elegation's posterous - Filed under 'economy'

March 22, 2009

Alarming News from Straight Shooting Reporter

I'm catching up on old posts from the week, this one from 4 days ago is pretty alarming. In my mind, the NPR reports have been the most straight shooting reporters on the economic crisis. The AIG bonuses have crystallized/embodied that the bailouts have not been fair, and have been executed poorly. Hopefully we will learn from this costly mistake.

"So, my modest proposal of things to be outraged about instead (or, at least, in addition) to the bonuses:

- The pathetic lack of global unity in the response (I'm looking at you: Europe).

- The fact that Congress still doesn't understand the issues well enough to create a coherent response.

- The fact that nobody understands Treasury's real plan and the vagueness of it makes us all suspicious that either there is no plan or they are hiding something from us.

- The stunning lack of reflection from the leadership of banks, ratings agencies, regulators, Congress, the Administration, media, etc, for their culpability.

- The lack of bold, forward-thinking responses. The Administration(s), Congress, and much of the rest of the world seem to constantly be fighting the last fight and catching up on the fly. That is not how it has to be. They can get in front of this--take bold, painful action, and clearly tell us why.

"I've felt more afraid today than I have in months. I was assuming that the government would, eventually, solve things. They'd try a lot of bad ideas, they'd be late and imperfect and inefficient. But they'd solve things. Today -- it's just a feeling -- but I started thinking that maybe they won't solve things. Maybe they'll be so politicized and so populist that the economy will collapse."

via planet money blog from npr

Filed under // economy NPR planet money blog

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October 13, 2008

Bailout Update 10/13: British become clear and decisive leaders

From the new nobel prize winner in economics Paul Krugman:

"But the Brown government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions. And this combination of clarity and decisiveness hasn't been matched by any other Western government, least of all our own.

...

I also wonder how much the Femafication of government under President Bush contributed to Mr. Paulson’s fumble. All across the executive branch, knowledgeable professionals have been driven out; there may not have been anyone left at Treasury with the stature and background to tell Mr. Paulson that he wasn’t making sense."

flickr photo via schillergarcia

Filed under // bailout economy krugman new york times

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October 10, 2008

Bailout Update: US to Buy Bank Stock

Is the Bush Administration reading Paul Krugman?

"What he should have proposed instead, many economists agree, was direct injection of capital into financial firms: The U.S. government would provide financial institutions with the capital they need to do business, thereby halting the downward spiral, in return for partial ownership. When Congress modified the Paulson plan, it introduced provisions that made such a capital injection possible, but not mandatory. And until two days ago, Mr. Paulson remained resolutely opposed to doing the right thing."

It seems scary, but I think they may actually be making some sense.

flickr photo via Itsgreg

Filed under // bailout economy krugman

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October 3, 2008

NYT: Waiting for Schadenfreude

Stumbled upon this article this AM.

by Judith Warner:

"Many of us who'd proudly decided, in our twenties, to pursue edifying or creative, or "helping" professions, woke up to realize, once we had families, that we'd perhaps been irresponsible. We couldn't save for college. We could barely save for retirement. If we set up a "family-friendly" lifestyle, we threw our financial futures down the drain.

So, like just about everyone, we worked hard and treaded water, but felt we were entitled to do better than that. And if we lived in the New York area, or another similarly wealthy area where the spoils of the new Gilded Age were constantly thrust in our faces, we felt, like my friend on the train, a little something more: we knew that we were losers. "

This post probably resonates with me right now as I am trying to choose (and am closer than ever) what I want to do with my life.

Filed under // bailout column economy judith warner new york times

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October 1, 2008

Plan -> Burned -> Goats -> Sharks -> Rocket to Sun

I don't feel quite as strongly as Hunter , but I thought this quote was hilarious and could be re-used for any situation.

"I was previously "skeptical" of the Paulson plan. Now I want it to die a hot, flaming death. I want its ashes to be fed to goats, and the goats fed to sharks, and the sharks put on a rocket and fired into the sun. I want the whole premise to be made Unspeakable, so that future generations shun anyone who even threatens to mention it."

Filed under // bailout economy

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September 25, 2008

Selling the Bailout Package: A Nightmarish Repeat in History

Krugman :

"the plan came first, and all this stuff about price discovery is an after-the-fact rationalization, invented when people started asking questions.

It has seemed very strange to me that such a supposedly crucial economic program would be based on such an exotic argument. My sneaking suspicion is that they started with a determination to throw money at the financial industry, and everything else is just an excuse."

Krugman Again :

The whole premise of the bailout push has been "We're the grownups, we know what we're doing, just trust us." Sorry, but that's how Colin Powell sold the Iraq war. Fool me once, shame on you, fool me twice … you shouldn't get fooled.

Filed under // bailout economy krugman new york times

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September 23, 2008

Uncertainty, the Bailout Plan

The uncertainty in the economy right now is fascinating. It has consumed my attention lately. Making sense of it early on, I wrote this to my family members right after I heard about the Paulson bailout plan:

"Overall I cant believe giving bush an 800 billion dollar blank check in his last few months is a good idea."

Since then, a few posts have caught my sentiment:

Krugman :

"This is telling: if Paulson can't be honest about what he himself sent to Congress — if he not only made an incredible power grab, but is now engaged in black-is-white claims that he didn't — there is no reason to trust him on anything related to his bailout plan."

Kos :

"What we need to determine the extent of this "crisis":

Transparency. Release the presentation Paulson gave to congressional leaders that supposedly has them all spooked. Give us the data and information, and let outside economists pore over the numbers and reach independent conclusions. The Bushies lie and have zero credibility. We can't trust anything they say.

Timing. Why the sudden rush, when the administration has been working on this plan for months? Seems more than a little suspicious.

Solution. We don't know what the problem is, so we really don't know if this solution addresses that problem. What we do know is that it's targeted not just at failing institutions, but any old financial firm on Wall Street that wants a piece of our money. Even those that "are very successful banks and investment houses that have done very well". Heck, did I say "on Wall Street"? I almost forgot. Any foreign bank can apply!

Details. Why $700 billion? Why not start off with, say, $75 billion. Is the emergency so dire that Treasury will spend all $700 billion next week? Doubtful. So put in what would amount to a bridge loan until people have had a chance to full understand the magnitude and severity of the problem. If it's truly as bad as people say it is, further moneys can be appropriated.

Motives. Given that the administration wants to give money to solvent financial institutions, is this just another component of the long-running conservative effort to bankrupt the government to destroy government's ability to improve people's lives?

Incentives: The administration is really concerned that solvent banks may not take the bailout, so it has to be as condition-free as possible. Why is the administration desperate to force taxpayer funds into these private Wall Street institutions? If they don't want our money, everyone wins, best of all, the taxpayers.

Politics. The American people hate this thing, and those approval numbers are only getting worse. Given all the points listed above, whoever votes for this thing, even an "improved" version, will face a world of hurt this November, and if not this year, in primaries and general elections through 2010."

Flickr photo via chi liu

Filed under // bailout dailykos economy kos krugman new york times

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