We must do everything necessary for world growth.
One must ask: Why? There is a big picture question, which is why "world growth", whatever exactly that is, is so necessary. The more practical question is, why must we "do everything necessary" for this growth? Does 'everything' mean complete debasement of the currency? Does it mean a real risk of national bankruptcy?
The mind rebels. Certainly, richer beats poorer, but 'everything' for the world? Is it so horrible if the world rests for a year and only produces the same as the year before? The "Greens" would say, great, and in fact, some commentary is that Britain should shed half its population to be ecologically correct.
In this vein of questioning the received words from on high (PPIP and supporting Big Finance at (almost?) any cost), the Congressional Oversight Panel ("COP") has released its April Oversight Report: Assessing Treasury's Strategy: Six Months of TARP.
It is clear from key sections of the report, from the Executive Summary, and from the emphasis of the video remarks of the Chair, Elizabeth Warren, that she is sympathetic to nationalization of insolvent banks or at least receivership, rather than PPIP and subsidies without end (the Japanese response for years).
There is a lot here, and the report is actually fairly brief. For those who would like a review of
bank crises going back to the Great Depression, this report has a cogent and very readable summary. There are also minority (Republican) reports, which I have not read because a summary of them made them seem to be overly industry-friendly, and since we have an industry-friendly Treasury Secretary and President, who needs a Republican critique?
Finally, the New York Times reports tonight that the Administration is trying to defuse complaints about TARP by letting investors in on the deal. In one sense, great! I can take advantage of my fellow taxpayers, because I have investable funds. But wrong is wrong, and PPIP is a disgraceful giveaway of a free option to investors, who will share the upside with the Government/FDIC but will share little of the downside. Also, PPIP completely corrupts the FDIC in a variety of ways and is grossly unfair to small financial institutions that only or primarily do banking rather than financial supermarket stuff a la the big bad subsidees.
In the meantime, is the stock market climbing a wall of worry? Certainly even bears must remember the several large rallies the Japanese stock market had before it fell recently to almost a 30 year low.
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