I have been wondering why the new administration has continued carrying out the ruinous, misguided policies of the Bush administration when it came to the banks. I simply couldn’t figure out why the hell we were giving away trillions of dollars on absurdly favorable terms to a group of incompetent managers — reckless speculators, really — who destroyed their own companies.

Perhaps this helps shed some light:

“Top White House economic adviser Lawrence Summers received about $5.2 million over the past year in compensation from hedge fund D.E. Shaw, and also received hundreds of thousands of dollars in speaking fees from major financial institutions.

A financial disclosure form released by the White House Friday afternoon shows that Mr. Summers made frequent appearances before Wall Street firms including J.P. Morgan, Citigroup, Goldman Sachs and Lehman Brothers. He also received significant income from Harvard University and from investments, the form shows.

In total, Mr. Summers made a total of about 40 speaking appearances to financial sector firms and other places, with fees totaling about $2.77 million. Fees ranged from $10,000 for a Yale University speech to $135,000 for an appearance paid for by Goldman Sachs & Co.

The disclosure — in a financial report that is required for federal office holders — comes as Mr. Summers is involved in shaping the Obama administration’s policy decisions on the financial meltdown as well as the broader recession. Among the many decisions the economic team has wrestled with has been whether to step up regulation of hedge funds, one of the most contentious subjects during a summit of world leaders this week. European nations pushed for tougher rules, while the Obama administration preferred a less stringent approach.”  (emphasis added)

Let’s review: Summers, along with Robert Rubin, pushed for the repeal of Glass Steagall, and supported the Commodity Futures Modernization Act; If memory serves, he was also around during the LTCM bailout.

If the history books eventually judge the Obama administration a failure, they may have to point to one horrific appointment as the root cause of the misguided policies: The “Smart Guy” who decided to continue the “Dumb Guy’s policies.

And that’s not very smart at all . . .

>

Source:
Hedge Fund Paid Summers $5.2 Million in Past
JOHN D. MCKINNON and T.W. FARNAM
WSJ, APRIL 3, 2009, 11:38 P.M. ET

http://online.wsj.com/article/SB123879462053487927.html

See also:
Summers Earned Millions in D.E. Shaw Salary, Bank Speech Fees
Timothy J. Burger and Kristin Jensen
Bloomberg, April 4 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4iGjejJVRko&

Category: Bailouts, Markets, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

169 Responses to “Larry Summers: Wrong Man for the Job”

  1. doug says:

    Another important piece of the puzzle. This one is even making MSM. I hope a few more folks begin to see what is going on as a result….
    Thanks Barry for all you do.

  2. lawofthebadpremise says:

    If Summers should resign for conflict of interests, then Paulson should go to jail. The latter made $500 million from Goldman Sachs, the firm he probably kept alive with the AIG bailout.

  3. WaveCatcher says:

    Wall Street and Congress… a den of thieves

    MSM… a circus act

    MSM+WS+Congress… an unholy alliance

    Taxpayer… screwed

  4. snapshot says:

    We need some credible figures right now running this banking show. I keep hoping Obama will hear that, see that. So far – no go. I keep hoping (since he supposedly carries his Blackberry where ever he goes) that he will one day get “The Big Picture.”

  5. grr says:

    he worked for DE Shaw so he shouldn’t get to work for the government?

    has DE Shaw had anything to do with the current crisis?

    you are just getting mad about something stupid and using that anger instead of logic to make a conclusion.

  6. some_guy_in_a_cube says:

    Expecting the people like who ran the ship into the iceberg to take it back into port is delusional.

    Enjoy the rally while it lasts.

  7. zell says:

    Last night Bill Moyers interviewed William K. Black, author of “The Best Way to Rob a Bank is to Own One”. He gave an overview of a what he describes as a coverup of a subtle criminal conspiracy that led to our current economic crises and the subsequent cover up. He names Summers, Geitner, Rubin, Paulson, Rubin, et. al.. Black argues his thesis well. His background with this subject goes back to the Keating 5. Yves Smith thought enough of it to place the interview on Naked Capitalism. Black wants the removal of the leadership of the troubled too big to fail banks so ther can be a proper investigation.

  8. insaneclownposse says:

    yeah, if he worked for DE Shaw and he’s conflicted – has a conflict of interest (who knows?) – he shouldn’t work for the government. Pretty basic stuff here.

  9. Pat Shuff says:

    “While on the commission and after becoming its chair two years later, Born sought comments on the need to regulate derivatives, specifically swaps that are traded at no central exchange, known as the dark market, and thus have no transparency except to the two counter-parties (no actual regulatory scheme was proposed at the time). The request for comments, called the “Concept Release,” stated that the growth of trade in derivatives had prompted the CFTC to re-examine its regulatory scheme. [1] The request for comments was opposed by Federal Reserve chairman Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers.[2] Specifically, on May 7, 1998, former SEC Chairman Arthur Levitt joined the other members of the President’s Working Group – Treasury Secretary Rubin and Federal Reserve Board Chairman Greenspan – in objecting to the issuance of the CFTC’s concept release, in which Born attempted to shed light on the dark market, citing grave concerns about the possible consequences of the CFTC’s action. ” Wikipedia

    I watched a Judy Woodruff hour-long interview with Summers waiting for ‘the question’, why he opposed bringing derivatives like CDS under CFTC regs. He basically said it was the other two guys fault, not him. But you
    had to back up the DVR and watch and back up and refer to the web to what he said at the time, etc.
    Summers can skate across thin ice the width of Hudson Bay before you can think and be back again in case you tried. Of the range of culpabilities in the debacle, public and private, Summers is certainly amongst them.

  10. rachel says:

    Why didn’t this information impress someone in the vetting process? How long will it take for Obama to understand the Geithner and Summers are undermining his administration? At some point the degree to which Goldman Sachs is woven into every detail of the disaster and all the moves that have been made to address it is going to be so obvious that all the MSM will be trumpeting it. For the sake of the good that he wants to do Obama must jettison Summers and Geithner and remake his economic team. Otherwise it will be a tragedy to have this potentially great president end up a target of justified public anger about how the financial world is being rewarded for its sins.

  11. snapshot says:

    http://brontecapital.blogspot.com/

    Bronte Capital has been referring to Sheila Bair as “corrupt” for days now. (It all started with the WaMu fiasco.)

  12. mark says:

    When a Pujo/Pecora type commission is finally seated by Congress I hope Summers is not exempted by executive privilege. He has a lot to answer for.

    BTW, the creation of a Pujo/Pecora type of commission is one of my “tells” that we are near a true bottom.

  13. Machiavelli999 says:

    Its easy for us to criticize from the sidelines and do Monday Morning Quarterbacking of Obama’s economic policy. However, I think it was Brad DeLong who put it best. He was talking about Adam Posen, an expert on the Japanese lost decade.

    He said that if Posen was the Secretary of the Treasury (or if Krugman, or if Ritholz) what would they do? Pretty much the same thing. Because once they realize the political realities of the situation. PPIP would be the best way to go.

  14. Marcus Aurelius says:

    The merger of governmental and corporate interests has a name. Why do we constantly avoid acknowledging the obvious? There is only one reason a person making huge wealth in the private sector would want to be inside government, and it’s not patriotism.

    If we ever retake our government, the penalties meted out will have to be horrific. Otherwise, the same dastardly alliances will reoccur. Tripled criminal penalties for elected or appointed government officials convicted of crimes an/or misdemeanors would be a good start. Putting an end to quasi-governmental agencies and positions would also be a step in the right direction.

  15. VennData says:

    Wait …the rich and powerful and connected rotate between gigs?

    The MSM used to be called “the News” …so I rephrase, this is news to you?

  16. Pat Shuff says:

    Pujo/Pecora type commission–

    Something of the level of the 9-11 commission…JFK…Challenger is fully warranted.
    Ain’t gonna happen, high friends, high places. The very lumpy rugs swept under,
    skeletons stacked to the ceiling in every room, on every level, both ends of the mall,
    spilling from the judiciary in whitewashing-ton DC. There is poesy in justice, freely
    elected representative democracy condemning all by majority.

  17. snapshot says:

    http://www.pbs.org/moyers/journal/04032009/watch.html

    Thanks Zell @ 8:50 – This is riveting. I could even follow the concept of pulling the FBI agents that would have helped solve the problem – post 9-11. To think we have 1/5 the agents today that they had to delve into the S/L crisis. Not acceptable.

    “Our system became a Ponzi scheme.” Barry – much about the rating agencies as well.

  18. number2son says:

    He said that if Posen was the Secretary of the Treasury (or if Krugman, or if Ritholz) what would they do? Pretty much the same thing.

    If so, De Long is wrong. Wouldn’t be the first time.

  19. EAR says:

    Machiavelli999,

    Here, here.

    The possibility of firing Summers is more realistic than the shrill cries for the jettison of Geithner. But I’d like to hear of some feasible replacements and how they should apply whatever more favorable perspectives and/or approaches they may have in order to change the course of the administrations’ economic policy for the better. What’s the alternative and where would it lead us? Nothing is wrong with opinion, alternative ideas are vital, the search for solutions should be constant. But ideas without a strategy that is politically and financially applicable in the current environment are more opinions than solutions.

    Everything changes when you’re ass is in the chair and you have to make the big decision.

  20. number2son says:

    … you are just getting mad about something stupid and using that anger instead of logic to make a conclusion.

    That’s right, that hedge fund gave Summers all that dough ‘cuz he’s such a sharp guy. Has nothing to do, I’m sure, with how policy has been shaped – or better, not shaped – to the benefit of hedge funds.

    Let’s just hope Obama isn’t also bought and paid for by the same crew that has Summers on their payroll. Write your representatives in Congress today. Demand real ‘change’.

  21. Greg0658 says:

    I’d be derelict to my folk if I don’t chime in too .. said this all before . I’ll say it again ..
    Governmnt should be of laws rather than of men. (I’m repeating a line in the Jaycee creed).
    Is America the businesses or its people? (the way money has mingled – I’d say business)
    Investing in corporations and giving that entity more favors than the investor is a problem.
    We should be voting at the booth on policy not characters.

  22. number2son says:

    Everything changes when you’re ass is in the chair and you have to make the big decision.

    Sure, if you’re a coward. These times demand men and women of courage.

  23. Thomas says:

    Personally I think Lawrence Summers is doing a fantastic job. He only fixes the stupid policies of Bush (not all of the policies were stupid and he is intelligent enough to recognize it).

    Bush is definitely responsible for allowing Mr. Cox ideology (allowing naked short selling and removing uptick rule), allowing 5 FASB idiots stupidity (only one out of five was an accountant, the rest were detached from real world academics like Roubini and Krugman).

    “William M. Isaac, a former chairman of the Federal Deposit Insurance Corp., told a House Financial Services subcommittee hearing on March 12 that “MTM accounting has destroyed well over $500 billion of capital in our financial system.”

    Since capital can be leveraged about 10 times in making loans, the rules have “destroyed over $5 trillion of lending capacity,” said Isaac, now a consultant with the Secura Group of LECG Corp.”

    “Recovering Writedowns — Banks Reporting Write-ups

    Now FASB has to deal with how banks deal with recoveries of previous writedowns due to other-than-temporary-impairment losses when there’s evidence that loss is no longer there.

    A March 27 letter sent jointly by the five federal regulators of financial institutions — the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit Union Association and the Office of Thrift Supervision — urged FASB to add such a recovery to current earnings.

    Since the losses were subtracted from earnings, that would be an equitable way for FASB to go — and soon.”

    http://www.bloomberg.com/apps/news?pid=20601039&sid=ajc25z7IOrTk

    SEC Said to Weigh Two Plans for Short-Selling Limits

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aoa7KqzRsoP8

    P.S. Barry, I would like to thank you for going on Bloomberg radio and declaring bank nationalizations and Citi going to zero. As I posted here before, I have loaded up on a number of bank shares like Citi, JPM, Wells, and BAC after your call and have already made 200-300% profits (2009 is my best year ever)

    Thank you Barry for creating this fantastic buying opportunity for us!

  24. Transor Z says:

    As long as Economics remains an unscientific pseusoscience, these problems will persist. The tobacco industry was able to tie up medicine for years until epidemiology came through. How much more so can vested interests confound and obfuscate policy around economic decisions?

  25. larster says:

    Everyone beats up on Summers, et al, maybe for good reason, but how bout some names of replacements? Begginning to sound like the party of No?

  26. Transor Z says:

    Pseudoscience

  27. EAR says:

    number2son,

    You misunderstood.

    What changes is that the luxury of observing and criticizing disappears.
    Your decisions have real implications.

    Your cry for “men and women of real courage” is an example. It’s easy to type or shout that these times demand them, not so easy to find them, appoint them and watch them contribute constructively to an effort that will produce positive results.

  28. franklin411 says:

    Completely agree, Machiavelli and Thomas

    Barry, do you really think Obama was just being “soft” when he rejected France and Germany’s call for an international super-regulator with jurisdiction over every financial market in the world (yes, including the US)?

    The whole history of American foreign policy, from 1900 to the present, is one of firm unilateralism interrupted by brief interludes of internationalism when it suits our interests. Americans will and have accepted international military alliances in desperate times, but Americans will never accept the idea that what they can and cannot do as individuals will be regulated by Frenchmen, Indians, Japanese and Zimbabweans.

  29. snapshot says:

    From Kenneth Black “It is our integrity that often prevents the greatest abuses.”

    How about we start by hiring those who paid their taxes.
    And those who are willing to:

    Get rid of the CEO’s covering up the losses.

  30. Greg0658 says:

    ps -
    On the sync of business & politics .. since we don’t have the policy changing abilities – slowly retract from corporate stocks and make them borrow like the rest of us. (imo) Wouldn’t that return self governing?

    On presidents, govenors, senators, representatives, mayors and councilmen .. they are allotted enough time in each of their periods to do much damage or good during their tenure. I think they all do the best for their constituency. The trick is who is their constituency? These days the world and its people are very dependant on well engineered structures for their well-being. And for many the system has wrung out over capacity.

    Hense the people need to get smart .. get out to vote on Issues .. and take the responsibility. (imo)

    pss – we would still need to vote for managers who hire* clerks.
    * install .. since we would be better off in The Long Run** with a moneyless society (imo)
    ** The Eagles released 1979
    psss – another grounder fav these day Don Henley’s The Garden of Allah from Actual Miles … fyi – been up most of the night (still going) watching Mtv’s 1988 100 Countdown on VHS (them were the days) what happened?

  31. number2son says:

    It’s easy to type or shout that these times demand them, not so easy to find them, appoint them and watch them contribute constructively to an effort that will produce positive results.

    What complete rubbish. There are plenty of people who could take Summers’ place who are honest, are not conflicted and who would have no problem whatsoever promoting policies of real change.

  32. EAR says:

    number2son,

    Names, please.

    Ideas, please.

  33. EAR,

    I could hear your point, more clearly, if anyone in this administration had even bothered to explain anything, in anything approaching detail, to the American People. But, quite sadly, that hasn;t been the case–instead, we’ve been entreated to, yet, more of the ol’ Soft Shoe..

    This– http://www.youtube.com/results?search_type=&search_query=the+obama+deception&aq=f

    is more the case than I’d ever care for, yet, there it is..

  34. Greg0658 says:

    Mark (really now)- we had two choices McCain or Obama? I voted for who I trusted more .. and am on record for who .. but it really doesn’t matter much now and for roughly 4 more years.

    ps – the 1988 Mtv Countdown is inserting Randy of the Redwoods for President every now and then. :-)

  35. techy says:

    Barry:

    I am sorry but i am surprised at the shallow conclusion and consipiracy story by you.

    just because they dont agree with you or you dont understand their actions does not mean they are corrupted.

    we are talking as though everything is so simple, and we could have fixed things in couple of months.

    or they are doing proven bad things…

    as some one said, its easy to become monday morning armchair quarterback…..but hard to accept that we dont understand all the complexities……but the best part we dont understand that we do not have all the data.

    so instead of calling names just because we dont agree how about saying that they should give more information about what they are doing,but we are assuming that the masses will be delighted to know that the whole world is sitting on financial derivatives time bomb…..remember that economy is a confidence game…..if we can fool the masses that everything is hunky-dory…50% of things will take care of itself(they will go back to their consumption mode…instead of savings any stimulus they get).

    but if you scare the masses…they will not buy any stuff for couple of months..leading to a huge economic down feedback cycle.

    btw its hard to believe but what if the stock market keeps going up….people feel that the worst is over and they go back to normal life….and companies stop laying off…stimulus helps pick up the slack in employment and spending….and the market will stay higher….

    we keep forgetting that return from safe investment is only 2%…so why not pay 30 times multiple for a cash rich, zero debt company making good products…like say aapl, goog etc..

  36. number2son says:

    EAR, you can’t possibly be that disingenuous.

    http://baselinescenario.com/
    http://en.wikipedia.org/wiki/Joseph_Stiglitz
    http://www.prospect.org/csnc/blogs/beat_the_press

    Now it’s your turn to prove you’re not a PR flack for Summers or his employers on Wall Street.

  37. Eric Davis says:

    I’m not sure why we continue to be obsessed with how government is skewing things up. As smart People who realize that crisis brings opportunity, Maybe if we focused on getting improved shareholder rights. There could be a chance that we could fix these companies ourselves. Instead of being skewed by all the incompetent managers, who spend the day playing golf, and figuring out how to pass the buck Or figuring out how to obfuscate the proxy.

    I just think if I had a big powerful blog, that many people read, maybe that could be a focus, as opposed to “Ken Lewis and Larry Summers should be fired” But I guess taking things into our own hands isn’t popular anymore… I guess we just need the government to step in with every listed company, and set the management right.

  38. Greg,

    do me a favor, stop trying to me into the (false) Left/Right paradigm.

    also, I said Nothing about it..
    ~~

    techy,

    to this: “but hard to accept that we dont understand all the complexities……but the best part we dont understand that we do not have all the data.”

    “we do not have all the data.”

    why is that? and, to your own point, How do we even know that 44′s administration does ?

  39. Winston Munn says:

    Obama won the latest version of Big American Idol because he looked best in a suit, spoke best, and was considered no threat to the status quo.

  40. snapshot says:

    techy @ 10:44 “but if you scare the masses….they will not buy any stuff for couple of months…leading to a huge economic down feedback cycle.”

    Huh?

    You sound like a banster trying to convince O why he should not investigate the bad CEO’s.

    I can handle the truth. I understand that the FDIC insurance is in place. We have survived huge investigations into financial wrong doings in the past. These losses need to be exposed – those stopping that from happening need to be replaced. The longer you lie to people, the more the trust erodes.

  41. Transor Z says:

    Relying on placebo effect to placate the masses is not “rigorous” in any sense. I’m a big fan of the American flim-flam man. Read your Mark Twain. It’s part of who we are. But this. Exchange between very bright people quickly devolves into barstool BS with no real foundation.

  42. Machiavelli999 says:

    But I’d like to hear of some feasible replacements and how they should apply whatever more favorable perspectives and/or approaches they may have in order to change the course of the administrations’ economic policy for the better.

    The reason you won’t hear any other feasible ideas is because they don’t exist. As I’ve said before, what Geithner is doing now is pretty much the best thing that can be done when you consider the economic and political realities of the situation.

    Nationalization is a non-starter not because its bad policy, but because its politically not realistic. As soon as Obama comes out with plans to nationalize and asks for $1T to recapitalize the banks, all hell breaks loose, Obama’s popularity plummets and he becomes inneffective.

    Krugman, Posen, Ritholz and all the other critics never take in consideration the political realities of the situation.

  43. franklin411 says:

    Eric,
    Shareholders do have rights: We have the right to remain silent, and anything we say will be laughed at by the BoD!

  44. number2son says:

    The reason you won’t hear any other feasible ideas is because they don’t exist. As I’ve said before, what Geithner is doing now is pretty much the best thing that can be done when you consider the economic and political realities of the situation.

    Repeating this lie will not make it any less true.

  45. number2son says:

    Or rather any less a lie.

  46. franklin411 says:

    number:
    Has anyone come up with a feasible alternative plan? Even Barry is a rank daydreamer in this regard: He has never told us how his support for nationalization translates into an actual plan that will receive 60 votes in the US Senate.

  47. Mike in Nola says:

    Old Warren ain’t doin too bad on the bailouts either:

    http://www.chron.com/disp/story.mpl/business/6358451.html

    And Fannie and Freddie are still giving retention bonuses (where they gonna go?), the justification being that many workers lost savings when the stock crashed. In that case, most everyone with a 401k deserves a bonus:

    http://www.chron.com/disp/story.mpl/business/6358421.html

  48. jeff in indy says:

    which does nothing more than confirm that the masses bought hook-line-and-sinker all the puffery of hope and “change.” change is good just as long as it’s NIMBY (read Congress’). the only change they were really looking for is more power to befuddle the masses. and now they don’t even have to try at the befuddling part. they’ve clearly adopted the Nike manta. . . Just Do It!

  49. techy says:

    snapshot:

    do you know how 90% of people in this country live?? do you know how much they know about economics?? or about how the politicians always rape the country…..because the masses are stupid, they want to continue living their life….even though at the end, it was just a stressed out slavery to the elites, who have taken control of the system.

    BTW i do not think O was the best man….but who the F***K wants to run for office….with so much dirt thrown around…and the voters…they dont even Effing deserve to vote….unless they seriously spend 100 hours getting educated and qualify(In my perfect world…. sigh )

    but you cannot say Obama is the worst we got so far….and doubt his every intention, so far i have not seen evidence that he is worse than any other politicians…..he is far better than Mccain. sorry we had to choose one.

    with all the lobbying that goes on in DC, who knows it may be impossible to do anything for the best of the country…..

    and who cares about the country…..its all about our self…isnt that what we are all supposed to do….as long as we do ok, its all fair….right??

    i digress, my point is Obama’s team has inherited so much mess….that it may look like they are not doing the right thing, but i beleive we dont have data.

    we dont know for a fact…that the 70-80% consumers must have reached a point of no return when it comes to debt servicing….given that their wages stagnated in the last 10 years.

    we may not know that all that financial engineering may have created such mess, that every financial asset is worthless(insurance, investments etc..)…imagine if people lose 50% in debt market because of rampant defaults….what happens to all the pension funds…401ks etc if market tanks another 60%??

    what happens to say MSFT and others cash if it has invested in corporate bonds, and they take a 80% hit

    all i am saying is…give some benefit of doubt to these people.

    and if they are really the same elite class who will screw the masses…..who cares, this is the best we can get…..i think we elected the best candidate of the two.

    now i am all confused. so why i am critical of conspiracy theories when they can be really happening because the elite controls the system??

    because we dont have enough data. but they will never tell us if that will disturb the normal way of life.

    so what are we supposed to do? ask for more data and hope that the masses can handle it…..

    but if we point finger without proof…..i think we lose credibility, not that anyone gives a rats ass to what barry is writing on these blogs..

    and i think barry will give a rats ass as long as he can make his millions….i am not blaming him, its the way of capitalist life…..every man for himself….

    BTW:
    you guys really need to think about why our politicians suck so much…..why the elite class rapes the country year after year…

    30% of votes are decided based upon religious beleifs….i live in the bible belt, and it hurts to see humans in delusion.(you should be happy that american being 80% christians….we dont have rules that we have to be in church on sunday morning else the cops will pick us up…..etc..)

    50% of the outcome is decided by who spends the most on campaign spreading bad information about their opposition(voters are stupid…).

  50. number2son says:

    Also, you can voice your views directly to White House Office of Public Liaison:

    http://www.whitehouse.gov/administration/eop/opl/

    Unless you’re cynically addicted to bad government, demand that President Obama remove Wall St. insiders from public office; starting first and foremost with Larry Summers.

  51. EAR says:

    Mark E Hoffer Says:
    April 4th, 2009 at 10:30 am

    EAR,

    “I could hear your point, more clearly, if anyone in this administration had even bothered to explain anything, in anything approaching detail, to the American People. But, quite sadly, that hasn;t been the case–instead, we’ve been entreated to, yet, more of the ol’ Soft Shoe..”

    Hey, I’m not beatin’ the drum for anyone in particular. I think immersing yourself in political affiliation and affection leads to myopia and disappointment. Humans have many more dimensions than labels we concoct to align/separate ourselves.

    The party I’m most interested in has my eyes and a future full of challenges they had no part in creating. In their interests I seek knowledge and perceptions that form a constructive way forward… ideas.

    That’s why I come here and “listen”

    Machiavelli999,

    Thanks for the pragmatism. It’s calming. I find the “Japan v. Sweden” argument troubling and a bit expedient. Are the two scenarios specifically comparable to a mess of this magnitude? Are the scenarios comparable politically?

  52. number2son says:

    Has anyone come up with a feasible alternative plan

    Joseph Stiglitz, Dean Baker, Simon Johnson: just a few who have offered sound alternatives to business as usual.

  53. Transor Z says:

    @techy: If I had to worry about shit like whether touching the Queen is breach of protocol… Just shoot me now.

  54. usphoenix says:

    Yea. Another “spirited” Sunday morning bash. It should be obvious to all that there is an arrogance here on the part of the insiders that says that sharing full disclosure with the public would do more harm than good. “Trust us to do what’s necessary”. Well, duh, isn’t that how we got here?

    The Moyer-Black interview was dead on even if there was nothing new to it. There’s an old saying “the definition of insanity is to keep doing what you’re doing expecting a different outcome”.

    Those in power would have us believe that the safest future is to keep them in power. So why exactly did we elect BO? So that Summers and Mongo can continue to run the asylum? There must be hundreds of executives of strong regional banks (how about from Utah), that do not have taxpayer blood on their hands, and are not part of the problem and cover-up.

    As long as Summers and Mongo are there, BO’s credibility takes a major hit: bottom line. What’s more interesting is that’s a price he’s willing to pay for the banker’s continued collusion.

    Years ago, Fukayama wrote a book: Trust. Should be required reading. Summers was outed today by the NYT article.

    Summers and Geithner have to go, for some fresh blood from outside NYC and DC. To do otherwise would be to perpetuate the fraud and cover-up.

  55. number2son says:

    Thanks for the pragmatism. It’s calming.

    You may find this a bit less comforting:

    Bill Moyers interview with Bill Black

  56. franklin411 says:

    Numbers,
    If you google “Stiglitz Plan” you come up with no results in the last 4 months.

  57. DeDude says:

    Geithner is set up to go next summer if the economy has not turned around clearly at that time. That was clear from the beginning, someone will have to be sacrificed for that sake of the midterm elections. If the economy is a lot worse by then, they will also have to get rid of Summers. If, by some miracle, the dow is 5 digits and unemployment has gone from double digits to less than 8%, then both stay and they will be heroes.

    The PPIP was clearly designed by someone without any political experience. Whether the assets are purchased for 5 or 80 cents on the dollar you will find some screming media idiot claiming that the gobernment and taxpayers are being robbed. Given the current sentiment and how hard it is to determine the fair value, many people will believe the screeming idiots. This is why you have to go Swedish. Punish the “bad” share- and bond-holders, by wiping them out. Then let new functional banks and financial institutions do business under tight regulations, while the bad assets are slowly sold. Even if you don’t think it is the best policy it is so much easier to defend politically in a way that even J6P can understand. If you are against it you are defending those big bad criminal share/bond holders; and it also has the classic simpleton logic of punishing someone, followed by licking the wonds, and getting back to normal.

    As much as I hate Karl Rowe and the previous administrations “politics-trump-policy” approach and all the damage it did to this country; you have to have someone in the white house who understand the political implications of the policy. If not, you quickly end up losing the power and ability to implement good policy.

  58. franklin411 says:

    PS–I did find this article:

    A Bank Bailout That Works
    By Joseph E. Stiglitz
    March 4, 2009
    http://www.thenation.com/doc/20090323/stiglitz

    Sadly, it offers no plan. Stiglitz just bitches and moans about the Geithner plan without offering any realistic alternative. He calls for nationalization, but refuses to tell us how that would work politically or economically.

    We don’t need eggheads throwing rocks at realistic plans and not offering anything to replace them. Stiglitz, Krugman and men of their ilk need to get real or STFU.

  59. techy says:

    Transor Z:

    you said it man….I cannot even imagine that sane people still live with such insane thoughts…

    i can understand that F***ing the queen will be a crime…..but WTF touching a person while pretending to be nice is bad

    Who the F** even cares about that queen…..but remember it will be a diplomatic suicide if the head of a country visiting london does not make an effort to visit her majesty…

    the world of delusion we live in…..I am gland Obama won(compared to the alternative), i would have lost all hope in humanity…and i would have started on the path to finish my “create a black hole” experiment with stewie.

    i hope my IP address will not be traced and me hunted down for the blasphemy….i have said worse thing about jesus being in bible belt :)

  60. Stuart says:

    Absolutely, Summer AND Geithner need to go before this gets turned around. Looking at recent history though, say Rumsfeld, when 99% knew he was not the right man for the job, it still took damn near two years to dislodge him. I think we’re stuck with Summers for a while yet,….unfortunately.

  61. number2son says:

    We don’t need eggheads throwing rocks at realistic plans and not offering anything to replace them.

    Unfortunately for you, and ad hominem attacks notwithstanding, Stiglitz does offer a viable and honest and workable alternative plan. Your problem is that you and the interests you represent are threatened by it. Why’s that?

  62. number2son says:

    If you google “Stiglitz Plan” you come up with no results in the last 4 months.

    ROFLMAO.

  63. franklin411 says:

    Number,
    No he does not. There are two obstacles that any practical person knows must be overcome on ANY issue (not just bank bailouts): Money and Politics.

    1. Money: Stiglitz does not tell us how much his plan will cost or save us. There are no numbers in his plan. That’s like saying your “plan” for getting rich is to make a lot of money really fast. Um…no numbers, no plan.

    2. Politics: Stiglitz does not tell us how any such plan for government ownership of the banking system would ever make it through Congress. Congress just voted down an authorization for a $250bn emergency bank fund. What makes him think Congress will vote for a potentially gargantuan bank bailout? And what about the way the Republicans have behaved since 1/22 makes people like him think that the GOP wants the American economy to improve rather than fail? The GOP has every incentive to work to undermine the economy.

  64. Transor Z says:

    @techy: According to Lyndon Larouche’s manifestos, you’re a dead man, dude. :)

  65. number2son says:

    franklin, you must have a morbid sense of humor to suggest that a plan for making the polluters pay for the clean up of their own mess should be rejected because of it is prohibitively expensive. And given the costs of the Paulson/Geithner/Summers cover ups and bailouts, it’s just plain ludicrous to boot.

    Your objection on the basis of politics relies on the cynical canard that politicians can never be persuaded to do the right thing. It’s our job as citizens to fight the lobbyists and vested interests to force them to do that. And that won’t happen if we remain silent.

  66. AlphaSquared says:

    D.E. Shaw runs one of (if not the) most secretive quant shops in the business. Everything on a need to know basis. I once brought a deal to them and couldn’t walk past the reception desk without a non-disclosure document in place and this while I brought the deal to them!

    No one except very high ups really know what everyone does. Highly technical place. David Shaw wrote the original paper which defined parallel computing. He built probably the first parallel computer with backing of the NSA. Where does an economist like Larry Summers fit into this mix? I doubt he’ll make much of a contribution to the exploitation of market micro-structure or applying non-linear dynamics or information theory to advance price series analysis. If he works for D.E. Shaw and at the same time gets paid to talk to competitors they’ve very likely put him out there to spread disinformation, get them looking in another direction while they attack yet another inefficiency in the markets.

    In any case I don’t see his association with D.E. Shaw as relevant at all to what he does now. He and Geithner seem either very afraid or stooges for the powers that be — maybe both. The public can envy his compensation from D.E. Shaw and his speaking engagements, but anyone a bit better informed ought to pay attention to the things that matter.

  67. franklin411 says:

    number,
    Morality’s got nothing to do with it. The government needs to do whatever it takes to produce a the fastest recovery that can be delivered at the lowest added cost to the taxpayer while simultaneously laying the foundation for future prosperity (since money must be spent, it should be spent on programs that add value whenever possible, such as education).

    It seems to me that the bigger one’s canoe in this society, the more “outrage” they have. Those of us who don’t even have canoes and have to worry about paying the rent tomorrow don’t have much time for philosophizing about the injustices of it all. We just need bread and jobs.

  68. hipster says:

    Anyone catch the Bill Moyers interview with William Black? Great piece….msm never picked this guy up….

    http://www.pbs.org/moyers/journal/04032009/watch.html

  69. DL says:

    DeDude @ 11:59

    “The PPIP was clearly designed by someone without any political experience”

    I take the opposite view. While I am personally opposed to the PPIP, I think that it is politically clever. It puts the taxpayers on the hook, but does it in such a way that the average person doesn’t realize it; moreover, there is no need to ask Congress for more money, at least in the near term.

  70. jeff in indy says:

    one glaring mistake we continue to make is to assume that the taxpayer contributions are still the people’s money and that those in charge treat it such. once that dollar leaves my hand it becomes “their” money. putting those in charge of government is like owning a restuarant; it becomes a game of who can steal the most. only in this case the numbers and the back door is so large millions (more likely now billions, since we’ve lept into the Trillions category rather handily) no longer matter.

  71. number2son says:

    Sorry, franklin, but your argument is breaking down into incoherence. You suggest the fastest recovery is the best, even if it doesn’t address the underlying structural problems that caused it in the first place. And yet the recovery has so far only enriched the risk takers. The money given away to Wall Street has not found its way into loans to the businesses that produce jobs. Loans that would, as you put it, lift a few canoes.

    This is the essence of Stiglitz’s argument.

    Conflating the Wall Street bailout with the stimulus bill doesn’t make the former any more palatable or just.

  72. franklin411 says:

    DL,
    Exactly. That’s the heart of the problem: How do you fix the financial system knowing you can’t spend more than a nickel doing it? Geithner’s plan is the only realistic plan on the table.

  73. Machiavelli999 says:

    Joseph Stiglitz, Dean Baker, Simon Johnson: just a few who have offered sound alternatives to business as usual.

    Their alternatives all require a lot more public money and hence they are politically impossible.

    The End.

  74. km4 says:

    Moyers drops bailout bomb on Obama
    http://www.dailykos.com/story/2009/4/4/716394/-Moyers-drops-bailout-bomb-on-Obama#c1

    WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they’re refusing to obey the law.

    BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

    WILLIAM K. BLACK: Well, you do a receivership. No one — Ronald Reagan did receiverships. Nobody called it nationalization.

    BILL MOYERS: And that’s a law?

    WILLIAM K. BLACK: That’s the law.

    BILL MOYERS: So, Paulson could have done this? Geithner could do this?

    WILLIAM K. BLACK: Not could. Was mandated—

    BILL MOYERS: By the law.

    WILLIAM K. BLACK: By the law.

    SNIP

    WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn’t matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, “You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you’re covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn’t work. You will cause your recession to continue and continue.” And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It’s working just as well as it did in Japan.

    BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

    WILLIAM K. BLACK: Absolutely.

    BILL MOYERS: You are.

    WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They’re scared to death of a collapse. They’re afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we’ll run screaming to the exits. And we won’t rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it’s foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, “We just can’t let the big banks fail.” That’s wrong.

    Great comment by a poster

    Below is a list of the notable speeches given by Summers last year, the amount he was paid, and the date of the address.

    Skagen Funds, $60,300, (1/9/2008)

    Skagen Funds, $60,300, (1/10/2008)

    Skagen Funds, $59,400, (1/11/2008)

    JP Morgan, $67,500, (2/1/2008)

    Itinera Institute, $62,876 (1/8/2008)

    Citigroup, $45,000 (3/3/2008)

    Goldman Sachs Co., $135,000, (4/16/2008)

    Associon de Bancos de Mexico, $90,000, (4/3/2008)

    Lehman Brothers, $67,500, (4/17/2008)

    State Street Corporation, $45,000, (4/18/2008)

    Siguler Guff & Company, $67,500, (5/7/2008)

    Hudson Institute, $10,000, (05/28/2008)

    Citigroup, $54,000, (5/30/2008)

    Investec Bank, $157,500, (6/13/2008)

    Goldman Sachs, $67,500, (6/18/2008)

    Lehman Brothers, $67,500, (7/30/2008)

    Tata Consultance Services, $67,500, (9/21/2008)

    State Street Corporation, $112,500, (10/2/2008)

    McKinsey and Company, $135,000, (10/19/2008)

    Charles River Ventures LLC, $67,500, (11/112008)

    Pricewaterhouse Coopers, $67,500 (9/9/2008)

    American Chamber of Commerce In Argentina, $135,000 (10/7/2008)

    American Express, $67,500 (5/7/2008)

    (http://www.huffingtonpost.com/2009/04/03/summers-received-hundreds_n_183058.html)

    Speeches my ass….these were payoffs. I think it’s time to call Barney Frank and read the ‘law’ as posted above and ask him why it has been ignored. I think it’s time to email and fax and call Barney until he gets so sick of it he won’t be able to stand it.

    The Federal Reserve, Geithner and Summers are working for ‘the money changers’ and it’s time to stop this insanity.

  75. Greg0658 says:

    um .. 1st sorry for any inferences
    2nd I finished 1988′s Top 100
    #1 Genesis – Land Of Confusion http://www.youtube.com/watch?v=Yq7FKO5DlV0
    #2 Michael Jackson – Man in the Mirror http://www.youtube.com/watch?v=bb2bIKwwEpU

    and for the sake of 3 places “Big American Idol” #3
    Bon Jovi – Wanted Dead Or Alive http://www.youtube.com/watch?v=k99h5aikc4g

  76. number2son says:

    Machiavelli, see my earlier response to franklin. You need to find another approach because repeating the same lie over and over again ain’t working.

    P.S. – well-chosen name

    franklin, once again you are wrong. The government has committed a huge amount of money to the bail out and that hasn’t worked. And the Geithner plan will waste more money in its guarantees of private risk. Tossing good money after bad isn’t a realistic plan. It is business as usual. And that’s the problem.

    Do either of you guys work for hedge funds, btw? They should be the only people happy about this.

  77. Greg0658 says:

    um .. 1st sorry for any inferences
    2nd I finished 1988′s Top 100
    #1 Genesis – Land Of Confusion http://www.youtube.com/watch?v=Yq7FKO5DlV0
    #2 Michael Jackson – Man in the Mirror http://www.youtube.com/watch?v=bb2bIKwwEpU

    and for the sake of 3 places “Big American Idol” #3
    Bon Jovi – Wanted Dead Or Alive … duh forgot 3 links bad “Your comment is awaiting moderation”

  78. jeff in indy says:

    km4; i would call it a “buy-in” v. a payoff, if we’re gonna keep up with the spin. sounds more wall-street’ish v. gangsta.

  79. km4 says:

    US Banking oligarchy f*cked up but Obama continues to allow his ‘financial experts’ to acquiesce to Wall St crooks demands.

    The Quiet Coup
    by Simon Johnson
    http://www.theatlantic.com/doc/print/200905/imf-advice

    The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

    IMO USA in addition to having most advanced economy and military also has the most advanced oligarchy so if the Obama doesn’t play harder ball with Wall St Banking oligarchy we’re on our way to becoming the world’s largest Banana Republic.

    Wake up Obama … America is watching this very closely !

  80. techy says:

    kiss theory:

    1. most big banks are insolvent (not exactly a news right??)
    2. most other big worldwide financials/pension funds/corporations/retired people investment etc are deeply entwined.
    3.70-80% of consumer is maxed out.
    4. Free market says businesses are free to lay off people….off-shore all jobs while they are pretending to cut cost….
    5. more job loss….more foreclosures…more tax revenue shortage….even state/local governments are bankrupt.
    6. consumers are scared shitless and have stopped buying the stuff, the one which we dont need…you see, no surprise there, but the problem is that stuff they buy…leads to their job sustainence…which they dont understand…..what a fucked up world.

    given these facts….what is the solution?? Please excuse me your rants about the right thing….and being clean….give me a less shocking….solution (keep the patient alive with the hope that maybe the life threatning blood loss can be replaced by feeding him more junk ).

    solution 1:

    let everyone take a hair cut…..oops, all of a sudden even microsoft has no cash since all their invest went kaput….not to mention that they are not able to sell any more software because everyone has stopped buying because of the extreme shock to every one on this earth……I am citing microsoft as an example because it has no debt, around 25 billion in cash/investment….and hugely proft making company…..and hard to believe that they may have to lay off 30% of their staff because of the shock….

    market falls 80%….pension funds go kaput….retirees go kaput…….

    unemployment goes to 30-40% ……who needs to keep people hired when nobody is buying anything other than food and energy, right?

    yes savers with millions in cash will be the king of that universe….i am a big saver, but we are a minority….something like 10%….we dont count.

    if i was asked for a solution, i will be doing the exact same thing these guys are doing.

    1. inflation to fight the asset deflation
    2. keep the shit covered and work in small increment…..at any cost(yes AIG–>$$$–>Goldman , why care….its all electronic numbers).
    3. yes the elite will again benefit, since they will corner a lot of the loot that is getting handed….but did they not always benefit…..nothing new….this time around no billion dollar capital gain and bonuses but loot the tax payer bailout money…
    4. we need wage inflation to help the consumer…..so that he can continue to service his debt, witht he hope to outgrow his debt by incremental wage inflation.

    ask a person on the street does he wants a job?? his answer will be yes.

    ask him if private is not hiring does he want government to increase spending to help hiring, he will say yes.

    but when the F*** right wing idealogy, “win the election even if the country loses” and talking the book gets in the way……and the media is not interested in too much thinking….the masses will not watch the tv, and they lose.

    so tell me how you will do it? and we can start some debate……..i guess we are anonymous and we are not running for office, and we dont care about popularity every day—- we will be more honest than obama :)

  81. DL says:

    franklin411 @ 12:49

    Much depends, of course, upon what one means by “fix”. A short-term fix, or a long term one?
    A long-term fix would mean a lot of pain for a lot of people, both inside the banking industry and outside of it. No first-term president could be expected to attempt such an undertaking.

  82. techy says:

    km4..

    you are annoyed about Summer’s making thousands for lectures/talks???? i thought billions in bonuses for failed wall street ideas were more bad??

    or maybe billions in contracts without bidding was bad??

    i guess you are more interested in the mole hill.

    how about you think about: trillion in loss to pension fund because of the market fall….trillions in loss of consuming power….

    how about this:
    ask a tax payer….does he wants to be taxed 10% more (10% pay cut) so that he can keep being employed…..or he would rather prefer to lose his job and the the government should stop bailouts.

    or how about this: if 20% become unemployed and sales tax goes through the floor…..how much do we lose in tax revenue??

    BTW: many people have been asked to choose between 5% pay cut or some lay offs….it has been implemented in some divisions of HP, and people chose pay cut…..what a suprise.

  83. km4 says:

    BILL MOYERS: Why are they firing the president of G.M. and not firing the head of all these banks that are involved?

    WILLIAM K. BLACK: There are two reasons. One, they’re much closer to the bankers. These are people from the banking industry. And they have a lot more sympathy. In fact, they’re outright hostile to autoworkers, as you can see. They want to bash all of their contracts. But when they get to banking, they say, ‘contracts, sacred.’ But the other element of your question is we don’t want to change the bankers, because if we do, if we put honest people in, who didn’t cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.

  84. km4 says:

    WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it’s going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they’re allowing all the banks to report that they’re not only solvent, but fully capitalized. Both statements can’t be true. It can’t be that they need $2 trillion, because they have massive losses, and that they’re fine.

  85. “techy”

    this: “……..i guess we are anonymous ” should be signal, enough, as to the depth of your understanding.

    no wonder you’re rationalization amounts to little more than wholesale Corruption.

    to your point about MSFT, if their products were, actually, any good, People would buy them–your reductio ad absurdum fright scenerio of “if Honesty, then Economy=Food & Energy Only” is, truly, a waste of pixels..you, really, think the Forge would go OOB?

    try thinking for a change, save the Intro to Agitprop-BS for your in-game chatter while maxing out your XBox scores..

  86. techy says:

    Mark E Hoffer..

    how about you come out with some substance than name calling??

    how about you give some critical thinking about the problem at hand??
    let me hear why the things being done are the worst solution to the given problem??

    BTW MSFT has 60 billion in revenue….and around 17 billion in profits, do i need to say more about their good products…

    same thing about Intel…..these companies have no competition in their core products….but what consumption of their stuff fell 50% for couple of quarters??

  87. Marcus Aurelius says:

    Winston Munn Says:

    “Obama won the latest version of Big American Idol because he looked best in a suit, spoke best, and was considered no threat to the status quo.”
    ________

    This does not seem to be a paradigm. Otherwise, GWB would have never gotten close to the Oval office.

  88. techy Says:

    April 4th, 2009 at 10:44 am
    April 4th, 2009 at 11:39 am

    and you want to talk about name calling?

    re: substance, try answering my assertion/question: ““if Honesty, then Economy=Food & Energy Only”…you, really, think the Forge would go OOB?
    http://encyclopedia2.thefreedictionary.com/forge

    OOB= Out of Business.

    past that, your ‘arguments’/suppositions/’proofs’ are convoluted, to the point of self-refutation.

    and, to this: “let me hear why the things being done are the worst solution to the given problem??”

    as, even you alluded to, above, it continues an epic Fraud, one that mangles Lives as it twists the *Truth.

  89. holulu says:

    Can someone send this post and Yevs’ to pres. Obama.

    Is he another moron like Bush?

  90. usphoenix says:

    I just reread BR’s post about Summers. In it BR wisely focused on the most worrisome aspect.

    I could care less about all the income per se. I care about the influence it buys. Which was BR’s point.

    Summers is in a key position to influence American financial policy and regulatory atmosphere.

    The G20 and most foreign governments feel strongly that hedge funds should be reigned in and monitored under a global umbrella intended to prevent another melt down or similar mishap. BO just told them to go fly a kite. Wonder why?

    That Summers is in the key policy position he’s in is like asking the fox to watch the hen house. He has been an early and strong advocate for the financial laissez faire that got us here. He is emotionaly and financially incapable of rational thinking on the topic. Just another haywire Harvard off the cuff impulsive emotion.

    There is no way he can divorce himself from his relationship with Shaw.

    This is the fraud and crime against reason that’s far, far worse than BO’s empty railing against lobbyists in DC.

  91. donna says:

    Yeah, we hate the banksters, and Summers took his cut from them. I’m hoping for Summers and Geithner to be gone soon, but who replaces them, that’s the question…

    Obama is not a moron, but it’s a multi-step process to go from the status quo to the end of this particular bankster era. We don’t get there in a few months, or by pissing off the people who currently hold the financial levers. Has to be sort of an iterative process, unfortunately. Just as they didn’t gain power and stupidity overnight, it won’t go away overnight, either.

  92. Marcus Aurelius says:

    Machiavelli999 Says:

    “Krugman, Posen, Ritholz and all the other critics never take in consideration the political realities of the situation.”

    Neither did Louis XVI. Perhaps Krugman, Posen, Ritholz and all the other critics have it right. Political “realities” have a funny way of becoming insignificant, very quickly.
    _____

    franklin411 Says:

    “Morality’s got nothing to do with it.”

    Morality – more accurately, ethics – has everything to do with it. Randian ethos is what landed us in this position in the first place. Like debt, more of the same will not get us out. The Big Lie – that big boys always act best and realistically when acting only on their own best interests – needs to be confronted and backed-down at every opportunity. Nice guys don’t always finish last. Some of them kick ass and take names.

  93. snapshot says:

    US Phoenix – “…sharing full disclosure with the public would do more harm than good. Trust us to do what is necessary.”

    I hope that O has just been fed this line and will soon see he must relent. Surely Congress people have had an ear full from their constituents. Granted, the public was in the dark for years but 60 Minute exposes and informative blogs have done much good.

    I would rather see money front loaded than this back-door business involving the FDIC where they don’t belong.

  94. snapshot says:

    front-loaded for restructuring that is – not for business as usual.

  95. strat575 says:

    That almost takes the cognitive out of the cognitive regulatory capture. Here are some totals I just ran:

    Breakdown 1:
    Distributive Shares: 3,756,126
    Salary: 2,019,495
    Speaking Engagements: 1,548,700

    Breakdown 2:
    Financial Services/Banking: 6,497,023
    Academia: 586,998
    Media: 135,000
    Policy/Commerce: 105,300

    Grand Total: 7,324,321

    http://paul.kedrosky.com/archives/2009/04/its_good_to_be_4.html

  96. techy says:

    ok so let me get this right, it is wrong to make money doing what summers did in the past??

    or you guys are saying it is wrong for him to be in office because he made all the money in the past being in bed with the financials??

    or is it possible that its just another way of being Lou Dobbs, “whatever you do is wrong” because its not what i like.

    so lets see….i make millions playing by the same legal rules which applies to everyone, but that will disqualify me from public office??? because you guys dont trust my integrity??

    so let me get this again, Paulson was corrupt because he was CEO of Goldman??

    is there an conflict of interest if he was in bed with financials in the past?? “PAST”

    dont you need a man to run this mess who used to be in the middle of that mess??

    oh well, why do you need an enemy when…..

  97. DeDude says:

    DL @ 12:42

    I agree that the part where they don’t have to get things through congress now was politically smart (or at least realistic). However, nationalization via the FDIC would in all practical terms be the same. What senator would dare to say no if the FDIC came calling and said give us 500 billion or we will go bankrupt. By initially letting the FDIC borrow the money from the Fed, they can push the day of that ultimatum out to whenever it is politically most convenient (like in 16-18 month).

    Letting private capital use government backing to purchase assets and either make big profits or have government pay if there are big loses, is to easy to attack and to difficult to defend, in simplistic soundbites. You are looking at endless short stories of fat cats making huge profits with government backing (OUTRAGE !!!!), or making reckless bets and being saved by government (OUTRAGE !!!!). And those stories will bite even if the economy is turned around because they are about “somebody-getting-something-out-of-my-pocket”.

  98. usphoenix says:

    @techy: We don’t need a man to” run this mess”. We need one to fix it.

    We don’t need a man clearly invested in business as usual. We need a man invested in a new global financial order that restores public trust.

    We don’t need to be the lone global country saying leave things as they are. We need to agree things need to be fixed, and then dive in with both hands to fix them.

    Summers has been free to associate with whomever he chooses on whatever terms he chooses. We should be free to choose leadership more attuned to the public good.

    When Summers speaks up in support of the global interest in a more rational financial order, and then takes strong action to make it happen, then we can say he has placed the common good above his own personal gain.

    Until then, Summers speaks for the failed status quo, as does BO’s administration.

  99. snapshot says:

    Wow USPhoenix – You are on a roll. There simply must be someone who has paid their taxes and can tell the truth willing to serve in the Treasury. The United States knows how to pull together, but not over lies and cover ups. Many would be willing to give up much under the right leadership. I truly believe that.

  100. franklin411 says:

    Marcus,
    Now is not the time. It took 30 years of failed policies to create this mess. It’s going to take 30 more years of reinvestment in America and reform to fix it. Simplistic solutions like nationalization simply waste the political capital the President has generated.