Freakin' awesome.

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Did Intervention/"Socialism" Avert a Depression?

Two economists, who did and an extensive study, think they can prove that intervention averted a second great depression.

(Neither of them is Paul Krugman.)

See New York Times article.

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Free-market Fundamentalism Revisited

Via Balloon Juice, I just discovered the American News Project (ANP), which seems to be an interesting source of video journalism outside the mainstream media. The résumés of those running ANP demonstrate a high level of experience and qualification.

In the video essay below, ANP took a look at the financial crisis. The story, produced last September, discusses many of the things we have been discussing here at ATK: Deregualtion of the financial sector, trade, economics and "free-market fundamentalism". The interesting thing, is that they don’t just seek answers to the why and how of the crisis and how to fix it, but they discuss how very few people, even the brightest minds, don’t know how to fix it.

It is pretty hard to have an honest understanding about whether or not the Obama administration is doing the right things to fix this crisis, when these types don’t have a clue. I think all a leader can do in this crisis like this is take a shot at fixing the economy based on their judgment, but in the end, it’s a stab in the dark.

It’s fine if someone chooses to criticize the administration’s economic policies, but if one does so while acting as if they know better, they are likely lying. In the end, those who criticize this approach probably have no clue how to fix it either, no matter what their credentials. In other words, we might be screwed.



EDIT:

In a second essay, ANP takes a good look at the possible rise of a populist movement with some historical perspective.

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Where is the outrage?!?!?

The blogosphere has been following the bailout and various other programs from Obama et al. I readily concede that on many issues, it is possible to make reasoned arguments on both sides. I am having a harder time with the current economic policies understanding why people think they are a good idea, are fair, or will ultimately be helpful. I am having an ever harder time understanding why most of the media isn't that interested in asking hard questions or being critical of these policies. I know that some are doing this, but it just doesn't seem to have gathered much steam.

It does seem that some non-traditional outlets are doing the hard work. Matt Taibbi (h/t to Mr. F and Mike) has had a few really good, well researched articles on the subject. Comedian, Jon Stewart has been willing to ask some hard questions of Jim Cramer (I'd love to see him interview Geithner). Hell, even Cracked Magazine gets it. The article is a week old, but still good. I love how he breaks it down:

Anyway, many of these banks own toxic mortgage-backed assets (for brevity I’m going to refer to these as ‘horseshit’ from here on). This horseshit is, amazingly, still considered an asset, although if anyone tried to sell it right now, they wouldn’t get a very good price for it, on account of its horseshitty attributes. The central problem here is that some banks own so much of this horseshit that if they valued it at what they could actually sell it for, they would effectively be bankrupt. In short, getting this horseshit off the banks’ books without making them bankrupt is our ultimate goal.

The government will provide loans for private investors to buy up the aforementioned horseshit from the banks. This would give these banks enough money so they could go about their business and not collapse like an old woman getting out of the bathtub. After that, if the horseshit goes up in price the government gets back their money and splits the profit with the private investors. If the horseshit goes down in price, the private investor takes a small loss, and the government takes a small to enormous loss, depending on various properties of the horseshit (taste? grittiness?)

There’s three problems with this plan. One, this involves buying horseshit from the banks for more than it’s probably worth, and keeping each bank’s current management intact, despite growing evidence that they’re colossal fuckers. Two, it involves the private investors taking a chunk of any potential profit while risking only a tiny portion of their own money–effectively another subsidy for wealthy jerks. And the third problem is that this plan may not be big enough. The private investors, even playing mostly with the government’s money, might not be willing to pay enough for this horseshit to keep the banks from going bankrupt. So the banks won’t sell, and we’ll all sit around picking at each other’s asses for a bit longer.

I am not suggesting that the revolution start now, but I would like to some serious questions coming from the MSM and some accountability demanded from the people.

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GM CEO Resignation vs. AIG Corporate Bonuses?

I have a question for the wise sages of ATK…

President Barack Obama released a statement today about GM. In it, he said that Rick Wagoner, CEO of GM, would be resigning so that GM could be taken in a new direction. Specifically, he said, “This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to this company; rather, it’s a recognition that it will take a new vision and new direction to create the GM of the future.”

Now, I am not as big of a supporter as others in Michigan and on this blog of the Big Three. I believe that they have dug their own grave a bit here, and that they are asking for taxpayer dollars to create new competition after they have misjudged automobile purchasers. That being said, though, I don’t think they are any worse than AIG and others who also severely misjudged their actions yet are being given a clean slate by the American taxpayers.

So, my question is this…

Why should CEO Wagoner be forced out of GM in order for them to get federal aid, while this was not true at all of the corporate executives at AIG (who, instead, received bonuses from the taxpayer bailout dollars)?

I look forward to your reasoned input on this…

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