Monday, February 16, 2009
Oh, What a Mess We're In!
I've been trying to educate myself about the economy, so my head hurts. But I've come across some great stuff, and if you're brave enough, you might want to give it a look-see.
Bill Moyers interviews Simon Johnson, former chief economist for the International Monetary Fund and professor at MIT's Sloan School of Management, here. It's 20 minutes long, but the man is fascinating. At the time of the interview, he was worried Obama doesn't have the political will, or understanding, to nationalize any of the big banks, and that the banks will bleed us dry if he doesn't. Articles I've read subsequent to this interview suggest that Treasury Secretary Geithner's "stress test" for banks is effectively an assessment of whether they are solvent. If the answer is "no," they're under new ownership and management. We'll see.
I've read article after article about how disappointing Geithner's plan for the banks, announced last week, was. Conventional wisdom is that it was too vague. Most financial writers were looking for something more detailed. See Gretchen Morgenson's Sunday column in the NY Times, for example. The banks didn't like it, either, because it didn't bail them out. A notable exception was Stephen Pearlstein of the Washington Post:
Pearlstein's column about it is here.
We'll see. Maybe Geithner's plan was just vague enough.
I'll have more on this tomorrow. (Oh, boy!)
Update: I beat Andrew Tobias to the Simon Johnson interview by at least an hour and a half. You have no idea how smart this makes me feel. Anyway, Andrew Tobias says you should watch it, so now somebody who knows something is recommending it.