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Out Of Touch, Part 2

What's interesting about the new DC J-List insiders' (just kidding) take on the AIG bonus mess is how they do not make the obvious connection to the bigger problem of Treasury's timidity regarding the financial crisis. Of course in the scheme of things, the AIG bonuses are a drop in the bucket -- but the problem here is, to coin a phrase, "systemic." Too much energy and political capital has been wasted by the Obama Administration in propping up the old Wall Street order and not enough in trying to figure out what exactly would be best for the country. Thus when Yglesias writes:

If thereís something the administration deserves criticism for, itís the fact that most observers think their public-private partnership for bank recapitalization canít work. If you want to talk about latter-day conservative populists being hypocrites, talk about their stances on the tax provisions in the budget. Thatís the big stuff thatís still in play. On the bonuses, the politicians have heard peopleís outrage and now seem determined to avoid future such blow-ups. Itís fine.

He fails to see the obvious connection with Geithner's sh*tty plans and his political blunder on the bonuses. They are intimately connected. Geithner and Summers are busy trying to save Wall Street, not the country's economy. Therein lies the problem.

I'll grant you that Geithner and Summers think saving Wall Street is necessary to saving the country's economy. And that is where they are wrong imo. They believe that these Masters of the Universe are essential to saving the economy. I do not believe they are.

Of course we need a vibrant financial system and eventually a new private sector financial industry will rise. But that does not mean we need, or can even afford, the old Wall Street that we have now.

If old Wall Street needs new money from the Obama Administration, I think it can not be gotten anymore. The days of the free bailout are over. Ironically, Geithner's political blunder doomed his plan to save Wall Street. And it may get him to concentrate on saving the country's economy. Which will be good for him, for President Obama, and most importantly, for the country.

Speaking for me only

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    I think the main goal of the elites (5.00 / 2) (#5)
    by SOS on Thu Mar 19, 2009 at 08:18:08 PM EST
    is to keep people happily twittering till they finish up this final ripoff and fortify their gated estates.

    Luckily.... (none / 0) (#18)
    by kdog on Fri Mar 20, 2009 at 09:06:32 AM EST
    there isn't a gate strong enough to withstand desperate men and women.

    I dont mind stealing bread
    From the mouths of decadence
    But I cant feed on the powerless
    When my cups already overfilled

    - Temple of The Dog

    If they keep feedin' on the powerless it will bite them in the arse...for their sake I hope they wise up before it is too late.

    Parent

    You know, BTD, I don't always agree with you (5.00 / 3) (#6)
    by tworivers on Thu Mar 19, 2009 at 08:29:23 PM EST
    But you're right on the money here.

    What Yglesias and Drum fail to understand is that the political tone deafness of the Obama admin. with regards to AIG bonus controversy is tied directly to Geithner and Summer's incomprehension of the new economic reality.  The outdated approach and mindset that Geithner and Summers are working with does not apply in this new reality.

    Was reading some Galbraith today (5.00 / 4) (#7)
    by Militarytracy on Thu Mar 19, 2009 at 08:35:58 PM EST
    Claims we have gone beyond anything in the "models" that over educated economists cling to.  Claims that if we want to know what to do and where to go from here we must study the other Great Depression.  He claims that banking was the last thing to recover then and when everything shakes out this time it will be the last thing to recover now, and that instead we must focus on how badly our seniors have been robbed blind and set up to end life poverty sticken.  We must make certain that medicare and social security are top notch and paying nice sums and that we need to lower the retirement age in order to create some middle class substance again.  Every instinct in my body tells me he is completely correct!  I just got a fresh print out too from the Soc Security Admin as to how much I'm worth to my husband, who would have to raise our disabled son alone, dead.  I haven't worked since Josh was born, that is nine years now.  I was a full time mostly "glistening" part of the labor force though prior to that for 20 years and now I don't qualify for disability that I have gone beyond not working 8 years. And the benefit that my family would receive at this point to make up for the loss of me to care for a disabled child was dismal.  I sort of felt raped because I well remember how important the benefit I received from my mother's death was when my poor father became very nonfunctional.

    Nobody knows what to do (5.00 / 1) (#8)
    by nellre on Thu Mar 19, 2009 at 09:05:44 PM EST
    But they know they have to do it in a hurry!

    I said something (5.00 / 0) (#9)
    by cal1942 on Thu Mar 19, 2009 at 10:31:54 PM EST
    to this effect a couple weeks ago.

    Geithner and Summers are busy trying to save Wall Street, not the country's economy. Therein lies the problem.

    I said that Geithner and company couldn't get their heads around what needed to be done, that they could only think in terms of restoring the status quo. I got jumped on.

    BTD said it much more elegantly.

    The point is that the current finance industry model is a disaster, a model that put us where we are and there is need for fundamental reform.  

    So, (none / 0) (#1)
    by NJDem on Thu Mar 19, 2009 at 07:42:03 PM EST
    I like to go to the 'other side' to see what they're thinking and I found this link you may find, well, interesting...

    p.s. have a safe trip if you're still on the plane :)

    Comments funny, especially Klein's (5.00 / 2) (#2)
    by Cream City on Thu Mar 19, 2009 at 07:51:46 PM EST
    in his self-defense.  Of course, the humor in his comment was unintentional. :-)

    Parent
    Out of touch indeed!!! (none / 0) (#3)
    by star on Thu Mar 19, 2009 at 08:04:23 PM EST
    How outraged are people going to be over this? bailing out "responsible gamblers" !!!!!

    http://www.huffingtonpost.com/roy-rivenburg/obama-urges-bailout-for-r_b_177165.html

    State of DisUnion (none / 0) (#4)
    by SOS on Thu Mar 19, 2009 at 08:12:15 PM EST
    Companies beef up security

    Last update: 6:30 p.m. EDT March 19, 2009SAN FRANCISCO (MarketWatch) - U.S. companies are being advised to batten down the hatches for their annual meetings this year amid rising anger among investors and the public over bonuses, bailouts, layoffs and slumping share prices.

    Are you joking when you indicate (none / 0) (#10)
    by Green26 on Thu Mar 19, 2009 at 10:41:30 PM EST
    that the economy doesn't need Wall St.?

    As I've said in the past, too many Dems don't have a clue about business or what drives the US economy. Hint: Wall St. is critical to business and the US economy. Capital is critical to business and the economy and capital comes from Wall St.

    Try reading the post again (5.00 / 1) (#11)
    by Big Tent Democrat on Thu Mar 19, 2009 at 10:52:08 PM EST
    Here's what I disagree with. (none / 0) (#12)
    by Green26 on Thu Mar 19, 2009 at 11:22:24 PM EST
    "I'll grant you that Geithner and Summers think saving Wall Street is necessary to saving the country's economy. And that is where they are wrong imo."

    Saving Wall St. is necessary to save the economy.

    "Of course we need a vibrant financial system and eventually a new private sector financial industry will rise."

    A new private sector financial industry will not rise.

    My views are based on having been involved in raising capital for almost 35 years. While Wall St. surely isn't perfect, the US system of raising and distributing capital is the best in the world.


    Of course a new Wall Street will rise (5.00 / 1) (#13)
    by Big Tent Democrat on Thu Mar 19, 2009 at 11:25:33 PM EST
    you are being silly.

    Parent
    supply & demand (none / 0) (#16)
    by Fabian on Fri Mar 20, 2009 at 04:55:30 AM EST
    If the demand is sufficient, some enterprise will arise to supply the services/goods demanded.

    Parent
    Best system... (none / 0) (#19)
    by kdog on Fri Mar 20, 2009 at 09:10:40 AM EST
    for Wall St, yeah, the rest of us...not so much.

    I mean look around man...jeez.

    Parent

    Then, you are being naive. (none / 0) (#14)
    by Green26 on Thu Mar 19, 2009 at 11:36:55 PM EST
    I don't expect you to agree on this and other business points. However, I know my views are based on considerable experience, as well as what I read. Yours appear to be based on political views and what you read.

    Wall Street necessary? (5.00 / 0) (#15)
    by NYShooter on Fri Mar 20, 2009 at 03:13:38 AM EST
    Ridiculous!

    Almost everything has a life cycle: birth....maturity....death

    There were times in our history when Wall St. provided a useful function. But, like all cycles, it burned out.

    At one time, banks had to compete, had to provide service and value to their customers. If they did a good job, they made a profit, and shared some of it with its employees.

    Then the Wall Street Worshippers de-regulated, consolidated, and monopolized.

    Later in the cycle, they discarded the notion of value and service. Instead, they looked upon their customers as "marks" to be fleeced. Why provide value when you can fleece? In came the "fees." $45 for one hour late payment; $39 for 10 cent overdrafts; schedule payments guaranteeing a huge increase in late fees, ad infinitum; until today, when fees make up more of a bank's bottom line than their core business.....lending, and collecting interest..
    When fleecing their customers became too easy, they decided to fleece their shareholders; in came 100 million dollar bonuses. Did you know that some of the largest "investment banks" skim as much as 40% of profits for executive compensation.
    They just ran out of new ways to screw the public and shareholders, so they turned to alchemy; razzle, dazzle, snip, chop, and puree.....CDS'S.

    If Wall Street disappeared tomorrow, the tens of thousands of regional banks would swoop in and pick up the pieces so fast, you'd be wearing your jock strap for a necklace before you knew what hit you.


    Parent

    NYshooter - Nice jewelry metaphor to wake up to! (none / 0) (#17)
    by DFLer on Fri Mar 20, 2009 at 07:15:04 AM EST
    Hey, my scholarship (none / 0) (#20)
    by NYShooter on Fri Mar 20, 2009 at 09:22:36 AM EST
    was for baseball, not S.A.T's.

    I try.....lol

    Parent

    Hey, I liked it! (none / 0) (#22)
    by DFLer on Fri Mar 20, 2009 at 04:22:53 PM EST
    and it was a fun wake-up call.

    been trying to come up with a similar metaphor for da gurlz. okay, just did. How about:

    "you'd be wearing your pelvic protector for pendant!"

    Parent

    mmmm, actually (none / 0) (#23)
    by NYShooter on Sat Mar 21, 2009 at 03:04:07 PM EST
    "pelvic" is a region; pee-pee is site specific.

    pee-pee protector for pendant.

    needs work, but getting closer......lol

    Parent

    Like I said, alot of you don't have (none / 0) (#21)
    by Green26 on Fri Mar 20, 2009 at 10:36:35 AM EST
    a clue about business, capital raising and Wall St.

    Wall St. is more than big banks. It's big investment banks. It's also other financial institutions, as well as stock exchanges, rating agencies, etc.

    It takes many many years to build these institutions. It takes alot of capital to finance and run them.

    Smaller banks don't have the capital, resources or lending limits to make alot of the loans that big banks make. If it were so easy for small banks to step in, why don't they step in now, take away customers and make loans, while the big banks are hurting and not lending.

    If Wall St. doesn't recover, the US and world economies won't recover for decades, if ever.

    Obama, Gaithner and others understand this; some of you apparently don't.

    Parent