U.S. Politics

[Tormund Ukrainesbane]

Here. Let me help you all out and rage against the amount of money.

#1

That is my money. Those dollars are backed by the full faith and credit of the United States, which is shorthand for the ability of the government to molest my paycheck for it. The fact that there is an entity slinging around more than double the entire federal budget is a huge risk to the economy and national security

#2

Good money after bad. After you make those kinds of loans, you pretty much have to make more and keep that company afloat. How many loans were given just so that the companies could pay off the loans that they already had? I said a year before TARP was even being debated that every dollar spent on bailouts would be used to justify additional bailouts down the road. How do you let a bank that owes you a trillion dollars fail?

On to secrecy. It is out and out fraud for any bank to accept investment and not disclose things like it's TRILLION DOLLAR DEBT. Such fraud includes selling preferred stock to the US Treasury. It is conspiracy on the part of the Federal Reserve to suppress the information. It is even further fraud and conflict of interest when you factor in that every bank that got those loans is a member bank of the Federal Reserve.

[awesome possum]

Which is exactly the point I was making. Though you obviously won't find his arguments persuasive, he's much better than the alternatives, Bush, or even McCain at debating and articulating logical arguments. And for the swing voters who may go either way, I rather think they'll appreciate that.

They may appreciate it, but then they'll remember it's Newt freaking Gingrich speaking and discount everything he's saying as absolute and utter bullshit.

blah blah blah

You obviously didn't read my first request at the end of my last post, so let's just go with the second then, okay?

[Shryke]

Here. Let me help you all out and rage against the amount of money.

#1

That is my money. Those dollars are backed by the full faith and credit of the United States, which is shorthand for the ability of the government to molest my paycheck for it. The fact that there is an entity slinging around more than double the entire federal budget is a huge risk to the economy and national security

What's the risk involved here? (I'm not saying there's necessarily none, but if you say it's a huge risk, tell me what that risk is)

#2

Good money after bad. After you make those kinds of loans, you pretty much have to make more and keep that company afloat. How many loans were given just so that the companies could pay off the loans that they already had? I said a year before TARP was even being debated that every dollar spent on bailouts would be used to justify additional bailouts down the road. How do you let a bank that owes you a trillion dollars fail?

This isn't necessarily true at all. Some companies/groups/industries/etc can be hit by temporary shocks (sometimes that aren't even their own fault) that can cause them to be temporarily insolvent. You can bridge that gap and they can easily become solvent again afterwords. That's not throwing good money after bad in the slightest.

It's like someone with a mortgage and alot of education/experience in a well paying industry. They get fired. They can no longer make their payments. Helping them with mortgage payments (say with short-term loans) to bridge the gap till they get another job is not a bad idea. It can actually be seen as securing your long term investment.

Also, they apparently payed the money back so I'm not sure what you are trying to say with your last sentence.

[Shryke]

Except it is important if only because it was kept secret from everyone, including Congress. The amount matters because that's the kind of liquidity that was needed to even get the banks to qualify for ITSATARP. It's the kind of liquidity we will need when the banks fail again, which is exactly what they are going to do. You can keep minimizing the amount of money, saying that it's the same money counted twice, but the fact of the matter is that it was a gamble (as Tormund is pointing out) and that it did absolutely nothing beside save a bunch of useless institutions.

If the fed was actually worried about the commercial paper market, this would have been out in the open. The fact that it wasn't is really just a hermeneutic exercise: censorship speaks volumes more than openness.

They aren't useless institutions though. That's why they were saved.

And there's no connection between the secrecy and whether they were actually worried about the financial sector. Frankly, they are more likely to have hidden it to keep people from freaking out about how bad the situation was.

[TerraPrime]

Re: FLoW

You oppose virtually every GOP position on substance, so you see what they do as dumb.

Allow me to clarify.

Stupidity and wrongness are two different measures, in my view. A person is wrong, whether they are also stupid, or not. Similarly, a person is stupid, whether s/he is right or not. Of course, it's easier to become wrong if you're being stupid, but the two are not necessarily connected.

More importantly, I don't think that people like Bachmann are wrong because they are stupid. I think they are both stupid, AND wrong, but each for their own respective reasons. As a counter example, I would use Andrew Sullivan - I don't think he's stupid, but I think he's wrong on many things. The fact that think he's often wrong doesn't then lead me to think that he's stupid.

I will also point out that I've often said that the GOP is quite smart about the political maneuvers and that they often out-play the Democrats.

So yeah, stupidity and wrongness are two different things. Related, but not the same.

Re: AP

They may appreciate it, but then they'll remember it's Newt freaking Gingrich speaking and discount everything he's saying as absolute and utter bullshit.

Well, I think FLOW actually could be right that Newt might have appeal to the disinterested-former-GOPs-who-now-call-themselves-independents.

I just don't know that it's a large enough segment to win against Obama. At least, I hope not.

[Tormund Ukrainesbane]

What's the risk involved here? (I'm not saying there's necessarily none, but if you say it's a huge risk, tell me what that risk is)

What's the risk involved with making loans that have nine zeroes in them? Is that a serious question? All loans are risk, that's the whole point of a loan.

This isn't necessarily true at all. Some companies/groups/industries/etc can be hit by temporary shocks (sometimes that aren't even their own fault) that can cause them to be temporarily insolvent. You can bridge that gap and they can easily become solvent again afterwords. That's not throwing good money after bad in the slightest.

It's like someone with a mortgage and alot of education/experience in a well paying industry. They get fired. They can no longer make their payments. Helping them with mortgage payments (say with short-term loans) to bridge the gap till they get another job is not a bad idea. It can actually be seen as securing your long term investment.

Also, they apparently payed the money back so I'm not sure what you are trying to say with your last sentence.

"Apparently" they paid it back. Because of course we automatically believe the organization that tried to keep 7 trillion dollars in loans under wraps for 3 years. We can completely trust them to be honest. I'm sure they'll be opening their books to audit any minute now.

And for the guy who talks about how national economics are not similar at all to household economics that's a pretty rich analogy. Especially this week when QE (3? 4? 5?) was announced because the global markets have been hemorrhaging money all month. Beyond that I know how it can work and maybe even did work. We the people are still allowed to get righteously pissed off when our money is getting thrown around like a rag doll, without our knowledge or consent.

And again, how many times did those banks pay back loans they took out last week with loans they took out this week? That is sending good money after bad.

[Former Lord of Winterfell]

"Apparently" they paid it back. Because of course we automatically believe the organization that tried to keep 7 trillion dollars in loans under wraps for 3 years.

I just want to point out that the "7 trillion in loans" is a pretty useless number unless you know the term of those loans. If a bank offers a $5B loan every day, with a term of only one day, that can be renewed each day for one year, that is substantively no different than making one $5B for a term of one year. The only difference with the former is that you repay it each night before taking it out again in the morning, but you're never really borrowing more than $5B. But because the term is for only one day, you're obviously making a whole lot of these one day loans to cover the entire year. And if you just add up the face value of those loans, and ignore the term, you might conclude that giving 250 $5B loans means you loaned them $1.25 T. But that's nonsensical, because you're really loaning them the same $5b over and over, so it is just one $5B loan.

That's why the $"7T" in loans is meaningless. What you really need to now is how much was lent at a given time to truly value the loan.

[Former Lord of Winterfell]

And again, how many times did those banks pay back loans they took out last week with loans they took out this week? That is sending good money after bad.

No it isn't. If a bank borrows $5B one day, then borrows $5B the next but repays the prior day's loans, that prior loan is now paid off. It is not a "bad" loan because it was repaid. It was a good loan. All you've got is the same exposure you had the day before -- $5B. Now, the new $5B you've loaned may turn out to be "bad" if it is not repaid, but you can't just ignore repayment of outstanding loans as if it never happened.

[Shryke]

What's the risk involved with making loans that have nine zeroes in them? Is that a serious question? All loans are risk, that's the whole point of a loan.

The Fed has said that all loans were backed by appropriate collateral. That the central bank didn’t lose money should “lead to praise of the Fed, that they took this extraordinary step and they got it right,” says Phillip Swagel, a former assistant Treasury secretary under Henry M. Paulson and now a professor of international economic policy at the University of Maryland.

And well yes, there's risk involved in any loan, are those risks greater then the risks involved in doing nothing? I'd say no.

And we don't know if they were slinging around "more then the entire federal budget" since we don't know how much was loaned at once. At least a 1/3rd of the federal budget though apparently.

"Apparently" they paid it back. Because of course we automatically believe the organization that tried to keep 7 trillion dollars in loans under wraps for 3 years. We can completely trust them to be honest. I'm sure they'll be opening their books to audit any minute now.

The Fed gets audited all the time. I mean, really Tormund....

And yes, according to any reports we've seen, it was all payed back.

And for the guy who talks about how national economics are not similar at all to household economics that's a pretty rich analogy. Especially this week when QE (3? 4? 5?) was announced because the global markets have been hemorrhaging money all month. Beyond that I know how it can work and maybe even did work. We the people are still allowed to get righteously pissed off when our money is getting thrown around like a rag doll, without our knowledge or consent.

And again, how many times did those banks pay back loans they took out last week with loans they took out this week? That is sending good money after bad.

Kindly explain what's wrong with my analogy. If you like, I can use a completely different one that explains exactly the same thing. And fyi, your attempt at a comeback here fails because we aren't talking about national economics, but about a business. A business can be temporarily insolvent, but still healthy in the long term if it can make it over that period.

And what does the crappy state of the global markets (which is related to the shitty state of the world economy) have to do with the long term viability of the financial sector? And in what way does it make letting that sector collapse back in 2008 a better idea?

But yes, as I've said like 3 times at least in this thread, those loans going out without anyone's knowledge (and to some extent, consent) is certainly a problem one should be irghteously pissed off about.

FLOW,

Dear god thank you. Those were excellent explanations of what I've been trying to say.

[awesome possum]

Well, I think FLOW actually could be right that Newt might have appeal to the disinterested-former-GOPs-who-now-call-themselves-independents.

I just don't know that it's a large enough segment to win against Obama. At least, I hope not.

Oh, I agree there will be some who might fall behind Gingrich because he seems like a genius compared to the idiot parade that has been on display the last several months, and also simply based on "nostalgia" and the belief that he kept Clinton in check.

I also think a decent number will have to weigh their disgust and loathing for Gingrich against their hatred for Obama and decide to just stay home. I encountered this at Thanksgiving when I went to my uber-conservative in-laws. My wife's aunt is so fervently GOP a year ago she would have called FLoW a RINO for ever coming to an agreement with any left-leaning person in this thread.

At Thanksgiving she professed several times that she hates Obama but she's not planning on voting at all because she'd rather have an ineffective president for four more years than let someone like Gingrich ever sniff the Oval Office.

That's why the $"7T" in loans is meaningless. What you really need to now is how much was lent at a given time to truly value the loan.

Well, as the original link stated, on one day in December, 2008, the banks needed $1.2 trillion. On one day. I don't care if they paid it back an hour later, they needed more than a trillion dollars in order to prevent collapse. And we've not just continued to enable these jackasses but our politicians are working hard to loosen regulations so that they can continue screwing our economy over for their own personal whims.

[Jaxom 1974]

Anthony Weiner man. 24 hour news just makes these scandals BIGGER.

I'd agree with you, except that when I had the fortune of cable (sarcasm) a few weeks ago, I flipped through at least 10 channels and each one of them was Herman Cain talking about what his dick had done. It looks like that might sink him, too.

Fair points.

Except there's always another story and the 24 hour media/social internet juggernaut rolls on.

Weiner's indiscretions were, and I might be recollecting wrong, intensified by the use of social media. People aren't sure how to deal with it properly yet. If this had come out two years from now, I think he weathers the storm politically. How does it register now? Other than the fact that it's become a footnote in the pop culture scene of 2011. Social media has moved faster than the damage control teams can spin for polical folks.

As to Cain, well, I do think it's simply a slightly different playing field for those seeking the Presidential Seat.

[Tormund Ukrainesbane]

No it isn't. If a bank borrows $5B one day, then borrows $5B the next but repays the prior day's loans, that prior loan is now paid off. It is not a "bad" loan because it was repaid. It was a good loan. All you've got is the same exposure you had the day before -- $5B. Now, the new $5B you've loaned may turn out to be "bad" if it is not repaid, but you can't just ignore repayment of outstanding loans as if it never happened.

Yes it is. Because if a party agrees to a loan repayment term and is unable to meet that obligation (repay the loan), it was a bad loan. If their only source of income to repay your loan is another loan from you, you are sending more money down the rabbit hole. The only reason the loans didn't drive the banks to failure in the first place is that the banks themselves own the bank that was lending them the money, and set the interest rate (at zero).

The Fed gets audited all the time. I mean, really Tormund....

Then why did it take special legislation that took years to push through to bring this info (along with billions of other waste and malfeasance) to light?

Kindly explain what's wrong with my analogy. If you like, I can use a completely different one that explains exactly the same thing. And fyi, your attempt at a comeback here fails because we aren't talking about national economics, but about a business. A business can be temporarily insolvent, but still healthy in the long term if it can make it over that period.

Your analogy fails on the basis of assuming that the banks just needed a little help to get right back on their feet. If a guy loses his job and can't pay his mortgage for a few months you give him a few thousand bucks. You don't give him $500 million. Solvent institutions don't need TRILLIONS in loans.

Temporary insolvency is solved by chapter 11 bankruptcy (if it's good enough for American Airlines, it's good enough for Bank of America).

And of course, as has been mentioned, these banks needed these funds just to get their insolvency to the point that they would qualify for TARP loans.

Beyond that I just thought it was funny that Shryke his own self, who hates it when people compare large-scale economics to household economics compared horrific bank fraud to helping a guy who was laid off.

[Jon Sprunk]

Well, I think FLOW actually could be right that Newt might have appeal to the disinterested-former-GOPs-who-now-call-themselves-independents.

I just don't know that it's a large enough segment to win against Obama. At least, I hope not.

I can only speak for myself, but as a former-conservative-who-now-calls-himself-an-independent, character plays a much larger issue, perhaps because I'm not beholden to an ideology. The kind of hypocrisy and self-aggrandizement that Gingrich regulary displays is a huge turn-off. I'd vote for Ron Paul (crazy as some of his views are) before a toad like Newt.

[Shryke]

Yes it is. Because if a party agrees to a loan repayment term and is unable to meet that obligation (repay the loan), it was a bad loan. If their only source of income to repay your loan is another loan from you, you are sending more money down the rabbit hole. The only reason the loans didn't drive the banks to failure in the first place is that the banks themselves own the bank that was lending them the money, and set the interest rate (at zero).

But you aren't sending more money. It's the same money. At best, you are losing the time-value of that money or some such, depending on the terms of the loan.

Then why did it take special legislation that took years to push through to bring this info (along with billions of other waste and malfeasance) to light?

Actually it came out of a court case for a FOIA request afaik.

Your analogy fails on the basis of assuming that the banks just needed a little help to get right back on their feet. If a guy loses his job and can't pay his mortgage for a few months you give him a few thousand bucks. You don't give him $500 million. Solvent institutions don't need TRILLIONS in loans.

Temporary insolvency is solved by chapter 11 bankruptcy (if it's good enough for American Airlines, it's good enough for Bank of America).

And of course, as has been mentioned, these banks needed these funds just to get their insolvency to the point that they would qualify for TARP loans.

I didn't say it was directly applicable to the banks, I said "good money chasing bad" is not always true. Sometimes good money is chasing good money. And gave you an example.

Here isn't actually a ton different, but it's more like "good money keeping the economy from collapsing and costing more money in the long run".

And restructuring is a good idea and no one has said different.

Beyond that I just thought it was funny that Shryke his own self, who hates it when people compare large-scale economics to household economics compared horrific bank fraud to helping a guy who was laid off.

Well yes, that's because you really don't understand why comparing a government to a household income is bad. Which isn't really surprising.

Here we are comparing a household to a business and only in a limited fashion. The key difference you will notice here is neither of the entities in the analogy is a government.

[TrackerNeil]

I will also point out that I've often said that the GOP is quite smart about the political maneuvers and that they often out-play the Democrats.

I used to think the same, but then I took a bird's eye view of our society over the last, say, sixty years and realized that conservatives have almost nothing to show for that time. They've managed to cut taxes and turn the US into a national security state, yes, but Social Security and Medicare have gotten only more generous. Abortion and birth control have become more, and not less, available. The gay rights movement marches steadily towards full equality. The law recognizes more protected classes than ever before. As far as I can tell, and despite a few throwbacks, this nation just keeps getting more progressive.

That's not to say that Republicans don't often manage to score political points against the Democrats; after the 2010 elections they adroitly managed to distract Americans from the terrible economy with phony concern about the national debt. However, this political chicanery just doesn't seem to do them much good in the larger sense.

[Horza]

On the broadest, crudest metrics the last 30 years has seen a huge win [in the US] for social liberalism and a huge win for what I'd [call] neoliberalism (or 'economic conservatism'). The caveats being that social liberalism hasn't extended to civil libertarianism, as the state has grown more powerful and more privatised thanks to the drug and terror wars and the capture of legislatures by the highest bidder.

Neoliberals are of course unhappy as well, having failed to destroy the remnants of the Great Society but such is politics - they aren't exactly wishing they could trade places with labor, and the genuine liberals, the ones upset about corporate monopolies, rentseeking and regulatory capture should best look in the mirror for the source of their woes there.

[TrackerNeil]

TrackerNeil - On all the progressive...progress you are right. But I would argue that the right has been very successful on the economic front, Perhaps not yet to the point that the government in place mirrors their thinking and rhetoric, but they've moved the goalposts so far. Richard Nixon declared "We're all Keynesians now." Milton Friedman, no liberal, was a believer in monetary policy and a central bank. Now an entire political party believes that both of these things are Teh Satan and that taxes and regulation are the problem despite taxes being really low and deregulation being the bigger problem.

Oh, I definitely concede that taxation policy is probably the biggest conservative victory of the last sixty years. Not spending, though; the GOP loves to spend money, so long as it's not on poor people.

However, the resistance to Keynesian economic theory is relatively new, coinciding roughly with the election of a Democratic president. (Same goes for the individual mandate to purchase health insurance, really.) Bush and the Republican Congress were OK with stimulus spending - in the form of tax cuts, naturally - back in the early aughts, and I suspect that if we see President Romney in 2013, they'll go back to it once more. In my view, contempt for Keynesianism is simply another form of the usual conservative antics directed at Democratic administrations.

[Horza]

Fair enough, but when you say "crudest metrics," can you specify?

Not in a huge amount of detail right now, but I think most people would agree 2011 is a better time to be gay, female and non-white in the US than 1981, and it's clearly a much better time to be in the top quintile.

Can you elaborate on what you think that neoliberalism is?

Ditto, but: the deregulatory, financializing, (non-military) public-sector shrinking policy agenda pursued in the North Atlantic economies from the late 70s (Carter and Callaghan were early adopters, Reagan and Thatcher the champions) following the collapse of Bretton Woods and stagflation.

[DanteGabriel]

Fox News tips its hand in the Republican primaries...

http://talkingpointsmemo.com/archives/2011/11/back_to_the_murdoch_primary_pt2.php?ref=fpblg

Sometimes I forget the knives of Fox can be turned against their own.

[TrackerNeil]

Fox News tips its hand in the Republican primaries...

http://talkingpoints...2.php?ref=fpblg

Sometimes I forget the knives of Fox can be turned against their own.

Heh. For Republicans, Fox News can be as much poison as promise.

Seriously, though...all this talk about conservative unrest over Romney will, I think, evaporate if he moves to - and remains at - the front of the pack. Back in 2008 I regularly read Redstate.com, and I remember well the fevered declarations of "If John McCain wins the nomination, I'll vote for Hillary Clinton!" (As I recall, Anne Coulter said something similar.) Not two days after McCain wrapped it up, however, the posts had changed from utter rejection to gushing admiration, talking up his statesmanship and war experience, blah blah. At some point someone will be anointed the winner and the Republican opinion leaders will get behind him, and all of his apostasies will be forgotten. That's the main reason I think, and have always thought, that Mitt Romney was a viable candidate. John McCain used to support cap and trade and that was forgotten, so Romney can get over his "problems."