Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

February 14, 2009


Robert Reich - Geithner and Fed Chair Ben Bernanke continue to do pretty much what Hank Paulson and Bernanke did: They hide much of the true costs and risks to taxpayers of repairing the banking system. Those risks and costs should be put on the people who made risky bets on the banks in the first place - namely bank shareholders and creditors. Shareholders of the most troubled banks should be wiped out entirely. Bank creditors- except depositors - should take major hits. And top executives who were responsible should be canned. But Geithner and Bernanke don't want to take these steps for fear of spooking the Street. They think it's safer to put the costs and risks on taxpayers -- especially in ways they can't see. Geithner's plan is better than the first Wall Street bailout but make no mistake: It's not transparent, and it's still a bailout.

Project on Government Oversight
- Accountability got mugged when congressional leaders stripped federal whistleblower protections from their compromise stimulus bill. There were, however, a couple of bright spots, with improved language for the government database that will track the flow of stimulus funds to the state and local level. In addition, POGO was cheered by the news that the management-challenged nuclear weapons complex lost out on the billion dollar blank check the Senate had been offering.

William Greider, Alternet -
The question about Geithner that intrigues me is why. Why do brainy technocrats like him often seem so clueless (or, if you like, indifferent) to the social reality once they have risen to the top of the governing heap? I think it may have something to do with the experience of being the smartest kid around and being told so from an early age. This could encourage a narrow kind of arrogance, but maybe also insecurity. Over many years, I have seen a certain type both in politics and private life who climbs the slippery pole by applying intellectual firepower and performing for the teacher. Superiors are impressed and always like this dutiful type. Promotions take them higher and higher. Then they get to the top and it becomes obvious something is missing -- a capacity to think creatively in strange new circumstances or the human empathy required to lead others.

My curbstone analysis could be dead wrong about Geithner but might aptly describe the career path of Larry Summers, Obama's economic advisor. Summers rose to the top -- president of Harvard -- on his well-known brilliance and he was done in there by his personal arrogance. He ingratiated himself with superiors on the way up and adjusted his economic thinking to seasonal changes in ideological fashion. He also learned the bureaucratic skills needed for policy infighting -- how to cut other economists with opposing views out of the debate. He somehow did so in the Obama White House.

E. J. Dionne, Washington Post - Mark Zandi of Moody's Economy.com estimated that the Senate proposal would have created about 625,000 fewer jobs than the House bill. Surely "moderation" should not mean more moderate job creation.




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