Your turn.

This is an Open Thread.

Writing about the political difficulty of "nationalization," Matt Yglesias glosses over the fact that the Obama/Geithner plan of free bailouts is a complete nonstarter politically. Matt writes:

Nationalizing banks would mean nationalizing the banks’ losses. That would cost a ton of money. Money that congress would need to authorize. If I were a member of congress, I would gladly vote to appropriate the funds. But would the actual members of congress? You can see where doubts might creep in.

Temporary takeovers are supported by the American People by 2-1 over more free bailouts. TARP was it. There will be no more. In fact, temporary takeovers are fast becoming the only viable solution politically. More. . .

In a post on how lousy the Media is, Tristero argues that:

[T]he meme the press is toying with right now, surely abetted by Republican operatives, is that Obama always avoids the hard decisions. A nice guy, the president, but just not tough.

I thought they were toying with the meme that Obama is a socialist? And that Obama was fighting back by dismissing critiques of progressive economists of his and Geithner's efforts on the financial crisis (you know the one where dismisses Krugman, Roubini, Stiglitz, et al?). In other words, unless, Stiglitz, Roubini and Krugman suddenly became GOP operatives, I think Tristero got this one wrong.

Speaking for me only

Since we all read Krugman, I'll put the link here and quote the part I think most important:

As I read it, this dismissal [by Obama of concerns about the Obama approach to the financial crisis] — together with the continuing failure to announce any broad plans for bank restructuring — means that the White House has decided to muddle through on the financial front, relying on economic recovery to rescue the banks rather than the other way around. And with the stimulus plan too small to deliver an economic recovery ... well, you get the picture. Sooner or later the administration will realize that more must be done. But when it comes back for more money, will Congress go along?

The moment of truth fast approaches. Bold or timid? FDR or Jimmy Carter? Obama must choose. And soon.

This is an Open Thread. The opinions expressed above are mine alone.

I think not much longer. From the NYTimes:

Analysts say it is far too early to know if Mr. Geithner and his team will be effective. But some worry that political and financial constraints have made them reluctant to grapple with the full magnitude of the crisis.

Many financial experts estimate that the nation’s banks are holding as much as $2 trillion in troubled assets . . . To avoid asking Congress for more money, Mr. Geithner has been trying to stretch government money by working with private investors, the Federal Reserve and government-controlled companies like Fannie Mae and Freddie Mac, the mortgage giants. But that has introduced other tough policy issues, many of which remain unresolved. “Their huge problem is that the American public is not willing to accept large losses for large financial institutions,” said Vincent Reinhart, . . . “Everything they are doing is about having the smallest possible footprint on the federal budget. They don’t want to engage the Congress and they don’t want to engage the American people in that discussion.”

(Emphasis supplied.) The ostrich approach does not have much life left I think. Speaking for me only.

GOP House leader John Boehner has been rightly ridiculed for his absurd spending freeze plan in the throes of a economic depression. Boehner of course offered this plan as a solution to the coming depression. The WaPo Editorial Board wrings its hands over "excessive spending" without even referencing the current economic situation:

More noteworthy is the significant jump in domestic spending that is built into the annual baseline. Critics of the spending package say that the increase is 8 percent over last year's levels; for complicated bookkeeping reasons, the number as scored by the Congressional Budget Office is closer to 6 percent. Either way, this jump raises both short- and long-term concerns. . . . [I]ncreases of this size cannot continue; it's worrisome that the president's proposed budget for 2010 appears to envision another increase in excess of 6 percent in this category.

You see? Fred Hiatt and Co. are worried about the 6% increase in spending, but not the 6.2% contraction in the economy in the 4th quarter. They are not worried that we are shedding jobs at a 600,000 per month clip. Yet again, the disconnect in the Beltway is incredible.

Speaking for me only

Ex-tenured University of Colorado professor Ward Churchill finally gets his day in court. His lawsuit against the University begins today in Denver District Court.

Churchill was hired by the university in 1978 and in 1991 became a full-time professor with tenure in the ethnic-studies department. He eventually became chairman. Churchill, who has published several books and articles, has received writing and university awards for his teaching.

Then someone came across an essay he had written mentioning 9/11. "He says the essay was taken out of context." [More...]

Times-Standard reporter Dave Santcliff writes that California could lead the nation out of the depression by legalizing marijuana:

Right now Californians pay $170 million a year for arrests, prosecution and imprisonment of pot offenders, according to statistics released from NORML. Poof! That would go up in smoke, and reduce the prison population as well.

Right now there's talk among lawmakers of an early release program for as many as 58,000 prisoners in the next couple of years because of overcrowding and fiscal shortfalls. There are plenty of good reasons to support AB 390.

As It Stands, it's time to legalize marijuana and jumpstart California's sagging economy into the 21st century.

[More...]

The Economist has an excellent cover story this week cataloging the extraordinary failures of the drug war.

I was particularly gratified to read the Economist's editors write that the fear of legalization is "based in large part on the presumption that more people would take drugs under a legal regime. That presumption may be wrong. There is no correlation between the harshness of drug laws and the incidence of drug-taking: citizens living under tough regimes (notably America but also Britain) take more drugs, not fewer."

That's exactly right, as I argued a couple of weeks ago here at Talk Left in a post titled "The Legalization Scare" [More...]

NYTimes:

John McCain and Richard C. Shelby, two high-profile Republican senators, said on Sunday that the government should allow a number of the biggest American banks to fail. “Close them down, get them out of business,” Mr. Shelby, the senior Republican on the Banking Committee, told ABC’s “This Week With George Stephanopoulos.” “If they’re dead, they ought to be buried.” While the Alabama senator did not say which banks to shutter, he suggested that Citigroup might be on that list, saying the bank has “always been a problem child.”

Mr. McCain, appearing on “Fox News Sunday,” echoed that sentiment without identifying any banks. Mr. McCain, who lost the presidential election last November, also accused the Treasury Department of avoiding the “hard decision” to let “these banks fail.”

[More...]

Well, late afternoon, anyway.

This is an Open Thread.

Probably few will disagree that the goal is desirable. Yet many, of faint heart, fearful of change, sitting tightly on the roof-tops in the flood, will sternly resist striking out for it, lest they fail to attain it.

-FDR, 1932

Alan Blinder, an economics professor, former Fed Vice Chairman and, as the New York Times, interestingly, chooses to point out at the end of his op-ed (will they do this for all guest pieces now?), someone who has "advised many Democratic politicians" (but never, presumably, any Republican politicians?)), writes in favor of a form of partial nationalization, the "good bank, bad bank" split (guess who gets the bad bank):