Yesterday Simon pointed out the AP story highlighting Tim Geithner’s many contacts with a few key Wall Street executives — primarily Jamie Dimon, Lloyd Blankfein, Vikram Pandit, and Richard Parsons — while leading the government’s rescue efforts as Treasury secretary. It’s certainly useful for the nation’s top economic official to talk to people in the banking industry, and it’s also useful for him to talk to banks that are being bailed out by the government. But the AP story did come up with a few important distinctions. Geithner talked to these Wall Street executives more than the key people in Congress — Barney Frank and Christopher Dodd — that he needs to pass his regulatory reform plan. And he talked to them much more than to, say, Bank of America, which is equally big and equally in debt to the government. So to be clear, Geithner is talking to these people more than dictated by the requirements of his job (or he’s not talking to Ken Lewis enough).
Still, you could say, what’s wrong with that? Can’t Tim Geithner talk to whomever he wants to talk to?
Of course he can, in a legal sense, and no one is saying he is doing anything illegal. All the evidence is that Geithner is a man of unassailable integrity, and a modest, courteous guy to boot.
But as the lobbyists have known for decades, the key to political power in the United States is access. Under-the-table bribes are relatively rare. The revolving door (government officials taking lucrative jobs at the companies they used to oversee) is important, but of little use when it comes to the very top people. Paul O’Neill, John Snow, and Henry Paulson were already easily rich enough to overlook such temptations (although Snow did leave Treasury to become chairman of Cerberus); Geithner may not be a mega-millionaire, but he already turned down his shot at being CEO of Citigroup in 2007.
Instead, if you want to sway some of the top people in government, the most important thing is to talk to them. All of us are influenced by the information and opinions that we are exposed to. Many people have a tendency to agree with either the first person or the the last person they spoke to on a particular issue, regardless of what other information they take in. (Where Geithner falls on that spectrum I have no idea.) This is why lobbyists make so much money; they sell access.
If, in the midst of a financial crisis, you get a disproportionate share of your advice from a few select Wall Street veterans with enormous personal interests in your decisions, you will be swayed a certain way. This is particularly worrying if you have spent the last several years even more deeply steeped in that circle, because you will be getting information and ideas that are confirming your prior beliefs. It is also worrying if, as was the case this past year, you do not have the time for detailed fact-finding or empirical studies, and instead you have to make important decisions based purely on logic and conjecture. Instead, you (and the public) would be better served going out of your way to talk to people who do not share your prior perspective and are likely to disagree with you. Now, the Obama administration is nowhere near as bad as the Bush administration, which disdained talking to its critics; this administration has reached out to its intellectual opponents, for example in the famous White House dinner with Krugman and Stiglitz. But one dinner does not balance eighty phone calls.
There’s nothing scandalous about the fact that Tim Geithner talks to the CEOs of Goldman, JPMorgan, and Citi a lot. It’s just a fact. It’s a fact that demonstrates the deep linkages between the thinking inside Treasury and the thinking on Wall Street (and yes, I know Citi and JPMorgan are in Midtown). It’s also one reason I have little interest in conspiracy theories — who needs a conspiracy when you have a sympathetic ear in the Treasury Department that you can get access to regularly? As we’ve said before, the key factor throughout this financial crisis has been political power. And if that power is composed of the power of ideas and the power of relationships, so much the better.
By James Kwak
The Baseline Scenario 
All the evidence is that Geithner is a man of unassailable integrity
Well, except maybe the tax evasion thing.
Whoops, my mistake.
He worked for Kissinger and was president of FRBNY from 2003-2009 overseeing the upcoming collapse while he looked the other way and/or sat on his hands and did nothing.
Of course he can, in a legal sense, and no one is saying he is doing anything illegal. All the evidence is that Geithner is a man of unassailable integrity, and a modest, courteous guy to boot
http://www.huffingtonpost.com/2009/10/06/william-black-geithner-a_n_311448.html
This looked interesting, but their server isn’t responding, and for some reason the google cache isn’t giving it up either.
http://www.commoditynewscenter.com/articles/Insight/How_Geithner_Became_Secretary_of_the_Treasury
http://tinyurl.com/GeithnerGoogleCache
So, really, we should blame China. Not just because it’s funny to say “blame china,” but because our princes may have sold us out?
http://www.aim.org/aim-column/the-big-money-behind-geithner/
Or maybe, blame the Ford Foundation?
On the other hand, anyone who has wielded this level of taste in his throneroom can’t be all bad:
http://www.thedailyshow.com/watch/wed-july-29-2009/home-crisis-investigation
It is complicated.
Geithner was supposedly the guy who came up with the idea of making the Government guarantee ALL of the debt in the banking system, and that was in June 08.(NY Times April 27, 2009. Someone post the link please.) They knew the ‘end of the world’ was coming.
I don’t care about Geithner’s tax evasion, his connections to wall street, his secret society memberships, the number of his telephone calls to his pals in TBTF banks, or whether James Kwak thinks he has integrity.
All I care about is his running the economy into the ground. So I say to Geithner: “Stop!”
Proverbs 27:18
Whoever keeps the fig tree will eat its fruit; So he who waits on his master will be honored.
And this whole phone call thing does call his integrity into question…
Or maybe: “Arschkriecherei, Halt!”
(Just ignore this part Yakkis)
Timothy Franz Geithner. Son of Peter Geithner. Strong German names. What is a “Geithner”? Someone who geithns? Who is really running him? Henry Kissinger? And if so who is running Kissinger? Group of 30? Can we cut to the chase please? What is the true pecking order? There is one. You know there is one.
Even if it is legal and within his right as a private citizen to talk to whomever he wishes to, he IS Treasury Secretary. This appears to be a conflict of interest in whom Geithner is representing vs. the duties and responsibilities of his office. If I were any of the other banks I’d scream “FOUL” until someone noticed and either did something or explicitly refused to do so (both are actionable).
1 Kings
I was thinking James or Simon had posted this before, but I think this must be the article you were referring to. This link is an article from Jo Becker and Gretchen Morgenson of the New York Times.
Do you believe that the billions that flowed back through AIG to the banks were untainted good-hearted attempts to save the ‘system’ for the good of all of us?
“All the evidence is that Geithner is a man of unassailable integrity, and a modest, courteous guy to boot.”
Unassailable integrity? How can you say that after he proposed the “Geithner Put” which socialized losses and privatized gains. He’s at worst a rat or at best incompetent. He was quoted most recently here (http://economix.blogs.nytimes.com/2009/10/08/geithner-says-americans-will-save-more/) saying Americans will need to save more in the future.
This makes sense only if you believe we are still on the gold standard and saving more means more gold reserves for the nation. If Americans save more, and nothing else fills in that gap, we can expect to have a lonnng recession.
If I could point to an overall theme of this blog it would be that the same IMF-style bungling that has worked so well to destroy nascent economies is being applied to the U.S.
Geithner headed up the IMF effort to gut the East Asian economies (especially the emerging ones) during the Asian currency crisis. He used his inside Asian connections to do the hit-job on their economies. “Sorry guys, I thought you were Latin America a decade ago” was his brilliantly convincing cover. Now he’s pulling the same thing on the U.S. using his inside connections with bankers. These telephone calls symbolize this process.
How soon we forget that greedy, stupid little pig Timmy is a known tax cheat.
Being more precise, stupid, greedy little pig Timmy tried to cheat the American taxpayer out of $32,00 in income taxes but that failed when he was appointed as Treasury Secretary by stupid little Obama.
“They knew…”
One of the many astonishing aspects of this crisis is, that they (Paulson, Bernanke, Geithner et al.) did not know. Between the failure of a big hedge fund in August 2007 and the collapse of Bear Stearn in March 2008: nothing was prepared. Then between Bear Stearns and the collapse of Lehman in Sept.’08: again nothing was done.
All accounts published so far reveal that Geithner et all were utterly unprepared (e.g. Ross Sorkin article in Vanity Fair last weekend).
Given the complete lack of transparancy, the intricacies and speed of global money flows, etc. etc. etc., we need very intelligent people with a clear, deep as well as broad understanding of it all. Clearly, Geithner and Bernanke lack this.
In addition to this we need honesty and integrity.
Unfortunately, this seems missing as well.
E.g. recently I read quotes from Geithner (translated from an Italian interview) in which Geithner said that banks should have influence in the debate and that we should be careful not to risk losing financial innovation.
I find it dishonest to call the dictatorship of the banks mere ‘influence’, and it is very worrying to hear the treasury secretary wanting to keep financial innovation (as Volcker and others have commented: the only useful innovation has been the atm machine). Obviously Geithner wants to keep the mechanism that allows privatization of insane profits for the bonus bankers, and ‘socialization’ of the trillions of losses for the tax payers.
Sorry, but that is utter lack of integrity.
It’s the integrity of honor amongst thieves.
Burn!
I think it’s an adjective: Geithn, Geithner, Geithest.
So, the real question becomes: Geithner than whom?
Well, I don’t know what Mr. Geithner said to his phone buddies but he can call me any time. What I would like him to call about is to explain in non-technical jargon exactly what constitutes/indicates the correct time to stop handing out money to TBTF banks! Now is asking for either a firm date or precise indicators of the correct time too much to ask? If the cost of a call is a problem let me have your number and i will call!
Now let us all get some exactness into all this childish, soothing, meaningless, ‘I’ll fix it when it is the right time’ nonsense. If you don’t k now, then make room in the kitchen for someone who does.
It’s not a matter of legality or personal integrity; its a matter of how one’s consciousness and perspective is formed. (This is what James Kwak is suggesting.) I do believe there is a consciousness formed by one’s class experiences, and only by extending yourself beyond your normal social boundaries do you see the difference in perspective.
I know a homeless shelter in downtown Miami where Geithner can visit, talk to the residents, and get a very different view of the world. I suggest he try it.
How sad that Geithner’s complete lack of vision and imagination should be interpreted as integrity. But I guess conventionality is the most valued trait of any banker.
Stuff your fascist economic model up your ass, douchebag. There is supposed to be a separation of the corporation and the state in this country.
The answer for a valid judgement on this Geithner phone matter depends on what he said to them and what they said to him. Like the Nixon Watergate tapes, like the Cheney – Oil executives meetings. We demand to know what was said!!! Also, on the character appraisal, it doesn’t take much depth of human nature study to know that Geithner, Bernanke and Sommers all have that evasive, implicated deceptive look about them, in their eyes. Bush looks into peoples soul, ha, a detective looks into their eyes. Those three fail the test. Eyes darting, shifting, looking away. I beileve they are rats. And they have manipulated Obama, and he is catching on to the betrayal, and I am needing Mr. Nobel to triage the deceivers, and rally this situation back in favor of the electorate.
Don’t we have more important things to write about than the phone calls the treasury secretary is making? This is really getting absurd (yes, I acknowledge I am writing about it also).
The man’s too involved with the industry he’s supposed to police/regulate, if that makes sense. Need a butt-kicker from outside the wire, but it’s not going to happen.
As I pointed out yesterday, or the day before: Goldman Sachs is up to its eyeballs in derivatives. Why? Because they have the assurance of Timmy that Jo/e Taxpayer will bail GS out if need be.
This is the crap (graft and corruption) that happens with this kind of distorted, biased, access to their hand chosen inside man – Timmy the Tax Cheat.
Seriously, I believe his actions are treasonous.
But given Obama was awarded the Nobel Prize – what a frickin’ joke – we might expect the next one to go to Timmy.
The financial economy is disgusting. I say we need to bring an end to ALL publically held companies and all the “financial” markets beyond 1 degree (i.e. a lender and a borrower).
Veeve gott to do some geithning. Send in a geithner!
Methinks you disdain conspiracy too easily, Mr. Kwak.
You got this sentence wrong: “It’s also one reason I have little interest in conspiracy theories — who needs a conspiracy when you have a sympathetic ear in the Treasury Department that you can get access to regularly?”
Didn’t you mean to say: “…who needs a THEORY when you have a sympathetic ear in the Treasury Department that you can get access to regularly?”
As the other readers point out, there’s plenty of conspiracy going on… just you, Mr. Kwak, and the rest of American, pretend to be blind to it.
Maybe you don’t know what a conspiracy is.
Black’s Law Dictionary defines a conspiracy, in criminal law, as: “A combination or confederacy between two or more persons formed for the purpose of committing, by their joint efforts, some unlawful or criminal act, or some act which is innocent in itself, but becomes unlawful when done by the concerted action of the conspirators, or for the purpose of using criminal or unlawful means to the commission of an act not in itself unlawful. Pettibone v. U.S., 148 U.S. 197, 13 S.Ct. 543, 37 L.Ed. 419; Mitchell v. Hitchman Coal and Coke Co., C.C.A.W.Va. 214 F. 685, 708; Hamilton v. Cooley, 184 N.E. 568, 571, 99 Ind.App. 1; Browning v. Browning, 226 Mo.App. 322, 41 S.W.2d 860,868.
Chew on that. Read it again. Break that definition down. Put that in your pipe and smoke it. I think it would be interesting if our readers can you think of any actions done by Geithner which fit that description?
Here’s one simple example: the entire derivatives market could easily be considered a huge conspiracy.
Any ban on Flash orders and high frequency trading won’t stop Goldman Sachs, who engage in specialists trading on inside information and breaking laws, “in exchange for liquidity,” and are front running trades. Goldman Sachs made its money by insider trading and siphoning off cash using a computer program called “F1” or “the hammer” which trades at .05 milliseconds to execute trades and manipulating price of oil on millions of mini-movements. GS is engaged in a scandal of high frequency trading, hacking their way into the NY stock exchange, engaging in electronic trades taking place in .05 milliseconds on insider information and and seizing control of what is called the market making or specialist system, in effect putting in a toll-both, and by some estimates, they are dragging $100 million a day out of the market and putting it directly into their pockets. GS is, in essence, using these Cancerous algorithmic trading programs, like a cancer or a virus, and GS claims they are adding value, but you must ask: “value for whom?” you must realize that the ones saying this (GS) WORK FOR THE CANCER, not for the BODY. They are adding value for GS and stealing from everyone else.
That, my friends, is the sin-qua-non definition of a conspiracy, and Geither is not just talking about it, he is enabling it, encouraging it, and covering it up.
Black’s definition of a Civil Conspiracy is even easier: “The term “civil” is used to designate a conspiracy which will furnish ground for a civil action as where, in carrying out the design of the conspirators, overt acts are done causing legal damage, the person damaged has a legal right of action.”
Readers? Any examples?
How about this one? Banksters engaging in massive Loan Origination Fraud, or using Mortgage Brokers as their frontmen, which resulted in the fact that there is the appearance of Fraud in virtually every loan file reviewed after crash. Yet Geithner is busy clearing away the toxic crap, stealing money from the citizens to line the pockets of the very white collar criminals who created financial crisis instead of prosecuting the crooks and regulating the banks. Big banks doing zero due diligence before buying toxic waste,and then bundling it, securitizing it and selling to other suckers down the line. Conspiracy upon conspiracy upon conspiracy, piled so high that you can’t see it anymore. It looks normal, doesn’t it, Mr. Kwak. Why can’t you see that Emperor Geithner has no clothes?
How about Henry Paulson’s Tarp fund, virtually the entire bailout, not going to make new loans, but instead nearly 90% goes into Christmas bonuses. When the people find out the PEOPLE will burn them at the STAKE, rip their guts out, tear off their heads and shit down their necks!” (Max Keiser)
How about Geithner and his wall street buddies creating a system that allows $500 trillion in credit default swaps? Is that a conspiracy? Geithner and his CO-CONSPIRATORS create a scheme to allow the Banksters to clear their debts, use no money of their own to close out trades, and GEITHNER and his CO-CONSPIRATORS get paid $700 billion to clear debts and save Banksters, to cover their debts. Does that fit the definition of a criminal conspiracy? A civil conspiracy?
Please, Mr. Kwak, tell me again what a swell guy Tim Geithner is… I need a good laugh, even if you’re asking me to laugh while I watch the fox guard my hen house.
Timmy has mastered the trait of seeming to say important things without saying anything that everyone doesn’t already know. Larry is much, much brighter.
Geithner showed the modest side of his personality Mr Kwak refers to by telling a congressional committee that he had never been a bank regulator—which was a very humble way indeed of interpreting his duties as president of the New York Fed.
Why aren’t these guys posting at Baseline and other blogs in the echo chamber? Where have they been all our lives? Read nothing else til you’ve read this:
http://www.deepcapture.com/on-rolling-stone-penson-financial-the-mafia-and-naked-short-selling/
At this late date, with all bailouts to the contrary, you actually believe Obama is on our side? Faith and hope trumps evidence, apparently.
Sorry, Geithner just doesn’t give me any ideas
– “gei” at the beginning of a word is rather rare in German – “geit” in Plattdütsch the inheritor of the Hanse’s lingua franca Niederdeutsch could be used as a verb in a sentence like “das geht(geit) mich nichts an”=that doesn’t concern me/I am not involved
also we have “Geist” which means ghost as well as (high brow) mind and which then shows up in the middle of words like “Begeisterung”= enthusiasm or “hochgeistig” signifying drinks with high alcohol content
Geithner — A modest man, with much to be modest about.
I have been amazed by the media and public reactions to the Geithner insider phone logs.
As a federal contractor, there are thick walls between wannabe contractors placing a bid for work and the folk who will make the decision. Violation of those “walls” is grounds for a challenge and overturn of the subsequent award.
Obviously, to some extent, it is a game. At the same time, all pay serious lip service to the rules.
Would it make sense for a judge to call a defendant to discuss an upcoming sentence?
Isn’t that what Geither, in effect, was doing? Getting spin on how to present the bailouts, negotiating much was needed, how all could cover asses best? And this wasn’t a l’il ole $1 million federal contract….
“Nah, Timmy. $10 billion won’t do me. Can you do twelve?”
The lack of outrage (of course I – we all — knew it was happening) at the extent of contacts now revealed makes me feel like this is truly an upside down world. How many times did Geither meet, in person? Were there any “sleepovers?”
Lady in Red
Welcome back, Silke!
thanks, Yakkis
I needed a bit of gloom after all we had elections and Merkel’s coalition partner foreign minister to be talks all the old stuff as if the system of the ever growing finance paradise hasn’t just exploded.
He sounds so retro that I guess we will be now a late-joiner to Anglo-style capitalism and why not, after the party is before the party, isn’t it? and once again Germany will show the world how to do right what all the others got wrong ;-((((
but all that hyperbole optimism really gets at me
this inability to learn from mistakes made, all this talking as if nothing has happened
Or else evidence of a gross misconception that might account for how badly he did the job.
I’d like to know who Dodd and Frank have on their speed dials and what their daily calendars look like. And while we are at it, why not find out who else was on Geithner’s speed dial? I wonder if Ken Lewis was on the speed dial until he tried to scapegoat the Fed and Treasury?
Are there less nefarious explanations for the difference in the number of contacts between Geithner and Dodd and Frank? Did Dodd and Frank want more contacts? Or were there on-going contacts between Congressional staffers and high-level Treasury officials? A superficial case may have been made that there were a disproportionate number of contacts but without digging deeper, is that all you have?
Your wish is the NSA’s command. Mark Thoma recently posted an article about the huge new datacenters that are going in to process/house the JabbaBytes that are now being produced by ubiquitous “sensors.” Once we get open access to all this information about each other, there’ll be a hot time in the old town.
While our country’s economic future has been hijacked by the surrogates of Goldman Sachs, JPM, Citi and the rest of the financial “wizards” who have feathered their beds with taxpayer money, there is barely mentioned of the destruction of the economic engine from which true wealth is created. The general shift of intellect from making goods out of raw material to the financial industry where money is made out of money, has doomed the future of America. Geitner/Paulson’s income redistribution from taxpayers to the financial sector, only sealed the fate of America’s eventual 3rd world status.
sounds like this might be the one occasion to make a fortune – invent an automatic point-allocating system for the sins of each person – start with 1 point for each hamburger consumed and ? points for adultery and 50? points for every cigarette smoked etc etc.
it would make life wonderfully easy you could “nudge” people strictly for their own good of course into wearing their point buttons on their lapels and thus make choice of partners for business, love and neighbourhood much safer.
also imagine the possibilities for fining people for throwing garbage in the wrong pails, if you could get a really advanced genetic finger printing system going – no more human weakness excuses – wonderful!!!!
Don’t you know it’s impolite to discuss the rampant criminality in the markets among gentlemen? Here we prefer to use words like “power of ideas.”
My thoughts exactly!!!! ;-)
Welcome to how the other 3/4 lives.
Kids these days often ask me, “Yakkis, you are the wisest of the wise, please tell me how I can make a living in this horrible economy?” And I always say to them, “Domestic government spying. Their budgets will never be cut, no matter how much the country suffers.” Then they always say “Thanks Yakkis, I never thought about that. I just assumed we were different from East Germany before the wall fell.” “Never assume kids!”, I tell them.
Your definition of conspiracy does not apply to the many fine people of Washington D.C. and Wall Street who are above the law.
…or not making….
No it doesn’t concern me or anyone else in the least that uninformed and corrupted decisions are about to undermine all of our livelihoods.
Nice post. I LOVE your rage against the machine. Don’t waste it, save it, there will be a time when it is the most valuable asset you own. Posting here for only Yackiss to have a retort is almost casting pearls before swine except that I (and hopefully others) have saved it in my collection and will relish using selected quotes to shove down their necks.
Bravo!!!
The fiction that Mr. Geithner is “unassailable” is laughable on it’s face, and many commentarians noted above. Falsely proppingup and bruting Mr Geithner, or any CEO, or captured regulator, or Congressman, or President as “unassailable” belies all the glaring facts and events, and denies the basic realities of human nature. I’m no legal expert, but from my pedestrian perspective, it would appear that at the very hightest levels of government, there exists an extreme collusion with select predator class individuals and oligarchs. What is the legal definition of collusion? If there are grounds to pursue collusionairy practices against anyone, most specifically that taxdodgey, predatorclass favoring, Wall Street insider, Giethner – then why is there no effort to remedy these wrongs.
What is see is thefew, the select predatorclass operators and oligarchs, owning and controlling the government, deceptively and illicitly funnelling trillions of the peoples dollars into their select offshore accounts, and DENYING the people access to, or influence in the conduct of the government, and causing grave injury and disatantaging themany (the people) for the sake of thefew (the predatorclass operators and oligarchs).
Something is obviously rotten and foul in the system, and pretending the systems’ operators are clean and guiltless is FALSE and deleterious.
what if it is not collusion but blackmail?
I am economics-wise totally ignorant but I like to do additions and subtractions and multiplications and divisions and I keep reading these figures of these bets swirling around the world amounting to so many trillions that the government infusion of a mere 1 (one) trillions seems laughably small by comparison, and even if it should be worldwide 10 trillion it would still be only a tiny part of it.
So could there not be instead of collusion an extortion going on like this:
either you (government) pay us to keep that bombshell full of wild bets being tossed around the world or we let it explode and then you will … but what will happen?
Now everybody seems as afraid of this explosion as I was when mother told me if you do not empty your plate you will be sent to bed without dinner. A totally laughable threat by my standards of today but at the time a looming desaster beyond my ability to imagine it. By her tone I had to assume that to have to go to bed without an evening meal constituted unimaginable horror.
Maybe these banksters have similar threats to make and as they seem to have made plausible and got away with it that they are unable to come up with precise figures of how much of wild bets are out there even the smartest guys in government feel forced to believe them. (The claim alone that they can’t come up with precise figures is so outrageous for a banker that I can’t believe that they utter this claim and are not immediately publicly flogged for it)
But nobody has described to me the likely scenarios of WHAT WOULD ACTUALLY HAPPEN, if one would let that bombshell full of wild bets and thus obligations to pay up let fall to the ground. Wouldn’t a lot of these bets neutralize eachother? These people are betting against eachother aren’t they? it’s not like the zero at Roulette what they are doing?
Sorry if I sound oversimplifying but this Taibbi at Rolling Stones has made me want to dare it.
What an amazing Post from James, only made more amazing by the comments (and I’m not in cynical mode!).
What a very strange world we appear to be living in now.
The thing that scares the S*it out me is what happens when all this justifiable anger can no longer be properly vented on these and other virtual forums.
You are right Silke, it is merely fright. They are afraid of this fright and its ability to become contaigous. It is too hard to adjust to over the short-term, and so what they are hoping for is an “orderly collapse.” The end result will be the same, except that certain people who would have lost their shirts get richer making the ultimate adjustment more painful for everyone else.
I’m not afraid. The American people can’t even get simple things done like organize a third political party, or get themselves basic healthcare. There is still a large contingent who is philosophically opposed to consumer protection despite the fact they are pure consumers and produce nothing. It really boggles the mind, but it does mean there won’t be any action anytime soon.
I’m not sure if your answer makes me happy or sad!
Yakkis
since ww2 we always had at least one third political party that mattered
– in my view it ended much too often as the tail wagging the dog i.e. the minority getting a much too large say in political decisions because the majority party couldn’t do without them (By now we have three “third” parties while our former second party seems to have decided to slide all the way to oblivion) – we from the little folks have always hated that third party which just now has it made back into government because it was the party of the “besitzende Klasse” (owning class) i.e. corporation owners, lawyers, doctors etc.
The British have their Lib Dems of course but somehow they seem to be able to manage to keep them out of government participation and restrict them to moaning about politics at the BBC – must be their voting system
so be careful what you wish for …
an “orderly collapse” leaves time for a miracle to happen …
any idea what that could be?
“The British have their Lib Dems of course but somehow they seem to be able to manage to keep them out of government participation and restrict them to moaning about politics at the BBC – must be their voting system”
But at least they seem to offer the most sensible policies. Maybe that’s the answer – the ‘don’t knows’ should win!
But seriously, as a recent ex-resident of the UK, en route to the USA, my ‘new’ country-to-be seems to have a far better self-correcting ability than the UK – just hope that correction arrives peacefully.
Well, on the other hand when there are only two parties that have only token differences and are backed and corrupted by the same “special interests” a.k.a. larger corporations, it’s really no wonder why 50% of people don’t even bother to vote.
Excellent!!
I do believe Kwak and Johnson are sincere – just naive beyond belief for people with a fairly good awareness of what. Where is their rage and disgust?
end of sentence in above posts “…of what is going on.”
I love how David Korton phrased this situation in his book title: “AGENDA FOR A NEW ECONOMY: FROM PHANTOM WEALTH TO REAL WEALTH.”
…
“Korten identifies the deeper sources of the failure: Wall Street institutions that have perfected the art of creating phantom “wealth” without producing anything of real value. Its major players engage in speculative trading, buy into asset bubbles, create debt pyramids, and engage in predatory lending practices. Their seeming success created an economic mirage that led us to believe the economy was expanding exponentially, even as our economic, social, and natural capital eroded and most people struggled ever harder to make ends meet.
“Our hope lies not with Wall Street, Korten argues, but with Main Street, which creates real wealth from real resources to meet real needs.”
~ http://www.davidkorten.org/NewEconomyBook
They aren’t naieve, they just need to play their cards right to continue on in, or land the jobs they want. So I think it’s up to people like us to say what they aren’t able to.
AFFF,
Can you steer me to a source on your comments about the computer programs that GS uses to siphon off money? Thank you. My website is at theamericaninjusticesystem.blogspot.com
Why don’t they just name Geithner as Emperor and be done with it already.
After commenting on one of your previous posts on this topic, I had some opportunity to talk to some former co-workers at the New York Fed who also helped with Geithner’s regular economic briefings and get their opinions on him, and found notes I took on one of the town-hall meetings he held at the Fed. (I used to be a low-level staffer there during the Geithner tenure.) I was struck by an explanation he gave of his MO in response to a question on how he conceived of his job responsibilities as President of the NY Fed: he said that, whenever a particular issue faces him, he has a mental list of all the experts in that area who he’s acquainted with, and his first step is always to call those people for initial guidance. This seems like a good MO, unless that list of people isn’t very long or varied, or if the people on it have conflicts of interest.
One person at the Fed expressed frustration that the Fed economists charged with advising him spent more time critiquing analyses generated by Wall Street analysts than presenting their own in-depth policy research. A survey of my memory of post-briefing elevator talk revealed more than a little consternation at the perceived condescension contained in this approach. Most of the analyses they had to bat down were either superficial or clearly biased to benefit the organizations generating them.
My own impression of Geithner from these meetings is that he had no framework for economic analysis of his own, and basically relied on borrowing thinking from others (albeit in a fairly systematic way). From a certain point of view, this may actually be a good trait for someone running a policy-generating organization but, as the post points out, it’s not a good trait in a crisis manager who needs to rely upon logic and conjecture to make quick decisions.
This description of Geithner’s consultative intellectual style would put him on the opposite end from say an Alan Greenspan who, from everything I’ve heard, was a very domineering figure at the Board, relying upon his own worldview to guide his decision-making more than fact-finding and analysis. He’s now seemingly abandoned that world view; there’s obviously pitfalls to both approaches.
I draw a parallel between Geithner and W: like W, Geithner finds himself in a high level job he is unprepared for, and thus must rely upon people he knows who are more knowledgeable than he. A person in such a position must have a very high regard for their own lack of corruptibility; such self-confidence in government officialdom is probably not good.
Silke, you think it might be a corruption of “Gunther”?
If related to geht… would it be “someone who shows concern?”
Quite so. And “the business cycle.”
Paul
as long as you adhere to the principle of one natural person one vote I think it is wrong if a voting system is thus constructed that a minority party gets again and again in the position to wag the dog – if the Lib Dems and its followers can’t make it in the UK, they should blame themselves and not the stupidity of their countrymen – if they don’t they are no democrats
as to the British from all I’ve read they seem to be able to act incredibly nutty for long long times until all of a sudden they get stubborn and make it through
other than that I also think the US has a good chance of reinventing itself and coming out ahead once again but that will probably demand to disregard all the victims who’ll be left scraping a survival at the road side – on the other hand, if consumers are broke whom are they going to sell their stuff to?
in my view the splitting up of the US into the beacon of the modern world and a third world country started, as perceived over here, with Reagan about whom my lawyer bosses at the time got the hysterics of excitement – finally the great unwashed would be shown their proper place
Never forget that’s what lots and lots of them are always dreaming of, teaching discipline and conformist behaviour to their lower downs.
nowadays they call it “nudge” but if you dig a bit deeper it is again the old disdain
seems we are scr..d either way
have you read Catch 22? great book, one of my “bibles” …
“das geht mich nichts an” is very common – the opposite would most commonly be said like this “das geht mich sehr wohl was an” and be used as a rebuttal after somebody had been told “halten Sie sich da raus” – keep out of it – so I’m afraid the geit takes a lot of fantasy to be turned into something meaningful
as to Gunther:
I think the most likely explanation is that in the dialect of the region where Geithner’s paternal grandfather migrated from there was a profession/handicraft called in the local lingo “geithnern” or some such thing – so you need to find a local hobby historian!
other than that Gunther was the king who was too afraid of Brunhild to woe her himself so he sent Siegfried to wrestle the maiden down for him – of course both Brunhild and Siegfried claimed to have slept separated by a sword and not done anything to betray the trust of the king but why then was Siegfried’s later wife Kriemhild such a murderous frustrated b…
and if Brunhild was ever content in her marriage then she sure must have loved power more than a good romp (I just hope that guy hung up on Frank history is not on this thread or I’ll be up for a slaying for my reading of the Nibelungenlied – there are many versions of course – but I happen to like this one)
if you ever want an explanation for a German name seriously enough to pay for it – this is the adress to go to http://www.uni-leipzig.de/~onoma/onomastik/
and here is Wikipedia’s take on Gunther http://de.wikipedia.org/wiki/Günther – sorry no English version available – according to them Gunther equals Kampf+Volk (I think two originally innocent words we have made the world all too rightfully fear)
Yakkis
here’s another Catch 22
if it is fright/blackmail then isn’t our bashing them just the wrong strategy i.e. kontra-produktiv (is there counter-productive in English?)
– wouldn’t we be better off giving them our unquestioning trust and support enabling them thus to stand up to the knee cappers?
I hope you’ll elaborate much more on the the “low-level staffer” perspective thus hopefully encouraging more of us to participate.
Who saw Simon on the Bill Moyers show? 30 minutes of compelling viewing http://www.pbs.org/moyers/journal/10092009/watch.html
Remember, our recently crowned Nobel Prize Winner for Peace and (Economic) Stability around the world nominated and insisted Mr. Geithner was the “best” person for the job at Treasury. His mentor and grand wizard Dr. Lawrence Summers gets to pull most of the financial levers while the POTUS uses his eloquence and celebrity to tell the 9.8% unemployed to hunker down because better days will be forthcoming (not a promise by President Obama but rather, an aspiration). The Change You Can Believe In, is just that – the double standard. Wall Street, Insurance Providers, Too Large to Fail Banks, et al don’t have to competite in the real world while the average taxpayer really does. Too Big To Fail is noted more accurately as “Too Connected to Fail”.
here is the link to the iTunes audio for those who like to feed ducks or admire the landscape while listening to these guys
http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?i=61524252&id=161038776
and for Bill Moyers’ addicts here is the link of the free of cost subscription to his podcast
http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=161038776
heard the other day btw an almost unbelievable Moyers-quote joining the crowd warning against vaccination …
here is my favourite grumpy old doctor on the subject http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6854454.ece
The best advice is not to waste any time supporting or not supporting it. The more you ignore the politicians the better you can prepare for the collapse.
Ian
there is a nice word play on this approach “ohne mich” means without me (then why are you reading this blog? ;-)
the word play then goes to “ohne Michel” http://en.wikipedia.org/wiki/Deutscher_Michel
Actually, this Moyers transcript of Simon Johnson and Marcy Kaptur is probably more a propos.
may it be that you admire this guy? if yes, here’s more for you
http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?i=61039204&id=251447071
if so, in my book he says in this interview in equal measure weird (fast and loose with the facts) stuff as sound stuff
and to add a bit more info on Obama’s economic team here is Cornel West on Larry Summers – as much as I fell instantly and irrevocably in love with the first black guy I ever saw and am thus guilty of positive discrimination I don’t think I could stand much of this brothering stuff
http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?i=61475860&id=251447071
Vegas Quixote: I like the collection of info on your site.
The protests re G20 in Pittsburgh gives me some hope. The government brought out the “big guns” against this protest. This is a sign TPTB expect more to come.
We may very well be headed for a civil war. I think I’d be a bit afraid if I was a cog in the government or financial sector – “guilty” or not, they may become targets for the outrage and desperation of “the people.”
don’t hope for too much btraven
ever since the Italians made such a mess out of reigning in protesters at one of these events (they even killed one) these international get togethers are under heavy heavy protection – look up the one where Bush massaged Merkel and you’ll see that the cordonning it off is standard by now
The Moyer session really brings out the problem fundamentals. Simon and Ohio rep Marcy Kaptur appear to say it is too late to fix and Congress is bought and paid for.
Is is correct to believe that the properly fixed system can be accurately defined and described? Can this also require taxpayers money and assets be recovered from the villains and also their prosecution? If so would a step forward be to publicize the fix recipe and hammer this at every communicating opportunity so it cannot be ignored? Should it be fowarded to every media jounalist, representative (state and federal) Be the subject of questions to the president? Should prevarication and evasion be subject to ‘why no action’ questions?
In fact can we have a post addressing this from Simon and Janmes please?
I’m sure glad I can put this request to all you banking experts.
Simon/James, second what NB said.
“So I say to Geithner: Stop.”
No use saying it…. he is not listening.
See e.g this graph showing the wealth disparity in the US, expressed as the % of national income the upper 0.01% take home. It reached a peak in 1928 at 5%. If I recall correctly, Galbraith in his book about the great depression argued that this peak disparity partly contributed to the 1929 crash.
The wealth disparity was corrected, the US had a solid middle class, President Carter warned of over-consumption, was not re-elected, and we got a deficits-don’t-matter president. The wealth disparity has increased to even 6% in 2007!
PLEASE NOTE: In contrast to the previous depression, this time the wealth disparity does NOT get corrected, but grows even bigger, thanks to the wealth transfer — or more correctly stated: theft!! — from the middle class to those upper 0.01% income takers.
I repeat my comment regarding the previous post.
Yes, it is very frustrating that top bankers have easy access to the Treasury Secretary. However, this is not new and surely dates back as far as Alexander Hamilton and Robert Morris.
Rather, the concerned including Simon Johnson and James Kwak should focus on documenting and demonstrating the specific dollar (and other) cost of these banking policies. The esoteric financial terms, the sophisticated mathematical models that don’t work, and so forth act as a smokescreen to obscure the diversion of trillions of dollars from productive sectors of the US and global economy, to the detriment of nearly everyone.
What has happened to the putative “toxic assets” since the PPIP plan was enacted six months or so ago?
Are the giant banks such as Goldman Sachs, JP Morgan Chase, Citigroup and so forth really solvent? If they are solvent, why did they need TARP? Have they transferred their bad loans to the taxpayer, and, if so, how?
What securities has the Federal Reserve acquired, for how much, and what are they really worth? What is the real value of the underlying mortgages, credit cards, and so forth pooled in these securities?
These are some of the questions that should be answered and the answers repeated clearly over and over again.
Is capital investment and R&D declining sharply from its already anemic levels during the housing bubble?
The appeal must be to the specific interests of the general public, businesses, and others, most of whom surely do not benefit from these policies.
John
What is wrong with a phone call? Nothing. At this point there is no public information what was said in phone conversations between Geithner and the CEOs of Goldman Sachs, JP Morgan Chase and Citigroup. Just speculation.
However, given that these phone conversations involved a transfer of $700 billion from the public treasury to the private banking system, I would assume the taxpayer has a democratic right to know what was discussed.
It is really unfortunate that you go to all the trouble to print your article here james, then defile it with some bizarre statement , “and no one is saying he is doing anything illegal”.
If this man, the treasury secretary is not “supposed” to act with the same good faith as a fiduciary for the country, then what is his job? And, INDEED, LETTING IN THE BANK LOBBY VOICE, is not only a conflict of interest, but it is evidence of who is buying elections, positioning their soldiers in treasury, and getting laws passed which in effect legalize criminality, like revoking Glass Steagall and letting Wallstreet gamble wtih depositors money,and bailing out entities that packaged, bought AAA ratings, then sold crap to the whole world? In other words, the wallstreet/washington complex that purchases all elections and top positions then legalizes criminality…and you take the time to say that no one is saying anyone is doing anything illegal? In good conscience, why aren’t you saying it james?
Belated thanks Ted K. for posting the article. It’s the smoking gun.
Excellent response. I don’t know what laws Geithner may have broken, but it seems we’re living in a world where rules only apply to the meek and powerless.
I have no problem with individuals that are not government appointees or employees getting privileged access. All I require is that these contacts are recorded, and that the records are released to the public immediately.
Geit in Dutch is “goat”
So “goatherd”?
Dutch or even the closely related Niederdeutsch at the Thüringen/Saxonian border where Geithner’s name came from? could be, but
I think it is a rather fertile area there and I think in such areas they do not have goats except for a few as toys for children http://www.oel-bild.de/Drei-Kinder-mit-Ziegenbock-und-Wagen.htm and maybe poor people had some also but herds?
– also I like goats – beasts with strange eyes and as baby goats really delicious food