Geithner, Bernanke have little in arsenal to fight new crisis

[alp227]

Barely two years after the financial crisis ended, Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke were back at it about a week ago. They were working the weekend phones with their counterparts in Europe, urging them to use overwhelming force to contain the continent’s spreading debt crisis, which was unnerving markets on both sides of the Atlantic.

Geithner and Bernanke could speak with authority. As two of the architects of the United States’ own financial rescue starting in 2008, they had eschewed half-measures, instead marshaling hundreds of billions of dollars to bail out the banks and successfully head off a new Great Depression.

But as the pair again donned the cloak of crisis fighters, their efforts underscored what’s changed in the last three years. The men, battle-hardened and more experienced, now have little more than the power of persuasion. No longer can they muster the same range of policy tools and supporters they had in 2008 should the European crisis become an even greater menace to the U.S. economy.

As Europe’s financial worries spread to new countries and financial firms last week, U.S. and other global markets experienced one of the most tumultuous weeks of trading in their histories. Markets open again Monday with persisting concern about Europe, anxiety about the prospect of a double-dip recession and continuing fallout from the historic downgrade of the U.S. credit rating by Standard and Poor’s earlier this month.

full: http://www.washingtonpost.com/business/economy/geithner-bernanke-have-little-in-arsenal-to-fight-new-crisis/2011/08/12/gIQAFuFvFJ_singlePage.html

[Angry Dragon]

1. As the world burns and people die in the streets

the bankers are seen counting their money to see if they have more than the next guy.
It is all about the King of the Hill

[ClarkUSA]

2. That's because the Teabagger House will shoot down all economic policy moves by Democrats.

The Treasury Secretary and the Fed Chairman don't make laws or have control of the purse strings.

[DJ13]

3. This scenario is exactly why many economists wanted the TBTF banks broken up

The smaller parts would have had to actually make loans to build themselves back up instead of manipulating markets to make all their money.

[villager]

4. Well, other than the overdue nationalizing of the banks...

n/t

[leveymg]

7. It's the MNCs that have the real money in cash hoarded away offshore. Nationalize them, and we'll

have about $30T in cash and liquid assets to rebuild this country.

[PSPS]

5. "Barely two years after the financial crisis ended..."

It's been a while since I knew I could stop reading an article midway through the very first sentence.

[bemildred]

11. Yeah, that stopped me right there too.

Morons or liars, take your pick.

[roxiejules]

6. 'Because of the constraints and concerns we have about the existing deficit'

January 5, 2009

President-elect Barack Obama said economists are suggesting a U.S. stimulus may have to be as large as $1.3 trillion, Senate Majority Leader Harry Reid said. Obama “has indicated that there’s at least 20 economists that he’s talked with, and all but one of those believe it should be from $800 billion to $1.2 trillion or $1.3 trillion,” Reid said after meeting with Obama on Capitol Hill.


Then two days later on January 7, Obama held a press conference:

TAPPER: Your team has talked about the stimulus package being $675 to $775 billion. But at the same time...you're going to distribute a memo in which economists say it should be between $800 billion and $1.3 trillion. How do you reconcile that difference...?

OBAMA: Well, we are still in consultation with members of Congress about the final size of the package. We expect that it will be on the high end of our estimates,]but it will not be as high as some economists have recommended because of the constraints and concerns we have about the existing deficit.


The same day Obama was interviewed on CNBC:

MR. HARWOOD: Tomorrow you're going to give a speech and talk about your economic stimulus package...It looks like it's going to be at the high end of your range, around $775 billion. If it's correct that, as your aides have said, the danger is doing too little rather than too much...why stop at $775 billion? Why not go to the 1.2 trillion (dollars) that some economists have recommended?

PRESIDENT-ELECT OBAMA: ...We've seen ranges from 800 to 1.3 trillion, and our attitude was that, given the legislative process, if we start towards the low end of that, we'll see how it develops....

MR. HARWOOD: So it's going to get bigger.

PRESIDENT-ELECT OBAMA: Well, we don't know yet.

[blkmusclmachine]

8. "Masters of the Universe:"

FAIL.

[jwirr]

9. Of course they don't - they are as trickle down crazy as raygun was. nt

Change cannot happen if you keep working with the old philosophy.

[Demeter]

10. Intellectually bankrupt

and now they've run out of Other People's Money--unless they hit up their Obscenely Wealthy Masters.