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March 24, 2009

3/24: The Netroots Still Ain't Sold

Liberal bloggers continue to criticize Treasury Sec. Tim Geithner's plan for dealing with toxic bank assets. Many are citing New York Times columnist Paul Krugman strident criticism of Geithner's plan, noting that Krugman "just won the Nobel prize in economics" and that he "has an exceptional track record over the past decade". Liberal bloggers aren't putting much stock in the fact that the financial markets appeared to respond favorably to Geithner's proposals. Ezra Klein writes: "[W]hen you're offering this direct of a subsidy to Wall Street, I don't know that you can intuit much from Wall Street's reaction besides the fact that they're thrilled with the subsidy."

What else is happening in the blogosphere?

GEITHNER TOXIC ASSETS PLAN: Comin' Under Fire

Liberal bloggers continue to attack Geithner's plan:

  • Firedoglake's Scarecrow: "I used to believe that massive government fraud and corruption was something that took place behind the scenes. If anyone tried it in the light of day, they'd be summarily fired, publically vilified, and probably indicted. But Tim Geithner's plan to remove toxic assets from the banking system is making it all respectable."
  • Atrios: "The Geithner plan will: (1) Funnel more government money to the banksters. (2) Allow the banksters to pretend for a bit longer that their hunks of big shitpile aren't quite as shitty as we thought by using the bullshit price that this process comes up with, allowing too big to fail businesses to stay in business for a bit longer. This might make sense if you truly believe the magic market you believe in fervently is genuinely incorrectly pricing the assets, perhaps because you genuinely believe that if you could turn around the economy fast enough that you could massively reduce expected foreclosures. But if you genuinely believe that, I don't think you've been paying too much attention to just what's been going on in the housing market. I don't think you paid too much attention 3 years ago when you didn't realize that it didn't quite make sense that so many people could afford $700,000+ homes in Orange County. I don't think you paid too much attention to the degree of speculation and outright fraud that was happening in parts of the country."
  • Open Left's Chris Bowers: "The question of the day is whether or not the Obama administration's 'new' bailout plan, presented today by Treasury Secretary Geithner, will work. Over the weekend, Paul Krugman was the leading voice of 'no, it probably won't.' On the other side, [Berkeley econ. prof] Brad DeLong was the main proponent of 'yes, it probably will.' Lacking relevant policy expertise, I am not going to pretend that I can determine whether Krugman or DeLong is correct. [...] So, rather than sitting here and pretending that I know what will happen, I am just going to be honest and say that I don't trust the people who got us into this mess to fix the mess."
  • Firedoglake's Jane Hamsher: "Timothy Geithner's new TALF/PPiP/FDIC* plan, like all his other plans, seems designed to shovel billions into the coffers of the very same bankers who got rich on the mortgage bubble. [...] Geithner seems to believe that there is an elite class of bankers in this country who must make money no matter what happens, who should never be held to account, and whose interests should always come first in any plan the government devises. Do you get a chance to make money in this 'off-the-charts good' investing opportunity? Noooo, these loans that nobody has to pay back aren't being offered to the public. The public understands what's going on all too well. The same thieves are back again to pick their pockets in broad daylight, thanks to the tireless efforts of Timothy Geithner on their behalf."

Several liberal bloggers disputed Hamsher's complaint that "these loans that nobody has to pay back aren't being offered to the public":

  • Think Progress' Matthew Yglesias: "To be fair, you do need to pay the loan back if you make money. But it's a loan that sharply limits your downside risk and gives you some shot at a substantial payoff. It's not a good investment for everyone, but I would say that for a lot of people who are in a position to be fairly risk-friendly with their money (the youngish and employed, basically) it's a good deal. [...] I'm pretty sure, though, that the public actually can come to the party. It says in my fact sheet, 'A broad array of investors are expected to participate in the Legacy Loans Program. The participation of individual investors, pension plans, insurance companies and other long-term investors is particularly encouraged.'"
  • BooMan: "[T]he 'off-the-charts good investment opportunity' that Jane is referring to is not TALF, but the buying up of toxic assets from a nationalized bank administered by the FDIC. That's exactly the kind of arrangement that so many on the left are urging on Geithner. The reason you and I are not being offered sweetheart deals to buy toxic assets in either the nationalization process or the TALF process is not because Tim Geithner wants to screw us, but because we don't have the money to buy them. In reality, any of us can start a hedge fund and be eligible to participate if we can convince other people to let us manage their money."

GEITHNER TOXIC ASSETS PLAN II: Following Krugman's Lead

Many liberal bloggers are echoing Krugman's criticism of Geithner's plan:

  • TalkLeft's Big Tent Democrat: "Krugman and Atrios speak for me. This [plan] is a disgrace and it will not work."
  • AMERICAblog's John Aravosis: "Whether or not the administration likes or respects Krugman, a lot of other people do (including the Nobel committee). And his incessant criticism of the administration's economic plans is increasingly disturbing. I'm willing to believe that Krugman is not right about everything. But at this point, are we really to believe that the guy who just won the Nobel prize in economics is wrong about everything?"
  • digby: "Krugman has an exceptional track record over the past decade, however, and it is a mistake for the anyone to dismiss his criticisms out of hand because of a perception that he has some personal animus [toward Obama]. More important than that however, is this idea that criticisms of Obama's economic policies are coming from sort of leftist fringe when the fact is that it's coming from mainstream economists. [...] The arguments aren't about right vs left, they are about insider vs outsider, wall street vs main street, what works vs what doesn't work."

Meanwhile, liberal bloggers aren't putting too much stock in the fact that the financial markets appeared to respond favorably to Geithner's plan:

  • Balloon Juice's John Cole: "[T]he world stock market is reacting positively, which makes me think we are about to get screwed since the only thing those guys care about is a bailout with no pain involved for any of the actors."
  • digby: "It's great that the Dow is rallying so crisply this past couple of weeks, but it operates on its own logic that doesn't really mean anything when you are talking about these fundamental, economic issues as Krugman is."
  • Klein: "...I'm not comfortable letting the Dow's reaction stand as the arbiter of success or failure. [...] There's much that enters into a stock market rally, but little is more directly correlated to enthusiastic trading than the prospect of making money. And no one doubts that this plan offers private investors an almost historic opportunity to make money. It may be that the plan is also the correct salve for the economy, or it may be that the plan is a good opportunity for investors that will fail the broader economy. But when you're offering this direct of a subsidy to Wall Street, I don't know that you can intuit much from Wall Street's reaction besides the fact that they're thrilled with the subsidy."

OBAMA: See? We Told You He's Slipping

Conservative bloggers are buzzing about Zogby's hint that his latest poll will show Obama's job approval rating at "about 50-50":

  • Power Line's John Hinderaker: "Regression to the mean. It's one of the world's most powerful forces, and it may have caught up with Barack Obama, just two months into his term: tomorrow's Zogby poll will show the President's approval/disapproval rating at 'about 50-50.' This will be no surprise to Power Line readers, who have followed Obama's steady decline to near the break-even point, as recorded by Rasmussen Reports. It's striking, though, that so far Obama's return to campaign mode (e.g. his appearance on the Tonight Show) has not arrested the decline that has been precipitated by public alarm over his radical policies."
  • Hot Air's Ed Morrissey: "Over the last few weeks, Scott Rasmussen has repeatedly shown a rapid rate in dissatisfaction over Obama's performance, and a smaller but still significant decline in approval. Yesterday's job-approval rating on the daily tracking poll has Obama at 56%, not the 50% shown by Zogby, but that's down from the high 60s at the end of January. [...] Zogby may or may not have overstated the decline, but he's got the direction right."
  • Glenn Reynolds: "[W]e'll see how this holds up with other polls besides Zogby; this seems a bit low by comparison. On the other hand, it's been a bad week for Obama, for those paying attention."
  • RedState's Moe Lane: "An 50% approval rating is quite respectable. For a human being. The question thus becomes, Is the President prepared to govern as a human being? -- because if he is, there will have to be some changes made to his operating style. To begin with, this nonsense of 'I won' will have to be completely banished from Obama's administrative philosophy. 50% Presidents don't get to rule as philosopher-kings. Second, there's a whole list of White House staffers who need to be publicly cured of their bad habit of publicly blaming every problem under the sun on either the Republican party or the previous administration. 50% Presidents don't get to have an unlimited number of scapegoats. And, of course, the President will need to either wrest control over his agenda away from his colleagues in Congress, or else admit that he's lost that control, and start building a new coalition to push his policy agenda. 50% Presidents need to actually accomplish things that the populace likes if they want to stay 50% Presidents. Alternatively, the Obama administration could just hope that this was an outlier, and keep doing what they were doing already without making any changes. That might work."

NOTRE DAME: First Charlie Weis, Now This?

Conservative bloggers are furious that The University of Notre Dame has invited Pres. Obama to speak at this year's commencement:

  • Townhall's Hugh Hewitt: "In a single gesture, ND has undone much if not all of the work of last fall during which the Roman Catholic hierarchy in America labored mightily to deliver the message that the Church really does mean what it says about protecting the unborn. [...] The country's preeminent Catholic institution just doesn't care about abortion, or embryonic stem cell research, or even late term abortion or the Born Alive Protection Act, at least not enough to stand in the way of a good party and a lot of camera time."
  • NRO's Jack Fowler: "Obama is also receiving a Doctor of Laws degree from Notre Dame. 'Laws' -- as in the things he tried to prevent in the Illinois legislature on the matter of protecting infants who survived abortion?"
  • RedState's hogan: "Instead of succumbing to celebrity and inviting a 'cool' President to speak at graduation, perhaps Notre Dame should focus on its core principles. Without its Catholic soul, the University would be relegated to the growing ash-heap of second-rate academic institutions cluttered with self-important academics pedaling their leftist propaganda and politically correct musings. Notre Dame should be better than that. And, that is why alumni and friends of the school should visit www.notredamescandal.com to register their objection to the administration's decision -- and more, they should step up and firmly withhold financial contributions to the University and stop all pledges to any annual giving or capital campaigns the University is running...including athletics."
  • Notre Dame law prof Richard W. Garnett: "I believe that the University of Notre Dame should not, at this time, honor President Obama with a ceremonial degree and the commencement-speaker role. To say this is not to deny that there are things about his election and achievements that a meaningfully Catholic university -- and, to be clear, Notre Dame is such a university -- could and should celebrate. Under the circumstances, though -- so soon after the president's insultingly bad statement regarding embryo-destructive research (in which he reduced moral critique to 'politics') -- it seems to me that there is no way to avoid the impression that Notre Dame is un-bothered (even though we are) by his deeply unjust actions."

BACHMANN: A Call To Arms

Liberal bloggers are criticizing Rep. Bachmann after she urged an "armed" revolt over the Dem cap-and-trade proposal:

"I want people in Minnesota armed and dangerous on this issue of the energy tax because we need to fight back. Thomas Jefferson told us 'having a revolution every now and then is a good thing,' and the people -- we the people -- are going to have to fight back hard if we're not going to lose our country. And I think this has the potential of changing the dynamic of freedom forever in the United States."
  • Firedoglake's Blue Texan: "I'm starting to believe Michelle Bachmann isn't actually a real politician at all, but instead, an unusually gifted performance artist who's engaged in a brilliant post-modern parody of an insane wingnut. [...] This is beyond unhinged. It sounds like a press release from Stormfront."
  • The Washington Monthly's Steve Benen: "It's obviously just rhetoric from overly-excited far-right lawmakers. It's no doubt intended to fire up the activists (and donors) who help Republicans succeed. But when Rep. Michele Bachmann (R-Minn.) casually refers to elected Democratic officials as the 'enemy,' and nonchalantly refers to keeping her supporters 'armed and dangerous,' it's probably a good time to remind Republican lawmakers to turn down the temperature a bit. [...] Obviously, Bachmann and other unhinged conservatives have the right to say what they please. But at a minimum, I think it's fair to describe this kind of talk from elected leaders in positions of authority as irresponsible."
  • MyDD's Todd Beeton: "[T]his is extremely dangerous language for a sitting member of congress to be using. [...] For me, this is comparable to the sort of frenzy [John] McCain and [Sarah] Palin were creating at their campaign rallies last year except Bachmann is being far less subtle. The revolution Bachmann is trying to incite here is along the same lines as the 'We Surround Them' farce Glenn Beck recently launched on Fox News. Their point (if I can try to get inside their heads for a minute -- scary) is that President Obama's agenda -- which was ratified by a strong majority of the nation in November, by the way -- is a threat to 'our economic freedom.'"

Conservative blogger Hinderaker, who conducted the interview with Bachmann in which she made these statements, defends her: "...I interviewed Michele for ten or twelve minutes. She explained some of the evils of cap and trade, and said that she is bringing an expert on the subject to speak at two meetings, one in St. Cloud and one in Woodbury. She encouraged the public to attend. Not very controversial, one would think."

THOUGHT OF THE DAY: Short-Term vs. Long-Term

TAPPED's Tim Fernholz:

"[S]hould the [Obama] administration try to fundamentally change the character of the financial system, or should it just try to get it running again and worry about sustainability later? James Galbraith, in an article well worth your time, argues that the two are one in the same. But the up-front political and financial costs of the kind of program Galbraith might prefer are probably too much for the U.S. government to face at this time. Perhaps all this talk of populism will provide an opportunity for that kind of agenda, but the administration would probably be happy just to have a functioning, or even semi-functioning, financial system, damn the moral hazard. It could work.

The administration is politically smart to focus on the short-term functionality of the credit markets, but like Matt [Yglesias] I do worry that they aren't preparing rhetorically for the kind of regulatory reforms and trust-busting that would create a sustainable system. There needs to be more preparation for the pivot that has to occur after stability has returned. Or, on the other hand, perhaps the PPIP will fail to work, and in so doing reveal that nationalization is the only option left. That would give the administration the ability to fix the banks for both recovery purposes and for long-term economic productivity."

LEST WE FORGET: You Know, The Guy Who Used To Be President

From Overheard in New York:

Guy: So I was talking to this hot girl the other day, but then she told me she liked Bush.
Girl: Oh...she's a lesbian?
Guy: No! Bush!
Girl: Oh, the band.
Guy: No, Bush! She's a Republican!
Girl: Wait. What?!

Posted by Ian Faerstein at March 24, 2009 12:59 PM



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