Lang voor de ineenstorting van het neoliberale kapitalisme waarschuwde Mike Whitney voor het failliet van dit systeem. Hij schrijft nu:
'Geithner's Debut:
"Not Ready for Prime Time"
"Not Ready for Prime Time"
By Mike Whitney February 13, 2009 "Information Clearinghouse"
-- Tuesday was Treasury Secretary Timothy Geithner's coming out party. He was supposed to outline Obama's Financial Stability Plan to the Senate Banking Committee. Wall Street was looking for clarity, but it didn't get it. Instead, they got 25 minutes of political posturing and blather. The markets went into freefall. By the end of the day, the Dow was down 382 points. It was a complete fiasco.Geithner is a smart man. He knows what Wall Street wants. They want a plan and they want the details. They don't want more gibberish. He knew that he'd get hammered if he didn't produce a workable scheme for fixing the banks, but he went ahead anyway figuring he could dazzle his audience with his brilliance. It didn't work. The markets plummeted and the pundits wrote him off as "not ready for prime time". Now his credibility is shattered just three weeks into the new administration. Why did he do it?Most people who've been following the financial crisis know what needs to be done. It's no secret. The insolvent banks have to be nationalized. They have to be taken over by the FDIC, the shareholders have to be wiped out, bondholders have to take a haircut, management has to be replaced and the bad assets have to be written down. There's no point in throwing public money down a rathole just to keep zombie banks on life support.Nobel prize winning economist Joseph Stiglitz sums it up like this:"The fact of the matter is, the banks are in very bad shape. The U.S. government has poured in hundreds of billions of dollars to very little effect. It is very clear that the banks have failed. American citizens have become majority owners in a very large number of the major banks. But they have no control. Any system where there is a separation of ownership and control is a recipe for disaster. Nationalization is the only answer. These banks are effectively bankrupt." ( Deutsche Welle)Economist James Galbraith says the same thing in an interview on Democracy Now with Amy Goodman:"I think it’s fair to conclude that the large banks, which the Treasury is trying very hard to protect, cannot in fact be protected, that they are in fact insolvent, and that the proper approach for dealing with them is for the Federal Deposit Insurance Corporation to move in and take the steps that the FDIC normally takes when dealing with insolvent banks.And the sooner that you get to that and the sooner that you take these steps, which every administration, including the Bush administration, actually took in certain cases—replacing the management, making the risk capital take the first loss, reorganizing the institution, guaranteeing the deposits so that there isn’t a run, reopening the bank under new management so that it can begin to function again as it should have all along as a normal bank—the sooner you get to that, the more quickly you’ll work through the crisis.The more you delay and the more you try to essentially prop up an institution whose books have already been poisoned, in effect, by this—the practices of the past few years, the longer it will take before the credit markets begin to function again. And as I said before, the functioning of the credit markets is absolutely essential to the success of the larger package, of the stimulus package and everything else, in beginning to revive the economy."Most of the economists say one thing while the bankers say the exact opposite. It's no surprise; they want to save their own skin. But bailing out the banks again is not in the public interest.Most of the bad paper and non-performing loans appear to be concentrated in the very largest banks. By some estimates Citigroup, Bank of America, JP Morgan-Chase and Wells Fargo are holding two-thirds of all the toxic mortgage-backed paper. Therein lies the problem. These banking Goliaths have powerful constituencies and substantial political power. Keep in mind, the Obama campaign received over $10 million in contributions from Wall Street, the largest contributors by far. This suggests that Timothy Geithner is point-man for the banksters and his job is to fend off nationalization. Geithner admitted as much on Tuesday in an interview with Brian Williams when he said that he intended to "keep the system in private hands". If that's the case, then the taxpayer better get ready for a real shellacking, because it will take many trillions to keep these dinosaurs from extinction. An interview in International Risk Analysis with Josh Rosner of Graham Fisher & Co sheds a little light on the backroom goings on during this charade:Rosner: "I am hearing very clearly from within the regulatory community that it is their primary concern that whatever they are planning is predicated on the notion that we must keep the large banks alive. But if we start off with saving the big banks as the point of departure, then there is no way we can marry that to an efficient or effective proposal. Lets define the solution based first on what is workable not by tying a hand behind our back with preconceptions."'
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