Monday, March 23, 2009

Wall Street Loves Obama Plan For Bad Assets. GOPers Run for Exits

Since President Obama was sworn in on January 20th, he has maintained approval ratings between 60-70 percent. So, the GOP fringe, led by Faux News, turned to the performance of the stock market as a way to insist that President Obama was doing a bad job. Remember this?
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Well, how do you think the GOP feels about this? "Stocks spike on bank plan" is the headline on CNN Money right now. Can anyone else hear the footsteps of the GOP running scared?

5 comments:

Jeff Lehner said...

Of course Wall Street loves the plan. Private gains, socialized losses. You were against that when Bush proposed it, Nick.

But are these gains sustainable? Time will tell. Either way, I'm starting to fear the damage to our Constitution will prove permanent...

Nick D said...

Jeff, this is a plan to draw private capital into the market for these distressed securities, as I understand it. That's a whole lot better than strict taxpayer funding of these losses.

For the last two months, the GOP has been using the decline in the stock market as a way to say Look! Obama must be doing a bad job, the stock market went down another 300 points! But now that it's gone up 500 points? Crickets.

You're right that time will tell whether or not these gains are sustainable. I'll be watching closely, because if stocks get down in the 6200 range again I'm buying.

And what is this damage to the Constitution that you speak of?

Jeff Lehner said...

Any of us could probably point to a dozen or so specific items related to all these bailouts that are of dubious Constitutional principle, what I'm talking about is the general concept that we're entrusting a single individual - Paulson or Geithner or whomever ultimately replaces Geithner and so forth - with the kind of authority as that which has been entrusted to the Secretary of the Treasury since September. The Founders weep.

Your other point: I agree, this is better than a straight-up bailout. If it works, great. If not, crank up the printing presses once more and we're F-ed for a generation. In either case, "less bad" is a poor substitute for "good." Capitalism is dead in America right now, that cannot be good.

Nick D said...

Well, one could make the argument that Congress delegated too much authority to the Executive branch in the TARP bill. I would, however, make the argument already had ample reason to weep due to extraordinary rendition, warrantless wiretapping, etc.

I don't accept your premise that captalism is dead in America right now. If it is dead, however, it died of suicide.

If you want to revive capitalism in America, it has to be a capitalism that lifts all boats. You can't have 80% of the population with zero inflation-adjusted wage gains since 1975 and expect the system to survive for long.

Jeff Lehner said...

"dead" = too strong.

"on life support" = more accurate.