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My question is, why do we need so much money so fast? Even if we get the bill passed, it's still going to be weeks before any checks get signed...
embarrassing
Let's see how Geithner will be able to sell this new, "cute-looking" plan to the Congress and to the public.
How do you think debt is going to be reduced .. without bankruptcies, write-offs and reined in spending .. I can't figure out!!
Letting all of the major banks go bankrupt this year is simply too painful. It's easy to act all indignant about politicians not making tough decisions - but I am pretty sure none of us would cheerfully immolate our political careers if we had spent 30 years building them.
This country is in deep denial and there is nothing to be done about it. Politicians are now making the only rational choice available to them - postponing the final collapse by a year or two.
http://mgiannini.blogspot.com/2009/02/on-lemon-...
I hope the dreamed announcement will be that we are going to have
"GOOD BANKS".
I am afraid we are going to have lemon juice by squeezing lemon banks and products
LEMON BANKING SQUEEZE
What exactly would be the detrimental hit to investor confidence if we actually looked at the books of these banks and nationalized those that are really underwater? It's a fallacious argument to compare it to Lehman, since that was investors recognizing that these trusted institutions CAN be underwater.
Admittedly, you'll have more complicated side effects (like Lehman's prime brokerage mess), but in the end the players in the market will be willing to lend to one another, knowing that the counterparty at least is solvent. It would, it seems, actually completely unfreeze credit, instead of just thaw it, with some thread of attempted market CPR combined with it that is unlikely to succeed.
There's lobbies, yes, and there's also simply fear of failure with the riskier and cleaner route, but is that really all it is? Maybe, perhaps, it's also the psychological need to DO SOMETHING, instead of watch events play out knowing that we have to accept what consequences come.
Indeed, read Miller's Daily Kos diary entry entitled "Are We Going to Buy the Bezzle?," and you will see he is raising something of an alarm:
http://www.dailykos.com/storyonly/2009/2/5/9358...
I just don't see how anybody can fairly accuse the man of being someone who is trying to hide the truth from the American people when he so simply and forcefully explained the truth of where Geithner and the banking industry seem to want to take us. If he didn't think we can handle the truth, he wouldn't have just told it to us, would he?
I read the first version of the WSJ article late last night, from which I took the quote from Rep. Miller. I characterized his position based upon what I had read. After reading subsequent revisions and your Daily Kos link, I have to say that you appear right. My characterization is of Rep. Miller's position seems unfair.
Sadly, Rep. Miller was only an example of what is a factually correct assertion: many in Congress, including those in positions of leadership, have been trying to get mark-to-market accounting treatment killed for many months. Consider this article from early October http://online.wsj.com/article/SB122290736164696..., and this statement from House Republican leader John Boehner:
"Onerous mark-to-market rules for certain financial assets that have no market value have worsened the credit crisis, and changing them has been a priority for House Republicans," House Republican leader Rep. John Boehner said in a statement. And other Congressmen and industry associations are on the bandwagon, too:
"One of the best reasons to fire [SEC Chairman] Chris Cox is the refusal to deal with the problem of mark to market," Rep. Darrell Issa (R., Calif.) said on MSNBC this week. "You do that, and you put trillions of dollars back into the lending pool. ... It's a tool that's available [to] the SEC, the Fed, the FDIC and the Treasury secretary, and they're not using it. There is a continued push to change accounting rules as part of a broader regulatory overhaul after the election. "What it does show is next year as part of the regulatory structural reform ... accounting rules are going to be part of that discussion," said Edward Yingling, president of the ABA.
So while I may have been mistaken about Rep. Miller, unfortunately the issue extends well beyond a single individual.
In this environment, when so many seem focused on placing ideology and/or party affiliation above sober reflection, I find your response refreshing and incredibly heartening. While I have ZERO sense of what direction you are coming at all of this from, the fact that you are ready, willing and able to take a step back from your initial reaction is, hopefully, a sign that others are, as well (particularly those in charge).
Generally, I agree with your revised conclusion. My issue is that I believe the cat is out of the bag and everybody who "matters" (and I hate to say that because it sounds so elitist) knows that these instituions are insolvent and should be institutionalized, which means to me that what Geithner is trying to do is NOT for the good of Hamilton's "unwashed masses" but the good for his real masters, the fools who leveraged us into this horrible position.
Thanks again for taking the time to review and respond.
It does not help your case that your entire argument is based on a quote that you present entirely out of context. By itself, the quote is 100% correct. There is no evidence of a policy statement in this quote; in fact you don't present any evidence of MIller's policy statements at all. Your statement that "He knows the problem is there, but is unwilling to face into the truth" is pretty strong considering that there is nothing in your post - other than your magical mindreading of Miller's policies - to back it up.
Now, maybe Miller has been pulling a fast one on us, and his writings on the internet do not match up with this actions. If that were true, I would love to learn it - it would force me to reassess Miller. But I need more evidence than this flimsy post.
If Treasury can keep C, BAC, and AIG on life support for awhile, until WFC, JPM, et al can strengthen themselves, then nationalizing is not as expensive. Especially since C, BAC, and AIG by then will be so in hock to the Feds as to be de-facto nationalized anyway.
Yes, we would all like to get on with it. But it is impossible in the current political environment. At least the Triage will begin.