Krugman: Obama admin dithering on banks

[katty]

more: http://www.huffingtonpost.com/2009/03/06/krugman-the-obama-adminis_n_172451.html

EXCERPT:

Krugman then goes on to explain this "holding pattern." He calls the administration out for presenting vague and inchoate proposals aimed at settling investors' nerves. When each new plan is shot down by "informed commentators", the administration simply replaces the old plan with a new one, which is actually just a slight variation of its predecessor -- and so goes the cycle.

Krugman then goes on to discuss "zombie banks" and suggests that the administration is in denial as to the full extent of the crisis:

So why has this zombie idea -- it keeps being killed, but it keeps coming back -- taken such a powerful grip? The answer, I fear, is that officials still aren't willing to face the facts. They don't want to face up to the dire state of major financial institutions because it's very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over. And temporary nationalization is still, apparently, considered unthinkable.

[FrenchieCat]

1. I swear that I get the feeling that Krugman wants Hillary Clinton to run in 2012.....

But if he thinks had she won, she would have nationalized the banks, chosen out of the status quo for her secretary of the treasury, and gotten a giant stimulus package passed through congress less than a month in office, I want him to pass the bong!

[katty]

2. yeah possibly, she would be not be doing any of that-as for

2012, god who knows what will be going on by then!

[bertman]

6. FrenchieCat, I don't think it has anything to do with Krugman wanting Hillary to run in 2012.

Krugman is just being the advocate for the "eggheads" in academia who have studied these things and know how to deal with them BUT who DON'T HAVE TO yield to political pressures or worry about their future with the party or their donors.

Krugman, like many of our top financial thinkers recognizes that the President is the instrument of his "advisors", all of whom were major players in the implementation of this massive giveaway or who jumped on the train while it was already rolling along. Seeing the resumes of people like Rubin, Summers, and Geithner, who would be surprised that these super-capitalists would be inclined to consider something like "Woooooo Scaaaary----- NATIONALIZATION---------WOOOOOOO" even though it's what is required to put an end to this downward spiral. Those guys have proved that they just want us to keep THROWING THE TAXPAYERS' MONEY TO THE BANKERS.

This descent into the economic maelstrom has been observed and anazlyzed in the recent past. In Japan barely 20 short years ago. Economists and financial historians agree widely that the Japanese hesitated and hesitated and hesitated to nationalize their FAILED BANKS just as we are HESITATING and HESITATING and HESITATING to nationalize our FAILED BANKS. The results were disastrous for Japan, just as they are about to be for US.

So, if you were an economic wise woman and saw your country being run down the wrong road by a President who is following bad advice, would you NOT try to stop him from doing so?? Krugman is trying to help America and President Obama see that his choices so far have been tentative and poor choices given the demands of the situation.

To warn our President and to speak forcefully on behalf of the nation is IN NO WAY advocating for Hillary in 2012. It is being an outspoken, patriotic American.

[lyonn]

3. Why didn't Obama pick Krugman for Sec. Treasury? sarcasm

It looks like he has all the answers and they seem to be a fairly simple process. Obviously I don't know a thing about economics it's just that all we hear is how Krugman has the answers and Obama desperately needs to heed his advice? Just asking...

[depakid]

4. Because he's beholden to the same center right economic policies that caused the problems

My pet theory on that (aside from the obvious campaign money) is that Obama became enamored with these types during his time at the University of Chicago.

[MasonJar]

5. Obama has a problem with some of the Progressive ideas he should be

implemnting. If that were not so, then Geithner would not be Treasury Sec and Rahm would not be Chief of Staff and Howard Dean would be HHS Secretary. I am pleased with several of Obama's changes, but he is listening to the wrong ideas (or he has the wrong ideas) on key issues. His attitude toward investigation of Bushista wrongdoings and of Bush law suits is another significant area of unease for me. It is simple: investigate crimes against humanity and the Constitution, adopt universal health care, nationalize banks temporarily, etcs.