Kerry on rescuing banks and government taking a "dominant position" in them

[ProSense]

Kerry Says Full Bank Rescue May Cost U.S. More Than $2 Trillion

March 6 (Bloomberg) -- Senator John Kerry said it may cost the U.S. government more than $2 trillion to fully recapitalize the nation’s crippled banking system.

The federal government should avoid taking full control of banks even as it temporarily assumes a “dominant position” in them through cash infusions, Kerry said in an interview on Bloomberg Television’s “Political Capital With Al Hunt” that will air this weekend.

Kerry, a Massachusetts Democrat, also said Treasury Secretary Timothy Geithner needs to move more quickly and aggressively in dealing with the country’s growing financial problems.

<...>

Toxic Assets

Kerry said that figure is “clearly over a trillion dollars and maybe over two.” He said he couldn’t gauge it more precisely because “the assets keep becoming more toxic. And they keep becoming more toxic by the day because we don’t find the bottom.”

He said the government shouldn’t take full control of any banks because that would lead to an unproductive debate over the wisdom of nationalization and because federal officials aren’t the best managers for those institutions.

“We’re going to wind up with a dominant position in the bank,” he said. “But there’s a way to structure that so we don’t actually take ownership.”

more

[dpbrown]

1. Wrong again.

Is this why you're not the president?

[ProSense]

2. There is a lot of rationale in the OP, not so much in your response.

“We’re going to wind up with a dominant position in the bank,” he said. “But there’s a way to structure that so we don’t actually take ownership.”

From Krugman:

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.

link

[karynnj]

4. Looks to me as if Kerry is not one of the officials refusing to face facts

[karynnj]

3. And what exactly is the "right" answer

If you know, then maybe you should be meeting with Geitner et al. Kerry was given a seat on the Fiance committee because of the work he did on the banking committee and the work going after BCCI. As it was his third Super A committee, Senate rules had to be waived.



As to why he is not President, it has NOTHING to do with being wrong. Over 4 years have passed since the debates - maybe you need to look at how often he was right. Throughout 2005 and 2006 there were any number of threads - labeled "Kerry was right".

Here is a partial list:

- Even Conservative Republicans now agree that Kerry's way to deal with non-state terrorism - that he spoke of as far back as 2001 - and even, in the 1990s.

- He was right on the basic outline of a plan to get out of Iraq. Many here bought that he either didn't have a plan or it was the same as Bush's, but those were Republican and media lies. In 2006, the media immediately recognized the Iraq Study Group recommendations as what Kerry had recommended. In 2006, Kerry was the main author of the Kerry/Feingold resolution, which every Democratic plan since has been based on - including Obama's.

- Global warming/the environment/ alternative fuels his plan was the best that anyone ran on to that point in time. In 2008, every Democrat and many Republicans borrowed from it.

- On NK, he was right on the mix of negotiations needed.

- Kerry's healthcare plan, which was nearly universal (he reworked it in 2006 to be universal and spoke of it at Faneuil Hall before any 2008 candidate had a plan.

So, why did he lose, the week before the election in a Gallup poll, 59% answered that the country was doing either very well or fairly well. This means he actually won some people not unhappy with how the country was doing. In 2008, the number of people who thought the country was doing well was close to 20%. The fact of the matter is that given where the country was, a biased media, and the Bush administration's use of the terror codes, it is amazing that he made it close. Not to mention, had there been an adequate number of machines in Ohio, he would have won.

[dpbrown]

14. Temporary Nationalization, just like Krugman says. Just like FDR did.

There is only one way out of this mess, and everyone knows the way out. Kerry obfuscates when his posturing essentially proves what Krugman says about the "unthinkability" of nationalization.

The game they're playing is costing all of us a longer and deeper depression. FDR knew the answer. Krugman knows the answer. Obama knows the answer.

The problem is getting the oligarch class who have been decrying "communism" from on high for what seems like eons to understand the dire straights we're in.

[ProSense]

15. Temporary nationalization of

four banks and then what?

What about the other troubled banks with 36% of the assets?

What's the solution for them?

Kerry makes a lot of sense.

[Better Believe It]

16. The FDIC steps in just like they have already done with 19 failing banks this year

Does that answer your question?

[DemocracyInaction]

5. I agree about Geithner

Point blank, there is something "wrong". Can't pinpoint it but feel it. Geithner rolled out his broad plan and then went hiding in the woodwork. He said later there would be details; but details are slow (if even exist). That is one of the reason the stock market is thrashing around. They need to take the financial entities by the back of the neck SOON. It will probably take taking them over for a few months and cleaning out the crap. Someone has to get inside the books---and I have to tell you, that I'm scared shitless of what they are going to find there.

[karynnj]

6. I am really shocked that they didn't work up multiple plans in parallel

They have to have many competent economists and Finance experts who are career. From one account, they intended to do the bad bank method, but decided a few days before the scheduled speech that it wouldn't work. Even if they have to "borrow" people from top universities, companies and other parts of the government - they need to investigate everything and then create a very detailed plan.

You are right that every day there is no real plan on the banks, it hurts. Geitner was good enough, they ignored his tax problems - he needs to show it.

[ProSense]

7. They need to be bold n/t

[Better Believe It]

8. What in the world is Kerry thinking and why is he thinking it?

"He said the government shouldn't’t take full control of any banks because that would lead to an unproductive debate over the wisdom of nationalization and because federal officials aren't the best managers for those institutions."

Sure.

I guess Kerry likes the people in charge now.

The people running the main banks have done such a fantastic job managing them why in the world would anyone want the government to interfere!

[ProSense]

9. “We’re going to wind up with a dominant position in the bank,”

“But there’s a way to structure that so we don’t actually take ownership.”

Pretty clear what he's thinking.

[Better Believe It]

10. A dominant position without full power to restructure is a recipe for failure

ya ... he's thinking of a half-way measure that won't get the job done.

[ProSense]

11. You have no idea what he's proposing beyond that statement. n/t

[Better Believe It]

12. Do you? It appears he has more confidence in the Wall Street banksters than I do.

[ProSense]

13. That's how you want it to appear.

Kerry's position on the banks is clear.

[Better Believe It]

17. Kerry current position on bank nationalization is perfectly clear. He's against it.

That's all we need to know.

Perhaps he'll change his position when 99.9% of the public favors nationalization and President Obama calls for nationalization.

Or maybe he won't.

[karynnj]

18. Actually, his position is closer to nationization than the Geitner approach

In the Finance committee hearings, he was the only one speaking of zombie banks and quoting Krugman. It looks like he is trying to find a structured solution that will protect the taxpayer and get the dishonest numbers off the books - without going the final step to nationalization. The question will be can you have the government essentially own most of the bank - without running it. Having listened to Finance committee hearings, this is the closest anyone on that committee or in the Obama administration is getting to nationalization. I suspect that nationalization is likely a line Obama has said he won't cross and Kerry wants to push the issues he mentioned as far as he can - knowing that nationalization won't fly.

I know there was a poll saying over half favor nationalization, but there is no one in the Obama administration or in the Senate Finance Committee going anywhere near as far as Kerry did. I don't think this issue should be poll driven - the value of the poll is knowing that if nationalization becomes clearly the right way to go - it can be argued that the political risk many thought exists is not there.

[ProSense]

19. Kerry is talking about a plan for the entire banking system,

that is all the troubled banks beyond and including the four that are the focus of nationalization debates.

Something needs to be done soon, and it has to be bold enough to solve the problem.