The Bank Morass and Geithner

TW: I do not post on the details of the banking morass as there is cacophony of voices trying generally unsuccessfully to provide some level of insight. The problem as Silver outlines is that few are actually qualified to speak intelligently to the topic and if they are the details are intricate unless one devolves into ideology (a frequent occurrence).

Bitching about the proposals out of the government is the easy route, that was true with Paulson and it is true with Geithner. But again as Silver points out, if anyone has an incentive to get this thing right it is the Obama Administration. Those on the left squawking about a sellout to Wall Street are from my perspective deeply wrong.

I sense that our financial system is screwed (specifically not only insolvent but deeply so). I do not know the answer. I suspect nationalization may be the ultimate direction as the losses are enormous (measured in trillions). One way or the other the governments here and elsewhere will have to absorb massive losses created by our financial institutions and their customers. While this is highly annoying and frustrating, I have yet to read a viable alternative solution. For those repulsed by the concept of nationalization I simply ask what is your solution especially one that is not merely socializing all the losses while in form avoiding nationalization.

From Nate Silver:
"...I'm sorry, but somewhere between 99.9% and 99.999999% of us are severely underqualified to be making policy recommendations on this particular issue. And I'm certainly in the majority on this one. My anecdotal experience for the past several months has been that the more someone knows about the economy, the more they know (or at least are willing to admit to) what they don't know. Anyone who is professing with certainty that this or that will work -- nationalizing the banks, for instance -- is an idiot.

...Nobody, absolutely nobody, has more incentive to get this right than the Obama Administration. If the economy collapses -- well, more than it already has collapsed -- then the Democrats get slaughtered in 2010, Obama is a one-termer, health care doesn't happen, the poverty rate increases by a couple orders of magnitude, and the imperative to fix the environment gets put on the backburner. To suggest that Obama or Geithner are tools of Wall Street and are looking out for something other than the country's best interest is freaking asinine. Maybe their ideas are wrong -- but their hearts are in the right place."
http://www.fivethirtyeight.com/2009/02/give-geithner-break.html