Friday, January 23, 2009
WIll Krugman Defend Thain's Stimulus?
In case you haven't heard, former Merrill CEO John Thain resigned today, presumably because of this scandal (HT2 Gene Callahan for the video):
UPDATE: This video was messing up my precious Google ads, so I took it down. You can click the link above to watch it.
On his show today Rush made the great point that people should be congratulating Thain for creating jobs. Rush was kidding of course, but really, it works: If Thain hadn't spent that money, Merrill / Bank of America would just be sitting on it. So the politicians are simultaneously yelling at the banks:
(A) "What are you doing, playing it safe with your loans? We gave you those billions so you would get it out into the community, putting people to work on infrastructure."
and
(B) "What are you doing, taking money that we gave you and wasting it on fixing up your office building?! Be careful with those taxpayer funds!"
UPDATE: This video was messing up my precious Google ads, so I took it down. You can click the link above to watch it.
On his show today Rush made the great point that people should be congratulating Thain for creating jobs. Rush was kidding of course, but really, it works: If Thain hadn't spent that money, Merrill / Bank of America would just be sitting on it. So the politicians are simultaneously yelling at the banks:
(A) "What are you doing, playing it safe with your loans? We gave you those billions so you would get it out into the community, putting people to work on infrastructure."
and
(B) "What are you doing, taking money that we gave you and wasting it on fixing up your office building?! Be careful with those taxpayer funds!"
Comments:
WTF is up with the designer who went along with this? She[1] had to have known M/L was a sinking ship and she was basically being paid to bust up lifeboats to make more deck chairs[2]. It was all over the news! How much was she paid in hush money? Why didn't she at least have the decency to sell the story to a tabloid?
[1] Yes, I'm casually assuming, by statistical inference, that the designer in question is a woman, not trying to make a statement about gendered generic pronouns.
[2] Apologies for the extended metaphor.
[1] Yes, I'm casually assuming, by statistical inference, that the designer in question is a woman, not trying to make a statement about gendered generic pronouns.
[2] Apologies for the extended metaphor.
The designer was probably worried about future income stability like the rest of us. She was happy to have the work.
The bailout was clearly beneficial for this particular individual. For the rest of us? Not so much.
Concerning Krugman: I grow more hopeful by each passing day that sound, free-market, Austrian-school economics will emerge triumphant.
The bailout was clearly beneficial for this particular individual. For the rest of us? Not so much.
Concerning Krugman: I grow more hopeful by each passing day that sound, free-market, Austrian-school economics will emerge triumphant.
She was responding to profit-incentive, Silas!! Seriously ...
Even this example of corporate stupidity helps illustrate that government regulation can only do so much. Companies that are filled with stupid people will tend to act stupid. Corporate welfare shouldn't be prescribed, of course; and the only thing restricting this type of behavior is the possibility of it getting out and Thain's name being rightly trashed in the press: the very thing that did happen.
No regulation can make up for being blasted as a moron on CNN and followed up on every other financial/economic blog in America.
Even this example of corporate stupidity helps illustrate that government regulation can only do so much. Companies that are filled with stupid people will tend to act stupid. Corporate welfare shouldn't be prescribed, of course; and the only thing restricting this type of behavior is the possibility of it getting out and Thain's name being rightly trashed in the press: the very thing that did happen.
No regulation can make up for being blasted as a moron on CNN and followed up on every other financial/economic blog in America.
Don't look now, but didn't Obama just do the same thing, in telling Citibank execs not to buy a new jet for themselves?
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