Tax the shit out of them. Using their proprietary, super computer systems to rip off the average investor is not how to have a balanced and equitable investment system.

It is beyond laissez faire.

We all believe that it is a mistake to let the screw-ups who caused the problem through their ignorance and greed keep their jobs . . .

Apparently not all of us believe this.

From Paul Krugman (at Bloomberg, via Calculated Risk):

“I think Bernanke has done a really good job,” Krugman said. “He failed to see this coming and he was behind the curve in early phases. But he’s been really very good in the sense that it’s really very hard to see how anyone could have done more to stem this crisis.”

Failing to see this coming and take steps to avert it before things went over a cliff — when that was his job — falls under my working definition of screwing up. Bernanke may have done good things eventually to stem the chaos once it happened, but being asleep at the switch in the first place is hardly a ringing endorsement of his suitability for another 7 year appointment.

No.
This has been another installment of…

Thanks, Masaccio.

FunnyWheelieDiva

I am sure my acting is really bad so send the cash to… .

The simple response to your headline question (which I know you know) is, obviously, “No.”

I’ve been reading business press for years. They never, never focus, or even mention, effects of events on people, only on the companies or industries they’re writing about.

People are clearly irrelevant.

I used to think, well, the human aspects are covered elsewhere — but that’s not good enough. Looking at any issue in isolation leads to a skewed and flat-out wrong conclusion.

And, this fact underlies a lot of the anger among the population, left and right, even though they may not realize it consciously.

Is this really Krugman’s most recent statement on this, though?
I guess we could spotlight this to him…

FWDiva

Sorry to beat the dead horse but it was the Clintons’ business model with Robert Rubin that paved the way for deregulation of the banks, a dysfunctioning SEC. After all it was the Clintons who praised Rubin in 2006 as the best SOT since Alexander Hamilton. I blame the democrats from 1992-2000 for this mess. And especially Robert Rubin and the Clintons. Bush just played along.

The date on the Bloomberg story is Aug 10, 2009, and it quotes him as saying this yesterday.

So, what’cha drinkin this evening?

Silly me, there were no responses when I started typing….

Lead on that story:

Ben S. Bernanke deserves another term as Federal Reserve Chairman based on his success in battling the financial crisis, said Princeton University Economist Paul Krugman, a winner of the Nobel Prize.

“He’s earned the right to a second term,” Krugman, 56, said yesterday in an interview in Kuala Lumpur. “He turned the Fed into the financial intermediary of last resort. When the banking system failed to deliver capital where it was needed, he put the Fed into the markets.”

They save the part I quoted above about Bernanke being blind to the situation in the first place for later in the story.

It is also symptomatic of the narrow focus of the business press, which measures the success of the bailout by its impact on banks and brokers, and has failed to connect bank and broker profits with customer abuse.

The problem is that last fall, in the midst of the misery, no one thought about anything except preserving the system for the benefit of the financial elites. No one gave serious consideration to the outrageous compensation for failure,…It was a given that taxpayers would eat the losses.

I think that these are really the issues that underlie a great deal more of the frustration with ‘the media’ than is often discussed.

As for the programmers… they probably want to think of themselves as well-paid innovators. Who am I to interfere with their powers of self deception…?

But this is a specimen that says a lot about this incredibly corrupt, dangerous system:

Profits have always flowed to whoever dominates the marketplace, and we have a technological advantage that it costs millions to match.”

N-o-t-h-i-n-g here about building value.
Nothing here about creating wealth.
Nothing here about the real functions of economic activity that drive economies and prosperity: wealth creation.

I honestly don’t fully grasp how ‘the rules’ were made for predation, rather than creation. But what we’ve had — and still have — is a system that makes money by creating bubbles, by insisting that ‘the money supply’ can be regulated while the ‘credit supply’ is supposedly untouchable and lies outside any conceivable regulatory framework.

Basically, these guys make money pumping up bubbles, and then make more off the collapse. That’s predatory.

You’d think the biz press could figure that much out.
But evidently their worldview, as you so cogently point out, is shaped by the notion that elites exist because they’re somehow ’smarter’ or ‘better’ or ‘more competitive’. Hogwash.

It’s called ‘insider info’.
And in an age of surveillance and supercomputing, they probably just have better surveillance.

I doubt we’ll see that as a headline in the WSJ any time soon.

Yeah, you have pretty much beat that horse all the way to the glue factory. You might try to find a new one sometime soon.

The only flicker of hope is to tax them.

A necessary, but hardly sufficient condition.

Replacing compliant regulators with competent regulators is another piece of it. Removing government enablers would be the capstone.

The revolving door between the Department of Defense and military contractors is well known. The similar door between Treasury and Wall Street is just as big (if not bigger), but gets much less attention from the TradMed.

And the Financial Media doesn’t dare touch the Revolving door, because they fear they would lose access to their precious insider sources and those who purchase advertising from them.

Peterr, Bernanke is an academic. He’s a public employee.

He didn’t rewrite Glass Steagall. He didn’t put the commodities trading outside of regulatory oversight, as Phil Gramm, along with Bob Rubin and Larry Summers, did in 1999-2000.

He wasn’t on the phone to Goldman Sachs multiple times each day, as Paulson was while working out the TARP bailouts.

Bernanke is not perfect, but I also don’t view him as a criminal.
What we’re looking at on Wall Street and with tax havens is genuinely criminal.

I assume that Bernanke was prepared to deal with money supply.
I don’t think he assumed he was up against international money laundering, tax haven problems, and crime. But that’s what I think that he’s up against.

For more, see Madoff, Bernard.

Don’t tax the IT guys….just give them a little extra to add an infinite loop in the code and watch their system come to a craw. Nothing like watching a network slowly go away.

If anything should happen to President Obama because of the hate promoted by the Republican Party and their minions in the corporate media then it’s time to declare open season on all Republicans and corporate media types. Show no quarter and take no prisoners. Death to tyrants.

He also didn’t do his job at the Fed, which is to oversee the health of the system.

Calculated Risk summarized some of the back-and-forth on Bernanke’s reappointment, including this analogy from Mark Thoma:

Here’s how I see it. It’s true that [Bernanke] failed to notice that the patient was getting sick. The signs of disease were there, but [Bernanke] either didn’t see the signs or they were misdiagnosed. In fact, there’s a case to be made that [Bernanke] saw some of the changes in the patient as signs of improving health. Had [Bernanke] made the correct diagnosis early enough, maybe we could have prevented the patient from getting sick …

And once the patient showed up in the office and was clearly sick, [Bernanke] didn’t get it right initially either. [Bernanke] thought the patient needed fluids – liquidity as they say – and the patient did need some of that, but [Bernanke] didn’t immediately see that there were also some key nutrient deficiencies and chemical imbalances that were threatening to cause further problems.

But [Bernanke] kept at it with tests and other diagnostics, and eventually got a handle on the problem. … The patient will get better, the deterioration was rapid and turning it around will be difficult – it won’t happen fast enough to suit any of us – but what has been done prevented a complete collapse, and is helping to move the patient towards recovery.

CR followed that with a personal observation of his own:

Professor Thoma’s analogy to a doctor who kept getting it wrong – but never gave up trying new possible cures – is pretty good. Is that the kind of doctor I’d want?

I’d like a doctor who never gave up trying for a cure, but I’d prefer someone with better diagnostic skills. I don’t oppose Bernanke for a second term, but I think there are better choices.

(San Francisco Fed President Janet Yellen, as an example, recognized what was happening much earlier than Bernanke).

My beef with Bernanke isn’t that he’s getting rich off of this — you’re right, that he’s an academic. But he gives academics a bad name. From an earlier CR post:

I thought he missed the housing and credit bubble when he was a member of the Fed Board of Governors from 2002 to 2005. . . .

[After CR debunked a July 2005 op-ed by Bernanke:] Bernanke is now channeling Coolidge’s monument to economic shortsightedness. . . .

[In March 2007, Bernanke said:] “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. [Says CR:] That became a running joke.

We can do better in a Fed chair that this — and at this point, we must.

Hmm, that doesn’t seem very Lakey.

Suz would have gotten out the fire hoses on that one.

I watched the disintegration of the SEC, it occurred on St. Reagan’s watch. The domination of giant banks is primarily a repub phenomenon, not a dem one, as the pattern of money payments to congresscritters shows.

Press worship of the financial elites is a corporate media artifact. In the 30’s, the term “big business” was a term of opprobrium, but in the 80s and 90s, it disappeared from the vocabulary, and its negative impact on society was lost from the discussion of regulation. At the same time St. Reagan convinced people that government was evil, and we are reaping those consequences every day.

It is hard to imagine how Clinton could have turned that around in the late 90s after the savage beatings he endured as President. I wish he had, but I flatly disagree that he should be blamed for the consequences of legislation from the corporatist party.

He wasn’t on the phone to Goldman Sachs multiple times each day, as Paulson was while working out the TARP bailouts.

http://www.nytimes.com/2009/08……html?_r=1

Yup.

how few understand it is capitalism doing its thing

capitalism by its very nature is designed to create a societry of haves and have nots

even to the point of the have nots bailing out the haves when they get too greedy.

americans want capitalism then whine when it does its thing.

capitalism creates a very selfish society

we see that selfishness reveal itself during these town hall meetings.

47 million without health care does not faze most americans

500000 going bankrupt every year over medical costs does not faze most americans.

rated last in health care for industialized countries does not faze most americans.

we are a country of me’s

our imperialism gives us away

we killed one million vietnamese and never lost a nights sleep over it

oh we protested but that was due to the draft not the vietnamese being killed

do you see any americans protesting over the one trillion dollars spent on our wars for profits

this so called great country is an imperialist country

the world knows this but says nothing as they want our money

we are great consumers I will give us that one

With communism man exploits man with capitalism it is the other way around.

very scary #s came out today:
productivity up 6.4% year-on-year, unit labor costs down 5.8%. In other words, a lot of people got fired so that those left got to work massively longer hours for less money. The plunging unit cost of labor (how much money people make) dropped at twice the rate expected. This means that consumers will have less money (and less time) with which to fuel a consumption-led recovery (really the only kind of recovery), since there are fewer workers, and they’re working a lot more but for a lot less. It also means that we’re going to emerge out of this recession with a significantly lower quality of life.

‘cept the banksters who’re gettin’ record bonuses, America’s going to heck.

I think that Bernanke was prepared to deal with the problem. In fact, I think he had written several papers on the subject of financial collapse and the possible steps beyond strict monetary policy that would be available to policy people.

Like most people, he operates in context, not on his own. Like many policy makers, he wants to act minimally, especially in a repub adminstration, which would be biased toward self-healing in markets.

I think the doctor analogy is wrong. It’s more like the car mechanic who sees the problem, and tries the cheapest fix first, then the next cheapest, and so on until he gets to replacing the motor.

Jane is upstairs!
Whipping Blue Dogs on Single Payer

we killed one million vietnamese and never lost a nights sleep over it

oh we protested but that was due to the draft not the vietnamese being killed

I don’t know what kind of researcher you claim to be but you don’t know jack about the Vietnam War.

this isn’t capitalism. At least not the mature, advanced, free-market, level-playing field form of capitalist country we’re supposed to be. We stopped being a capitalist economy sometime midway through shrub’s reign, when advanced capitalism (and the globalization which was supposed to accompany it) was strangled on its deathbed, and the regulatory mechanisms that enable it were thrown out with its corpse. Under shrub, we reverted to an older, more imperfect model – the crony market economy, where government acts solely to advance the interest of a small coterie of cronies and their public-subsidy-dependent corporations, where an ever-bigger government begins to squeeze out the private sector but provides no service to the public in return, but rather serves as the personal piggy bank and militarized protection racket of a tiny ruling class of thieves and their deluded enablers. This is no more a capitalist economy than a mafia don is a respectable political leader.

We stopped being a capitalist economy sometime midway through shrub’s reign, when advanced capitalism (and the globalization which was supposed to accompany it) was strangled on its deathbed, and the regulatory mechanisms that enable it were thrown out with its corpse.

Agree with the view that what we’re seeing is not ‘classic capitalism’.

Whether you call it ‘vampire capitalism’, or ‘corporate capitalism’, it’s predatory, prone to bubbles, and unstable. I don’t think Adam Smith would recognize it.

But I’m more of masaccio’s view that you need to go back to Reagan, and definitely Bush I, to find the roots of the disaster we see today.

I agree with you that this started a ways before shrub. Like I said, shrubco strangled capitalism while it was on its deathbed, but it was a longtime getting onto that bed in the first place. The present crisis goes back, I believe, to Eisenhower in many respects – when large segments of the economy (beginning with the military-industrial complex) started becoming “protected” – exempt from the transparency or competition that true capitalism requires. Then, president-after-president relaxed regulations, entrenched and protected entire sectors (defense contractors! coal! insurers! banks! whatever) and the groups that owned them started getting more and more powerful (as illustrated graphically in out-of-control executive pay), mechanisms such as intellectual property protection went from being guardians of opoprtunity into yet another police mechanism allowing official authority to throttle innovation and invention on behalf of its corporate owners and rentiers, anti-democratic forces started to assert themselves in the shadows… the great promise of “free” America died a little bit as a time, until shrub killed off what was left.

Now we just have a royal mess to clean up, and the anti-market, anti-democractic forces long festering in the shadows are trying to take center-stage, even as we try to save it all. As that horrifying NYT story yesterday said, if you’re an average college-educated young American (i.e., daddy’s not a CEO and you don’t have a trust fund) and you want a meaningful job, want to start a business with a chance in heck of prospering, have an innovative idea you want to try out and want to get financed, want opportunity and upward mobility? Move to Communist China.

http://www.nytimes.com/2009/08……html?_r=1

That’s not a a compliment for China. Its a testament to what we’ve allowed our own country to become.

Teddy is upstairs!
Reid’s Re-Elect Reasons to be Rocky

At least Judge Rakoff in New York isn’t buying it. After he jails Thaine and Lewis, he should go after Bernanke and Paulson. See story at HuffPo.

This applies to the health ‘insurance’ companies, too.
They’re talking about raising premiums 20 to 30 percent, and claiming it’s justified by rising health care costs … but how much of the increase in health care costs is caused by those premiums?

Give me $7 trillion and I could not only fix the financial system I would give you a pony.

As it is the financial system remains profoundly broken, the money pumped into has been mostly wasted, and it could all go kerblooey again. In fact, it probably will.

I commented at Naked Capitalism last night on Krugman’s endorsement of Bernanke. As I said there, Krugman said in his last book salon here that he owed his job at Princeton to Bernanke and he has never criticized Bernanke directly anywhere that I have seen. His support of Bernanke without disclosing these facts is unprofessional. If he is going to be biased, he should state those biases up front.

You are right. What we see has been called crony capitalism and casino capitalism

I think Krugman respects Bernanke, and following my comment at 20, I think Bernanke has done pretty well, considering. When Bernanke was appointed, Krugman said he was all we could expect from Bush, which I think is not great praise.