Obama is failing on the Banks.

[edhopper]

It is becoming apparent that Geithner was the wrong man for Treasury and is too cozy with the crowd that screwed everything up. By continuing to run from nationalization while even people on the right are seeing it needs to be done. And throwing billions and billions more at insolvent Banks. Obama is just letting things get worse and worse until it maybe be too late.
I am troubled by their refusal to accept what so many (and most economist) see as inevitable.

[w4rma]

1. I called it the second I did any research on the Geithner and crew. They are failing big time. nt

[spanone]

3. why, because the dow is going down? that's due to 8 years of deregulation gone wild

[edhopper]

5. It has nothing to do with the Dow

The course they are taking will not result in what we need.

[AZ Criminal JD]

14. Care to be specific about that?

[galileoreloaded]

74. Sure. The 30B to AIG would stabilize the budget deficits of

all the western states. Meaning no cuts to education or services. Are you wiling to follow the administrations line on this and force my kid into a classroom of 50 for some unseen boogeyman of collapse??? Is the spectre of "bad stuff" so scary that you willingly subject my kids to just that, the effects of collapse(without the collapse you are so scared of) just to save a retiree's 401K?? You think the next generation will respect the last, once they see the graft, corruption, and naked self interest overriding their interests??

Do you think no one will notice??

[sandnsea]

2. Geithner uncovered Bear Stearns

He's the one that pulled the plug on this whole fiasco.

They blew up the global economy. It isn't going to be easy to fix, for anybody.

[edhopper]

4. True

but the way to fix it is the nationalize Citi and B of A and not throw billions at them and let their management stay. I didn't say it wouldn't take a long time to fix, I'm saying what they are doing is like the Republicans thinking a tax cut will take care of it. They're actions are wrong. What they are doing will not fix anything, no matter how long.

[sandnsea]

9. You don't know that

any more than Krugman does. Nobody "knows" how to fix this mess. There will be backlash to anything that is done. Nationalization would freak people out, and cause the DOW to drop, just as much as the rumor of the need for nationalization does. We're fucked for a while, that's all there is to it. I really don't see any way around it. All the phony money went caplooey.

[edhopper]

21. I don't care about the Dow

It's not just Krugman. MOST economist see nationalization as the way to go. We can continue to do what we are doing now and follow the Japanese model that led to a lost decade, or follow the Swedish model and fix this shit. Yes I do know that what Obama is doing is not going to work. In fact he has admitted that the Swedes did the right thing. He just blew it in picking Geithner, who wants to mimic the Japanese.

[girl gone mad]

25. Believe it or not, economics is a science.

We do know what will happen if we allow zombie banks to persist, since we have a very recent model to study. Propping up the banks to avoid government supervised bankruptcy was a disastrous policy for Japan. There is no reason to believe we would fare better. There are several reasons to think we would fare even worse.

[sandnsea]

31. They pretend it is

But the truth is, they'll cook the numbers any way they want to justify their actions, just the way they did to get us into this mess. I don't know why people keep denying it. This isn't Japan, it isn't Sweden, it isn't 1929. It's a global economic Big Bang. They don't know what to do.

[w4rma]

46. I think we all know what needs to be done. I think we know it at a gut level. (nt)

[edhopper]

48. If you are

suggesting that this is a result of not having a bigger majority in Congress, it's not. While that is important for many things (Health Care big one) Obama has all the power and resources he need to nationalize the Banks now. He simple lacks the will to do so. And Geithner lacks the vision.

[w4rma]

50. I'm suggesting nationalization of the big banks. The Swedish model worked. We should be using it. nt

[edhopper]

52. YES

Whole heartedly agree!!

I was mislead by the link in your post.

[amandabeech]

66. The FDIC "nationalized" WaMu, a fairly large bank, and it "nationalizes"

a couple of small banks every Friday night.

Do you remember the huge S&L mess?

The fix for that began when George I "nationalized" just about every S&L, including some large ones. The clean up of the bad assets was done by the RTC. We didn't have a bunch of insolvent zombie S&Ls after that.

Folding up bad banks is not new, and if the pubbies scream, we can just cite them Poppy and the RTC.

[sandnsea]

70. That is not "nationalizing"

Folding one company into another is not nationalizing, even if it's banks and even if it's federally regulated. You'll know what "nationalizing" means by the end of the week I suspect. It isn't going to be pretty either.

[amandabeech]

75. That's why I put the word in quotes.

Why don't you enlighten me and all of us about "nationalizing" ahead of time instead of keeping we the idiots unenlightened?

[JBoris]

6. WTF? AIG is Obama's fault?

I think you watched a bit too much CPAC over the weekend.

[brentspeak]

8. ???

Where did the OP make that claim?

[JBoris]

15. "Obama is failing on the Banks." "Geithner was the wrong man"

Can we allow more than 30 seconds to pass before we claim that Obama's economic policies have failed? I don't see how this is different than the repubs saying the economy (AIG and the DOW's latest shitstorm) is Obama's fault.

[edhopper]

28. You are assume

I wrote this post because of the Dow fall today. I did not, it is a response to the efforts of Geithner to preserve the Banks.

[brentspeak]

7. It's exactly like Nassim Taleb has said:

To have a chance at getting through this without complete collapse, the people who helped cause the mess (Geithner, Bernanke, etc.) have to be shown the door and replaced by capable people not beholden to Wall St.

[Mike 03]

10. Nationalization is happening. Are you watching? They are just calling it

something else.

Please.

Honestly, who rec's posts like these?

Did anybody watch Bernanke testifying last week?

Jesus christ.

[brentspeak]

12. Wrong. Read:

http://krugman.blogs.nytimes.com/2009/03/02/failing-the...

[dysfunctional press]

13. no- it really isn't.

how is converting our investment in citi from preffered to common stock nationalization?

[TBF]

17. You're correct as far as I understand (not an econ major); these

people are freaking out because the dow is down. They're confused.

[girl gone mad]

26. On what planet?

Does Citi still have its prior shareholders from before? Is the same management team there?

The answer to both is yes, thus they have NOT been nationalized.

[edhopper]

27. Show me where

the share holders and bond holders have been wiped out and the management has been replaced. That's nationalization, what we have is welfare for the rich.

[sandnsea]

32. No, it's just federal capitalization

Taking over the direction of the operation of the banks would be nationalization, and we may get there yet.

[specimenfred1984]

11. It was clear the fascist U.S. was failing years ago

Let's address the real problems like our gov't is fascist.

[Abq_Sarah]

16. Economically?

[TBF]

19. They don't want to discuss that here. I've tried. I've also tried

discussing why capitalism isn't helping. Not getting anywhere with that either.

[JuniperLea]

18. LOL!

Yeah, damn that Obama for not fixing all this day one!



AAAAIIIIIEEEEE!

[TBF]

20. Noone is saying it's Obama's fault. It's systemic and it's been around

longer than Obama. Both the fascism and the capitalism. Those are 2 things we cannot blame on Obama.

[JuniperLea]

22. See the subject of the OP

"Obama is failing on the banks"... that would be the no one of which you speak, methinks?

[JBoris]

23. Exactly what I was about to post "Obama is failing on the banks". How is this not blaming Obama?

[edhopper]

33. And I DID NOT

say the problem is his fault. The solutions he is trying are failing.

[JuniperLea]

42. LOL!!! He isn't at fault, just his solutions...

Whatever.

[edhopper]

45. Since your having such a hard time with this

I will explain it this way. Iraq was not his fault, but it is now his job to fix our situation there. If his solution was to keep all of our troops there for at least ten more years, then his solution should have been viewed as a failed plan.
Does that make sense or do you just want to throw down another little rolling man in place of rational thought.

[JuniperLea]

51. Let me break it down for you

You said in your OP that Obama has failed the banks. How about giving his plan some time? Your insults won't make you look any brighter.

[edhopper]

54. I said that Obama is failing

giving more time to a failed policy doesn't help, it just makes things worse.
Why do you think the current policy of pouring billions and billions into insolvent Banks will eventually work?

[JuniperLea]

60. It may actually take MORE money!

Read this...

http://www.pbs.org/moyers/journal/02272009/profile.html

And pay attention to Peter Orszag...

Filling the gap brings the banks back to square one. The way BushCo did it was wrong; no oversight. Do not confuse the two.

[edhopper]

57. And if he

adopted McCain's plan for tax incentives to fix Health Care, would you say, "Give it Time"
And if he adopted Bush's plan to fix our energy concerns by just drilling more would you say "Give it Time"
And if he said that we should extend the Bush tax cuts and stop any regulation of the markets would you say "Give it time"

[JuniperLea]

58. Nice strawman...

Whatever

[edhopper]

64. So saying that his policy in this matter is doomed to failure

is a strawman? I don't think so.

From wikipedia

"A straw man argument is an informal fallacy based on misrepresentation of an opponent's position.<1> To "attack a straw man" is to create the illusion of having refuted a proposition by substituting a superficially similar proposition (the "straw man"), and refuting it, without ever having actually refuted the original position.<1> <2>

It should be noted that presenting and refuting a weakened form of an opponent's argument can be a part of a valid argument. For example, one can argue that the opposing position implies that at least one of two other statements - both being presumably easier to refute than the original position - must be true. If one refutes both of these weaker propositions, the refutation is valid and does not fit the above definition of a "straw man" argument."

I presented Obama's and your positions validly.(since i take you agree with his actions) I also offered why I think they are failed policies. Your answer was give it time.
I only ask if you would hold a similar position if Obama took similarly mistaken positions.

Now, could you explain why giving this policy moer time can make it work?

[JuniperLea]

69. Jesus Fucking Christ...

You named BUSH failed policies, not Obamas! THAT was the strawman! Jesus! Try to keep up.

[edhopper]

71. I'm

saying Obama is CONTINUING the failed Bush policy.
Can you keep up?

[JuniperLea]

76. You are flat wrong...

There's no need, and no desire to keep up with erroneous information. Had you been able to keep up, you would understand how this is different, and how it is necessary.

[edhopper]

79. Yeah

I'm a dolt. Along with Paul Krugman, Noriel Roubini, Joseph Stieglitz and Alan Binder. ALL who say the same thing I am saying.
Which economist are you listening to besides Berneke?

[TBF]

44. To be fair he's not correctly acknowledging & defining the problem. n/t

[edhopper]

34. No it will take a long time to fix

But what he and Geithner are doing will not fix it at all!
Just think tax cuts for the wealthy as an analogy.

[Thickasabrick]

24. This is crap - I don't care if he hired God - we couldn't solve this

in a month or even several. Jeebus.

[girl gone mad]

29. Why such low expectations?

Sweden did it in a matter of weeks, using less than 2% of their GDP. The banks they preprivatized were larger, as a share of Sweden's GDP, then our insolvent banks are.

[Thickasabrick]

36. How many of Sweden's banks at that time were as intricately linked to the global

system we have today. Much has changed.

[edhopper]

40. Yeah,

What are Stieglitz, Baker, Roubini, Krugman, Johnson et al thinking? Can't possibly work.

[Thickasabrick]

62. Look, I'm not arguing against nationalization....I think that's what

will ultimately happen. I think something is in the works but Obama and his team are not sharing that - which is probably good to avoid panic in the market. My only point is that people are not being patient enough. Something is in the works....we just don't know what it is.

[edhopper]

38. I am not asking for this crisis

to be solved today. I am saying what he is doing will not work. It did not work in Japan and it won't work here.

[burythehatchet]

30. Let me break it to you gently.

It was too late a year ago.

[graywarrior]

35. ATTENTION; THE REPUBLICANS FUCKED UP THE ECONOMY

REPEAT:

THE REPUBLICANS FUCKED UP THE ECONOMY ALONG WITH GEORGE BUSH!

ALL OUR MONEY IS IN IRAQ!!!!!

[glinda]

37. Here here!

[edhopper]

39. AND

WE ELECTED OBAMA TO FIX IT!!!

Continuing the Bush/Paulsen plan will not work!!!

[graywarrior]

41. The media and Rush are laying out plans to blame this ALL on Obama and the dems

[edhopper]

47. True

and by choosing a policy that has a small chance at success, he is playing into their hands.

[OmahaBlueDog]

53. ..or in the hands of the oil industry

[graywarrior]

63. TRUE

[mudesi]

43. Your Concern Is Noted

[otohara]

49. Corporations, Banks, Wall Street Failed All By Themselves

they fucking shipped our jobs to China and India, fucked millions of homeowners, and gave themselves bonuses and salaries that absolutely no one is the world deserves.

[Winterblues]

55. while even people on the right are seeing it needs to be done.

That should give you pause on it's own. Anything the Right is for is probably not good for America..

[edhopper]

56. Noted

but to be fair, only a few on the right have said it. It is FAR from their stance.

[orwell]

59. Of course...

...it should take just a few days to fix a problem at least 20 years in the making, (almost 100 years in the making if you date it from the original sin - the creation of the Federal Reserve.)

This is an extremely complex situation with many opportunities for grave errors through unintended consequences. Geithner was not my first choice - Sheila Bair from FDIC would have been a stronger choice. That being I am willing to give them some time cognizant of the fact that most of us have no idea how bad this is. At the very least Geithner knows pretty well where the bodies are buried.

Maybe we should cut them some slack for a while longer until they present a more comprehensive plan. They don't even have Treasury staffed yet.

[edhopper]

65. I give Obama plenty of slack

on not calling for single payer Universal health care. On filling the stimulus with to many tax cuts. On continuing the faith based funding.
I did not, repeat, DID NOT write this post because things aren't fixed yet.
I wrote it because the plan he and Geithner laid out is the WRONG PLAN!
We didn't give Bush time to work things out in Irag, because it was a MISTAKE.
This is a mistake, a big one. And it started with picking Geithner.

[Kip Humphrey]

61. Obama has fallen for the trap set by BushCo. Bailouts for Wall Street are doomed to fail and will

further drain the treasury which will ultimately further tie Obama's hands by emptying his arsenal and leading to an inescapable economic collapse.

[FrenchieCat]

67. Keep feeling smart and underestimating Barack Obama

and his crew.....and underestimating what your suggested solution
would mean.

Go ahead.......

In fact, I'm gonna bookmark this thread.

Almost sound like hopes that he will fail in order to be right.

[anigbrowl]

68. Disagree. I think he's playing a shrewd game, and a long one too.

Look, if Obama or Geithner comes on TV and says 'well, this is just fucked...look, we're taking over the biggest banks in the country and that's how it is', within 5 minutes the far right will blow a fuse and start with 'see! commie takeover! Man the barricades!'. OF COURSE they would be full of shit to say such a thing - but ~10-20% of the population + full of shit + guns is a bad combination. I'm sorry to put it so bluntly, but we are sitting on top of a delicate political situation right now. The GOP is imploding, and the titular head of the RNC is kissing Rush Limbaugh's feet - which would be funny, if it wasn't for the fact that Limbaugh is the standard bearer for a bunch of violently inclined bigots.

What Obama and Geither are doing is letting Wall Street come to them - I'm not thrilled about helping institutions like Citi etc., but I strongly prefer that they put themselves in the hands of the government rather than the government laying hands on them. If we nationalize in a way that looks like it's involuntary, it will create a political firestorm. We're not running from nationalization, but allowing it to occur as a smooth transfer of power rather than as a unilateral decision from DC.

[edhopper]

72. I can only hope that you are right

I have seen no evidence that this is what they are doing, and I'm especially suspect of Geithner.
But one must hope.

[ozu]

73. I'm suspect as well.

Geithner, Paulson, Summers, Rubin are the exact same people. Same job titles, same economic philosophies, same good old boy banker network.

Anyone who thinks Geither's policies will magically be different or more effective than that of the past 15 years is just not being honest with his background.

http://www.washingtonpost.com/wp-dyn/content/story/2008...

[Romulox]

77. We tried to tell people that the reason Obama was appointing rightwing neoliberals

to all of his key economic positions is because he intended to implement a rightwing, neoliberal policy.

[RiverStone]

78. What is the inevitable your referring to?

You said: I am troubled by their refusal to accept what so many (and most economist) see as inevitable.



The inevitable failure of more banks or an economic catastrophe of greater proportions?

What do you see as the end game?

[edhopper]

81. The inevitable

is the nationalization of the insolvent Big Banks.

[leftofthedial]

80. The Summers-Geithner gang is part of the problem

not part of the solution.

I said that the day the team was announced.

[leftchick]

82. perhaps that is the plan

Obama is no FDR. FDR was proud the robber barons and bankers hated him. He wore it like a badge. Obama has embraced them and is beholden to them as much as any other politician. He would not be where he is if he were not.

[edhopper]

83. Okay

So I'm just a dumb poster here on DU.
But maybe you'll listen to Paul Krugman:
http://krugman.blogs.nytimes.com/2009/03/03/zombie-fina... /

"And the insistence on offering the same plan over and over again, with only cosmetic changes, is itself deeply disturbing. Does Treasury not realize that all these proposals amount to the same thing? Or does it realize that, but hope that the rest of us won’t notice? That is, are they stupid, or do they think we’re stupid?
I don’t know which possibility is worse."