Elizabeth Warren Explains It All

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So basically we have three models we can follow in the current economic crisis to save our failing and failed financial institutions: we can follow the FDR model and shut down insolvent entities, we can follow the Swedish model and temporarily takeover the entities we think we can restructure and save or we can follow Japan's lost decade model and subsidize and try to save nearly all of them.

Obama used to talk a lot about moral hazard but you can expect him to shut up pronto because he is clearly talking out of his ass while playing "bottom boy" for the banksters. Obama has allowed nearly 2 trillion dollars to be squandered between what the Fed has paid out and what the taxpayers are being forced to cough up for the likes of Goldman Sachs. Moral hazard, indeed...

So, we are absolutely following the Japanese model and making a huge motherfucking mistake too. Obama wants to simply re-inflate the bubble in the grand tradition of U.S. economic bubble and bust cycles. He's wrong and we are fools to allow it to continue.

More here:

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The Daily Show With Jon Stewart	M - Th 11p / 10c
Elizabeth Warren Pt. 1
thedailyshow.com
Daily Show Full Episodes Economic Crisis Political Humor

The Daily Show With Jon Stewart	M - Th 11p / 10c
Elizabeth Warren Pt. 2
thedailyshow.com
Daily Show Full Episodes Economic Crisis Political Humor

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So Elizabeth does much talking because that's about all she can do. But yes, she is getting the word out and that's a hell of a lot more than what Obama is doing as bankster butt-boy.

But let's be clear about how very little oversight exists for the processes being undertaken right now in our names. It's a big fucking joke with the banksters laughing all the way to China, Japan, the Hamptons and Dubai.

We need to re-regulate the banks and undo what was wrought by Phil Gramm, Jim Leach and Bill Clinton when they repealed the Glass-Steagall Act that was originally implemented by FDR. Why in the world would they have done that? Because there was money to be made, that's why. Pure, unadulterated greed. Same old story...

Here's a funny thought: maybe as a matter of national security we shouldn't allow foreign interests to control so large a part of our financial markets. If people understood that most of our debt is held by China and Japan I would think that there might be some tumult over that very fact. And why should that be the case, after all? We should manufacture and sell in the U.S. so that we owe less to the outside world. That's what everyone else is going to do - just you watch! Some might call it protectionist; I call it survival.

Charity starts at home. So does good sense.

We need to force Obama to actually fix the problem and not just re-inflate the endless cycle of bubble and bust to which we have all grown so appallingly accustomed. Enough is fucking enough! If you are as exhausted and disgusted by Obama's last three months as I am, it's time to force his hand. There is nothing we can't fix here by regulation, Obama.

Honore de Balzac said that, "Behind every great fortune lies a great crime."

Today that crime is called a "bailout" and TARP.

Economic Crisis Roundup

Simon Johnson says: "Break up the banks"
http://www.salon.com/tech/htww/feature/2009/04/23/simon_johnson/

Simon Johnson is the former chief economist of the International Monetary Fund and in recent months has emerged as one of the most cogent critics of how the Obama administration is addressing the banking crisis.

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The Crisis That Could Bring Down Obama
http://www.progressive.org/mag/rc041509.html

In other words, the banks are insolvent. That's why they must rely on the Troubled Assets Relief Program. But at the same time, they are claiming to be healthy. Both things can't be true.

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Bernanke, Paulson should be charged with securities violations
http://www.huffingtonpost.com/diane-francis/bernanke-paulson-should-b_b_190636.html

Instead, Bernanke and Paulson told Lewis not to disclose the dire consequences unfolding at Merrill within his bank which meant that millions of shares of the Bank of America and other stocks worth tens of billions traded for prices they would not have fetched if these U.S. government officials had not allegedly imposed a cover-up.
...
In this case, the two most powerful regulators in the history of the world financially damaged markets, widows and orphans, pension funds, mutual funds and other investors by not telling them a bank, and indirectly the financial system as whole, was in worse shape than previously disclosed.
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Rather than face the music and take decisive action, Bernanke and Paulson ordered a CEO to disobey the law of the land. This makes them accessories, not leaders.

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Obama is blowing it. BIG TIME!

We are still doing the countdown to bank nationalization. Our politicians want to re-inflate the bubble that got us here, not actually fix the problem. By re-inflating the bubble we can pass off to future generations the problems we are creating today in the financial sector. I guess its like taking a really messy bowel movement and not even thinking to wipe your own ass - that must be someone else's problem!

And so we have Obama kowtowing to banks but playing hardball with the last remaining segment of America's great job creating industries: the auto manufacturers. I will be the first to criticize the auto-makers but I will also recognize that they create jobs. So who is it better to save: leeches like banksters or the job producing "morans" at GM?

We are a long way down a dark tunnel leading us in the absolutely wrong direction. Maybe all Obama can do is to lessen the impact of the hard fall that us sure to come. Our problems are systemic, from top to bottom. The solutions will not be band-aid solutions. We are looking at tourniquet and amputation procedures. It's bad. Really bad. We are apparently doomed to live in interesting times.

But hey, have a nice day!

The Big Takeover

Video Primer:

Visit msnbc.com for Breaking News, World News, and News about the Economy

The article itself:
http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution

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Grayson pressed on, demanding to know on what terms the Fed was lending the money. Presumably it was buying assets and making loans, but no one knew how it was pricing those assets — in other words, no one knew what kind of deal it was striking on behalf of taxpayers. So when Grayson asked if the purchased assets were "marked to market" — a methodology that assigns a concrete value to assets, based on the market rate on the day they are traded — Kohn answered, mysteriously, "The ones that have market values are marked to market." The implication was that the Fed was purchasing derivatives like credit swaps or other instruments that were basically impossible to value objectively — paying real money for God knows what.

"Well, how much of them don't have market values?" asked Grayson. "How much of them are worthless?"

"None are worthless," Kohn snapped.

"Then why don't you mark them to market?" Grayson demanded.

"Well," Kohn sighed, "we are marking the ones to market that have market values."

In essence, the Fed was telling Congress to lay off and let the experts handle things. "It's like buying a car in a used-car lot without opening the hood, and saying, 'I think it's fine,'" says Dan Fuss, an analyst with the investment firm Loomis Sayles. "The salesman says, 'Don't worry about it. Trust me.' It'll probably get us out of the lot, but how much farther? None of us knows."

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I find Matt Taibbi a bit shrill and uneven at times but that article is a good solid read. I haven't fact checked it exhaustively, but it's correct in the main in its retelling of the economic disaster that now burdens us.

Economic Ping Pong

The Geithner Plan FAQ
http://delong.typepad.com/sdj/2009/03/the-geithner-plan-faq.html

Brad Delong explains the highlights of the Geithner plan.

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Financial Policy Despair
http://www.nytimes.com/2009/03/23/opinion/23krugman.html?_r=2&ref=opinion

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.
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As economic historians can tell you, this is an old story, not that different from dozens of similar crises over the centuries. And 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.
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The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.
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You might say, why not try the plan and see what happens? One answer is that time is wasting: every month that we fail to come to grips with the economic crisis another 600,000 jobs are lost.

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So that's Paul Krugman explaining why this is the same old story from Obama and Co. - give the wealthy folks that have driven our economy to the brink billions and billions of dollars without oversight because *THEY* know how to fix it. If they win, they profit hugely. If they fuck it up all over again, the taxpayers will cover it. Brilliant!

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I Think Paul Krugman Is Wrong
http://delong.typepad.com/sdj/2009/03/i-think-paul-krugman-is-wrong.html

I find that a scary sentence to write. If the past decade has taught me anything, it has taught me that mistakes are avoided if you follow two rules:
1. Remember that Paul Krugman is right.
2. If your analysis leads you to conclude that Paul Krugman is wrong, refer to rule #1.

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And then DeLong goes on to tell you why he's right and Krugman is wrong. The sentence I find a little scary to write reads:

I think Brad Delong is wrong.

Obama had the mandate to nationalize the banks they day he walked into office. Wasting a bunch of time getting there while the economy tanks even further is just idiotic.

What Obama obviously wanted was the same blank check Paulson demanded. And he's getting it even if he is cloaking it better. At the end of the day it's just the same socialized solution for those at the top while everyone else in the U.S. goes begging for the kind of economic justice more readily available elsewhere among the western nations.

Universal healthecare, the green agenda and better educational opportunities are starting to look like distant dreams indeed. After all of this money is squandered on solutions that will not and could not have worked, they will still need even more money to finally nationalize the banks and cover for the toxic assets that are very significantly lower in true market value than anyone imagines right now.

One things that is remarkable about this huge fiasco is how even well informed economists disgree on what to do and why to do it. That goes such a long way to covering the asses of our clueless politicians that I find it actually worrying.

So yeah, this is another follow-up on the countdown to nationalization.

Zombie Banks

Regulatory reports show 5 biggest banks face huge losses
http://www.mcclatchydc.com/227/story/63606.html

America's five largest banks, which already have received $145 billion in taxpayer bailout dollars, still face potentially catastrophic losses from exotic investments if economic conditions substantially worsen, their latest financial reports show.

Citibank, Bank of America, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase reported that their "current" net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31. Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.

The disclosures underscore the challenges that the banks face as they struggle to navigate through a deepening recession in which all types of loan defaults are soaring.

The banks' potentially huge losses, which could be contained if the economy quickly recovers, also shed new light on the hurdles that President Barack Obama's economic team must overcome to save institutions it deems too big to fail.America's five largest banks, which already have received $145 billion in taxpayer bailout dollars, still face potentially catastrophic losses from exotic investments if economic conditions substantially worsen, their latest financial reports show.

Citibank, Bank of America, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase reported that their "current" net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31. Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.

The disclosures underscore the challenges that the banks face as they struggle to navigate through a deepening recession in which all types of loan defaults are soaring.

The banks' potentially huge losses, which could be contained if the economy quickly recovers, also shed new light on the hurdles that President Barack Obama's economic team must overcome to save institutions it deems too big to fail.

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Here comes socialism
http://www.salon.com/news/feature/2009/03/10/banks/

If South Carolina Sen. Jim DeMint isn't declaring that even temporary nationalization of banks is "the same idea as socialization," then his colleague from the same state, John McCain sidekick Lindsey Graham, is telling NBC's "Meet the Press" that Obama needs to consider the idea. Even Alan Greenspan is part of the conversation. The Ayn Rand disciple whose every public utterance for most of his life has been devoted to extolling the virtues of the free market is suddenly pushing nationalization.

Of course, even though the federal government now owns 36 percent of Citigroup, and Citigroup and other massive banks are teetering on the edge of insolvency, the Obama administration swears there's no plan for a government takeover. "This is a very complex set of problems, and bad decisions can result in huge taxpayer expenditures and poor results," President Obama told the New York Times on Friday, bringing up -- and then shooting down -- the idea that bank nationalization would save the financial sector. Treasury Secretary Tim Geithner told PBS's Jim Lehrer last week that nationalization is "the wrong strategy."

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No, the wrong strategy would be the one that will fail. Throwing good money after bad in more bailout bullshit with no oversight, for example.

Obama, Geithner: Stop being a bunch of fucking ponces and get what needs to be done accomplished. Here on this blog I post comments like this one as a veritable countdown to economic catastrophe based on your executive indecision.

Krugman Nails It Again

I like Krugman's op-ed piece here:
http://www.nytimes.com/2009/03/09/opinion/09krugman.html?_r=2&partner=rss&emc=rss

Obama is doing things much too slowly. He's allowing the GOP to be obstructionists and thereby widening the chances of failure for his shallow policies. He needs to bold and make moves that run deep. Instead I see the same political manoeuvring that have made the last handful of decades economically disastrous for the U.S.

Force his hand, he apparently can't do it alone and never had the will to do so.

Faith in the Dollar

It has begun.

They want you to believe in the turn around. The recovery is being predicted for the second half of 2009 and a full upswing for 2010. Major media wants you to believe.

In truth, you might as well.

Do you suppose it hurts the top 1% when these economic culls occur? It does not.

Believe.

More later...

Less Than

Decade at Bernie’s
http://www.nytimes.com/2009/02/16/opinion/16krugman.html?_r=1&ref=opinion

Last week the Federal Reserve released the results of the latest Survey of Consumer Finances, a triennial report on the assets and liabilities of American households. The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.

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Thank you Bush! Thank you GOP! All smoke and mirrors, all one big illusion.

I have said it endlessly for 8 years: these guys were a lootocracy. Reverse Robin Hood - steal from the poor and give to the rich. Whether through deregulation or war or crisis-based economics - they had both hands deep into your pockets. Believe it, you are living the proof of that statement.

Prosecution for the endless lies? Is it time?

Jump You Fuckers! Part Two

Simon Johnson on Bill Moyers Journal
http://www.pbs.org/moyers/journal/02132009/watch.html

BILL MOYERS: Are you saying that the banking industry trumps the president, the Congress and the American government when it comes to this issue so crucial to the survival of American democracy?
SIMON JOHNSON: I don't know. I hope they don't trump it. But the signs that I see this week, the body language, the words, the op-eds, the testimony, the way they're treated by certain Congressional committees, it makes me feel very worried.
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BILL MOYERS: ...I mean, when I watched the eight CEOs testify before Congress at the House Financial Services Committee earlier this week, I had just finished reading a report that almost every member of that Committee had received contributions from those banks last year. I mean in a way that's like paying the cop on the beat not to arrest you, right?
...
SIMON JOHNSON: I have no problem with poachers turning gamekeeper, right? So if you know where the bodies are buried maybe you can help us sort out the problem...
...
SIMON JOHNSON: I have no idea. Of course, the administration, the new administration, has a lot of rules about lobbying. And they have rules that basically say, I think, as understood the rules, when they were first presented, I was very impressed. They basically said, "We're not going to hire lobbyists into the administration. There has to be some sort of cooling off period."
BILL MOYERS: And the next day Obama exempted a number of people from that very rule that he had just proclaimed.
SIMON JOHNSON: Yes. It's a problem. It's a huge problem.
BILL MOYERS: So here's the trillion dollar question that I take from your blog, that I read at the beginning, quote, "Can this person," your new economic strategist, in this case Geithner, "really break with the vested elite that got you into this much trouble?" Have you seen any evidence this week that he's going to be tough with these guys?
SIMON JOHNSON: I'm trying to be positive. I'm trying to be supportive. I like the administration. I voted for the president. The answer to your question is, no, I haven't seen anything. But you know, perhaps next week I will. But right now, as we speak, I have a bad feeling in my stomach.
My intuition, from crises, from situations that have improved, the situations that got worse, my intuition is that this is going to get a lot worse. It's going to cost us a lot more money. And we are going down a long, dark, blind alley.
...
SIMON JOHNSON: That's where you go and you check the bank's books, and you say, okay, not only do we use market prices, not pretend prices, not what you wished things were worth, what they're really worth, okay, in the market today. We use that to value your loans and the securities that you have, your assets, right?
And we also assess what will happen to the value of the things you own if there's a severe recession. So that's the idea, it's a stress test, like when you go to see the doctor, they put you on a treadmill, and make you run to see how your heart is going to behave under stress.
So you're looking at how the bank's balance sheets will look under stress. And then you say to them, "This is our assessment of the amount of capital you need to cover your losses, and to stay in business, and be able to make loans, through what appears to be a severe recession."
And, as the president said, we may lose a decade. So we've got to be very hard headed, and all the officials forecasters are still too optimistic on that. This is the amount of capital you need. Now you have a month, or two, to raise this amount of capital privately.
And when this was done in Sweden, by the way, in the early 1990s, they did it to three big banks. One of the three was able to go to its shareholders, raise a lot more capital, and stay in business as a private bank, same shareholders. That's an option. Totally fine. However, the ones that can't raise the capital are in violation of the terms of their banking license, if you like.
We have no problem in this country shutting down small banks. In fact, the FDIC is world class at shutting down and managing the handover of deposits, for example, from small banks. They managed IndyMac, the closure of IndyMac, beautifully. People didn't lose touch with their money for even a moment. But they can't do it to big banks, because they don't have the political power. Nobody has the political will to do it.
So you need to take an FDIC-type process. You scale it up. You say, "You haven't raised the capital privately. The government is taking over your bank. You guys are out of business. Your bonuses are wiped out. Your golden parachutes are gone." Okay? Because the bank has failed.
This is a government-supervised bankruptcy process. It's called, in the terminology of the business, it's called an intervention. The bank is intervened. You don't go into Chapter 11 because in that's too messy. Too complicated. There's an intervention, you lose the right to operate as a bank. The FDIC takes you over. I think we agree, everyone agrees, we don't want the government to run banks in this country.

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Here's what I want to be understood in the most crystal clear way that is possible to imagine: we know exactly what to do and we must do it.

I've been blathering on about the solution for over two months privately and I even blogged about it here:
http://thebloodofpatriotsandtyrants.blogspot.com/2008/12/what-should-have-happened.html

There is no fucking mystery in what we need to do. None. Zero. Anyone that tries to claim that we don't know what to do is completely and hopelessly full of shit. Got that?

Most reasonable economists agree that we need to do something like the Swedish solution. Krugman supports it. DeLong supports it. The list is quite expansive really. Those people are not idiots despite what people may say about their political leanings. And despite all the empty rhetoric about how "left-leaning" these economists may be let's be clear about what they want to do: they want to save capitalism and the status quo in this country as you know it. For this they are branded heretics, leftists, and even socialists.

The extreme right - completely blinkered and as spent as a used condom - wants more deregulation and tax cuts to boot. The market will correct this problem. I really can't address that kind of thinking because it is too cruel and asinine on its face. Thousands will die while these morons figure out that they are dead fucking wrong.

Personally, I am extremely disappointed in Obama already. It may be that he is in the midst of the ultimate clever economic brinksmanship against the GOP...maybe...we can hope. Hope is cheap. Hope is usually in vain and achieves nothing. Or it may simply turn out that despite all of that uplifting campaign rhetoric Obama is a mere stooge for the elites that control him.

We are in deep shit. Not because the outlook is so bad economically, but because there is no political will or ability to do what must be done.

We are in the grip of the lootocracy.

Avoiding Oversight At All Costs

Some Banks Want to Return Government Money
http://www.nytimes.com/2009/02/11/business/economy/11wall.html?_r=1&partner=rss&emc=rss

Paying back all those funds would be difficult in this tough economic environment. But banking executives worry that the government may intrude further into their businesses as long as they are beholden to Washington.

“We just think that operating our business without the government capital would be an easier thing to do,” said David A. Viniar, the chief financial officer of Goldman. “We’d be under less scrutiny, and under less pressure. Not that we’d be out of the public eye; we’re still going to be in the public eye.”

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Facing Oversight, Banks Go on Offense
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/10/AR2009021003302.html?hpid=topnews

The banks helmed by Blankfein and the other seven chief executives called to appear before the House Financial Services Committee this morning received $165 billion from the $700 billion government bailout. Lawmakers are furious at the executives over accounts of their lavish spending since receiving the taxpayer funds, and have attacked them for hoarding the money instead of using it to boost lending.

"This is going to be a torture session for them; they know they are going to be pilloried, particularly by the Democrats on the committee," said Anne Mathias, director of policy research for Stanford Group, a financial services firm. "They know that they have to reframe the debate on their own terms and show that they understand the public frustration."

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Obama on Nationalization
http://www.calculatedriskblog.com/2009/02/obama-on-nationalization.html

Obama: Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem; Sweden had like five banks. [LAUGHS] We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.

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Yeah, that's Obama getting it completely wrong. Wrong as wrong can be...

And who benefits? Exactly.

We do not benefit. Not you and I. Not Main street. The ones that used deregulation and off-shoring to destroy a strong economy are still being handed gold on silver platters while the rest of us go without.

But we must continue going without because we have different traditions in this country. Traditions like what Obama - plutocracy?

Selling the Stimulus

A collection of three videos:

Visit msnbc.com for Breaking News, World News, and News about the Economy

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Obama always speaks well. He shows that yet again. Some of it is overly simplified and therefore ambiguous. But I hear him saying "...from the bottom up" and I just have to smile.

Maddow is deeply intelligent as always. She dogs her subject and never veers off course while continually appearing to be the very soul of congeniality. Ultimately, she is wickedly cruel - but so charming that it cannot possibly be held against her.

William Greider does a good job of telling it like it is. Obama and the Dems must make a true choice. I have heard that Obama owes much to individual contributions of mere dollars and that he therefore owes far less to the usual lobbying interests that normally own politicians. The question is quite simple: who does Obama serve? He cannot have two masters.

Has Obama chosen to go down in history as the man that turned it around or will he stay pat at the mere color of his skin?

Maddow Schools the GOP on the Meaning of Stimulus

Visit msnbc.com for Breaking News, World News, and News about the Economy

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Rachel, you will be mine. Oh yes, you will be mine.

From Jobless in America

http://www.thenation.com/doc/20090223/von_hoffman/single

"Class war has begun." - Sue Oelkers, Red Wing, Minn.

"Here in California, the official unemployment rate is now 9.3 percent, but that doesn't include people like me, and there are a lot of us." - W.K. Grady, Los Angeles

"...We were told, Work hard, play by the rules, and pay your taxes and you will get ahead--you will have the so-called American Dream. That's a damn lie, and I for one am mad as hell about it. God help those in charge should I and the millions of other people like me (our numbers seem to be growing exponentially by the day) reach a point of desperation and no return. There will be a revolution and no redemption for the people who caused this mess." - Joris B. Rapelje, Clinton Township, Mich.

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Joris? Don't be too surprised by that late night knock at the door...

Teaching Mr. Obama How to Haggle

http://www.nytimes.com/2009/02/09/opinion/09krugman.html?_r=1&ref=todayspaper

So Mr. Obama was reduced to bargaining for the votes of those centrists. And the centrists, predictably, extracted a pound of flesh — not, as far as anyone can tell, based on any coherent economic argument, but simply to demonstrate their centrist mojo. They probably would have demanded that $100 billion or so be cut from anything Mr. Obama proposed; by coming in with such a low initial bid, the president guaranteed that the final deal would be much too small.

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Mr. President, I call your attention to this Monty Python bit:
http://www.mwscomp.com/movies/brian/brian-14.htm

Your inability to haggle correctly has been noticed by others also:

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http://yglesias.thinkprogress.org/archives/2009/01/tax_cuts_as_stimulus.php

It’s one thing to unveil a compromise as a result of a bipartisan negotiation, and another thing to unveil an opening bid that you say you hope conservatives can get on board with.

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So what have you to say for yourself?



They were pleasantly surprised and complimentary about the tax cut that were presented in that framework. Those tax cuts are still in there. I mean, I suppose what I could have done is started off with no tax cuts, knowing that I was going to want some and then let them take credit for all of them. And maybe that's the lesson I learned.
...
It's a little hard for me to take criticism from folks about this recovery package after they presided over a doubling of the national debt. I'm not sure they have a lot of credibility when it comes to fiscal responsibility.

Paul Krugman's "Letter to the New President"

What Obama Must Do
http://www.rollingstone.com/politics/story/25456948/what_obama_must_do/print
Excerpts:

How bad is the economic outlook? Worse than almost anyone imagined.
...
In other words, you have to get job creation right — which FDR never did.
...
Do the math: You probably have to spend $800 billion a year to achieve a full economic recovery. Anything less than $500 billion a year will be much too little to produce an economic turnaround.
...
The biggest, most important legacy you can leave to the nation will be to give us, finally, what every other advanced nation already has: guaranteed health care for all our citizens. The current crisis has given us an object lesson in the need for universal health care, in two ways. It has highlighted the vulnerability of Americans whose health insurance is tied to jobs that can so easily disappear. And it has made it clear that our current system is bad for business, too — the Big Three automakers wouldn't be in nearly as much trouble if they weren't trying to pay the medical bills of their former employees as well as their current workers. You have a mandate for change; the economic crisis has shown just how much the system needs change. So now is the time to pass legislation establishing a system that covers everyone.
...
...and we'll have universal health coverage up and running by the end of your first term. And that will be an achievement that, like FDR's creation of Social Security, will permanently change America for the better.
...
Universal health care, then, should be your biggest priority after rescuing the economy. Providing coverage for all Americans can be for your administration what Social Security was for the New Deal. But the New Deal achieved something else: It made America a middle-class society. Under FDR, America went through what labor historians call the Great Compression, a dramatic rise in wages for ordinary workers that greatly reduced income inequality. Before the Great Compression, America was a society of rich and poor; afterward it was a society in which most people, rightly, considered themselves middle class. It may be hard to match that achievement today, but you can, at least, move the country in the right direction.
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I also haven't said anything about foreign policy. Your team is well aware of the need to wind down the war in Iraq — which is, by the way, costing about as much each year as the insurance subsidies we need to implement universal health care. You're also aware of the need to find the least bad solution for the mess in Afghanistan. And I don't even want to think about Pakistan — but you have to. Good luck.

There is, however, one area where I feel the need to break discipline. I'm an economist, but I'm also an American citizen — and like many citizens, I spent the past eight years watching in horror as the Bush administration betrayed the nation's ideals. And I don't believe we can put those terrible years behind us unless we have a full accounting of what really happened. I know that most of the inside-the-Beltway crowd is urging you to let bygones be bygones, just as they urged Bill Clinton to let the truth about scandals from the Reagan-Bush years, in particular the Iran-Contra affair, remain hidden. But we know how that turned out: The same people who abused power in the name of national security 20 years ago returned as part of the team that, under the second George Bush, did it all over again, on a much larger scale. It was an object lesson in the truth of George Santayana's dictum: Those who refuse to learn from the past are condemned to repeat it.

That's why this time we need a full accounting. Not a witch hunt, maybe not even prosecutions, but something like the Truth and Reconciliation Commission that helped South Africa come to terms with what happened under apartheid.

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That's probably Krugman's most compelling piece of writing ever. Brilliant! He misses almost nothing. Although I would have made more explicit warnings about escalating things in Afghanistan and Pakistan, Krugman clearly doesn't want to distract too much from the main thrust of his extremely insightful comments on economic matters. Still, it remains true that if we have to watch where we spend our dollars we have to avoid throwing money away on adventuring abroad. War is the most foolish extravagance ever - and we simply cannot afford it! And what we don't waste on war can be spent on this country instead, within our own borders. You know, spending taxpayer dollars on taxpayers.

Onward...