CapitalistImperialistPig

It's pretty clear now that Suskind's message is not so much that Emanuel, Summers, or Geithner - or probably any of the other people who talked to him - failed, but Obama. Obama, it seems, could give terrific speeches but flunked follow up. Perhaps most momentous and characteristic was his encounter with the Captains of all the big banks on Wall Street. They were shaking in their boots. Obama told them that he was all that stood between them and the pitchforks and they all got the reference. Then he made his catastrophic mistake. Obama is a consensus seeker to his core. He likes to find a position everybody can agree on. But his audience was an audience of sharks. They understood fear and they understood weakness. If Obama had wielded the former like a sword they would have bowed to any demand that spared their necks. Instead, he told them "I'm here to help you." They smelled weakness and blood and his power evaporated like a bad Wall Street dream. Oba...

In the late 1970's the United States was suffering from ruinous inflation from a variety of causes. Jimmy Carter appointed Paul Volker to head the Federal Reserve system in 1979 and Volker made his bones by determining to squeeze inflation out of the system. He did this by clamping down brutally on the money supply, raising the Federal funds rate to 20% and producing the worst recession since depression days. The country suffered, but inflation evaporated, and thus he broke inflation and made Ronald Reagan's career when the economy rebounded sharply. Reagan, however, didn't care for his pro regulation stance and ultimately replaced him with Alan Greenspan, who achieved an outsized reputation for financial genius before it became clear that his easy money policies and hands off regulatory stance had contributed greatly to building the monster that ate the world's financial system in 2007-2008. After the fall, and Obama's election, Volker, who had been a key Obam...

Though most of the men won’t say it, they feel that the nexus of math and risk—and the gaming of both, without flinching—is an area of male inclination. In fact, many of the women agree. They say that’s part of the problem. Suskind, Ron (2011-09-20). Confidence Men: Wall Street, Washington, and the Education of a President (p. 205). Harper. Kindle Edition. The view from Chapter 9. The battles Brooksley Born had fought and mostly lost in the Clinton administration were refought under Obama, just with higher stakes. This time the sisterhood was larger, including Washington Senator Maria Cantwell, an early critic of Paulson and Geithner, FDIC Chair Sheila Bair, SEC Chair Mary Shapiro, and Elizabeth Warren, head of TARP oversight. They were still drastically outnumbered by the old boys network led by Geithner and Wall Street, but they had one crucial advantage - they had been mostly been right where Summers, Greenspan, and the other efficient markets devotees had been wrong. Bair, a...

Ron Süßkind reports a revealing musing of Larry Summers to the effect that information has probably contributed to inequality by making it possible to pay people what they are worth. I recall a Business Week cover story of a decade or two back which similarly reported that customer service had become so lousy because computers had revealed to businesses just how little our business was worth to them. If you are the travel scheduler for a major corporation, airlines will anoint your feet with oil and pave your path with gold, but if you are a family travelling with children - not so much. Similarly, the rainmakers of the corporate world are showered with cash, while the faceless worker bots see their salaries driven relentlessly downward. A meritocratic society, where merit is measured purely by contribution to the profit center, can be a very unequal one indeed. Libertarians say "so be it." Conservatives say "as God intended." Liberals, though, have a more d...