Paul Krugman says “no deal“.
Numerous other economists express scepticism.
Obama poses some general principles/objections.
Bernie Sanders is more specific.
An anonymous member of Congress is shrill.
What do The Editors think? wonders the economic policy community, turning their lonely eyes to me. Well: the primary fault here lies with the institutions who wrote bad mortgages, then with the institutions who laundered these into ridiculously-overvalued securities, and finally with the financial geniuses who bought this nonsense and are now left holding big piles of shit. The sins range from poor risk assessment to professional malpractice to flat-out fucking lying. As this albatross-laundering scheme was carried out in what was at best (I gather) a regulatory gray area, it’s hard to see how the government holds any particular liability here, except for not adequately babysitting the private business transactions carried out by adults. As these under-regulated securities carried no FDIC-type guarantee, I can see no reason for the government to feel obliged to back them up. Which is to say: I am enough of a free marketeer that my prejudice is to let failing enterprises fail, and I’m sure that, were it anybody else’s ass in the fire, the good people who run these failed enterprises would be taking to the pages of the WSJ to editorialize in support of this view. Now, I am sympathetic to the argument that the overall consequences to the economy of letting Big Shitpile fall apart naturally would be too horrible; but, if that is the case, I would like my pound of flesh, please.
September 21, 2008 at 3:48 pm
Thirty years of conservative governance, summarized:
1. Taxes on the rich are too high. Cut them.
2. Social Security is doomed to failure. Raise the FICA payroll tax.
3. Brown people are scary. We need to pay Republican-held corporations billions of dollars so we can invade and occupy their countries.
4. FICA withholding doesn’t really go to Social Security. We need that money to pay off the debt we ran up invading and occupying the countries of scary brown people.
5. Social Security is doomed to failure again. We need to put the rest of FICA in the markets to save it.
6. The markets aren’t meeting their potential due to federal regulations. We need to deregulate so that investors can take more and bigger risks.
7. Uh oh, a bunch of rich people are losing money because they made loans to people who couldn’t afford to pay them back. We need to use the tax revenue we increasingly take from working people to bail those rich people out, because if those rich people go broke then we will have a real tragedy on our hands.
8. The poor people that went broke when they lost their jobs and went underwater on their mortgages? Screw them, they were stupid and were going to end up broke anyway.
9. Socialism is evil except when we do it to save the rich.
Repeat.
September 21, 2008 at 4:33 pm
bring back the guillotine.
September 21, 2008 at 4:48 pm
Year Zero for Wall STreet. i’m talking VP-level and above. wipe them all the fuck out. clarify just what a “moral hazard” really is–a “pound you in the ass jail” hazard. let out everyone who has been convicted of any crime relating to marijuana use and replace each and every one of them with Senior Managers at every major firm in NY, the entire WSJ editorial board (and no rupert, you don’t get to choose their replacements), all REIT salesmen, all mortgage mill millers, all deregulators of banking industries (perhaps putting the Democrats who voted for bank dereg and the bankruptcy bill should start off with a year of solitary, the better to allow them time to wrap their heads around THE HORROR), every Ph D from MIT who gins up a bunch of complex bullshit so that he can buy a bunch of stuff and fuck hot chicks, in fact throw in the majority of the economics professors at Harvard, MIT and so on who don’t seem to understand how to teach ethics to their charges…
i want them all to be like Toby Beecher in Oz, the upper middle class white guy with a drinking problem (an accountant, i believe) who ends up with a swastika tattooed to his forehead and some aryan nation cock up his ass. unprotected.
too harsh?
September 21, 2008 at 4:59 pm
Conservative Fiscal Conservatism 101
Fall 2002: President Bush, issuing dire warnings against a failure to act, stampedes Congress into authorizing use of military force against Iraq. Price tag $550 billion and counting.
Fall 2007: President Bush, citing concerns that an expanded program to provide health insurance for children might hurt private health insurance companies, vetoes the SCHIP bill. Savings: $6 billion per year.
Fall 2008: President Bush, issuing dire warnings against a failure to act, stampedes COngress into authorizing the use of monetary funds for moguls. Price tag: $700 billion and counting.
September 21, 2008 at 5:14 pm
No pounds of flesh. Heads on pikes, please. I want wholesale slaughter (either financial or physical will do) of all those responsible for creating this mess, as well as those who profited so richly from it. Fire all the senior executives immediately with no parachutes of any sort, revoke all stock options from the day they were hires, and force them to pay back all bonuses and other extra compensation from the past five years. I would also argue that we either triple the capital gains tax or abolish it altogether and treat capital gains like any other income with a maximum tax rate of 50% on incomes over $200K (I would do the same to the inheritance tax as well). Those who created this mess must be made to pay substantially to clean it up.
September 21, 2008 at 5:17 pm
If only the Democrats hadn’t proven time and again that they are every bit the corporate whores that the Republicans are (they just have a little more modesty), I might think that we have a chance.
Sadly, we’re fucked.
September 21, 2008 at 5:18 pm
This mess can’t be fixed by the current American politics. Americans need education, the elimination of the influence of economic benefit in politics, and force Congressman to write their own bills, not lobbyists.
This problem is a twenty-five year fix. Invest in K-College education on civics and economics, everyone in this country needs more then twelve years of school. Universal Health Care and Universal College and/or work with the pre-established Union Vocational programs that are effective, (see the IBEW Apprentice Program.) I don’t believe in a cash handout to a bunch of wacky strip mall “schools”. That;s just more predatory capitalism.
We need to enforce and expand the fraud laws when it comes to products. The voters want to know the straight, bottom line contents of all products financial and otherwise, and remove the fee frenzy aspect of moving bad paper around. Continue participating in the global market, but take pride in American made products and start manufacturing again.
Change the economics of campaigning with credits instead of cash. Like Intrade, or something new, or whatever until we figure out what works besy. Thirdindary, make it illegal for a member of the legislature to let a lobbyist write their bills. If your congressman can’t write a bill, he/she needs to be exposed and defeated by someone who isn’t dependent on the fucking ticks and leeches.
I know that Bush’s parfting gift to President Obama is the inabillity to spend a dime on the programs he is promising. The other problem is the Chinese and the other nations that own our debt might realize that we’ve been selling them bullshit derivative, magical thinking, computer generated worthless nonsense, and that will fuck up the world economy. Giving the same idiots a trillion dollars to go repeat the same mistakes is a mistake. The market is going up as the timeout on short selling is going to be over, then we will see what kind of problem we really have. It’s not a bad idea to divide as much of your liquid assets by 100,000 and place them in a FDIC insured account for a few months. Just try to stay with or beat inflation, keep your money liquid, realize you don’t know what you don’t know, and buy gold last week. Ooops, to late for that. Real, scare, precious, metals could have made you rich as hell this year.
Seriously, there are lots of opportunities to invest coming up with all the carnage, put your money in a bunker for a few months, then go after the low hanging fruit. And remember have fun during this depression. You can tell your Grand Kids how gritty you are. Plus, don’t fight in the Thunder Dome, it may seem like a good idea at the time, but just don’t. Avoid zombies. You’ll need a dog pal, a Highway Star, and leather to defeat the resources hungry, post-apocalyptic, cannibal biker coalition of the willing. Just keep that photo of “New Eden” or whatever it’ll be called in your breast pocket and your eyes on the road. Warrior.
September 21, 2008 at 5:52 pm
No, just about harsh enough.
(And shouldn’t it be “What *does* The Editors think?”?)
September 21, 2008 at 6:01 pm
The first clue that all was not well was this staggering statement from 2006:
“Last week’s GDP report shows that the U.S. economy continues to be almost exclusively driven by consumer spending. In fact, the net effects of government, investment and trade are negative.”
(http://seekingalpha.com/article/19525-gdp-report-shows-u-s-economy-continues-to-be-driven-by-consumer-spending)
So how could every politician in Washington that wore their gold and fuchsia cheerleading outfits last week to rah rah the American consumer now put on their mourning coats and tsk tsk Joe and Flo Omaha for walking away from a jumbo mortgage? Fuck em. Bail everybody out or nobody out.
“One Death Is A Tragedy; A Million Is A Statistic.” -Joseph Stalin
September 21, 2008 at 6:15 pm
Fire all the senior executives immediately with no parachutes of any sort,
Back in the day, despairing traders used to jump out of the window with no parachute at all. Of their own free will.
September 21, 2008 at 6:20 pm
Sheesh, reality sucks. The 1929 windows exits were a Will Rogers routine.
September 21, 2008 at 7:16 pm
Let em burn.
September 21, 2008 at 7:26 pm
Well, we can’t give you a pound of flesh at this time. But we could leverage that against these 3000 pounds of shit; how would that be? In terms of weight, we’re offering you a THREE THOUSAND PERCENT increase over the amount you originally asked for. How could you possibly lose?
September 21, 2008 at 7:38 pm
Back in the day, despairing traders used to jump out of the window with no parachute at all.
I suggest we push this bunch.
September 21, 2008 at 8:26 pm
Kevin Drum and others ( I am too lazy to Google it, you go ahead now, go git! gtit!) have suggested bailing out the distressed homeowners.I like the idea,
September 21, 2008 at 8:58 pm
I favor the Tamerlane approach: Beseige their fortresses and, once they’ve fallen, slaughter the men, enslave their women and children, pillage their valuables and burn the rest. Since we’ve incrementally abandoned all the other trappings of 17th century Enlightenment, why not?
September 21, 2008 at 9:54 pm
Hey, didn’t the Pats play today? How’d that go?
September 22, 2008 at 12:44 am
I can no longer find a valid link for the The Poor Man’s Institute for Freedom and Democracy white paper on the Theory of Structural Kitten Economics, formally at http://thepoorman.net/2005/08/23/institutionalized. In these uncertain times, this sort of bold economic leadership is called for. Is there any chance of getting a repost or fresh link?
September 22, 2008 at 12:45 am
that should of course read: The Poor Man’s Institute for Freedom and Democracy and a Pony. my apologies.
September 22, 2008 at 4:51 am
We’re handing over $700 billion to our Wall Street overlords – is that the “trickle-up” economic theory?
September 22, 2008 at 5:56 am
Yes, I agree: The Giants broke the Patriots’ brains.
Amazing how much Belichick managed to accomplish with just a slight unfair disadvantage.
I say we let them film other teams’ practices again. It’s sad to see Pats fans suffer.
September 22, 2008 at 6:52 am
Let them eat SHIT!
If nothing else the debate on this should be drug out as long as possible. The only reason we don’t see people flying out of windows on wallstreet is because the markets haven’t really tanked yet. Let ‘em sweat this shit out ’til thursday… Then we’ll see some jumpers. (actually I doubt any of them can open their windows anymore)
September 22, 2008 at 6:53 am
Stupid carol burnett, I can’t believe she’s actually cheering for people to commit suicide.
September 22, 2008 at 10:10 am
Atlas Begged
September 22, 2008 at 10:49 am
With any luck, Paulson can become America’s Paul Bremer.
September 22, 2008 at 11:24 am
You’re seriously asking to give these fuckers free liposuctions in addition to all the rest?
The simple answer is to replace the stock market with the public stocks, for 1 (one) week. Every banking executive with their head and hands manacled, all guns and rotten tomatoes confiscated at the door (this is just humiliation, not pain), no bathroom breaks, 8 hour shifts, full medical attention available.
And no, this is not a joke. If I were joking, I’d gloat about the tomatoes – I’m serious. Humiliation is plenty, without pain. Anybody who threw something at them should spend a night in jail – there are plenty of cameras at that place to see who threw what. This is not vindictive, this is a rational plan to build our future economy on a solid basis.
September 22, 2008 at 11:37 am
“bring back the guillotine.”
You impatient impudent little diaper mannequin:
I’m not FINISHED w/ it yet!
Waiter! More Cheney Turducken!
September 22, 2008 at 12:07 pm
Juan Cole is shrill.
September 22, 2008 at 1:27 pm
Bernie Sanders: “A company too big to fail is a company too big to exist.” Perfect.
September 22, 2008 at 4:50 pm
You’re all just a bunch of whiney liberal monsters.
Look at yur gravytars, people!
~
September 22, 2008 at 7:41 pm
The bailout is indeed BS. I just wish I had one of them cushy CEO golden parachute jobs (or one of those cushy Congress/Senate seats, I hear the payouts are pretty good there, too.) Buyer beware if you can’t afford the house. Buyer beware if you don’t know what kind of ‘assest’ you are buying. Buyer beware if you don’t know what kind of stock you are buying. I say let all the losers, from the top all the way down live in a cardboard box under the bridge. I miss the homeless crisis…
September 23, 2008 at 1:37 am
Do I get a different avatar if I use a different e-mail address?
September 23, 2008 at 1:40 am
A brave new era of interchangeable avatariness is dawning.
September 23, 2008 at 4:35 am
I think this succinctly captures the gravity of our situation.
September 23, 2008 at 8:18 am
“A brave new era of interchangeable avatariness is dawning.”
Yes, but only mine is a sentient-y Xmas tree that hovers above its own fart cloud.
Rather like the stock market a year ago.
September 23, 2008 at 9:16 pm
n.b. folks: you can pick your own avatar if you go to wordpress.com and sign up for an account. You have to hunt around a little bit before you find the link that lets you create an account without creating a blog, but it’s there, swear.