Can the FDIC survive the Obama/Geithner Plan?

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1. Unstable Isotope says:

   March 22, 2009 at 7:50 am

   All I hear is “blah blah blah.” I am concerned that Obama is hearing only one side of how to solve the economic crisis. I hope he is hearing dissenting voices on the left.

2. Rebecca says:

   March 22, 2009 at 8:24 am

   Grover Norquist must be euphoric right now.

3. Unstable Isotope says:

   March 22, 2009 at 9:10 am

   Perhaps Norquist is ecstatic, but it won’t help Republicans because they have no alternative plan. Their only ideas are tax breaks and less regulations. They couldn’t even decide whether they supported the AIG bonus tax or not.

4. anonone says:

   March 22, 2009 at 9:26 am

   The real question is: Can we?

5. xstryker says:

   March 22, 2009 at 10:05 am

   I love Krugman, but I honestly want him to be outside of the administration. The job Krugman is doing as an outsider, an independent critic of the administration, is vitally important (I put Roubini in this category too). Krugman’s on the record more than once saying that he doesn’t have the temperment for politics. I’d love to see Larry Summers (probably the chief economic thinker in the administration at this point) replaced by Stiglitz. If Geithner’s to be replaced, he should be replaced by someone with more executive experience, like Volker.

   Volcker opposed the repeal of Glass-Steagall, and oversaw the recovery of the last massive recession in the early 80’s as Fed Chairman. From Firedoglake:

   In late 1986 and early 1987 Glass-Steagall restrictions on commercial banks were beginning to be successfully challenged in the courts, with the New York State Banking Department and with the Federal Reserve. At the end of April and again in May 1987 the Federal Reserve Board voted 3-2 to permit commercial banks to engage in some limited securities underwriting over the objections of Fed Chairman Paul Volcker who opposed the change. In June, soon after Alan Greenspan publicly backed the Treasury Department’s new position on the creation of a few very large banks saying, ”I do not have a fear of undue concentration of banking powers,” the Reagan administration announced its choice of Greenspan to replace the retiring Volcker.

   Volcker continued to oppose the expansion of banks into the securities underwriting business until his retirement in August 1987. At this time there was still support for Glass-Steagall in Congress (even from Schumer who wrote an oped for the NYT, Don’t Let Banks Become Casinos) and so, even with Greenspan at the Fed continuing to advocate for repeal, the most Citicorp and others could do was to chip away at regulations. Over the years several attempts were made to change the law but failed to win passage in Congress. It would take a Republican Congress and the Clinton administration’s Robert Rubin and Larry Summers at Treasury to repeal Glass-Steagall.

   Supposedly, Summers has been marginalizing Volcker’s influence in the administration. That needs to stop.

   A quote from Stiglitz:

   The theories that I (and others) helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith’s invisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency.

   PS: A certain someone we all know would turn against Krugman, Stiglitz, or Roubini the moment any of them took office, based on, shall we say, ethnic reasons.

6. Nancy Willing says:

   March 22, 2009 at 10:50 am

   ditto X

7. jason330 says:

   March 22, 2009 at 11:03 am

   X,

   I had no idea all those guys were Dutch?

   Oh wait. You were not talking about me. Nevermind.