” One thing, which I wish Taibbi had emphasized more is that it looks increasingly like credit would not have “seized up” across the board, for very long anyway had the big banks been allowed to fail. The mid-sized banks and the community banks, which lacked exposure to much in the way of toxic assets (because they sold them off to the big banks which then folded them into Mortgage Backed Securities) would have survived. It would have been bumpy but well run banks just outside of big bank status, BB&T for instance, would have filled in the space.
The bailout was, as David Stockman says, a Wall Street crisis. The bankers all freaked out when their bets turned terrible, and then played the information leverage game with Washington to get the tax payers to pay for their mistakes. They basically said that the entire economy was going down (it wasn’t) and therefore an unprecedented abandonment of what was left of our market based economy was justified. It was a giant con. “
Illustration By Mike Keefe
” 2011 Delivered So Much Political Chicanery And Congressional Knavery Some Thought That 2012 Couldn’t Possibly Outdo It.
The more cynical among us, including your humble correspondent, knew better. A presidential election year would be enough to guarantee a new low, and we knew Obamacare would come before the Supreme Court, NBC would be in charge of the Olympics, the EU would continue its monetary meltdown while France — our favorite comic opera country — would be holding its own presidential election. Inevitably, we concluded, 2012 would leap every hurdle to make 2011’s nitwittery seem mild in comparison. And, of course, it did.
The monthly accounting of 2012 is ready, and it reads like a movie script Mel Brooks would have rejected.
JANUARY was a tough month. Several of the Republican presidential wannabes rolled over quicker than the Italian cruise liner Costa Concordia. The difference between the candidates’ Gucci-shod consultants and the ship’s captain (one Francesco Schettino) was obvious. Schettino abandoned ship as fast as he could, leaving the women and children behind. The consultants clung desperately to their candidates until the money ran out. “
Illustration By William Warren