Alan Greenspan and Paul Krugman are two of the most respected figures in economics today. Greenspan from the free market fundamentalist right, Krugman from the redistributive social capital left.
They both conclude, Greenspan reluctantly and Krugman confidently, that the amount spent on economic stimulus to date is almost certainly not enough and they both call for at least temporary bank nationalization in the US as the only possible solution to a liquidity crisis that has become a solvency crisis.
At this point, if two highly respected figures of widely acknowledged intelligence and knowledge on the subject of economics have come to the same conclusions from opposite ends of the economic ideological spectrum, isn't that a pretty convincing indication that they're the right conclusions?
You have to feel a certain sympathy for the Obama White House; Obama is a careful centrist by nature and inclination, events are forcing him to be much more radical than he'd prefer and he's already getting flack for being a dangerous socialist from the usual numbskulls. But he has the cover of widespread support both for him and for his policies and he can honestly point to right wing Republican support for a more aggressive stance on the banks from figures like Greenspan and even some Republican Senators.
The idea may be to build a consensus that is practically air-tight combined with a public disgust at obstructionist know-nothing Republicans publicly wishing for Obama's failure and opposing even the mild steps he's taken so far.
The question becomes, is there time any more for such a long game or is the damage accelerating faster than any solution will be able to repair?
UPDATE: Braaaaaaaaaaaaaaaaaaaaiiiins.................!
Monday, March 09, 2009
Subscribe to:
Post Comments (Atom)
Popular Posts
-
Octopuses are smarter than they should be. Every other invertebrate registers as static on an EEG. An Octopus generates the kind of slow l... -
Julian Assange is in jail in UK facing deportation to Sweden on charges of rape. Many people, otherwise sympathetic to Assange and Wikileak... -
Conservative MP Brad Trost believes female politicians should be bullied and terrorized and threatened with jailing for believing in differe... -
'Emboldened.' In every article about white nationalists or the 'Alt right', two terms designed specifically to obscure... -
I think we should start a movement to protect against the insidious threat of 'Ten Commandments law'. Sure the Christians and Jewis...
-
The Christian Labour Association of Canada, not to put too fine a point on it, is a fake union. They're an association with no standing...
-
Spotted at Scott's Dia Tribes : Rachel Marsden , serial stalker, Anne Coulter wannabe, former Fox News personality fired for being too... -
For the comic book fans, hat tip to Andrew Sullivan : Frank Miller is the comic book artist and writer behind The Dark Knight, a bunch of gr... -
The day before a massacre at a Quebec Mosque Kellie Leitch attacked a motion opposing Islamophobia as 'special privileges'. Pres... -
We can't count on liberals and their cherished institutions or standard of decorum and responsible governance they keep hoping against ...
4 comments:
Good analysis. I think it's plausible, but personally I think Obama is being too cautious with this long game - and not just because I agree with him. His approval ratings aren't exactly in freefall. The Republicans are in the midst of self-annihilation with these Limbaugh incidents. Speaking pragmatically, the opportunity would seem to be open for him.
I think it's also time to start thinking about what "temporary nationalization" might mean. Why should the people give ownership of the banks back to the private sector - and how would they go about doing it?
There are already models in Scandinavia and the UK to study.
For that matter Bank Nationalization in the US is routine, the FDIC takes over smaller banks almost weekly - the issue is the huge wounded giants like AIG and Bank of America. The aftermath of this crisis should be bigger banks chopped down to smaller units - Never again should there be banks that are 'Too big to fail'.
It has to be said, the Canadian government made the right choice to deny the big bank merger proposals of the last few years. Imagine if Canada had entered the current crisis with huge mega banks like BMO/Scotia saddled with huge debt from costly mergers. As it is we have one of the healthiest banking sectors in the world right now because we limited the debt a bank can carry to about half what American banks could and we don't have unweildy too big to fail entities rotting away and poisoning the arteries of the financial system.
I'm not sure I entirely agree.
You're certainly right about the Canadian system having benefitted in the past from government policies preventing further mergers. But look at the current situation. You've got five major banks, and everybody else is an almost trivial small player. All five of those banks are "too big to fail," which is why we can trust our government to provide any cash infusion which they may deem necessary, should they at any time run into difficulty.
Yes, it could be worse - but we're sitting on a "too big to fail" time bomb as it is, kept in check only by good regulation.
If it comes down to good regulation being what keeps the banking sector profitable, then one of the strongest arguments against permanent nationalization - that government bureaucrats make bad businessmen - would seem to lose some of its steam.
More on the dangers of ever letting banks get 'to big to fail.'
Post a Comment