From a profile of Elizabeth Warren, who heads up the panel in charge of distributing TARP funds:
While the bubbly and brilliant 69-year-old professor is a darling of Democrats, Warren has become the scourge of conservative Republicans, who question her panel’s exploration of more-liberal approaches such as nationalization and bank liquidation.
There really are three things that can be done with banks right now: (1) nationalize them, (2) liquidate them (either via a government-led taker-over or by letting them slide into bankruptcy), and (3) keep propping them up.
I don’t have a strong opinion as to which is best, other than believing — as nearly all sane people do — that letting banks like BoA and Citi slide into bankruptcy would be catastrophic.
It was only a few weeks ago that John McCain and Richard Shelby were chanting “let them fail” during the Sunday morning gabfests. And now liquidation is “more-liberal”?
There’s only “Liberal”, “More Liberal” and “Most Liberal”
I cannot believe she is 69. She looks great.
There’s also this:
This is the opposite of what I would think.
I think the presence of someone who seems to know what they’re doing and to be zealously guarding the interests of the American public and demanding these people transparently explain what they’re doing and prepare to do the apparently only possible things for truly insolvent institutions would tend to reassure the public.
To the Beltway, though, as long as everyone wanders around doing mystery things in the dark for banks and non-bank financial institutions while assuring a skeptical (and justifiably so) public that, hey, we insider magicians know what we’re doing thank you very much, the public will be really really happy and maybe start spending again.
This is really a bizarro world of opinion.
Everything that is not perfect is not perfect because it is more-liberal.
It’s hard out there for a conservative. After calling Obama a socialist, it’s difficult for people not to notice that he’s given billions if not trillions to bankers and similar people and without having much direct oversight. And to say he’s a tool of the oligarchy isn’t something even today’s braindead (I’d like to use the term Schiavo-esque, but they wouldn’t get it with the correct nuance) GOP is going to say out loud. So really, all they’re left with is a frustrated sense of WTF?, which is shared by millions on the left and right. But really, how can you turn something that’s cost us trillions, may or may not have been worth it, had bipartisan support, has few actual alternative plans, is probably never going to be accounted for in regards to success of failure, and can only be explained away as necessary at the time? I guess the Tax Day Tea Party Hissy Fit makes some sense when looked at from that perspective, but so would sitting at home and masturbating to Lulu records.
And my turntable hasn’t been set up for over three years, so I’d be game for more hissy fits if only I didn’t have a life.
Deregulation and tax cuts, of course!
Uh, what was the question again?
I can’t say whether she’s right or wrong, but she explains stuff in a layman’s terms. When I listen to her, I get it. And what she’s saying makes sense. Here’s hoping she’s right.
Letting them slide into bankruptcy is batshit insane. Therefore, it is the conservative option. Everything else is “more liberal”.
@Mary: I saw State of Play at the matinee. Helen Mirren looks 40.
I’m getting really tired of hearing about how the general public just needs to “start spending again”. Call me crazy, but I don’t think everyone rushing out to Best Buy and maxing out their credit cards is going to solve all our problems.
I’m sorry, but I thought we got in this mess precisely because everyone was just spending whatever cash they could get their hands on without regard for the future. Maybe we need to think about how we can build a sustainable economy that doesn’t demand 50% return on investments year over year for a handful of major stockholders.
We’ve got a massive sucking demand for infrastructure in this country. We’ve got deteriorating schools, sub par telecommunications, non-existent public transportation… maybe we don’t need more personal spending. Maybe we need more municipal spending. Perhaps just running out and buying a stack of iPhones isn’t the best economic choice. Instead, kicking taxes up by a couple of percentage points and plowing the revenue into public research grants or universal health care initiatives or non-toll road projects would better serve our communities and our personal lives.
Cause I’m really sick and tired of being told that John Q. Consumer is the panacea to the marketplace when he’s getting laid off by the hundreds of thousands every day with only his bootstraps to come to his rescue.
I just don’t see consumer spending as the solution to our financial woes anymore. I think it’s time for a New New Deal. The kind where everyone chips in to buy things we, as a society, genuinely need.
Ha ha, Republican Jeopardy!
Then there is hope for me yet.
You’re underestimating the extent to which kooks and cranks and crackpots have taken over the GOP. A “more conservative” approach to the bank crisis would involve returning to the gold standard. Probably along with bringing back slavery and repealing womens’ right to vote.
No matter how insane the GOP seems, remember…there’s always a whole new level of lunacy waiting to burst forth.
Agreed, but the problem is convincing people that wind turbines that will provide free energy after installed are a better buy than F-22s.
@Mary: Second that. Elizabeth Warren looks incredible for 69 years old.
The more McCain talks, the dumber he sounds.
@John Cole: Thumbs Up or Thumbs Down for State of Play?
@MikeJ: I don’t think this is a tough decision at all for anyone not on Capital Hill. If they scraped every procurement project on the books, I seriously doubt you’d see an outcry of protest from anyone not currently employed by a major military contractor.
Unfortunately, a far number of Congressmen and Senators just happen to be elbow deep in the military cookie jar. The military projects like that aren’t being help up by public pressure. No guy on the street really gives a flying crap about the F-22 or the F-35 or how many aircraft carriers we have or the model number on the next line of tanks. As far as the military is concerned, the average voter just wants three things out it – make it quick, make it painless, and make it a win. That’s why we’ve got Desert Storm and WW2 stamped as good wars and Vietnam and Iraq 2 stamped as bad ones.
The toys are just toys. They look cute on TV, but they don’t bring in voters. Our marine corps took out a band of pirates with night vision scopes attached to sniper rifles. I bet you could run a thousand pirate fights for the cost of a single new age fighter jet. And yet, marines do it quick, cheap, and right. Our “precision” bombs on our high end fighters usually just make a bigger mess than we started with.
Why not let them fail?
I don’t get it. Assuming, of course, that the TBTF Banks’ TARP money went to smaller and actually responsible bankers, who would presumably use all that extra cash to, I don’t know, stimulate their local economies.
That being said, I have no idea what letting these Big Banks fail would mean, ultimately.
The problem is that we’ve built a consumer-based economy that assumed constant growth. However, the world economy will contract this year for the first time since WWII. And may contract next year, and the next year. This is going to cause huge upheaval in the world. Our de facto slaves in Asia are already being sent back to the farm in the millions, due to soft demand.
This is all as it should be and as it needs to be. The path we were on was unsustainable. But it’s going to be a painful process.
Wow, no kidding.
Here she is talking with Jon Stewart.
She is, such as it is, a 69 year old babe.
And smart and funny, too, if her performance on TDS was any indication.
Apparently, it would mean (1) trillions of dollars in assets tied up while bankruptcy court played itself out and (2) banks scared shitless out of lending to one another. In other words, a great way to usher in a second great Depression. Unorganized bankruptcy — which I think is what “let them fail” means — isn’t a serious option.
Point of order, WW II was neither quick nor painless.
Better to quantify it as the public wanted wars that had a realizable goal that was reached.
Today, I think most people are burned out on war.
They tried it, got tired of it and now bitch about the credit card bill for the shiny new thing.
@John Cole: I told my wife I would do Helen Mirren if she offered.
Or in simpler terms: Financial Jenga.
The problem is they got tentacles into everything from insurance to credit cards. Letting them fail would mean essentially throwing gods only know how many counter-parties to various deals into financial limbo.
Thanks to GOP deregulation, the Big Banks have an explosive vest strapped on and are holding the rest of us hostage. And we can’t disarm the fucking thing until we find where they hid the deadman switch.
I could basically make a “Politico” myself by just writing down the first contrarian thought that comes to my mind and attributing it all to anonymous sources.
Yeah, that’s what I keep hearing.
Again, assuming the money went to solvent, if smaller, financial institutions.
err…you mean that that isn’t how they do things?
@John O: There was a great story on NPR not too long ago about what it took for the government to take over a bank on Friday in order to make sure that by the following Monday to make sure that people could withdraw their money. For the 100 person single branch bank, it took 80 FDIC personnel, and all 180 of them the entire weekend to get it functioning again on Monday. Just imagine the scale necessary to take care of BoA or Citi. I doubt either of these could be taken care of in a month, not a weekend. And imagine what would happen to people or businesses if they couldn’t get to their money for that long.
@JK: I’m not John (though I wish I was of course) but it gets a thumbs up from me. There were actually some twists in there that I didn’t see coming, which is pretty hard to do these days.
And there are no conservative approaches to this mess. None, whatsoever. Except the one, wherein “free markets do their job!” would be to let them combust, which, of course, is the worst idea in the world.
The problem is that folks haven’t (or don’t want to) make the next logical step from saying that the economy will be fine if you just “go out and spend.” For the middle class to do that, they have to have money. To get the money to buy their wants rather than needs, they need a job that pays living wage or even a bit more. And they need to know that they don’t have to hoard in case they get sick or get laid off.
I discovered Elizabeth Warren when I heard her book on tape, All Your Worth: The Ultimate Lifetime Money Plan. It was so good I bought it myself. I highly recommend it.
According to an former high-ranking member of the Bush Administration who only agreed to be quoted if it could remain anonymous, Elizabeth Warren is neither “bubbly” no “brilliant”, and is in fact the person that got John Boehner drunk before he showed up on This Week this morning.
I’m fairly deep into my Bank of America credit line at the moment. If they go belly-up, am I excused?
@anonevent: I should have also mentioned, that due to having the FDIC, that we are legally obligated not to let these banks fail, at least as far as maintaining access to deposits. Could we let the rest of the bank fail, though? I doubt it, unless we completely privatized the bank, and divided it up. And the ultimate goal is to allow people access to their money and access to loans.
This is if the government took over a company. In a bankruptcy, creditors take the bank to court to get as much money as they can. And, of course, the nature of bankruptcy is that there are more creditors than there are assets. So BY ITS VERY NATURE, bankruptcy means court fights. And when the assets are chopped up mortgages, covered by Credit Default Swaps et al, it will neither be short nor neat in a bankruptcy to determine who gets what.
Apparently, that would be a disaster unless it was done in an organized way. That’s probably what the article means when it talks about Warren wanting liquidation — she wants a way for the government to be able to take companies over and liquidate them without subjecting their assets to the ravages of bankruptcy court. Lehman debt goes for 15 cents on the dollar now, despite Lehman having had assets of something like 95 cents on the dollar. Letting big banks go through bankrupcy in the usual way is a disaster, as the Lehman example showed.
So, no, we can’t just let banks fail.
Then you have the people like me who still miraculously have a retail job get your hours cut to the bare minimum that the company has to give you as a “full-time” employee [since when the fuck is 32 hours full-time?]. They then one up that with a Saturday morning meeting about how no one is making standard, and if you don’t increase your numbers in the next two weeks, then we’ll have to let you go. Of course this is after they told you that you had an awesome March, but if you bring that up it doesn’t matter, these two weeks will determine your future.
Doesn’t matter that I’m trying to live in the ruinously expensive Bay area on 32 hours a week while attending the JC on my “days off”. Nope, I gotta make those sales to support people who make more per minute than I do per week; while they give you an entire new store layout full of “non-negotiable standards” that are essentially stupid redecorating projects that they’ve failed to send you all the material required for their proper execution.
Hey, at least I caught up to the current post after four days (I’ll take my victories where I can get them).
Jay Severin Has A Small Pen1s
I’ve said it before and it’s worth repeating..
Watching millionaires, who have their salaries guaranteed by the taxpayers as well as their health insurance and pensions, talking about letting the economy collapse is why they should be frogged marched out of the capitol building and put into prisons.
We already have enough F-22’s to take out every other fighter on the planet. F-35 is a reasonable expenditure because airframes wear out and having a unified airframe saves monies. Beyond that, anti-ballistic tech should be researched because a fuckton of countries are going to figure out ICBM tech soon, but should not be viewed as a first-line defense. More like last line we are three minutes from being vaporised tech.
The biggest savings though would come from a general acceptance that we don’t have to be a superpower anymore. Seriously. We’re just another group of monkeys on this spaceship we call earth. We have no need to blow all life to hell. It’s ok not to be #1.
You’re probably not watching your local news. One way the military-industrial-political complex has craftily done its best to ensure its survival FOREVER is to ‘salt’ jobs in every possible district from Smertville, MA (Lincoln Labs, Lexington) to Bumfrick, NE to Boeingsburg, WA. Every procurement cut will be trumpeted as a “local jobs lost” story on the 10 o’clock news. Then Faux will cherry-pick those local tales of woe for their next “How Obama X’s pansy pacificism destroys America’s home towns” weekly hate-athon. Of course it would make more sense financially, ecologically, and politically if the people designing chips and writing programs and soldering titanium and casting fiberglass were building something useful, like efficient transport and public works, but the Obama administration needs to have actual jobs available, posted & ready to hire starting Monday, before they can start scrapping the military make-works that thousands of voters in dozens of communities rely on for their paychecks.
She is 69!
Never commented before, but Elizabeth Warren is 69 warrants a WOW!
Fourth thing that can be done with banks: reorganization in Bankruptcy under Chapter 11, which is not liquidation.
according to the article, she’s 59, not 69.
Conservatives have lost all common sense and decency, and rather than putting their noses to the grindstone are too busy blaming the grindstone-maker because he’s( or she I suppose) of the opposite registered party. Defy logic and reason? Then you must be a LimbaughCon.
we need more “5 thousand dollars for a hammer” stories.
my current favorite example of military spending: “marines in a tube”:
But that’s not all. Bush is protecting us from English hijackers with a fearsome anti-terrorist tool: the Virginia-class submarine. The V-boat was originally meant to hunt Soviet subs. But there are no more Soviet subs. So, General Dynamics and Lockheed Martin have “refitted” these Cold War dinosaurs with new torpedoes redesigned to carry counter-terror commandoes. That’s right: when we find Osama’s beach house, we can shoot our boys right up under his picnic table and take him out. These Marines-in-a-tube injector boats cost $2.5 billion each — and our President’s ordered half a dozen new ones.
Lynn Cheney, the Veep’s wife, still takes in compensation from Lockheed as a former board member. I’m sure that has nothing to do with this multi-billion dollar “anti-terror” contract.
Pretty sure she is actually 59, not 69 unless she finished college in her early 30s.