Geithner must go

[Beet]

This is silly. Geithner had recused himself of all AIG work by the time this decision was made, and it was done at such a low level within the NY Fed that he wasn't even informed of the decision. Yet people are latching onto the fact that he was still titular head of the NY Fed in order to blame him personally. The merits of the action is also, at the very least, debatable.

So what does this whole brou-ha-ha tell us? It tell us that people are mad, and they want blood, but we already knew that. But just a few points of response

* If the bailout is so unfair, why has every country in the world bailed out its banks? Including Dubai? Even Iceland would have done it if it were possible. Every country in the world, singularly, has pursued the exact same policy, might that give even the tiniest, weeniest bit doubt that there is some merit in this policy?

* People argue from one side that the policy failed because the banks aren't lending, and from the other side that the crisis was caused by too much lending. You can't have it both ways: either reckless expansion of lending is good, or it is bad. The reality is that banks are still lending, not as much as they were during the bubble, but more than they would be without the government rescues.

* I agree with the author that Geithner is well intentioned and doing his best. He may not be very politically savvy, and admittedly that could be a problem. But I wish people would understand that these things aren't as simple to deal with. Perhaps if there were more high profile takedowns of executives, and the passage of the 50% bonus tax as the UK and France have done, that would help matters.

[Beet]

* If the bailout is so unfair, why has every country in the world bailed out its banks? Including Dubai? Even Iceland would have done it if it were possible. Every country in the world, singularly, has pursued the exact same policy, might that give even the tiniest, weeniest bit doubt that there is some merit in this policy?

Ahhh, the old "everybody else is doing it so it must be a good idea" argument....classic.  And Israel didn't.  I'd bet dollars to donuts they were not alone either.

No that's not the argument. The argument is that the government rescues prevented an even more catastrophic collapse that would have cost everyone far more money, and the weasels in Washington knew it. In fact the reason we have 10% unemployment and so much pain now is that the rescues were not even larger and more decisive.

The fact that almost all other countries in the world saved their banks (including Israel...NO major Israeli bank or banking group collapsed in 2008-09, and when they did almost collapse, the 1983 bank stock crisis, the Israeli government nationalized all of the banks), not only in 2008-09, but virtually throughout history, does raise the bar for those who argue that it's only because "the government is in the hands of the banksters". You have to assert that not only is the US government circa 2008 "in the hands of the banksters" but that every government in the world, and every government in history, has always been in the hands of the banksters, and not a single one was ever led by any politician of character whatsoever. That is a more difficult assertion and one that I certainly disagree with.

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Yeah, there can't be a middle ground when it comes to credit, it's all or nothing!  Seriously, that's your argument?[/quote]

What are you talking about? I'm not saying it's all or nothing, I'm saying you can't have it both ways. Did you even read what I wrote? Apparently not. Commenting purely from emotion...

[Beet]

Geithner is not going anywhere. When push comes to shove, the Senate is not going to go off the populist cliff, and there will be something like exactly 60 votes for cloture.  Suck it up.

You mean Bernanke?