President Obama, it's half past noon and you haven't fixed the economy yet? WTF??

[JohnWxy]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x432086

[edhopper]

1. Those of us that complain.

are not asking why it isn't fixed yet. We are saying what we see from Geithner and Summers will not fix it, no matter how much time they give it.
A great difference. To suggest we are saying what you posted is a strawman argument.

[JohnWxy]

2. the gist on M$M is: " why aren't we seeing signs of a turnaround right now?"

also, I spoke of more than just the bank bail-out. I also spoke of the stimulus bill too.

I stand by my criticism of M$M. There is no straw man argument there. They are reacting hysterically, histrionically.

On Meet the Press, Sunday, the moderator, talking about the current economic crisis, said:
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"But let's talk about history. FDR, at the height of the Depression, the first thing he did was deal with confidence. Before he dealt with the New Deal and fiscal stimulus, he closed down the banks. He got people to stand by, not do a bank run and take out their money. That hasn't happened here yet. Is he failing in this fundamental issue and mission of restoring confidence?"
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Talk about a run on the banks and saying "That hasn't happened here yet." is melodramatic, over-the-top hysteria talk. FDIC insures all bank deposits up to $250,000. That wasn't the case in 1932. Saying "that hasn't happened here YET." is hysterical rhetoric.

"restoring confidence"??? the polls show the people have very strong confidence in Obama. The polls also showed that the people DO NOT EXPECT TO SEE RESULTS (IMPROVEMENT IN THE ECONOMY) FOR SOME TIME. The polls show that people are expecting it to take about a year before you can expect to see some tangible results from whatever action the current administration takes. They realize the Republicans have really F***ed the situation up and it will take a while to repair it. HEll, the whole world knows it!

I would say the people have a lot better hold on the situation than many of the M$M I spoke of.

Sen. Schumer responded to the moderators question ("is Obama failing to restore confidence?" with:
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SEN. SCHUMER: No, I don't believe so. And the polling shows that while people are very worried about the economy, they have a great deal of faith in the president's plan, in the president's ability to get us out of this mess. And the president wisely, I think he said it yesterday, is not promising a bill of goods in three months, so that when it doesn't happen then people are going to say they don't--he said it's going to take a while. So I think the bold action the president has proposed, his very reassuring and honest words, not underestimating the problem but still giving people confidence that we're going to act, is going to work. And it's going to take a little while.

and ....Schumer again:
He's going to get us out of this mess. He is smart, he is bold, he is moderate, but it is going to take a little while. I wouldn't measure the stock market over the day-to-day as to how well we're doing. I think that you're going to have to give the president's plans, which are just taking effect this week, some time to work.

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MR. GREGORY: And why don't you believe that in fact some of what's happening (girations of the stack market_JW) is a response to the policy agenda of the president?

SEN. SCHUMER: Because the policy agenda hasn't begun to work.(my emphasis_JW) This is the first week the housing plan is working. This is the first week the stimulus money gets in, in, into circulation. And frankly, the president has a huge burden on his shoulders, as I said, brought up by eight years--if you're going to be partisan, let's say eight years now. But a long time coming. The people are confident in him. And he's been honest, even in the budget. Why is one of the reasons the deficit went up? Because the president said, "I'm not going to say the wars are off the budget. I'm not going to say that other issues, AMT or other things are off the budget." He's being honest about it. He knows it's going to take tough medicine. But the number one way to get us back moving again and to get the budget back in good shape is to get this economy going. And I know those, you know, those on the hard right--Lindsey's a little more moderate--but I know those on the hard right say, "Cut government spending, let's go back to the old Reagan days." Well, the last president who did this when we were in this type of situation was Herbert Hoover. Herbert Hoover said the government should do nothing when we were in a recession, not a depression. We did nothing and it related to a depression. You ask the American people...

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Regarding the bank bail-out, any plan of any design isn't going to work or show magical results in 6 weeks. All economists and rational people recognize that. There are those who may prefer a bailout where the government relieves the bank of all their bad loans. I'm sure the bankers prefer that sort of plan. I personally, and many others think this is unacceptable. But whatever plan is employed, it will take time. It won't produce results in several weeks.

The bank bailout is will help the economy create jobs only very slowly. That is what the stimulus plan which you did not comment on is for. It is pretty much universally accepted that a stimulus plan is necessary to get the economy going again as credit is going to expand very slowly.

People can have sensible, constructive discussions about the pros and cons of any given plan to rebuild the economy. But this can be done without acting like the end of the world is nigh (as i said, simply because they don't see immediate reaction in the economy). The stimulus plan was just past a week or so ago. It will take a while before disbursements are made to put people to work. Once people are working they will have money to spend.



NOw I've got to go now.

[edhopper]

3. You are

right to criticize the MSM for this.
I thought you were criticizing those of us on DU who have thought that Obama and Geithner were not being aggressive enough with the banks.
As far as the MSM. I agree and it wasn't a strawman argument as far as their conduct.
Sorry I jumped the gun on your OP.

[JohnWxy]

4. The credit disaster is a tough problem. The banks do have us over a barrel in that it would be

catastrophic to let them fail. They would love to have us (the gov) buy all there worthless loans. Then voila! they would have cleaned up balance sheets. these *&$%#'s love free market capitalism until they get into trouble THEN THEY ARE BIG BELIEVERS IN PUBLIC SUPPORT for your 'brother' the billionaire banker.

There is no easy solution to this mess but I think the only way to go (although I am open to other ideas) is to give them capital through acquisition of an equity share. Then we can share in any upside - which you can look forward to IF the Gov helps them through this.

But another way to go is to declare the Financial Services industry a disaster area and the Government would open up a People's Bank. This bank would make regular loans to any individuals or businesses who needed them, for buying houses or cars or meeting a payroll or to finance inventory. This way the "bailout" money would be going strait to those who needed it without the middle man. Then let Wall street get themselves out of the problem they created.

I think that providing credit to the economy is like a utility - electricity or heat or sewerage and streets. It's too important to be left to fast busk artists and con-men. Have a no frills public bank.

I didn't know this when I first suggested it, but that's one of the things FDR did.

Anyway, that's my thoughts on the matter, for what they are worth.

[edhopper]

5. You don't include the option of nationalization.

This is not a People's Bank or throwing money at the ones we have.
The government goes in, takes over the bank, fires the incompetent execs,liquidates the shareholders, and then recapitalizes it and sells it to new investors. That's the Swedish model which worked. What we are doing is the Japanese model. which did not.

[JohnWxy]

6. as I said, I personally am open to other ideas including the Swedish model.

I just don't like the 'bad bank' notion, however it is packaged.

I don't think taking an equity interest precludes moving to the same actions as the 'Swedish model'. I don't think acquiring an equity position means we are in there forever. We would eventually, get out, but at terms which don't cost US (the government) an inordinate part of the losses.

I like the Swedish model. the one thing we have to consider, that unlike the Swedish banking system, our big banks are central banks to international business with big investors from all over the world involved. I think we would have to execute the 'swedish model' with some finesse.

Many in the financial community are worried about "zombie banks" - that's a code for "buy our bad assets".

A 'People's bank" would actually be acheived by using a failed bank and employing the personell already there. They would just be working for the Government. Then after a while this would be sold to private investors. This bank would be free of the bad assets that Wall Street created. (In a practical sense this really is the "Swedish model". I would prefer to see Wall Street banks keep their bad assets.

[edhopper]

7. Your "People's Bank" model

is pretty much what Krugman and Roubini describe as nationalization.

Overall I think we are o0n the same page.

[JohnWxy]

8. Yeah, we are. I started talking for nationalization last Oct. (link) then I modified because

The "N" word gets some people freaked-out. Give it another name and we still get to the same place.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=45714