The Real Doom-and-Gloomers

"Meet the new boss, same as the old boss": British philosopher Pete Townshend sings "Won't Get Fooled Again" (playing acoustic guitar, and accompanied by classical guitarist John Williams) at the 1979 Amnesty International benefit show, The Secret Policeman's Ball.

"We have always known that heedless self-interest was bad morals. We know now that it is bad economics."

-- Franklin Delano Roosevelt, accepting the Democratic
nomination for a second term as president in 1936

by Noah

I. MEET THE NEW BOSS, SAME AS THE OLD BOSS

Where I live, in New York City, it usually seems that there are more banks on the corners than there are mailboxes. They seem to come and go in the middle of the night, as if they were mobile homes just temporarily parked on the property, until they are replaced by another bank. There's always a bank there, it's just the names and the decorating that change. They seem to change names so fast that they don't even penetrate the public consciousness.

My own bank has changed names only four times in the last 12 years. In the banking business, they call that stability. Kinda reminds me of some sort of corporate musical chairs game, or maybe it's a shell game. "Step right up. See if you can find your money!" Well, the money has always been there, even if the carpeting and the sign on the door have changed, and even if there are fewer and fewer employees each time, and my wife and I have to get all new checks. How long my money will be there is now a mater of conjecture in this day and age. One thing's for sure, if I was a decorator, all I would have to do is sign up a couple of the bigger banks as clients and I'd be set for life. It must all be very confusing to bank robbers (the ones outside the bank, not the ones inside).

All of this got my mind spinning a few days ago when I read an editorial in the Wall Street Journal about Secretary of the Treasury Tim "Mr. Inside" Geithner, entitled "Geithner at the Improv." It was about his (as the WSJ calls it) "opening act," aka his first press conference. They seemed to find him lacking, but for different reasons than many of us. They found him lacking for three basic reasons:

(1) He spoke, and the market went down.

Well, the same thing happened every time Bush or his guy "Hank the Grifter" Paulson spoke. It didn't seem to bother the WSJ so much back then. Hmmm. I wonder why.

(2) He didn't focus on just the banks, instead offering, as they say, "something for everyone."

I don't think you or I are included in that "everyone," but some people weren't taught about sharing. They do say that, like Paulson, Geithner "will be making it up as he goes along," and to the WSJ it's worth pointing out that that is bad. I agree, but what if they had chosen the word flexible? That would have a more positive, confidence-building connotation, wouldn't it?

The WSJ looks at "making it up" as something that delivered something other than confidence and rising stocks. OK, I get that, but I also get that maybe rising stocks should not be the number one priority right this moment. Maybe solvency and true stability should come first? And again, why wasn't Hank the Grifter critiqued the same way?

(3) They take both Geithner and his boss, President Obama (hopefully he really is Geithner's boss), to task for pronouncing some "doom and gloom."

Excuse me, piggies, but those of us who do not drive penis-extension Porsches home to Short Hills, NJ, or Greenwich, CT, every night might have very good reasons for a little, as you deride it, "doom and gloom." You and your cronies may not be suffering as you stuff your pockets with taxpayer cash, but a lot of people feel a darkness coming over the land.

There are people trying to tell us that Geithner is the "new" boss at our Treasury, but if there was ever a "Meet the new boss, same as the old boss" kind of guy, Timmy G. seems to be exactly what Pete Townshend was writing about almost 40 years ago. Hank the Grifter, meet Timmy G. Oh, that's right, you guys already know each other. You came from the same robot factory to take over our money. I never did learn how to take a sheet of paper and cut it into a string of identical little bears or something, but somebody did, and we don't seem to be missing a beat in the alleged transition between the old Treasury Department and the new one. So, we have two guys, Timmy and Hank, who don't make us warm and fuzzy, but two different treatments. Why, Mr. Murdoch, why?

Rather than focusing on banks alone or proposing a single bailout architecture, Mr. Geithner offered something for everyone with a financial problem [well, not you or I], albeit with most of the details left to be filled in later. Investors naturally took this to mean that, much like former Secretary Hank Paulson, Mr. Geithner will be making things up as he goes along. If the goal was to reduce uncertainty, it didn't work. (By the way, the Senate also passed the "stimulus" yesterday. Stocks fell nearly 5%.)

That said, Mr. Geithner's proposal is correct in its tacit acknowledgment that there is no grand miracle cure. The problem of the capital hole in the financial system is too big to fill in any single way, or with public or private capital alone. The bad assets need to be worked off one by one, institution by institution, until balance sheets are cleaned up and normal lending can start again. It's three yards and a cloud of toxic securities.

I buy the bit about there being no one miracle cure. But we need a Rommel, and we get another Klink. Hank the Grifter seemed pretty disorganized -- unless, that is, his dispensing of $350 billion to his old buddies on Wall Street without any strings attached whatsoever was the plan all along. What? Me? Cynical? So let's just say that when people say Geithner is like Paulson, I'm not brimming with optimism about this guy either. However, you can bet that the WSJ liked Paulson's no-strings-attached approach and has worries about all of this talk about strings this time around. Could that be the difference?

Mr. Geithner said the feds will subject all major U.S. banks to what he called a "stress test" to assess their financial health. We had thought this is what the FDIC, the Federal Reserve and other regulators were supposed to be doing all along, but that's last year's failure. A fresh and thorough scrubdown should be useful in forcing banks to be realistic about their businesses, especially the value of their bad assets.

Regulators? The WSJ complains that regulators weren't doing their job? After they've spent decades bitching and moaning about those pesky regulations being bad for business and not allowing corporations to run even more amok? After they've spent decades campaigning and editorializing for deregulation to the point where the word "regulation" should be removed from their dictionary? If the situation weren't so dire, this would be hysterical!

Then, as you can see, they go on about scrubbing bad assets and "forcing banks to be realistic about their businesses." Realistic? Wow! The WSJ and Wall Street have just learned a brand-new word. Today's word is "realistic." "Look, Mom, the word 'realistic' comes almost right before 'regulate' in the dictionary. Isn't that swell?"

The feds can then sort the banks that have enough capital and are worth saving from those that are insolvent but don't want to admit it. The latter can be liquidated, their depositors protected by the FDIC and their assets sold immediately to a healthier institution or worked off and sold over time. In Mr. Geithner's calculation, the banks that survive will emerge with a clean bill of health that will make them eligible for more public capital, which in turn will help the banks attract more private capital as well.

The editorial drones on about Timmy's vague plans for ridding banks of toxic assets, including those wonderful bad mortgage assets you might have heard something about, and leveraging private capital to buy the toxic assets. I have an only partially facetious question: If assets are toxic, how are they assets? The problem, as even the WSJ all too briefly implies, is, how do you fairly value such assets -- er, junk -- er, wreckage -- er, scrap?

Not many people seem to be mentioning one very important thing in all of this. It's not just assets that will be "cleaned up" -- gobbled up, or dumped on the scrap pile. This is going to have the end result of some banks, as the WSJ briefly mentions, not surviving as well. What's left of those banks will be incorporated into bigger banks. Deregulation has already enabled the frenzy of bank mergers that have caused things like my bank changing its name every three years, apparently just to provide a bigger ATM machine that takes a better picture of me but now fails to provide a receipt half of the time. Maybe next time, they'll have an even bigger ATM that not only doesn't give you a receipt but also laughs at you in 5.1 surround sound!

These mergers are sometimes euphemistically referred to as "consolidations." Corporate buzzwords like "synergistic" also get thrown around a lot. Does increasing the unemployment rolls or slashing of worker-bee benefits get mentioned? No, not so much. Bailout money will be used to buy up banks. Your money -- but don't you go counting on having an ownership interest. The thing that isn't being spoken of is that soon there will just be a couple of megabanks that own all the banks in your town. The name-changing will stop, and some decorators who put all their eggs in one wrong basket will go out of business. These banks will be so big that if one of them fails, we will all be out of business in so many ways. It looks like the WSJ and the whole financial world, Geithner included, thinks such a scenario is healthy and desirable. Yet there is no mention of the Megabank Monopoly scenario and what a tremendous downside it has.

The editorial ends by saying that the WSJ is put off by President Obama's and Secretary Geithner's aforementioned "doom and gloom" rhetoric, that kind of talk doesn't "help public confidence." Yeah, like we're all as stupid as you want us to be. No one mentions that I will soon be able to walk down Second Avenue for 10 blocks and count eight banks owned by just two megabanks. If one fails, then all the retail locations between those banks, along with the jobs, on Second Avenue will start closing up real fast. The financial world still hasn't learned its lessons about unchecked deregulation and avarice. It's still "bigger is better." It's still about uncontrolled greed, with the only meaning of "control" being a couple of banks having it all. When the next downturn comes . . .

So, let me get this straight. The WSJ thinks Geithner is much like Paulson, who they were all gung-ho about back in the fall, but they don't like his doom and gloom. What's the difference? That one was Bush's guy, the other is Obama's guy? One guy talks (and probably only talks) about "stress tests," and the old guy did not? Is it just that the current mumblings about conditions strike a sour note with the "just give us the peons' [i.e., our] money" crowd?

The answer is probably all of the above, with one addition. The WSJ types and their Wall Street and bankster masters just want your tax dollars and they want them now -- no "doom and gloom," no strings attached, big fish gobble up little fish, and absolutely no change in the status quo, right down to still giving out bonuses that are now being rebranded as "retention awards" to get around a possibly deliberate loophole, and using your money to keep them in the lifestyle to which they have become accustomed: Super Bowl tix, McMansions, penis-extension Porsches, vials of coke, free-flowing Dom and all. What recession? What depression? Not here!

Did I mention loophole? Yes, I did. Think about this one. Congress agrees to send these assclowns our taxpayer money. Our money flows out. Am I being cynical by bringing up the possibility that a significant amount of that money, our money, might flow back to the same politicians as "campaign contributions" at some future date? Is this how they now define "public campaign financing" in Washington?


II. THE OTHER SHOE DROPS ON THE PARTY OF NO


In this Friday Countdown segment, Keith O's subject was the "Grand Opposition Party," with help from The Nation's Chris Hayes.

In Saturday's WSJ, another piece of the puzzle appeared, this one written by Bradley R. Schiller ("an economics professor at the University of Nevada, Reno"). He continues the Repug "doom and gloom" talking point. It's more "let's trash Obama" talk. Now I'm glad that Obama, of the two main guys running, won, but that doesn't mean I'm a raving fan. I want him to succeed in saving us from what Bush has wrought, and, in fact, what the failed right-wing economic policies that started with Reagan have wrought. The Rush Limbaughs of the world, if they were patriotic, should want any president to succeed, regardless of where they might stand on the political spectrum. If any president doesn't succeed, we are all screwed.

If we keep the status quo, we will be more than screwed the next time, if there is a next time. Not regulating the size of banks, in effect letting a few megabanks become monopolies, can't be a good idea. Again, what happens if one fails? It's too much of that "too many eggs in one basket" thing. So here's the WSJ again, trumpeting the latest Repug talking point about "doom and gloom," only this time it's about the Obama stimulus plan. These lowlifes are trying to take down Obama any way they can, and if the financial health of those who don't own financial institutions is hurt, what the hell do they care? It's that old uncontrolled greed again that got us in this situation in the first place.

Professor Schiller writes:

President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.

In his remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today's economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover.

This fearmongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don't come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate.

First of all, who the hell are these Repugs to talk about fear-mongering? This fear-mongering thing has been their talking point for over a week. Schiller goes on to express worry that "fearmongering can trigger a political stampede to embrace a 'recovery' package." Where was this guy when Bush and Rice were going around yelling, "Mushroom cloud! Mushroom cloud!"? Or when Cheney was saying that if you vote for Kerry, you will die?

Schiller's piece is entitled "Obama's Rhetoric Is the Real 'Catastrophe.'" Really? I would have placed Obama's rhetoric way down on the list of what the real catastrophe is. To me, although not to these WSJ wackadoodles, hundreds of thousands of people losing their jobs and their health care last week, along with any hope of sending their kids to college, maybe losing their homes, etc., is the catastrophe. Those things are higher on my list, but then, maybe Schiller is just all bent out of shape because we now have a president that can address a crowd or a roomful of reporters without us cringing in embarrassment. Not only that, but I feel reasonably certain that the new president can spell "rhetoric' and "catastrophe" and use them in a coherent sentence. Screw this bozo!

Back in 1971, David Crosby of The Byrds and Crosby, Stills, Nash & Young released an album with a song called "What Are Their Names?" It's about wanting to know the names of the men who really run this country, and where they live. The rest is left to the imagination of the would-be torch-and-sharpened-pitchfork-carrying citizen activist. How long before people grab bats and go play club-a-seal on Wall Street?

Did you notice that when these bankster swine showed up for their mild tongue-lashings before some grandstanding politicians in Congress in that meaningless dog-and-pony show last week, full face shots were barely shown? Are they worried about being easily recognized? Is someone at the networks worried about vigilante wanted posters? That whole Congressional farce was proof positive that our legal system has failed us every bit as much as our financial system.

People were angry back in 1971, they were angry 40 years before that, and they are damn angry now. Just how high will the anger meter go? How many more months will be like January, when almost 600,000 lost their jobs and men like those that write for the WSJ and their masters in the financial world either don't notice or don't give a rat's ass about anything other than themselves? These are the Marie "Let Them Eat Cake" Antoinettes of our time.

These Wall Street terrorists have destroyed many, many, many more lives that Osama bin Looney himself. Rupert Murdoch, with his Wall Street Journal and his FOX News and countless other media outlets, gives them a voice. These are the real doom-and-gloomers.

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