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You are here: Home / Politics / Domestic Politics / Thick as Thieves

Thick as Thieves

by John Cole|  November 17, 200911:22 am| 69 Comments

This post is in: Domestic Politics, Assholes

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More good news about the Goldman boys and Tim Geithner:

The Federal Reserve Bank of New York gave up much of its power in high-pressure negotiations with the American International Group’s trading partners last year, according to a government report made public on Monday.

Just two days before the New York Fed paid A.I.G.’s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut — but it never got the chance.

UBS, of Switzerland, alone offered to give a break to the New York Fed in the negotiations last November over how to keep A.I.G. from toppling and taking other banks down with it. It would have accepted 98 cents on the dollar.

But UBS’s good-faith gesture was quickly drowned out by Goldman Sachs and the top French bank regulator. They argued, with others, that it would be improper and perhaps even criminal to force A.I.G.’s trading partners to bear losses outside of bankruptcy court.

The banks and the regulator were confident that the New York Fed was not willing to push A.I.G. into bankruptcy, because earlier in the fall the New York Fed had stepped in with $85 billion to prop up the insurer.

The New York Fed, led then by Timothy F. Geithner, who is now the Treasury secretary, therefore had little leverage in the negotiations, according to a post-mortem of what has emerged as the most inflammatory episode in the rescue of A.I.G.

In the Army, we had a saying called “Fuck up, move up.” Looks like that sure was the case for Geithner. And you just have to love the sense of entitlement from the Goldman boys- it would be illegal for them to not get paid in full! And, because of who they are and where their people are in our government, the gambit worked.

I seriously think Goldman Sachs and the folks like them are the biggest threat to the future of this country, but since they own everyone, they’ll just keep siphoning off the money until the nation collapses.

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Reader Interactions

69Comments

  1. 1.

    ramster

    November 17, 2009 at 11:30 am

    A smart parasite keeps the host alive, but weakened and incapable of resisting or repelling the parasite.

  2. 2.

    Hunter Gathers

    November 17, 2009 at 11:31 am

    Pablo Escobar has nothing on these guys.

  3. 3.

    BlueDWarrior

    November 17, 2009 at 11:31 am

    This is what happens when all the smart people run away from political appointments and running for office, the only people left by-in-large are the very people you DON’T want dancing the public end of the public/private two-step.

    Of course the same can be said in many business circles, since boards seem to also want to promote failure. So we end up with a bunch of Nero-wannabes running our largest corporations.

    Seems like an untenable situation, yes?

  4. 4.

    PeakVT

    November 17, 2009 at 11:32 am

    Thank FSM for Timmeh. Without him the government might have spent that money on poor people.

  5. 5.

    geg6

    November 17, 2009 at 11:33 am

    I dunno, John. I’ve been reading a lot about Timmeh and his shenanigans lately, none of it flattering. The natives are restless and Timmeh is looking like a convenient and convincing sacrifice. I don’t know how much of it is real outrage at his endless GS suckupage or just good political cover for WH bungling of the financial mess. But there seems a strong undercurrent of hostility and disdain lately in all the Timmeh coverage I’ve seen, even from some of the most idiotic of “reporters.”

    Hopefully, I’m right. I have never been a Timmeh fan. Consider him one of Obama’s biggest blunders.

  6. 6.

    Zifnab

    November 17, 2009 at 11:33 am

    I think that Obama may be echoing President Lincoln in at least one major regard. He’s got an absolutely horrible pack of generals leading his army.

  7. 7.

    John Cole

    November 17, 2009 at 11:33 am

    @Hunter Gathers: Pablo Escobar at least had to deal with the risks of his profession. You and I get to handle the consequences when Goldman Sachs and company fuck up.

  8. 8.

    comrade scott's agenda of rage

    November 17, 2009 at 11:35 am

    Anybody who has read Matt Taibbi’s blister piece on Goldman Sachs and doesn’t want to fry every last one of them, well, clearly you’re not a communist trying to socialize our nazism.

  9. 9.

    BlueDWarrior

    November 17, 2009 at 11:35 am

    @PeakVT: Well considering how the Republicans and DINOs seem to want to screw Obama, they probably would have filibustered to death any nominee who would actually tell Congress to spend money on the poor.

    It really sucks but right now there are too many people who hold office that really shouldn’t, but because our system shuns the smart and capable, and nature abhors a vacuum, well, you see what happens…

  10. 10.

    Bullsmith

    November 17, 2009 at 11:38 am

    Wall Street stole trillions of dollars from taxpayers. Eventually they’ll bankrupt the country (with gusto). I don’t see any even tiny indication otherwise.

    In a way Communism got momentum from this kind of limitless class warfare and greed. In turn fear of Communism made the true elites more concerned with keeping the mob well fed and complacent. When the Soviet Union fell and China embraced making money, there was no reason not to just steal everything they can.

    I’m amazed these guys can walk down the street and not get punched in the face. But in America, proof of wealth is proof of merit. A Christian country my left buttock.

  11. 11.

    RememberNovember

    November 17, 2009 at 11:43 am

    WHere is the grassroots movement to expell Gethner?
    Timmaaaay! Sorry Timbo, ya gotta go. Im sure Mr Hankie will have a gig for you at Goldman “punch America in the” Sachs.

  12. 12.

    El Cid

    November 17, 2009 at 11:43 am

    Did you also catch Ben Bernanke whining about how the mean old banks were helping cause unemployment by not doing enough lending?

    Gee, maybe the Fed and Treasury should have somehow used their combination of authority and the trillions of dollars in cash and backing they were handing out to banks and investors to extract something out of the deal, but, naaaah, let’s just pretend we’re totally just powerless observers as we give the looters trillions.

  13. 13.

    RememberNovember

    November 17, 2009 at 11:43 am

    @Bullsmith:

    This.

  14. 14.

    Crashman06

    November 17, 2009 at 11:46 am

    Quoth Taibbi:

    The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

    What a picture that man paints.

  15. 15.

    BlueDWarrior

    November 17, 2009 at 11:48 am

    @El Cid: I honestly believe that they are in collusion to make sure that Obama goes down.

    Why isn’t every industry that isn’t banking beating down the doors of Congress for Federally-funded and run Health Insurance/Care, if for no other reason than to have themselves NOT pay for it anymore.

    I don’t see why the heavy hitters in the Manufacturing Industry aren’t running ads saying “Tell Congress to vote for more infrastructure projects.” I mean don’t they WANT to be able to sell product and services?

    This is why I said upthread, Major Corporations now are ran by Exec. Boards who don’t care, and by CEOs who are total megalomaniacs who have drunk the Chicago School Supply-Side kool-ai. So when the American market dries up, there isn’t going to be another to replace it because you can be damn sure the EU isn’t going to put up with this bullshit… then again they might be doing something about that too right now.

  16. 16.

    bayville

    November 17, 2009 at 11:49 am

    Zerohedge has an in-depth analysis and a copy of Barofsky’s report.

  17. 17.

    Leelee for Obama

    November 17, 2009 at 11:49 am

    I am not defending Geithner for his hand in this mess, but I have to ask why he is the one to get shit on, and not Bernanke and most especially, Hank Paulson? I know he was Cahirman of the NY Fed, but I’m fairly sure that Treasury Secretary and Chairman of the Fed over all, probably had as much or more to do with these decisions. Insofar as UBS taking less, I’m sure it would have amounted to a large sum but 2 cents on the dollar doesn’t seem like enough to make them appear to be reasonable saviors. Maybe 75 cents?

    If Geithner is the fall guy, that’s the way it is-but he and Bernanke have always been in Public Service, right? How come the G/S guy gets a pass on responsibility? Cause he’s out of government?

  18. 18.

    Mirthless Chopper - Frmrly TheFountainHead

    November 17, 2009 at 11:51 am

    It’s getting harder and harder to imagine that these guys DIDN’T quite literally sit around a conference table and plan the heist of trillions of taxpayer dollars.

    I’m putting my money in a clay pot and burying it.

  19. 19.

    El Cid

    November 17, 2009 at 11:52 am

    The main reasons I failed to focus rage on Timothy Geithner himself were (a) I saw zero evidence, zero, that the Obama administration was looking at anyone else for the position who would have had significantly different policies, and (b) I have seen zero evidence that the Administration wanted things to be done differently.

    Geithner was doing what the Administration and its most prominent and well-placed advisers thought was right.

    Anything more regulatory and interventionist would have been seen as dirty hippie leftist economy stifling luddite FDR worshiping soci@alist crazy, and the conventional wisdom of the last 30 years among our political Establishment is ‘do whatever the super-ultra-rich want’.

  20. 20.

    BlueDWarrior

    November 17, 2009 at 11:52 am

    @Leelee for Obama: Well, I think there are so many people to blame for this situation and it all goes back about 40 years to the start of the Culture Wars.

    People don’t seem to realize that the Culture Wars started around the same time as the War on the Middle Class… makes you wonder about that some, doesn’t it?

  21. 21.

    BlueDWarrior

    November 17, 2009 at 11:54 am

    @Mirthless Chopper – Frmrly TheFountainHead: Well that’s a no go as well, if the barons have their way, inflation will screw anyone who tries to bail out of the Bankster’s system.

    It’s all a very nasty game and because they can rewrite the rules whenever they damn well feel like because if you complain, you don’t get a job (or conversely if you run a business, you don’t get any funding to stay in business)

  22. 22.

    PeakVT

    November 17, 2009 at 11:57 am

    @BlueDWarrior: True. But there were better candidates for SoT available who would have been confirmed – Janet Yellin for one.

  23. 23.

    Mirthless Chopper - Frmrly TheFountainHead

    November 17, 2009 at 11:57 am

    @BlueDWarrior: Oh, I didn’t say it was a good idea….just that that’s what I’m going to do as the least bad option….at least I’ll know where it is, even if it’s worthless!

  24. 24.

    wilfred

    November 17, 2009 at 11:59 am

    Oh dear. Back when people on the left were decrying the influence of Goldman we were getting lectures on trusting Obama’s judgment and the CRISIS that had to be dealt with or else we were all going back to living in some pre-capitalist stone age.

    Obama picked him. Or they picked him. Make up your mind.

  25. 25.

    geg6

    November 17, 2009 at 12:01 pm

    @Leelee for Obama:

    I can’t speak for anyone but myself, but Paulson is gone. Bernanke is similarly off the radar because he has his term as chairman and there’s not much to be done about it unless we can find something criminal on him.

    But Geithner has been an absolute disaster for Obama. Both he and Larry Summers are the worst possible people to be running the economic brain trust at the WH. How Paul Volcker got marginalized, I’ll never understand.

  26. 26.

    Hunter Gathers

    November 17, 2009 at 12:03 pm

    @John Cole: I think I got it backwards. How about These guys have nothing on Pablo Escobar .

    Pablo had to worry about getting whacked. The most these guys have to worry about is only being worth 100 mil, as opposed to 200 mil. Or, gasp, time in a minimum security half-way house with a pool. We live in the mists of the Greatest Theives Of All Time.

  27. 27.

    Waynski

    November 17, 2009 at 12:04 pm

    Well, of course they had to pay Goldman Sachs, it would have been irresponsible not to. And I think this is good for John McCain.

  28. 28.

    Hunter Gathers

    November 17, 2009 at 12:08 pm

    Geithner served his purpose, which was calming the markets, if one can do such a thing. He’ll soon be gone, and his replacement, no matter who they might be, will have a hell of a time getting confirmed. Geithner was chosen because he was the only one who was going to be able to get through confirmation. And the GOP was playing nice back then. I can only imagine the clusterfuck that occurs when his eventual replacement is named.

  29. 29.

    jl

    November 17, 2009 at 12:09 pm

    Funny, Bobo addressed this issue this morning in a characteristically flaccid column:

    The Nation of Futility
    By Bobo Schnucks
    The Negligent Times
    Published: November 16, 2009

    When American bankers first captured the US government, they saw flocks of pigeons so big that it took them 30 minutes to all take flight and citizens’ assets that seemed to stretch to infinity. They came to two conclusions: that their plans for humanity could be completed here, and that they could get really rich in the process.

    This moral materialism fomented a certain sort of manic energy.

  30. 30.

    Leelee for Obama

    November 17, 2009 at 12:14 pm

    @geg6: I wonder about Volcker as well. I think he might have been, as he was when he was Fed Chairman, more concerned with inflation than with stimulating the economy. He may have been right, but I gotta tell you, things got very bad for me and mine during those times. My husband (yech) was working and we were getting Food Stamps, WIC, Medicaid and HEAP, and we still couldn’t make it. There might have been a legitimate reason for his being sidelined. I’m no great fan of the Geithner/ Summers team, but I’m not sure enough of how these things work.

    @BlueDWarrior: It doesn’t make me wonder, I just reinforces my opinion that what is wanted is a Master/Serf dynamic, and they may get it, FSM help us.

  31. 31.

    Scott H

    November 17, 2009 at 12:15 pm

    Lloyds’ Prayer

    Our Chairman,
    Who Art At Goldman,
    Blankfein Be Thy Name.
    The Rally’s Come. God’s Work Be Done
    On Earth As There’s No Fear Of Correction.
    Give Us This Day Our Daily Gains,
    And Bankrupt Our Competitors
    As You Taught Lehman and Bear Their Lessons.
    And Bring Us Not Under Indictment.
    For Thine Is The Treasury,
    The House And The Senate
    Forever and Ever.
    Goldman.

    From an email making the rounds on Wall St. I found it here.

  32. 32.

    Zifnab

    November 17, 2009 at 12:18 pm

    @wilfred:

    Obama picked him. Or they picked him. Make up your mind.

    /rolls eyes

    It doesn’t matter who gets picked. Goldman Sachs was going to lean hard on anyone in power. You make it sound like this was some grand conspiracy to elect Obama because he’s been a GS drone the whole time.

    Obama went from Senator to President inside a decade because he was a savvy politician taking advantage of a political groundswell. He was probably the least tainted by GS, when compared to Romney and Clinton and McCain and Edwards. Goldman was in the top five contributors for every candidate with an honest shot.

    Obama
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

    McCain
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00006424

    Hillary
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00000019

    Romney
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00000286

    Edwards
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00002283

    Goldman picked them all. Like betting on every number on the roulette wheel. Go crunch the numbers on the Senate and the House. You’ll see the same thing. Goldman Sachs funds elections. Period.

    It’s Kang and Kodus with these guys. The best you can do is lean hard on your politicians from the get-go and look for a guy that actually wants to put your interests on par with Goldman’s rather than just railroading over you.

    That’s what we elected in Obama. A compromiser willing to deal with everyone, rather than a political crony who was only going to favor a handful of rich industry insiders.

    Unfortunately, we’ve got one entire political party that’s sold out to corps, and large chunks of the other that are more than willing to obstruct and fight.

    So even when Obama is fighting for a win-win deal, he’s got to contend with the Senators and Congressmen that don’t think guys like Goldman are winning enough.

  33. 33.

    Zifnab

    November 17, 2009 at 12:19 pm

    @wilfred:

    Obama picked him. Or they picked him. Make up your mind.

    /rolls eyes

    It doesn’t matter who gets picked. Goldman Sachs was going to lean hard on anyone in power. You make it sound like this was some grand conspiracy to elect Obama because he’s been a GS drone the whole time.

    Obama went from Senator to President inside a decade because he was a savvy politician taking advantage of a political groundswell. He was probably the least tainted by GS, when compared to Romney and Clinton and McCain and Edwards. Goldman was in the top five contributors for every candidate with an honest shot.

    Obama
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

    McCain
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00006424

    You can look up Hillary, Romney, and Edwards, too.
    http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00002283

    Goldman picked them all. Like betting on every number on the roulette wheel. Go crunch the numbers on the Senate and the House. You’ll see the same thing. Goldman Sachs funds elections. Period.

    It’s Kang and Kodus with these guys. The best you can do is lean hard on your politicians from the get-go and look for a guy that actually wants to put your interests on par with Goldman’s rather than just railroading over you.

    That’s what we elected in Obama. A compromiser willing to deal with everyone, rather than a political crony who was only going to favor a handful of rich industry insiders.

    Unfortunately, we’ve got one entire political party that’s sold out to corps, and large chunks of the other that are more than willing to obstruct and fight.

    So even when Obama is fighting for a win-win deal, he’s got to contend with the Senators and Congressmen that don’t think guys like Goldman are winning enough.

  34. 34.

    MNPundit

    November 17, 2009 at 12:19 pm

    But come collapse the money will be worthless and then we will take revenge on every last one of them.

  35. 35.

    Napoleon

    November 17, 2009 at 12:23 pm

    Geinther needs to be fired today over this.

  36. 36.

    inthewoods

    November 17, 2009 at 12:23 pm

    A silly question perhaps, but I wonder if anyone knows if the NY Fed did have the power to affect the contracts outside of bankruptcy court? If they did not, then that was clearly the play – keep AIG out of court so that the Fed has no power.

    Just wondering….

  37. 37.

    jeffreyw

    November 17, 2009 at 12:23 pm

    Lonely atop the new open picture thread.

  38. 38.

    marcopolo

    November 17, 2009 at 12:25 pm

    Simon Johnson, former chief economist for the World Bank, pretty much laid all this out in May in the Atlantic

    From the overview:

    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.

    Here’s to hoping this code works :)

  39. 39.

    marcopolo

    November 17, 2009 at 12:27 pm

    Oops my bad and lack of reading comprehension shows…Johnson was at IMF not World Bank–as it says in the overview which I should have read before I started writing, heh.

  40. 40.

    Alan

    November 17, 2009 at 12:34 pm

    I seriously think Goldman Sachs and the folks like them are the biggest threat to the future of this country, but since they own everyone, they’ll just keep siphoning off the money until the nation collapses.

    Yep, but there’s more important things to worry about: the CRA, Fannie and Freddy, Barney Frank, Nancy Pelosi, socialism, illegal immigrants, that evil nazi/commie/muslim Obama–who btw is not doing anything while changing everything (thanks Butters), death panels, etc. etc. etc.

  41. 41.

    Tsulagi

    November 17, 2009 at 12:47 pm

    In the Army, we had a saying called “Fuck up, move up.”

    Yeah, that was pretty much the motto in my work after 9/11 when wingnuts sprouted like mushrooms in the dark with all the really smart mental faculties of that fungus. Once during a meeting gave the status on a project I was still running: On time, on budget, and exceeding expectations. A nutter, about to chronicle his latest expensive fuckups and how he wasn’t responsible, actually said something to the equivalent of “That’s all well and good, but you don’t see the big picture.” My jaw dropped for a second or two before having to laugh at that idiocy.

    The only reason I survived that period was I had a contract. And that incompetence seems to be part of the wingnut DNA. It took awhile, but finally realized we just couldn’t afford the true nutters.

    Hopefully government will come to the same realization. Can’t afford the good ole boy cronyism in the financial community either.

  42. 42.

    oliver's neck

    November 17, 2009 at 12:51 pm

    Well, the upside here is that Goldman is just giving away the rope rather than selling it.

  43. 43.

    J

    November 17, 2009 at 12:51 pm

    Alan,

    surely you meant to include ACORN as well?

  44. 44.

    Perry Como

    November 17, 2009 at 12:58 pm

    Apologies to Joss Whedon.

    Buffy the Vampire Squid Slayer — Once More With Feeling

    Blankfein:

    What a lot of fun
    You guys have been real swell
    And there’s not a one who can say
    This ended well
    All that money
    We’ve been stealin’
    Say, we’re happy now,
    Once more with feeling
    Now I gotta run
    See you all in hell

  45. 45.

    Alan

    November 17, 2009 at 1:08 pm

    @J:

    Yeah, ACORN should have been included.

  46. 46.

    Demo Woman

    November 17, 2009 at 1:50 pm

    Call me Sully, but McCain/Palin would have destroyed the economy before Goldman and Sachs. Palin continues to do damage in the name of tea baggers and birthers.

  47. 47.

    geg6

    November 17, 2009 at 1:56 pm

    @Leelee for Obama:

    From what I’ve read about Volcker and his input into this administration, he’s been basically saying the same things and advocating the same fixes as Roubini and Krugman. Which probably explains why he’s been sidelined. If there’s anyone Geithner, Summers, and GS don’t want advice from, it’s Nouriel, Paul, and Paul.

  48. 48.

    slag

    November 17, 2009 at 1:57 pm

    In the Army, we had a saying called “Fuck up, move up.”

    I’m pretty sure that particular saying has some universal appeal. Is there anyone who doesn’t think their boss is kind of an idiot?

    The banks and the regulator were confident that the New York Fed was not willing to push A.I.G. into bankruptcy, because earlier in the fall the New York Fed had stepped in with $85 billion to prop up the insurer.
    __
    The New York Fed, led then by Timothy F. Geithner, who is now the Treasury secretary, therefore had little leverage in the negotiations

    This Morton’s Fork is the inevitable result of enabling institutions to become too big to fail. Frustrating. As. Hell.

  49. 49.

    kay

    November 17, 2009 at 2:17 pm

    More and more I think it would have been better to just let it all tank.
    The only people telling us that we would have suffered greater harm had it tanked are the people at the very top who profited from the bail outs, directly, and they’re no longer even remotely credible.
    1. I can’t get over the fact that the lender of last resort accepted such lousy terms.
    2. We got nothing, nothing in return, in fact, the bailed out institutions are not lending, which was the single rationale given for bailing them out: they reneged even on that.

  50. 50.

    Demo Woman

    November 17, 2009 at 2:25 pm

    @kay: I agree with you but Bush would not let that happen under his watch. You have tea baggers screaming about their tax increase and deficits. Sometimes Most of the time I feel as though I living on another planet.

  51. 51.

    Why oh why

    November 17, 2009 at 2:33 pm

    That’s what we elected in Obama. A compromiser willing to deal with everyone, rather than a political crony who was only going to favor a handful of rich industry insiders.

    Unfortunately, we’ve got one entire political party that’s sold out to corps, and large chunks of the other that are more than willing to obstruct and fight.

    But it’s Obama who chose Geithner, Emanuel, Summers and other evil Wall Street hacks for his administration top economic jobs. Nobody forced him to.

    I guess we see the limits of “nudge” incrementalist BS and the true face of Obama and his dangerous Chicago associates (I’m talking about UoC economists, of course).

  52. 52.

    par4

    November 17, 2009 at 2:40 pm

    The biggest threat to the country is to keep voting for either major party. Neither one deserves political power.

  53. 53.

    kay

    November 17, 2009 at 3:07 pm

    @Demo Woman:

    I agree with you but Bush would not let that happen under his watch.

    I suspect Geithner is yet another free market ideologue.

    Like Greenspan, who finally figured it out just this year, Geithner’s shocked, shocked, that these entities operate exclusively for the enrichment of the top 1%.

    Did he really think they were going to start lending once we bailed their asses out? Please. Why should they? They’re doing very, very well sitting out this so-called financial crisis, and contributing nothing to it’s resolution.

    Maybe he really believed all that clap trap about bailing them out to free up credit, and helping “Main Street”. Who knows.

  54. 54.

    Demo Woman

    November 17, 2009 at 3:15 pm

    @kay: Initially I gave the President a pass on his appointment of Geithner because Geithner did know where the bodies were buried but no longer. We still have tooo big to fail, and the gap between the rich and the poor continues to grow.
    Free markets only benefit the middle class with strong regulations. (thank you unions) As a nation, it is time to ask what democratic nation exists without a strong middle class and as a nation, it’s time to change course. IMO

  55. 55.

    batgirl

    November 17, 2009 at 3:40 pm

    @BlueDWarrior: No wondering — it was a brilliant move. Keep the peons distracted by hot button culture issues (abortion, homosexuality, religion…) while we rob them blind. Divide and conquer, baby, divide and conquer.

  56. 56.

    kay

    November 17, 2009 at 4:07 pm

    @Demo Woman:

    I was a big Geithner defender. I thought (and think) that his last employment shouldn’t preclude public service. I still don’t buy that argument.
    I’m just looking at the actions he has taken or approved, and the results of those actions. I don’t really have a motive yet.
    I can’t imagine why anyone would still believe that if we funnel enough money to the top, it will eventually trickle down. It’s never been true. I’m fucking amazed we’re still trying it. This has to fail, what, 50 times, before everyone admits it doesn’t work?
    He still believes that.
    So far, he’s either an ideologue or an idiot. I’m not to “crook” yet.
    He’s a very poor steward of other people’s money, I will say that. I think that’s apparent.
    You have to really marvel at the gall of these clowns screeching that the unions wouldn’t take sufficient concessions in the auto bail out. They live in some fantasy world, where 25 an hour plus benefits is immoral and wrong, but they’re pulling in 30 million a year. Jesus.

  57. 57.

    Demo Woman

    November 17, 2009 at 4:16 pm

    @kay: When Bush II tried to trickle down shit (cuz that’s what it is), I asked friends when it worked. The only time the middle class earnings improved was under Clinton and not by that much.
    Any way during the next several years, I would ask the same friends and work mates how the middle class was doing.
    Now we have a situation where under the stimulus they are getting tax cuts, although to little, and they swear there taxes went up. Gee, let them eat cake like Bush did.
    Earlier trolls were spouting that some of us thought of Obama as the Messiah and maybe he’s not the entire blame, but we have to change courses if we believe in a strong middle class.
    Of course the same folks think of Palin as a reasonable alternative so what do they really know.

  58. 58.

    Bruce (formerly Steve S.)

    November 17, 2009 at 4:16 pm

    they’ll just keep siphoning off the money until the nation collapses.

    Are you in snark mode or are you serious? Because I say stuff like this all the time but I’m dead serious when I do.

  59. 59.

    kay

    November 17, 2009 at 4:24 pm

    @Demo Woman:

    I never thought Obama was any “Messiah”. I think that’s a stupid talking point, meant to demean.
    My problem with Geithner now is pretty basic: people don’t trust him with money.
    That’s an issue if you’re Treasury Secretary during the Great Depression II.
    He’s the Treasury Secretary and we don’t trust him with money. What’s worse, I think one of the rationales for keeping him on is the stock market will go down. Heaven forbid. They crybabies in finance will start screeching that they’re scared, again.
    I could really give a shit what the stock market does, so that’s the upside for me. I’ve become reconciled to losing everything I put into it anyway. I have no idea what these people will do next year, or in the next decade, so betting on them seems dumb. I’ve given up on that idea.

  60. 60.

    Demo Woman

    November 17, 2009 at 4:37 pm

    @kay: True.

  61. 61.

    kay

    November 17, 2009 at 4:50 pm

    @Demo Woman:

    I read the New Yorker piece on Geithner and others in the Obama Admin. It covered the immediate aftermath of their recognition of how serious this was going to be.
    The part that scares me is this: Geithner was really hustling to get his plan in first, and thereby capture Obama’s ear and undivided attention. We know he’s ambitious, and he’s managed to get the attention of some really powerful people throughout his career, so that’s the pattern.
    Geithner told his staff: “plan beats no plan”, so they churned one out. He was first with a plan.
    My hope is he wasn’t approaching developing a plan, any plan, as a game he had to win, because the culture he came up in seems soaked in that sort of zero-sum short-sighted stupidity and reckless ego.
    He “wins” but we lose. That anecdote gave me a little chill.

  62. 62.

    Demo Woman

    November 17, 2009 at 4:57 pm

    @kay: There is such a disconnect in our country with some who think that the Obama appointees are socialist.

  63. 63.

    Demo Woman

    November 17, 2009 at 5:02 pm

    @kay: My comment is awaiting moderation because I said that there is such a disconnect in our country with some who think that the Obama appointees are soc.i.a.list.

  64. 64.

    slippy

    November 17, 2009 at 5:21 pm

    @El Cid:

    the conventional wisdom of the last 30 years among our political Establishment is ‘do whatever the super-ultra-rich want’.

    Judging from their actions of the last 30 years, the super-ultra-rich want to end their social class’ dominance of America by having their heads shoved onto pikes, because the more successful they are at rubbing their arrogant, stupid ideas into our faces the more likely that this game is going to end with blood in the streets.

    If the average American was aware in detail of what the super-mega-ultra-rich do, have done, and are continuing to do I don’t think our society would manage to continue for more than about 3 days before imploding in violence. And the longer the horse-fucking goes on, the more likely that becomes.

    I am very disappointed in Obama for his failure to understand this, sit these fuckwads down, and tell them how it is.

  65. 65.

    kay

    November 17, 2009 at 5:21 pm

    @Demo Woman:

    there is such a disconnect in our country with some who think that the Obama appointees are soc.i.a.list.

    I’ll say. This idea that his economic advisers are liberals is preposterous. Hell, Geithner was a registered Republican. He was listed on the GOP website for the 2004 convention.

    I don’t even believe that Americans are “class warriors”, or any of that. I believe that if this approach ends up (again, not ascribing evil intent) not benefiting “regular people” but only benefiting the top 1%, it is not going to matter why Geithner did what he did.
    I don’t think regular people have any objections to the top 1% making huge amounts of money. But if we end up feeling they made it at our expense, to the exclusion of us, Obama is going to pay politically, and dearly.

  66. 66.

    garhighway

    November 17, 2009 at 5:29 pm

    The IG’s criticism of Geithner misses the point.

    The whole point of bailing out AIG wasn’t to do AIG any favors. It was to see that its counterparties on the swaps did not have to engage in a mark-to-market valuation exercise. Why, you ask? Because AIG had TRILLIONS in counterparty exposure, ALL of which would have had to be revalued the moment it stopped paying (or collateralizing) at par. The minute it (or the Fed, on its behalf) says “we aren’t going to pay face value”, then the paper isn’t worth face value, and the holders have to take a write down.

    On the heels of Lehman’s collapse, the seizing up of the credit markets and the shadow that was already cast over the entire financial sector, demanding that additional wave of writedowns would have been a very bad idea. (And remember, there was already a massive amount of skepticism in the markets about the marks of those assets already known to be on the books of the big houses. This would have made that worse.)

    Add to this that AIG’s counterparties were legally entitled to the money (the Fed had zero authority to negotiate anyone downward so long as AIG wasn’t in BK) and you come to the place Geithner came to.

    Shorter answer: if the name of the game was forcing Goldman to take a haircut they should have just let AIG go under. Then they would have gotten a haircut for sure.

    But the IG wants it both ways (don’t question the bailout itself but dump on Geithner because he executed it the way it was designed) because it is politically expedient to do so. After all, no one will make any enemies crapping on Goldman these days.

  67. 67.

    Leelee for Obama

    November 17, 2009 at 6:33 pm

    @garhighway: This is the best explanation, in simple English, that I have seen so far. Thanx, garhighway.

    As I said up thread, I’m no great lover of Geithner or Summers, but I don’t think Tim G. is the villain in the AIG bailout. I also don’t believe that nationalization, in actuality, would have gotten through the Congress. And it would have had to get through Congress. So Roubini, Krugman, and maybe Volcker, may be correct that we should have Nationalized the banking system. But, if you think the tea-baggers have been insane, picture them if the Obama Administration HAD Nationalized the banks. It beggars imagination.

  68. 68.

    Wile E. Quixote

    November 17, 2009 at 6:34 pm

    Can we call in a predator strike on Wall Street and while we’re at it arrest Timmeh and ship his ass off to Gitmo? The guy is a worthless, lying, incompetent fuckup who’s positively dripping with Lloyd Blankfein’s pecker snot. Look at the bullshit way he handled his taxes. He has a complex tax situation and rather than do the smart thing that millions of Americans do, which is spend a few hundred bucks to hire an accountant and spend a few hours with them going over his tax situation he makes up a stupid lie about how TurboTax caused him to screw things up.

    Timmeh is the Michael D. Brown of the Obama administration. I have yet to see any brilliance or even competence on his part or any indication that he was appointed as the secretary of the treasury other than sheer cronyism.

  69. 69.

    J. Michael Neal

    November 17, 2009 at 7:06 pm

    I agree with garhighway, and ask, What the fuck was Geithner supposed to do? Barofsky’s report is badly flawed in a couple of ways. garhighway pointed one out. Another is that his argument is that, faced with bank intransigence, Geithner was supposed to violate his regulatory authority and abuse his powers. Didn’t we have enough of this in the last administration (which, admittedly, this was during)?

    Another point. People seem to have missed the implication of the quote John used. Do you see the phrase “the top French bank regulator”? This was a foreign relations problem as well as a financial one. Do you really think anyone wants to have the president of the New York Fed making decisions that will wreck US foreign relations?

    Demo Woman gave a perfect example of the wrong mindset:

    Initially I gave the President a pass on his appointment of Geithner because Geithner did know where the bodies were buried but no longer. We still have tooo big to fail, and the gap between the rich and the poor continues to grow.

    It’s been ten fucking months. All of the things you want require Congressional legislation. Right now, we are stuck with too big to fail. The amount of risk on the bank balance sheets means that there’s no way to break them up at the moment. You couldn’t put together smaller companies that had the assets necessary to handle the risk. Contrary to what a lot of people seem to believe, that’s not a linear function. The ability to carry risk decreases faster than the size of the asset base. Reinstituting Glass-Steagel right now would be a disaster, since the commercial banks would end up with the assets, and the investment banks would end up with the liabilities. That doesn’t work.

    You can not advocate both breaking up the banks, *and* not subsidizing their recapitalization. Until they’re recapitalized, they can’t be made small enough to fail. Pick one or the other. Punishing the bad guys at Goldman would, admittedly, be very satisfying. I agree. How much of your nose do you want to cut off to do it?

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