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jAZ
03-26-2009, 05:42 PM
http://tpmdc.talkingpointsmemo.com/2009/03/viva-cantor-krugman-house-gop-backs-receivership-for-insolvent-banks.php?ref=fp2

Viva Cantor-Krugman? House GOP Backs Receivership For Insolvent Banks
By Elana Schor - March 26, 2009, 1:49PM

There were few details in today's outline of the House Republican budget alternative -- but on the thorny question of future bank bailouts, the GOP had a clear plan. And it looks a lot like Paul Krugman's preferred method.

TPMDC noted the first stirrings of the GOP's Krugman love earlier this week, when House Minority Whip Eric Cantor (R-VA) joined the liberal economist in lamenting the taxpayer subsidy built into the Obama Treasury's latest bank rescue plan. But today's Republican budget alternative goes even further, directly repeating Krugman's past criticism of the Treasury's bailout ethose:

In sum, the message with bailouts of this magnitude is that your profits will be private but your losses socialized.

Now, House Republicans go on to extrapolate a future of socialized losses as well as profits -- a prediction one suspects Krugman would reject. And then they go right back to Krugman-ville with this proposal:

[O]ur plan supports a process to address insolvent institutions that stops throwing good money after bad into failing institutions and places insolvent ones into temporary receivership. ... For insolvent firms, either the FDIC or a Resolution Trust Corporation-type entity would restructure these firms in receivership by selling off their assets and liabilities, reappointing private management, while protecting depositors -- a process that builds off Washington Mutual's arranged sale last year.

Here's how Krugman suggested combating the financial crisis back in January:

A better approach would be to do what the government did with zombie savings and loans at the end of the 1980s: It seized the defunct banks, cleaning out the shareholders. Then it transferred their bad assets to a special institution, Resolution Trust Corp.; paid off enough of the banks' debts to make them solvent; and sold the fixed-up banks to new owners.

When I asked House Minority Leader John Boehner (R-OH) directly about his alternative budget's embrace of more direct government involvement in the winding down of insolvent banks (using the word "liberal"), he affirmed that a receivership scenario "not unlike what happened under [the Resolution Trust Corporation] would be a better way to resolve" the unanswered questions of banks' financial health.

It's one thing for the party of smaller government to embrace more government involvement in insolvent banks than the Obama administration ... but this also raises the question of whether Republicans would consider forcing a House vote on creating a new version of the Resolution Trust entity. It would be illuminating to see how many Democrats would be in their corner.

Late Update: A reader writes in to make a very good point about this Carroll-esque turn in the Republicans' bailout stance:

[This] is actually great news for the Democrats. As Krugman has stated, his greatest fear is that the Geithner plan will not work and that by the time that becomes clear the Obama Administration will have squandered the political capital it would need to advance the bankruptcy-capital injection plan. With the GOP now adopting Krugman's line, there's no need to fear the absence of political capital since the GOP is binding itself publicly to the strategy. This is a win-win for the Obama Administration and the American people.

Dave Lane
03-26-2009, 05:48 PM
Damn socialist Obots!! Bunch of gad damnd wothless commie pinkos!!

jAZ
03-26-2009, 06:56 PM
http://www.samizdata.net/blog/archives/mad_commie_sml.jpg

BucEyedPea
03-26-2009, 07:31 PM
Nixon wrecked our economy with his socialism. Taco never denied GOP socialism...it exists.

wild1
03-26-2009, 07:46 PM
in socialist western europe they already communize banks when a certain few people decide they don't like their financials any longer.

it appears obama wants the government to be even more powerful than it is socialist western europe, if he wants to communize other types of businesses whenever a few people sitting around a table decide they want to.

Direckshun
03-26-2009, 09:52 PM
http://img99.imageshack.us/img99/5668/plan2x.png

Direckshun
03-26-2009, 10:14 PM
Honestly, the Republicans got snookered, here.

If they were smart, they would have done what Gingrich and the Republicans did in 1994 in response to Hillary Healthcare, and what Reid and the Dems did in 2006 in response to SS privatization: oppose, oppose, oppose, and provide no alternative while you're chipping away.

You remain always on the offensive, and allow the public to simply assume you have the superior idea.

Obama kept complaining this time around that there were no alternative ideas provided, and Republicans bit. They provided a plan, which is an incredible waste of time to provide an entire faux budget. And it puts them on the defensive as the alternative to the Obama plan seems to be, as we can see, a clusterfuck. Now they're on the defensive, and Obama's plan can use the wind to sail easier.

Really, really dumb move.

jAZ
03-26-2009, 10:55 PM
Honestly, the Republicans got snookered, here.

If they were smart, they would have done what Gingrich and the Republicans did in 1994 in response to Hillary Healthcare, and what Reid and the Dems did in 2006 in response to SS privatization: oppose, oppose, oppose, and provide no alternative while you're chipping away.

You remain always on the offensive, and allow the public to simply assume you have the superior idea.

Obama kept complaining this time around that there were no alternative ideas provided, and Republicans bit. They provided a plan, which is an incredible waste of time to provide an entire faux budget. And it puts them on the defensive as the alternative to the Obama plan seems to be, as we can see, a cluster****. Now they're on the defensive, and Obama's plan can use the wind to sail easier.

Really, really dumb move.

Actually, the "they have no plan!" counter-argument is sound politically BECAUSE people understand at a gut level that if you don't provide an alternative, you are just bitching to be bitching.

I'm not denying your point, which is that if the opposition can get away with throwing stones without having to put forward an actual alternative... then they would be far better off doing that. But I think they are in a lose lose situation largely because Obama is putting forward very clear plans that are based on the very issues he campaigned on.

That sort of (moral) clarity is hard to compete with

Direckshun
03-26-2009, 11:00 PM
He's also created a far more inclusive impression than either Bush or Clinton did in the examples I cited. That impression only underlines the "where's your plan?" soundbite that Obama pounded Republicans with over the past couple news cycles.

He's played it about as well as can be expected at this point in terms of selling the budget. He's crushing the Republicans on message.

KcFanInGA
03-26-2009, 11:23 PM
Oh man. The Mayans were right. 2012. It'll all be over. This is crazy!

Taco John
03-27-2009, 12:58 AM
Big suprise. Republicans are socialists too.

I can think of one Republican who wasn't in favor of this "plan." The actual Republican one.

Radar Chief
03-27-2009, 07:48 AM
Big suprise. Republicans are socialists too.

I can think of one Republican who wasn't in favor of this "plan." The actual Republican one.

The funny part is I doubt jAZ created this topic to agree with you.