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Paul Krugman on Obama's Apparent Nonexistent Plan For Fixing the Banks

I know I've been away for a long time. I miss the rigors of blogging, but I promise I'll be back soon with more regular posts.

Here's Paul Krugman on feeling despair about Obama's apparent apathy about the banks.

Obama and Geithner say things like,

If you underestimate the problem; if you do too little, too late; if you don’t move aggressively enough; if you are not open and honest in trying to assess the true cost of this; then you will face a deeper, long lasting crisis.

But what they’re actually doing is underestimating the problem, doing too little too late, and not being open and honest in trying to assess the true cost. The actual plan seems to be to keep the banks semi-alive by implicitly guaranteeing their liabilities and dribbling in money as necessary, all the while proclaiming that they’re adequately capitalized — and hope that things turn up. It’s Japan all over again. And the result will probably be a deeper, long-lasting crisis.

I'm not an economist but I believe that unless the struggling banks are washed and held out to dry, the economy's going to keep spiraling down. Americans have this paranoia of socialism (even though most couldn't tell you exactly what that is), but the monetary system is in this state of pseudo-socialism — where taxpayers have all the risks of capitalism but none of the rewards; and the banks enjoy the safety of nationalism with the profit of capitalism. Either way you look at it taxpayers are getting screwed.

I'm glad economics is finally a topic that's safe to talk about in public. It's just scary to see how naive so many actually are when it comes to talking about it. Time to brush off Keynes. He's getting dusty.

If you would like to continue reading more, the previous article is called Smile! God Hates You!, the next article is called How to Tell People They Sound Racist.