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Botchers, or butchers?

By Owen Paine on Sunday February 15, 2009 03:55 PM

Father Smiff's pal, Dougwood Hen, has it right here -- "They’ve botched the stimulus" -- but then he goes and lays this lead egg: "They’re botching the financial rescue."

Botching? Looks like a fine heist to me, so far, and only likely to get more clever as it unfolds. This is their home course, after all.

Let's begin at the beginning. Here's Henwood:

"The only thing that makes any sense is to nationalize the weakest banks, kick out management, wipe out the shareholders, clear the decks, and start over with a tightly regulated system."
I.e., do it Sweden's way. And that led to what, Doug?

Well, Sweden's hi-fi sector was back looking like it did before the crisis in under 5 years, so it "makes sense" for who? The Wall Street rexheads?

To be fair, you note "This isn’t even all that radical a position anymore."

Indeed not. In fact, who gives a flying frog's leg about clever solutions that preserve the system? Hey, clever solutions might help Uncle "win" in Iraq too!

That being said, I think so far you are the reporter from the inside; but then you go righteous on us: "If these sick and devious “public-private partnership” schemes don’t work out, which seems likely...."

Devious, perhaps, but sick as in morbid? I think maybe that's a case of counting out Kong while he's still on his feet:

(Recall Carl Denham: "Don't worry, boys -- we've taken a lot of the fight out of him since he left his island.")

You point out correctly that "they’re doing absolutely everything they can to avoid even an orthodox nationalization." Maybe that's not because they're sick and foolish and blind, but because a string of nationalizations would not advance their interests.

I also agree that "This is looking more and more like Japan’s disastrous indulgence of their “zombie banks” in the 1990s than Sweden’s successful bailout." Indeed. The Swedes didn't indulge their zombies -- talk to Wallenbergerbitzstein.

And you're probably right, too, that "Instead of a few rough years, we’re likely to get a miserable decade" That's because the time out to regroup serves the corporate agenda quite nicely -- if we let 'em pull it off, that is.

You leave me thinking your take is something like this: these fucking bowtie-heads are taking us through purgatory just because they're driven like zombies to follow their ideological compulsions as much as their love of gain, and that they're gonna go Japan's way, not Sweden's way, and make our lives far far worse than they have to be.

But why give advice -- even if it's good advice -- to the enemies of humankind? Why should we the weebles, the job smurfs of America, care whether the rescue is well done or botched? We the weebles don't need no stinking private credit system. Say that -- not to the bankers, but to your fellow weebles -- and be done with it. Say we don't need no savings, no stockholders, no bondholders. They all suck the fruit of our toil.

Why should we small tubers give a rusty fart about the great bail? It's all just double-entry bookkeeping -- as in double talk, double back, double shuffle, double duty, double cross, double steal. Hell, if you like authoritarian farce, watch an episode of Hogan's Heroes.

When it comes to the real world of poli econ-con, we the road kill need to keep our focus on Uncle's recovery plans, now caught in a process that has indeed been, utterly, as Doug sez, "botched" from January of '07, at least -- and botched on purpose.

But if we must talk balance-sheet magic tricks, let's look at 'em from street level. Whatever is done for the big banks, Swedish massage or Japanese teac ceremony, life out here in mortgaged Middle America continues the slow seepage of rising delinquency and default.

Comments (6)


Fair enough, Owen, but I think Henwood is concerned first and foremost about all the little people who will get screwed without functioning lending institutions. As a Leftist electoral victory or revolution that results in the 'Great Equanimity' that many of us would like to see flashes less than a blip on the immediate horizon, I think his qualified concerns are justified.

It's a difficult position to be in when you know that to do anyting right the wrong way is still wrong, while still hoping that a right wrong way might keep at least a few kids or families from starving meanwhile.

I think Owen is right. Henwood might be Fay Wray in this one.

Or maybe a stockholm syndrome sufferer.

Al Schumann:

I think what Henwood is getting at is that even by the standard of cynically protecting the entrenched system and its major players, they're botching it. Whatever amazement there is in his writing exists as a reaction to the incredible idiocy of their maneuvering. I doubt he believes they have even the slightest concept of enlightened self-interest, never mind any concern for the commonweal. Their baroque stupidity and counterproductive efforts, even in full control of the strongest positions from which to enforce their desires, is stunning in its lunatic Hamiltonian majesty.


Unfortunately, OP, you do need the banks, unless you're ready to launch a barter economy. Nationalization, in theory, is a great idea. National banks could lend money at reasonable interest rates (which would be paid to the Treasury) for socially valuable projects. Wanna start a bike factory in your home town? Fine, here's $100K at 3% interest for 5 years. A local theater group, too? Why not, here's another $100.

Why the 3% interest? I dont know. Maybe to make sure you do real red-blooded proletarian theater, and not some alienated weird post modern stuff.

Seems to me that Henwood was saying what he was saying as a comment on how dumb they're being even within their own terms. I didn't think it was his statement of what should be done from a sane perspective. Haven't we SMBIVAistas been toying in these terms ourselves lately?


Web manager: please shrink the photo of Henwood at the top of this post, or add three new posts on top of it (or one OP rant), so that I don't have to keep seeing his face.

Actually, I like the guy, and even now feel the need to defend him. There aren't that many people who have a solid grounding in mainstream economics and can also talk marxist theory with the (best?) of them. All we are doing in attacking Doug is repeating the old futile quarrel between democratic and revolutionary socialism.

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