Obviously a wealthier world would be better, but I suspect that it will at worst slow things down. The airlines and air transport, after all, matured a great deal during the Depression.
The Obama/Geithner plan could rob the taxpayers to pay off the banks.
Of course, “robbing the taxpayers” seems to be the general theme of this administration.
He managed to talk down the dollar. It’s like he doesn’t even care about it, or US sovereignty in general.
Can someone remind me again why this tax cheat (who is now in charge of the IRS) is “indispensable”?
[Thursday morning update]
More thoughts from Jim Lindgren.
[Update a few minutes later]
“I wish the Admin could bring back the days when Joe Biden had sole possession of the gaffe-o-matic.”
A commenter makes the point of what is so worrisome about this:
I’ve been following the currency issue for years, and repeatedly over the past 10-15 years, the Saudis, Iranians, Russians and others have been pushing for an alternative reserve currency. The prime reason is mistrust of the United States fiscal policy.Now the Chinese, our largest creditor, have joined the chorus. Frankly, the only thing saving the dollar right now is that no one trusts any of the other major currencies.
It really doesn’t matter what Yglesias says or does, the global markets are speaking. Obama and Geithner are now “welcoming’ such a discussion. Basically we are looking at the downfall of the dollar similar to that of the Pound Sterling back in the 1970’s. The sun is setting on American economic leadership unless the grown ups act responsibly. To me, this is economic treason.
And the treason is not in going along with a second reserve currency per se, but in making it seem necessary to much of the rest of the world due to insanely reckless fiscal policies that are debauching the dollar.
[Update late evening]
Welcome, Instapundit readers. I’m glad that Glenn linked this post, but it’s not the one that I sent him (which means that he looked over the rest of the site and picked it out). Anyway, you might want to do the same.
If the problem was too little regulation, then why are the unregulated institutions being used to bail out the regulated ones?
I wish that someone had asked the president that question last night. And here’s another missed opportunity — if the solution to our problem is nationalizing health care, why is Europe, where they did that years ago, having the same problems we are?
[Update a couple minutes later]
Here are some more questions that should have been asked last night:
Mr. President, a staple of Democratic party rhetoric over the years is that the GOP is the party of big business and the Democratic party is the party of the working man. Yet it would appear to the casual observer that Wall Street banks have hijacked your administration and are moving heaven and earth to socialize their staggering losses. Do you find it worrisome that Republicans are now increasingly inclined to argue that what’s good for Citigroup is not necessarily good for America, reversing the long-established rhetorical order of the political universe? And how comfortable are you with your progressive allies who are now wondering aloud about an administration that argues that bankruptcy is only an option for “the little people”?
We may not have the best government that money can buy, but we definitely have one that money can buy.
[Update a few minutes later]
Here’s an excerpt from the Barone piece that I’ve been thinking about for a while:
Democrats like Barack Obama and Barney Frank, at least on the campaign trail or in sound bites, have portrayed the financial crisis as the product of deregulation. The solution, they say, is more regulation. In that vein Frank, one of the brainiest members of Congress, is proposing that the Federal Reserve become a regulator of systemic risk, with the power to regulate firms that because of their size or strategic position are of systemic importance.
My American Enterprise colleague Peter Wallison has argued powerfully that this is a bad idea. Neither the Federal Reserve or other regulators identified the systemic risk which caused this crisis. Neither did most financial institutions or investors. Systemic risk is hard to identify for the very reason that it is systemic: It results from just about everyone doing what turns out to be the wrong thing. (Housing prices will always go up, therefore there is no risk in buying mortgage-backed securities, etc.) Identifying some firms as posing systemic risk is saying that they are too big to fail, in which case they’ll take undue risks and end up having to be bailed out by the government. These strike me as very strong arguments.
I would have a lot more confidence going forward if the people running things now weren’t the same people who didn’t see this coming (and in the case of Barney Frank and Chris Dodd, and Charles Schumer, partially responsible for it). Why not put Peter Schiff in charge? He’s one of the few who actually called it far ahead of time. Of course, the last thing that this administration wants is someone who actually understands economics.
…and staying bought. Some thoughts from Glenn Reynolds:
it wasn’t just AIG: Wall Street in general gave profligately to Barack Obama, and to Democrats generally, in 2008. Yet now, when the polls shift, all of those politicians who were so happy to take the cash are suddenly pretending they have never even heard of Wall Street. Instead they’re getting behind punitive taxes, protesters steered to executives’ homes and what both the Financial Times and the New York Daily News have called a “witch hunt” against bankers and brokers.
As Joseph Nocera wrote in the New York Times, “Congress, with its howls of rage, its chaotic, episodic reaction to the crisis, and its shameless playing to the crowds, is out of control. This week, the body politic ran off the rails.” They probably acted nicer when they were asking for money just a few months ago.
If these donations had been given out of love and admiration, Wall Street donors would have reason to feel jilted. But if–as is generally the case with political donations–they were more in the order of protection money, then Wall Street donors may instead feel duped. They might want to ask themselves what protection, exactly, they got for their investment.
And more from Jonah Goldberg:
The Democrats were whorish in their quest for AIG money. But once the money stops flowing and the neighbors are watching, the Democrats suddenly pretend they never wore the naughty librarian outfit for their Wall Street Johns.
As Glenn says, it might be refreshing to see businessmen support politicians who support free markets. Some do, but too many don’t. Because we’ve let the government get out of control, they get far too much financial leverage from their political contributions. As Glenn notes, when an investment in a politician has a much higher payoff than an investment in (say) plant, the country has gone far off the rails from what the Founders intended.
Astrium has officially shelved its nutty suborbital project:
“The world economic situation has created a difficult near term environment in which to finalise ongoing discussions with investors. Astrium is to temporarily slow down the technical activities focusing on core risk mitigation for the project. The [space jet] team achieved impressive results in the pre-development phase particularly in the field of propulsion technology. Astrium sees suborbital flight as a promising area because of the emerging space tourism market.”
They had no sensible business case even in a booming economy. There was never any way that a vehicle with a billion-dollar development cost was going to compete with the other players.
Unless, of course, they were hoping to pull a Concorde, and have the taxpayers pick up the tab.
[Update a while later]
More thoughts from Doug Messier, with a roundup of the competition.
It’s the shade of the great economist, in a knockout.
The country’s in the very best of hands.
…as an economic parable. I’d read this once before. It does make a lot of sense, given the time in which it was written.
There may be a new trend in the Midwest:
Temporary Mayor Michael Brown made the off-the-cuff suggestion Friday in response to a question at a Rotary Club of Flint luncheon about the thousands of empty houses in Flint.
Brown said that as more people abandon homes, eating away at the city’s tax base and creating more blight, the city might need to examine “shutting down quadrants of the city where we (wouldn’t) provide services.”
He did not define what that could mean — bulldozing abandoned areas, simply leaving the vacant homes to rot or some other idea entirely.
Presumably, those areas would go back under the jurisdiction of the county, like other unincorporated areas, including policing by the Sheriff rather than city police.