In my last piece, I talked about how Tim Geithner's job over the past five years has been to (a) print money, (b) give it to rich friends, and (c) deny everyone else legal and financial rights. This shows up everywhere, from the 0% you get on your savings account versus the insider information the rich get, to your lack of access to the Fed discount window. It's a symptom of bought government, which I try to expose on our show every day. (You can help by signing our petition at GetMoneyOut.com. )
I find it laughable to hear President Obama's spokesperson talking about how his campaign represents the 99%. For starters he'd have to fire Geithner, to prove he's not the leader of a bought government. After all, it is Geithner who took a system indirectly rigged to profit the 1% at the expense of everyone else, and institutionalized and formalized it during a crisis.
The reaction to my piece was explosive -- I've rarely gotten so many comments, thoughts, and questions on a single topic. So I think it's worth addressing some of them.
Here are some of your questions and comments, as well as my responses.
Casino Capitalism comments:
Any time there is talk about Obama caring about the public and latching on to OWS for his re-election campaign, there is one simple point to make - how can he possibly have any credibility when he has Geithner as Treasury Secretary. That is the single biggest indictment of Obama'sintentions.
The thirteen bankers, and especially the half dozen titans from New York, returned to their corner offices that afternoon with very strong feelings about one man in Washington: Tim Geithner.
"The sense of everyone after the big meeting was relief," said one of the bankers. "The president had us at a moment of real vulnerability. At that point, he could have ordered us to do just about anything, and we would have rolled over. But he didn't--he mostly wanted to help us out, to quell the mob. And the guy we figured we had to thank for that was Tim. He was our man in Washington."
In public life, constituencies are important. Geithner now had one: the powerful but reviled leaders of the nation's largest banks. He'd have been loath to claim their backing, just as they'd have known not to be demonstrative with support. It was, after all, a bond of mutual desperation: both Geithner and his silent backers were fighting for survival. As one banking lobbyist said, "If Tim were fired, we'd be in trouble; we knew that." Of course, he'd have plenty of job offers in New York.
Why haven't the bankers been prosecuted ? The simple answer is that going after them would expose the politicians who defended them. It would hurt the false narrative that has been created that blamed the crisis on corporate greed. As if companies only recently started caring about their bottom line. Companies are expected to care about their bottom line. Maintaining that bottom line means staying in business and continuing to employ people. Money is in politics because of the heavy handed interaction the government has with business. As long as that incentive exists then so will the influence. The simple reason for that is that people are corruptible. Ultimately regulation s are only as powerful as those who are to enforce them. Many of those regulators are overseen by Congress.
Much of this was made worse when Congress, under Republican leadership, revised the bankruptcy code to prevent discharge of student debt and to prevent "cram-down" of residential mortgages. They made it extremely difficult for real human beings to discharge debt in bankruptcy allowing corporations to do it easily.
For those who aren't familiar with cram-down, it is a provision of the bankruptcy code that allows corporations in bankruptcy to wipe out loans for more than the appraised value of the collateral. If homeowners were allowed to do this, then they could force the banks to eat the depreciated value of their homes. They would still have to go through bankruptcy and would not retain wealth, but they don't have any wealth anyway. At least cram-down would allow them to keep their homes and reduce their mortgages to the current value of the home. Think how many people could have kept their homes if they were allowed to do what corporations can do!
Just another example of Dylan's point -- there are 2 classes of citizens. And the human class is considered inferior.
The most frustrating feature of complaints like Ratigan's is that he does not point out what alternative courses of action were available to whom or when.
It's all very well to blame Geithner, but he would not have lasted twenty-four hours as chair of the FRBNY if he had attempted, say, in 2006, to do any of the things we all might now see that he should have done (and what were those things, anyway?)
Ratigan does not say just what Geithner should have done, because Ratigan does not have any idea what Geithner or anyone else in authority should have done to stop the disaster or when they should have done it.
The frustrating part of this is that we seem to be without a clear alternative course of action that someone should have taken at a particular time (Example: we know that the murder would not have occurred if the shooter had refrained from shooting the victim.) Jamie Dimon's theory, namely, that these things just happen now and then, is very unsatisfying; but is there something better?
Is there any such proposition, that is, who should have done what and when should he or she have done it, currently being expressed about the Economic Crisis? Can anyone state such a proposition?
For those that didn't read the Onion piece that Dylan is referring to, stop and read it. If it is not a complete outline of what middle American is now facing then I don't know what is.
Follow Dylan Ratigan on Twitter: www.twitter.com/DylanRatigan
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OMG = Obama Must Go!
Exactly. Hidden inside the noise machine is the simple truth that bankers and "Wall Street" didn't do anything illegal or particularly wrong. Housing prices in this country nearly tripled and now they are in the process of a deep corrective plunge--neither Wall Street nor banks could possibly have caused this, and this is what has triggered our economic descent. The Fed caused this by throwing around a lot of easy money during the Bush administration in the form of absurdly low interest rates and lax regulation--thus overstimulating the economy and throwing it into a tailspin it is going to take years to recover from.
Legal maybe, but very very wrong.
just mentionning OBAMA MUST .................shows how DICTATORIAL you are.
Does he have to OBEY your wish............?
that is not the Democratic way of doing things.
I have a feeling that the NEW Economy has made the FINANCIAL SECTOR a most important one, and for several reasons, it would not be wise to KILL the one sector that is cerating some wealth for all those who invested in order to be able to have a decent retirement.
Sure there are many schemes ..........inside Wall street , but hey that's the system !
F***(ire) the NEW economy. Bring back the REAL economy.
no problem with me. i just observe.
When asked if he sympathized with the OWS protesters, Geitner answered "NO'"
"President Obama's spokesperson talking about how his campaign represents the 99%"
President Obama would have to represent the Tea Party also, because they make-up the 995
.
TEAbaggers have been discredited. they were astroturf at the service of the Koch brothers et al
Get rid of him, President Obama. I adore you and want you to be reelected...Geithner is a drain on your creditability.
The fact that Ratigan is part of the 1% and is calling for an end of their control over our political process is impressive, when you take stock that people who criticize them on major networks are usually shown the door makes him that much more heroic.
If anyone is part of the 99% and thinks Timmy is on their side, they haven't been paying attention. Shame
One of the benefits of smaller government is less exposure to the influence of private money (individuals and corporations). Why would anyone want an even greater role of government in private affairs?
come on .......................do not bring in the benefit of smaller a Government !
you simplistic or Machiavellian small Gov bunch !
WE just need Representatives who are NOT BOUGHT and who do the bidding of their RICH MASTERS.
so that idea of www.getmoneyout.com is a good one Dylan had......other things he says are just too much.
There will always be rich folks, and that's the way things are. And, they will always be glad to use their money to influence the political tides.
Government controls too much of our lives, and so we get a bloated government that has more folks on the take than if we had smaller government. Therefore, there is more money chasing after folks who have more power than they used to. And that's the way things are.
How is that? How can you back that up? I say the opposite, a smaller government is even more easily bought and paid for. A gov't small enough, say, to be drowned in the bathtub, in the words of Grover Norquist, the great champion of small government.
DEFEAT the GOP/Teabaggers in 2012 !!!!!!!!!
So we can have 4 more years of 9% unemployment, $ trillion dollar deficits, and blame Bush policies?
All those instead of solutions that work.
That is not what I want for America.
Perhaps, but it was a depression of their own making. The real economy had very little to do with what just happened, it was WallStreet greed all the way (including the offering of extremely reasonable terms on home mortgages). Also, keep in mind that WallStreet has actually profited greatly by the events of the last 4 years (or, at least, their managers have).Â
Also, if you are suggesting that he should have imposed higher capital requirements on banks in the run-up to the crisis, I doubt he could have without a political consensus, which plainly he did not have. But, more importantly, there was in fact a multitrillion-dollar mountain of "debt" instruments outstanding that had nothing behind them except the willing suspension of disbelief. It was a con game and everybody knew it. But nobody knew what would happen if new "hard" capital requirements on banks put all those "instruments" into default at once. It was not unreasonable to expect a huge run on all banks everywhere and the widest, deepest insolvency ever in the world.
Obama/Geithner and before them GWB/Henry Paulson tried to save the banks because they hoped the productive resources of the world economy could recover from the destruction of so much nominal "capital" more quickly with existing institutions in place. There were some grounds for that hope, although closing and reconstituting the banks overnight with new receivership-type management could have been better. But I have no more proof that my way would have worked any better.
That does not make it "trendy" to "follow the herd", or however else you could phrase different ways to dismiss contrary opinions without having to confront them.
That said, I also agree with Barrie Cowan's assessment.
It is easy to destroy and ruin...............difficult to build and improve things.
BUT one thing i hate about what has happened is that after being saved by Obama, they turn and Attack him as being ANTI biz etc.............
Wall st instead of showing gratefulness, are now stabbing Uncle Sam.
THAT UNGRATEFULNESS is unforgivable and makes them look horrible in my eyes.
I remember that Joe on CNBC quacking WASHINGTON DC the Financial Capital of the world , and also that Joe saying " WE ARE ALL SOCIALISTS NOW " !!
SO you see te Hypocrisy ?
F&F