BAGnewsNotes: Underneath the Hood
litbrit: The view (and racket) outside my window: St. Petersburg tea baggers attend party of NO class
Cogitamus: Dear Blue Dog Bartlebys: Do your 'effin jobs or quit
the peoplesvoice: The great foreclosure robbery of the 21st century
naked capitalism: Goldman, Fed, Citi getting preferencial allotments of H1N1 vaccine
Infrastructurist: The Daily Dig: Strangest Bridges Edition
First Draft: Malaka of the Week: Evan Bayh
The Brad Blog: The Rise of the Tea Bags
Fried Green al-Qaedas: Putting things in perspective
Pruning Shears: It isn't reform unless it gives Goldman an aneurysm
Raw Story: Pentagon officials won't confirm Bush propaganda program has ended
The Washington Independent: Wingnut smackdown: Birther lawsuit dismissed
Krugman points out (again) that the administration should have nationalized troubled banks. They didn't, and the under-regulated, undisciplined banking industry is hurting everyone else as a result:
Ask the people at Goldman, and they’ll tell you that it’s nobody’s business but their own how much they earn. But as one critic recently put it: “There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system.” Indeed: Goldman has made a lot of money in its trading operations, but it was only able to stay in that game thanks to policies that put vast amounts of public money at risk, from the bailout of A.I.G. to the guarantees extended to many of Goldman’s bonds.
So who was this thundering bank critic? None other than Lawrence Summers, the Obama administration’s chief economist — and one of the architects of the administration’s bank policy, which up until now has been to go easy on financial institutions and hope that they mend themselves.
Why the change in tone? Administration officials are furious at the way the financial industry, just months after receiving a gigantic taxpayer bailout, is lobbying fiercely against serious reform. But you have to wonder what they expected to happen. They followed a softly, softly policy, providing aid with few strings, back when all of Wall Street was on the ropes; this left them with very little leverage over firms like Goldman that are now, once again, making a lot of money.
But there’s an even bigger problem: while the wheeler-dealer side of the financial industry, a k a trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not. Key banks remain financially weak, and their weakness is hurting the economy as a whole.
(Need you ask?)
Every so often I will run across some talk show from the past that points out just how naive we all were as a country, many years ago.
On October 5, 1958 the Open Mind program hosted a discussion on the future of television in politics and how advertising could possibly be used to make or break a candidate or issue. Fifty years ago, remember?
Bear in mind, TV wasn't as all-encompassing as it is today. Stations routinely went off the air at midnight. Color was new. Video tape was new. Most homes had TV's that were, at the most 17" and usually encased in a massive console. There were virtually no live on-the-spot reports and there were lots and lots of talking heads.
So, when Open Mind brought on Professor Eric Goldman (author of the book "Rendezvous With Destiny"), John Elliot Jr. from the BBD&O Ad Agency and Lloyd Whiteburke, an advertising consultant. The conversation about the possibilities that Television could influence a political campaign were very real.
Lloyd Whiteburke: “There’s no FTC, no Federal Trade Commission in political advertising. If a product is falsely advertised, as you all know, the Federal Trade Commission will seek an injunction against the advertiser and have that advertising changed and penalize the advertiser. The only person penalized for buying a candidate who is not what he represents himself for is the voter. And he’s got four years to wait to throw him out, throw out this candidate. So it imposes a tremendous sense of responsibility on the advertising fraternity to make darn sure that something isn’t done, that isn’t correct for which the FTC does not have call. And that’s why some of the practitioners do, in the course of their work, say things and do things that are perhaps not exactly right. And we have to watch that and we have to police our own . . . “
Television was still in its infancy. The 1952 Presidential campaign, being the first to utilize Television in a prominent way, was recent history. The Kennedy-Nixon debates were still two years off and cable was only an idea.
I don't think anyone could have imagined what it would all become.
Attytood: This is what 'empathy really looks like in America
The GunToting Liberal: Army Reserve Major Fredrick Cook sucessfully weasels his way out of Afghanistan combat orders by challenging Obama's eligibility as his Commander-In Chief
Politics In The Zero: Fix the economy by prosecuting the CEO of Goldman Sachs
Vagabond Scholar: Diagram Madness
Economist's View: Robert Reich is happy
The Anonymous Liberal: John Yoo - Still Lying
This is interesting. The administration's new regulation proposal contains procedures that will essentially quarantine financial companies in trouble, making it easier for the feds to step in and isolate problem operations. The devil, of course, will be in the details:
They are the biggest of the big — the Citigroups, the Goldman Sachses, the AIGs and other financial behemoths. The Obama administration doesn't want so many around anymore.
Financial regulations proposed by the president would result in leaner and simpler institutions that don't carry the weight of the system on their marble columns.
Around Washington and Wall Street they have come to be known as TBTF — too big to fail. It's not just size, though. These companies are so far-flung, so intertwined and so precariously leveraged that a single one's collapse can create systemwide tremors that imperil the finances of millions of Americans.
With that fear in mind, the government stepped in to bail out Citigroup Inc., Bank of America Corp. and American International Group Inc. with tens of billions of public money last year.
Looking to avoid such a costly intervention, President Barack Obama's regulatory plan calls for large, interconnected companies to pay a heavy price for the systemwide risk they pose.
So far, however, congressional debate has centered on the administration's plan to put the Federal Reserve in charge of these "systemically significant" companies. Less attention has focused on the potential effect on the institutions and the financial system's hierarchy.
Under the administration's proposal, companies such as Citi, Goldman Sachs and others in a broad top tier engaged in complex transactions would face stricter scrutiny and have to hold more assets and more cash as cushions against a downturn.
