Wednesday, February 11, 2009

Truth and consequences

Bank CEOs have been covering their nakedness with TARPs now that we're all exiled east of unregulated free market Eden. But this is an inversion of Genesis; this particular Eden was run by snakes for snakes with nary a god in sight despite the snakes' claims to be masters of the universe.

These are the people we so generously bailed out. The sad part is that the bailout came with essentially no strings attached, a result of typical Bushist incompetence, carelessness, and cronyism, abetted by typical Congressional Democratic panic, naivete, and willingness to continue in an abusive relationship. Democrats, even after nearly eight years of blithering, blinding, bullshit-filled, insincere stupidity, couldn't manage to expect more of the same and put some teeth into TARP oversight (which is now left to the Obama administration to do for them).

Now the CEOs have launched a charm offensive to try to convince those of us after all that our money was well spent on them. We really are lending it out, they say, not just lining our pockets with it, bathing in it, and drying off our crotches with it after our skin turns all pruny with the designer scent of bath beads made of easy money.

Oh, bullshit.

The real truth is that credit is dry. Projects that would employ hundreds for a couple of years or more are unable to find financing today. Not public projects, private ones.

Despite this reality, amateur wingnut economists from the Republican Congressional caucuses to to Amity Shlaes to the illiterate, innumerate commenters on major metropolitan newspaper sites all agree on one thing: Don't stimulate the economy with anything related to government. They'd rather go hungry let others go hungry if the alternative is to do anything publicly funded. For these twisted savages in business suits, there simply is no commonweal.

Those of us who live in the world as it is, who don't prefer to sustain a discredited set of free market theories at the expense of beggaring their neighbors, don't really give a shit whether a job comes from public money or from private money. We realize that one of the crucial functions of a government is counter-cyclical spending to soften the rough patches and prevent deflation.

Obama and Tim Geithner are about to try TARP II, which will try to regulate these same CEOs into the lending behavior we want. I hope it works, but I know these weasels will do every thing they can to manipulate our oversight to their profit.

Better would be to learn that they can't be trusted: Temporary financial socialism is a better answer. Take these SOBs over, outsource their jobs, and make prudent loans in the public interest. When times get better, sell off the banking assets at a profit - a well-earned profit to be sure.

Update (2/13): Paul Krugman had this yesterday, a day after I did:

... temporary bank nationalization (the solution favored by a growing number of economists, myself included)...
But no way I'd claim priority; I got it from him in the past, I'm sure. Read the whole column. It's filled with good analysis.

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