Wednesday, March 04, 2009

Treasury Department publishes all of its bailout activities; getting through this!


Visitors may find it illuminating to look at the U.S. Treasury Department’s Emergency Economic Stabilization Act Page, here.

The page is segmented, with most of the links related to the Capital Purchase Program, which appears to link to contracts with about 100 institutions. Any one contract (such as Bank of America) is lengthy and detailed. Wells Fargo is listed, but not Wachovia, which has already been purchased by Wells Fargo but still operates relatively separately.

Citigroup, however, is listed separately under the Targeted Investment Program. AIG is listed as a “Systemically Failing Institution” (no kidding!), and there is a section for the Automotive Industry Financing Program, for GM, GMAC, and Chrysler.

Treasury has also set up a separate website called “Financialstability.gov” which starts out with a presentation of TALF, the Consumer and Business Lending Initiative.

Steven Pearlstein has an interesting perspective today (Wednesday March 4, 2009) at the bottom of page 1 of the Washington Post Business Section, “Debt Doesn’t Have to Be a Burden,” link here. The national debt, in relation to GDP, is still much less than it was after World War II, which was followed by an economic boom. Pearlstein says that it’s OK for government to spend more on infrastructural investments while private citizens get used to living within their means.

But it’s the way that the individual “sacrifice” is managed that is so politically dicey. Individualism, as we understand it now, is predicated on a money economy with some level of confidence and stability, so that individual “moral hazard” really means something. In times of breakdown or “historical mugging” as Richard Cohen wrote yesterday (Tuesday) on p A13, “History Roars Back” as he muses about Stefan Zweig and his “The World of Yesterday,” there is a tendency to force people back into socialization and unwanted interdependence, and arbitrarily and politically assign the levels of sacrifice in non-monetary ways. Wasn’t “the Cultural Revolution” the endpoint of that threat back in the 60s (in Communist China)? A desire to control one’s own life, normally a virtue (and a preventative for jealousy), becomes seen as selfish and “anti-people”. In my own coming of age, I’ve seen all this before. Back in the mid 1970s, when New York City had its financial crisis (while I lived in the Village during my “Second Coming”), there was talk of utter breakdown (“Ford to City: Drop Dead”). But we got through that as cooler heads prevailed, and New York boomed in the 1980s, to every one’s surprise.

On Tuesday night, on ABC Nightline, Britain's Prime Minister Gordon Brown called for a "Global New Deal" and international standards for (financial) regulation.

Maybe we can turn this around yet.

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