What is going on with this Bad Bank idea? And what has happened to Barney Frank?
What is Barney Frank's stand on this? Does anyone here know? Are there going to be real hearings on this stuff? Is Obama doing his behind the scenes thing? Will he talk to the people about specifics--or just generalities. And sacrifice....
Atrios, he of the cryptic econ messages to readers, and Josh Marshall at TPM are both looking at the Bad Bank proposal being floated and feeling very uncomfortable--and at Barney Frank, who appears to be accepting the Obama line, per commentary by Theda Skopcol (there's no link other than to the quoted portion at TPM that I can find--which is strange).
Apparently, Rep. Frank, head of the House Banking Committee, is saying that the Banksters must be given more money to make them more stable and to satisfy their stock holders (?); in exchange, they need only promise to support Congress in improving the social safety net. There's no transcript, so it's necessary to listen to the video. He might be saying the safety net issues need to be addressed first? Not clear.
Like that will work either way?
Especially with Camp Obama saying that cuts and "reforms" to SocSec, Medicare, and Medicaid are needed, with Speaker Nancy Pelosi putting everything on the table except for elimnating the three programs, where does Frank think any safety net improvements are going to get support from? Get signed by which president? Especially if the banksters get their money up front....
I spent the primary season trying to suss out what Obama really would do as president; I never felt I knew, but I felt very uncomfortable with his comments, flip flops on commitments, hints given to private fund raisers. Now, I'm getting even more uncomfortable.
Would Hillary have been better? At least Dems would have held her to her promises; I have no such sense Dems will do that with Obama. And that is moot, of course.
But what has happened to Barney Frank? Skocpol thinks she knows--he's being bamboozled (TPM prefers to think he can't be, and TPM used to be the bamboozle maven):
The idea that "elites" will "get serious about repairing the safety net" if they are FIRST given billions of dollars of payoffs to shareholders who made bad decisions is the height of naivete. There are no corporatist institutions in U.S. politics that can enforce this kind of bargain, that can corral all the interests and get them to carry through on mutual promises. That is why Obama and the Democrats will get for the people in general exactly what they push through right now and will squander opportunities if they give money and leverage to "elites" first!
This is what Ira Magaziner imagined with health care back in 1992 -- that he could get up front understandings with powerful interests by giving them concessions in the Health Security proposals, and they would let it get through Congress later. (I remember sitting in his office as I took notes for BOOMERANG and having him complain to me that he could not understand why the business roundtable types "lied" to him about what
they would do!) Of course, they turned on him the moment Congress got ahold of things. Same thing will happen here.
The banking/Wall Street interests will sucker Obama and Barney Frank into giving them yet more (unpopular and ineffective and very expensive) handouts -- and, then, when the improvements to health care, college funding, etc. come up later they will suddenly be fiscally responsible with the public's money. And, of course, they will have plenty of blue dogs and small business lobbies and others to hide behind as they make this manuever. Mark my words, this is my prediction.... U.S. institutions frustrate bargains and can only be moved by big pushes of popular leverage at key moments of crisis. (My emphasis)
There's an undercurrent of feeling that the really Big Bankster Boyz are behind all the problems, but it's very difficult for lay people to voice how and what, which makes it difficult to, say, call one's Congress Critters to rationally demand actions. And the MCM (Mainstream Corporate Media) is working to make things less transparent, not more understandable. Just look at Bernie Madoff's $50B! No need to worry your little heads about those amorphous trillions. Who can even write out a trillion? Just focus on Ol' Bernie and his giving expensive gifts to relatives.... Or, before Madoff was found out, the MCM worked with the Repubs to place the blame on people with lower incomes and the Dems demanding that they be given cheap mortgages. Or it was Fannie and Freddie, somehow....
Bernie Madoff's criminal behavior is so much easier to understand (even if many are not sure how he actually did it), so he'll be the whipping boy for the MCMers (members of the Mainstream Corporate Media), the butt of jokes for the late night comics, the easy to remember bad actor for the public. Madoff's crime has a name which is familiar to most people. The Banksters' activities, no such easy handle.
Is it time to try to get Congress Critters to pay attention to the public once again? Will the public think that Obama has their best interests in mind and not get riled up enough to go after their reps? Will this go down so fast we'll have no chance to try to influence our representatives?
What can we do and what should we do?
This comment has link to Krugman's blog post on Bad Bank; scroll for second one (I'm being lazy).