The World's Dumbest Deliberative Body
| Thu Mar. 26, 2009 8:58 AM PDT
Midway through the second period of our global economic collapse, how's the home team doing? Conventional wisdom says the Wall Street crowd is whiny and petulant. President Obama is well-meaning but maybe a little too cautious. Europe is too disorganized and too eager to shift the blame instead of taking action.
And then....there's the Congress of the United States. Michelle Bachmann, taking a page out of the Bircher playbook circa 1963, wants to make sure the Chinese don't foist a one-world currency on us while we're down. Don Manzullo is so relentlessly clueless that even the normally imperturbable Ben Bernanke can't pretend to understand him. And LA Times columnist Michael Hiltzik is watching television:
On C-SPAN I found the perfect thing: The House Financial Services Committee was grilling Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke about the AIG rescue.
Rep. Jeb Hensarling (R-Texas) grumbled about "socialized medicine," as though he had wandered into the wrong committee room. Rep. Maxine Waters (D-Los Angeles) obsessed about the "small group of Wall Street types who are making decisions," especially Goldman Sachs & Co., which she described in terms James Bond uses to describe SPECTRE.
Their colleagues, meanwhile, emitted what the writer David Foster Wallace might have described as "recombinant strings of dead cliches" about undeserved bonus payments, U.S. taxpayer money paying off foreign banks and the mushrooming of that new American art form, the bailout.
They showed, in sum, that they have no understanding of the roots or remedies for the financial crisis, and — more to the point — no great desire to understand. They left me convinced that if we are to have a productive investigation of the financial meltdown, it must be taken away from posturing lawmakers.
Hiltzik's solution is a fantasy lineup of investigators to shove Congress out of the way and figure out what really happened. A friend who works on Wall Street ended an email cautiously supportive of Geithner's toxic waste plan with this: "One last thought — could we possibly send Congress into recessuntil this is all over? They are killing us...." My solution is — what? I don't have one. Enjoy the show, folks.
Advertisement
Advertisement
Comments
Killing Wall Street traders
Submitted by tpx on Thu Mar. 26, 2009 9:33 AM PDT.
Killing Wall Street traders would boost Congress' reputation.
I watched the whole House
Submitted by nepeta on Thu Mar. 26, 2009 9:42 AM PDT.
I watched the whole House hearing. Many of the Republican questions did indeed make me feel like I was channel surfing between the Twilight Zone and the hearing. Very strange and clueless people. Maxine Waters' innuendo about some sort of Goldman Sachs conspiracy in the bailout seemed a bit far out to me, but I gave her benefit of the doubt because of her similar sorts of correct theorizing on Iraq. I hope everyone watches the Bachmann video to get the 'flavor' of Republican angst on the bailout.
RE: Goldman Sachs
Submitted by wp200 (not verified) on Thu Mar. 26, 2009 9:42 AM PDT.
Haven't you read Matt Taibbi?
Goldman Sachs, it turns out, was [AIG's] biggest customer, with $20 billion of exposure in [AIG's] CDS book. Which might explain why Goldman chief Lloyd Blankfein was in the room with ex-Goldmanite Hank Paulson that weekend of September 13th, when the federal government was supposedly bailing out AIG.
When asked why Blankfein was there, one of the government officials who was in the meeting shrugs. "One might say that it's because Goldman had so much exposure to AIGFP's portfolio," he says. "You'll never prove that, but one might suppose."
Market analyst Eric Salzman is more blunt. "If AIG went down," he says, "there was a good chance Goldman would not be able to collect." The AIG bailout, in effect, was Goldman bailing out Goldman.
Eventually, Paulson went a step further, elevating another ex-Goldmanite named Edward Liddy to run AIG — a company whose bailout money would be coming, in part, from the newly created TARP program, administered by another Goldman banker named Neel Kashkari.
I'd say Maxine Waters is onto something.
Dumbest Deliberative Body
Submitted by swiftfox (not verified) on Thu Mar. 26, 2009 9:48 AM PDT.
Second period of what? If this is supposed to be a hockey analogy, the halfway point would be January 2011.
Is there a disinterested party in the House?
Submitted by Doctor Jay on Thu Mar. 26, 2009 9:53 AM PDT.
Self-dealing is a problem, but this crisis is so damn big, I think it would be hard to find someone who didn't have some ties to a company or institution in trouble.
I think that Hilzik got it exactly right when he mentioned "posturing lawmakers". I don't think the people in question are rocket scientists, but neither do I think that they are so stupid as to actually believe some of the rot they are spewing.
Michele Bachmann is a case in point. She said what she said because she figured it would help her reelection and fundraising. Probably especially fundraising. She's dumb like a fox. And free to embrace the crazy, since there's no chance that any Republican proposal will ever be enacted.
So by all means, let's bring back the gold standard, fan fears of a global currency, and disband the Federal Reserve. Where does it say in the Constitution that such a thing can exist, anyway?
Waters as Mel Gibson in Conspiracy Theory
Submitted by karog (not verified) on Thu Mar. 26, 2009 9:56 AM PDT.
I watched Maxine Waters on Tuesday and she reminded me of Mel Gibson in the movie Conpsiracy Theory. On the face of it, Gibson's character Jerry seemed like a loon but of course in the end, it turns out he was right. I think there is more truth to what Waters was after than she'll be given credit for.
In addition to what wp200 cited, Goldman stated recently that they really did not need to be paid off since they were properly hedged (that assumes their hedges could have paid). Well if that is so, why did the taxpayer have to pay GS off (via AIG) if they were otherwise covered?
And Kevin, why had Preview Comment disappeared?
A solution: 1) Beg Britain
Submitted by giotto (not verified) on Thu Mar. 26, 2009 9:57 AM PDT.
A solution:
1) Beg Britain to take us back, at least into the Commonwealth
2) Have the Queen appoint a Governor General
3) Have the GG prorogue Congress until the danger has passed, or until Congress has come to its senses, or until the American people learn to quit voting these ninnies into office.
The downside would be having the Queen on our money; but I don't care for the new currency anyway, so I can live with that.
I don't understand why the
Submitted by DN (not verified) on Thu Mar. 26, 2009 10:00 AM PDT.
I don't understand why the musings of Maxine Waters seem so strange. It is true that a small clique of Wall St. connected types has developed a plan to help bail out Wall St. connected types. It may help gets us out of this situation, but there are alternatives that would have correctly shaved those who misbehaved and been as effective. I would suggest to your Wall St friend that a better solution is to send most of the folks there home. Once you factor out the rethuglican comments from the hearing, it was mostly OK.
sweet Jesus, she's crazy
Submitted by Stacy (not verified) on Thu Mar. 26, 2009 10:02 AM PDT.
The facial expressions of Geithner and Bernacke really says it all ---- she's just nuts. Then the realization: this is the Congress of the United States and Bachman is the face of it. No wonder we are all lathered up and in a panic.
Hayek's Thoughts
Submitted by Brian O (not verified) on Thu Mar. 26, 2009 10:10 AM PDT.
While I doubt we're on the road to totalitarian control of the state and economy, it really is bizarre how prescient Road to Serfdom is regarding the impotence of a democratic deliberative body in dealing with financial crises. We ask our elected leaders to fix the economy, but they prove unable to do so to our satisfaction. We then argue that if only a smaller group had more power and we marginalized the elected representatives, then we could finally fix things. They also fail, as the market is notoriously difficult to "fix". We then argue for more centralized power and are soon under the thumb of central planning.
Again, I don't buy into this final outcome and I believe intervention is prudent and necessary (as, arguably, would have Hayek). I suppose the dynamics Hayek describes run as far back as Aristophanes and all the way up to Wednesday's South Park, but it's strange seeing them played out so brazenly and without any sense of irony.
It does make me question, however, the wisdom of removing the filibuster.
Goldman Sachs
Submitted by nepeta on Thu Mar. 26, 2009 10:11 AM PDT.
I haven't read Matt Taibi on GS influence, but I understood from Waters' questions the gist of many of the points you bring up in your post. On the face of it though, doesn't everyone agree that AIG had to be bailed out on the 'too big to fail' rationale and that rationale was independent of who had the most to lose? Lots of counterparties had lots to lose. Although the look of impropriety remains because of heavy Goldman Sachs involvement in AIG's bailout, part of that can be explained because of Paulson's history of being a previouis GS CEO, don't you think? But I'm still open to further argument.
Dumb and Dumber
Submitted by g. powell on Thu Mar. 26, 2009 10:18 AM PDT.
Sorry, Congress, NY State has the two dumbest deliberative bodies in the world: the state senate and the assembly. The Feds will have to be content with the No. 3 spot
Blithering idiots in office
Submitted by jimBOB on Thu Mar. 26, 2009 10:20 AM PDT.
Blithering idiots in office is one of the hazards of representative government, but it's not like the various forms of authoritarianism (monarchy, military dictatorship, oligarchical dictatorship) are immune to elevating morons, or dealing with senility/decline in leadership positions. The advantage to representative government is that the general population is more likely to buy in to its initiatives, and won't try to violently overthrow the government if things are going badly.
Clearing dumbass legislators out of the way might seem superficially attractive, but bear in mind that if the attempted solutions don't work we're a lot closer to armed rebellion if the nonworking policy was implemented without wider input.
That said, the biggest problem we have with incompetent legislators seems largely located in the right wing party. Our political systems needs two viable political parties, but the GOP doesn't seem up to participating in a constructive way.
More "moderate" false equivalency
Submitted by badpenny (not verified) on Thu Mar. 26, 2009 10:36 AM PDT.
Ugh. Typical press conduct. Must find wacky comments from both sides of the aisle or it would just be a totally biased and unfair article.
Have the people jumping on the Maxine Waters is a conspiracy nut bandwagon (must do so to be seen as "reasonable") not been paying attention. Hmm. It certainly does seem like a small clique of Wall Street elites are running the show. Does anyone really dispute that?!? And, I don't know if you all have noticed but Goldman Sachs seems to be extremely well represented in our government. Yes, AIG needed to be bailed out, but Goldman certainly seemed to be at the front of the line to be made the most whole out of it all.
Are badpenny and I the only ones paying attention?
Submitted by Chris (not verified) on Thu Mar. 26, 2009 4:01 PM PDT.
While the delivery may have been off this is not coming from nowhere.
Remember who played a key role in deciding to bail out AIG? Henry Paulson, the Goldman CEO-turned George W. Bush Treasury Secretary. Paulson, according to a September 27, 2008 New York Times piece by Gretchen Morgenson, led a team of regulators and bankers in early September to determine what to do with the most severely wounded financial institutions.
One of the participants in those meetings was Lloyd C. Blankfein, Paulson's successor at Goldman Sachs.
Out of those meetings came the controversial and heavily criticized decision to allow
Lehman Brothers, a Goldman competitor, to go belly up, and to bail out AIG. Starting with $85 billion from the Fed, taxpayers have pumped a total of $170 billion into the giant insurance company. The bailout was crucial to Goldman in that it permitted AIG to pay off its $12.6 billion debt to the firm, $8.1 billion of which was to cover AIG-backed credit derivatives.
You see, it can't be that
Submitted by Bloix (not verified) on Thu Mar. 26, 2009 6:34 PM PDT.
You see, it can't be that Republicans are idiots. It has to be that Congress is dumb. And so, when Maxine Waters says something that's so obvious you have to work as hard as you can to ignore it, she's being an idiot.
Hey, the best economists are
Submitted by Jay (not verified) on Thu Mar. 26, 2009 8:36 PM PDT.
Hey, the best economists are going to disagree on how to fix the economy. You know, people who are paid to think about how the market works. And we do not have the best minds in Congress. So yeah, I don't expect them to completely understand how the markets work and how they should be fixed. Although I would like it if they held some hearings with the best economists and asked them "hey you're smart, how do go from being fucked up to not so fucked up?".
Maxine Waters is being pretty rational. Especially considering the revolving doors amongst the CEO/Board of Directors world. And you have to consider this: not everyone is qualified to run a huge investment firm with billions in assets. There is a small pool of people that are qualifed so, in one sense, it shouldn't be a surprise that these guys have connections to each other and various investment firms. We just had a Republican president, someone who is inclined to give a government position to a banker/businessman.
That said, Michelle Bachmann is a raging, inbred idiot. And the scariest thing isn't that she's stupid, the scariest thing is that people voted for her.
Post new comment
MoJo Comments: Send Us Your Feedback
We changed our spam software to better filter comments. Should you encounter any issues, please let us know.
