One of the points mentioned in this morning’s Washington Post piece about the Geithner speech is a point I’ve mentioned already a few times: that a lot of key political appointments at the Treasury haven’t been made yet, let alone been confirmed. And that played an important role slowing down and frustrating the planning.
From what we can tell, one of the big issues is that it’s actually hard to find people with the requisite knowledge of banks and the capital markets who aren’t also compromised — either in policy or business terms — by the housing bubble and the rest of the financial collapse. And that raises again as a question: why have none of the people who were financial orthodoxy dissidents and saw what was coming been brought in to the administration. I know I’m hardly the first one to bring this up. And we know that the big appointees — Summers and Geithner — were part of the mix. But there aren’t even any of them further down into the appointment structure. They’re all still on the outside.
Often I feel like there’s something cheap about dividing everyone up by who got this or that question ‘right’, as a way for the people who got it ‘right’ to discredit everyone else. Happens on the right or the left. Sometimes people are just lucky. And being right once doesn’t mean you’ll be right again. But it would certainly help having some people in the mix who’d gotten in the habit of thinking in ways that allowed them to see what was coming.
As Elana Schor highlights, the Dodd executive pay restrictions weren’t added to the stimulus bill at the last minute in conference, as much of the reporting this week as described it. Rather, they were added by voice vote days before the bill passed, with no objection from either party. The only thing last minute about them was the last-minute effort to strip them and other pay restrictions out of the bill. So the framing of this as a sneak attack under cover of darkness? Not true.
Lobbying from alleged Mini-Madoff Faux-Sir Allen Stanford helped kill a bill that would have cracked down on financial fraud.
Seems like he gave a nice amount of currency to Dems too — though so far Sen. Cornyn looks like the only one who got to take the “financial services industry fact-finding mission” to Antigua courtesy of Sir Allen.
From Jim Manley, Sen. Reid’s spokesman: “Senator Reid supports Senator Burris’ decision to cooperate with all appropriate officials who may review this matter, including state agencies and the Senate Ethics Committee.”
The big development over the weekend was when Sen. Graham (R-SC) said he thought that nationalization of some of the major banks may be unavoidable. He’s now being forced to defend his comments back home. Charlotte-based B of A doesn’t seem that pleased.
Just out from the FT …
The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman has told the Financial Times.
In an interview with the FT Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers.
“It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”
Late Update: As Jon Taplin asks, is this the cover Summers and Geithner need.