Irreversible Errors

The Administration’s top thinkers on banking regard themselves as avoiding “irreversible errors” – meaning precipitate moves on banking.  They argue that “wait and see” may work out and, if it doesn’t, they can always take more dramatic action later (e.g., of the Hoenig variety).

Writing in the’s Economix today, Peter Boone and I argue that this line of reasoning makes sense, but needs to be taken to its logical conclusion.  Specifically, we should recognize that delay in banking crises almost always and pretty much everywhere leads to lower growth and higher fiscal costs – the price of eventual bailouts increases and the amount of fiscal stimulus required goes up.  The jobs lost, the longer recovery, and the higher national debt are all costs that must be weighed in the balance.  And that balance, in our view, indicates moving faster and in a more comprehensive manner in the direction suggested by Thomas Hoenig – a senior Federal Reserve official who has a great deal of experience dealing with insolvent banks.

We support much of what the Administration is doing.  But their errors with regard to banking are creating irreversible damage.

In addition, we didn’t have room in the NYT column to make an additional point.  If you think the big banks are strong today, as they increasingly defy the government, how easy do you think it will be to take actions against their interests down the road?

By Simon Johnson

43 thoughts on “Irreversible Errors

  1. It’s time to declare that irreversible damage has already been done. I spoke to a friend who runs a restaurant in northern California. Her bank reduced her revolving credit line — her credit record is perfect — to such an extent that she can no longer make the afford to pre-order to keep the business going. As a result she may have to close down. Once you are closed down, it will be damn near impossible to start up again.

    I call that irreversible damage.

    I think we’ve lost this war. As with the Spanish Civil War, some of us can say we were on the right side of things. That didn’t prevent Franciso Franco from ruling for 30 years. For Whom the Bell Tolls and all that.

    Maybe we can all write a book about it that nobody will read.

  2. If the Great Depression is any example, it should be far easier to take action against them later – but of course the crisis and price to society will have to progress much further. And that probably means no second term for Obama.

  3. As much as I hate to say it, Mr. O’s administration — one elected on the theme of “change” — is deferring to same huge moneyed interests that previous administrations have. This means that all solutions will be vetted by them or people sympathetic to them, and will serve their interests. I know focusing anger on these corporations and the sharpen-the-pitchforks mentality is not useful, but we of the Joe Six-Pack demographic are feeling that there is no other mentality left that doesn’t make us feel like absolute chumps.

  4. How crazed that they’re focusing on whether or not their myriad errors at the tactical level are “reversible” (with different, new errors, I presume) when the fundamental strategy is insane.

    1. How can they possibly believe these holding companies are “healthy” when they’re pure zombies, propped up purely by governments, still run by the same gangsters (incompetent gangsters no less), and where no one can explain what their reality-based economic basis was supposed to be in the first place.

    2. When did these banks ever “function” in a reality-based manner? When were they ever well-run? Where is the evidence that they can in fact be part of a reality-based economy? That they can be well-run?

    It seems to me they existed briefly, fed off bubbles and rents, destroyed the financial sector, are dragging down the economy, and can still only exist through rents and through government’s attempts to find new bubbles to blow up.

    4. So what can possibly be the economic basis of these structures going forward? Especially in a world of depleting resources (while reality-based “growth” really ended ten tears ago)? Clearly the administration wants to prop up these zombie structures toward the goal of propping up zombie exponential debt itself, and the simulacrum of “growth”, for as long as it can.

    5. So the true irreversibility, the fundamental error, is the waste of time, the waste of residual real wealth, and (for those who still believe the system could have been redeemed in something like its current form) the waste of the political opportunity, which Obama absolutely had, to effect “Change” short of radical upheaval.

    But he squanders all that, and at the same time entrenches feudal reaction – the banksters (as Simon said above), and the republicans. These are and will be the only beneficiaries of Obama corporatism.

  5. Both action and inaction produce “irreversible” errors.
    Japan delayed, stalled, procrastinated and lied, too… and irreversibly had a decade of decline and deflation.

  6. You know, it’s funny. In the world of federal construction where I used to work, when we did an environmental impact statement under the National Environmental Policy Act (NEPA) one of the analysis questions we were (and are still) required to address explicitly is whether the selected project constitutes an irreversible and irretrievable commitment of government resources. There are lengthy policy memos and books written by many agencies that tell you how to answer the question. One wonders how well the current set of actions would hold up under such an analysis.

  7. I am afraid that perhaps, though I can’t exactly hope it happens, we will just have to watch the depression unfold due to the oligarchs and then and only then will change be able to really occur.

    I agree with Adam above though, that probably does not bode well for a second Obama term (and who might replace him is frightening as Americans tend to swing to opposites…).

  8. “I know focusing anger on these corporations and the sharpen-the-pitchforks mentality is not useful”

    I beg to disagree; We, from the non-banksters Universe, need to make perfectly clear to our elected representatives that 2010 and 2012 will be unbelievably painful to THEM. What we need to do is to make them understand that the voting booth will be used as the modern equivalent of the pitchfork.

    I guarantee you they’d find a better way to deal with the banking problem.

  9. Could someone who advocates taking over the 10 largest–or whatever–banks please provide some
    detailed analysis about how this would occur? How
    many people, from where, etc? I don’t think Geithner
    has filled all the spots on his staff. Will we just
    borrow some guys from the Post Office?

  10. In the narrative I see surrounding this situation, “wait and see” does not play a major role.

    1) The US government has actively assumed the role of capital investor – providing more than a trillion dollars (through TARP and other programs) to banks that apparently didn’t realize they were clogged up with debt until it became catastrophic to the global economy.

    (Still don’t understand how highly educated guys from the Ivy League who get paid millions every year didn’t see it coming.)

    2) The US government has actively assumed the role of AIG – providing billions in financing to the failed insurance company to cover losses on the very risky bets these banks made this century at the roulette table known as the American housing market. Goldman did quite well in this deal.

    3) At some point, the zombies will need to be dismembered – or perhaps the idea is to let them continue to be a drain on national resources for all eternity – or until we collapse. The investment in their continued existence seems at odds with the need to solve the problem.

    I cannot wrap my head around the idea that throwing more than a trillion dollars at a problem is somehow just biding time for us to the day when we shift course and then truly solve the problem.

    If they are truly acting as if this was a Hail Mary pass tossed at the final minutes of the last game of the season – I’m not convinced we’re gonna score a touchdown – it really may be the last game of the American season.

  11. Simon: When you wrote that you support much of what the Administration is doing, did you refer to what it is doing in the financial sphere or in other matters?

    Do you support the expanded and probably further expanding military action in Pak-ghanistan?

  12. And, I would argue, was only pulled out of it by the housing-fueled consumption bubble in the U.S. Their economy has absolutely cratered in the last six months.

    So, for all their ZIRP/QE efforts, they got a lost decade or two and *then* a Depression. OTOH, given their demographics, maybe that’s the best they could have hoped for.

    Carson Gross

  13. At some point, we have to declare the FIRE economy toast. The war is un-winnable, and that we need a completely new game plan. A back to basics approach, starting with savings and more importantly, jobs.

    China has outmaneuvered the United States using theories published on the internet in 1999. Specifically, a white paper produced by the People’s Liberation Army (PLA) titled “Unrestricted Warfare” – (超限战, literally “warfare beyond bounds”); attacks on computers (eg recent DOD Joint Strike fither break in) economic warefare (cheap goods), protracted wars in Afghanistan and Iraq…

    Our economy is based on a rate of 70% consumption to resume a steady state flow, and bring the economic mathematics back into the old order. That’s not going to happen. demand is toast – the energy markets are a proxy for economic production and other than speculation or a war between Israel and Iran, we won’t see $147/bbl oil anytime soon. If we do, the economic pain will only get worse.

    U-3 and U-6 numbers released today indicate that year over year unemployment is accelerating. GM has declared that it is not going to make it’s 1 billion dollar bond payment due June 1, 2009.

    So we sit here doing what we told the Japanese not to do – zombify banks – and here we are in deflation, just like the Japanese have been for the last 16 years or so.

    Irreversible errors are a moot point. That horse left the barn long ago. President Obama wants to push the reset button regarding foreign policy. We need a reset button for the economy here in the US

  14. The temporary nationalization proposed by Thomas Hoenig is not what the Obama Administration wants. To let these banks fall into bankruptcy only to be dismembered and returned to the private sector is not their aim.

    If that were Obama’s aim, then the non zombie Banks like Wells Fargo that were forced to take TARP funds would be allowed to return the money and act without government control. And Geithner would not be asking for more unconstitutional power to take over non-bank entities. No, the effective all but nationalization of GM, AIG, and the major banks is a bid to control major sectors of our economy to create a more socialized and centrally controlled economy. That is Obama’s aim. Remember, let’s not let a crisis go to waste.

    I am afraid we are in for a “L” shaped recovery at a significantly lower level of economic output and health than the level we are at now. And you can thank our Dear Leader Messiah and his merry band of monkeywrenchers for that.

  15. What we can say is that the current period IS the epitome of “self-regulation”.

    I agree with Paul above. A long L curve (if you can call a straight line a curve) is what self-regulation will bring us.

  16. There actually are ex-Fed governors and executives at large regional banks that know how to run things, hire relatively honest people, remember the objectives of old regulatory processes, spin off assets, communicate to the bond market, etc.

    The reason the financial markets should be heavily regulated is: 1) a very small percentage of corruption can destroy value for everyone, and 2) money is involved.

  17. I have been thinking about a distinction made by Ricardo Caballero, econ dept chair at MIT, between the micro-economic functions of banking and the macro-economic functions of the large banks. The former has to do with credit underwriting and asset allocation–essentially investment decisions and management. The latter has to do with an international system of money transfers.

    I think it is concern about the fallout from a breakdown of the international system that explains the seemingly skewed responses of the US Treasury and the Fed to the banking crisis–the otherwise inexplicable combination of boldness and timidity, the behind-closed-door deal-making and the unlegislated activities of the Fed, the failure to manage the bonus compensation issue properly and the seemingly unwarranted transfer of wealth from the taxpayer to the “banksters” and their friends, the confusing mix of programs intended “to get credit moving again” and those that seek to restore confidence in the capital adequacy and earning power of the big banking franchises (even if making that point requires hidden subsidies and funky accounting).

    The US is not an emerging economy. It is the world’s richest nation. It has been the sole superpower for a number of years. Its currency is now, and for the foreseeable future, will be the world’s reserve currency. The global, and increasingly globalized, banking system is part of a world order which has the US at its center. To say that concentration of banking in a small cartel of institutions having outsized political power is analogous to oligarchical rule typically seen in emerging economies is useful, but only if we fail to acknowledge the international dimension. From that perspective, what kind of leadership are we offering?

  18. Questions:

    1. Is her bank a local community bank?
    2. The bank can reduce your friends revolving credit due to the following. Which is it?
    a) The bank is poorly capitalized and cannot make the loan
    b) The bank perceive a higher risk simply because of the overall business environment (not related to your friends credit record).

    Historically, banks always tighten lending during every recession because of overall increase in risk. Therefore, we need to figure out how much reduce lending is really due to the bank capitalization issue.

    Lastly, current evidence suggest most community banks are health.

  19. Prof. Simon,

    Which time horizon to pick? Do we look to 2010, a decade, or our grandkids future? Since your efforts are directed to the current administration, picking up on voting booth comments, January 2012 seems to be reasonable. What you should propose is a plan that will produce the lowest unemployment rate (a proxy for good times) on that date. Unfortunately, the plan could get derailed by the 2010 elections. Therefore, it needs to on track enough to inspire confidence by then. My main point is that including dates in prognostications may instill a sense of urgency.

    Thanks for leading our merry band.

  20. demographics were an issue (they are here too; nobody is writing about that; but in terms of liquidity and risk preference i can tell you that people like my 65-year-old mother are not going to put any capital at risk again if they don’t absolutely need to) plus for some reason loan spreads were very low in japan compared to the US, making it far more difficult for banks to earn their way out.

  21. I agree, irreversible errors have already been made and the fundamental one is not focusing on the right kind of deflation and the fact that these bad debts have to go away.

    The FED and the administration all seem to be focusing on CPI inflation/deflation when a huge problem is asset deflation. Granted the bubble needs to be deflated, but I don’t see any credible policy to prevent over correction. Over correction is only going to spread and deepen the debt default problem which will only make the banks worse off. This is a key spiral that has to be addressed.

    And I’m not convinced that creating inflation at this point does any good (or is even possible). While it helped in the Great Depression, it wasn’t really policy anywhere until 1931 or later. By then bankruptcy and bank failure had worked off a lot of the debt overhang. I fear that trying to create inflation now is futile. Or worse, cause a dollar currency crisis causing massive import price inflation (without wage inflation) which will only speed up debt default as disposable incomes evaporate – unlike the 1930’s we are import dependant.

    If I had my druthers, our policy approach would be to buy up the inventory of foreclosed and foreclosing homes in markets where price declines are approaching realistic and sustainable levels (put a floor in). We can sell the inventory at a later date when growth has returned. Force the banks to write down the debt and get restructured (as Simon and others are basically calling for). And a massive stimulus plan to take up the capacity slack in the economy.

    I think our trajectory leave the government bankrupt, a crashing dollar and a banking system that is also bankrupt. Lets all hope I’m wrong.

  22. Why is it a problem for banks to defy the government and not a far worse problem for the government to cartelize and micromanage the banks?

    Indeed, the relationship between big banks and the government is an issue – a long term issue. But why condemn the banks for buying the politicians without condemning the politicians for shaking down the banks. Unfortunately, as the role of the government in the economy grows, corruption grows in tandem. It has come to the point that both parties in the political center have been bought by Wall Street. The “free enterprise” party no longer supports free markets and the anti-big business, pro-little guy party kowtows to the financiers.

  23. Reality-based “growth” really ended thirty (30) years ago. Economic growth was replaced with uneconomic churn, instead.

  24. “… the effective all but nationalization of GM, AIG, and the major banks is a bid to control major sectors of our economy to create a more socialized and centrally controlled economy.”

    Huh? GM I can sort of see where someone might say something like this; AIG I don’t know. But the big banks? Both administrations bent/are bending over backwards to avoid even the appearance of excercising anything like ‘control’, despite the fact that any private investor crazy enough to give as much money to Citibank as the Feds have given Citibank would demand (and be entitled to) full control.

  25. banking oligarchs and the way the bubble and the sector appear like a 3rd world country blow up

    The founders of the Republic/authors of what was our Constitution opposed concentrations of power. notice there is no federal corporation law. corporate law is administered at the state level. The states have jurisdictional responsibility for state law. the banking regulators too are very cozy on bank mergers; keep in mind the fed is a creature of the major banks and investment banks. granted i’d supported the repeal of glass steagall although now i support the repeal of gramm leach bliley and eliminating the fed, repealing the federal reserve act and going back to highly capitalized financial depository institutions. also forced divestitures by the major financial institutions of all their commercial holdings. on their vast balance sheets, utilities and other sorts of commerce and industry are lost. DOJ and FTC can oppose mergers which actually they have to review on anti-competitiveness grounds. during the bush crimeteam era, this was DOJ/FTC review of mergers was very laxed. I saw it in heavy industry which has endured a great deal of abuse under the trade agreements that breach Article 1 Section 8 of the Constitution and permit trade without tariff. Our society uses indirect taxation and is part of our institutions while other societies had had a history of direct taxation that we from our founders did not have. wealth accumulatin and developement was far better and more deep even in the hoover era than today in our current crippled commerce. it’s pathetic and violating the constituion in theme and form along with producing concentrations of power that abuse the institutions of the constitution and that too, are among the reasons we are in the condition we are.

    Andrea Psoras
    (917) 828 2498

  26. Indeed, far to much cruft has been plastered over the Constitution. Its main weakness is it failed to deal with banking and control of a fiat money supply, which is why the present monster grew between the cracks. This is now usurping state powers as well, as most are now dependent on the federal printing press.

  27. Simon, you say: “…Specifically, we should recognize that delay in banking crises almost always and pretty much everywhere leads to lower growth and higher fiscal costs – the price of eventual bailouts increases and the amount of fiscal stimulus required goes up….”

    Isn’t this an unique situation? The banking crisis in the US poses a significant threat the credit structure of the entire world. Perhaps, and just in this one case, more of a “wait and see” approach is warranted.

    Also, in the absence of a valid market valuation for toxic assets, how would you move faster without running the risk of a legal battle over seizure of assets? If you thought Treasury was slow to act, wait until the entire seizure thing gets into court.

    Finally, how much bigger do they get proportionately than Standard Oil in 1900?

    When anything threatens to become more powerful than the government of the US, the government takes them on. When have it lost?

  28. I beg to differ. A remedy cannot, and will not, be found in the voting booth. Elections are between “Tweedle-Dee and Tweedle-Dum” as Helen Keller so aptly noted. In addition, the elections can be (and apparently have been, in the past) rigged. The only remedy I can see is some version of “pitchforks.” Politicians and banksters need to be “skewered.”

  29. I don’t think that Geithner and Summers are trying to avoid “irreversible errors” but rather create an “irreversible lock-in” with PPIP to get toxic securities off Wall Street’s balance sheets and to protect their unsecured bondholders.

    My guess is that underlying the toxic securities are Alt-A and prime option-ARMs that were underwritten with no-doc, NINJA standards. (This much-larger-then-subprime default wave will not crest until the summer of 2011.*) In addition, these option-ARMs (taken out in the hope of quickly flipping the property) are probably way underwater so they can’t be refinanced even with ultra-low mortgage rates. Also don’t forget that should Congress pass bankruptcy cramdowns these toxic securities will be further impaired. All this explains the single-mindedness of TARP’s “cash for trash” approach that began with GS alums Paulson and Kashkari.

    Under PPIP the FDIC could lose as much as $1 trillion whose insurance fund will be replenished by increased FDIC insurance fees on deposit accounts. When this backdoor tax hits the American public they will be furious, and President Obama could well loose his reelection bid in 2012 [hmmm, Professor Johnson, perhaps you should frame your arguments in terms of 2012 presidential election politics?].

    Geithner, Summers, Bair and Bernanke have been reckless in their financial engineering shenanigans.

    PPIP must be stopped before it is “irreversibly locked-in.”

    * Uhlfelder, Eric, “More Mortgage Meltdown Misery,” Financial Times, February 7, 2009 (see chart).

  30. “(Still don’t understand how highly educated guys from the Ivy League who get paid millions every year didn’t see it coming.)”

    They did see it coming, when they bothered to notice. They were just trying to suck up as much money as they could when they could.

  31. “A back to basics approach, starting with savings and more importantly, jobs.”

    We need to redo our trade policies and reinvest in manufacturing. We have to bring wealth creation back to this country. This not so much to create direct labor positions in manufacturing, since these will inevitably be replaced by automation, but instead it is to support a domestic supply chain including engineering and R&D. Without this change our economy, our standard of living and ultimately are national security are toast. Unfortunately making this change comes up directly against the vested interests who have controlled this country for at least the past 30 years and have thrown the US public to the curb.

  32. One problem here is that the Obama administration in general, and President Obama in particular, is fairly conservative in the old sense of the word (i.e., in the sense of someone who wishes to use old proven methods rather than new unproven ones and do things in old proven ways rather than new untried ways, as vs. the neoconservatives, who believe in imposing ideology at gunpoint, something which a true conservative would never continence). This is something which I noticed during the primaries especially when he was talking to black audiences. He had a wariness about proposing changes that conflicted with traditional means of doing things. He seemed to have an attachment to pragmatic conservatism — the observing of what has been tried in practice, and what worked, and what did not work — and incremental changes to the current status quo, rather than wholesale changes. (Note that this traditional pragmatic conservatism has nothing to do with the neoconservatism of Gingrich/Bush II/etc., which was all about ignoring pragmatic reality in favor of ideologically-based solutions, sort of like the late Soviet Union except different ideology). In that way he is like a lot of middle-class blacks of my acquaintance — they simply are not the fire-breathing radical type, more Bill Cosby than Louis Farrakhan. They seem “liberal” only by the standards of a Rush Limbaugh or Newt Gingrich (who believe that the 40+ years of successful implementation of FDR’s reforms to the economic system prove that these reforms are “liberal” rather than being proven good practices that have withstood the test of time) not because they are actual fire-breathing radicals.

    So those who are proposing radical change are up against not only pressure from the banks that do not desire such radical change, not only against Obama administration officials with ties to the banks, but up against Obama himself. Obama simply is not a pitchfork-wielding revolutionary type. The conservative case for change is going to have to be made, and it’s going to have to be made in a way that is understandable both to the general public and to President Obama himself. All this ranting and raving about pitchforks is not going to do anything except trigger the natural conservative reaction, which is to avoid any action that is proposed by pitchfork-waving radicals.

  33. Indeed, the goal for the nation’s financial and corporate elites became to spend five years getting paid $40 million per year, then retire. If you plan to retire within five years you’re not concerned with the long term. All you care about is whether you can manage to make the Ponzi scheme go on long enough to make your nut and get out before it collapses.

  34. The hollowing out of the U.S. economy is indeed a major concern. I suggest that you go to your local department store and attempt to locate underwear made in the USA. You won’t find any. That’s right, we’re in the same position as the Ottoman Empire — we can’t even manufacture our own undergarments in any realistic manner. And we all know what happened to the Ottoman Empire in the end…

  35. I suppose it’s inevitable that whenever an economics blog becomes popular, it attracts the usual crowd of gold bugs and conspiracy theorists.

    One point: In a democracy, “the government” is not some alien imposition upon the people, or a dictatorship imposed by an evil tyrant. “The government” is *us*. For better or for worse, the majority of the public voted for President Obama and his platform and agenda, and today overwhelmingly approve of how he is performing his duties. Mutterings about dark conspiracies in the face of all this just make you look like a nutter.

  36. this game of chicken between gov’t and banks is sickening and quite frankly i am tired of it. i agree with simon, bust them up. does gov’t have the guts? you can’t play nice with domestic terrorists and they are the banks. memo,,,they don’t like the gov’t. bust them in a 100 pieces and send the leaders packing!

  37. the banks think they are the tell all. embarrising and disappointed in thier actions. just agame of chicken which i am afraid the bank folk will lose. god,,,should have moved to costa rica years ago. i don’t think i would count obama out yet. he’s got some payback to administor. the people who got him there are ready to receive it!

  38. We really are in a bind. We are hoping the government will break up the big banks, when it is becoming increasingly clear the government and the big banks are the same people. How we get out of a situation this ugly without a violent realignment of power is a frightening question, and even more frightening, I am seeing the odds of successfully negotiating such a change non-violently going down by the day. I hope I’m wrong and being overly melodramatic…

  39. boris, obama is a pretty good poker player. i do have faith in him. my grandfather always told me that the smartest people are the ones with thier mouth shut. they are listening contemplating thier next move. i bet my existence on it!

  40. Don’t forget to skewer the US consumers! Without their propensity to spend beyond their means, we wouldn’t be in this mess!

    The silliness of the self righteous, rock on!

  41. As in Leonard Cohen’s song, everyone knows … in this case, that government has refused any stake/power/controlling interest in the banks, with the result that the banks continue their merry dance and cannot possibly be curbed. The government’s refusal to assume even a degree of responsbility for the banks is designed to make the government appear to be trying its best on behalf of the people, while ensuring the continuation of a desperate situation, in the present and in the future. It might be worth quoting (as does author Susan Jacoby in her book The Age of American Unreason) from a speech given by Robert F. Kennedy on April 4, 1968, the day he learned of the death of Martin Luther King:
    “… what we need in the United States… is love, and wisdom and a feeling of justice toward those who suffer within our country …” Do the government’s economic policies and practices reflect these?

  42. Under normal circumstances with a transparent, unbiased, neutral bureaucracy, I would wholeheartedly support breaking up the big banks. letting the insolvent go into bankruptcy and return them all as smaller entities.

    However, I have just a few problems with this approach, namely centered around the trustworthiness of this Administration, this Fed and the influence the Big Banking Institutions now have over our government.

    This Administration and the Democrats have poisoned the well of public trust, with their proposed Witch Hunt Torture trials, their DHS Right Wing Terrorist warnings, blocking of Fannie and Freddie reform, their prosecution of Ted Stevens and their lack of prosecution of ACORN, all sorts of Wall Street miscreants, and corrupt politicians like Harry Reed, Charlie Rangel, and Diane Feinstein, among other things. I wouldn’t trust this gang of lying leftist radicals to take out the trash, and surely not to remake the financial sector.

    Bernacke, along with Paulsen, has been exposed recently by the coercion testimony of Ken Lewis, the B of A CEO, and I’m sure there’s a lot more to it than that. Their rash bailout plans started us out on a path we may not recover from.

    Simon has laid out well the case against the oligarchy on Wall Street. Others have claimed that all the big Wall Street Banks were involved in naked short selling, and other manipulations of the market. Former SEC Chairman Chris Cox has basically said the SEC staff lied to him repeatedly, about Madoff and other fraudulent schemes. And there clearly was immense bureaucratic chicanery and fraud at many levels involved in the financial meltdown.

    At this point, who in charge do you trust to clean up the mess?

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