobless were 45 and over.I'd just add that throughout his career Samuelson has argued against public policy that mitigates all of this.
What offends middle-class Americans, most of us, is economic capriciousness. People crave order, predictability and security. They want to believe that personal virtues of studying, working hard and planning will be rewarded in the marketplace. Even in good times, these ambitions are often frustrated. But in today's economy, the disconnect has widened. Setbacks and losses seem increasingly divorced from personal effort. Our whole values system seems besieged.
Sunday, February 08, 2009
Roubini and Setser, February 2005 http://tinyurl.com/dl20090207: [In the early 2000s] The Federal Reserve responded aggressively to the sharp falls in US equity markets, and the Bush Administration added a massive fiscal stimulus to the Fed’s monetary stimulus: as Ken Rogoff (2003) has noted, the US recovery was the best recovery money could buy.... [F]oreign central banks were unwilling to let their currencies fall against the dollar, and intervened massively... a seemingly unlimited credit line from the world’s central banks funded the expansion of the US fiscal deficit, preventing the growing stock of Treasuries from crowding out private investment....
A cooperative grand bargain... offers the best chance for unwinding of the US external imbalance without a sharp deceleration of US and global growth. However, such a bargain looks increasingly unlikely.... China may be willing to add $240 billion, or even $300 billion, to its reserves for another year. We doubt it will be willing to do so for two more years.... [T]he risk [of] a disorderly unraveling... a sharp correction of the US dollar and of the US bond market, a surge in US long-term interest rates, a sharp fall in the price of a wide variety of risky assets (such a equities, housing, high-yield bonds, and emerging market sovereign debt) - are growing. Such an unraveling could result in a sharp economic slowdown in the US. It will force countries that now depend on US demand growth for their growth to adjust as well...