{"id":4166,"date":"2010-06-10T23:25:16","date_gmt":"2010-06-11T03:25:16","guid":{"rendered":"http:\/\/1boringoldman.com\/?p=4166"},"modified":"2010-06-10T23:39:23","modified_gmt":"2010-06-11T03:39:23","slug":"oversight-too-late","status":"publish","type":"post","link":"https:\/\/1boringoldman.com\/index.php\/2010\/06\/10\/oversight-too-late\/","title":{"rendered":"oversight, too late &#8211; austerity, too soon&#8230;"},"content":{"rendered":"<br \/>\n<blockquote>\n<div align=\"center\"><strong><a href=\"http:\/\/www.americablog.com\/2010\/06\/congressional-oversight-panel-rips-aig.html?utm_source=feedburner&#038;utm_medium=feed&#038;utm_campaign=Feed%3A+Americablog+%28AMERICAblog%29&#038;utm_content=Bloglines\" target=\"_blank\">Congressional Oversight Panel rips AIG bailout<\/a><br \/>      <font color=\"#000000\">AMERICA<\/font><font color=\"#990000\">blog<\/font><\/strong><br \/>      by Chris in Paris<br \/>      June 10, 2010<\/div>\n<p align=\"justify\">The fingers are being <strong><a target=\"_self\" href=\"http:\/\/news.yahoo.com\/s\/mcclatchy\/20100610\/pl_mcclatchy\/3531144\">pointed  directly at Hank Paulson<\/a><\/strong> during the Bush administration and <strong>the  Federal Reserve which would be Tim Geithner at that time and location<\/strong>.   Taxpayers will never see their return on this and Goldman is still  getting a free ride from the billions they had riding on that deal.   Paulson was of course the former CEO of Goldman Sachs.<\/p>\n<ul>\n<div align=\"justify\">The  federal government didn&#8217;t exhaust all its options before it committed  tens of billions of taxpayers&#8217; dollars to bail out the American  International Group during the height of the 2008 financial collapse,  according to a new report from a congressional watchdog panel. <\/div>\n<p align=\"justify\">The  Congressional Oversight Panel , which was created to monitor the  spending in the 2008 bank bailout bill known as the Troubled Asset  Relief Program, or TARP, detailed in its latest monthly report the  government&#8217;s extraordinary rescue of AIG and its lingering effects on  taxpayers and the financial markets.<\/p>\n<div align=\"justify\">AIG, once one of the largest  and most successful insurance companies in the world, collapsed in 2008  when it couldn&#8217;t meet the collateral demands of its customers. The  firm, the oversight panel said, had an &quot;insatiable appetite for risk&quot;  but a &quot;blindness to its own liabilities.&quot;<\/div>\n<\/ul>\n<\/blockquote>\n<div align=\"justify\">I appreciate Chris calling our attention to this Congressional Oversight Panel. Right now, people are all in a wad about the debt, and guess where it came from &#8211; TARP. Obama&#8217;s contribution was the Stimulus Package, something he had no choice about, and was on the smallish side to boot. TARP was ill conceived if not criminal. Bush did exactly what he did with Iraq. He got us at a time of panic and fear, then pulled one over on us.   <\/div>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" width=\"513\" height=\"365\" border=\"0\" src=\"http:\/\/1boringoldman.com\/images\/nd2010.gif\" \/><\/p>\n<div align=\"justify\">They accuse us of trying to blame everything on the Bush Administration. The reason we do that is because they were at fault!  <\/div>\n<blockquote>\n<div align=\"center\"><a target=\"_blank\" href=\"http:\/\/news.yahoo.com\/s\/mcclatchy\/20100610\/pl_mcclatchy\/3531144\"><strong>Oversight panel: Feds jumped too soon to  bail out AIG<\/strong><\/a><br \/>  <img decoding=\"async\" border=\"0\" src=\"http:\/\/l.yimg.com\/a\/p\/us\/news\/editorial\/c\/2d\/c2d2663ac3a064c05d1d268424fe292e.gif\" \/><br \/>  By Chris Adams<br \/>  June 10, 2010<\/div>\n<p align=\"justify\">&#8230; A key finding of oversight panel&#8217;s new report is that the government  &quot;failed to exhaust all options&quot; before committing the first $85 billion  to the AIG rescue. The government has said &mdash; and said again Wednesday in response to the  report &mdash; that it was under extraordinary pressure and had to move  quickly to prevent the chaos that would have resulted from a meltdown of  AIG, which was linked to <strong><a target=\"_blank\" href=\"http:\/\/news.yahoo.com\/s\/mcclatchy\/20100610\/pl_mcclatchy\/3531144#\"><font color=\"#366388\"><span class=\"kLink\">major <\/span><span class=\"kLink\">financial <\/span><span class=\"kLink\">firms<\/span><\/font><\/a><\/strong> around the world.<\/p>\n<p align=\"justify\">  Elizabeth Warren , the Harvard professor who chairs the oversight  panel, said the panel doesn&#8217;t agree with that all-or-nothing conclusion. &quot;The panel rejects that analysis,&quot; she said in a conference call  Wednesday. &quot;Time was short in part because of the decisions that had  been made over the preceding three days and the preceding three months.&quot;<\/p>\n<div align=\"justify\"> As early as the summer of 2008, for example, there were signs that AIG  was in serious trouble. The government could have acted earlier and more  aggressively to organize a private <strong><a target=\"_blank\" href=\"http:\/\/news.yahoo.com\/s\/mcclatchy\/20100610\/pl_mcclatchy\/3531144#\"><font color=\"#366388\"><span class=\"kLink\">rescue <\/span><span class=\"kLink\">of <\/span><span class=\"kLink\">AIG<\/span><\/font><\/a><\/strong>,  but it was focused on another company at the time and left AIG to try  to arrange its own private financing&#8230;<\/div>\n<\/blockquote>\n<div align=\"justify\">Now we&#8217;re poised to make the opposite error it seems &#8211; turn off the stimulus too soon:<\/div>\n<blockquote>\n<div align=\"center\"><strong><a href=\"http:\/\/feeds.dailykos.com\/%7Er\/dailykos\/index\/%7E3\/749758m_Lgg\/-Bernanke-channels-Krugman;-World-doesnt-end\" target=\"_blank\">Bernanke channels Krugman; World doesn&#8217;t end<\/a><br \/> <font color=\"#ff6600\">Daily KOS <\/font><\/strong><br \/> By Laurence Lewis<br \/> <sup><em>on Keynesianism <\/em><\/sup> <br \/> 06\/10\/2010<\/div>\n<p> <\/p>\n<div><strong><a href=\"http:\/\/www.reuters.com\/article\/idUSTRE65830120100609\" target=\"_blank\">Reuters<\/a><\/strong> quotes Fed Chairman Ben Bernanke, testifying  before the House Budget Committee:<\/div>\n<ul>\n<div>\n<div align=\"justify\"><strong><font color=\"#990000\">In terms  of the time frame, right now, I don&#8217;t think is the time, this very  moment is not the time, to radically reduce our spending, or raise our  taxes, because the economy is still in recovery mode and needs that  support. <\/font><\/strong>However, the risk of course of ongoing deficits is the  potential loss of confidence in markets and the way to reassure the  markets is by creating a plausible plan for a medium-term stability in  the fiscal situation. Obviously you can&#8217;t run deficits (of) 10 percent  of GDP forever. <\/div>\n<\/div>\n<\/ul>\n<div><strong><a href=\"http:\/\/krugman.blogs.nytimes.com\/2010\/06\/06\/lost-decade-here-we-come\/\" target=\"_blank\">Paul Krugman<\/a><\/strong>, on June 6:<\/div>\n<ul>\n<div align=\"justify\"><strong>But  don&rsquo;t we need to worry about government debt? Yes &mdash; but slashing  spending while the economy is still deeply depressed is both an  extremely costly and quite ineffective way to reduce future debt.  Costly, because it depresses the economy further; ineffective, because  by depressing the economy, fiscal contraction now reduces tax receipts.<\/strong> <strong><font color=\"#990000\">A rough estimate right now is that cutting spending by 1 percent of GDP  raises the unemployment rate by .75 percent compared with what it would  otherwise be, yet reduces future debt by less than 0.5 percent of GDP. <\/font><\/strong><\/div>\n<p><\/p>\n<div align=\"justify\">The  right thing, overwhelmingly, is to do things that will reduce spending  and\/or raise revenue after the economy has recovered &mdash; specifically,  wait until after the economy is strong enough that monetary policy can  offset the contractionary effects of fiscal austerity. But no: the  deficit hawks want their cuts while unemployment rates are still at  near-record highs and monetary policy is still hard up against the zero  bound. <\/div>\n<\/ul>\n<div align=\"justify\">As<strong> <a href=\"http:\/\/www.dailykos.com\/storyonly\/2010\/6\/9\/874612\/-Bernanke-joins-Summers-and-Romer-in-telling-Congress-not-to-cut-spending\" target=\"_blank\">Joan McCarter<\/a><\/strong> noted, Christina Romer and Larry  Summers have sent the same message to Congress. Let&#8217;s hope <strong><a href=\"http:\/\/latimesblogs.latimes.com\/dcnow\/2010\/02\/obama-names-deficit-commission-.html\" target=\"_blank\">someone else<\/a><\/strong> is listening.<\/div>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Congressional Oversight Panel rips AIG bailout AMERICAblog by Chris in Paris June 10, 2010 The fingers are being pointed directly at Hank Paulson during the Bush administration and the Federal Reserve which would be Tim Geithner at that time and location. Taxpayers will never see their return on this and Goldman is still getting a [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4166","post","type-post","status-publish","format-standard","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts\/4166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/comments?post=4166"}],"version-history":[{"count":0,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts\/4166\/revisions"}],"wp:attachment":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/media?parent=4166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/categories?post=4166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/tags?post=4166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}