delong.typepad.com/sdj/2008/07/every-time-i-tr.html
Ta-Nehisi Coates Writes About the Burden His Parents Carried July 11, 2008 Every Time I Try to Crawl Out, They Pull Me Back in! Called on forty minutes' notice, I trot over to the J-School studio to be a talking head on BBC/Newsnight about Fannie and Freddie. I have my talking points ready: The chance that American taxpayers will actually lose any money if Ben Bernanke and Henry Paulson decide that Fannie and Freddie need government support is very low: * The interest payments they have coming in are greater than the interest payments they have going out. Nevertheless, there is now a risk that Fannie and Freddie will need some form of government support in the next month: * The situation could require a lot of government-provided liquidity at any moment * It and might even require more liquidity than the Federal Reserve can provide with its current balance sheet. Either the Fed needs to be given the power to pay interest on reserves immediately--so that it can swap interest-paying reserve deposits for mortgages next week--or this has to become not Fed but Treasury business. The game the Fed and the Treasury are playing right now is as follows: * Keep risky asset prices from collapsing... Bernanke and Paulson have asked for additional regulatory authority: * They should get it. The cautious will favor the first option, as running the least risk of aggravating uncertainty. In short, I trot over to the J-School TV studio as part of the sober, sensible, bipartisan consensus, intending to carry water for Ben Bernanke and Hank Paulson. And what do I find also on BBC/Newsnight when I get there? WHO HAS THREE POINTS HE WANTS TO MAKE: * Barack Obama wants to take your money by raising your taxes and pay it to the Communist Chinese. Congress needs to extend the Bush tax cuts, and if it does then that will fix the economy, and if it doesn't then the economy cannot recover. I am not paid enough to deal with Grover Norquist and his willful stream of defecation into the global information pool. It is as Paul Krugman says somewhere: Grover Norquist's MO--George W Bush's MO--the entire Republican Party's MO these days is find a problem (ie, financial crisis and threatening recession), find something you want to do for other reasons unrelated to the problem (ie, extend the Bush tax cuts), claim without explanation that will solve , and so profit--because Peter Cardwell of BBC/Newsnight is too busy being the objective journalist referee of the yelling match to do his proper job and say: Come, come, Mr Norquist, are you serious? Your claim to believe that Nancy Pelosi's actions are responsible for the rise in oil prices is risible! I have been carrying water for the two of you for a year now, as you have tried to do your jobs and contain the ongoing slow-motion financial crisis. Tell him that there is serious public business that needs to be done, and that pseudo-ideologues like Grover Norquist are not helping. Tell him that unless he can control the swine like Grover Norquist and his ilk who work for him, that both of you are going to, Monday morning: * announce your support for Barack Obama for president * announce your change of affiliation from the Republican to the Democratic Party You owe it. You owe it to all of us in the sober, sensible, bipartisan consensus.
July 11, 2008 at 05:19 PM Uh, Brad, "There are a bunch of options if push comes to shov: * Having the government formally guarantee GSE debt. One is to guaratee mortgages so that they can be traded, providing liquidity to lenders. Two is to arbitrage the implied federal guarantee (which shows up in their borrowing costs) through the accumulation of an unrelated investment portfolio, the gains from which can be converted to public market value, and as much of that as possible funneled to management's benefit. You can add an additional point to your list: guarantee the guarantees, put the US balance sheet behind the agencies' guarantee portfolios. This salutary business can then continue as if nothing happened. The public will not be the worse for people taking losses on overpriced investments.
July 11, 2008 at 05:19 PM "To have the government step back in order to teach feckless financiers a lesson is simply not worth destroying the jobs of millions of Americans." But where's the surtax on the salaries above a certain level of financial professionals? Fsck, it's not enough that they don't have to pay anything for the services the state provides them (ie the constant stream of real or implied bailouts), they insist on demanding that they get to pay LOWER taxes than the rest of us, most obviously through claiming that their income reflects cap gains. I fail to see how imposing such a surtax will hurt the financial system and all those millions of jobs that we supposedly care so much about.
July 11, 2008 at 05:28 PM You owe it to all of us in the sober, sensible, bipartisan consensus. Now, who was it who said that another name for bipartisanship was "date rape"? Somebody famous and loathsome, the name's on the tip of my tongue but it's just not coming to me...
July 11, 2008 at 05:53 PM Norquist doesn't get that raising taxes instead of just putting expenses on debt will actually result in less money going to the communist Chinese? It's the same dilemma thinking about "conservative commentators" - are they really dumb, or malicious, or in a weird ideological bubble that fools even smart people? In any case, the dorky Reasonable media moderators are indeed enabling this madness. I think the Pelosi and oil bit comes from "opposition to drilling" - but there's already plenty of land open for drilling, and we wonder why oil companies aren't drilling more where they are already allowed to. It's often subtle and difficult wondering just where it's worth doing (in various sense of the term) and where not. One thing that may help reduce heating/cooling costs: low-depth "geothermal" power (not the use of way-deep heat to make power, but using the ground from about 8-250 feet as a heat sink. BTW, watching and listening of course to "The McLaughlin Report" is very fun, and they make the yelling cool.
July 11, 2008 at 06:02 PM not feeling very nymous - It was NOT the Navy, Air Force, or the Marines. BDL - Hank Paulson has a gazillion dollars from raping and pillaging at a major IB and, for the past eight years, has seen his tax bill be significantly lower than his administrative assistant's. John McCain promises to perpetuate that, while Barack Obama suggests that the spread should become slightly smaller (though still MAJORLY in Paulson's favor). What Economic Model are you using in which you honestly expect Paulson to work for the good of the country, yet not in his own best interest?
Now, Michael, When you deposit tuppence in a bank account Soon you'll see That it blooms into credit of a generous amount Semiannually And you'll achieve that sense of stature As your influence expands To the high financial strata That established credit now commands You can purchase first and second trust deeds Think of the foreclosures! You see, Michael Tuppence, patiently, cautiously trustingly invested In the, to be specific, In the Dawes, Tomes Mousely, Grubbs Fidelity Fiduciary Bank!
July 11, 2008 at 06:41 PM Just remember, Brad, when the revolution comes, the rampaging hoards will go after members of the "sober, sensible, bipartisan consensus," too. Your head will go on the chopping block right next to those of Grover, Phil G, Hank, and Ben.
July 11, 2008 at 06:44 PM Nah, you know how it works for liberals. They call on us when they've exhausted all their options, we save their asses, and then they throw us away. Why, a little more of this and we might, like, demonstrate or something.
Unsupported assertions, because this comment section is too small to contain a full historical treatise: Sober, sensible, well-intentioned people could, in good conscience, see "bipartisanship" as a virtue once upon a time because of a transitory set of circumstances: the strength of the labor movement, and the way the Communist Menace during the earlier part of the Cold War scared the establishment into being on its best behavior, lest...
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