Also-very-smart Brad DeLong shares a less popular but sunnier outlook and offers an FAQ. He also reassures us that if toxic assets are not already fundamentally under-valued, “then we have worse [...]]]> Nobel Prize-winning Paul Krugman despairs over the plan as he understands it now (we’ll see if that changes now that we have an “official” unveiling”).

Also-very-smart Brad DeLong shares a less popular but sunnier outlook and offers an FAQ. He also reassures us that if toxic assets are not already fundamentally under-valued, “then we have worse things to worry about than government losses on TARP-program money–for we are then in a world in which the only things that have value are bottled water, sewing needles, and ammunition.”

By bottled water, I presume he means gallon jugs, not the little land-fill fillers that are edging out beer in consumption to the dismay of others.

Calculated Risk (who also seems reasonably bright) sums things up, and gives another take: “It is pretty clear the administration opposes nationalizing insolvent large banks, and is instead willing to have taxpayers subsidize shareholders of the banks. So the question isn’t “Is this the optimal solution?” (it isn’t) but “Will it work?” Maybe, but at what cost?”

I’ll be back when I finish my Garden of the Apocalypse and make an ammo run.

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Posted in: D's, Economics, Politics
Post tags: Bank Bailout 2009, Brad DeLong, Paul Krugman, Tim Geithner, Toxic Assets

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Personally, I think that Dodd, Geithner & Obama deserve every bit of egg they get on their [...]]]> If you enjoy the gallows humor, then the last few days since it was revealed that AIG is paying big bonuses to the managers that ran their business into the ground have probably been a real laugh riot for you.

Personally, I think that Dodd, Geithner & Obama deserve every bit of egg they get on their face over this.

So. So far, we have everybody screaming an’ hollering about AIG paying bonuses for bad behavior out of their bailout funds.

Democratic politicos jump on the bandwagon and start showing how in tune they are with everybody by clamoring to get the money back.

Then Talk Radio decides to buck the trend and try to make hay on the other side – pay the bonuses! Getting it back is wealth envy! This will be a good test to see if they can swing popular opinion among elements of their listenership that are already committed to the other side. This also creates humorous situations with Republican politicos trying to figure out whether to scramble to the 76% side who want to claw that money back or whether to follow the lead of talk radio, all the while trying to distinguish themselves from the Democrats.

Now we learn that Obama’s treasury and Chris Dodd – the very clowns ready to pull the trigger on legislation to get the bonuses back – are the ones that made sure they could get paid to begin with.

All this noise. The bonuses are bad, and Obama+Treasury+Dodd should have let the stimulus stipulations nullify them. But it isn’t worth going back to get now. With the energy and noise being put into this, something useful could be accomplished.

The bottom line is this: the bonuses amount to less than .1% of the bailout money AIG got. In a perfect world, you’re going to lose more than .1% of any effort you make to friction. Write it off, get over the populist fever, get off your assorted high horses, and move on.

Update: xkcd knows the difference.

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Posted in: D's, Economics, Politics, R's
Post tags: AIG, Barack Obama, Stimulus 2009, Tim Geithner

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