News round-up: 13 Nov 2008
I have been doing these round-ups rather sporadically now, but the news flow is still considerable. In fact, the news flow is so much that I have off-loaded my links onto a feed which you can access here.
The main story I am following is the sheer lunacy of bailout schemes in the US. This morning I heard Stephen Roach of Morgan Stanley on Bloomberg radio lamenting the switch by Hank Paulson completely away from the TARP plan that he sold to Congress. While one can certainly debate the merits of this plan or that plan, I am incredulous over the cynical way the Bush Administration sold one plan and is now running with another. Yves Smith has a good story on this. Paulson Now Admits Mendacity – Naked Capitalism. FT Alphaville also covers Yves take and adds a few more. Views on Paulson’s U-turn. And then there is Dean Baker. Paulson Abandons TARP, Where’s the Ridicule? Needless to say, Americans should have learned from Iraq not to trust anything coming from the Bush Administration. By the way, Asian stocks sold off on the news. Asia slumps amid bail-out U-turn.
Another item of note was the fact that Germany’s GDP contracted for a second quarter. They are clearly in recession along with New Zealand, Singapore, the UK, the US, and Denmark. France and Spain report tomorrow and are likely to join the party. Germany moves into recession.
As for the market tumble, foreclosure increases, the Alaska vote going to Begich and a host of other issues, I will leave that on the news feed. Do read the feed — there are a host of good stories there like a video from Paul Kedrosky showing Bill Ackman on Charlie Rose.
Cheers.
Ed
Needless to say, Americans should have learned from Iraq not to trust anything coming from the Bush Administration
Yeah, that’s what we need, some childish partisan garbage tossed in the mess by a punk who can’t handle the stress, so reverts to “Bush did It”.
Get back to your binky, Ed, and let the grown ups handle this one, why don’t you.
Good article except for the childish political input. I guess we’ll see how well we will do under Obama. It just seems so obvious what has happened here. We have gotten so good at avoiding economic downturns (or so we thought) that we just put off the inevitable re-adjustment which unfortunately will go to far the other way. This policy, by the way, was in place for both republican and democrat administrations. Blaming Bush for this is just as ignorant as blaming Clinton for the economy. Banks even thought the policy was working and that’s why all the loans were given out to those who historically, would not have qualified for them. Just my 2 cents.
Guys, I am not a Democrat so my comments are hardly partisan. I could have gone into greater detail on that point but it was a side issue.
The point is that the Bush Administration has been rather bold about promoting its own agenda. Regardless of whether you agree with that agenda, the fact remains that the Democratic Congress has been incredibly conciliatory in allowing the Administration to run with its agenda.
Now, regarding Iraq, we were sold on the invasion because of WMDs which turned out not to be there. However, Wolfowitz admitted that this was only a fig leaf chosen for “bureaucratic” reasons. Remember that quote?
I think this is a quote that sums up the Bush Administration’s modus operandi quite well. Again, you can agree with their objectives, but the way they go about achieving those objectives is very much an ends justifies the means approach.
I find this cynical and I would prefer an administration that uses a different approach.
Now, where’s that binky?
One last point on the Democrats. They are no different here as you indicate, anonymous. Had Al Gore or John Kerry been President, I imagine things would not be much different economically today.
Your point about avoiding downturns — what I would call an asymmetric monetary policy is certainly at fault here.
Will Obama change things? I am not so certain. His top guys, Rubin, Summers, and Geithner are all part of the financial orthodoxy.
So, again, I am not clear that he Democrats are going to do any differently.
I’m not sure why any mention of the Bush administration is automatically seen as childish and partisan. One cannot help but see the parallels between the two examples cited:
1. The bailout was sold to Congress as a way to get rid of toxic debt (or financial WMDs as Buffet calls them) gumming up the banks. Lately TARP bailouts are being justified simply as a general all-purpose recapitalization tool for rescuing any failing industry.
2. The Iraq war was sold to Congress as a way of preventing weapons of mass destruction falling into the hands of a rogue nation. Later the war was justified as simply the removal of a bad man from power over a failed nation.
Both cases seem to fit the definition of bait and switch.
Wag the Dog, well said! Bait and Switch.