Objectively intelligent.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

Brad Delong criticizes Obama for helping to cause the mess we're in:

I think that's one half of it. The other half is the selective bailout. We made a decision to reinflate stock and r/e prices for investors and asset holders while ignoring the losses to workers. (Other than unionized auto workers, who were powerful enough to cut themselves a discrete deal.)

If the bailout had been structured so that Main Street received some of the money (recall, Bush did something along those lines), it would have worked much better and saved both Main Street and Wall Street at once. Wall Street would have received less, but the money given to Main Street would have been spent on mortgages and other debts that instead went bad. And who held that paper? Wall Street. Win/Win.

We could have at least tried to save Main and Wall. But we didn't. "Wise" men (including me... I argued the bailout made sense, and technically it did) said all we needed to do was shore up the financial system and it would in turn stabilize Main Street. Instead, it took all the money and did exactly what rational actors would in that situation. It speculated on assets outside the Main Street economy. And worse, it preyed on Main Street with aggressive foreclosures, and foreclosure abuses.

The 2008 Bailout will never be over. It destroyed Main Street's trust in govt and finance. And finance runs on trust. Without trust, money doesn't flow. Which it isn't. You can cite me any stat on subprime lending and floating home loan rates re-emerging as proof the lending spigot has opened to Joe Sixpack, but those are outliers. They might as well be credit card lenders, which have loaned freely through most of the entire crisis up to today. But the guy trying to borrow for a business loan, the little guy, he's still stuck in vicious cycle:

If you don't need money, you can borrow as much as you like at low rates. But if you need it, fuck you.

2008 was socialism for the affluent, period. It's defended by jackasses who'll say it's imperfect because it had to be done so fast, or that it saved the retirement accounts of millions of common people. Bullshit. We could have done all of that while allowing the people in those banks to lose their asses along with the little guys. We could have allowed investors to suffer on par with labor. But when the fuck did any govt anywhere do that, right? This is why Trump is in office and Bernie is surging. Obama bit his lip and kept the ship afloat for eight years, following the sage wisdom of those who above all else sought to maintain the status quo. Admirable work in some circles. But he never broke the fourth wall and told the little people what Bernie and Trump and Warren are: You're getting fucked in a rigged system. The little guy knows it. He gets it. And now that cat is out of the bag - openly discussed and admitted. I don't know how we ever go back to 2007. It appears impossible. Our democracy is permanently altered.

[Adder]

Originally Posted by sebastian_dangerfield

You can cite me any stat on subprime lending and floating home loan rates re-emerging as proof the lending spigot has opened to Joe Sixpack, but those are outliers.

Wait, you think returning to the bubble years' lending would be (a) good and (b) a sign of improvement for Joe Sixpack? Um, no. That was Wall Street preying on the vulnerable. We want that reined in.

We could have done all of that while allowing the people in those banks to lose their asses

No we couldn't and trying to would have gone an immense amount of damage to the little guys. See, every bank run ever. Whose mortgages and savings do you think are on the bank's balance sheets?

We could have allowed investors to suffer on par with labor.

How? In your (moronic) morality tale, investors were "bailed out" with low interest rates and loose monetary policy. You think labor is better off without those measures? Because they aren't.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

I think that's one half of it. The other half is the selective bailout. We made a decision to reinflate stock and r/e prices for investors and asset holders while ignoring the losses to workers. (Other than unionized auto workers, who were powerful enough to cut themselves a discrete deal.)

If the bailout had been structured so that Main Street received some of the money (recall, Bush did something along those lines), it would have worked much better and saved both Main Street and Wall Street at once. Wall Street would have received less, but the money given to Main Street would have been spent on mortgages and other debts that instead went bad. And who held that paper? Wall Street. Win/Win.

We could have at least tried to save Main and Wall. But we didn't. "Wise" men (including me... I argued the bailout made sense, and technically it did) said all we needed to do was shore up the financial system and it would in turn stabilize Main Street. Instead, it took all the money and did exactly what rational actors would in that situation. It speculated on assets outside the Main Street economy. And worse, it preyed on Main Street with aggressive foreclosures, and foreclosure abuses.

The 2008 Bailout will never be over. It destroyed Main Street's trust in govt and finance. And finance runs on trust. Without trust, money doesn't flow. Which it isn't. You can cite me any stat on subprime lending and floating home loan rates re-emerging as proof the lending spigot has opened to Joe Sixpack, but those are outliers. They might as well be credit card lenders, which have loaned freely through most of the entire crisis up to today. But the guy trying to borrow for a business loan, the little guy, he's still stuck in vicious cycle:

If you don't need money, you can borrow as much as you like at low rates. But if you need it, fuck you.

2008 was socialism for the affluent, period. It's defended by jackasses who'll say it's imperfect because it had to be done so fast, or that it saved the retirement accounts of millions of common people. Bullshit. We could have done all of that while allowing the people in those banks to lose their asses along with the little guys. We could have allowed investors to suffer on par with labor. But when the fuck did any govt anywhere do that, right? This is why Trump is in office and Bernie is surging. Obama bit his lip and kept the ship afloat for eight years, following the sage wisdom of those who above all else sought to maintain the status quo. Admirable work in some circles. But he never broke the fourth wall and told the little people what Bernie and Trump and Warren are: You're getting fucked in a rigged system. The little guy knows it. He gets it. And now that cat is out of the bag - openly discussed and admitted. I don't know how we ever go back to 2007. It appears impossible. Our democracy is permanently altered.

It's a little worse that that. As I recall, the bailout was structured to give relief to Main Street as well as Wall Street, but Geithner (in particular) didn't want to do that, and didn't use the tools Congress gave him.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

It's a little worse that that. As I recall, the bailout was structured to give relief to Main Street as well as Wall Street, but Geithner (in particular) didn't want to do that, and didn't use the tools Congress gave him.

It was initially supposed to create bad banks to soak up and modify bad loans, but that was nixed (don't know who was responsible there). Then there was supposed to be a ton of money allocated to mortgage modifications. That was a fucking joke. The lenders set up new servicers to milk that (Wells Fargo most luridly, and perhaps criminally). They actually made money off the modification system while making it near impossible for borrowers to get modifications. There are a couple really amazing studies on it.

I believe Geithner was a big fan of citing moral hazard (the little people can't be taught they can be bailed out... that only applies to the TBTF clowd). He was also a proponent of the argument that the little guy wasn't as good a risk, while the banks would surely pay back Uncle Sam at profit. Nevermind that by bailing out the little guy with direct subsidies (same way Bush gave everyone checks during a bad economy a few years prior, only much bigger), Wall Street would have been the ultimate recipient of a lot of the funds.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

It was initially supposed to create bad banks to soak up and modify bad loans, but that was nixed (don't know who was responsible there). Then there was supposed to be a ton of money allocated to mortgage modifications. That was a fucking joke. The lenders set up new servicers to milk that (Wells Fargo most luridly, and perhaps criminally). They actually made money off the modification system while making it near impossible for borrowers to get modifications. There are a couple really amazing studies on it.

I believe Geithner was a big fan of citing moral hazard (the little people can't be taught they can be bailed out... that only applies to the TBTF clowd). He was also a proponent of the argument that the little guy wasn't as good a risk, while the banks would surely pay back Uncle Sam at profit. Nevermind that by bailing out the little guy with direct subsidies (same way Bush gave everyone checks during a bad economy a few years prior, only much bigger), Wall Street would have been the ultimate recipient of a lot of the funds.

I think you and I mainly agree about this.

[Adder]

Originally Posted by sebastian_dangerfield

the banks would surely pay back Uncle Sam at profit.

Which they did, but doesn't stop some people from going on about how much money was "given" to the banks.

Nevermind that by bailing out the little guy with direct subsidies (same way Bush gave everyone checks during a bad economy a few years prior, only much bigger)

1/3 of the ARRA was tax cuts. I'm struggling to remember exactly what form those took, but this site (no idea what it is) says that there were withholding tax cuts and some other stuff, in addition to unemployment benefit expansion and additional SSI payments. There was actually money spent - not loaned - to give to the little guy.

Should it have been more? In my view, preferably more actual spending rather than more cash, but that's primarily because when you build a bridge or a wind farm you both get to pay the workers and wind up with a bridge or wind farm.

[Hank Chinaski]

From a friend's Facebook- he immigrated from Iraq after serving as an aide during the second Iraq War. For context he is very anti-current Iraqi government, especially the behavior during the recent protests.

Whether the president is republican or democrat today is irrelevant, the situation with Iran would have been the same, the Bush and Obama's policies toward Iraq were disastrous, the Bush administration didn't figure out how to stabilize Iraq until the last year of his residency and their plan needed couple of years to work (first few years of Obama's presidency) but Obama who ran on ending the Iraq war didn't want to wait long enough for Iraq to stabilize so he pulled out the troops right after Iraq was stabilizing, Obama's biggest mistake was giving Iran a seat at the table of the Iraqi politics, any Prime Minister should be approved by Iran like Maliky which the Obama admins admitted that it was a mistake by allowing Iran to keep Maliky in power even though he didn't win the elections back in 2010.

Anyhow, since the US pulled it's troops, Iran have build many many armed militias, they are all anti Americans and pro Iran, they are stronger than the Iraqi military, they control peoples lives, they kidnap, they bomb, they kill all this while destroying the Iraq economy, people have no jobs, no electricity, no safety, they see their wealth controlled by Iran and corrupt politicians, so they took the street protesting.
Iran have gotten way stronger than they were because they control more and more of Iraq everyday.
the Iraqi protesters didn't choose to leave their country and travel to Europe through the sea, they chose to fix their country and since they started, the Iranian militias been kidnapping them and kill them, then they these militias started attacking military bases.

What would any president do? even if Trump is benefiting from this, its still the right thing to do, and a democratic president would have done the same, its either that or leave Iraq and let Iran to officially take over and get more and more strong.

Trump did the right thing in hitting Iran, I just hope he doesn't leave things half way or undone like Bush and Obama, I loved Obama and voted for him but always criticized his Iraq/foreign policy, and just because I'm not a Trump fan doesn't mean I won't agree with this.

[Adder]

Originally Posted by Hank Chinaski

From a friend's Facebook- he immigrated from Iraq after serving as an aide during the second Iraq War. For context he is very anti-current Iraqi government, especially the behavior during the recent protests.

Whether the president is republican or democrat today is irrelevant, the situation with Iran would have been the same, the Bush and Obama's policies toward Iraq were disastrous, the Bush administration didn't figure out how to stabilize Iraq until the last year of his residency and their plan needed couple of years to work (first few years of Obama's presidency) but Obama who ran on ending the Iraq war didn't want to wait long enough for Iraq to stabilize so he pulled out the troops right after Iraq was stabilizing, Obama's biggest mistake was giving Iran a seat at the table of the Iraqi politics, any Prime Minister should be approved by Iran like Maliky which the Obama admins admitted that it was a mistake by allowing Iran to keep Maliky in power even though he didn't win the elections back in 2010.

Anyhow, since the US pulled it's troops, Iran have build many many armed militias, they are all anti Americans and pro Iran, they are stronger than the Iraqi military, they control peoples lives, they kidnap, they bomb, they kill all this while destroying the Iraq economy, people have no jobs, no electricity, no safety, they see their wealth controlled by Iran and corrupt politicians, so they took the street protesting.
Iran have gotten way stronger than they were because they control more and more of Iraq everyday.
the Iraqi protesters didn't choose to leave their country and travel to Europe through the sea, they chose to fix their country and since they started, the Iranian militias been kidnapping them and kill them, then they these militias started attacking military bases.

What would any president do? even if Trump is benefiting from this, its still the right thing to do, and a democratic president would have done the same, its either that or leave Iraq and let Iran to officially take over and get more and more strong.

Trump did the right thing in hitting Iran, I just hope he doesn't leave things half way or undone like Bush and Obama, I loved Obama and voted for him but always criticized his Iraq/foreign policy, and just because I'm not a Trump fan doesn't mean I won't agree with this.

Interesting perspective. Thanks for sharing.

Leaving aside the legalities (which have been muddied by prior administration practice), my primary concern isn't so much getting rid of this guy as where it leads and whether this administration has planned carefully for it. I have zero faith that it has.

[Tyrone Slothrop]

Originally Posted by Hank Chinaski

From a friend's Facebook- he immigrated from Iraq after serving as an aide during the second Iraq War. For context he is very anti-current Iraqi government, especially the behavior during the recent protests.

Whether the president is republican or democrat today is irrelevant, the situation with Iran would have been the same, the Bush and Obama's policies toward Iraq were disastrous, the Bush administration didn't figure out how to stabilize Iraq until the last year of his residency and their plan needed couple of years to work (first few years of Obama's presidency) but Obama who ran on ending the Iraq war didn't want to wait long enough for Iraq to stabilize so he pulled out the troops right after Iraq was stabilizing, Obama's biggest mistake was giving Iran a seat at the table of the Iraqi politics, any Prime Minister should be approved by Iran like Maliky which the Obama admins admitted that it was a mistake by allowing Iran to keep Maliky in power even though he didn't win the elections back in 2010.

Anyhow, since the US pulled it's troops, Iran have build many many armed militias, they are all anti Americans and pro Iran, they are stronger than the Iraqi military, they control peoples lives, they kidnap, they bomb, they kill all this while destroying the Iraq economy, people have no jobs, no electricity, no safety, they see their wealth controlled by Iran and corrupt politicians, so they took the street protesting.
Iran have gotten way stronger than they were because they control more and more of Iraq everyday.
the Iraqi protesters didn't choose to leave their country and travel to Europe through the sea, they chose to fix their country and since they started, the Iranian militias been kidnapping them and kill them, then they these militias started attacking military bases.

What would any president do? even if Trump is benefiting from this, its still the right thing to do, and a democratic president would have done the same, its either that or leave Iraq and let Iran to officially take over and get more and more strong.

Trump did the right thing in hitting Iran, I just hope he doesn't leave things half way or undone like Bush and Obama, I loved Obama and voted for him but always criticized his Iraq/foreign policy, and just because I'm not a Trump fan doesn't mean I won't agree with this.

I don't understand the criticism of Obama here. W. invaded the country and removed its government. Since then, unsurprisingly, Iraq's government has been weak and has lacked legitimacy. Obama didn't "give Iran a seat at the table." Iraq is majority Shi'a, and Iran is Shi'a. Iraq's Shia's gave Iran a seat at the table, as was inevitable when W. removed the prior Sunni regime. Also, IIRC, many people criticized Obama for removing troops, but that was the deal the Iraqis gave us. Your friend is saying that Obama should have forced Iraq to do what he wanted instead of having its own government.

He is right about the militias and the mess that the country is, but it's hard for me to see what Obama or anyone else could have done with the mess that W. left.

[Hank Chinaski]

Originally Posted by Tyrone Slothrop

I don't understand the criticism of Obama here. W. invaded the country and removed its government. Since then, unsurprisingly, Iraq's government has been weak and has lacked legitimacy. Obama didn't "give Iran a seat at the table." Iraq is majority Shi'a, and Iran is Shi'a. Iraq's Shia's gave Iran a seat at the table, as was inevitable when W. removed the prior Sunni regime. Also, IIRC, many people criticized Obama for removing troops, but that was the deal the Iraqis gave us. Your friend is saying that Obama should have forced Iraq to do what he wanted instead of having its own government.

He is right about the militias and the mess that the country is, but it's hard for me to see what Obama or anyone else could have done with the mess that W. left.

https://themoth.org/stories/leaving-baghdad

I talk to him about Moth Judges, not Iraq politics. But from this post he felt the invasion was good. He feels that Bush waited too long to implement steps that would stabilize the country, but he did near the end of his term. He feels Obama pulled the plug before those steps could gel. He feels Obama should not have let Iran into the government and should have taken more action as Iran grew more powerful within Iraq. He might be a moron or he might really know what he is talking about.

His Facebook has recently been focused on the protests and the kidnapping of all the protesters. He is quite strongly anti-Iran. But I can't answer your questions, just give you the perspective of one person that has a much different view than any of us have.

[sebastian_dangerfield]

Originally Posted by Adder

Which they did, but doesn't stop some people from going on about how much money was "given" to the banks.



1/3 of the ARRA was tax cuts. I'm struggling to remember exactly what form those took, but this site (no idea what it is) says that there were withholding tax cuts and some other stuff, in addition to unemployment benefit expansion and additional SSI payments. There was actually money spent - not loaned - to give to the little guy.

Should it have been more? In my view, preferably more actual spending rather than more cash, but that's primarily because when you build a bridge or a wind farm you both get to pay the workers and wind up with a bridge or wind farm.

I’m not one of those saying the banks were gifted money. I fully realize that they were merely failed businesses which deserved to collapse which were given lifelines thousands of other businesses failing at the same time were not.

That’s really the rub with 2008, isn’t it? Those who are supposed to die and be eaten by their betters were instead given a do over on terms which allowed them to steal even more assets at crazy low prices, watch them reinflate due to lax monetary supply, and then make new fortunes on the appreciation. The little guy, even the mid sized to large businessman, was only invited to this party via the stock market, where he often wound up buying shares in the same would-have-failed-entities. That’s a dry assfucking for Main St. is what that is.

It’s always been a somewhat rigged game. But it was so naked this time around, no one could refute it.

This shit, the drug war, institutional racism, Citizens United, all of this crony capitalism... It’s not a theory. It’s no longer something we can credibly dispute. This country’s got no legitimate authority on which to demand respect except for force. It’s “wise” to assert populism peaks volcanically and quickly fades. This round of it started in the fallout from the housing collapse, became overt in 2009 with Santelli’s “tea party” rant, and has now culminated in Donald Trump and Bernie Sanders raising the highest levels of campaign cash on the backs of this message: The Establishment is weak and corrupt and needs to go.

And where the media could unify to stanch that sort of message in the past, today’s media is atomized.

I’d put Geithner next to Gingrich in the list of People Responsible for the Freakshow. And I don’t see this Freakshow ending any time soon. This appears to be Populism 3.0 in a 10 stage cycle.

ETA: And what was Geithner’s genius after 2008? Continue policies that encouraged bank consolidation. And regulate the little banks just like big ones. A better recipe for an even more extreme TBTF mess, and a dearth of lending on Main St, couldn’t be conceived. But it can’t happen again, right? A madman in the Oval and a crazy spike in oil prices similar to 2005 could never create another 2008...

[Adder]

Originally Posted by sebastian_dangerfield

I’m not one of those saying the banks were gifted money. I fully realize that they were merely failed businesses which deserved to collapse which were given lifelines thousands of other businesses failing at the same time were not.

Yes, the failure in your analysis is in appreciating that banks are different from other businesses.

And, in fact, the fact that they paid all that money back with interest at least somewhat undermines the argument that they were all failed businesses. Turns out those assets weren't all completely worthless after all.

Those who are supposed to die and be eaten by their betters

But they were eaten by their betters. There's no more Wachovia, Washington Mutual and a bunch of others. Much more so than other industries, failed banks get literally taken over by other banks that aren't failing.

[sebastian_dangerfield]

Originally Posted by Adder

Yes, the failure in your analysis is in appreciating that banks are different from other businesses.

And, in fact, the fact that they paid all that money back with interest at least somewhat undermines the argument that they were all failed businesses. Turns out those assets weren't all completely worthless after all.



But they were eaten by their betters. There's no more Wachovia, Washington Mutual and a bunch of others. Much more so than other industries, failed banks get literally taken over by other banks that aren't failing.

1. Banks are not different than other businesses. We protected GM and AIG for the same reason we did banks. TBTF.

2. The assets only recovered value because we propped them up with accommodating monetary policy and direct purchases of MBS.

3. Businesses can have all the assets in the world, but if they can’t liquidate them to cover operations and no one will lend to them, They Go Under. Bear Stearns and Lehman were also holding assets which eventually recovered value later (somewhat). But they got caught in a cash crunch.

If you can’t fund operations and the market deems you untrustworthy and thinks it’s preferable to watch you die, you are failed. Those are failed banks. Almost all of them. They exist by grace of the taxpayer. They are, in the deepest Trump accent, truly (unlike most of his targets for the insult), Losers.

Wachovia, WAMU, Bear, and Lehman are at least honorable losers. They went down. Goldman begged Uncle Henry for an 80 cents on the dollar payout using AIG as the stealth delivery method. That’s crony capitalism at its worst. I’d have done the same, as would you, but I’d like think we’d both admit to our skullduggery. Not Goldman. They’re entitled and unashamed, the ultimate “welfare mothers” of Wall Street.