Leftfield

On Bailouts and Moral Hazard

Didn't Washington just sell back $billions of warrants back to GS and a few others before they matured into profitability? Seems, our leaders can't stand it if the taxpayers don't shoot themselves in the foot EVERY time.
The sucker at this poker table is clearly the taxpayer. Who is now forking over the chips to Wall St., win, lose or draw. And, the few leaders who lost their jobs in Sept. '08 drew golden parachutes that could support a city block of normal families, for life.
The specter of mobs with pitchforks is being used to discredit any logical, sensible, moral reform of the rampant abuse of the system by the privileged that's continuing to worsen while Rome burns. Lehman could have been handled with some sensitivity. A false dichotomy between status quo and a straw man of worst case alternatives is stalling any reform and implementation of credible policies. Our overpaid leadership class is demonstrating only skill in acquiring gains for itself. None in solving the problems.

If Another Stimulus Comes, It Needs to Be Different

Anyone can see millions unemployed, $trillions needed to fix the infrastructure and $trillions having been voted for "stimulus" and bailouts and how they could have been combined for the best result .
Instead, Wall St. and Washington took 90% of it for themselves and their cronies. Now, another stimulus with the same thieves in charge?

More Goldman Outrage

Let's hope their greed will be their downfall. The seeds of their destruction. Soon. It will be appreciated if there's something left for the rest of us by then.

Wasted Lessons from AIG

Coming the day after COLA was suspended for SS, coming on a year that is likely a record for Wall St. bonuses, I wonder what line of reasoning our "representatives" use. Is it, these policies will somehow work out, despite all evidence to the contrary? Or is it, don't worry, we're all above the law?
Or is it, such abject stupidity that our lawmakers don't have a clue that the $trillions they're handing out to kleptocrats aren't just party favors?

More on Greed, Regulation, Lehman, The Financial Industry

I admit I tended to swallow free-market ideology right up until TARP disabused me. The point you make about greed and sloth being different sides of the same coin, i.e: Both being about obtaining unearned "rewards" despite any suboptimal social outcomes, is most useful. Big government favors rent seekers of all sorts and I wished to be freed from it's burdens, but the most greedy, the oligarchs, discard free markets in a nanosecond to buy the influence that has suffering Main St. paying $trillions to kleptocrats and the largest bonuses in history to Wall St. this year (Bloomberg radio, 10/13).
So, your plan of regulation and a system to handle TBTF failures looks good to me. I like the part about haircuts; how is it GS got paid 100% on contracts it had with AIG?
I would like to see lots of clawback and, there has to be plenty of flagrant criminal activity to prosecute.

Proposal for Fed to Become the Next AIG

LTCM, then Wall St., now they want the Fed to implode. Keep handing these children bigger toys and it's always the same result. And they keep dragging the rest of us in deeper. I don't recall agreeing to selling my children and beyond to serve Wall St. in the first place.

Exit Strategy: An Argument Against Bernanke's Reappointment

atlasman is completely right.

Six Signs Economy Is Turning the Corner

From informed, realistic-sounding comments and articles I've been reading on SA like stnickb1 above, it looks like CIT was the major lender to numerous smaller businesses. Our leaders continue to "let them eat cake" by letting this one amongst the majors drop dead.
I'm not reassured by these indicators as tax collections are in the toilet and letting CIT drop is an indicator that a fairy godmother is expected to rescue governments rather than jobs and middle-American businesses. Indicators cite din the article are mostly Wall St. monopoly games.
I don't see how this works if voters wake up other than at the point of a gun.

In Support of Goldman Sachs

I agree that GS is gaming a system that is allowed and encouraged by their incestuous relationship with our bloated, intrusive, utterly corrupt government. Pure cronyism.
There was a time when real problem-solvers from industry took temporary positions in government. Industry making real products was the driver. Now it's revolving doors in an economy that's become a complete house of mirrors by financiers, lawyers and bureaucrats. What has government done to solve this? LOL.
Voters have long settled for crumbs, leaders long ago sold out and Constitutional principles are now window dressing. I agree that big government is the biggest problem here.

$10 Trillion in Wall Street Aid and No Investigations?

Actually, we're living in a "Fool's Paradise" where it's the fools (us) that remain, given the state of our "democracy."
This article points out well how DC and Wall St. are mainly a huge crime scene now. If our "public servants" can't venture over to AIG, we see whose "servants" they really are, as you helpfully point out.
Note also the lack of investigative reporting by the mainstream media. Hello? Anyone home?

When Journalism Misses the Big Picture

Good point; if a journalist or bigshot can't explain simply, there is probably no understanding.
Too bad with the economy, mainstream journalists mostly don't even try to get beyond soundbites. This debacle is huge yet there seems to be none of the whistleblowing and investigative journalism once common, at all. I've heard mainstream journalists actually joke about their math and economics ignorance all too often. The ramrodding of TARP came with the media having no clue of it's importance. I saw a silly program about, "take your own stress test" while that was in the news, with a reporter added that she knew someone who had a heart attack soon after a stress test.
Mainstream media wasn't always so clueless or worse. Lack of investigative reporting is "the dog that didn't bark."

The Unintended Effects of Bad Policy

Thanks, Jambo. I leave thumbs up on well-written opposing views if I've really learned something. I rarely leave negatives except for Cetin. I think we can be grateful if any comment/article either helps us to improve our case or occasionally change our minds.

The Virtue of the Republic

Of course, the inflation statistics of the government show a substitute of a cheaper brand over Tide to be an equal trade, not a cut. Same with hamburger substituted for steak. Wall St. and DC are ginning up bad statistics more than ever now to "solve" the crisis. Marking to magic. Stepping up the fogbank is not a good way to reassure investors that they are seeing good value.
US and Detroit offer some examples and comparisons. Hedonic prices as calculated in inflation statistics are also famous for imputing astronomical values to computers as they advance over previous, less-capable models. What fun! If they had started that when the Model T ruled, they would have imputed $millions in value to each car purchased today and we would have shown zero inflation for the last century.
Detroit automakers were once so rich, powerful and full of hubris they were commonly labeled "dinosaurs." They have nearly completed that whole analogy now. How similar to the US who still commands great power in the world as the basis for it decays and shrinks. Aiding failures is only hastening national bankruptcy. Keeping the same leaders is suicidal.

The Unintended Effects of Bad Policy

Stagflation, coming to a nation near you. Well written article, thanks. When we have fiat currency at the behest of the biggest Wall St. and DC interests we have growing lists of maladies and misallocation, not virtues. After about a century of the Fed, their funny money has caused so many bad decisions in our economy as to make us nearly, possibly, toast.

The Ultimate Risk of Government Influence Over the Private Sector (Part 2)

Sen. Dodd put the stipulation into the AIG bailout that bonuses were protected. I know, he forgot, then remembered that someone on his staff did that because someone from Obama's staff told him/her to. Or something.

It's true that it's hard to know who the media is shilling for. During the mortgage cramdown controversy, the fact was not publicized that bankruptcy judges effectively use cramdown in almost all other types of loans as one of their tools. And, during mark to magic, the public discussion was again, shilling for the banksters.

Suddenly AIG bonuses are called bills of attainder. I've seen many other business situations hopelessly altered by subsequent government actions, please stop crying about this one instance.

The article concludes by saying that the "conflicts of interest" between Wall St. and DC are "dangerous." I think that has been proven the least of our worries.