This is basically where I am:
But look: this is all just nitpicky bullshit. Taibbi’s piece is basically about how the finance industry owns Congress and the Obama administration, and that’s basically true. In fact, I have a piece coming out in a week or so in the print magazine that makes pretty much the same point. My approach is different, and my language is all PG-rated, but my conclusions are pretty much the same. The finance industry, through both standard lobbying and what Simon Johnson calls “intellectual capture,” has, over the decades since Reagan was elected, convinced nearly everyone that what’s good for Wall Street is good for America, and that what’s bad for Wall Street would be catastrophic for America. Everything else follows from that.
So, sure, I think Taibbi overstates Rubin’s influence and thereby understates the real systemic problem here, but hey — it’s his article, not mine. Generally speaking, he gets his facts right and he gets the big picture right: Obama’s team is nearly as dedicated to the economic status quo as Republicans are. Ditto for many — though not all — Democrats in Congress.
I think that is a pretty fair assessment.
AB
It’s weird that some of the rebuttals of the Taibbi piece skirt around or ignore the thesis of the piece itself. I mean, yeah, he could have tuned up slightly, and I think many people were taken aback by the title, but the actual argument – that the levers of government are pulled by the very people who caused the financial mess in the first place – is actually not that novel.
Yutsano
I find it fascinating that Drum says this:
And then moves on to this:
First of all I don’t agree with Drum’s conclusion here. Taibbi in fact is putting all of this on Obama without analyzing the system writ large. But doing a backflip like that trying to defend someone doesn’t exactly scream “strong defense” to me.
jeffreyw
Just read that. There can be no argument that big money owns the congress. All the details of how and why make no difference.
mr. whipple
What a shock. I thought I was voting for the radical socialist Palin said he was.
AhabTRuler
@mr. whipple: Personally, I gave up when he didn’t nationalize the oil companies and nominate Hugo Chavez for the Supreme Court.
ETA: Also, where is Obama’s revolutionary newpaper?
Jim
Well said. If he had said that Obama hasn’t been tough enough on the banksters, picked a team overly sympathetic to them, hasn’t been aggressive enough going after them, I think the piece would be generally agreed upon…. and nothing that hasn’t been said ad nauseum for going on a year now. But he depicts Obama was fiendishly twirling his moustaches as all goes according to his cunning plan.
This is the part that most annoyed me, when he tried to explain to a tea-bagger why she should hate Obama
So provocative! So original! So tiresome.
Lolis
The sad thing is that President Obama is to the left of the Democratic House run by that crazy San Franciscan soc!alist, Nancy Pelosi. Everyone is the problem. The president is by far more progressive than any of the major bills he has passed so far. Not that this makes me feel all that much better about the situation.
BB
So Taibbi states figures and draws conclusions which are technically nonsense, but his piece is collectively true?
Rey
Basically, we are screwed. What’s the alternative? President Jay-Z? yeah like that’ll happen….
Sleeping Dog
Yeah, Taibbi and Drum are right. The big lies about Washington are that the that the Repugs are all for free enterprise while trying to stack the deck for their paymasters, while the Dems spout off about civil liberties and the little guy while shilling for their paymasters. Of course both have the same paymasters.
Ezra had a post this week with a quote from Emanuel saying how the Obama admin was all about success. Meaning that what ever stinking sack of sh*t that comes out of congress regarding any initiative will be claimed by the scum at 1600 Pennsylvania Ave as a “SUCCESS”. But its at both ends of Pennsylvania Ave from both parties. The Dems are selling out liberals and the Repugs are selling out the conservatives.
Obama is an empty suit and that doesn’t surprise me, but I hoped that wouldn’t be true.
John O
I’m with you, John/Kevin. Matt made the same points in his blog rebuttal.
I don’t see how anyone with an IQ over 90 can’t see that Big Money really runs the show now. The natural evolution of unfettered capitalism, one could surmise. And a political abortion of spectacular proportions: The teabaggers would be a lot quieter at least, if Obama couldn’t even pull some support out of them had he gone after Wall St. hard. Sadly, that’s just not his style, at least that I can tell.
For me, Taibbi captures the emotion of it better.
DougL (frmrly: Conservatively Liberal)
@Lolis:
lol! Now how about something based in reality?
Obama went to the White House surrounded by the financial jackals that exist. If he had gone radical and pitched the usual criminals and went for new blood I think it would have been a field day for the press in talking about his ‘tossing conventional wisdom for his agenda’ (soshulism!). I am hoping that Obama plays whack-a-mole as the existing criminals fail to reign things in and the public hears of it (and feels the results economically).
I just don’t think that Obama had a whole lot of choice in who he started his administration with, business interests expected the game to continue and if he had made waves it could have made things even more difficult for him during the infancy of his administration. He needed to keep things somewhat stable and unfortunately the usual criminals allow that.
Regarding Congress not passing financial and banking laws with the teeth necessary to be effective, when shit hits the fan all Obama has to do is point out that both parties have failed and if the people demand change then they better start yelling at their reps so they will send a bill his way.
I hope Obama is further out on this than we think he is since right now all we can do is wait for the shit to hit the fan.
PeakVT
Mostly OT: Filibuster haters, take heart! Find out if your senator is a hero or a zero.
Karmakin
I’ll say it again, because it bears repeating.
Everyone is the problem.
Drum hits on it, then basically throws it away.
That’s not just Democrats. Or Centrists. Or Blue Dogs.
Everyone, and Everything follows from that. Yet this much bigger, more important point is then ignored.
As long as the economy is measured by the Dow Jones, as long as we cheer productivity increases and somehow pretend that this result in a better deal for the workers, as long as we push for our investments, be it real estate, stocks, or whatever, to have a comfortable retirement.
Obama, and other such politicians simply have no choice. No other recourse. Their hands, are tied. By a lot of the people who complain about what he does, more or less.
They want their cake and eat it too. Sorry. No can do.
Martin
I think the nuance that is missing in these pieces is how to properly do the transition. I agree that we as a nation (and not just DC) is too beholden to Wall Street, but at the same time you can’t just flick the switch and turn it all off.
This isn’t like 1980 not only because of that intellectual capture, but also because everyone gave up Social Security and annuities for 401Ks. It turned into actual fiscal capture and if you let it blow up you blow up a lot more today than 30 years ago. So the real question is how to get the balance back – how to get it so that when Wall Street does trip over its own stupidity, that it doesn’t trip everyone else too – and how to eliminate that incentive for Wall Street to do financial alchemy.
I don’t think when things are blowing up that you can afford to rely on people that don’t believe in the system to a large degree. That’s the argument we make about Republicans – why trust them to govern when they don’t believe in government. Why trust a Wall Street recovery to a bunch of people that don’t believe in (or perhaps even understand) the instruments that are blowing up. It’s the same deal with the devil every other industry has to deal with. The question is, once the emergency is over, then what? Will Obama stick with the same team with the same game plan, or will that change?
JGabriel
Kevin Drum:
Great. Goldman Sachs as the new General Motors.
Fuck. At least GM gave us cars. What do we get from GS? I’m still not seeing the upside of Nationwide Economic Meltdown as a corporate product supported by the US Gov’t.
Seems kind of self-defeating, somehow.
.
El Cid
I think it’s pretty rare when journalists and pundits successfully portray the subtle interaction of economic elites and intermediating institutions and individuals and the political establishment. In fact, I’ve don’t think that I’ve ever seen it done by a journalist.
JC
Damn, and I just left this brilliant comment (in my own head, LOL), on the other thread on Tabibi.
Here are two questons: The team of Geither/Summer, and now Bernanke recommended to stay as head of Fed – do have at least SOME say in creating/implementing the financial regulatory structure for the nation. (Not all say, Congress has a lot, but some say.) Given that fact, is the nomination of Obama’s team of THIS three-headed dragon, Geither/Summers/Bernanke – which IS in Obama’s control –
a. Does THIS team and what they do to create/influence financial policy – are they creatures who can CHANGE the regulatory structure that made them rich, or mere continuers of the ‘bankster vig’, that enriches a select few, making the rest of us poorer?
b. If the question to A is, YES, then a secondary question (less important that the first, as only related to the article) they are creatures of the finance world, then is THIS ‘Team Finance Obama’, a betrayal of the financial rhetoric of Obama?
bayville
This part, is without a doubt, accurate.
JC
Well, then we are screwed, right? How big can the “Vampire Bankster Vig” get? Bigger than it already is? How much can they guys suck out of the american economy, making us all poorer?
And where is Blade, to combat these Bankster Vampires? I’ll sign on as Ryan Reynolds, because I want that sixpack on my own body.
General Winfield Stuck
Well, I went and read about half of Taibbi’s little opus and the best that I can gather is he wasted a lot of time and bandwith to basically describe the people Obama hired as rats. I already knew that, and would be hard pressed how it could be any, or much different if he had hired one rat over another in an industry over run with rats.
And folks like Krugman, who stand on the sidelines and fling mud on how yer doing it wrong, should have raised their hands when Obama was looking for soldiers to fight this battle.
So let’s remember, what a huge shit sandwich Obama was dealt, with the sky reported to be falling on the world economy.
“Obamas Big Sellout”” is bullshit by Taibbi, after reading his sanctimonious whining because people called him his sloppy fact checking, important ones or not, research and writing.
No doubt Obama has made mistakes and maybe some big ones, but I don’t have any sympathy for people who take that and write headlines like Taibbi to cause people to pay attention to what they write.
There is not a doubt in my mind that Obama never wanted anything what so the fuck so ever to do with Wall Street, Banks, and auto companies, and getting involved in bailouts and unwinding all the felonious shit. Obama hardly said a word about any of it until Paulson and Bush broke the news that hell was on our doorstep and the devil wanted his due, or America and the world could and would have to eat cake.
You have to buy into something before you can sell out. Obama never did the former, except as a reluctant rescuer.
Mark S.
@JGabriel:
Beats the shit out of me.
John O
Lots of great points, as usual.
Obama IS hampered by the built-in inertia; we don’t get jack-squat from G-S in terms of ROI, and the economic team the President put together makes one a little suspicious.
I simply don’t see how this ends well.
JC
So, this seems clear to me – if we grant the premise that these guys, are ‘rats’ – or part of the Vampire Bankster Nation – WHY is it the case that Obama had to hire ‘rats’? Why not give a bigger role to Goolsbee, or Volcker, who is really trying to rein in the excesses?
JGabriel
mr. whipple:
Hell, I hoped I was voting for the radical sociaIist Palin said he was.
But I knew I wasn’t. Anyone who is actually surprised by Obama’s centrism wasn’t listening to him during the campaign.
.
kay
I’m deeply uncomfortable with taking a fairly large group of individuals and labeling them “acolytes” of Rubin, based on four different possible points of connection.
If he wanted to say that these people share an approach, an ideology, and that he thinks it’s 100% wrong, I have no problem with that.
Why set it up like Rubin is the evil puppet-master? What does it even matter? He objects to the APPROACH, right, not the individual?
“What do all these people have in common? Connections, tangential or otherwise with…RUBIN!”
And he goes to such lengths to get there. Citi to Goldman to the Clinton Administration, he can tie all of these people together using those threads.
I’m uncomfortable with that set-up. I hate that “associations” argument.
He thinks the advisors are too sympathetic to Wall Street and not progressives. Okay. Just list the objections to the specific actions of each individual and go from there.
Why create this big unified theory that revolves around one individual, unless he’s hinting that they are acting not out of some shared ideology or discredited theory, but instead out of personal interest?
If that’s the charge, if he really thinks the Treasury Secretary designed TARP to personally enrich himself and his associates, that’s a serious charge, and he’d have to back that up.
So what is he saying?
Is it that they’re not progressives or that they’re corrupt? Because those are two very different things.
John O
@General Winfield Stuck:
I don’t think Obama “sold out” either, not at all. If he was King, things would be better, but that’s not the way he approaches things, which isn’t all that bad a thing. It’s just slower.
I still think Taibbi is right, and I suspect Obama thought he could talk the Smartest (financial) Guys in the Room, also the most influential, into admitting their mistakes. Those mistakes were, in fact, rather easy to point out.
He misunderestimated their sense of entitlement, because the POTUS doesn’t look at things that way.
JC
Kay,
That’s easy – Rubin is a good stand in for the ideology. And, was instrumental in lots of the deregulation that landed us in this position (as was Summers), and is quite happy with Vampire Bankster nation sucking down a larger VIG off of the american economy.
It makes it a better story, even if you are really talking about the ideology.
BR
Sounds like what’s needed is a new metric to replace the Dow and it should be talked about everywhere on a daily basis.
Any ideas?
General Winfield Stuck
@John O:
Now I don’t know much about this topic, so I won’t make calls on what or what should not have been done. Whether drastic change was necessary, or not. But seeing what happened when a small company like Lehman going under did to the body economic, it seems to me, while drastic change may have been and may still be necessary, that when dealing with possible global catastrophe, slow might be the ticket, for now.
And it may well have been a mistake hiring the so called smartest guys in the room, ie Gheitner and Summers, as I have said from day one I don’t trust either. But what have we gotten on the meta economic stage lately, a 3.5 GDP last quarter, and a job market heading in the right direction. All this from doom just over the horizon.
And no doubt the Wall Street fucks came out smelling like roses and maybe that was or wasn’t necessary, I don’t know, and I doubt Taibbi does either, and I hate that these gilded crooks got away with it. But what is more important now. Getting payback, or not eating out of a tin pot?
kay
@JC:
I don’t like “stories”.
I also sort of resent this idea that has become entrenched that Taibbi is the only one daring to question the approach to the bail out. It’s bullshit. Plenty of people are critics. I think I have read a withering Reich column every day since January. Elizabeth Warren takes TARP apart nearly monthly. Her last piece was “The Death of the Middle Class”, I believe. She’s hardly an Obamabot, and she’s in an actual oversight role.
He’s the only one that uses individuals to draw an elaborate web of connections and associations, sometimes the connections are so attenuated as to be ludicrous. I don’t even think that’s necessary, unless we’re going with what amounts to a conspiracy.
Obama can meet a person at Harvard AND that person can have once worked for Rubin, or later work for Rubin. Those two events are not conclusive as to anything. Was the first question in the interview “please state your connection to Rubin, because we’re forming a team of acolytes ( wink-wink CO-CONSPIRATORS)?”
I’m not on board for the associations stuff. If he’s got such a great case he shouldn’t need it.
valdivia
Have any of you read Dani Rodrik on Simon Johnson? I would recommend you do, so that no one takes his word as the golden standard of understanding as if he is infallible. The fact that Johnsons’s diagnosis keep getting repeated really drives me nuts.
Rodrik’s point is that the problem of economists is that they are always 100% certain they are proselytizing policies that will fix it all and then when they turn out to be wrong, they turn around and exhibit zero self doubt arguing the opposite without thinking that maybe the problem is not only the direction or content of theories but the way they make it seem like silver bullets that every country can follow like a freaking plug-in recipe. No consideration how each freaking case may be different. Sorry for the rant I am just tired of hearing people like Johnson who were telling countries like mine what to do in the 80s and fucking us up royally now be made out to be heroes because they are hocking some other economic certainty without zero idea of how it will really play out.
El Cid
Ideologies don’t live and breathe by themselves, so from time to time you have to connect them with the individuals they apparently inhabit.
John O
@General Winfield Stuck:
I read my share of Calculated Risk and The Big Picture and because of those two blogs I only lost 13% last year, which I believe should qualify me to run Citi.
I understood there was no good alternative to the bank bailout. I just resent being put in that position, and that nothing substantive to stop it from happening again is or will be done.
It would have been smarter to spend that money from the bottom up. Should’ve given it to us.
valdivia
@General Winfield Stuck:
this and what Kay has been saying.
JC
Well, I do get your point. I would only say that I do like stories, and as Digby says:
Most people do like stories, and Tabibi is good at this. He can use his abilities for good or evil, or course, but factually, is he correct that Team Finance Obama is part of Vampire Bankster Nation?
Kevin Drum, John Cole, many many many others agree, that yes, this is the case.
If it IS the case, then a ‘riveting story’, is GOOD way to make the point.
Bruce (formerly Steve S.)
It’s funny that Taibbi is being held to the same rhetorical standards as an academician and much higher standards than we expect from your garden variety op-ed writer. Jesus, people, lighten up. His oeuvre is closer to that of Colbert or Carlin. He’s fun to read and correct about the essence of most issues. His primary outlet is a magazine that puts Taylor Swift on the cover, for Christ’s sake. And in spite of all that he’s righter about stuff than any of Hardball‘s blowhards, and his contributions more factual and profound than a year’s worth of This Week roundtables put together.
JC
Agree with Bruce. I haven’t been as entertained reading about financial stuff, as I have since Billmon stopped writing. Ah, I miss Billmon. Bruce for the WIN!
John O
@Bruce (formerly Steve S.):
Right ON.
PeakVT
And he goes to such lengths to get there. Citi to Goldman to the Clinton Administration, he can tie all of these people together using those threads.
I think Taibbi believes the connections are more substantial than casual acquaintance through working in the same organization at the same time. But even if the connections are weak, I still find it unfortunate (disturbing?) that so much of the economic policy leadership is drawn from a relatively narrow circle. And without speculating about motives, there is no doubt that Obama’s policies are going to be influenced by the people immediately around him. He can’t be an expert at everything, even though there is no doubt he is very intelligent.
Toast
I’m frankly shocked at all the people rushing to defend Taibbi because he gets the story — the “story” being that Wall Street pulls a lot of the strings in DC — “basically right”. If recognizing that economic and political power are deeply intertwined is some sort of threshold for being allowed to publish 10,000-word screeds in national publications, all of us should have Taibbi’s job.
This bit from Drum – pointed out by an earlier commenter – stands out:
“Ridiculous” doesn’t do it justice. It’s a batshit-crazy lie. But, as with so many of the details Taibbi lards his pieces with, it sexes things up a bit. It gives his story more pop. And it’s exactly the sort of thing that makes Taibbi so detestable.
Taibbi doesn’t merely exaggerate; he fictionalizes. He joneses so hard for over-the-top indignation that he can’t settle for being pissed off at what is, he needs to warp reality to be even worse so he can get his rhetorical rocks off. As a stylistic matter, I find it repulsive. As a practical matter, it does no favors for the cause he purports to represent.
John O
@PeakVT:
Silly.
The personal is everything in the The Village. And it is where we live, too.
Mark S.
@Bruce (formerly Steve S.):
This.
And Taibbi’s a journalist. He writes stories.
John O
@Toast:
*scoff* Taibbi admitted as much in his rebuttal. He said that was obviously a worst care scenario.
Like those are always underestimated.
JC
I understand this point. That Obama had ‘no choice’, and given the fear among the elites, he had to nominate people who are part of the Vampire Bankster nation. To reassure, if nothing else – change comes slowly.
And that may be right, who knows?
General Winfield Stuck
@Bruce (formerly Steve S.):
I had at least thought this way to a degree, until I read his response to critics. Seems to me he takes himself quite seriously, Rolling Stone and Taylor Swift, or not.
My god, the man was on Morning Joe. You can’t get any bigger than that/this is both snark and true when all the chickens are counted.
Will
JC,
Billmon still pops up occasionally to write a KOS diary. The last one was in October, but he seems to miss a few months and then pop in again. Google Billmon and Kos for more info.
Billmon’s absence is a bit worrying. While I never pinned it down exactly, I got the feeling that he works in or around the financial industry. He predicted a lot of the things that Taibbi and company are saying, and I’ve noticed that he tends to vanish when he’s pretty much lost hope.
I’d actually pay good money to see how the plugged-in insiders were investing their own money. I suspect the results would scare the shit out of everyone here.
kay
@PeakVT:
There’s huge gaping holes in even the “narrow circle” association argument. What about Christina Romer? Why leave her out?
She’s brilliant, she’s an academic, she co-authored his economic platform, and she’s clearly influential.
She doesn’t get mentioned because he can’t draw even the most attenuated connection to Rubin, or Goldman.
John O
@Will:
Billmon was so creepily three days ahead of the last Israeli-Lebanon conflict I thought he was actually some sort of mystic.
Whatever that person does, I read it, and act on it. One smart dude.
General Winfield Stuck
And I realize, I might have got carried away some after seeing the Obama Sellout thingy. What can I say, as a card carrying O-bot.
kay
@PeakVT:
And Elizabeth Warren. Who Obama cites constantly to sell the consumer protection for financial services idea, with her toaster analogy.
She doesn’t fit the associations theme, so she’s ignored. I think she’s fairly influential. The House passed most of her plan yesterday.
JC
Will,
That’s right! I just went over and found Billmon at Kos. Here’s the last thing he wrote about Financial Stuff.
Talking about a Congressperson defending Goldman, this awesome quote:
Jim
@Toast:
Well, that’s something else I don’t like about Taibbi. He doesn’t represent any cause, he stands on the sidelines and sneers with his arms folded, too cool to engage. Nothing and no one is good enough for him. That’s the distinction I make between him and Krugman. It’s also why I find it so funny that the PUMAs are declaring Taibbi their great vindicator. Taibbi would be saying the exact same thing about Hillary, maybe worse.
Will
John O,
If I had to guess, from some of his tidbits of personal info and writing talent, I’d bet that Billmon works for one of those insider financial research/news services that cost big bucks to get and somehow never get leaked on the internets.
Will
I wouldn’t cite Warren as an influential insider. She was on PBS very recently for an extended interview and was fuming about how the economic crisis was being handled. During the interview, she said that she has no real power or investigative authority.
I think it’s an extended version of this one.
John O
Yeah, from my reading of Billmon, and I was an addict after I found him, I suspect he’s an insider of possibly several stripes in his careers.
I tend to use the “retrospectively correct” principle of evaluating the case being made in real time. Billmon never failed to make the grade.
JC
Kay,
I appreciate your factual examples, of Roemer and Warren.
However, couldn’t those examples also be used, that Obama didn’t actually give the POWER to these people? Just like Goolsbee was marginalized, certainly Warren’s role isn’t one that is a threat to the agenda of Vampire Bankster Nation.
And Roemer – what is her relationship to financial regulation, if any? Last I recall, last piece I read, she was pushing for a much bigger bailout, ala Krugman – but got voted down by Geithner/Summers.
Ailuridae
@General Winfield Stuck:
Umm, WTF? Can you provide any evidence that Krugman or Baker or DeLong or Galbraith wouldn’t have been thrilled to serve in a major policy position if asked. Like-minded individuals to the, Goolsbee (who I know a bit_ and Volcker have happily agreed to serve in secondary/subservient positions.
I don’t disagree that Obama was handed the shit sandwich of all time. Please don’t accuse good people of not being willing to do the work without some evidence that is the case.
General Winfield Stuck
@kay:
What about that lady who ran the FDIC agency and foresaw what was happening and got slapped down. She seems smart and honest.
I’m too lazy to look it up. But wonder what happened to her. She might have been a good one to turn to for Obama, instead of them good ole boy crooks.
Jim
Sheila Bair? From what I understand, she hasn’t been brought into the inner circle. and I think she should.
John O
@General Winfield Stuck:
Brooksley Born. And I agree.
burnspbesq
@Bruce (formerly Steve S.):
It is possible to write stylishly for a general-interest magazine and have the facts straight. Go back and read the reporting that Bethany MacLean and Peter Elkind did on Enron for Fortune, for example.
Taibbi doesn’t seem to give a shit about facts.
JC
Sorry, one more bit from that Billmon:
Again, Vampire Bankster Nation.
Again though, it really could be that Obama’s judgment was that he couldn’t take on Vampire Bankster Nation immediately.
Or, it could be that he is fine with being one of the ‘centrist Democratic elite’ that has made it’s peace with Vampire Bankster Nation.
I certainly don’t know.
J. Michael Neal
@JC:
I hate to point out the obvious, but the purpose of reading about financial stuff isn’t to be entertained. I can recommend any number of novels to pick up if that’s your goal. The purpose of reading financial stuff is to learn. The biggest problem with Taibbi is that his primary purpose is to entertain. He’s good at. What he isn’t any good at is teaching, largely because he doesn’t know the subject himself.
Matt Taibbi, and the ethic that elevates him, reminds me of the ethos of the Harvard Business School, which is basically that, if they teach you some basic management techniques, you don’t have to know anything about a particular industry to run a company in that industry. Taibbi thinks that, because he writes really well, that he doesn’t have to actually know finance to be able to explain it to people. Subject matter knowledge is trivial.
Well, HBS gave us George W. Bush, and I don’t think that Taibbi is much of an improvement.
Will
I know academia is a dirty word these days, but as someone who spent the middle portion of the Bush administration in graduate school, I learned to respect the shit out of the people with Ph.D.s after their name. This is especially true regarding the two wars and the financial crisis.
The professors around me saw through the bullshit, correctly predicted the outcomes and made very accurate predictions about what was coming. As an example, people in academia saw both the housing and stock market crashes coming years before they happened.
I suspect that a lot of people in the financial services industry and media saw it coming, too. Professors were just the only ones looking at the data and history that didn’t have money to make by keeping quiet.
Obama probably could have benefited from this insight. I suspect that having more academics and less banking professionals among the appointments would be very welcome right now.
Ailuridae
@Jim:
Bair hasn’t been brought into the inner circle (and no Democratic administration would consider otherwise) because, broadly, she is an ignorant conservative ideologue. Which, of course, is why the Morning Joe crowd is so pissed that she is left on the fringes.
Democrats get a fever that a Republican appointee could point out that the “CRA ruined American finance” meme is BS while not realizing that’s an exceptionally low bar.
Rosali
Sen Ensign, Gov Sanford, John Edwards on SNL talking about Tiger’s affairs.
General Winfield Stuck
@Ailuridae:
I am at your service.
Why would Obama ask someone who said this?
Didn’t exactly raise his hand, did he.
Or maybe he did and was turned down. These things are not normally made public.
SGEW
@Ailuridae:
I’m only familiar with the evidence on Krugman:
“I’m temperamentally unsuited to public office.” – Paul Krugman, 2008 (cf.)
Lord love ’em.
[ETA: ah, ya beat me to it (with an alternative source to boot!); obviously, Prof. Krugman really likes to make it very clear that his temperament is not suited for a government job (or it’s his convenient excuse, whichever)]
J. Michael Neal
@JC:
No, she got voted down by Joe Lieberman and Olympia Snowe. The administration was behind a larger stimulus package.
JC
I agree completely – but I disagree that I don’t learn when reading Tabibi. Again, the ‘entertaining story’, of course, has to be true. And in this case – as has been stated – I believe it’s true, Drum believes it’s true, Felix Salmon (a econ head if there was one) believes it’s true, Digby believes it’s true…
And I still say Bruce for the win. Tabibi is more ‘accurate’ and educating, that probably 80% of the editorialists out there.
John O
@Will:
Look, “intellectuals” aren’t always right, but their consensus coupled with their records, again with the benefit of hindsight, should be sort of our default-setting.
JGabriel
kay:
Perhaps.
On the other hand, Taibbi himself grew up as the privileged son of a well-regarded network reporter — Mike Taibbi, Emmy winner and multiple winner of the Murrow Award — in the media world, also a small world of connections and the privileged, similiar to and often crossing paths with the world of finance (Mitchell/Greenspan, anyone?).
So, to my eye, it looks less like Taibbi is creating a web of ludicrous connections, and more like he is describing one he grew up in and the dynamics of which he knows well.
.
Will
Krugman’s a bit of a bad example, because he’s been a longstanding critic of Obama, to the point that I suspect he quietly but actively dislikes him. He got plastered as a blindly partisan Clinton sympathizer for it, but I’m wondering if he was reacting more from either a much closer reading of Obama’s record or off-the-record personal information.
J. Michael Neal
@Will:
You mean people with PhDs like Larry Summers, Christina Roemer, Austan Goolsbee, and others in his administration? This is another one of those things that Taibbi was factually incorrect about.
Hunter Gathers
I have always foung Taibbi’s work to be that of a low rent HST wannabe, but what gets me worked up about it is that he won’t come out and say what bugs him about Obama so much. Obama rubs him the wrong way (always has, for some odd reason), but the gutless prick won’t come out and say exactly what it is that bugs him so damn much. So he hides behind the “Rubin is the cause of all of it” meme.
If Taibbi has a personal problem with Obama, he should take a page from Dr. Gonzo himself and stop hiding behind his polemic bullshit. Thompson knifed Ed Muskie (the Ibogaine rumor) because he thought of ‘Big Ed’ as a worthless piece of shit, and NEVER hid that fact from anybody. Thompson despised Humphrey because of the carnage Humphrey and Daley caused at the 1968 Dem Convention when Humphrey hijacked the party and Daley set loose his dogs out into the street to beat the tar out of anyone they pleased (Thompson included), and never hid that fact from anyone either. HST also never hid his personal contempt for Nixon as well.
If Taibbi is going to get on his soapbox and bitch, he needs to give us the REAL reason he doesn’t trust Obama. Until then, he’s just another hack.
What I find the most hilarious about Taibbi is his anti-corporate rhetoric. I would hate to tell you this, Matt, but the guy who publishes Rolling Stone, you know, the guy who writes your paycheck, Jann Wenner, is THE original corporate sell-out. He sold out decades ago.
Can’t wait to read the newest fluff piece from RS about the current flavor of the month, who just happens to be sprawled out half naked on the cover, with a ‘If you buy my shitty record, I might fuck you’ look about them. But I’m sure I’m wrong about Lady Gaga, so what do I know.
J. Michael Neal
@JC:
That’s an amazingly low bar, given the quality of editorialists we’re stuck with. That ratio would, for instance, leave him as the fourth best OpEd writer for the Washington Post. Is that really the standard your shooting for?
Comrade Kevin
@J. Michael Neal: Did Taibbi shoot your dog or something? You start frothing at the mouth at every mention of his name.
Ailuridae
@General Winfield Stuck:
Ughh. Paul Krugman isn’t qualified to be Treasury Secretary (and neither are Baker or DeLong). That’s one position of many, however. Also, I am pretty sure that if any of them were offered LS’s job they would have taken it.
Also, Krugman is clearly being glib in his comment about disposition. Paul Krugman, or Dean Baker or Brad DeLong aren’t considerations for jobs like that.
Keith G
My city just elected Annise Parker, a very out lesbian as mayor, with 53% of the vote in today’s run-off election.
As a gay guy, I am so proud of Houston. If I can find one, I’ll put up a link to her acceptance statement. She is quite a fantastic person.
JGabriel
Will:
I don’t know about “plugged-in insiders” but I seem to recall that, at least a year or two ago, most economists, when asked, said they were keeping their accounts in basic money markets, for lack of any better options.
So, not particularly scary, just really (small-c) conservative strategies.
.
Will
Our elite overlords actually draw from a small pool. Harvard’s enrollment is under 20,000, which is smaller than the enrollment of The University of Utah. Yale’s is under 5,000.
Our nation’s “Best and Brightest” is drawn from a very tiny pool that includes some of the brightest students in the nation mixed with a large number of the children of the country and world’s privileged, some of whom are brilliant and some of whom are George W. Bush.
That’s a good starting point to any discussion as to why our national dialogue is so incestuous and limited.
John O
@Hunter Gathers:
Tough crowd.
I still trust Obama, but Taibbi is pressing as many of my “Why should I?” buttons as much as anyone I have the time to read regularly.
Do you not think Wall St. has a disproportionately large influence on Congress?
I’d like to see that explained and defended, no question.
JC
Just saw this interview with Tabibi at Reason:
One quote stands out:
Okay, well, clearly Tabibi isn’t gonna go the sedate academic or Washington way when he writes…
Ailuridae
@J. Michael Neal:
Ben Nelson (and Chuck Grassley oddly) are the villains of the stimulus fight. The cutting of state aid and replacing that with the AMT (which isn’t stimulative) cost somewhere between 2 and 5 million jobs.
General Winfield Stuck
@Ailuridae:
My original comment was that people like Krugman slinging mud from the sideline did not raise their hands to help Obama. That is demonstrably true from his own words. Whether or not he was asked is irrelevant.
I do hate it when people can’t admit they were wrong. And you were and are one of those people..
Will
I think we’ve also established that only one of those three has any substantive power in the Administration. As for Summers, I was thinking more of the type of professor who teaches, researches and makes his money primarily from these pursuits and less from things like this:
Yutsano
@Keith G: Huzzah! Rise of the lesbyterians!
Brick Oven Bill
A little birdie knew that this all must be Reagan’s fault. Somewhere down at the root of this mess.
For the record, Reagan nominated Volcker, not Geithner.
In either case, my shower now works, so I’m off to take one. Go Carbon Dioxide!
JC
J. Michael Neal,
Please explain why Kevin Drum, Felix Salmon, the humble proprietor of this blog, and Digby are wrong, that the essential thrust of Tabibi’s article is right.
Do you agree or disagree with their – also my – assessment?
Or, rather – even better – do you think that Obama is/is not a member in good standing of Vampire Bankster nation, or hopes to reduce the power of Vampire Bankster nation, despite the evidence of the appointments that have the most power?
J. Michael Neal
@BR:
The S&P 500? Beats the shit out of the Dow, which can’t even do math right.
More seriously, let me think aloud here. The fundamental economic problem here is that the power of Wall Street is far greater than it should be relative to the rest of the economy. The focus, here and elsewhere, is that we need to reduce the power of Wall Street.
Maybe we’re all looking at this from the wrong direction. Maybe we should be focusing more on increasing the strength of everything else. Right now, we can’t get meaningful regulatory reform through Congress. If everything else could be made stronger, it would reduce the relative power that Wall Street holds over Senators, by producing new funding sources to corrupt them, if nothing else.
As I said, I’m thinking out loud. I don’t know that there’s an effective way to do this, either. Maybe, though. Maybe one advantage of pushing green technologies is that it could enlarge the set of the business community that’s dependent upon Democratic largesse rather than Republicans. Maybe there are other things to do.
Cat Lady
@Jim:
The choice was between Obama and McCain/Palin. I don’t think you have to be an O-bot to say, after reading everything related to the way capitalism as represented by Wall Street *cough* Goldman Sachs *cough* has wrapped it’s tentacles around our representatives in Congress, that Obama was the best choice. We only could choose between Obama and McCain/Palin. We need better Senators and Representatives. We need to keep shining the the light on the fuckers and force them to defend themselves.
Obama is the chauffeur of the Goldman Sachs limousine that Bush drove for 8 years of pedal to the metal towards the cliff.
General Winfield Stuck
@Will:
He may be a bad example, and I take him at his word that he is temperamentally unsuited for government work. It takes the ability to compromise and work with others in a infinitely complex manner.
This was my complaint with Krugman, and a Nobel Laureate in economics I might add. He has no sense of what inside the shithouse is really about and went way overboard in much of his ideological criticism. He seems to have calmed down some from those early days of the O administration. And many of his ideas seem sound, but not the hysterics and flaming Obama, which is why I included him. And because he has a lot of credibility in the subject. Though not politically as you say, for being a Clintonista of the first order.
JC
Here, of course, we agree.
Ailuridae
@General Winfield Stuck:
You haven’t established what you think you have established. Then again, BJ wouldn’t be BJ if people knew what they were talking about in relation to economics and finance.
Krugman killed Obama during the campaign and at times exceptionally unfairly. He wasn’t getting asked to join the administration. And of course its not just Krugman its people like Krugman (and that includes Baker and DeLong and Galbraith) who are slinging mud from the sidelines. Well those people largely weren’t invited into the administration and any of that vent that got in have been marginalized (Roemer as a merciful exception).
JGabriel
@Ailuridae:
The guy won a Nobel Prize in Economics. Krugman’s at least as qualified to be Treasury Secretary (or Fed Chairman, which would probably be a better fit to his academic record) as Obama is to be President.
It’s fine to be critical, but let’s not advance arguments that are on their face ridiculous.
(Did I just say that on the internet? [Buries face in hands.])
.
J. Michael Neal
@Will:
No, we haven’t. You are relying upon the writing of someone who can’t identify the actual set of jobs that Austan Goolsbee has had, or what his policy beliefs are. Austan Goolsbee, for instance, disagrees with him. Of course, there are anonymous quotes saying otherwise. Oddly enough, the people who want to believe those anonymous quotes over Goolsbee on the record prefer to take the word of people speaking on the record over anonymous sources from elsehwre in the same story.
General Winfield Stuck
@SGEW:
Didn’t beat ya. twas a BJ mind meld of sorts
I do appreciate your effort and help :)
Keith G
@Yutsano: And when tomorrow’s papers show the pic of her on the stage holding her partner’s hand aloft in victory, please let it register that many of us down here are not crackers.
Steeplejack
@BR:
I have read various places that the S&P 500 is a much better metric than the Dow Jones Industrial Average, but I have not researched it in depth. The Dow is comprised of only about 30 companies, and they run to the old-school, dinosaur-y end of the spectrum.
But what are we really measuring? I’m not sure that the health of the economy in general can be encapsulated in one number, especially one focused on the stock market. That strikes me as reinforcing the fallacy that what’s good for Wall Street is automatically good for Main Street. I’m not sure I agree with that. We appear to be starting another jobless recovery, and the bulk of the population’s
incomereal earning power has been stagnant for 30 years. And that has been true through all the booms and bubbles of the last two decades. Ugh.Ailuridae
@Brick Oven Bill:
No, dipshit. Reagan renominated Volcker. Volcker was already head of the Fed when Reagan took office.
Reagan also failed to renominate Volcker a second time a decision that is among the worst in the modern history of the Presidency.
General Winfield Stuck
@Ailuridae:
What I established had nothing to do with knowledge of finance. It had to do with a simple statement that you are trying to weasel out of with ancillary crappola. But by all means continue, that kind of wiggling is also allowed.
Will
Here’s the frustrating thing about our national politics. In about 20-40 years, the posthumous insider memoirs, classified documents and guilty survivors will start to paint a picture of what actually happened and what people were really like outside the well-crafted personas. Until then, we can only gleam the occasional insights from reading between the lines and the odd “too honest quote” fuckup.
Krugman may have been that harsh because he doesn’t understand the realities of the rough-and-tumble world of politics, even though he’s served in an official capacity in the past. He may have been overly partisan out of loyalty to his previous benefactors. He may have trouble that the officials are doing what he would do. Or he may be privy to private insights about the people involved that he can’t share publicly.
Either way, it’s impossible to miss that, for some reason, he’s been very down on Obama and his team for some time.
bago
I’m in DC and the reflexive conservatism still surprises me. The parochial defense of prejudice is amusing.
Hunter Gathers
@John O:
There is no doubt that Congress is a wholly owned enterprise of Wall Street. But regulatory changes have to pass through Congress. Obama doesn’t have a magic wand he can wave and change financial regulations by executive order. And when the branch that writes these laws is filled with corporate hacks, there’s not much one can do about it.
Unless we do total public funding of political campaigns, we are going to have to get used to eating our daily shit-sandwich.
I don’t expect Obama to be a saint. I never have. I voted for him for one main reason : he is the only one who can bring the American Empire down for a soft landing, with as little permanent damage as possible. If we had President Walnuts, we would have crashed and burned already.
J. Michael Neal
@JC:
Of the four people you list, three of them have a lot less experience in finance than I do, and none of them are particularly experienced in politics.
As for Felix Salmon, please provide some citations to him. I’m less than inclined to say whether or not I agree with him based upon your question alone. Of the stuff of his I’ve read in the past, it has tended to a lot more nuance than you are indicating.
Kevin Drum, as others have pointed out, basically wrote a post that says that Taibbi gets a bunch of stuff in his piece wrong, at least one of which is an extremely damning indictment of Taibbi. No one who thinks that the $23.7 trillion figure has any relevance to anything should be relied upon.
I think that it’s not really worth responding to this particular question, since it already assumes its answer.
Ailuridae
@JGabriel:
No, no he’s not. Economics and finance are not one and the same and Krugman simply doesn’t have the requisite experience to be Treasury Secretary. But he would be awesome in LS role, or head of the Economic Advisors or head of the Fed. Not all jobs in finance and economics have the same qualifications/
Yutsano
@Keith G: I have a good bud who’s an engineer in the Houston area, so I can certainly attest to that. Granted he’s an import, but still, he definitely doesn’t qualify a cracker material.
Will
That and the fact that Summers name and face are all over the place in discussion of Obama’s economic policies. He and Geithner are the public face of the Administration’s economic policies. The other two may have a large role in private, but everyone is keeping really quiet about this, if so.
My suspicion is that they, like Elizabeth Warren and Paul Volker, are not the prime movers of White House policy. Could be wrong, but suspect not.
Ailuridae
@bago:
Its not conservatism; its establismentarianism. Similar but not the same.
General Winfield Stuck
@Ailuridae:
Then answer me this genius. If Krugman is not qualified to be Secretary of Treasury, what the fuck is he doing spewing boatloads of flame on how Gheitner and Obama should be doing it.
You can;t have it both ways.
Will
bago,
DC is a mid-sized Southern city that just happens to double as national capital. Moving the capital outside of a major cultural center like Philly and New York was one of the worst decisions made by the Founders.*
* Not doing away with slavery being the worst.
J. Michael Neal
@Steeplejack:
The narrow composition of the Dow is only one of its problems. Another one is that, as I said above, it gets the math wrong. The Dow is not weighted by the market cap of the stocks in it; they all have exactly the same effect on its changes, regardless of how large they are. Worse, it doesn’t even weight by the price of the stocks in it. A $5 move has the same effect on changes in the Dow no matter which stock it is. Thus, a stock with a price of $20 has to have a 25% move to have the same effect that a stock priced at $100 has with a 5% move.
That wasn’t really the question BR was asking (he was looking for metrics other than the stock market), but the Dow is just dumb. That it has the grip on the imagination of the financial world that it does is a sign that the financial world isn’t as bright as it likes to think that it is.
PeakVT
@kay: Well, I didn’t say that every single member of Obama’s economic team has an association with Rubin. But Geithner and two of his deputies worked for Rubin, Summers worked for Rubin, Orszag and Furman worked at the Hamilton Project (which was founded by Rubin), and Gensler (Commodities Futures Trading Commission) worked for Rubin. That so many people in the current administration worked for Rubin may be inevitable because he was SecTreas for so long. But, again, motives aside, having so many people around who share the same outlook seems like a problem to me.
Don’t forget that Geithner and Summers are fuck-ups in their own right.
bago
@JC: That is win. If you can’t give coherent answers to someone throwing the horns, who can you answer to?
Ailuridae
@General Winfield Stuck:
I’m not qualified to be coach of the Dallas Cowboys. It doesn’t prevent me from pointing out that Roy Williams can’t get the requisite separation to be a number 1 receiver.
The Treasury is really, really fucking complicated. Geithner isn’t struggling with the complexity (he excels there) and that isn’t where the criticism is coming from. Its odd you keep citing Krugman while ignoring that its a huge swath of leftist economists who all have the same opinions about the stimulus, and cramdown and well everything and are all, rightly, criticizing Obama
You think you are playing gotcha and it just shows that you don’t understand complexity. And, in that way, despite your attempts to defend our President from Taibbi’s attacks you are behaving in the same way Matt does.
General Winfield Stuck
@Ailuridae:
Wut? What? What you smokin’ boy?
J. Michael Neal
@General Winfield Stuck:
There are three reasons he’s spewing the way that he is:
1) He does know a lot about economics,
2) He thinks he knows even more than he really does. That shouldn’t surprise anyone, because he’s an economist. A group of academics with a more inflated sense of their own self-importance is hard to find, and that’s saying a lot when talking about academics;
3) He has a column with the New York Times.
Beyond that, just knowing a lot isn’t sufficient for being Secretary Treasury. You also have to know how to manage people, and how to work with others. Krugman isn’t good at either. At least he recognizes it, which is why he said that he didn’t want the job.
It’s also worth noting that economics and finance aren’t the same subjects, though they both deal with money. Some of the most basic assumptions aren’t shared. Economics is about equilibria, and the idea that there is a balance that exists. When you swing away from those balances, the tendency of the system is to swing back to them. It gets more complicated from there, but that’s the starting point.
My training is in finance, and I’d never assume that there is some equilibrium that the system is necessarily trying to return to. Economists will tell you that markets should behave rationally. A finance guy will tell you that the market can stay irrational a lot longer than you can stay solvent. It uses risk as its paradigm, rather than equilibrium.
In most cases, this doesn’t lead to terribly widely divergent views. Right now, we’re not looking at most cases. Things get very, very weird when the economy gets as far out of equilibrium as it is right now.
Will
I will grant that Obama has a huge problem when it comes to expertise. The officials with the experience to run something like the Treasury, on both the Republican and Democrat bench, got that experience in an age when both parties had wholeheartedly embraced the type of free market fundamentalist policies that wrecked the economy. That’s their background, and I don’t see much indication that they have risen above their patrons’ intellectual underpinnings.
Obama would have either had to find an outsider, which pretty much means an academic or minor official, and try to get them through Congress. That would have been difficult to impossible in the middle of an economic crisis.
That’s about the extent to which I agree with the critics of Taibbi and company’s thesis. The problem I have is that Obama and his team should be establishing an independent and, yes, progressive vision of where we should be going and keeping his nominees in check.
At the moment, it looks like it’s the nominees who are the ones keeping the White House in check.
Ailuridae
@General Winfield Stuck:
I’m not the one pissing a stream of fact-free ignorance on this thread. You are, simply, out of your depth. You have just enough of an idea what you are talking about to post in this comment thread. But in a material sense you have no idea what the fuck you are talking about. Its painfully obvious.
J. Michael Neal
@Will:
No, he hasn’t. He was a staffer for the Council of Economic Advisers during the Reagan Administration. That non-political job is the only post in government he’s ever held.
mr. whipple
Krugman sort of helped Obama this week by comparing Clinton’s economic/job creation record to what Obama would need to equal, as if how Clinton got that record was something to emulate. Um, aren’t we looking at the same pool of pointy heads?
General Winfield Stuck
@Ailuridae:
Poor baby. Got something wrong and instead of just admitting it, throws a tantrum. You will feel better when the swelling goes down. Mr. Genius. LOL
Will
He’s a bright guy and quite well connected politically. I suspect he’s been inside enough to know how things operate.
John O
@J. Michael Neal:
I buy that almost completely. I’m about 75% cash. You could almost say I bought it about 75%.
So, what would YOU do? Cut taxes on the wealthy?
(I have no idea if that’s what you would be prone to do, for the record. I’m just sick of that as a “solution.”)
J. Michael Neal
@Will:
Well, yeah. The stuff that happens in private tends not to get the same kind of attention that the stuff in public does. In particular, it’s particularly bad form in politics to take your private arguments and agreements public. I’d also like to see the evidence that Christina Roemer, the Chair of the Council of Economic Advisers, has been marginalized.
JC
Here’s the link to the article.
On the fact that the financial community has too much power, we agree, although I like my Vampire Bankster Nation metaphor, of course.
And I think you may have misunderstood my 2nd question.
Is Obama fine with ‘the financial community having too much power”?
Given his appointments – fine upstanding members of Vampire Bankster Nation – it would seem so.
As was said above, by a couple of folks – it may be the case that Obama is not fine with it, appointments not withstanding – but if he has appointed anyone less in cahoots with the current financial and regulatory regime, there would have been an immediate reaction from the financial bloodsuckers, Congress, and the Village, that would have destroyed the reforms he is trying to get through.
We can’t see into his head – but we can see that the people who Obama HAS appointed to the most power – are NOT anyone who is going to challenge the financial community, in a way that the portion of the american profits created, go LESS to the same financial community. We can see this in his actions to date then.
General Winfield Stuck
@mr. whipple:
I agree that much of the Krugman shrillness we saw early on has dissipated, as I mentioned in subsequent remarks. Like someone else said here, maybe some, or a lot of that had to do with the primaries and left over angst from his ties to the Clinton camp/
AhabTRuler
@Will:
Ahem.
Ailuridae
@General Winfield Stuck:
Nope. You still have no idea what you are talking about.
John O
@Ailuridae:
Well, gee, Ailuridae, that was well debated.
Would you be so kind enough as to answer this question?
JC
It seems to be simple, after all.
a. The financial world gets too much money, relative to the rest of the economy, especially given what is actually contributed. (Vampires)
b. If these guys fuck up, they get off scot-free, because if they don’t, they bring down everyone else (Banksters)
c. Congress/Washington/NY etc, pretty much give the Vampire Banksters what they want, to the detriment of the naton.
So – is Obama part of C, or hoping, at some point, to change C?
His actions in his financial appointments – the ones with power – show he is PART of C above. And this is in conflict with his rhetoric in the campaign (and a lot of the rhetoric now).
But the argument that he had very little choice, may also be true – I don’t know.
Brick Oven Bill
I am now in the process of refilling those 2-liter bottles of former diet-soda with water. These came in very handy over the past week. Balloon-Juicer members, let this be a teachable moment.
Keep extra water around the house. This time it was Carbon Dioxide, the next time it might be the electrical grid. This was only a week, and I had access to town-water. A bunch of additional 2-liter bottles with water will be filled following this experience.
Here is a story from Hurricane Katharina worth repeating. If these Goldman Sachs’ bastards get their way, which they will, this could be world-wide.
“Behavior of people in general was horrible selfish animalistic.”
In my judgment, Goldman used George’s Christian faith against him. George went along with it. They own Barack. They surely have the Columbia records.
By the way, it is very, very, nice to be clean. I have no whiskers!
General Winfield Stuck
@Ailuridae:
I only mentioned Krugman in my comment. These other names are yours. I provided evidence that Krugman would in fact not be thrilled to serve, and did not raise his hand to help out. The rest of your mendacious shit is just that. Mendacious Shit.
Or mind reading about what Krugman was thinking, as he was saying something the opposite.
Now kindly piss off wanker, or head over to KOS or Hamsherland with your fellow wankers.
The Sheriff Is A Ni-
I find it hilarious that Taibbi uses the same tactics we cry about the Villagers and right-wingers using all the time – anonymous sources, playing fast and loose with numbers, connecting the dots with tangential connections – but since he says the populist bullshit we want to hear he ‘gets the big picture right’. Confirmation Bias 101 is in session.
And if he says the things the Villagers want to hear on a national stage – ZOMG OBAMA’S IN TROUBLE WITH TEH LEFT – well, its just a happy coincidence, right?
J. Michael Neal
@John O:
Do you mean if I get to be absolute dictator, or if I’m stuck in the position that Obama’s in? I’d give two completely different answers.
No, I have no desire to cut taxes on the rich. Even if I get to be dictator, and trying to stick entirely with financial regulation, I would move slowly. One of the problems is that a lot of the desirable changes can’t be implemented quickly. The last year has only papered over the problems in the financial industry, not fixed them, and a lot of the proper solutions would uncover them. For instance, we can’t make the banks small enough to let fail right now, because there’s still too much risk on their balance sheets. Forcing them to cut down right now would send half of them into insolvency. (This would be even worse if you tried to reimpose Glass-Steagel right now, because the assets would go with the commercial side, and the liabilities with the investment side, which would promptly lead to the bankruptcy of all of the investment banks.)
So, the stuff I lay out is all longer term. Glass-Steagel won’t be possible again for at least a decade; that’s how long it’s going to sort out the balance sheets.
1) Make all derivatives traded on exchanges. Lay down very strict, and bright-line, rules on what constitutes a derivative, and if someone comes up with a new one, they have to petition to get it onto an exchange.
2) Scale capital requirements to the size of the bank. I don’t think that there is any practical way to limit the size of the banks directly without doing more harm than good. For example, going back to the rules that banks couldn’t cross state lines is a really bad idea that would really impede the useful flow of capital. However, if you force banks to keep higher reserves as a percentage of liabilities as they grow larger, there is an incentive against growth, and less risk of them failing.
3) Find ways to regulate credit default swaps like insurance. Simply requiring that you have to own the underlying asset to buy the insurance is problematic with these products, but I’ve seen several interesting ideas for how to mimic that.
I’ve got some others, but they aren’t terribly fleshed out right now. As for what I would do if I were in Obama’s position, I don’t know. A lot of it depends upon exactly what is possible from Congress. Given the extent to which I think Congress is a giant, useless turd, the answer might be, not very much.
Ailuridae
@John O:
So, what would YOU do? Cut taxes on the wealthy?
Is that the question? Tough to follow the jump links?
John O
@The Sheriff Is A Ni-:
Confirmation bias like the sun rises in the East?
Will
AhabTRuler,
How to say this politely?
There are a lot of people around, but the majority of D.C.’s residents and the type of people who work in the Federal government do not mix. Outside of D.C., you are talking about a bunch of disconnected small cities and suburbs that have a varying amount of culture.
I know D.C. very well and have friends there. Culturally, it’s no New York. It’s not even Atlanta. The whole place is suffocatingly straight laced.
Among the federally employed, it’s a very insular company town. You aren’t going to find a mix of people from different fields and interests interacting, sharing ideas and becoming romantically involved.
It’s all government, all the time. People namedrop Senators like Los Angelenos namedrop directors. Outside of Tacoma Park and the colleges, there aren’t many freaks and other artistic types around.
John O
@J. Michael Neal:
No wonder you’re out here.
Good list.
Thank you.
I think it goes deeper, and the tax code needs to paired to about 20 pages, and the accounting rules to 100. We’re collecting money here, not trying to find God. It’s overly complicated because that’s in The Man’s best interest.
Ailuridae
@General Winfield Stuck:
Folks like Krugman indicates a set bigger than one. Try again.
You’re a particularly dim bulb.
J. Michael Neal
@JC:
You mean the post by Felix Salmon in which he says:
Yeah. That’s quite a defense, there. As it happens, I’m far more interested in even handed examinations than I am of enjoyable screeds that jump off the page. I find that they tend to be much better ways to figure out what’s going on.
Beyond that, I still see no reason to engage with your second question. As I said, I have little interest in enjoyable screeds on the subject, which seems to be the only thing you are interested in. If you would like to have a reasonable discussion, that’s fine, but those generally involve fewer references to vampires.
scudbucket
@J. Michael Neal:
This is an amazing display, caught in real time, of arrogance, narcissism, anti-intellectualism, and an unstated presupposition that ‘those who can’t do teach’:
I present you J. Michael’s takedown of Krugman:
He thinks he knows even more than he really does. That shouldn’t surprise anyone, because he’s an economist. A group of academics with a more inflated sense of their own self-importance is hard to find, and that’s saying a lot when talking about academics;
So, your subjective experience in private sector economics grants you more authority than an individual who has spent his entire adult life examining those very issues?
This I want to hear.
John O
@Ailuridae:
All right, this is even a little weird for me, but I feel the need to come to the defense of GWS, since I do not think he/she is a “dim bulb,” not in the slightest.
Will
On D.C.,
I do kind of like go-go, at least in small doses. That’s not really a Federal employee scene, though.
General Winfield Stuck
@Ailuridae:
No it does not. If I wanted to include other folks, I would have said Krugman and other folks. or, and others. The non colloquial equivilent would be “People like Krugman”
Wanker
Ailuridae
@John O:
I am sorry. Does “Folks like Krugman” not indicate a set bigger than one. Define membership and get back to me. I offered a possible set of “folks like Krugman”and was informed that … well, I really don’t know what I was informed.
Defend as is your wont. GWS has no idea what she is talking about and is trying to hand-wave her way out of it.
John O
@scudbucket:
Right. It had the distinct feel of “My God is better than yours” to it.
General Winfield Stuck
@John O:
Thanks J.O. But you may be on shaky ground. :-)
JC
Sigh. Come on, you must know what I mean – maybe you have a problem with my ‘rhetorical flourishes”, but you are surely bright enough to get my meaning?
The same thing without the rhetorical flourish is said in my last comment, said in YOUR comment that ‘finance has too much money’, and said at the beginning of the post by Martin:
Bottom line – do you think Obama is INTERESTED in the financial sector capturing less of the nation’s wealth? And what is your evidence for the yes or no?
I keep saying I don’t know, but that it seems as if he isn’t – with my evidence being his appointments of real power. Just interested in managing the sector a bit more, so that the sector won’t eat it’s own tail, taking the nation and the world with it.
John O
@Ailuridae:
Dude(tte):
I made no reference whatsoever to your quibbles with Krugman.
Seems to me though, retrospectively, that Krugman (and perhaps his ilk!) have been right more often than not over the past 5-10 years.
Ailuridae
@General Winfield Stuck:
Please try again. Why spend the words?
People like Krugman means the same as “Krugman”.
Ok. “People like You” aren’t very smart.
Yutsano
@Ailuridae:
If that’s diminunization by feminization I’m gonna say right now knock it off. I don’t care to get involved in your dick measuring contest here but that shit pisses me off to no end and does nothing to advance your argument.
General Winfield Stuck
@Ailuridae:
I are a he. Curious that you assumed she. Playing the misogyny card?
Ailuridae
@John O:
I have no problems with Krugman. I am defending him here against a slur.
I’m of his ilk and broadly agree with him and his criticisms of the President (whom I also really like and admire)
Will
On the subject of regulatory capture, I’m becoming increasingly fascinated by the stories of government officials who leave public life for a couple years and make millions for nothing more than lending their name to some private sector financial firm and maybe coming into the office once or twice week, maybe.
My cynical side suspects that this kind of thing might buy a little influence. I also suspect that any political type who criticizes the FIRE industry a little too much knows they do so at the expense of an short, easy job with the kind of paycheck that ensures that they and their family will be comfortable for generations.
John O
@Ailuridae:
Well, I might be able to relate. I got kicked out of Pandagon once when I was trying to agree with them.
LOL.
Personally speaking, my fingers aren’t fast enough for my head.
J. Michael Neal
@John O:
You must be a big fan of moving to IFRS. Me, not so much, though a slow convergence would be fine.
Couldn’t disagree more. It’s overly complicated, because that’s the only way to keep up with The Man. Look through the tax code. One of the things that you’ll find is that it’s extremely difficult to pin down exactly what constitutes income. The Code started out not complicated. Then someone found a way to get some money without it being counted as income. Someone else found a different way. So, we had to add parts to the Code to get those defined as income. So people kept finding other ways to get a hold of some money without it counting as income. So we had to make it more complicated.
There are two things that make the tax code as complicated as it is: trying to define what is income, and declaring what income you don’t have to pay taxes on, either temporarily or permanently. You could make the tax code a lot simpler by doing away with the latter, and we’d be in better shape. You can’t get rid of the former. Sure, it would be nice if people stopped trying to find ways to get a hold of money without it counting as income, but good luck with that.
The same thing even more true of GAAP. It’s complicated because, if it isn’t, people cheat. Sure, they cheat anyway, and some of the complications are designed to help that, but not most of them.
Take, for example, the rules on whether or not you have to account for a lease as a capital lease or an operational one. Sounds stupid; a lease is a lease. Sure, but if you allow the obvious accounting for a lease, you suddenly find that there are lots of companies that aren’t carrying assets on their balance sheet that they clearly should, just by leasing instead of buying. So, you have to come up with rules to stop that, or you’ll suddenly find that none of the airlines have a single airplane on their balance sheet. Odd, that.
So, you establish rules on what constitutes a capital lease, so that they’ll have to carry them. The FASB decided that, among other criteria, if you expect for 90% or more of the present value of the asset to be consumed by the lessee under a signed contract, then it is transferred to their balance sheet. Now what you find out is that the software used by everyone is programmed such that it will always spit out a set of calculations that show that only 89.5% of the present value is so consumed, without anyone who is capable of making honest estimates of these things ever looking at it.
The simpler you make the accounting rules, the more abuse you allow of them. Now, granted, since I’m a grad student in accounting, you should expect me to advocate leaving them complicated. Still, it’s the only way.
General Winfield Stuck
@Ailuridae:
Now the truth comes out. You were defending just Krugman against a slur. One that I proved was true.
Please wank on. Being I’m so dumb.
John O
Off to bed. More shopping tomorrow.
Fortunately, I think enough people are still stupid enough to bother to watch the Bears game.
Thanks as always.
cbear
Hey folks, just because Taibbi enjoys dropping turds into the punchbowl doesn’t mean the punch didn’t already taste like shit.
JC
I’m also off – enjoyed the discussion. It’s been a few months since I’ve gotten involved in one here.
Ailuridae
@General Winfield Stuck:
Why would identifying an unknown interlocutor as a she be misogynistic? Lacking a reason to suggest otherwise I use the feminine to describe people who’s gender/sex is unknown.
John O
@J. Michael Neal:
Argghh.
Bullshit.
If the tax code and accounting rules were simple enough so that anyone with a decent HS education could figure out Bill Gates’ tax nut, and the accounting rules were similarly straightforward, we would be in a position to debate the priorities much more honestly.
General Winfield Stuck
@cbear:
Long time no hear stranger. Guess you know about making the funny pool.
Ailuridae
@General Winfield Stuck:
Actually you still haven’t proved what you thought you did.
John O
@J. Michael Neal:
I’m gonna go out on a limb here and ask another question: Do you profit from the complexity for a living?
I think so, based on that last very cogent defense of the complexity.
J. Michael Neal
@scudbucket:
Actually, no. My subjective experience dealing with economists in academia, as well as the stories a lot of other people I know, mostly in academia who have to deal with the economists, share, leads me to conclude that they, as a group, have a wildly overinflated opinion of themselves, and that one should not trust them to have a good sense of what they know and what they don’t know. Ask around other social science departments; you aren’t going to find a lot of people who think much of them.
As for studying these very issues for his entire adult life, that’s something that Paul Krugman has decidedly *not* done. His expertise is in international trade. That’s what he’s spent his entire adult life examining. His qualifications with regards to financial regulatory policy are meager, at best. He, like a lot of us, has picked things up tangentially as he studies things that are kind of, but not really, like regulatory policy.
That was, really, the point I was trying to make. Finance is not the same thing as economics. Paul Krugman is an economist. Financial regulatory reform is primarily a question of finance. It’s not the same thing.
DougL (frmrly: Conservatively Liberal)
I just luv how we here at BJ can engage in an intellectual discussion without the childish name-calling you see in so many other places on the intert00bs. You fucking assholes make the rest of the shitheads out there wish they could fit their asses as tightly on their heads as we do here.
You peeps rawk! Now FOAD. ;)
General Winfield Stuck
@Ailuridae:
Okee dokee. If you say so.
I am off to sandland on Planet Libtard hopefully for dreams of Kate of Alice Through the Looking Glass.
Maybe she will make me smarterer.
AhabTRuler
@Will:
I’ll credit you with the best possible interpretation of that statement and simply inform you that you are incorrect in the above estimation.
A majority of Federal employees are career civil servants and long-term residents, if not native.
ETA:
Ha, you couldn’t be more wrong, although it does tell me a great deal about who you think works for the Federal Government.
I should add that I am currently a contractor with the Gov’t., and within the last week I have heard the sentence “when we went to the Chuck Brown show” uttered.
General Winfield Stuck
@Ailuridae:
We will let the readers decide, as always, if they aren’t too pissed off from such a vacuous discussion and put a pox on both our houses.
scudbucket
@J. Michael Neal:
This started out as a bit of a bitchslap, but now its obvious that you have know idea what your talking about:
One of the things that you’ll find is that it’s extremely difficult to pin down exactly what constitutes income.
That is exactly not why the Code is so unclear. Income has always been precisely defined.
§ 61. Gross income defined
(a) General definition
Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
Even taxable income is precisely defined:
§ 63. Taxable income defined
(a) In general
Except as provided in subsection (b), for purposes of this subtitle, the term “taxable income” means gross income minus the deductions allowed by this chapter (other than the standard deduction).
The problem is the impenetrable layers of deductions and exemptions which Congress has added through the years, usually for the benefit of corporations and trusts.
You really ought to research a little about these topics before you begin proselytizing.
J. Michael Neal
@John O:
We would also be in a position where we couldn’t trust the financial statements of any company in the country, because we’ve allowed them to define things however they like. Should an airline be able to operate without having any airplanes as assets?
Your false assumption is that it is possible to write the code in such a way that anyone with a high school education could figure out how much Bill Gates owes. You can’t do it, because, as you make things simpler, you allow him a lot more leeway as to whether or not something should count as income.
Rich people are either really clever, or can pay someone who is really clever. You’ll soon find that Bill Gates has $0 of income. For example, Microsoft owns a house. It leases it to Gates for $150 a month. Does he have any income based upon that lease?
scudbucket
@scudbucket:
I guess I should mention that those definitions are from the US Code.
Wile E. Quixote
@J. Michael Neal
That’s a completely stupid argument. Joe Cassano had plenty of experience in finance, as did the guys running Lehman Brothers and Bear Stearns. Jim Cramer has tons of experience in finance too, but I seriously doubt that you’re following his advice. The fact is that we’re in the situation we’re in because a bunch of people with “experience in finance” were greedy, stupid and incompetent.
Just because someone has a lot of experience doing something doesn’t mean that they’re any good at what they’re doing, it just means that they’ve been doing it for a long time, especially on Wall Street, where there’s no punishment for fucking up and where compensation is almost completely orthogonal to performance.
John O
@J. Michael Neal:
How about we go a step or two back and make Microsoft not a legal person?
Income is easy to define.
In this case, some independent assessment of the value of the property minus what Bill is paying to live there. C’mon.
J. Michael Neal
@scudbucket: Those two lines from the Code don’t define what is income. They define the terms “Gross Income” and “Taxable Income.” That’s not the same thing. Do you not even realize that your interpretation is completely circular? Gross income is defined as income received from whatever source. That’s nice. What constitutes income received from a source? From the definition that you are telling me explains it all, I have no idea.
Give me a simple definition that will allow me to look at any and every transaction that someone might be a party to, and know, just from that simple definition, whether any party has received income. I challenge you.
Wile E. Quixote
@J. Michael Neal
That’s a completely false statement. The way our tax code and accounting rules are set up now companies can define all sorts of things as income, or as losses, depending upon what is in their best interests and upon how much they’re paying their accountants, who are nothing more than hired guns, ethics be damned.
J. Michael Neal
@scudbucket:
Yeah, I know. I’ve read them. I’m not convinced that they tell me whether or not I need to recognize income when someone buys me a pizza, though.
Do they tell me whether or not I need to recognize income when someone lets me live at their house without paying them money? If so, how much do I need to recognize?
If I have a ten year old truck, that I bought for $24,000 when it was new and put 300,000 miles on, and trade it to someone for an eight year old truck that they bought used for $12,000 and then put 48,000 miles on, plus a boat that’s been sitting on their property since they bought the property, and four tickets to the Yankees game, do I have to declare any income? How much? Does it change if I have a small business that bought the truck, rather than myself? How about if I bought it through my business, and the business receives the other guy’s truck, but I get the boat and the tickets? How about if I get the boat, but give the tickets to charity?
These are some of the easier questions. Would you like to go through some about corporate revenue recognition?
J. Michael Neal
@Wile E. Quixote:
That’s very true, but, if you are going to make a citation to authority, as the original poster did, then it helps to make citations to people who actually have some authority on the subject.
J. Michael Neal
@Wile E. Quixote:
That’s also true, but they can define a far smaller number of things as income than they could if you didn’t have rules that they had to follow. The false assumption that you are making is that, because we have lots of rules, and companies have lots of leeway, that they would have less leeway if we had fewer rules. That’s simply not true.
How much accounting do you know? I ask because, if the answer is that you don’t have a lot of experience with it, it would be more efficient for you to try to pick some up than it would be for me to try to conduct an Intermediate Accounting class here on John’s blog.
FlipYrWhig
@JC:
Strange. I remember when Austan Goolsbee was _the_ smoking gun for how Obama was less liberal than Hillary Clinton. He was the globalization apologist, free-trader, Chicago School, Social-Security-privatization nemesis of progressive Democrats. Here’s a paean to him by George Will in 2007. Here’s Democratic Underground having a cow about him. There’s no standard by which Goolsbee shouldn’t be viewed as part of The Problem, presuming there is a problem. Curious, isn’t it?
Wile E. Quixote
@scudbucket
Yeah, this should be good coming from someone who’s a grad student.
J. Michael Neal
@scudbucket:
Coming back to this, but:
Yeah. I’ve managed to get within a semester of having a master’s degree in accounting and pass all four parts of the CPA exam without having spent any time researching the tax code or GAAP.
John O
@J. Michael Neal:
The hell with all that shit!
Income is either earned or unearned, we (hopefully) can all agree it’s a net financial gain.
So just tax net financial gain.
Look, I realize that it is way more complicated than that, I just dispute that it has to be.
The tax code makes me extra nutty, I’ll admit.
If you don’t allow anything to be “deducted,” you have a starting point.
mr. whipple
I’m not so sure about anything other than greedy.
Stupid and incompetent? They seem to do pretty well. They seem to be able to invent financial products that I think myself and most people can barely grasp. They seem to be able to influence legislators and others to do their bidding. And yet even when they lose a bunch of money, somehow they find more, and things turn out ok for them.
I wish I was that stupid.
J. Michael Neal
@John O:
Not right now, I don’t, no. I had to leave my previous job thanks to a nervous breakdown and am looking for another one.
J. Michael Neal
@Wile E. Quixote:
Grad student who worked in finance before going back to school, it’s worth pointing out.
Will
Snort. Nice and subtle accusation of racism.
I am aware that D.C. has a large, prosperous middle and professional class that draws from a very multi-ethnic talent pool. The Federal government has long nurtured a particularly strong black middle class.
None of this changes the fact that much of D.C. is mired in chronic fucking poverty and rampant crime in a way that is not found in any other major city that’s not named Detroit.
There’s a huge disconnect between the world found in D.C.’s office buildings and the worst neighborhoods. D.C.’s Federal culture is not the same culture that most of the city lives in, no matter how many go-go shows the contractors and Congressional staffers go to before retreating back to the suburbs and safely gentrified neighborhoods.
It wasn’t called the “Murder Capital” of the U.S. for years for nothing.
scudbucket
@J. Michael Neal:
Ah, a true believer I see. Let me answer that.
In 1913, Congress passed the 16th amendment, asserting that ‘The Congress shall have power to lay and collect taxes on incomes, from whatever source derived…’. Concomitant with it’s passage, IRC (the internal revenue code) was revised to include a definition by which gross income was defined as ‘income from whatever source derived’. This was important because in 1895, in the Pollack case, the US Supreme court ruled that taxes in income derived from rent and other remuneration were direct taxes and therefore unconstitutional. In 1907, the Court ruled in the Flint case that income from corporations was constitutionally taxable because of the special ‘privileges’ the corporate entity derived from a government dispensation. Income taxes could apply, this court ruled, to all so-called ‘privileged’ income generating practices, or sources. By 1916, the 16th amendment was challenged in the Supreme Court, and the ruling (actually many of them from 1916 -1920) concluded that enacting the 16th amendment did not change or alter the taxing powers of the federal government: taxes on income from any source other than a ‘privileged’ activity, or from foreign sources, was unconstitutional.
So, you’re right!: I can’t indicate where in the code it says that normal income from US citizens is taxable (although it does constitute income).
Not too often that this ever comes up: my apologies for being impertinent.
J. Michael Neal
@JC:
Sure, I know what you mean. However, I have zero interest in answering the question as you have asked it. If you would like to have a discussion without the ridiculous flourishes, I’m game. However, I’m not going to do so if you insist on using them. That turns it into a pissing contest rather than an attempt to exchange information. Try someone else.
J. Michael Neal
@scudbucket:
You’re still missing the point. I don’t care whether or not it says, in the Code, that normal income from US citizens is taxable. What I want you to provide me is a simple definition of what counts as income. All you do is keep changing the adjective in front of the word “income” and pretending that that means that you have defined the word. You haven’t.
I want a simple definition that covers all of the bases as to whether I need to count something as income, and how much I need to count it as. If you are correct that we really could make the Code very simple, then there should be such a definition. If there is any ambiguity as to whether or not something should count as income, then you’ve made it too simple to qualify for what you have claimed.
YankeeApologist
So, before people started getting mad and insulting each other (which, frankly, is not really surprising considering the frustrating and overwhelming nature of what we’re discussing), I have to say that as someone who didn’t even pass Course II Algebra in high school, listening to J.Michael Neal and Ailuridae and some of you with a background in finance and economy has been pretty informative.
But here’s my personal dilemma.
I could listen to you two talk for three weeks and still know positively fuckall about what we’re dealing with. When I first read Taibbi’s article, I felt like I had more information than I had before, because his style panders to people like me – which means people more likely to read Rolling Stone than The Economist. Therein is the rub, I think. People that know better are rolling their eyes at the 26 trillion dollar thing, but that was one of the few articles I read that I almost came close to understanding.
So what do us hoi polloi do when voting season rolls around again? How do those of us who can’t tell a housing bubble from a credit default swap still make our vote count in Congress races when we don’t know who’s even remotely interested in making this better?
scudbucket
@J. Michael Neal:
Oooops. Not a true believer after all. Well, have fun with that argument: that the entire Code collapses because ‘income’ isn’t defined.
Actually, if you look at the code, it lists activities (sources) of remuneration under which you are obligated to pay taxes. So, the failure to officially define ‘income’ is a bit of a dead-ender. The real juice of the tax law is way in the back: in the 400’s. There it specifies all the activities subject to the income tax, and it’s pretty clear. The definition in section 61 (gross income def.) really doesn’t add anything to the stipulations occurring on those sections.
Wile E. Quixote
@J. Michael Neal
What I know about accounting comes from the one quarter of it I took at the UW. Accounting is not about numbers, accounting is about financial information control, management and manipulation. I also know that accountants are hired guns, companies hire accountants to manipulate information in a way that is most favorable to the company and bend GAAP as much as they possibly can.
I have to say that I don’t have a lot of respect for accountants, Bear Stearns, Washington Mutual, Lehman Brothers, et al had lots of accountants working for them, and despite that they’re all bankrupt. Given the current state of our financial system, why should accountants be accorded any more credibility than, say, academic economists like Paul Krugman?
J. Michael Neal
@YankeeApologist: You’ve hit upon one of the fundamental problems of Democracy in the modern world. In the late 18th century, things were simple enough that everyone who they actually let vote could take the time to develop a sufficient understanding of everything necessary to understand most, if not all, of the issues facing the country. That worked.
There are a lot more subjects that government has to address now than it did then, most if not all of them have become a lot more complicated, and we made the moral decision that even people who have to work for a living and don’t have as much time to study should be allowed to vote. That turns it into a mess. There really isn’t a way for any of us to know enough about more than a few of these subjects to make a truly informed decision.
So, we have to take someone else’s word for it. For instance, how do *you* really know that global warming is a problem and what the right solution is? Me, I trust the word of a bunch of scientists to tell me the first part of that answer. I rely upon a whole lot of different people to help me understand the second, and I still have to guess.
Now realize that finance has a lot more moving parts in it than climate science does, which means that there isn’t a nice consensus of scientists who will all tell you pretty much the same thing. We can’t even run controlled experiments on it.
Really, I don’t have an answer to your question. I’m not sure that there is one. The system as originally designed doesn’t really work any more, but I have no fucking clue what to replace it with, and I kind of doubt that there is something better to replace it with.
scudbucket
And actually, I will say this about defining the term ‘income’: in 1920 (Eisner v Macomber) the supreme court ruled that ‘income’, for the purposes of the taxing laws in effect, was to be defined as the gain derived by a corporation from capital and labor minus expenses.
AhabTRuler
@Will: I am not really trying to accuse you of racism. But your perception that there is some sort of divide between the Federal workforce and the surrounding population is incorrect.
J. Michael Neal
@scudbucket:
No, the Code doesn’t collapse because income isn’t defined. I never argued that it needed a precise definition to function. All I argued was that income is very difficult to precisely define, and therefore it’s impossible to have a simple tax code that does the job.
My position is that we are stuck with a complicated tax code, and that income will never be defined precisely, because every time you pin down what constitutes income, someone will change how they do things a little bit in order to create some income that they don’t have to pay taxes on. It turns into an endless game of modification, and the best we can do is to try to find a point at which the trade off of greater complexity is balanced by the cost of having loopholes that we don’t close.
I think what may have happened is that you came into the discussion part way through, and didn’t read the original exchanges I had on the subject of complex tax and accounting codes, because you seem to have thought that I was arguing something completely different than what I was.
Wile E. Quixote
@J. Michael Neal
Oh, and if there is a good “Accounting for Dummies” style book you can recommend I’d love to read it. The accounting course I took was interesting because it opened my eyes to the fact that accounting was more than just adding up numbers. The theoretical framework of how accounting was supposed to work, which is that it was about knowing what an organization was doing and where it was going and being able to ask the right questions, as opposed to how it seems to work in the real world, which is that you bend things in such a way as to prevent the most favorable picture of your organization’s activities, was fascinating.
One of the things that stuck in my mind from the class was the instructor saying that it didn’t matter if you had the greatest product in the world and that people were lining up around the block to buy it. If you weren’t asking the right questions about what the company was doing it didn’t matter how much you were selling or how much money you were making, you’d eventually end up going under because you really didn’t know what you were doing.
YankeeApologist
@J. Michael Neal:
I am in agreement that modern democracy is messy at best, and a trainwreck of catastrophic proportions on any given Sunday.
The fact that you and Scudbucket both seem very knowledgable on the topic and disagree completely makes me want to stop reading this and go pick up a Rolling Stone. Heh.
As you brought up global warming, I think the reason I support measures to prevent it is that I’m a careful person that chooses to err on the side of caution. Living more frugally and doing things that don’t harm the environment may have some downsides for the oil and automotive industries, but the downside of the alternative seems way worse. Also, I think internal combustion is a laughably obsolete way to make things go.
In relation to finance, as Wile E. pointed out, there are a lot of accountants, economists, and financial wizards involved in the biggest crash we’ve had since the Thirties. It makes me feel that unlike global warming, there’s no one on my level to trust, except the guy that does my band’s taxes and gets me some decent writeoffs on drumsticks.
It reminds me of a Norm MacDonald quote, concerning his failed television show – “It takes a room full of some of the most talented people you’ll ever meet to make the worst show you ever saw.” It’s depressing to people in my shoes, and I think that’s why the whole “nothing to see here, move along” mentality is so pandemic.
J. Michael Neal
@Wile E. Quixote:
That’s something less than a complete view.
You are assuming that the accountants were in policy making positions in these companies. They all had lots of secretaries, too, but I don’t use that as a reason to despise all secretaries.
I don’t know that they should, but academic economists, as a profession, haven’t exactly covered themselves in glory, either, so I’m less than convinced that they should be accorded more credibility than accountants.
J. Michael Neal
@scudbucket:
Is your implication that that’s a comprehensive answer that will allow me to know exactly what I need to declare as income?
scudbucket
@J. Michael Neal:
This guy is like Palin: he keeps repeating the same false nonsense with the conviction of a true believer. A rogue troll. Unhinged.
Jasper
The truth is the 26 Trillion number wasn’t an error, he was quoting someone. And it is also incorrect to assume that since actual losses will be almost certainly less since than the total amount guaranteed, that the amount guaranteed is irrelevant.
And the huge issue I have with the Fed and Bernanke is we do not know what the true number is or who got the money or even under what terms. There is just a big black box with a total that is unimaginable, greater than the entire output of the U.S. in a year, and we are all at risk for it. In the event of a meltdown, an actual collapse, the number is meaningful. That’s not likely, but I don’t think people should be comfortable after what we just went through dismissing ‘what experts all conclude’ is a ‘remote’ possibility. Remote has been redefined, or should have been.
So I have no problem with someone pointing out the worst case and calling it worst case. It is much more accurate than one “rebuttal” I saw which falsely alleged that the total bailout was less than the stimulus package. In any meaningful sense, that is a g. damn lie and the real value of Taibbi pointing out the total exposure is making sure everyone realizes that amount going to banks is FAR in excess of the Treasury amount and FDIC funds.
Steeplejack
@DougL (frmrly: Conservatively Liberal):
Back atcha, you fuckhead.
J. Michael Neal
@Wile E. Quixote: You seem to be on the right track there, except for your assumption that, in the real world, all accountants do is “bend things in such a way as to prevent the most favorable picture of your organization’s activities.” That actually isn’t true. It’s true of some accountants. More often, it’s what people above the heads of the accountants do. If you offer to pay enough, and are unscrupulous enough, you can always find an accountant who will tell you what you want to hear. That’s not the fault of the accounting profession, though, because that’s true of any set of people you can name.
On the whole, the accountants I know were at least as frustrated with what has happened as the rest of us. Most of the ones with positions of influence within the field fought a lot of the abuses that went on. The FASB tried very hard to get fair value accounting implemented, for instance. Congress put pressure on them to prevent it as soon as it became inconvenient. You’re engaging in a lot of scapegoating here.
I don’t have a particularly good place for you to get started; if you’ve taken intro to financial reporting, then Accounting for Dummies probably wouldn’t be that helpful. Most any intermediate accounting textbook would help, though they don’t make for very exciting reading. I think the most important thing you could do would be to drop some of your preconceptions that the whole thing is a corrupt racket and accept that, like everything else, accounting has good and bad sides to it.
J. Michael Neal
@scudbucket: I no longer have any idea what your basic point is. Are you arguing that we can make the tax code really simple? If so, please provide a simple definition of what constitutes income such that I can rely on it.
Also, please tell me what it is that I’m such a true believer of. That isn’t clear to me, either, and it really sucks not to know what it is I believe so truly.
Jasper
@scudbucket:
I do taxes for a living and I don’t think any of us believe that there is a definition of income that is simple. Our system could be simplified, but it will never, not in any conceivable scenario ever be made “simple.” I suppose you could argue for making life simpler, like it was in the good old days when there was an agrarian economy and stocks were supposedly traded under a tree, and that would allow for taxes to be simplified, but that’s not a realistic hope, IMO.
The sort of scary thing about taxes is getting into an area where there is so much you do not know that it’s impossible to be comfortable that you even have asked the right questions. It’s not necessarily that the tax law is so complex, but how deceptively simple laws are applied to complex situations. That’s the real reason why taxes can’t be made simple.
J. Michael Neal
@Jasper:
Taibbi quoted that number credulously without taking the time to understand what it represented. Passing it off on Barofsky isn’t a sufficient answer unless his goal is to be nothing more than a stenographer. I thought that that was what we were trying to move away from.
It is also not true that actual losses will almost certainly be less than that figure. It is absolutely certain that the actual losses will be a lot less than that figure. With regards to the question of how much will be lost, the total amount guaranteed is irrelevant. Completely so. It does have some relevance to other questions, but not that one. *Any* attempt to answer that question must take into consideration what was guaranteed, not just how much of it there is.
By the time anything close to that number would be meaningful, the meltdown would be so large that it wouldn’t matter whether or not the Fed had guaranteed any of it or all of it. If all of those assets became worth zero, the world economy would collapse no matter who was holding on to them. So, it’s still irrelevant.
YankeeApologist
@Jasper:
As a less-educated conversationalist, I agree with you on a philosophical level.
It seems to me that just taking rules away won’t make the business of finance simpler. Of course, that’s rampant speculation based on the dodgiest of logical gambits, but I stand by it nevertheless.
You could present the same argument for our law code, the Department of Motor Vehicles, or more humorously, the English language. We probably don’t NEED many words to survive as a race, but they somehow still come in handy, don’t they?
That’s my dubious contribution.
+5, if it’s any defense.
Jasper
@J. Michael Neal:
You conveniently missed the point I (and Taibbi I assume) was trying to make. The amount at risk is not 700 billion, it’s many Trillions with a T – it’s a number so large as to be incomprehensible and largely irrelevant, as you say. Maybe it’s ‘only’ 14 trillion. How exactly should he phrase that? Estimate the expected losses under some not end of the world scenario and present that number.
It’s also extremely relevant that the actual exposure is in many ways a guess. We do not know the total amount, who got it, the terms. Bernanke effectively told Congress to pound sand when they asked for details.
Sure it’s inflammatory, but what he fights against is a long, endless, drone of boring, lifeless, selective “reporting” that leaves most of the public who does not spend any time reading financial blogs hopelessly uninformed. The perfect example was this Fernholz nonsense:
That might not be a g damn lie in a courtroom, but in any sense of understanding the actual bailout, it is provably untrue. Period. Taibbit’s number gives readers a much more accurate sense of what is at stake and the extraordinary measures we took and are taking to bail out Wall Street.
It’s also offensive, as it implies that the poor people on welfare got more than the banks, so, see, we shouldn’t worry our pretty little heads about that multi-trillion package that went to the banks…. It’s the kind of rationalization I expect from right wingers, to be honest.
I expect the reason Taibbi has a huge appreciative audience among financial bloggers is because the ones I trust appear to believe Taibbi gets much, much closer to the truth than anything that has appeared in most of the “respected” outlets since the crisis began.
inkadu
@Wile E. Quixote: More Than a Numbers Game: A Brief History of Accounting.
Just cracked it open last night. Seems well written with an eye on the ideas behind accounting instead of the technical methods of accounting. It’s probably what you’re looking for.
Plus, if you but it direct from the BJ link, a portion of the proceeds goes to support photos of Lily.
cat48
Geithner is not rich. He has never worked for a bank, except the Fed. He started at Treas. when James Baker was Secy Treas there and worked his way up in the Govt job. He has worked on several market crashes that have happened in foreign countries like Mexico and Asian countries. They called for help and the US sent him to help straighten them out. He is horrible at communicating, but he is extremely smart. I read in an article about him that he and Obama hit it off when they first met because they had both lived overseas when they were children. His father ran a program that Obama’s mother worked for in Indonesia they think, so that hire was more personal for O. Summers is the ex-president of Harvard and he has softened some since he worked there. He and Christine Romer give O the economy briefings every a.m. Summers has checked his ego a lot. He used to be really rude but appears much better now. He does well on the Sun. shows now usually. I guess Matt was not able to connect Romer, the lifetime academic to Rubin, so he just did not mention her. She is really the one who worked on the stimulus the most, but she thought we needed $l.3T to make up for what we lost but that was nixed by O cause he knew it would never pass the Senate.
Anne Laurie
@Will:
And here I thought I was the only one who felt like this about Billmon’s absence!
Although I suspect the ‘plugged-in insiders’ are investing the heartblood portion of their funds in mason jars full of negotiables, stashed in nations of temperate climate that don’t have extradition treaties with our federal government.
The thing about economists, as far as I can tell, is that they’re the certified priests of the only modern religion that every member of the Permanent Top Tenth believes in. And Obama went to the same seminary as the economists now running our economy and his Treasury Department. To extend the metaphor a little farther, it’s not that Obama is a child rapist, or even in favor of child rape — it’s just that he’s known all these child-rapists since they were seminarians together, and so he has a sympathy for their foibles that us outsiders just can’t understand.
inkadu
: ref=”#comment-1479929″>J. Michael Neal: You definitely deserve some kind of award for this thread. I’ve never gone from thinking someone was a total douchebag, to thinking he might have something to say, to thinking he is actually right about the issue related to the original douchebaggery.
Now we just need someone with rhetorical flourish to come up with a title for the award. “Douchebag Rehabilitation Award”?
I’ll just continue to eat my rhetorical flourishes here at the kid’s table while the adults talk about facts. More coca cola, please.
inkadu
Anyhoo. it’s late. I haven’t been to BJ in about a week. But I wanted to share this McCain tidbit I heard on NPR today:
“Government spending under the Obama administration has grown by thirteen percent. Thirteen percent! Isn’t that amazing? At a time when people are losing their jobs and their houses that the government is spending more?”
I shit you not. It reminded me of a Dilbert cartoon:
Frame 1: Pointy-Haired One: “First, let me start this meeting by saying the earnings projects for next year are fantastic and we will remain a very profitable company. Second, we can not offer any raises this year because of tight financial conditions. Excuse me, Linda, didn’t I ask you to put something about the United Way fund raiser in between those two agenda items?”
YankeeApologist
@inkadu:
I’m with you, Inkadu. I’ve never felt more like a slack-jawed yokel in my life.
Thank you, J.Michael, for the bits of insight I was actually able to glean tonight. Right on.
gwangung
This…
really does not match up with this:
You’re convincing me that you don’t know what the hell you’re talking about.
FlipYrWhig
@Jasper:
But if by telling a lively story that leaves the public _feeling_ more informed (and righteous) he actually doesn’t leave the public _being_ more informed, he’s potentially doing real harm.
I mean, if you watch Glenn Beck you’ll find out all kinds of things you never knew before about how Van Jones and the Rockefellers are using ACORN to turn America fascist, and it feels like knowledge because it involves charts and inside dope from supposed experts, and there are thousands of people out there who’d tell you that it doesn’t matter that the Cash For Clunkers website doesn’t _really_ give the government access to your computer, because the important thing is that it’s the type of thing the government _would_ do, so it’s _essentially_ true.
There’s a huge risk in giving people pseudo knowledge, especially when it feels so exhilarating. When you choose to be inflammatory, you have to be damn careful, especially because people trust you and will be inclined to believe what you say _because_ it feels the opposite of “boring, lifeless, selective.”
inkadu
@YankeeApologist: It’s a topic that brings out some interesting fault lines.
After eight years of Bush, I’d really come to think of the progressive blogosphere as a monolith. There would be disagreements, of course, but they were cliqueish ones, not substantial ones.
We’re getting into very difficult territory now that we have to struggle with supporting a president or supporting our progressive ideals… There are a lot more diversity of thought out there. I think there’s about four groups on the left side of this debate:
1. People with a shallow view of things and think Obama has a magic wand.
2. Others with a more complex understanding of both the problem and the political realities.
3. Party apparatchiks, more loyal to Obama the President than to any ideals.
and
4. Corporate lobbyists.
Before Obama, groups 1-3 had nothing to argue about, since their goals were essentially the same. Intraparty bile was reserved for jerks like Lieberman and corporate whores (rhetorical flourish).
But with this topic, you need to position yourself very carefully.
– The True Believers will say Taibbi is right, and fuck you for saying different.
– The Pragmatists will say Taibbi is basically right, but will wave their hands and say whacanyado.
– The apparatchiks and lobbyists will try to bring down Taibbi by any means necessary.
Discussing Taibbi’s article is difficult because depending on the — well, first because the subject is obviously complex and a bit amorphous — but secondly because depending on the shading of your discussion you could signal allegiance with the “wrong side” of progressive politics. That’s why I was irritated almost immediately by JMN’s comments, because his trashing of Taibbi put him in the appartchik/lobbyist group; but reading him more, he just seems like someone who knows something and is giving actual objective commentary — something you almost never see on a blog.
But, in general, anyone who comments negatively on Taibbi’s piece without saying, “But this financial system, and it’s infiltration into all levels of government, is obviously a bad no-good horrible mess,” is part of the problem. That’s the test that Fernholz failed. Attacking Taibbi is giving aid and comfort to the enemy, as far as even pragmatist progressives are concerned.
I’d never shoot someone that’s not in the game.-Omar
See? See? This why you only bring ONE bottle of coca cola to the kid’s table. Otherwise they get hyperactive, thinking they’re spiderman, and webslinging blog comments from wall to wall.
inkadu
@FlipYrWhig: Is Taibbi really informing people or not? I guess it depends on what they knew before and what they knew after. There is certainly a danger of personalizing a complex financial/political situation and blaming it on the Rubins… but what is the risk of NOT personalizing it? I think public sentiment DOES need to be radicalized; if they’re not emotional about it, they’ll be bored by it, disinterested. Effective politics demands simple, emotionally-charged narratives. In a different environment — say a more neutral media, a less entrenched interest, a more reasonable opposition party — I’d say, sure, let’s be reasonable and measured in all things. But with politics you always have to aim further than your target if you want to ever get close to it.
Look at it this way: we have two groups. One says that any government intervention is tantamount to communism and that means your children will be turning you in to the secret police who will send you to political education camps.
The other group says that yes there are a lot of complex problems interacting on several levels… yes, there has been some failures of regulation, some creative accounting, that has lead to a higher valuation of assets… What the fuck is that? No. The other side, if it wants to get anywhere, has to yell, “These people are screwing you over. Do you want them to keep fucking you?”
That’s why I’m not going to jump all over Taibbi for his article, even if it is flawed. Someone needs to get people riled up.
And I wonder how much self respect I should lose since I’ve blogged about this article four times longer than it would have taken me to read it. That’s right. I haven’t read it. I admit it. You can pretty much do whatever you want at four in the morning.
J. Michael Neal
@Jasper:
Except that that’s not what I said. However, if you want to say, “The amount at risk is not 700 billion, it’s many Trillions with a T – it’s a number so large as to be incomprehensible and largely irrelevant,” then my advice is that you say, “The amount at risk is not 700 billion, it’s many Trillions with a T – it’s a number so large as to be incomprehensible and largely irrelevant,” not, “The amount at risk is not 700 billion, it’s $23.7 trillion.”
One of those answers has the virtue of being what you want to say. The other is not; instead, it’s every bit as dishonest a statement as you want us to believe the other is. If you think that it’s a lie, the proper response is not to throw out your own lie.
What I said was that the $23.7 trillion figure is either a lie, or it is the comment of someone who has no idea what he is talking about. Whichever, my conclusion is that the author should not be listened to.
Then say that. If you think that the total exposure is a guess, then saying that it is a specific figure means that you are lying.
No, it doesn’t. He is responding to what he claims is a lie by offering his own lie. If that’s his approach, then he is a lying hack, no less so than the lying hacks we usually dismiss around here.
Exactly which financial bloggers constitute his appreciative audience? So far, the only one I’ve seen cited was Felix Salmon. Upon examination, his appreciation was, shall we say, rather muted.
JGabriel
Ailuridae:
Suddenly reminded of John Cole’s defense that the phrase “Jane Hamsher’s of the left,” as a set, didn’t, by definition, include Jane Hamsher.
Which, to be fair, I suppose is technically true if you’re using Russell & Whitehead’s Principia Mathematica for your definition of sets, but it’s the kind of thing on which Gödel based his incompleteness theorem.
.
J. Michael Neal
@Jasper: Now that I think about it, there’s another, very serious, flaw in your defense of Taibbi just using made up numbers to refure the claim that less money has been allocated than was to the stimulus, namely that you have the order of appearance reversed. Fernholz’s comment, correct or not, came in response to Taibbi’s use of the $23.7 trillion figure, not the other way around.
Napoleon
Drum and Cole are right.
hypusine
re: original posting – Yup. I’m less concerned with the reaction and more caught up with wtf can be done about it. No blinding insight yet. There are a lot of structural and cultural barriers (many intentionally placed) to overcome.
Pitchforks just ain’t what they used to be, y’all. We need votes or media memes (that transcend the economic interests of media owners) … or some other way to effect change. When I have a brilliant insight I will totally post it.
hypusine +3
Jrod
It’s a valuable endeavor for those of us on the left to mercilessly slag the highest profile voice in the country railing against the complete capture of our federal government by big financiers for being too hyperbolic and emotional, and for daring to use *gasp* anonymous sources and for failing to never, ever get anything even slightly wrong (because the practical difference “literally untold trillions” and a worst-case figure of 23 trillion as figured by said unnamed source is make-or-break reporting, yessirree).
We can work hard to discredit Taibbi, while the right-wing has Beck, Limbaugh, Hannity, and the rest of a vast media empire riling up their side with screaming about socialism, stifling the productive with unfair taxes, death taxes, welfare queens, the CRA, and lots of other emotionally appealing unabashed bullshit.
Then, when 2010 rolls around and a fired up right-wing base hit the polls in droves, while a left-wing that’s been told that all this high-finance stuff is over your pretty little heads, so let’s just shovel an undisclosed numbers of trillions into the banks, and obviously it was silly to expect anything better from health-care reform than giving 55-year-olds a fucking medicare buy-in rather than the exorbitantly expensive couple hundred-billion a year it’d cost for single-payer universal coverage decides to stay home and play video-games, that’ll be the biggest treat of all. Can you imagine the legendary rush of smug condescension we’ll get to feel toward the moronic masses, who just couldn’t be bothered to vote because they’re so lazy and dumb?
Remember folks, it’s not about actually convincing people to oppose the auctioning off of our government. It’s about making sure we don’t go getting too overheated and emotional, not like those dirty fucking hippies.
FUBAR?
Once lobbying to pass legislation evolved to where it is today, government by the people became a quaint notion we once learned about in civics class. It now costs so much to run a campaign that you can’t get elected to the office without those dollars. Both sides sell out, some more than others. It’s what we have to work with. Pity it doesn’t really work so well as it used to. Nowadays the clowns we elect walk in lockstep to the party/lobbyist line and to hell with their constituents best interests. We need a viable third party. I’d like a pony for Christmas too, not sure that’s going to work out well.
Brien Jackson
A couple more thoughts about Taibbi:
1. Seriously, this Rubin shit is weak. His “response” might be the pussiest thing I’ve ever seen Taibbi write. If you’re going to b a polemicist, be a fucking polemicist. Own that shit. Don’t get all defensive when people point out your polemic is stupid and get all “I was just reporting…” You were reporting what? That senior officials in the new Democratic administration can be tied to a guy who spent 2 years as chairman of the NEC and then 4 years as Secretary of the Treasury during the last Democratic administration? Well sweet baby Jesus on a pogo stick, get this motherfucker a Pulitzer! How would we ever find this out without this intrepid journalism!?
And not incidentally, but who gives a flying fuck about whether or not someone is a “Rubinite?” Putting aside that there isn’t really any such thing as Rubinism, and I might be a little fuzzy, but I seem to remember shit wasn’t all that bad when Bob Rubin was in the Clinton administration.
2. Not all that connected to anything, but I still haven’t got an answer to this yet so I might as well ask again; when the hell did Austan Goolsbee become a left-populist warrior?
3. I guess I get the desire for Outrage(c), but if you take a deep breath for a second; if you want comprehensive and effective regulations of the financial industry, how exactly do you plan to get them if you kick everyone who understands what you’re trying to regulate out of government?
Brien Jackson
@Jrod:
Ya know, I really wish American internet progressives had never heard the term “single payer.”
aimai
I know I’m at comment 200 at this point and everyone has probably forgotten comment 21 but Christ on a pogo stick does anyone thing that Krugman and the entire left of the country refused Obama’s generous offer of employment on the transition team, or any other time? Does the name Howard Dean ring any bells? Because I seem to remember a rather unceremonious defenestration.
Romer aside the fix was in on the Economic front. No serious critics of the small stimulus or the big bailout of Wall Street were going to be heard from.
aimai
General Winfield Stuck
@aimai:
Yes, I remember it since I wrote it, but apparently you can’t understand what you read. I was talking about Krugman specifically, but now you are saying Obama has dissed Progressives, (which I take issue is true from the “internet Progressives’ claim * who I think are actually left wing ideologues) across the board and is what? A centrist dem? So fucking what.
Yours and some others tribalism is wearing thin. If you insist that Obama is selling you out, as does Taibbi, apparently, then maybe you should pull up your camp and move to another one that will do your bidding as you think they should.
Obama never claimed to be a “progressive” and my recommendation to him, is to give the so called “internet progressives” the Bronx salute and find another internet base, or whatever it is, which is not as important as you guys think you are. IMHO
What does Obama have to lose, that maybe lefty blogs will start being reasonable and fair. That ship done sailed a while back and is far out to sea.
kay
@aimai:
Christina Romer was the point person on the stimulus (and on television almost daily during the Congressional debate).
She meets with Obama daily.
She lobbied for more than a trillion dollars, she got less than that, because it had to pass the Senate in a hurry.
That’s what happened.
Brien Jackson
@aimai:
Yeah, I definitely believe Paul Krugman has no interest in working for the administration.
kay
@aimai:
You can’t say “Romer aside” and “stimulus” in the same sentence.
Romer is the stimulus. She developed it, she came up with the number, and she lobbied for it. Predictably, she got less than she wanted out of the Senate.
How was she “sidelined”? She’s the stimulus person. There is no other.
jcricket
Look, i’m as convinced as the next guy we can’t fix this structural problem, short of turning into France, where it appears the farmers and rail unions run the country :-)
Or Norway, where the wingnuts are marginalized and the capitalists all had their brains replaced with intelligent AIs and therefore support things that benefit society as a whole.
What we can do is fairly simple and would probably fix 80% of the problem.
1) Bring in a few regulations – lower leverage limits and eliminate some pernicious customer fees (heck, bring back max. rates). Industry will whine, but the public will be on our side and the world won’t end. It would be one thing Democrats could point to as “standing up to the industry” (no matter how pathetic it really is). Just those two things would kill a ton of the excesses.
2) Enforce this new and existing regulation. With a vengeance. Again, with the whining, but enforcement is pretty cheap. Transparency and auditing are good for the market (compare the investment activity on the NYSE to less regulated exchanges).
3) Raise taxes on the rich, a lot. If we can’t prevent them from earning ever bigger pieces of the “pie” at least we can make sure society gets something from them. No more investment manager “income” loopholes, cap. gains rate back up to 25% at least, higher top marginal tax rates (repeal bush tax cuts, add a bracket or two at $1m and $5m). etc.
kay
@aimai:
Jared Bernstein was the second on the stimulus. A progressive.
I think we watched a different stimulus debate.
General Winfield Stuck
@kay:
And these folks continue to insist that The Stimulus was a sellout because it wasn’t enough and Obama caved.
When in fact it is the largest discretionary spending bill in the history of the country, and by a large margin. With just about nothing in it but progressive programs, the real “progressive”.
But But. It had tax cuts in it, which makes it another sellout to the hated wingnuts. Doesn’t matter that these tax cuts were centered around payroll tax relief, which helps the poorest among us.
I can’t take arguing with people I basically agree with, as it sucks out the spirit to be involved in politics. I can handle and enjoy mixing it up with wingnuts, but this fratricide shit is just too much. I don’t get it, especially directed toward the smartest and most loyal to his campaign promises as any dem presnit in my lifetime, though mitigated with working in the tattered and complex machinery of our political system/ meh
Napoleon
@kay:
I thought that they never even presented what she thought to Obama re: the high end number.
Brien Jackson
@Napoleon:
Who is “they?”
kay
@Napoleon:
She’s the stimulus lead person, Napoleon. She meets with Obama every morning. I don’t know how we’re getting that some individual silenced Romer.
I think she’s brilliant, and the idea that she was cowed is close to insulting.
I watch her on tv. She’s not easy to intimidate.
kay
@Napoleon:
I’m honestly confused. Is this the new theory on the stimulus? That Obama actually lobbied for a smaller one?
That he was somehow denied progressive input on the stimulus, again “leaving aside” Romer and Bernstein (because we must, or the theory falls apart).
They thought 800 billion would mitigate damage and fill a hole, but were opposed to 1 trillion?
How does that even make sense? You either buy the stimulus idea or you don’t. They bought it, but only up to a point?
Jrod
@Brien Jackson: Yeah, those stupid DFH silly little internet progressives with their foolish hopes of universal coverage. How unserious can you get? Why can’t they be satisfied with the Democrats’ super-awesome compromise with the insurance cos., where they graciously allow us to buy into medicare at full price at age 55 and agree not to fight against a few new regulations that probably already have loopholes worked out, because in return everyone in the nation will be required to buy their shitty, overpriced product? For lefties to be at all bothered that Obama’s #1 priority during this whole farce of a debate was keeping the big money assholes happy shows how ungrateful they are!
@General Winfield Stuck: I can’t take arguing with people I basically agree with, as it sucks out the spirit to be involved in politics.
Then don’t argue, you fucking numb-nuts. The left won’t collapse into Rainbow Gatherings and be-ins if you fail to get online every day to slap down those silly pie-in-the-sky hippies. It’s your choice to spend your time battling against the Jane Hamshers of the left. Seriously, try it: next time you read about some intemperate left-wing fire-breather who writes more polemic than dry, stuffy analysis, fucking ignore it. It’s not there for you. It doesn’t hurt your cause, assuming your cause includes putting some brakes on the rightward lurch of the USA.
It might hurt your ability to pretend that the left is some kind of Algonquin Society in which everyone uses cold logic and hard analysis for all questions and never gets too worked up, because that’s just unseemly.
Will
Political optics. The media and the teabaggers were freaked out by the ONE TRILLION DOLLARS!!!! figure, so the political types figured they could get around it by a slightly lower figure – the $9.99 of governmental calculus. That figure was then horsetraded even lower in Congress.
MikeF
Ryan Lizza’s excellent New Yorker piece on Summers (an example of good journalism that Taibbi would do well to study) goes into the administration-level discussion of the stimulus. According to Lizza, Romer thought a $1.2T package would be best; for reasons ranging from the practical to the political, other administration officials settled on a lower figure.
In other news, DeLong weighs in on Taibbi and subjects his article to withering scrutiny:
Brien Jackson
@Jrod:
Yeah, see, “universal coverage” and “single-payer” aren’t the same thing. Which is largely the point to my facetious remark, single-payer is great, but on the whole it’s actually fairly rare. Only Canada, the UK, Australia, and Taiwan can really be considered single payer systems, is it your contention that everyone else’s healthcare sucks? I mean, France is pretty much universally regarded as having the world’s best healthcare, and they don’t have a pure single payer system. Germany is doing just fine, and they still have insurance companies, albeit ones that are managed like public utilities.
I’ve got nothing against single-payer, but it would be nice, helpful even, if people intent on bringing it up at every turn would actually do a little reading up on comparative health insurance regimes from around the world. It’s entirely possible to develop a perfectly sound universal healtcare system without single payer insurance.
Brien Jackson
@MikeF:
Delong’s takedown is awesome.
http://delong.typepad.com/sdj/2009/12/ten-things-on-which-matt-taibbi-really-does-not-know-what-he-is-talking-about.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BradDelongsSemi-dailyJournal+%28Brad+DeLong%27s+Semi-Daily+Journal%29
Of course, the more people that actually know what they’re talking about criticize Taibbi for writing know-nothing polemics, the bigger Taibbi’s stock amongst people who desperately want their own Glenn Beck to love grows, and the more they reflexively defend his “populism.”
MikeF
Oops, links didn’t work.
Lizza’s article
DeLong’s post
General Winfield Stuck
@Jrod:
Naw, I won’t quit. I can’t resist know it all assholes like yourself to knock down with your mindless self absorbtion. You fuckers think it’s all about you and the tribal theater you live to wank in.
Please, fucking please form another party and then we won’t have to pretend you actually care about making progress. You are absolutely no different than the ignorant self possessed wingnuts of the right. Just the flip side to the Malkin coin.
Fuck wits like you make it easier to stomp on and provide relief from concern of entering into a circular firing squad with those you thought were on your side, when it’s actually just another full frontal skirmish line. No different than doing battle against wingnuts.
Now take your liberal puke funnel and shove it so far up your arrogant ass, you shit out your nose.
Jrod
@Brien Jackson: What the hell are you arguing about? My point is that we’re getting jack-shit. Not single-payer, not a public option, not universal coverage. We’re getting a few new regulations at the cost of having to buy worthless catastrophic coverage at whatever price the insurance companies find reasonable.
So sorry for using a triggering word, pardner. But keeping working to stop leftist populism. We can do just fine without those votes.
General Winfield Stuck
@Jrod:
first of all dumbass, nobody knows what we will end up with, so your outrage is premature. Second, you are an ignorant fool.
Jrod
@General Winfield Stuck: Wow, that’s impressive.
Seek therapy.
@253: You’re so right, there’s no way I could figure out which way the winds are blowing. No doubt the Dems have been holding the Lollipops and Health-Care for All bill in reserve these last 6 months, just waiting for the right moment to spring it.
We’ll only get anything decent through reconciliation, which the Dems don’t want to use.
By the way, it’s unseemly to get so emotional, hadn’t you heard? Teabagger-like, even.
General Winfield Stuck
@Jrod:
All the wankers say that when they got nuthin”
kay
@General Winfield Stuck:
Just for the record, I have no problem discussing this with Napoleon. He’s consistently honest and civil and he addresses each point. ating
As I said, I’m not advocating shutting dissenters down, or any of that, and I don’t mind “shrill”, whatever the hell that means.
I read Obama’s critics. I learn a lot. I read Krugman, I read Greenwald, I read Warren.
I just don’t believe this particular critic, Taibbi, meets my standards.
Also, I have to say, like Greenwald, for someone who is always accusing others of not taking critics well, Taibbi acts like an arrogant ass when he’s confronted with a critic.
Taibbi attacks his critics personally and vehemently.
AngusTheGodOfMeat
@General Winfield Stuck:
I hate it when the flames are being thrown and I am not in the middle of it. But anyway, you guys are onto an interesting point.
I have always been fascinated by how easily people who are mostly like-minded in the political context can get into the most vociferous arguments with each other on the Tubes, and end up using the same kind of tactics we’d expect from our arch enemies, the righties.
In a strange way, I think, these internecine flamefests help to temper our liberal ideas, make them stronger in the long run. Not while they are happening, but later, when the smoke clears and the food fight has moved on to another topic.
Just saying. Is there any good alfalfa? I’m hungry.
Redhand
Tons of good posts here, but John O says it best for me too: “Taibbi captures the emotion of it better.”
We really are an oligarchy ruled by Wall Street now. So much for Obama’s “Change you can believe in.” The lie reflected in that campaign slogan is why Tabbi’s rage resonates so well with me.
Joel
I guess the fundamental issue is that a lot of actively voting Americans are also in favor of the status quo.
gwangung
@Redhand: Yes, he captures the moment, but it’s REALLY unfortunate that he’s so sloppy on facts and economics concepts. He’s got the mood, but misses on the causes, doesn’t get the ongoing effects and therefore will not come remotely close to advocating useful solutions. It’s almost like he’s…a journalist.
@Joel: And, this, too, unfortunately….We’re all a bunch of stupid wankers a lot of the time.
Bruce (formerly Steve S.)
This thread has gotten too unwieldy for me to shoot off individual responses, so I’ll just stand by what I said up at #37. However, I do want to say something about this:
Which is obviously why you spend so much time in the comments section of John Cole’s Balloon Juice. Because, Christ knows, my go-to for rigorous analysis of financial matters are the anonymous Taibbi and Krugman scolds in the comments section of John Cole’s Balloon Juice.
People are funny.
General Winfield Stuck
@Joel:
I think you are right.
General Winfield Stuck
@Jrod:
You are the expert on tea bagger mentality.
CalD
I would just point out that a lot more people own stock and mutual funds now than did back in the 70s, before Reagan. Also, the derivatives markets put every homeowner in the game these days whether they like it or not.
And as crazy as this may sound, even as recently as the Carter administration millions of people still had no idea that they even needed such big houses to live in. People would have been aghast at the idea of sinking themselves into as much debt as we now take quite for granted for the sake of a few more square feet of floor space in their great rooms.
It’s a fact that what happens on Wall St. now affects a lot more people a lot more directly than it did at the beginning of the Reagan administration. Comparing attitudes about it then and now is apples and oranges. It used to be a rich people’s problem, now it’s everyone’s. And we all bear some responsibility for creating the demand for credit that has fueled the worst abuses in recent years. If you want to change the world, try living a little simpler.
Jrod
@General Winfield Stuck: I can’t speak for all the wankers, but this wanker only brings it up when perusing something that reads like a meth-head furiously pounding a keyboard with his teeth clenched and a vein popping out of his forehead, all over a disagreement that really, seriously, shouldn’t cause such stress.
For fuck’s sake:
If you honestly believe that, you are delusional.
General Winfield Stuck
@kay:
In this thread, I have not said that Krugman is not a very smart individual and has good ideas that should be listened to. I like Krugman, and usually read what he rights, and much of it makes sense, even to a dweeb like me.
My complaint is with the hysterics of Obama fail, or Obama sellout language, and that is the main problem I have with Taibbi’s piece, though added, is a piece where he is creating some boogyman world of “Rubinism” and the like.
As someone upthread noted, I remember when Robert Rubin et al were heralded as economic wizards by the left during Clinton./
Now he is the devil from former believers. And Obama has made a deal with that devil, so has sold out. This is simplistic and hypocritical imo , coming from the left. It is how wingnuts deal with fallen hero’s.
J. Michael Neal
@Jrod:
Worthless to you, maybe. I’ve been unemployed for four years and have multiple pre-existing conditions that make it impossible to get individual health care insurance in 47 of the 50 states. Fortunately, I live in Minnesota, which is one of the three that have sufficiently funded their high-risk insurance pool such that I was able to get in. I have, though, had to turn down opportunities in other states, and my goal of getting into a PhD program is on hold until I know I’ll be able to get insurance where I go. (Minnesota doesn’t have any programs with tenured professors who would be very useful given my research interests.)
The bill on offer sucks relative to what we were hoping for. It is a significant improvement on what we have. Or, at least, it’s a significant improvement on what I have.
General Winfield Stuck
@Jrod:
Dude you started the flame with personal insults. I just returned fire, and like all wankers you retreat under the flag of –you must be mental talking to me like that. It is one of the last refuges of internet asswipes who can dish it out but can’t take it.
Did you think we would be easy here?
General Winfield Stuck
@Jrod:
I believe you are a shallow uninformed idiot
AngusTheGodOfMeat
I think this should go into the lexicon, under humor.
Brien Jackson
@kay:
I thoroughly enjoy reading criticism of the administration. I don’t have a lot of use for criticism built on erroneous facts, childish conspiracy theories (OmGZ ITZ TEH RUBINITES!!!11!), and assertions so ridiculously distorted as to be downright dishonest. And I’d seperate Greenwald from Taibbi a bit. I’ve been critical of Greenwald in the past, mostly for his style of argument, but the guy is right on civil right’s issues, he’s meticulous, and he’s taken a lot of undue and unfair criticism there. He’s not so good a writer on a lot of other things, for which he tends to get criticism. I think the unfair criticism he took from so many places for so long makes it hard for him to distinguish the different kinds of criticism.
Taibbi is just being a smarmy bitch.
kay
@Brien Jackson:
Agreed, especially on the comparison between Greenwald and Taibbi.
I don’t disagree with Greenwald. I think he’s delusional about the role and likely actions of the prosecutor, any prosecutor, anywhere, as a practical matter, but I don’t disagree with him. I do wish he would report on the progress they’ve made in closing Gitmo, if he is indeed concerned about the detainees, but maybe I missed it. A lot has been happening there.
I’m surprised and dismayed that liberals are endorsing Taibbi’s ridiculous bail out number just as we go into the battle for a job’s bill.
We’re finally getting around to putting some resources towards jobs and liberals think it’s a good idea to promote the idea that Obama spent 23 trillion?
I will hear Taibbi’s bullshit number on the floor of Congress, used by “fiscal conservatives” to argue against domestic spending. We’re handing conservatives a weapon, and there’s no truth to that number. It’s stupid and counterproductive to insist it’s valid.
Jrod
@J. Michael Neal: If a slight improvement is all we can get, I’m not saying to veto it or anything. I’m just saying it’s crap, and needs to be better. People in your shoes, and in mine, as I also know the joys of severe pre-existing conditions, will get a bit of help. But, assuming the plans brewing in the senate are what we get, many people aren’t going to helped, and may well be worse off than if no bill had passed.
I hope whatever passes is helpful to you, but unfortunately if it’s not helpful to most people the Dems will get shellacked in the midterms. If that happens, they’ll be well under the 60 votes needed to do anything at all in the Senate and Obama will be a lame duck. Savaging FDL and Taibbi won’t change that.
@General Winfield Stuck: Please point out where I personally insulted you before you started posting 3 times a minute about how horrible and worthless I am.
AngusTheGodOfMeat
This is Balloon-Juice. You should be careful what you wish for.
General Winfield Stuck
@Jrod:
@Jrod:
Didn’t say you were worthless and horrible.
I said you were an idiot. And stand by that.
I am done with you and your childish whining. You sound kind of young.
gwangung
My perspective is that you can’t get solutions that work if you’re working off of bad figures or have to fight through bad figures and facts, particularly when they’re coming from “your side.” GIGO, after all….
Jrod
@General Winfield Stuck:
“Gah! Every time I smash my hand with this ball peen hammer it hurts! What the hell!?!?”
“Maybe you could try not smashing your hand with that hammer, dumbass.”
“GAAAAH!!!! HOW DARE YOU INSULT ME SO!!!!!”
General Winfield Stuck
I do want to say that when I first slammed Krugman mostly for his anti-Obama style, I was thinking about quite a while back.
I regret this only that in recent times Krugman has dialed back the shrillness considerably, as far as I can tell.
Everyone deserves redemption and I should have afforded that to Mr. Krugman, but didn’t. Sorry bout that Paul Krugman.
jcricket
@Jrod: It’s crap, but getting nothing is worse than crap. It will kill other attempts at HCR for 20 years. It will not result in better HCR around the corner. It will also likely worsen any 2010 Dem losses in Congress.
As others have pointed out, ad nauseum, SS and Medicare were both total crap when they first passed. Now they are a zillion times better. But if they didn’t pass, we wouldn’t be anywhere near where we are today with those two bedrocks of the (generally meager) US social safety net.
And besides, I don’t think it’s actually crap. The 10 regulations (as long as stupid crap like the lifetime cap goes back away) are pretty important steps on the HCR road and help a ton of people. If they can get real subsidies, Medicare expansion, etc. in there this is probably better than we could have hoped for (sadly).
Doesn’t mean we shouldn’t be angry. We should. And we should keep fighting every year after this to expand on this bill – just like we did with SS and Medicare.
But spiking this bill will do the opposite of what progressives want and move us further from our goals.
Brachiator
This is nuts. There ain’t no status quo. The economy is in a shambles. The Republicans can pretend that tax cuts and deregulation are the answer but God help us if they actually return to power and get a chance to try Deregulation 2.0.
I don’t doubt the influence of the finance lobby, but I don’t think that this is the fundamental problem. The financial industry is outplaying the government so well that they don’t even have to worry about using their influence.
For example, in the UK (which has similar economic problems to our own), the government recently introduced a 50% tax on some banker bonuses. How did the bankers react?
The the Obama administration has put too much faith in people in Treasury, who are so deathly afraid of a return to something resembling the Great Depression, that they can’t get over their fear of history to craft intelligent policy. They are also too enthralled by the ill-conceived ideas of former Clinton cabinet member Robert Reich, who consumer spending alone can magically jumpstart the economy (hence the past emphasis on small checks to taxpayers rather than broader job creation plans).
kay
@gwangung:
I think it’s now going to be nearly impossible for Taibbi to credit the Administration’s acts or policy with any positive news on the economy. He’ll have to dig in. He’s announced that Obama sold out, and there’s no going back from there.
Digging in sucks, because it doesn’t leave you anywhere positive to go.
The stimulus is now pretty well recognized as having contributed to mitigating the effects of the recession. The “liberal” parts worked as planned. While it’s true that the stimulus was too small, it worked, and that goes to proving liberal economic theory.
So, if I’m a liberal, and I want to promote liberal economic ideas, I think what I do is trumpet the fact that stimulus worked, rather than focusing on that it was too small. Krugman does this. It’s smart, and it’s honest.
But I can’t do that if I’m Taibbi. On balance, I think his approach harms progressives.
Jrod
@jcricket: Again, I’m not in favor of spiking the bill. I can’t help but worry, though, that if the Dems can’t pull off something better than what’s currently on the table 2010 will be a bloodbath. If the Dems lose congressional power in 2010 and they spend the next two years accomplishing nothing because they lack the magical 60 votes, Obama isn’t going to have much to run on. Sure, he won’t be a republican and that’s good enough to get my grudging vote, but not all voters see things so pragmatically.
We may luck out, though, since the right-wing seems intent on destroying their own coalition.
It’d be interesting, from a totally detached perspective, to what happens when both parties in a two party system split down the middle. Too bad it’d also be interesting in the sense of the old Chinese Curse.
YankeeApologist
@AngusTheGodOfMeat:
“In a strange way, I think, these internecine flamefests help to temper our liberal ideas, make them stronger in the long run. Not while they are happening, but later, when the smoke clears and the food fight has moved on to another topic.”
Wow. I think there’s a lot of merit to that. I just wish it didn’t come with 100 posts of “get therapy” or “fuck you, wanker”, but I do think that ideas that are shaped and tested end up much stronger.
Mr. Furious
This has been a thoroughly entertaining and informative thread, with some very strong and weak comments from expected and unexpected sources, but at the end of the day, I have to give credit to Taibbi for one thing if nothing else:
Forcing the discussion.
And as for Taibbi being nothing more than Beck or Limbaugh of the Left? Fucking. Please.
Is Matt Taibbi given three hours a day on nationally-syndicated radio? An hour on television every night? Is the rest of the media regurgitating his horseshit as credible and one side of an “honest debate” on the issues? Is Taibbi issuing the marching orders to the Democratic party?
Get back to me when any of those things is even close to happening and we can have a 300-comment argument on it. Until then, give that shit a rest.
Mr. Furious
@kay:
LOL. As if the GOP needs Taibbi to source their bullshit and it will be his fault if they do. Taibbi was simply repeating someone else’s number, so they could attribute it to Barofsky all by themselves.
jcricket
@Jrod:
I agree with you and think this is the only thing that will “save us” from massive losses.
I can’t get why Democrats think being “super serious” about paying for the bill is a good idea. Bush didn’t pay for either war or the Medicare Part D expansion. Not suggesting it’s a good long-term strategy, but we should make everything in the bill start in 2010 (or at least get going) – subsidies, Medicare expansion, all regulations, etc. We could have even combined some real higher-end taxes with it to maybe pay for it a little more (like a new tax bracket above $1m, or increasing cap gains rate to 20%).
Then we get to stay in office and figure out how to better pay for it. Instead we’re so focused on the long-term (deficit/cost) that we’re going to screw ourselves out of the medium-term ability to make the bill better.
FlipYrWhig
@inkadu:
Yeah, that’s kind of the entire fucking problem with every blog lately. We’re all reading for who’s on whose side. People who like the article like that it makes their “side” more exciting and more “emotionally true.” Thus if you don’t like the article, for whatever reason, you have proven you’re On The Wrong Side. Instead of being on the good Taibbi/Hamsher take-no-shit side, you’re on the Yglesias/Klein accommodationist-wussy side. And the point is to show that you’re a take-no-shit kind of person, because anything less is corporate, man, and if you’re not being a cynical dickbag at every possible moment, you might as well be a Republican. It’s _so_ wearying.
gwangung
@kay:
Personally, I’m not sure if it makes any sense if something harms progressives or not. It’s more helpful to see if something helps in crafting solutions or not, i.e., if it’s accurate. Again, GIGO applies to progressive figures as well as conservatives. If you’re spouting nonsense, if you’re spouting sloppy and inaccurate factoids, then you’re not helping. Period.
gwangung
@FlipYrWhig: Yeah, this as well. More concerned with being on the side of angels than with actually solving the problem.
AngusTheGodOfMeat
@YankeeApologist:
Fuck you.
.
.
.
.
.
.
.
Just kidding. I swear. Just couldn’t resist.
burnspbesq
@J. Michael Neal:
Go read the Supreme Court’s opinion in Glenshaw Glass.
income is realized whenever there are “instances of [1] undeniable accessions to wealth, [2] clearly realized, and [3] over which the taxpayers have complete dominion.”
Alas, that’s a bit difficult to administer.