I couldn’t agree more with David Obey about both TARP and the stimulus:
I think everything [President] Bush and [President] Obama have done on the economy is getting a needless bad rap. At least that’s everything Bush did after September of the last year he was in office. . . I knew then it would be costly political vote because I was pissed off, because I detested being in the position we had to help the very people [on Wall Street] who had caused the economy to implode in the first place. We had no choice. If you’ve got an epidemic going on, you’ve got to treat the people who caused the epidemic as well as the people treating it or everyone is going to die.
The public hates it, but it happens to have been a pretty damn good deal for the taxpayers. When all is said and done, that will not have cost the American people nearly as much as we feared. The cost will be less than $100 billion. And if you can save your economy by spending $100 billion, I’d say that’s worth it. Even if to do that you had to give some help to the dumb bastards who got us in trouble in the first place, and you can quote me.
The problem for Obama, he wasn’t as lucky as Roosevelt, because when Obama took over we were still in the middle of a free fall. So his Treasury people came in and his other economic people came in and said “Hey, we need a package of $1.4 trillion.” We started sending suggestions down to OMB waiting for a call back. After two and a half weeks, we started getting feedback. We put together a package that by then the target had been trimmed to $1.2 trillion. And then [White House Chief of Staff] Rahm Emanuel said to me, “Geez, do you really think we can afford to come in with a package that big, isn’t it going to scare people?” I said, “Rahm, you will need that shock value so that people understand just how serious this problem is.” They wanted to hold it to less than $1 trillion. Then [Pennsylvania Senator Arlen] Specter and the two crown princesses from Maine [Sens. Olympia Snowe and Susan Collins] took it down to less than $800 billion. Spread over two and a half years, that’s a hell of a lot of money, but spread over two and a half years in an economy this large, it doesn’t have a lot of fiscal power.
I realize that there arguments to the contrary on both issues: Treasury should have struck a hard bargain with AIG creditors (maybe 60 cents on the dollar) rather than making them whole, why complain about the size of the stimulus rather than giving credit for the fact it passed at all? Jon Chait explains the back-and-forth on the stimulus very well:
It’s possible the moderates really were fixated on the $1 trillion barrier, and any larger proposal might have simply gone down in flames. That, of course, would have been a catastrophe: an economic meltdown and a political flameout that might have crippled Obama’s entire agenda out of the gate. The counter to the counter argument is that Obama was maximally positioned to play political hardball: He could have insisted that a $1.4 trillion stimulus was what he needed to fight the recession, and threatened to blame Republicans who stopped it for abetting mass unemployment. That would have been a risky play. But given the social and political costs of mass unemployment, it was probably worth taking a chance to push the stimulus number as high as it could go.
When all is said and done, I think history will show that TARP was an imperfect success and that the stimulus was much too small.
Daddy-O
DFHs were right again.
I disagree with Obey’s point, dramatically drawn, that if we let the big banks die, we’d all die, too. BS. No way.
We’d be just fine if they died, but they don’t die–they get eaten and resurface as bigger banks than before. They’re vampires, in more ways than one.
DougJ
@Daddy-O:
Given the way large-scale bankruptcies work, I think we might all have died if we’d LET THEM FAIL. It would have tied up literally trillions of dollars in assets for months to years.
Nick
Since blaming Republicans hasn’t appeared to have worked on healthcare or even financial reform or unemployment, I’m gonna go ahead and say the White Hosue made the smarter political move in pushing for a stimulus that can pass rather one that they can grandstand until the media goes “Well, gee Mr. President, good leaders compromise”
and for the record, that’s exactly what we at ABC assumed would happen. The President and the Democrats would fight Republicans and we’d slam them for not compromising. We’d present the Republicans as reasonable “We’d be happy to vote for a stimulus, but not one that puts us in debt” and Democrats are partisan shrills just trying to use a collapsing economy as a use for spending. but the President compromised. They fucked up our narrative.
DougJ
@Nick:
Interesting. You may be right.
I still think that, given the stakes, Obama could have gotten more.
Cacti
Given the makeup of the Senate, I don’t think the stimulus was ever going to get much bigger than it was.
Violet
@DougJ:
Yeah, that’s where the problem was. It would have been fine in principle to let them fail, but in practice it would have tanked the entire economy and tied up trillions of dollars for years. Not really worth it.
Econwatcher
I’d feel a lot better defending what was done before if the financial reform legislation took a serious stab at breaking up the “Too Big to Fail” entities. Then you could say, yeah, we had to bail them out to save ourselves. But as soon as things calmed down, we cut them down to size, so this will never happen again.
But we can’t say that. They used their reprieve to fend off the most serious efforts at restructuring. So instead, we are left saying, they were big enough to blackmail us then, and in the future–well, we now have a few extra tools in our kit, so maybe it won’t be so bad next time.
We got played.
General Stuck
I still think it was Glass Steagal that is at the root of the broken economy. And it did break, no routine bidness cycle downturn. I don’t think it was just because of too big to fail, but more too interconnected to fail. And big too.
I think the stimulus worked within the parameters of what it was meant to do. Cushion the fall and keep the patient/economy breathing until self corrections could take place, a lot of them needed this time around and they are still on going. More stimulus would likely have created a little better current condition politically for dems, but I doubt they would have sped up a permanent job market developing.
Dems do need to go populist on the safety net, Unemployment insurance etc….. Which btw is also too stimulus.
bob h
I think Obama was operating on the assumption that there was some sense of responsibility and good will on the Republican side. He now knows better, but the price of this education was a too small stimulus.
cat48
Stim was too small. Why the fuck do we have to keep wanking about this?????? Yes, the fucker was too small & everyone hates Obama because of it, except me. Anything else?
Oh, the bailout worked? No, Obama made this economy by bailing out big banks. The left guests, including Cenk (obviously trained by FDL/HuffPost), have been on my TV telling the public all day. He should have bailed out small banks and everyone would have a job and ponies! GOT IT DOUG??
Don’t worry about all those freaky ferners banks that would have imploded too! Who needs them?
Corner Stone
Obama was not maximally positioned to do this. Every thing he had said to this point clearly indicated he would never do this.
His entire platform and strategy for success, however you define it, was predicated on an intense and sincere (however you define that) effort at bipartisanship.
DougJ
@General Stuck:
I like to call it Stass-Gleagal.
David Brooks
@Daddy-O: According to one member of the House finance committee, “letting big banks die” meant that, at one point, they were facing your high street bank branch not opening its doors the next day. Imagine the reaction to that among the populace. The nation might have survived, but many people caught up in the panic would not.
Allison W.
There is no way in hell Congress would have signed off on a trillion dollars. I knew that then when I first heard the numbers being floated. No way in hell. I don’t care how much Obama speechified, they wouldn’t have given it to him.
And from what I see now, 1.4 trillion would have turned out to be too small also. I’m no economist, but it doesn’t look like a few hundred billion dollars more is going to do the trick.
Corner Stone
@Econwatcher:
What efforts?
They flipped Obama the long bony one and have been paying out record bonuses and salaries ever since.
FlipYrWhig
“The moderates” include a huge number of Democrats. You can’t call out “the Republicans who stopped it” if the Democrats aren’t unified among themselves.
I have always thought that the $1 trillion figure was a huge psychological burden. Whether they asked for $1.4T, $3T, or $10T, the final figure was always going to be just under $1T. Starting at $1.4T made the inevitable negotiation down below $1T quicker.
Davis X. Machina
We now know that there is absolutely zero risk for a Republican flowing from abetting mass unemployment. Risk of re-election, yes. Risk of rising from the House to the Senate, yes. Risk of shifting offices from Minority Leader to Speaker, yes.
Regular old risk-risk — nada, zip, rien, nichts…
Corner Stone
@Allison W.:
Remember that time Hank Paulson put Congress people in a room and told them so scary, so frightening, that they did exactly what they were told immediately?
They won’t tell us what he said but obviously it was some good shit because he got what he wanted NOW, NOW, NOW!
Davis X. Machina
This, despite a fair amount of loose talk on DKos and Democratic Underground about having it all fall down would be a good thing, causing us to all turn away from our consumerism, re-discover what matters in life, build real community, and choose a Better Way, huh? Go figure.
Nick
@DougJ: Not anymore than a trillion I don’t think…and a hundred billion or two hundred billion more wouldn’t have made that much of a difference, especially since it just meant more tax cuts.
And the end of the day, he had to convince Senators who had an electoral incentive to oppose whatever he did. He needed Republicans willing to put aside their party’s agenda and do what’s best for the country.
and Jacob Javitz lost his primary almost 30 years ago.
Nick
@Econwatcher: Too Big Too Fail was never going to survive a constitutional challenge.
Resident Firebagger
I’ve heard enough people I respect — Elizabeth Warren, for one — say that something had to be done in the fall of 2008. So, OK.
But the fact is this was also used as a cover to make sure that Goldman — aka, Obama’s biggest donor — got ALL its money from AIG. Remember that?
And if the stimulus was too small to work, it’s too small to work. Obama doesn’t get credit for it. Not with near 10 percent unemployment, still. I’d also argue that Obama also shouldn’t get credit for FinReg, since it likely won’t keep what happened in ’08 from happening again, or for HCR, since forcing people to hand over what little money they have left to the insurance companies will ultimately be just another step in the dismantling of the social safety net.
And, somewhat relatedly, why is it whenever Congress passes something, some people here slobber all over Obama for making historic progress, but if Congress doesn’t get something done, then it’s all the fault of the Republicans and Blue Dogs? Just wondering.
Allison W.
@Corner Stone:
yeah, so after paying that shit load of money out, congress was soooooooo ready to do it again.
Cacti
@Davis X. Machina:
It’s the same sort of magical thinking that we saw during the HCR debate, where if we just killed the insurance industry as we know it, the tens of thousands of people it would put out of work would all just sort itself out.
Because shut up, single payer! That’s why.
DougJ
@Resident Firebagger:
I agree, I mentioned this BUT it seems silly to blame Obama, given that TARP was set up and administered by former Goldman employees and that most of the structure was in place before Obama got in.
EDIT: Also too I had not heard that Goldman was Obama’s biggest donor, I only agree that the AIG terms were too favorable to Goldman.
middlewest
There needs to be a tag, like, “Balancing checkbooks on the Titanic” for stuff like this.
Nick
@Corner Stone:
Yes i do remember this, I also remember how the bailout failed the first time immediately after and it was only after the Dow fell 777 points in one day that it finally passed.
cat48
Great! Now Van de Huevel is on TV. Bash, bash Obama. Thanks Katrina! Real white of you here at election time!
Allison W.
@Resident Firebagger:
I thought his largest donor was the University of California?
in any case, please refer to older posts for your other statements. It has been debated to death.
Cacti
@cat48:
More of that “useful, constructive criticism” from the left.
Davis X. Machina
@Nick: Talk about your missed opportunities. A whole lot of people who actually wanted to return to a simpler and more authentic life-style got their opportunity snatched away from them that day, let me tell you.
cat48
@Resident Firebagger:
Actually Goldman was NOT his biggest donor. I’m sure it was a University on one of the elite coasts. Anyhoo, it was 1/800th of his total donations.
Well, when Congress doesn’t get something done; it’s obviously because they didn’t really want the legislation anyway or they would have used their BULLY PULPITS!
Sly
For what it was designed to do (keep demand somewhat stable), the stimulus was about right. It would have been nice if more of the money aimed at certain business tax cuts were geared toward state budget relief, but Nebraska was one of the only states with a balanced budget back in 2008/9. No way Nelson was gonna let his constituents pay for someone else, because he would suffer electorally if he did.
If the purpose was to reduce unemployment back to 5%, even as just a temporary measure, ARRA would have just been a massive public works project almost on the order of the WPA. We can debate whether such a thing was necessary, and I would fall on the side that it was and still is, but that was not what ARRA was initially set out to do. It set out, in large part, to try and create private sector employment.
Corner Stone
@DougJ: OpenSecrets says U of C $1.5M and second is GS at $1M
Contrib list
Tom Q
Actually, cat48 & cacti, Katrina was pretty good just now — not 100% in line, but definitely crediting the economy and GOP for most of Obama’s difficulties, rather than taking shots at him. Maybe having Jonathan Alter alongside kept her from indulging her firebagger side.
Jay B.
There is no way in hell Congress would have signed off on a trillion dollars. I knew that then when I first heard the numbers being floated. No way in hell. I don’t care how much Obama speechified, they wouldn’t have given it to him.
Good thing he didn’t try.
And from what I see now, 1.4 trillion would have turned out to be too small also. I’m no economist, but it doesn’t look like a few hundred billion dollars more is going to do the trick.
And I’m no mathematician, but $600 billion more than the $800 billion (with too much of THAT in tax cuts) is about 75% more stimulus. We agree that it worked, just not as much as it could have. In my crazy mind, 75% more would have worked 75% better than it worked. And probably more.
Especially if they put more of it toward railroads, infrastructure and the rest of the ‘multiplier’ kind of projects.
The media, the Democrats (many of whom were scared and/or opposed) and the Administration all ran from the $trillion + stimulus, even though actual economists were screaming that it was insufficient.
Juicers live in the Just Right mode. On this thread “loose talk on DKos and DU” wanted things to be worse. Naive pony-wishers like Paul Krugman wanted more money to be spent, less on tax breaks and more overall funds in the stimulus. Juicers, while saddened that the economy, as predicted, is still in the shit pile, KNOW things were handled just right.
Sly
@Jay B.:
It’s not thinking that things were handled “just right,” its knowledge of the fact that the President isn’t an Emperor, and that you can’t manufacture 60 votes out of thin fucking air.
Welcome to Representative Democracy. Enjoy your stay.
Davis X. Machina
You know, when you look up and see yourself singing the same song as Timothy P. Carney, maybe it’s time to check the sheet music, or even play in another band.
Bill H
Spread over two and a half years it was invisible. Spent all at once, and specifically on jobs, it might have been visible, had a measurable impact, and might have impressed people favorably toward the Democrats who passed it. As it is, anyone who claims anything for it is accused of bullshitting and finds real difficulty proving otherwise.
cleek
@Corner Stone:
if only McCain had put Congress people in a room and told them to Stop The Bullshit!
we’d be rockin right now!
alas.
General Stuck
We like to call it our Goldilocks Green Balloon.
askew
You are talking about maybe an additional $300 billion in stimulus. If $787 billion was too small, an additional $300 billion wasn’t going to make that much difference. The amount of the stimulus would have been plenty had more of it been given to states and less of it had been tax breaks.
And this is just an academic discussion because $1 trillion was never passing the Senate nor were we going to get more money for the states. The Maine twins oppose giving money to the states and were opposed to anything larger. That’s reality. Also, the longer the fight dragged out the more likely the bill died.
cleek
NewYorker.
via Atrios.
Kerry Reid
@DougJ: Nothing to say here except that this comment literally made me bark with laughter.
Nick
@askew: There would have been a stimulus regardless, but the longer it dragged out, the worse it would be because the more leverage the GOP and conservatives had the angrier the public got.
Nick
@Tom Q: Katrina had generally been ok, going after the President when need be, but keeping the spotlight on GOP and conservative obstruction in public forums.
Nick
@Jay B.:
I know right, think of all the other great shit we passed since because we didn’t blow our wad on a stimulus that could never pass.
Jay B.
@Sly:
Again, it’s a good thing we’ll never know.
All you experts in representative democracy — which is basically supermajoritarian rule — keep asserting that he did all that was possible, meanwhile, in our actual democracy, David Obey said:
And then that number vanished into air.
And his CEA Chair Romer, also submitted a $1.2 trillion proposal that never made it past Larry Summers.
Jesus Christ. Yes. It would have. That’s 40% more.
Some of you are literally arguing in the perfect inevitability of political possibility counting while dismissing the potential impact of hundreds of billions of dollars because it doesn’t sound like much.
Jay B.
@Nick:
No shit. You’d think people would be happier with 9.5% unemployment and no more unemployment insurance.
General Stuck
@Jay B.:
Come Firebagger walk with me.
Nick
@Jay B.:
which obviously is the fault of a stimulus that was too small?
Actually, brainiac, the no more unemployment insurance problem is because Demcorats ARE NOT COMPROMISING.
Michael
@Corner Stone:
I always wondered about what all got said there. Apparently, there was a shload of shouting, and I remember one report that Paulson was actually down on his knees begging.
Amazing that Congressman Orange Boner was able to overcome his fiscal scruples in order to do the bidding of white guys from his party.
Mnemosyne
@Resident Firebagger:
Define “work,” because every economist out there agrees that the stimulus worked to prop up the economy and prevent us from spiraling into a full-on depression. Every single one. Yes, even K-Thug.
If by “work” you mean “completely fix all of the problems surrounding the financial collapse,” then you need to say that because otherwise you sound like a flat-earther when you insist that the stimulus did nothing.
Jay B.
@Nick:
Yes, the fact that the stimulus was too small means that UI is now, impossibly, out of reach.
If we had more stimulus, we’d have more people working — brainiac — and we’d have fewer people who needed UI and, with a lower unemployment rate, there would be less of a fight about extending it because the GOP would have no reason to vote against it.
Or do you not really understand cause and effect? Right now, genius, the GOP has to continue to crank up the misery index so people stay mad until November. A better economy — a direct cause of a bigger stimulus — would be death for them.
Thankfully, the Democrats, including the President, decided the deficit was more important than a bigger, more effective, stimulus and decided to have other legislative priorities.
Mnemosyne
@Jay B.:
It doesn’t sound like much because they never existed. That’s not what passed.
I still don’t understand your brilliant strategy of constantly complaining that the original stimulus was too small rather than arguing that we need another stimulus, but I’m sure you have a great explanation for why it’s better to keep debating about things that happened over a year ago than to try to get something new passed.
ThatLeftTurnInABQ
Something that I think gets lost in these post-facto debates over the size of the stim is that it requied deficit financing (or else it wouldn’t have been a Keynesian stimulus anyway), and we didn’t know how much of a deficit we could finance at the time (very early ’09), because nothing that large had ever been done before. Nobody really knew for certain how large of a deficit the US could run without the bond market freaking out and the rates on newly issued Treasuries climbing to levels where the budget would be eaten up by rapidly inflating costs of short term debt service. Inflation vs deflation was an argument that hadn’t been settled at that point. Now we know that deflation won, but that’s benefit of hindsight. I think that played a role in picking a sub $1 trillion figure.
Jay B.
It’s not a strategy. It’s a criticism. A criticism that many of us had from the start, when there was still hope something larger could come out.
As far as “getting something new passed”, I’d love that. However, I’ll put that to a vote, it’s a representative democracy and all. Does anyone, particularly the ‘realists’ out there, think that getting a new stimulus of any amount — hell, even the $30 billion to extend UI — is probable or even remotely possible?
Of course we need more stimulus. But we had our chance. And we passed, in order to do the prudent thing.
Actually, this is the big criticism. I don’t deny that Obama has gotten more positive done than most anyone since LBJ. We need all of it. But we, sadly, unfairly, tragically, need a LOT more too. The Democrats had a window of two years — again, unfairly, but that’s life — to change the direction entirely. But not every Democrat was on board. In Congress. In the Administration. We’ll probably have the chance to rule again, in 10 years or so. Give or take a few sessions. But not the same opportunity, I’d argue.
jl
I think reminders and explanations that the stimulus was too small (and poorly designed) are important because you need a counter to the GOP argument that the stimulus did nothing or counterproductive.
So, I don’t have problems with going back to predictions that Keynesian economists made a year or more ago. It reminds people that the Keynesians were right, the compromising Obama administration was wrong (except for its Keynesian economist wing Romer and Bernstein in their initial analyses that Summers buried), and the GOP was very very wrong, and the Real Business Cycle economists were almost perfect inverse predictors (if they said it was going up, that meant it was about to crash, example being commercial real estate market).
Fred Fnord
TARP? Successful? Lending rates are as close to zero as you can get, TARP funds were never used to increase them. Instead, TARP funds were used to lever more money out of the government via short-term bonds.
If what we wanted to do was give enormous amounts of cash to banks without having to pay them back, we should have just done that. As it is, it’s exactly what happened, but with the added advantage (from the banks’ point of view) that nobody knows about it.
General Stuck
@Jay B.: Per usual, you are simply regurgitating FDL bullshit here on what is success and failure, and setting some unknown or arbitrary signpost for which is which. The fact that the economy is doing as well as it is when it’s prognoses two years ago was near death, is good enough for most liberals, and you have no real proof that more stimulus would be creating a permanent job market, and neither does Krugman or any one else.
Every success is a missed opportunity, for what? better success. More stimulus meaning more faster recovery is just the latest, though recycled, expression of how Obama has failed us today. It is tedious, if not predictable.
800 billion was all we could get when we got it. Period, case closed. Move the fuck on to the next missed opportunity. We can’t wait for it’s unveiling.
El Cid
I think Obama should have proposed a $10 million stimulus just to watch a whole bunch of House members and pundits shit their pants.
Mnemosyne
@Jay B.:
It made sense to make it at the time since you still had some hope of getting something bigger passed. It makes absolutely no sense now over a year later. You sound like the guy who’s still bitching about his wife scratching the car door a year after it happened. Let it go.
The only way it would make sense to keep talking about it would be as a strategy: “The stimulus was too small, so we need a second one.” Krugman is approaching it as a strategy by presenting it as part of his argument for a new stimulus.
But by your own admission you’re not saying what Krugman is saying. You’re just bitching and moaning to hear your own voice.
UI is going to be extended. A new stimulus might be possible if we could talk about it as, you know, a new stimulus and not “you guys fucked up by making the stimulus too small and you’re all a bunch of motherfucking assholes,” which is your approach. That tends not to put people in a mood where they’d like to help you.
If the Democrats actually gain a few seats in November, I could easily see another stimulus package passing. If the Republicans either shrink the Democrats’ majority in the Senate or manage to take over one or both houses of Congress, then jack shit is getting done until 2012 aside from impeachment investigations.
Mnemosyne
@jl:
I disagree. I think people hear it as “the stimulus didn’t work” and fold it into the Republican arguments.
They’re not hearing, “It worked, but it could have worked better” from people on the left like Jay B. They’re hearing, “It didn’t work at all,” which the same thing the Republicans are saying, so they’re assuming the Republicans are right and it didn’t do any good.
Personally, I would rather be hearing, “The stimulus worked great at the time, which is why we need more.” Better to build on success than to try and salvage a failure, which is what all of the bitching about the too-small stimulus sounds like. It sounds like think the stimulus was a mistake that has to be covered up with more stimulus money.
JMY
I was actually shocked that the stimulus package actually passed. It’s easy to argue that the stimulus should have been more than it originally was. It was a scramble to get votes for what most people now consider a modest $700+ billion stimulus. I can only imagine how difficult it would have been to get a $1.4 trillion or higher bill passed without it being slimmed down. And make no mistake about it – that would have happened.
jl
@Mnemosyne: You are probably right regarding how to present it. In any case, reviewing what different groups said, comparing that to what happened has to be part of it, IMHO. If you want to emphasize the parts that worked great, and point how great they were and what good they did, I have no problem with that.
Tecumseh
One thing not factored in was that we already gave the banks close to a trillion dollars less than six months before. Then Obama had to go out there and ask for another trillion dollars. I think some of the fear of sticker shock because of that– those are two big numbers to suddenly announce you want to spend. Another thing was how could they have used the 1.4 trillion as I don’t know how many shovel-ready projects there were still out there. You can’t do a WPA program these days. I’ve also always wondered what level of communication there was between Congress and the Administration when it came to putting the stimulus together because maybe they got word that anything over a trillion was a non-starter. And I also agree that politically, asking for 1.4 trillion without the votes might have been a disaster.
And as far most of the economists out there saying they needed to spend more, it seems to me those economists never actually are talked about in the news. Krugman’s the only economist who gets put on air but he always comes off as the token liberal with a shiny prize who fills out our token liberal quota. The fact he’s been right about anything for the past five or six years never seems to enter the equation.
I do, however, think the question of just how much Obama could have gotten out of a stimulus will probably be the big question that will haunt his administration and post-Presidency. Don’t think anybody will know the answer and I think we’ll be debating this for ever and ever and ever.
General Stuck
800 billion was an outrageously huge discretionary spending bill unheard of in our history as a country. It was also chocked full of progressive causes and the money to implement them. It was all Obama could get at the time, and the wingnuts are still enraged that it passed. It has done it’s job, with additional long term benefits in R and D that will outlast the Obama administration and serve as a stalwart achievement of his presidency and it’s legacy. Move on progs and whine about the next success as a lost opportunity. This one is stale, but it heartens the wingnuts that liberal ideologues hate it almost as much as they do.
Jay B.
I’m using the Administration’s own benchmarks you idiot. They underestimated the terrible shape of the economy, underestimated the money they should be pumping into it, and were, without stimulus, estimating unemployment below 8%. Certainly, without stimulus, things would be infinitely worse. And yet, here we are!
To be fair, it is Centrist’s dream world of process, compromises, bipartisanship and legislative victories. How’s that working for everyone? If you are satisfied Fred, well, that’s just sweet.
But, and I know I’m being a total firebagger here (retire the word, really, people who use it sound like assholes) by pointing out that a huge swatch of Americans don’t really feel served by their government.
Yes, of course, it’s my fault for not being more enthusiastic, but part of me ALSO wants to fault the people for still being unemployed, dealing with their foreclosures, spending their tax dollars on expanding military budgets and not having a sensible personal energy policy.
Maybe there is no solution, in which Bring on the Brawndo. Maybe it’s going to take forever. Trouble is, we don’t have that long.
But so long as “800 billion was all we could get when we got it. Period, case closed.” is your argument, well, we’re going to continue to get the government we deserve, but good.
General Stuck
@Jay B.: It’s weird, the comment you cite of mine was eaten,, and doesn’t show up on my end. WP mystery again.
And yea, move on. This happened two years ago but you whistledicks are still mental masturbating it. And benchmarks are made, then changed because nobody knows wtf it is with our economy. You are worse than Ken Starr and his never ending witchhunt on Clinton. Always one more past rock to turn over to find out how Obama has failed us. I am sick of it. If you want to argue for more stimulus now. Fine, but the past is past except for those who wallow in it and insist on dragging the rest of us with them. jeebus fucking christ.
Midnight Marauder
Goddamnit, Fred Fnord! You just broke the Internet!
Jay B.
No he’s not. He was worried that the exact scenario that is taking place was going to take place.
In July of 2009 he said they were going to have to ask for another stimulus, because it was already apparent it was too small.
Here’s him from July 14 (two days ago):
Jay B.
And you are always spot on with amazing analogies. Next, Why Kos is Worse than Hitler.
I smell another two day three-month sabbatical coming on!
From the very fucking post we are commenting about:
“When all is said and done, I think history will show that TARP was an imperfect success and that the stimulus was much too small.” – Doug J.
Take up with the management, asshole.
General Stuck
@Jay B.:
LOL
Stop fallin’ in love with me now.
General Stuck
@Midnight Marauder:
I’d say. How did my comment end up in Fred’s box. Never seen that before. very very veird.
Brien Jackson
@General Stuck:
The problem with that, as MOA pointed out yesterday, is that a non-trivial number of the firms at the center of the mess weren’t ever covered by Glass-Steagall.
@Econwatcher:
the way to make sure a TARP situation doesn’t happen again is to establish clear authority to seize and unwind failed non-commercial banks.
Brien Jackson
@Corner Stone:
That doesn’t really work as an analogy, because you had divided government, not one singular governing party and an opposition.
General Stuck
@Brien Jackson: Well, yea, the whole derivatives thingamabob. That was act two of Gramm’s S-G repeal, inserting language in a new bill he sponsored exempting them from any regulation whatsoever. And therefore any proper accounting to where anyone had a clue what was happening. But I still think letting finance banks and commercial ones intermingle their business is the main culprit. But I am no expert, that just seems like common sense to me.
Brien Jackson
@Jay B.:
I’ll bet dollars to dimes that if you had normal unemployment rates you’d have more Democrats than just Nelson voting against extension.
And seriously, Republicans? They vote against UI because they don’t believe in it.
JAHILL10
@cat48: Beaten to the punch again. Thank You!
Corner Stone
@Brien Jackson: It’s not an analogy but a data point.
Chris
@General Stuck: I think you’re at least partly, and maybe completely, right about Glass-Steagall. But we should remember that Congress (mainly Republicans but both sides had hands in it) have been poking holes in the G-S Firewall for decades. As a result, resurrecting G-S wholesale was probably impossible. What has just passed is certainly not the best thing, but may be good enough. We’ll have to see.
Corner Stone
@Brien Jackson:
Normal as in 5%, or less?
You understand you’re talking about some 10M+ people in the difference right?
There’s a difference in magnitude between 5% and 10%.
Corner Stone
@Jay B.:
With 5 days of drama queening in the middle?
No thank you.
Corner Stone
@General Stuck:
It kind of mattered. People knew it mattered at the time.
This isn’t groundless bitching or whistling past the graveyard.
Corner Stone
@Mnemosyne:
Yeah, right. And the next time something drastic needs to be done?
Your answer will be, “Hoocoodanode??”
Well, some people coodanode.
Jay B.
@Corner Stone:
That and it’s the subject matter of the post.
Corner Stone
@El Cid:
Or maybe offered them a piece of that gum that stays chewy fresh a really long time? The one where the -rahm- ram nails them in the stomach to make them spit it out?
General Stuck
@Corner Stone:
People “knew” no such thing. Some people theorized it did, others realized it was all that was possible politically. And now puma wankers continue to wank about it because they have nothing better to do except fill up blog threads here with hand wringing Obama fail angst. Which is the real reason, of course.
Corner Stone
@Michael:
They hedged around and said essentially that Paulson told them the day the earth stood still was today if they didn’t cough up that fat cash. With no restrictions or oversight, natch.
Corner Stone
@General Stuck:
Of course you’re right. I don’t give a whit about the new normal of 9.6% official unemployment, nor that 1M homes will be foreclosed.
I just want to put on my puma fur coat and wank some more.
General Stuck
@Jay B.: The subject of the thread post was Dougj agreeing with Obey’s take that it was all they could get out of the senate due to Snow, Nelson, and other prima donnas.
General Stuck
@Corner Stone:
Of this, I have no doubt.
Corner Stone
@General Stuck: That’s not at all what Obey is saying.
General Stuck
I tell you what CS. You and Jay B. need something useful to do, why don’t yooze two investigate the archives on how many times I called myself a liberal, and report back to the group. Should keep you both occupied and out of our hair. For awhile.
Corner Stone
@General Stuck: I’m not sure how it’s on me if you’re too much of a moron to read plain language without contorting it to mean what you want.
Wait a second…oh shit, I have a hangnail!
John Cole I am officially asking you to ban me. I just don’t think I have the strength to clip this nail without returning here.
General Stuck
@Corner Stone:
Reading your garbage here day after day, the request is still open. If I had any, I might offer good money. The BP would appreciate it, and so would my abused brain cells.
kay
@Brien Jackson:
True. Nebraska is at 4.9%. Not a whole lot of incentive for Nelson to extend UI.
Bernard
theft is theft, however you choose to describe what the Banksters are doing. there is no justification for saving these Bankster the way they did. more than a pound of flesh is due in this case.
Holding America hostage began when Reagan was inaugurated and the economic plans to rob America were implanted into the American way of thinking about Government/capitalism.
such a smart plan, only took time once it was implemented. about 40 years. and now is near the final act in the plan.
You didn’t think there was a “free lunch?” Someone has to pay for the endless wars, tax cut to the Rich, Faith Based “reality” and Fox, lies and videotapes.
this is the price, paid on the installment plan, like BP wants it to be for their “success” in capping the leak. they are calling in their markers now!!! Pay up NOW!!!
That's Master of Accountancy to You, Pal (JMN)
@General Stuck:
You’re defining “Glass-Steagall” over broadly. G-S is one very specific thing: the separation of commercial banks and investment banks. There was a lot of other deregulation that occurred between 1980 and 1999, but you can’t conflate them. When someone asks you how the repeal of G-S played a role in the crisis, you need to address what it was actually about. How did the fact that one company could control both a commercial bank and an investment bank lead to the crisis?
General Stuck
@That’s Master of Accountancy to You, Pal (JMN):
I thought that’s what I did. The deregulation of derivatives was a separate bill, or a slip in by Phil Gramm that allowed no regulation of derivatives trading. Read my comment again.
@General Stuck:
That's Master of Accountancy to You, Pal (JMN)
@Resident Firebagger:
No, because that’s not what happened. There was no way to prevent Goldman from getting 100% of what it was owed without6 forcing AIG into bankruptcy. Even then, because of the way the laws were written, they had a higher priority on the AIG’s assets than just about anyone else. Basically, anything that was denoted as collateral on their swaps trades would have been stripped out before everything else was divided up among the other creditors. You would have had people with insurance contracts getting stiffed while GS walked away with their loot.
Another reason that just letting AIG go into bankruptcy wasn’t an option was because it would have precipitated a foreign affairs crisis. The French, in particular, were leaning heavily upon anyone they could get a hold of and telling them that they were going to be extremely pissed if their companies didn’t get covered at 100%.*
Making Goldman take a giant haircut wasn’t in the cards. There were too many moving pieces, which couldn’t get cranked in a way that allowed it while also taking care of the other things that were essential. And, before anyone suggests it again, letting AIG go into bankruptcy to make sure that Goldman got its haircut and just covering everyone else wasn’t a viable option. Between the twin nightmares of getting that coverage through Congress and Goldman tying everything up in court for a couple of decades, it wasn’t a viable possibility.
*This is where my defense of Tim Geithner from this period comes from. He takes a lot of criticism for being the guy who signed off on the deal that paid off Goldman, but what were his choices? The Bush administration made him the fall guy. They told him to get it done, knowing full well that the President of the New York Fed is in no position to precipitate a full scale foreign affairs crisis, or any of the other things that would have been the fallout of a decision to do anything other than what was done. The mere act of putting Geithner in charge of making the decision was exactly the same thing as telling him what the decision had to be, except that it allowed everyone else to avoid getting their fingerprints on it.
That's Master of Accountancy to You, Pal (JMN)
@General Stuck: Well, you better be able to defend that statement, then. Explain how it is that allowing the commercial and investment banks to mingle their funds was the main culprit.
How does that explain the hole that AIG (an insurance company with no commercial bank attached) dug for itself by making trades with Goldman (an investment bank that, at the time, had no commercial bank attached) and a bunch of foreign banks (largely uncovered by Glass-Steagall, by the mechanic of being foreign)?
Are you saying that we would have been able to just let AIG go belly up had Glass-Steagall still been in place? Under what justification?
Explain the connection you drew between deregulating derivatives and allowing one company to own both a commercial and an investment bank. I don’t see it.
As I’ve said before, a far, far bigger problem was a change that happened over the same time frame as the late 90s deregulation but that was not, in fact, a part of it: the switch of the big investment banks from being partnerships to being corporations. That’s something that was never regulated against. It changed for different reasons. It also produced a much greater shift in the risk appetite of the big investment banks than anything related to Glass-Steagall did.
General Stuck
@That’s Master of Accountancy to You, Pal (JMN): No I said it was both. And no one can really pin it to just one cause. I have no evidence one way or another, but based my suspicion that repealing GS was the last psychological firewall of GD reforms to fall, and that changed the mindset to a free for all, that was poured gasoline on by the Bush administration not caring about any regulation. LOL, I am no expert, and you might well be right about the nuts and bolts of the cause. So I will defer to your expertise. Relax.
Nick
@Jay B.: THEY WOULD’VE DID THIS ANYWAY!!
do you really think any stimulus would’ve been big enough to give us 5% unemployment?
wengler
Um…why isn’t anyone mentioning foreclosures as the thing that Obama failed on?
People are walking away from their perfectly good houses left and right because they don’t have the money to pay for the monthly mortgage rate when it adjusts into absurdity. These aren’t the NINJA loans, these are the crappy ARMs with their teaser rates. The banks(or mortgage holders) are run by fucking idiots knowing that the government is going to cover their defaults, so instead of making a deal keeping the homeowner in their home they are adjusting up, kicking out and are the proud owners of assets that they can mark on their balance sheets at whatever price they deem them to be.
So to repeat. More empty homes. More homeless people. More jobless people. All so some rich fuck can game the system that other rich fucks set up. It’s sad to know that the people in control now are really our only hope.
FlipYrWhig
Of course more stimulus would have been better. There’s also NO FUCKING WAY to have gotten it to be bigger. It wasn’t going to be a trillion dollars. Notice that TARP wasn’t a trillion dollars either. The “centrist” Senators who fuck up everything took their cut at fucking it up, and did. If you want it to have been bigger, explain what leverage you have to stop that Snowe/Collins/Specter group from fucking it up. Explain your killer counterargument to the perfectly understandable suggestion, “Why don’t we start with something smaller and see how it goes?”
Instead of complaining that it was “too small,” think of it as the maximum the immediate political context could bear.
Recall
Sure there is. Even now you can still do it. Just jack the top tax rate up to 95%. Just take their fucking money.
BrYan
Where can I find what got cut out of the stimulus bill? There’s a jackass at work who I will call Freemarket Mark who hates all things government but bitches whenever those government services get taken away. He loves to come over and tell me whenever Obama “really screws up”. He thinks the stimulus should have focused on jobs. Now he is saying we spent all that money and got nothing. We should have at least created something. I would like to get him to agree on some things that were in there but got taken out because of A-holes like Richard Burr, who is up for re-election this year in our state, then point out that those thing were taken out because of Republicans.
BrYan
To answer my own question, here.
http://www.cnn.com/2009/POLITICS/02/07/stimulus.cuts/index.html
Ugh, this is a tough sell, the things are way to general to get the guy to agree.
sparky
it’s getting kinda old debunking this stuff but once again TARP IS NOT THE BAILOUT. since no one believes me, here’s mister Ritholtz:
Nick
@wengler:
Because this is legitimately not his fault. He had a perfectly good plan to combat this and it was overwhelmingly rejected by the Senate.