"The AIG bailout, in effect, was Goldman [Sachs] bailing out Goldman [Sachs]."
--Matt Taibbi, "The Big Takeover"; Rolling Stone (3/19/09)
"Here's the dirty little secret . . . most of the stuff that got us into trouble was perfectly legal. And that is a sign of how much we've got to change our laws."Taibbi's article is apparently the buzz of the blogosphere this weekend. Warning: it makes dark, corporate conspiracy movies like Michael Clayton seem like Snow White.
--President Barack Obama
My advice: read it on an empty stomach. It would be a shame to waste a nice meal as you see how all the pieces fit together (at least according to Taibbi).
Quick summary: the dollars are bigger (much) than you think, the process worse and more opaque.
Posts
2 comments:
The article in Rolling Stone is a very good explanation of what happened, places blame eloquently, but doesn't offer any solutions.
Personally, I endorse some form of "bank triage." This is from Paul Krugman's NYT column today:
"there’s a time-honored procedure for dealing with the aftermath of widespread financial failure. It goes like this: the government secures confidence in the system by guaranteeing many (though not necessarily all) bank debts. At the same time, it takes temporary control of truly insolvent banks, in order to clean up their books."
Unlike a person on "life support," a bank on life support can continue to get worse -- i.e., lose more more money. Even now, does anyone really know what AIG's total loss exposure is??
So, you intervene to stop that, and flush at least some of the bad debt insolvent institutions have incurred (vs. distributing it to the rest of the economy to shoulder).
Post a Comment