1) Given that he isn't stupid, I think we have to assume that Obama knows that, he just doesn't "want" to do any better than Geithner. (Or put another way, he doesn't want anyone who would do it "differently" than Geithner).
2) Despite what some of the commentators seem to be saying, I don't think that it is the nationalization of the banks that has the markets spooked so much as it is the threat of nationalization. The markets hate uncertainty. You'd be better off to announce (and stick with) a plan that calls for nationalization for some banks then you would be to keep floating out different ideas with the "threat" of nationalization constantly hanging in the background.
Your two comments go hand-in-hand. The reason Obama has selected a "Try anything short of nationalization" guy is that he doesn't presently support nationalization. Whether that's for economic reasons, political reasons, or both? I couldn't tell you.
"Here’s how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators.
"Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again"
Two Comments:
ReplyDelete1) Given that he isn't stupid, I think we have to assume that Obama knows that, he just doesn't "want" to do any better than Geithner. (Or put another way, he doesn't want anyone who would do it "differently" than Geithner).
2) Despite what some of the commentators seem to be saying, I don't think that it is the nationalization of the banks that has the markets spooked so much as it is the threat of nationalization. The markets hate uncertainty. You'd be better off to announce (and stick with) a plan that calls for nationalization for some banks then you would be to keep floating out different ideas with the "threat" of nationalization constantly hanging in the background.
CWD
Your two comments go hand-in-hand. The reason Obama has selected a "Try anything short of nationalization" guy is that he doesn't presently support nationalization. Whether that's for economic reasons, political reasons, or both? I couldn't tell you.
ReplyDeleteI can turn back to Krugman for the result:
"Here’s how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators.
"Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again"
I always knew that, lurking within you, was the "conscience of a liberal". ;-)