Paulson/Summers/Geithner or Volcker/Krugman/Stiglitz?

[MannyGoldstein]

What's your pick for the best way forward?

I'm thinking that DU is trending towards the latter, by I'm always curious to see where things are at.

[FarCenter]

1. What does Volker have in common with Krugman and Stiglitz

[MannyGoldstein]

2. They All Tend To Favor The Same Types of Policies

At least that's my understanding - is that wrong?

[Oregone]

3. No Twain/Voltaire/Dickens category?

[HCE SuiGeneris]

4. Zappa/Vonnegut/Lennon

[clear eye]

25. Classic. n/t

[SoCalDem]

5. Elizabeth Warren for Sec Treas..Krugman for the Fed

that should do it

[JDPriestly]

12. I'm with you SoCalDem.

[Thickasabrick]

36. Yes...I didn't take the poll because Warren wasn't on it! nt

[Davis_X_Machina]

6. Typical black-white excluded-middle thinking.

There are lots of different ways to arrange those six.

Summers and Krugman and Stiglitz are academics, Geithner, Paulson and Volker are bankers, for instance. In other ways, they're more alike than different. None of them are Chicago School zealots, or worshipers at the altar of Austrian economics.

Volker endorsed Obama, Krugman was pretty clearly a Clinton supporter.

And Volker, if you remember, drove the country into what was, until the last 18 months, the deepest recession since the Great Depression, as a deliberate policy to rein in inflation.

[MannyGoldstein]

7. But Don't They Tend To Line Up That Way In Economic Policy?

Which is the crux of my question?

I may be wrong, let me know. Volcker did what he did, and it worked to get rid of a big problem.

[Davis_X_Machina]

8. Krugman's co-authored papers with Summers.

[MannyGoldstein]

9. Wow. Link? Nt

[kenny blankenship]

27. They worked together in the Reagan administration's council of economic advisers

Summers was more senior, Krugman went to get the coffee. But that doesn't mean they agree on everything - or on most things.

You're absolutely right, IMO, in wanting a clean break from Reagan era economic orthodoxy. Krugman has reevaluated and recanted -in part. And Summers is a poisonous tick and will always be. I too was hoping for change.

[HamdenRice]

17. Agree in principle, but one thing I think you get wrong about Geithner

The reason Geithner is so catastrophic is that -- and this is crucial -- Geithner has never been a banker, in the sense of a private sector banker. He's purely an ideologue.

He's always worked for semi public banks or for government. At least someone like Paulson had the cynicism to tell banks during the crisis to fuck off accept being partly nationalized.

Geithner, never having been inside a private corporate bank, swallows every bit of ideological flim flam they run in front of him.

[Davis_X_Machina]

31. But I thought..

..the Fed, and the government generally, were the servants of the banks-per-se? So it shouldn't matter.

[HamdenRice]

32. The Fed is a federal agency. It's nothing like a private bank.

There is a lot of Ron Paul ideology floating around that the fed is private, a servant of banks, etc.

Just get a reputable college economics textbook to learn the truth. Obviously the Fed works closely with the banks and has some similar goals, but it is a public, federal agency. It's work is nothing whatsoever like the work of private banks. It is a Keynesian, New Deal institution intended to allow the government to control monetary policy (technically created during the Progressive Era of Wilson, but its modern function is a result of what FDR did to it during the New Deal).

Libertarians and Ron Paul supporters have spread the meme that the Fed is not a federal public agency, but it's just not true. They want to abolish the Fed and go back to the gold standard so that we will all be serfs of those (the super rich) who own the gold. For reasons that are beyond me, some self described leftists have swallowed this malarky and support us voluntarily going back to being slaves of the gold owners.

Oh, wait a minute. Were you being sarcastic???

[Unvanguard]

10. I'm not sure Krugman and Stiglitz would have been with Volcker in the early '80s.

Stiglitz especially is none too fond of paranoia about inflation.

But in the present context, all three are probably right. We needed a larger stimulus, and now we need better and stronger financial reform than we've seen.

[TheWebHead]

11. Volcker/Krugman/Stiglitz = S&P500 -250, DJIA -2,000

Obama doesn't like Krugman anyways so thankfully it ain't gonna happen. Professors who have no skin in the game, either in terms of managing money or being behind the wheel politically and instead shoot spitballs from the sidelines as typified by Krugman and Stiglitz is an awful idea. You might as well suggest Amy Goodman as our new press secretary while you're at it.

[JackRiddler]

13. That's a start. The stock market is an indicator for fools and fat cats.

Amy Goodman for press secretary is another great idea, but I think she'd be better as Secretary of State.

[MannyGoldstein]

14. So Being Correct Is For Losers?

Perhaps you can post a list of a few predictions that Paulson/Summers/Geithner have gotten *right*. Lowering tariffs with China will create jobs? Ending Glass-Steagall will help the banking system? Let's see a few.

[JackRiddler]

18. Note also that the statement effectively cedes sovereignty to Wall Street...

Which of course already happened (somewhere between six minutes after FDR died and the arrival of Summers-Rubin), but maybe TheWebhead would say the government's democratic and the stock market is just "investors" who merely react to "good" or "bad" economic policy, especially as made by hard-headed, pragmatic fellows like Paulson/Summers/Geithner - all major players among the guys who ruined everything while turning themselves into Croesus. Motherfuckers and moral criminals, to a man. (If they're not legally so it's because they write the laws).

[MannyGoldstein]

30. Wow. I Like The Cut Of Your Jib, Man.

Well said.

[JackRiddler]

35. Thanks back at you, Manny.

Thumbs up!

[clear eye]

15. I would have made the progressive alternative Stiglitz/Roubini/Warren

Krugman has been all over the map regarding handling of the financial industry crisis. In his columns Sep 2008, he outlined a few of many problems w/ the first bailout, but did not even suggest that Congress hold a day or two of hearings w/ prominent economists and implement a few regulatory changes or a commission to recommend some before voting. He allowed himself to be herded into such a panic that he recommended an immediate yes vote. As was shown by the week and a half of useless Congressional speeches and dual vote, a small delay didn't make a difference, and it could have been used more constructively to parlay the reality of the crisis into forcing Congress to deal at least a little w/ the mess they had made by deregulation.

The combo of Stiglitz for the macro picture on the possible remedies, Roubini for the impact on U.S. (as opposed to multi-national) businesses, and Warren for the impact on the working and middle classes, would be killer.

[JackRiddler]

22. Excellent.

I voted for the option given, but you are absolutely right.

I'll take Warren for President, by the way.

[HamdenRice]

16. You have to delete Volcker before I vote for that slate. How he became a left hero is beyond me

You can complain about how Paulson, Geithner and Bernanke have handled this crisis which had its origins in the private sector. They may not have handled the crisis in the optimal way, but for fuck's sake they didn't deliberately start it.

But that fucktard Volker deliberately created a catastrophic recession in the late 70s with interest rates that translated into 20% bank prime lending interest rates, in order to (1) squeeze inflation out of the financial system, which in his mind equaled squeezing semi automatic wage increases out of the system through mass unemployment and (2) ensuring that Jimmy Carter would not get re-elected.

It just goes to show how shallow many DUers sense of economic theory and history, and who the good guys are that for many on the left Volcker and Ron Paul are heroes of part of the "left".

The only possible response to this utter nonsense is:

:rofl:

Does anyone have fucking access to Wikipedia???:

"The federal funds rate, which had averaged 11.2% in 1979, was raised by Volcker to a peak of 20% in June 1981. The prime rate rose to 21.5% in '81 as well.<7>"

As for Krugman and Stiglitz, they would be great. They pretty much align with my views.

But for another head exploder, does everyone realize that Stiglitz was the chief economist of the World Bank? How does that square with the "left's" view that the World Bank is "teh evil"?

[JackRiddler]

19. By the same process of rightward shift that allows Clinton & Obama to stand as "progressives"?

[HamdenRice]

20. There's no comparison. Neither Clinton nor Obama set out to smash union wages

Volcker is a far right wing ideologue as is Ron Paul. That people who think they are on the left worship them just shows that many people who think they are on the left are woefully misinformed and susceptible to wishful thinking.

[JackRiddler]

21. True, Clinton didn't "set out" to do that. But then came NAFTA, WTO...

welfare "reform" and the Rubin-Summers "free the banks to plunder" laws.

[Unvanguard]

28. Volcker is not a "far right wing ideologue" and is not remotely comparable to Ron Paul.

Volcker has always been a Democrat, and opposed Reaganite supply-side policies during the 1980s. It's hard even to say that he sought to make Carter lose the 1980 election; that was more of an unfortunate side-effect. The worst years of the recession, after all, did happen under Reagan.

Arguing that he sought to "smash union wages" outside of the context that he sought to "smash" price increases in every respect is seriously misleading. What Volcker wanted to do was end an inflationary cycle where inflationary expectations seemed to have permanently embedded high inflation in the economy. To do so, among other things he had to reduce nominal wage increases built into the system by unions. But the only point of those increases was to keep workers' wages in line with inflation, which Volcker successfully stopped (well, drastically reduced).

It is certainly possible to question Volcker's decisionmaking: there are reasonable arguments that what he did was not necessary or not worth it, that the anti-inflationary aggressiveness of the Fed is overwrought, that the Fed paid too much attention to the wealthy people harmed by inflation than to the working people devastated by unemployment and the recession (not to mention the people in developing countries whose growth prospects were seriously diminished). But to observe this, even to agree with these critiques, is not to pretend that Volcker was a far-right ideologue: what he was then and now is moderately left-of-center, with an enough of a technical economist's mindset to be willing to do things that are politically unpalatable for anyone.

[clear eye]

26. Stiglitz left the World Bank b/c is wasn't making changes

in the direction it needed to go to be more constructive. He wrote a book about how their policies could be improved, and they didn't listen.

[Odin2005]

23. Volcker/Krugman/Stiglitz

[lonestarnot]

24. Yes.

[Greyhound]

29. Voted for them, but I think Volker would be the Wall Street mole that would

ensure the game continues on the same road.

[DU GrovelBot]

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[Mithreal]

34. K&R for visibility