End of the Magic Show-By Eugene Robinson

[kpete]

End of the Magic Show

By Eugene Robinson
Tuesday, February 24, 2009; Page A13

It's reaching the point where desperate measures -- brutal honesty and complete transparency -- may be the only way to bring the economy out of its kamikaze dive. If so, this won't be pretty.

A certain amount of legerdemain is designed into the financial system and makes everyone richer. But those we trusted with the world's money are being shown to have acted with such cupidity, irresponsibility and incompetence that a consensus seems to be forming around the cautionary words of George W. Bush, our greatest unintentional aphorist: "Fool me once, shame on -- shame on you. Fool me -- you can't get fooled again."

This week, the Obama administration is set to begin its "stress tests" of major U.S. banks to gauge their fundamental health. Officials clearly want to avoid nationalization of behemoths such as Citigroup or Bank of America -- a drastic step that would probably be gussied up with a nice euphemism, such as "temporary receivership." But the market, in driving the banks' stock prices remorselessly downward, is betting that some kind of takeover is inevitable.

What credibility will officials have if they report that the banks still have a pulse? It's unfair that President Obama's team should be tainted by the sins of the past, but the recent record of federal regulators is one of abject failure. Bernard Madoff, investigators now say, scarfed up what he calculates as $50 billion of investors' money and seems to have purchased no securities at all for at least the past 13 years. Allen Stanford took in something like $8 billion, and authorities can't find the certificates of deposit he was supposed to have bought. If alleged scams of this magnitude were possible in broad daylight, under the government's nose, what other outrages remain to be stumbled across?


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more at:
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/23/AR2009022302323.html?hpid=opinionsbox1

[Viva_Daddy]

1. The cyrrent economic crisis is just a repeat of what happened before

For more information, I recommend "The Great Depression" by Robert S. McElvaine. The problem is still as FDR clearly (and rightly) referred to it as GREED. Similar financial schemes lead to the Great Depression of 1929 - 1941 as have lead us to the current crisis...only this time compounded by Credit Default Swaps and "Derivatives" and Globalization and Outsourcing. This is a SELF-INFLICTED wound by the "Financial Sector" (with the complicity of corrupt Govt officials) but all of us are in the same soup. Until and unless these crimes are clearly delineated to the American People (indeed the whole world), these merchants of Greed will simply do this again when the economy recovers.

[Amonester]

2. That's it. Time to nationalize all banks. Because...

the so called "free market" has failed miserably.

[nc4bo]

3. Had to look up cupidity...

cupidity

Noun
Formal strong desire for wealth or possessions.

That about sums it.

I'm sick of the magic bullets, faeries, smoke and mirrors and deception that allowed this boil to fester.

What standing does Citigroup have to propose anything?

Shouldn't the executives of Citigroup, Bank of America and much of the rest of the nation's financial establishment just say they're sorry, sit down in the corner and shut up? Taxpayers have already spent hundreds of billions of dollars bailing out Wall Street, not to mention the trillions more we've put at risk in various kinds of backstop guarantees. It would be nice to hear sincere apologies and expressions of gratitude. "Have we got a deal for you" is pushing it.

Having to take over one or more of the big banks is the last thing the new administration needs on its already-full plate, and I understand why Obama and his advisers would do anything they could to avoid taking that step. They can't avoid revealing how bad things really are, though. They might as well go ahead and, to borrow from Walter Bagehot, "let in daylight upon magic," because the illusion is long gone.

What standing does CG have to propose ANYthing - none, zilth, nada - F Citigroup, AIG and others like them.

The Obama Admin. needs to lay out the whole stinking rotting corpse right there on the table (F' M$M and others of the "stay positive" meme), shine the light into every dark corner, under every rock and rotten log and in the faces of ALL those responsible and constantly remind America that this is an inherited mess. All Obama can do at this point is to try to nudge the boulder a bit to the left or the right. If he's lucky, he may be able to slow it down a hair but he definitely can't stop the momentum from it's downhill freefall. Even if he could, should he?