Saturday, March 21, 2009


Matt Taibbi in the Rolling Stone on AIG and the American plutocracy. Go read. Now. I'll wait. (via)

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Two months into his term, this will probably be the single thing that determines Obama's legacy. Seems to me that he needs to fire Geithner immediately, and bring in some sort of Wall St. outsider. [EDIT 3/22: OK, after calming down and thinking and reading about Geithner some more, and watching Obama emphatically back Geithner on Leno, it's pretty clear that Obama probably can't fire Geithner, for obvious political reasons. Firing a Cabinet member this early into the Admin's term would be a huge media feeding frenzy and wouldn't necessarily make anything better. You have to go to war with the Treasury Secretary you have, and not the Treasury Secretary you might wish to have, etc etc.]

We are looking down the barrel of a French Revolution style economic and political clusterfuck, and Geithner doesn't seem to see the problem correctly. Obama needs to yank the administration of the bailout funds away from DoT and hand it to DoJ.

You rob a 7-11, you go to jail. You steal from every single American taxpayer? You're granted Too Big To Fail status and your buddies at DoT on your speed-dial will go to bat for you.

I'm not posting this to brag that I'm going to be the first one out with the barricades, rather to say that (like pretty much every American) I'm basically OK with other people making shit-tons of money as long as I can live my life undisturbed. And the French Revolution would definitely count as a disturbance. I mean, everybody who isn't already growing their own food is going to suffer in the event of some sort of national breakdown of order. Especially Richie Rich and his credit card. Can't eat plastic. That scenario would not be much fun to live through. I'd rather see the country able to emerge from the crisis more or less intact.

It's not the accumulation of wealth that's problematic per se, it's the concomitant accumulation of power (and its attendant privileges) that's the big problem. I don't hate people for being wealthy, but I certainly do hate the stupid self-righteous arrogant strutting-peacock fucks that have brought the mightiest country on earth to its knees. They have unbalanced the system and are throwing an epic temper tantrum over the country's natural desire to re-balance that system.

I think a lot of people could agree that if the situation gets much more 1930s-ish, the risk of things getting all 1790s-ish in a hurry becomes frightfully high. We are not terribly well equipped to deal with 1930s-style problems at the moment, thanks to the insane Bush-era tax-cuts-plus-two-wars policies that doubled the national debt in eight years, plus they kept cutting interest rates until they approached zero (which helped inflate the real estate bubble) and leaves Obama very little room to maneuver.

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Speaking of the 1930s....keep an eye on that unemployment number. Americans, I think, can be kept more or less in line as long as we have something to do. But if unemployment shoots up, in a society that's still built on endless consumerism, eating regularly becomes concern #1 for a lot of people, and hungry people are angry people.

Here's the government's official estimate of the employment situation (warning: PDF). Look at the bottom chart on page 20. U-3 is what is usually reported in the press as "the" unemployment number, but U-6 may actually be closer to reality. (The seasonally adjusted U-3 number is what was recently reported in the press.) For an explanation of these terms, here is the relevant section of the Wikipedia article on unemployment.

Notice how much higher the U-6 number is relative to U-3. 14.8% is a hell of a lot scarier than 8.1%, which is already terrifying.

For comparison's sake (via Wikipedia), here is a nice graph that shows very clearly the sustained unemployment spike in the 30s. On the right side of the graph, we are just barely past the knee in the curve. Any bets on what level the current spike tops out at? Any bets on how long it lasts? (Not me, I don't gamble....)

It can't happen here
It can't happen here
I'm telling you, my dear
That it can't happen here
Because I been checkin' it out, baby
I checked it out a couple a times, hmmmmmmmm

And I'm telling you
It can't happen here
Oh darling, it's important that you believe me
(bop bop bop bop)
That it can't happen here