Paul Krugman: All the President’s zombies

[Wetzelbill]

From Krugdaddy's blog. -WB

All the President’s zombies

Ben Bernanke’s testimony over the past two days gives us our best clue yet about where the administration and the Fed are going with bank rescue. And the answer seems to be … nowhere.


Simon Johnson and James Kwak read it the same way I do:

This is another sign of the serious brainpower that has been expended on finding ways to avoid or minimise government ownership of banks, and to avoid the slightest possibility of offending shareholders – shareholders whose shares have positive value primarily because of the expectation of a further government bail-out.

And The Economist’s Free Exchange puts it bluntly:

At this stage, I joked, I’d be just as happy with them just saying, “We have a strategy, we will continue to inject capital to prop up zombie banks indefinitely. That’s pretty much the whole plan and we’re counting on it bringing the financial sector back to life someday, somehow”. Is it just me or is that pretty much what Ben Bernanke said yesterday?

No, it’s not just you.

http://krugman.blogs.nytimes.com/2009/02/25/all-the-presidents-zombies/#more-1461

[The Backlash Cometh]

1. Zombies. Who knew that genre would resonate?

From anorexic in the 80s, to Zombies in the 00's.

[KittyWampus]

2. I learned earlier that Zombie Banks is a term from the Japanese crisis. The term is highly

descriptive and I very much approve.

[KG]

3. 3,2,1 on the Krugman bashers coz he's not sufficiently obsequious to the chosen one.

[Wetzelbill]

4. oh man

Let's just not go there. :)

[Wetzelbill]

5. kick

[leftofthedial]

6. I agree. I think the economic team is a disaster. The wrong people in the wrong place

at the wrong time.

Monetarists have Zero to offer. They've already done 100% of the damage they can do. Continuing their policies now is just dumping incomprehensible amounts of money into a bonfire. There are two ways out of the current problem: nationalize the banks or let the system fail completely.

One of those will happen. It could happen quickly if Obama escapes the voodoo spell the zombie priests have him under and acts forcefully. Or it could happen in slow motion over the next decade or so if he keeps sacrificing our money to the bank gods.

[Wetzelbill]

7. yeah, good assessment

It's amazing to think the money they are willing to just keep tossing down a rathole. Obama's no fool, I think he'll get there, I just hope it's sooner rather than later. I think it will be, he does have so much on his plate, I don't envy his job at all. Well ok, maybe a little, but that's just because I heard a president can order any kind of food at any time from the WH kitchen.... :)