Matt Yglesias

22 Responses to “Quote of the Day”

1. MattF Says:
   March 20th, 2009 at 11:04 am

   One goal, I think, is to get to a point where the words “moral hazard” actually mean something, i.e., where a moral failure is understood to be a kind of failure. Not that “bankers should be moralists”, but that “doing something patently immoral has negative consequences”.

2. kafka Says:
   March 20th, 2009 at 11:05 am

   “Now it’s our turn, and the best advice is still the same even if there’s no international institution that’s going to make us do it.”

   If the Democratic party was what it was during the New Deal era (you know, that Fascist era of FDR, low immigration, etc.) that’s exactly what would happen. But now we’ve got 2 GOP parties whoring for Wall Street. Obama’s biggest campaign contributor was the financial services industry, and in Congress, you’ve got pigs like Schumer and Dodd who have been stuffed with Wall Street $$$ from the get go. Their campaign donor lists would make any GOPer proud.

3. Don Williams Says:
   March 20th, 2009 at 11:24 am

   1) I don’t know about the “indispensible men” but the honest, virtuous men get to get stabbed in the back with great regularity. In order to shut them up.

   2) Gary Hart –for instance. Blown out of the water in 1988 by revelation that ..gasp..he had a mistress on the side. Two weeks AFTER the 1988 election, George H Bush announced that he was going to fuck the taxpayer to the tune of $200 Billion or so to bail out some crooked Savings and Loan Executives down in Texas.

   3) Eliot Spitzer was onto Hank Greenberg and AIG three years ago — until his political career was destroyed by someone following him around and exposing that ..gasp…Eliot screws whores.

   4) So now nobody –including “progressive” bloggers –are listening to Eliot when he says we should NOT be diverted by the bonus bullshit — rather, we should be focusing on how AIG is merely the front for huge transfers of money from the taxpayers to political donors at AIG’s back door:

   http://www.slate.com/id/2213942/

4. Econobuzz Says:
   March 20th, 2009 at 11:31 am

   His larger point is how very unlikely it is that it’s genuinely true that only the people who screwed up the financial system and their buddies are competent to fix it.

   They may be competent to fix it, but they can’t be trusted to fix it. They are emotionally and morally unable to fix it.

   That’s why all this talk of retaining them is BULLSHIT. They’re like a Pit Bull that has bitten you once. They’ll do it again. For Christ’s sake, they don’t think that they’ve done anything wrong.

   BTW, that’s also what’s wrong with Summers and Geithner. They’re extremely competent. But they’re not emotionally or morally equipped to fix the problem. It would be better having Eliot Spitzer in there. At least his “blindness” extends primarily to paying for pussy.

5. ronbailey Says:
   March 20th, 2009 at 11:32 am

   One big reason the “financial elites” want to run the cleanup effort? They are the ones who buried the skeletons, and they would very much like MOST, if not all, of those skeletons to stay buried. If the guilty “elites” are running the show, they get to spin the story that ultimately gets told. If an outsider calls the shots, they run the risk of all hell breaking loose.

6. Don Williams Says:
   March 20th, 2009 at 11:39 am

   Eliot Spitzer at Slate:

   “Everybody is rushing to condemn AIG’s bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG’s counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?

   For the answer to this question, we need to go back to the very first decision to bail out AIG, made, we are told, by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke last fall. Post-Lehman’s collapse, they feared a systemic failure could be triggered by AIG’s inability to pay the counterparties to all the sophisticated instruments AIG had sold.

   And who were AIG’s trading partners? No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes. So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.

   It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure….

   …Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion capital infusion, and aren’t they sitting on more than $100 billion in cash?…

   …The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.”

7. Don Williams Says:
   March 20th, 2009 at 11:44 am

   The amount involved in the AIG bonus is comparatively PALTRY compared to what Goldman etal are getting. So WHY is there a huge UPROAR all of a sudden?

   A news media uproar that is, oh so conveniently, burying the information about the transfer of BILLIONS to AIG’s counterparties. Seen any NY TImes Page One articles on that?

8. Don Williams Says:
   March 20th, 2009 at 11:48 am

   Re Econobuzz at 4: “It would be better having Eliot Spitzer in there. At least his “blindness” extends primarily to paying for pussy.”
   ———-
   Yeah. And he pays for it himself — he doesn’t ask us to cough up $173 BILLION to pay for it.

   Oh , but dealing with whores is a sin.

   Whereas taking $Trillions away from hungry kids, sick people without healthcare, crippled Iraq vets, and the homeless — and giving it to rich cocksuckers is “Statemanship”.

   And taking $Millions for this betrayal –well, that’s just supporting “Free Speech”.

9. Econobuzz Says:
   March 20th, 2009 at 11:59 am

   This is where Obama and his team have been politically and culturally tone deaf. One can be pro-market and pro-private banking, but still teach Americans that the system and incentives we have created are corrupt and need to be radically altered. There are generations of businessmen (MBAs) who, operating under these perverse incentives, have become economic and social monsters — really, enemies of democracy and free markets.

   BHO and his team’s job is NOT to resurrect that system and preserve those incentive structures. But you would never know that listening to them. A public-private partnership with the same old private sector — operating under the same old incentive structure: fucking tax payers — is not the answer.

10. Ed Smithe Says:
    March 20th, 2009 at 12:06 pm

    Honestly, many of you folks need to step back, and really think through this type of rhetoric. I’m all for trying to fix the system, but are these the types of people that you want to punish:

    http://www.nytimes.com/2009/03/20/nyregion/20siege.html?hp

    This one size fits all approach is creating a mob mentality that is bound to get someone (or someone’s innocent family) hurt or killed. And for what? Is that going to fix greed and corruption? Is that our objective?

    What’s amazing to me is that suddenly we’ve directed all of our anger towards the financial system, as if all of this shouldn’t have ever happened. Meanwhile in other sectors of the economy, be it politics, law, unions, etc…There’s no outrage…Are people sending busses and protestors to Chris Dodd’s house? Or some of these corrupt California Republicans? What about the union bosses that pissed away people’s retirements? Did ThinkProgress organize an outing to go protest in front of their house?

    It’s sickening to me that you’ve got folks out there in the financial world that just woke up in the morning, went to work, did a good job, and now they’ve got to face this bullshit…because some of you feel as though its perfectly fine to dictate what they ought to make, and what they ought to do. That’s not the way that this country has ever worked, nor is it the way that it ought to work in the future. This idea that someone who makes less than $250,000 can run these companies is preposterous–not because that amount of money is a measure of how bright you are…but what some other line of work or profession is going to be willing to pay you for that amount of effort. This isn’t public service, it’s private industry…and until you put a cap on every other sector of the economy, folks are going to gravitate to professions that pay them more (if they can make the grade…whatever that is).

    What you don’t realize is that your behavior swings the pendulum, and eventually its going to swing back. Some of us would like to see these problems solved in a responsible, Constitutionally sound fashion, others don’t give a shit. The problem is that when it comes time for the pendulum to swing back…there’s nothing that people like me can do to prevent this from burning you.

11. Glen Tomkins Says:
    March 20th, 2009 at 12:23 pm

    They just know where the bodies are buried

    Look, there never was any credibility to the idea that only these Masters of the Universe know how to master the universe of high finance they created, thus their continued participation is indispensible.

    Yes, yes, they failed rather spectacularly, and so, of course, the idea that they have special abilities is ridiculous. But, more to the point, the universe of high finance they created has failed rather spectacularly. It becomes more clear every day that the key skill set in this universe was the ability to work a confidence game. Not only are these people not really very good as cons (their scam only worked so well for so long because they had the best of dupes, us!), we don’t really want con artists, good, bad or indifferent, running things.

    The only claim these folks have to remain players is the implicit blackmail power they still hold over the politicos. The confidence game segment of our markets has been so out of control for so long, that it long ago infected even previously staid and respectable sectors. The whole political spectrum has so universally pushed 401Ks, etc. — the whole alphabet soup of programs designed to cajole ordinary Americans into markets they clearly have no business buying into — that millions of voters have zillions of dollars sunk into at least the more, previously, respectabel sectors like the NYSE. Sending in the Fraud Squad, which is clearly what should happen at this point, has this fatal drawback from the point of view of the politicos, that the truth-telling would not confine itself to the obviously crooked, newer sectors, but would uncover the network of lies underlying even the more staid markets like the NYSE.

    It doesn’t help that the folks who run the markets get to put legislators on their payroll, in the form of campaign contributions. But even aside from that effect, simply serving the millions of ordinary voters who have their life savings tied up in the NYSE, and became so entangled because the politicos agreed in chorus that this was a good idea, dictates not rocking the boat even on the undeniably con game sectors of our financial non-system.

    Until and unless we replace the whole gamut of politicos we have now, from top to bottom and from left to right, we will not be able to have policies in place that are based on the simple and basic truths of the current state of our markets. We will continue with half-measures that will only deepen the crisis.

12. Ed Smithe Says:
    March 20th, 2009 at 12:29 pm

    Glenn,

    It’s their money. Do I tell you what you can do with yours?

    With respect to your comment about the politicos, I agree 100%…But it’s not money that corrupts…It’s the politicians themselves.

13. Glen Tomkins Says:
    March 20th, 2009 at 12:59 pm

    Ed Smithe,

    We don’t live in some sort of libertarian paradise (or the inferno that would actually prevail if society’s non-system of governance were still the libertarianism we last saw in Hobess’ state of nature), so yes, you do tell me how to spend my money. And I am plenty ticked that for a generation my money has been used to encourage and even subsidize ordinary Americans putting their money where it clearly does not belong, into our stock markets.

    We wouldn’t have markets at all without the ground rules for them that we have to have a government to establish and enforce. I have no interest whatever in using govt to compel individuals to do anything whatever within the confines of their private lives. But we can’t enter our markets without coming out of our private dwellings and into the public square, under public rules. I am very interested in keeping those rules from inciting class warfare on behalf of the malefactors of great wealth. This is a philosphy so radical that even Republicans like TR used to espouse it.

14. Josh G. Says:
    March 20th, 2009 at 1:03 pm

    No, it is not their money. It’s our money – it is all coming from the taxpayers.

15. Patri Says:
    March 20th, 2009 at 1:21 pm

    I am a bit tired of all the esoterica and rather evasive language with regard to the banks and AIG. Most of the top level positions are wired–only those in the corporate money and power clubs get the jobs. There are thousands of very, very capable people who would love to be given the chance to show that they are smart, creative, and willing to do their best for the under $250,000 they are given. The “only the current best and brightest” can undo what they did to destroy the financial world is spin and rot. Get rid of the multi-million dollar phonies and employ those with integrity, those who take pride in their work, take pride in a job well done.

16. Joe C Says:
    March 20th, 2009 at 1:25 pm

    I have read elsewhere that AIG employees have anonymously boasted they will go to AIG’s counterparties, presumably using their knowledge of all the dead bodies, to further bilk the Treasury.

    If so, next week’s quote of the week will be: “Capitalists will always sell us the rope we use to hang them with.”

17. Ed Smithe Says:
    March 20th, 2009 at 4:13 pm

    Josh,

    Was referring to the money one makes for retirement.

    Glen,

    We have tradition and we have laws. You’re going to need to change both if you’d like to control that. And where does it end? Again…think about the pendulum…The founders created a right of center system that was more interested in protecting liberty than most anything else. That prevents nuts in my party from taking things away from you…as it SHOULD prevent the nuts in your party from taking things away from me.

    I’m not a libertarian, but I do find it necessary to not have caps set on compensation for private companies by a bunch of used-car salesmen. These guys have screwed things up enough over the years…why would you want to cede MORE power to them?

18. wiley Says:
    March 20th, 2009 at 5:50 pm

    AIG got a get out of jail free card. That, apparently, wasn’t enough. I hope that whatever they keep of their bonuses is severance pay.

19. Glen Tomkins Says:
    March 21st, 2009 at 12:54 am

    Ed,

    Well, I’m not particularly in favor of this taxation scheme to recover the AIG bonuses. I’m not agin it, I just don’t think it’s nearly a forceful enough response, compared to what I advocate, a measure we should have undertaken long before the AIG bonuses were revealed, and on the all of these dodgy marketeers, not just AIG. As I said in 11. above, I’m in favor of sending in the bank examiners and the FBI’s White Collar Crime squads. The idea is not, primarily, to exact any sort of vengeance on the perpetrators, though failing to punish the guilty does create a moral hazard in this case. The main purpose of sending in the bank examiners is that we won’t hit bottom on this crisis and start to climb back up until and unless we come clean on the value, as in mostly lack of value, of these fraudulent assets. I’m confident that the bank examiners and FBI would find all sorts of violations of those long-standing laws you’re in favor of enforcing. I’m not sure I would characterize the Founders as right, left or dead center in contemporary terms, but I’m pretty sure even Hamilton would disapprove of fraud in the creation of financial instruments.

    You also misread my prescription for the political end of this crisis. I certainly don’t expect much of any of the current set of politicos, though I’m willing to be pleasantly surprised. As I say in 11. above, it will probably be necessary to replace them all, from top to bottom, and from far left to far right. None of them are nearly radical left enough.

    But their more basic failing, the one that requires their exit from the scene if we are to start back up out of this crisis, is an unwillingness to assert public power and to take public responsibility. We elect them to make and execute the laws, and the only thing they can think of to do with that power and responsibility in the face of even a crisis such as we are in now, is to find some technocratic “centrist” like Geithner to take all the responsibility and make all the decisions. And all these technocrats in turn can think to do is to accede to whatever the malefactors of great wealth who got us into this mess want.

    We don’t need to fear that the present set of politicians will take too much power to themselves. They have always had the supreme power that the Constitution gives the Congress, and have for decades refused to use it. What we have to fear is the continued tenure in office of these people who won’t take in hand the power they already have, but instead leave our public policy to be dictated by the barons of Wall Street. Even if you think that such an oligarchy is a sound form of government, these particular oligarchs of ours have now shown themselves decisively incapable, and the oligarchy has failed.

    Public powerlessness is what we have to fear now, the continued unwillingness of our elected representatives to assume the power and responsibility required of them by the terms of their offices. The oligarchy that de facto has ruled this country for over a generation has failed. If we don’t go back to having an actual functioning republic, and have our representatives resume their powers, power will pass to some man on a white horse.

20. Pat Says:
    March 22nd, 2009 at 10:25 pm

    Don’t file it under de Gaulle. If it’s anyone French, it’s Clemenceau. But, if I recall correctly, it’s an Arab proverb.

21. Ex Girlfiend Says:
    April 8th, 2009 at 10:04 pm

    Hey, cool tips. Perhaps I’ll buy a bottle of beer to that person from that forum who told me to visit your blog

22. Vince Delmonte Says:
    April 15th, 2009 at 6:38 am

    If you ever want to read a reader’s feedback , I rate this article for four from five. Detailed info, but I just have to go to that damn msn to find the missed bits. Thank you, anyway!