The Government Doesn't Listen to Reason

The government does have a handful of people worth listening to. While not always hitting the nail on the head, Sheila Bair, Chairman of the FDIC, seems to be more right than wrong, in my opinion. Now this may be a bit of Monday morning quarterbacking, but she is publicly pointing out how it would have been better to break up some of the financial institutions instead of propping them up with TARP. A wonderful idea that the Administration doesn't seem to be willing to confront. Of course, when you fill you house with people from the industry, what do you expect?

Did I Mention, The Recession is Over

You probably already know this, especially if you are part of the 10.2% unemployed, but everyone seems to be saying the recession is over. The NY Times notes this in the following article.

Indeed, even Europe has passed the downturn and is on the road to recovery. Don' t believe me? Read this.

Sure, the piece is a bit down on the prospects for the UK but most of the rest of Europe is just peachy.

Yep, that decides it, the recession is over and everything is fine. Why doesn't it feel that way?

Well, for plenty of people the recession has not ended and perhaps never will. They have hunkered down and will remain in that state for some time to come. Others have learned that being frugal is not the worst thing in the world, which of course is a matter of degree. There is a difference between frugal and true poverty. But for those getting by, just more cheaply, they are learning some of the joys of doing it yourself. My wife cannot understand why I like to mow the lawn, do the fall clean up, stain the deck and do other things around the house myself. In part it is the money I save but largely I just enjoy doing it. And if you can come up with projects that the whole family can do, so much the better.

Disclosures: None.

Comments

[phil from E...:]

Sheila Bair gets a lot of favorable press but for what? The FDIC would be as insolvent as any Wall Street bank if she didn't have the backstop of Treasury and the ability to assess the banking industry for funds.

The 3 year prepayment of assessments borders legitimate fraud. It is a legality stretched to justify the accounting the banks want and need. It's a prepayment because FDIC says it's a prepayment. Let's see 3 years down the road what happens. I'm betting another "prepayment".

Nov 15 10:14 AM

[Moon Kil Woong:]

First off the FDIC's only credible solution to their underfunded system is to raise premiums just like any insurer. Phil is right in mentioning that this is a sham.

Even so, I like Sheila Bair in general. She has been more on point with reality than the SEC, Federal Reserve, and Treasury during the Obama and Bush Jr. Administration. For that she gets my respect. She also is 100% correct that the collapse of the too big to fail financials should have gone through the FDIC. Sadly, she is way too even handed for the bankers to ever feel safe with handling their mess. They would much rather have Paulson declare the end of the world so they can get anything they want and everyone can approve the Federal Reserve abandoning all legal precedent and print its own money using quantitative easing.

This catastrophe certainly has not been wasted on those trying to steal both money and power.

Nov 15 11:25 AM

[Adoptsalot:]

Possibly one of the best interviews I have seen in six months. A lot of topics covered. Very interesting.

www.pbs.org/now/shows/...
Elizabeth Warren on the Economy
Stocks are up, but so is unemployment. What's wrong with this economic picture and what's being done about it?
What exactly is going on with the economy? Stocks are up and big bonuses are back, but while they're throwing parties on Wall Street, there's pain on Main Street. One out of every six workers is unemployed or underemployed, according to government statistics - the highest figure since the Great Depression.

This week NOW gets answers and insight from Harvard professor Elizabeth Warren , who's been heading up the congressional panel overseeing how the bailout money is being spent. NOW Senior Correspondent Maria Hinojosa talks with Warren about how we got to this point, and where we go from here.

Nov 15 07:12 PM