Krugman poking more holes in ideological rants against nationalization of some banks

If you’re a taxpayer of any political stripe would you rather get something or nothing for your tax dollars?  To me that’s one of the simplest ways to sum up why I’m for temporary nationalization of some banks deemed “too big to fail.”  In today’s New York Times, Paul Krugman also points out that we already “nationalize” banks – when the FDIC temporarily seizes banks which fail:

Still, isn’t nationalization un-American? No, it’s as American as apple pie.

Lately the Federal Deposit Insurance Corporation has been seizing banks it deems insolvent at the rate of about two a week. When the F.D.I.C. seizes a bank, it takes over the bank’s bad assets, pays off some of its debt, and resells the cleaned-up institution to private investors. And that’s exactly what advocates of temporary nationalization want to see happen, not just to the small banks the F.D.I.C. has been seizing, but to major banks that are similarly insolvent.

Bank Bailout: Hurts Worse When the Politicians Failing Us Inspired Hope and Promised Change

There are so many things to dislike about the big banks, brokerages and insurance companies that brought the financial crisis upon us that one doesn’t know where to begin.  So instead, let’s begin with the politicians who we elect and pay to keep us out of these messes.

They failed us last fall with the first enactment of the TARP – the $700 billion bailout – and they’re failing us again.  Only now it hurts worse because the folks failing us are the ones who inspired hope and promised change.

I had a fantasy that change would mean a different approach in handling the greed and inequity which hide behind the  corporate ramparts.  I thought change would mean a president taking advice from the likes of Krugman and Galbraith and instead we’ve got Summers and Geithner.  Where the problem with Krugman and Galbraith may be that they’re too “liberal” for a president trying to be non partisan and centrist, the answers to our problems do not lie with “the establishment,” represented by Summers and Geithner.

I’m angry, there are lots of people angry, and we don’t want to be told any reckless business is “too big to fail.”

On Tuesday, Geithner was still singing, Too Big to Fail.  He didn’t tell us much, but he did tell us Washington is still willing to pull out the stops for the investment class.  Congress is no better.  When it comes to the financial services sector, Congress is operating in the irrelevant sector.

What we do still have a chance at here is change.  Some players need to be thrown out of the game, and their survival shouldn’t have anything to do with how far their tentacles reach into the larger economy or the campaign accounts of our elected officials.

So, here’s another fantasy … Perhaps Treasury Secretary Timothy Geithner’s announcement Tuesday was only a trial baloon.  Maybe he and Larry Summers were on the phone with Robert Rubin and Alan Greenspan and thought they might be able to rig the game one more time for Wall Street.  Geithner may have said, “Boys, I just don’t know, I think we’ve run our string, but I’ll try for one more – but I’m telling you, if there’s blowback, this president is different than the last two …”

That’s my fantasy anyway.

Christmas Fun & Enlightenment: Pelikan’s Book Haul

Since I was a kid my favorite gift category has been books.  I’m looking forward to diving in to this year’s new additions to the library:

1. The Return of Depression Economics – Paul Krugman
2. The Geography of Hope – Chris Turner
3. American Lightning – Howard Blum
4. Arc of Justice – Kevin Boyle
   

Some Clear Thinking on the Financial Mess from Norris and Krugman

I read both of these columns in last Friday’s edition of the New York Times.  It’s the end of a historic year for the U.S. economy.  We may look back in a few years and say that 2008 was the beginning of the end for supply-side economics (trickle down) and a nearly wholly unregulated financial services system.  2008 will hopefully become known as the time when ordinary people got concerned enough about the price they were paying for the excesses of banks which traded stocks, brokerages which sold insurance and insurance companies which did both.  2008 was a year when ordinary folks began to understand mortgage backed securities and credit default swaps – and what the failure of those derivatives meant for their local widget makers’ line of credit.

If you don’t read anything else today, read these two columns:

• Op-Ed, Floyd Norris: A year of financial contradictions and chaos - New York Times
• Op-Ed, Paul Krugman: The Madoff Economy – The New York Times

Read more

Video: Paul Krugman on Economy and Obama’s Economic Plan | November 7

Krugman Wins Nobel Prize

Congratulations today to Princeton Prof. Paul Krugman for winning the Nobel Prize for Economics.  Through his columns in the New York Times since 1999, Krugman has clearly and succinctly explained an increasingly complex economy in ways that are easy to grasp and meaningful to those of us not steeped in the vocabulary and process of today’s markets and the economy.

Here in the dwindling American middle-class we’ve all known that things are different, the prospects for the American Dream have become elusive.  Krugman has had an uncanny ability to understand this at a high level and explain it at a broad level. 

Krugman has become so well-known in the mainstream and new media for his abilities that we sometimes forget that his day job is “Professor.”  Academics get a bad wrap for living in “Ivory Towers.”  Krugman on the other hand has done the public a service by translating his Ivy League intellect into the language of us all.  His Nobel is a reminder to me that there is an accomplished theorist behind the Times columns and appearances on Countdown with Keith Olbermann.

Perhaps Krugman’s greatest accomplishment, when all is said and done, will not be the Nobel-quality academic work.  It may end up being his ability to translate a transformational economy to the rest of us.  What I’m going to do in honor of Krugman’s Nobel is see if I can continue my Economics self-education by understanding more of what he’s accomplished in academia.

Some of Krugman’s Recent Work in the New York Times:

• The Conscience of a Liberal (Blog)
• Op-Ed: Cash for Trash – New York Times, September 21
• Op-Ed: The 3 a.m. call - New York Times, September 28
• Op-Ed: Moment of truth – New York Times, October 10

Listen to Krugman

Princeton economist and New York Times op-ed writer Paul Krugman has some points on the current economic crisis worth hearing. The op-ed column is from Sunday and contains an excellent summary of what the problems are facing Wall Street and Main Street.

 

Op-Ed, Paul Krugman: Cash for Trash

from The New York Times, Sunday, September 21, 2008

Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq. Read more