Comments: Another Perspective

You see, this is why on occasion I have voted Republican -- because they had been able to say "no" to stupidity.

Not consistently mind you, but still, the ability to say no and dig in heels is a virtue.

do you accept a mob of 40 year-old former doctors and lawyers coming to John Boehner's house and cutting off his nuts with pruning shears?

Yes, but that has nothing to do with the sake of the free market. Probably more to do with the general Republican take on things. And the man blubbers on command; I mean really -- have you seen him NOT tear up?

Why would they be former doctors and lawyers? The skills of doctors seem immune to financial downturns, although their income may not be.

Posted by Labiche at September 26, 2008 10:53 AM

I don't understand this, Jonathan. For seven years we've been hoping someone would say fuck you to one of Bush's schemes. This scheme, which would transfer about 8000 dollars of wealth per household to the richest people in the country, is not only not going to ward off a Depression - it will be a snack in the ongoing sudden shrinking of the financial sector - but could well instigate one. The funny thing is that the GOP is expected, basically, to vote to take money from the Red States and throw it at the blue states, which is where the investor sector lives. Now, it is true that when the S and L crisis happened, the exact inverse of this - blue state money flowing to the red states - happened without a peep from blue state politicians, who were dems. And they thus condemned themselves to about 15 years of minority status in the Congress.

I say, hurray - and the Great Depression talk is about as impressive as the talk about Saddam Hussein attacking the U.S. with drones.

Posted by roger at September 26, 2008 10:54 AM

I have another question:

Do we trust a group of people that does not include a single person who had the foresight to think that this crisis could happen to manage this crisis?

Posted by Benjamin A. Schwab at September 26, 2008 11:04 AM

Labiche:

this is why on occasion I have voted Republican -- because they had been able to say "no" to stupidity.

They're not just saying no to stupidity. They're saying no to stupidity, because it is not stupid enough. It's like they're saying no to a five day bombing campaign against Iran because they want to use nuclear weapons instead.

roger:

the Great Depression talk is about as impressive as the talk about Saddam Hussein attacking the U.S. with drones.

Roger, literally no one on earth knows what the consequences will be if we just go on as now. But we're talking about the deflation of an eight trillion dollar asset bubble. I don't find it persuasive when people say this won't have big and possibly catastrophic consequences in the real world. The whole point of the Boy That Cried Wolf is that there eventually WAS A WOLF—even if, as with George Bush today, it was a wolf that had been bred and raised from infancy by the boy.

What I find frightening and infuriating about Boehner et al isn't that they helped blow up this particular deal, which was a million miles away from the best possible policy. It's that they're living in a complete fantasy world. At some point the Sane Evil People will have to make some large-scale, unpleasant choices. And as horrible as it is, there's a real chance we will live and die on them succeeding. This will be much more difficult if not impossible with these psychonauts around.

Posted by Jonathan Schwarz at September 26, 2008 11:34 AM

Jonathan, when they postpone the day of my execution, I welcome it for whatever reason.

I agree that there's plenty of stupidity in there and they may be obstructing for the wrong reason, but if it wasn't for them obstructing this would be closed out last Sunday, under typical "we know best what's good for you" cover of darkness.

It's like they're saying no to a five day bombing campaign against Iran because they want to use nuclear weapons instead.

That's actually an excellent example. Bombs are easy to chuck and could be used unilaterally as a matter of convenience, but nukes invite the world community in for the discussion. In the end if we decided to use nukes, I think we'd be better informed -- about who we are and what we are about.

Our narrative is always about us, not the people we do things to (bomb/nuke).

Posted by Labiche at September 26, 2008 11:47 AM

Doctors and lawyers, huh? Well, in this one case, you can add a 37-year-old engineer to the list, too, but big deal. When we have car mechanics and fry cooks also, THEN we'll have something!

I realize that Orwell said this in book form. Guy could write. 1984 is a novel which unfortunately I understand better and better with each passing year.

On the other hand, recent events in Pakistan make me wonder whether I might be being too glib. Hence, I volunteer to cut off Boehner's nuts with a slide rule. I think I have one some place.

Posted by Aaron Datesman at September 26, 2008 12:43 PM

Jonathan, I don't think this is right: "But we're talking about the deflation of an eight trillion dollar asset bubble." I'd say the bubble is much, much bigger - maybe ten times bigger. The bubble is the whole shadow financial system. Not once in the whole debate has anybody proposed the only thing that will contain the problem, which is a sensible, institutional trading mechanism for collateralized securities and bets on them, otherwise known as derivatives. Until there is a transparent mechanism in which all sides trade these things, throwing 700 billion dollars at the black hole is meaningless. And of course we are really talking about a trillion and a half dollars, since we should count the last year of Fed "loans" and Treasury actions.

Your stance doesn't make sense. If you concede it is a bubble, the answer is not to feed it. That is like saying, the patient has lung cancer doctor - quick, let's buy him a pack of cigarettes!

Posted by roger at September 26, 2008 01:16 PM

Roger, I don't think we disagree much here. The 700 billion would only be worthwhile if it were part of a plan to write down the losses as quickly as possible and kill banks that truly were insolvent, while recapitalizing the ones that could live. If it's just part of propping up the bubble, then it's worse than useless. That's why I'm not sad to see this particular bailout die. I am sad and terrified, however, that John Boehner has any say in anything that happens ever.

And of course you're correct there's another even larger "bubble" -- though bubble may not be the right term for it -- but it may be less important than the housing bubble, because the imaginary wealth isn't spread as evenly. The housing bubble deflation thus might cause a much greater drop in actual consumption. On the other hand, no one understands it at all -- which is why an institutional trading mechanism is absolutely necessary, as you say. It's not true that no one has proposed that, but you're correct that no one has talked much about it anywhere near the real power centers of the political system.

Posted by Jonathan Schwarz at September 26, 2008 01:31 PM

Proposing improved "mechanisms" or reformed institutions to deal with the ones that "let us down" shows you mean well, but these mechanisms or institutions will once again mirror the ambitions and visions of society of those running them. And who will appoint whom to run them? You know the answer to that one. No change until the Ronald Reagan mindset is at least diminished in the American mind. And, as of now, fat chance of that.

Posted by donescobar at September 26, 2008 02:36 PM

...doctors and lawyers coming to John Boehner's house and cutting off his nuts with pruning shears...

John Boner, you mean. Zing!

Posted by John Caruso at September 26, 2008 09:29 PM

Jonathan S.:

Sorry, but I remain unconvinced that the bailout would be a net benefit. It's been offered as axiomatic, a universal truth generally agreed upon, but it may also cause hyperinflation as the dollar craters under the burden of so much debt and the persons being rewarded for gaming the system rapidly convert their unearned dollars to Euros and Yen.

Posted by Jonathan Versen at September 26, 2008 11:25 PM

is it too much to ask to at least sacrifice certain CEO salaries at this altar(if not the CEOs themselves)? at least then it would have some meaning...

Posted by almostinfamous at September 27, 2008 12:26 AM