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Friday, October 07, 2011

Geithner or Holder?

The preceding post has received a fair amount of attention, much of it surprisingly respectful. The biggest surprise of all was this mention by BooMan, the masochistic frog-wrangler who, in the past, has received a fair amount of ribbing in these cyber-pages.
Joe Cannon makes a compelling case for why the Wall Street protestors should make Tim Geithner's resignation one of their core demands. He does it, however, without making any argument whatsoever about what Geithner has done wrong. He simply states that he's been "awful." It's more about the symbolism, and I can't say he's wrong.
I've made the case for his awfulness in previous posts, and many other writers have made the argument more persuasively. At this stage of the game, there is no need to argue the obvious, just as one need not consult a professional hydrologist before stating that water is wet. But BooMan makes an excellent point...
I can make a solid argument that the real problem is with Eric Holder at the Department of Justice, who hasn't done enough to hold the banking criminals accountable for their actions.
Damn. Y'know, I can't mount any sort of counter-argument. After all, the OWS crew does seem to be particularly (and justifiably) exercised by the fact that the Goldman Saxon hordes committed obvious crimes yet walked away scot free.

And yet, for some reason, the public doesn't seem pissed off at Holder. The film Inside Job mentions Geithner and Summers by name. Holder goes unreferenced, even though the Justice Department gets slammed. Why is that?

Let's get back to Geithner:
Part of this is about realistic expectations. I don't know that we've ever had a Treasury secretary who was an adversary of Wall Street. That's not how our system functions or has ever functioned. The equivalent would be to hire a secretary of Defense who was implacably opposed to defense spending.
To an extent, this is reasonable. But 2009 was a special case. The people wanted radical action, and instead they got...Larry and Timmy.

Here's another reason to mistrust Timmy. Put him in a purple suit and spray his hair green, and he'd look an awful lot like a certain supervillain...

Y'know...since the marvelous Heath Ledger is no longer with us -- and Hollywood will probably never stop making Batman movies -- maybe Timmy should see his upcoming retirement as more of an opportunity....
If you take aim at Eric Holder I suspect one aught to have a good hard look at the SEC, and the two way traffic between the SECs and the banksters. Why would anyone work for the SEC if they didnt have the carrot of a nice Wall Street job waiting for them. Is that really what the Pecora Commission was calling for? Self-regulation?

When Booman agrees with you, it's time to start running the other way, IMO.
I agree that the Wall St. bankers are for the most part terrible people who did (and are doing) terrible things to the other 99% of us. But "obvious crimes?" Complaining that they are not in prison just begs the question: what sections of the U.S Code are you alleging they violated? I read the article you linked to and there is no answer there. Matt Taibbi is a cute kid, but his schtick is to stir up trouble to sell magazines, not come up with actually prosecutable crimes.

One reason the bad guys get away with what they do is they have bought and paid for Republican lawmakers to "repeal and deregulate." The awful stuff the bankers do is no longer illegal. I'm not suggesting that absolutely no Dems. went along with this, but they are few and far between. The blame is no where near even.

The other reason they get away with their bad acts is that corporations are not people -- they are set up specifically to be shields to personal liability.

If we want the laws changed, we all need to vote EVERY SINGLE ELECTION. And not for third party spoilers -- that's just an emotional outburst that might as well be another vote for the very problems we all decry. And we need to organize. It's not an either/or choice. We need to do both.

By the way, I'd still like a non-visceral explanation for why you hate Geithner so much. I get it that you don't like the shape of his face for resembling a comic villain (I happen to think that drawing looks more like Eric Cantor). But what else?
It's even worse than I suspected in re: Our local affiliate of OWS.

I've become a member of their FB (I know) group and they're talking about fluoridation and the Rotschilds. When one of them complained they were starting to veer into craziness, the leader of the crazies responded with her college credentials - 3.75 GPA, Deans List, etc, etc ad infi-nothing.

With losers like the members of the Little Rock branch of OWS this thing is doomed.
To Penelope Pennebaker:

I like "ad infi-nothing"! Thanks for a great phrase (which I will be borrowing liberally) and a laugh.

I think there is hope for OWS. Organizing is hard work. But once some smarties decide to do it, the crazies and lazies will slink away and quit gumming up the works. Fingers crossed, anyway.
Re: Penelope Pennebaker

I felt somewhat similarly when I read about the local "Occupy" faction where I live.

From the Post-Gazette:

At the beginning of a meeting in the First Unitarian Church on Morewood Avenue, moderators tried to describe an elaborate system in which attendees would vote on proposals by agreeing, agreeing with reservations, standing aside, disagreeing or attempting to block an idea entirely.

Each option came with its own signal -- waving two hands in the air, creating an X by crossing one hand over the other -- and everyone would show their symbols at the same time.

After some shouting and a few groans from the crowd, moderators eventually decided instead to count the number of people who raised their hands when asked if they agreed with an idea. The group then had to define a consensus, which they set at 75 percent.

"It's important that everybody is heard," Ms. Houser said. "We don't want anyone to feel ostracized or left out."

Sure, the local newspaper could be making this up, but it doesn't seem fabricated. It sure as hell doesn't inspire confidence in the "local chapter."
I know why I hate Geitner. When this crisis emerged, he was the main coordinator of the government response. There were really two broad strategies that could be followed. The first would involve nationalising banks, and extinguishing the claims of private capital. Subordinated debt issued by banks would have been worth zero. Shares issued by nationalised banks would have negligible net worth. However the banks themselves would have been rescued, and the bank holding companies stripped of value. To do this needed some pretty aggressive and brave decision making and possibly a little new law. But it would have avoiding being in the current situation where new credit is just not going to happen for the next 20 years unless government changes it. Banks were bailed out unconditionally with public money and with no punishment for the executives that failed. They continue to pay themselves and they continue to fail. Their banks will continue to shrink and credit creation will be in reverse for 20 years. And banks will continue to resist the changes which are required to revitalise the economy as these changes would dilute their ownership.

This choice has pretty much guaranteed a depression. That's good enough to hate him. In a choice between the public good and the status quo, they chose the status quo. Shame on them.

In addition, Geitner was a prominent member of the failed policy consensus that brought us to this sh*tty place. It was his championing of bank sponsored deregulation (among others). Same as Summers or Rubin. All of the same cloth. Its just that Geitner is still in office.

That consensus was wrong. It is pernicious. It will lead to ruin. It needs to be consigned to a dustbin and its ideas need to be ridiculed. Credit creation needs to be regulated. Banks need to be regulated. Utility businesses should make utility profits. If we dont reject it we will never be prosperous again.

They bailed out the banks in a way which ensured that no one was punished for failure. They gave them capital on non-economic terms. The banks used that grace to exploit and destroy their weakest customers who had already suffered their worst predations.

Shame on the UST and the Obama administration. Corrupt from the top to the bottom. Its a Bankocracy, and it cannot be tolerated.

So stop asking why Geitner? You are just revealing you havn't been paying attention for the last 10 years.

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