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So did Krugman really think that another plan was being discussed? That was a very silly assumption.

This will stabilize the markets……or not. If not, then we’ll go to Plan B.

But it was clear to me that this was the path.

Krugman obviously has a good track record. They don’t hand out Nobel prizes to preening economists.
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I agree with that djjl. I agree with allot of what Krugman says but sometimes I get the feeling he only want’s HIS ideas to be implemented.

The fact that he thinks the TARP wasn’t BIG enough should tell you which direction he was going in. Can you imagine the outrage now if the Trillions everyone is yelling about had been doubled, like Krugman called for? And nationalizing the banks? It would never be allowed to happen.

Secular, I too agree with what you said.

The market is up – at least the financial stocks
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Housing stocks up strong as well. Actually the gains are strong across all sectors.

The market is up – at least the financial stocks. Evidently Wall Street thinks it’s just peachy to have about $10K from every family on Main Street handed over to them.
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I’m a “left of center” investor who owns stocks and I like this plan… ALLOT. Sometimes economists just like to hear themselves talk… bloggers are like that sometimes

Sorry Nancy, but that is how he comes across to me. A little puffed up and very negative. Its just my opinion, so it really doesn’t mean anything outside my own head.

Nasdaq 1,518.10 +60.83 +4.17%

S&P 500 803.27 +34.73 +4.52%

booya.

Paul Krugman is not alone in his concerns. I’ve been reading a number of (left of center) economic blogs for months, and so far only Brad DeLong has jumped on board the Geithner Plan. The rest are either quoting and endorsing Krugman or saying something similar.

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I’ll always believe that Bush knew that there were no WMD in Iraq but wanted to invade Iraq for whatever reason. I also believe those who protested were the actual patriots. A patriot asks questions and doesn’t follow blindly.

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Sec – I agree with all you have said. That’s why regulation and monitoring is imperative. If this had all been in place these criminal and fraudulent acts would not have been allowed. This is where Bush dropped the ball. It was his stewardship that let this get out of hand.

I agree, Krugman has been a little cranky with Obama’s plans. But especially after he won the prize. A little ‘Nobel Narcissism’, anyone?

Krugman has always voiced his opinion – he did it during the Bush administration and he’s doing it now. He has had a good track record. What you are referring to as ‘Nobel Narcissism’ is shortsighted – the economic crisis came to the forefront during the middle to late September. Nobel winners are announced in October. The many bailout programs were just taking shape then.

Frankly, in retrospect – don’t you wish the Bush administration had paid more attention to individuals who believed there were not any weapons of mass destruction in Iraq, before we invaded? If memory serves me correctly, those who questioned the administration back then were written off as either attention seekers or unpatriotic.

I’m not talking about greed. I am talking about CRIMINAL behavior and acts. I am talking about LIEING to stockholders. I am talking about INSIDER TRADING. I am talking about CIRCUMVENTING with CRIMINAL INTENT rules set in place to regulate financial transactions and record keeping. I am talking about THEFT by DECEPTION as in the whole bonus fiasco.
After things calm down, investigate, indict where called for, and if convicted LOCK THEIR ASSES UP AND CONFISCATE EVERY FARKIN NICKLE THEY HAVE to make restitution to the folks bilked. Namely US TAXEPAYERS.

djjl – I was lurking. I was just too tired to comment. The munchkin had roto virus and was horribly sick. She lost 3 pounds in 5 days, dehydrated and ended up in the ER on iv. But I always manage to get to this site, just to keep up with all the fun.

I know people are scared, it’s human nature to feel threatened when your very existence is at risk. So I understand that but I’m just saying we have to take a deep breath and stop living in fear. We did that for the past 8 years. And I refuse to live my life in fear of the unknown. I believe in the resiliency of the American people and our way of life. I just believe that someone has to watch the “hen house” before the fox takes all the eggs. By the way my hubby who was planning to retire at 62 (he’s a bit younger than me) has decided that he has to put it off until things simmer down a bit.

JA, thanks for the link. I wholeheartedly agree with your thoughts and the linked article. FWIW, what the Republicans are offering is the exact opposite of a “free market.” A free market is defined by several characteristics, including free access to information by all users.

If you take derivatives (including CDSs) as an example, the problem is that most of them were traded over the counter in a private transaction. There was no market (such as the stock market or a chicago board of trade) for trading these instruments, and so there was not price discovery that a free market requires. Which helps to explain why so many derivatives were woefully mispriced.

Democrats can and should make an aggressive argument that they, not Republicans, are the protectors of real capitalism. That we regulate not to hurt business, but to help it. When all market participants have access to information, efficiency increases and prices decrease. The Republican way — opaque markets, and no regulation — is a perversion of capitalism. And we are learning that hard lesson now by spending tons of money ex post to fix stuff that could have been avoided up front.

Back to my sandbox analogy. The government should have regulated derivatives by requiring trading in a secondary market, and increasing collateral requirements. That would have made these “toys” safe. But because we did not, the government has to get in the sandbox, otherwise the kids won’t play.

(Okay, now I really have to get back to work ).

The housing market bubble was artificially created by mortgage lenders who chose to gamble. Just see how the housing collapse “hurt” probably the worst of them all – CountryWides’s former CEO Angelo Mozilo.

With that said I went back to Adam Smith and “The Wealth of Nations.” Even he said there were inherent problems with unchecked capitalism. I believe that anyone who is willing to take a risk with his/her resources and money should be allowed to profit. (I’ve taken a few risks in my life – I did marry my husband, and have reaped the rewards.) I’d like to link you to an article that was written last year I think and discusses the concept of uncontrolled capitalism. I’m just against not being able to put the brakes on when it gets out of hand (any fool could have seen the collapse of the housing market coming. The bubble kept getting bigger and bigger and like a balloon you know it had to bust.) We have all kinds of controls in this society to limit the negative effects on society (you know, speed limits, drinking while under the influence, etc.). The only things I know we can’t control are the weather and natural disasters, though I wouldn’t put it past anyone to try and do it. Here’s the link:

http://tinyurl.com/dmnk4k

Let me know what you all think.

I think of capitalism as a sandbox with kids playing with toys. You need an adult (the government) to make sure the toys are safe, and that the bigger kids don’t beat up the little kids and take their toys. Aside from that, the kids should be left alone to play. And the adult should rarely, if ever, enter the sandbox and play with the toys herself.

In other words, capitalism REQUIRES being greedy. Per Adam Smith:

every individual necessarily labors to render the annual revenue of the society, as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is pro-rooting it . . . he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. (Smith, p. 423)

No company would make a product if it could only recoup its costs and was just breaking even.
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The exception (and a shining example) to that rule is a company like The Auto Club (AAA) A very well run company with great customer service and top notch products

and Not-for-Profit.

I agree with righting the ship and putting it prudent regulations. As Obama said on the campaign trail, we should regulate financial institutions according to what they do, not what they are called.

As to the “greed” charge, I’ve never understood it. In a capitalistic society, all economic actors are motivated by greed.
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crap! pulled back in again. No, profit is not evil. When I say greed I’m talking about the opportunists who made a tone of money and then passed the risk down the line (bundling) until all the risk is now in “our” pockets. Maybe hedge funds are the worst culprits, I don’t know. Greed coupled with ruthless diregard for the next guy is what I’m saying.

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