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Stiglitz, who served in the Clinton administration, minces no words: We're being robbed

In an interview, Stiglitz said about the Obama-Geithner plan to aid Big Banks that it offered "perverse incentives." Hhmmm, "perverse." Ya think?

The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.

"Quite frankly, this amounts to robbery of the American people. I don't think it's going to work because I think there'll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer." (My emphasis)

Not mincing words. Not often asked to appear on MCM interviews*. Go figure.

Via Atrios.

Also, Stiglitz sees the changing from the US dollar as the reserve currency as a good thing.

"We may be at the beginning of a loss of confidence (in the U.S. dollar reserve system)," he said. "I think there is support for some sort of global reserve system."

*MCM--Mainstream Corporate Media

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Submitted by jawbone on

In addition to making numerous influential contributions to microeconomics, Stiglitz has played a number of policy roles. He served in the Clinton Administration as the chair of the President's Council of Economic Advisors (1995 – 1997). At the World Bank, he served as Senior Vice President and Chief Economist (1997 – 2000), in the time when unprecedented protest against international economic organizations started, most prominently with the Seattle WTO meeting of 1999. He was fired by the World Bank for expressing dissent with its policies.[3] He was a lead author for the Intergovernmental Panel on Climate Change. Stiglitz has advised American President Barack Obama.

I was surprised by the final sentence.

Did Clinton have anything to do with Stiglitz getting his World Bank position? After his 95-97 stint as chair of Clinton['s Council of Econ Advisors.

oceansandmountains's picture
Submitted by oceansandmountains on

at CNN asking whether Geithner should be given "new powers" to "fix" corporations. Aside from the question itself, it's reassuring that it's running 59% against Geithner.

Mandos's picture
Submitted by Mandos on

For certain I believe that the government (in the body of Geithner or some other entity) should have the power to intervene in corporations whose permission to exist resides most prominently in their capacity to serve the public good. Banks qualify.

oceansandmountains's picture
Submitted by oceansandmountains on

in this administration defining the public good as anything other than doing what's best for the well-to-do (or perhaps what's best for the "creative class").

Mandos's picture
Submitted by Mandos on

...the government should have that power. Because without that power, the banks can pretty much do what they want. Having government oversight and control doesn't make it worse (they can only be as bad as the banks themselves), but has the potential to make it better.

We call this regulation.

oceansandmountains's picture
Submitted by oceansandmountains on

is a smidge more involved than simple regulation.

Principles are great and wonderful but they have to be acted on by humans. That's where things go FUBAR. I have no more confidence in this administration's dedication to what's good for anyone other than their target audience of the well-off and the "creative class" than I had for the last administration's dedication to the Geneva Convention.

Submitted by jawbone on

sinking feeling. That the only thing worse than not doing something is for them to do something....

But, otherwise, receivorship would be through FDIC and would not be as wide reaching, right?

If the Big Bankster Boiz were screaming about the ruckus about the AIG bonuses and saying they would give back their TARP monies (now that many of them have been transfused with TARP money through the AIG payouts on CDS's, etc., of course--and they'll soon have almost free loans from the FDIC) rather than have their compensation messed with by the government (which gave the money which they gave out...), I think the Big Bankster Boiz will go ape shit over this proposal.

Now, is this for the optics..or does Team Obama mean it? And what do they mean to do with such powers? Is this another executive power grab? What is really going on here?

oceansandmountains's picture
Submitted by oceansandmountains on

he asks a very simple and important question. Does the government have the technical ability and functional competence to carry it off? If what we've seen so far with TARP is any indication, the answer is a resounding "no." And if the commitment to transparency is only for media consumption, then receivership is a staggeringly bad idea.

Mandos's picture
Submitted by Mandos on

...if you're opposed to the TARP/TALF/whatchamacallit and you're opposed to bank nationalization, what exactly *can* the Obama administration do that would meet your approval? Resign and turn it all over to Hillary Clinton (never mind that she's nth in the line of succession)? I do recall a distinct risk of Greenspan and Rubin...

oceansandmountains's picture
Submitted by oceansandmountains on

Wow, not past the primaries? No end to the chest-thumping? It's not all about Hillary, you know.

What Obama could have done long before now was to actually listen to all the people on the left who he pwned with the Kewl Kid marketing shtick and not have Geithner in charge. But no, to those who voiced concerns about Geithner and Summers the OFB wailed about how he wasn't president yet (and then after 1/20/09 it was all about it's only been x days, give him a chance). At what point does the Obama-lust dissipate enough to see that Geithner would have been just as dandy in a Bush Administration as he's been here? Having the fox in charge of the chicken coop doesn't suddenly become smart just because the MSM finally likes your guy.

Mandos's picture
Submitted by Mandos on

It's not me who needs to get over the primaries. I mean, not a day goes by without a Clinton-I-told-you-so from a Usual Suspect. Like, for instance, the wonderful little parenthetical comment in the title of this blog post. Totally transparent.

Mandos's picture
Submitted by Mandos on

...the point is, it seems that if Obama listens now, he still won't satisfy some, for having not listened then. (To whom? People who didn't want him to win the primaries?) ie, it's an impossible bar, at that point.

As for the "my guy" "Obama-lust" jab, it is simply that he's there, and both solutions and non-solutions will descend from there, and complaining about the fact that he's there changes nothing and actually teaches nothing other than that no American politician can get there without genuflecting to the Powers That Are. That's the bottom line.