Economic imperialism

Krugman lays it down

The bank bailout plan is a stinker, sez Paul Krugman:

 

Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

This is more than disappointing. In fact, it fills me with a sense of despair.

After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.

I think the operative phrase is "clouded by excessively close ties to Wall Street." Both Tim Geithner and Ben Bernanke are creatures of the massive entitlement culture that spawned the erstwhile Masters of the Universe. Basically, instead of following the "nationalization" plan of seizing the banks and placing them in receivership until their assets are rehabilitated -- a model that served us well during the last Bush-era financial brouhaha, the savings and loan scandal of the late 1980s, and a model that rescued the Swedish economy -- Geithner wants to purchase the "toxic" mortgage-derivative assets held by the banks at a far higher price than that at which the allegedly infallible free market values them. And he's willing to give them subsidies in order to do so.

Once again -- privatizing the profits, socializing the losses. Damn it feels good to be a banksta.

-A

 

 

Meet the new boss

 Part of the problem inherent in the many-armed bailout of the financial sector is that it hasn't been clear exactly who's in charge. Prior to and during last fall's financial meltdown, it was clear that the money men were calling the shots -- and the grim aftermath of that orgy is apparent to everyone.

President Obama was catapulted into office largely on the hope that it would be he -- and, by extension, us -- who was now in charge. But it seems that the bankers are still calling the tune. Obama's apparent impotence in the face of the AIG bonus scandal, for example, seems to speak to the pervasive influence that the financial sector still weilds over the legislative process.

And now, as the next stage in Obama's bank rescue plan goes forward, the banksters are still acting as if they didn't torpedo the whole economy, as if they are still somehow entitled to the largesse they took for granted. From the NY Times:

 

But some executives at private equity firms and hedge funds, who were briefed on the plan Sunday afternoon, are anxious about the recent uproar over millions of dollars in bonus payments made to executives of the American International Group.

 

Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms, according to people briefed on the conversations. The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress, these people said.

I went into the wrong line of work. Shoulda been a banksta.

-A

H/T Atrios

Flashpoints on 03/24/09

Program: 
Flashpoints
Air date: 
Tue, 03/24/2009 - 10:15am - 11:00am

Journalist Greg Palast on the 20th anniversary of the Exxon Valdez spill and the current economic meltdown. And Malik Rahim of Common Ground Relief on the current financial situation.

The Abe and Joe Talk Radio Show on 03/24/09

Air date: 
Tue, 03/24/2009 - 8:00am - 9:00am
Short Description: 
Abe and Joe dive into Tim Geithner's bank bailout plan

 Abe and Joe dive into Tim Geithner's bank bailout plan, the ongoing looting of the Treasury, and the perks of membership in the ruling class.

Capitalism has Failed & Israel Gives Jews a Bad Name

program date: 
Wed, 03/18/2009

Host Per Fagereng speaks with Saul Landau, scholar, author, commentator, and filmmaker on foreign and domestic policy issues. He has been a fellow at the Institute for Policy Studies since 1972. He has written 13 books, thousands of newspaper and magazine articles and reviews and made more than 40 films and TV programs on social, political, economic and historical issues.  He is Professor Emeritus at Cal Poly Pomona University. They'll discuss two recent articles by Mr.

29:02 minutes (13.3 MB)

False Hopes in Economic News. Can Real Democracy Prevail?

program: 
Presswatch
program date: 
Wed, 03/18/2009

Theresa Mitchell with"the news you're not supposed to know" warns us not to be suckered by news reports that our economy is getting back on its feet. The super-rich and their gambling machine (derivatives) are about to implode the entire global economy.  Hyperinflation, anybody?  Welcome to Zimbwabe!  Will we go fascist? Or can we re-learn the fundamentals of democracy? And grow our own food?

25:16 minutes (11.57 MB)

Flashpoints on 03/19/09

Program: 
Flashpoints
Air date: 
Thu, 03/19/2009 - 10:15am - 11:00am

Catherine Austin Fitts on the A.I.G. Bailout and Controversial Bonuses.

Catherine Austin Fitts is the president of Solari, Inc., the publisher of The Solari Report and managing member of Solari Investment Advisory Services, LLC.  She served as Assistant Secretary of Housing and Federal Housing Commissioner at the U.S. Department of Housing and Urban Development in the first Bush Administration. 

Political Perspectives on 03/19/09

Air date: 
Thu, 03/19/2009 - 9:30am - 10:00am

Host Per Fagereng speaks with Saul Landau, scholar, author, commentator, and filmmaker on foreign and domestic policy issues. He has been a fellow at the Institute for Policy Studies since 1972. He has written 13 books, thousands of newspaper and magazine articles and reviews and made more than 40 films and TV programs on social, political, economic and historical issues.  He is Professor Emeritus at Cal Poly Pomona University. They'll discuss two recent articles by Mr. Landau, "Capitalism has Failed: Face the Facts," and "Israeli Policy Gives Jews a Bad Name." They will also touch on the recent elections in El Salvadore.   www.ips-dc.org/staff/saul

Circle A Radio on 05/06/09

Air date: 
Wed, 05/06/2009 - 6:00pm - 7:00pm
Short Description: 
Howard Zinn compares the economic crisis of today with the Great Depression

In our current economic meltdown, pundents rush to compare our present-day situation to the Great Depression.  We talk with historian, author, playwright, and social activist, Howard Zinn, to explore the truth in the comparisons, and where they fall short.

We also feature Oral Histories from the Library of Congress.

 

Capitalism Hits the Fan: Richard Wolff on the Economic Meltdown

program date: 
Mon, 03/16/2009

Richard Wolff has been a professor of economics at the University of Massachusetts since 1981. Dr. Wolff's major interests include the critical comparison of alternative economic theories (neoclassical, Keynesian, and Marxian), the application of advanced class analysis to contemporary global capitalism, and new developments in Marxian economics. He is a member of the editorial board of several academic journals including Rethinking Marxism. He also publishes regular analyses of current economic events on the websites www.globalmacroscope.com and www.monthlyreview.org/mrzine.

25:15 minutes (23.13 MB)
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