Republicans to Attribute TARP to Bush

[Solomwi]

Fast when slow. Tall when short. First when last. Dry when wet. Won when lost. Fat when thin. Summer when winter. How many more do you need to get the point, KH? I can go on...

[KrazyHorse]

[Dinner]

An argumeent can be made that TARP is a mixed bag. Some good some bad. The bad typically associated with auto bail out and giving preferential treatment to union pension obligations at the expense of of other creditors.

I'm actually ok with that, and yes I understand the claims about how that might discourage other future lending (the truth is in 10 years people will be tripping over themselves to lend GM money so it won't matter much), because literally this was the only way to keep GM working as a viable automaker. Before you ask, yes, auto makers are a nation's industrial jewels which need to be preserved where ever possible because their industrial capacity is vital during times of war.

[SpencerH]

Anyone who can read knows that the financial bailout was originally started by the Bush administration and denounced by the Dems. Lately, in order to spread blame for the unpopular spending, the Dems have pointedly noted the Bush administration involvement while the Repubs have ignored it. How can it surprise anyone that the Dems now want to ignore history and the Repubs embrace it when the bailout appears somewhat successful?

[Ramo]

Literacy

Final vote for first half of TARP:
House Dems: 172/253
House Reps: 91/199
Senate Dems (counting Lieberman and Sanders): 41/51 (1 absence)
Senate Reps: 34/49

Final vote for second half of TARP:
House Dems: 241/254 (3 absences)
House Reps: 19/179 (4 absences)
Senate Dems: 51/59
Senate Reps: 6/40

Even while they were in power, most House Republicans couldn't bring themselves to vote for TARP, a bill drafted by their own party. While they were out of power, they completely abdicated responsibility.

[curtis290]

Like I said, expansionary when the economy is slow, cooling when hot. In the sense that upward bumps are levelled off to fill the downward ones I guess one could draw that conclusion in the short term, but overall the extra stability should result in greater wealth in the long run.

It sounds like you're talking about Keynesian-style fiscal spending aimed at generating real economic activity. Except that I don't think Keynes ever mentioned actual bailouts of the financial sector of this kind.

By the way, the two most competent government agencies in the US are the Fed and the CBO.

However, Congress has slowly learned to game the CBO and is taking away some of the Fed's ability to act independently.

The quality of government is going to go down as a result.

You mean like actually wanting to see the Fed's financial records months later? Or maybe wanting them to spend the extra 50,000 dollars a year to publish M3 statistics? Or wanting to have a say in the trillions of dollars spent by the Fed (or wait, I guess they didn't spend that, we have Fannie and Freddie bonds on the other side of the balance sheet, which I'm sure will be SO valuable over the next few years to come).

The Fed is one of the most INCOMPETENT institutions of the Federal government. We have historically low interest rates for two decades (combined with a laxly regulated financial sector), the economy overheats, and people wonder why we're in the midst of a financial crisis. The Fed claims to be independent from the rest of government so that it can effectively manage the economy in the long-term without the influence of popular pressures. Yet why has it been completely incompetent since the Volcker years? Back then interest rates were too high to keep down inflation and benefit lenders (the banks). But once we got into the 90s with the huge asset booms and a financial industry that aimed at generating wealth for itself primarily by funneling capital through its many conduits, it desired low interest rates to enable these huge asset booms so that the casino game would continue. The Fed may be insulated from popular pressures, but it certainly isn't insulated from the desires of the financial sector that it serves.

[Dinner]

Anyone who can read knows that the financial bailout was originally started by the Bush administration and denounced by the Dems.

Denounced by the Dems? The majority of Congressmen who voted for the TARP program were Democrats and the almost exclusively the people who voted against it were Republicans (who were split about 50-50).

[KrazyHorse]

Curtis

As I suspected previously, you're a ****ing idiot.

http://inflationdata.com/Inflation/Inflation_Rate/historicalInflation.aspx

http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx?dsInflation_currentPage=1

Inflation has been low and stable since the 80s. Thinking that changes in nominal interest rates can lead to changes in inflation (the premise of the Fed's open market operations) is NOT THE SAME as claiming that low interest rates imply high realized inflation. The disconnect between the two is the foundation of the Lucas Critique, and is why your claim that the same high nominal interest rates of the Volcker years are necessary to control inflation is, frankly, idiotic.

As for the rest of it, I can't even see a coherent ****ing point. "Benefiting lenders" by having high nominal short-term rates (the thing that the Fed actually controls) is a ****ing joke, you utter imbecile. Insofar as banks as a group benefit from nominal rates, they do so via the carry trade (borrowing short and lending long). Driving up the short end of the yield curve HURTS THEM.

If you're going to construct conspiracy theories, at least ****ing get your story straight.

You're a ****ing buffoon.

[KrazyHorse]

Next up: Curtis takes issue with the government CPI numbers and claims that inflation is far higher than it's been reported to be...

[ricketyclik]

It sounds like you're talking about Keynesian-style fiscal spending aimed at generating real economic activity. Except that I don't think Keynes ever mentioned actual bailouts of the financial sector of this kind.

Precisely, except that I was referring specifically to the home loan bailouts, in response to KH's claim that it's better to bail out the financial sector because they're more profitable.

[KrazyHorse]

No, my claim was that the financial sector "bailouts" were not, in the end, anything other than liquidity provisioning on the timescale of a couple of years.

The auto and homeowner "bailouts" were, on the other hand, giveaways of free money to politically privileged groups (homeowners and unions).

Calling them by the same word doesn't make them the same.

[ricketyclik]

No, my claim was that the financial sector "bailouts" were not, in the end, anything other than liquidity provisioning on the timescale of a couple of years.

The auto and homeowner "bailouts" were, on the other hand, giveaways of free money to politically privileged groups (homeowners and unions).

Calling them by the same word doesn't make them the same.

But "in the end" where would the financial sector be now without the "liquidity provisioning"? My argument is that although the other sectors' bailouts may not be directly paid back, their benefit to the economy overall isn't necessarily any less.

[KrazyHorse]

I understand that you think there is some kind of desert argument to be made here. I, on the other hand, think that nobody in the First World today can make a claim to deserve what they own without that claim being laughable on its face.

The government lent money to banks and they paid it back. The government "lent" money to automakers, homeowners and such assorted scum, knowing full well that they were never going to be repaid.

the government is out money to one group, but not the other.

Playing "what if" and thinking it means something for desert is like asking "what if the Fed deliberately inverted the yield curve strongly", seeing that basically all consumer banks would go out of business, and concluding that a non-inverted yield curve somehow means that bank profits are "undeserved".

It's a moronic game that only morons engage in.

[Dinner]

Krazy Kitty be nicer to the new guy. Think of it as an investment in the future. By being semi nice you can keep him around to argue with and call names for years to come but if you chase him off right away then you'll be back stuck with calling BK names again.

[Thoth]

Ecotard.