“And the accusation has been repeated enough that a writer can now casually drop it into a magazine article without being asked to provide any evidence for this nuclear-strength assertion.”
This is a significant proportion of “content” now - nuclear-strength assertions with no evidence presented or required. My “media diet” has shrunk accordingly but it’s difficult at this point to maintain a basic but accurate understanding of what’s going on in the world.
That would make a great post. Other assertions are that healthcare and college costs are rising when they aren’t. And in the case of college they have fallen quite considerably. But many writers just drop those accusations in articles without a thought.
My guess is that the cosmopolitan audience that is primarily the target for such news articles is an alumni/recent grad/ or parent sending their kid to a private school that is now absurdly expensive.
But agree, there are very affordable college options available and the idea that you need to go into massive debt to even attend one is factually untrue!
“ parent sending their kid to a private school that is now absurdly expensive.”
Nope private has plunged as well. What they’ve done is increase sticker price and then they offer $25k or $50k in “merit” aid which has nothing to do with merit - it’s just a straight up discount.
I mean yes. I got merit in that range to attend my school. But that was GW, a good private school that gets you into DC and access to unparalleled opportunities in politics and government, but otherwise isn't particularly prestigious.
Does the next tier up regularly do that for students? Ivys? This is merit we're talking about here, not financial aid. I think a lot of parents, especially those of means, are expected to pony up the full tuition.
I'd like to note that I am not standing up for the claim that higher education is impossible expensive for low and middle income Americans.
Just noting that for a certain dual income homes that make up a significant swath of the audience for the NYT, WSJ, etc. They do end up paying absurd amounts of money for private universities. That's on them, but I think that is the context for why there are so many pieces that focus on the sticker price of the university, without diving deeper into the actual cost many parents end up paying.
MIT hasn't _dropped_ it's headline tuition but the increases definitely slowed WAY down (now less than inflation I think). They have increased way more slowly than I expected 10 years ago when my kids were born.
The average American lives from meager paycheck to meager paycheck (when our capitalist imperialist overlords bother to pay him at all) and is on average only EIGHT MINUTES from abject penury!
What changed my thinking on college is the realization that the degree premium for a bachelor's degree is roughly $36k/year for the rest of your working life. So yes, college is expensive, but it's a hell of a deal. For college to not be worth the money, it would have to cost like $600k-$700k.
Granted, I don't know how much of this is sheepskin effect versus how much of this is "these are smart people who would be making more money anyways." Probably some of both. Still, the idea that college is a rip-off seems wildly overblown and graduates should not whine about their student loans unless they're one of the rare few who were tricked in to getting an actually useless degree.
This is a really effective way of thinking about the NPV of college. Obviously hugely depends on what major and to a lesser degree which college. Underwater basket weaving at Southwest Panera Bread State is not gonna be the same as engineering or business at a State flagship but the general point stands. There is very good college debt and very bad college debt. It isn't a monolith.
This depends so much on what field you go into. The problem with college costs is there are many societally-valuable things people do that require degrees that don’t pay enough to make it a good deal to peruse them.
That said, I have my masters from a lower cost state university and have no disadvantage over people who paid twice what I did to get their degrees.
I’m an LPC who works in substance use treatment serving a population with significant homelessness. Theoretically, in 2 years, I’ll be eligible for a federal program that cancels my debt after 3 years of service. I’m skeptical that will happen
This is just a normal lag. It takes several years after a trend reverses before it’s clear that it has actually reversed, and takes several more years before the kind of people who had been concerned about the trend are willing to accept that it has reversed.
Which concerns that were actually solved are people still bringing up? The ones I see are the fact that health insurance keeps getting more expensive, and that nearly 10% of people are uninsured, and those are both true, even though the rate of increase is much less than it was 15 years ago, and so is the uninsured rate.
I sometimes see people complaining about pre-existing conditions, although the ACA prohibits policies that discriminate in rates or coverage based on the patient's prior health.
But then, Republicans did try to repeal that, and maybe they will again. America can't free itself from distinctively American problems for good, even if few people want them back.
It's much worse now but this has been going on for a while. When I started working in niche service journalism in the mid-late 2000s, when I tried to chase down stories about even mundane topics (like the regulation of stormwater runoff), I found that the spin on the issues - including very much in academic journals - was just wrong, or extrapolated beyond reason. Now it's largely the default.
With College fees they increased 8 fold as share of median income from 1970 to 2010 and then levelled off. Both perspectives can be right depending on what time frame you use, though the idea it is increasing seems outdated.
Curiously enough, people who never go to the doctor are exactly those hurt by reforms like the ACA. It used to be that health insurers could offer great deals to those who make no claims (good health and no habit of seeing the doctor) while refusing to take patients with chronic illnesses (who are guaranteed to claim a lot, and are expensive to cover). It was good for the insurers, and good for people who could be assured of excellent health -- but terrible for people with the misfortune of actually needing coverage.
Now they have to take everyone regardless of health, which means the healthiest patients cross-subsidize sicker ones. Which also happens in every other country where health insurance exists. (Americans also pay exceptionally high prices, and many people take a cut along the way, but that is a separate matter and would require different reforms to address.)
The best risk pool is the entire country. I would never go back to a system where people were segregated by risk.
I haven't paid much attention in the past couple years, but my premiums went up significantly when Trump ended CSRs. I'm on the ACA, and California responded by raising premiums on everyone with Silver level coverage. They've kept rising well over inflation over every year, and they exploded against last year, while my prescription drug coverage got worse.
This is a big problem on Twitter and a reason why, I think, MY enjoys an enduring competitive advantage in the punditry business.
A specific example is this socialist economist Marshall Steinbaum who I was always interested in because he would have lefty takes against YIMBYism and things like that. But....he just never actually explained or argued for anything! Just some knowing snark. And like, I'm not an economist so I'm not going to be able to dig around in his papers he published or something and try to reverse engineer his snark. So after a while I just stopped paying attention because what's the point.
Anyway, to any pundits out there, my advice if you want to persuade people: actually go through the trouble of persuading them! Like, lay down the argument.
When you combine that with the kind of chicanery that was going on at Lehman Brothers, it seems like an overstatement to call the criticisms of the Holder Justice Department for not even trying to prosecute the bank fraudsters a "conspiracy theory." This is from Dick Fuld's Wikipedia profile:
"The Report of Anton R. Valukas, the official court-mandated investigation into the Lehman bankruptcy, concluded that "While the business decisions that brought about the crisis were largely within the realm of acceptable business judgement, the actions to manipulate financial statements do give rise to 'colorable claims', especially against the CEO and CFOs but also against the auditors. In the opinion of the Examiner, 'colorable' is generally meant to mean that sufficient evidence exists to support legal action and possible recovery of losses." "Regarding liquidity, throughout 2008 Lehman made false claims of having billions of dollars in available cash to repay counterparties when in reality, significant portions of the reported amounts were in fact encumbered or otherwise unavailable for use. On September 12, 2008, two days after reporting $41 billion in liquidity, true available funds totaled only $2 billion." Lehman filed for bankruptcy on September 15. "
See also Angelo Mozilo's slap on the wrist for his insider-trading and chicanery at Countrywide.
Finally, read Neil Barofsky, the Inspector General for TARP. His books provides the receipts of how Geithner, et al undermined his attempts to hold the bank fraudsters accountable.
All of this stunk to high heaven and people saw what was going on. We paid a huge political price in 2010 for letting these guys walk.
The reaction to Luigi Mangione has shown that a lot of progressives want to shoot bankers and insurance executives for merely existing. The existance of banks and insurance is a crime in and of itself.
I think people want to do it but don’t want to deal with the consequences and sort of admire Luigi for having bigger balls than them. I also think human brains are poorly integrated and often ambivalent.
I think you're right in the narrow sense that this is a fairly basic human impulse to feel emotional satisfaction when a person you believe is bad is harmed.
But it used to be the case that moving beyond this was considered one of the things that made a person civilized. Going even all the way back to ancient Greece the basic idea was that unrestrained violence against the enemy was barbarism and regulated violence was civilization. That the same victim could be both justly and unjustly harmed, and the distinction was not the nature of their crimes but rather the process by which violence was distributed.
It is disturbing and, in my opinion, a sign of profound moral rot that this is just not something many people believe in our country today, and it's part of a broader issue about a whole range of things (not just violence) where people seem to increasingly be equating "this feeling I am having is a natural human emotional impulse" with "therefore it is fine". This basic attitude characterizes most of the right and also, increasingly, the left as well.
"It is disturbing and, in my opinion, a sign of profound moral rot that this is just not something many people believe in our country today, and it's part of a broader issue about a whole range of things (not just violence) where people seem to increasingly be equating "this feeling I am having is a natural human emotional impulse" with "therefore it is fine"."
I cannot agree with this comment more. It's been especially apparent in the context of the Trump administration's deportation of students who were lawfully here but who engaged in protests against Israel. People who support the administration aren't responding to objections by saying things like "under appropriate precedent, the 1A protections at issue here don't apply to the individuals in question, and therefore the deportations are legally justified and the level of due process provided is legally and ethically sufficient." No, they're just saying that these students engaged in rhetoric they disagreed with so good riddance- WHATEVER is done to them is justified and fine solely because they have been ACCUSED of having engaged in problematic protests. For some (all?) of the individuals in question the administration hasn't even attempted to allege that they actively supported Hamas or anything nearly that egregious- it's just that they don't like these students and therefore want them gone. Any pretense of restraint or conformity to rule of law is discarded, but their supporters gleefully and wholeheartedly support the actions. Same with the Venezuelans deported to a torture prison in El Salvador. These are bad people so any level of pain and suffering imposed on them by the state is celebrated.
It's frightening to witness people's celebration of the removal of any moral or ethical safeguards against the unmitigated use of authoritarian power by our government. Principles are entirely absent from these discussions.
It seems to be a particular problem on the right that support for Trump is completely all or nothing; if you're on the Trump side you can't publicly criticize anything his administration does. The silence from the business community on tariffs has been deafening. It seems like it should be perfectly possible for someone like Zuck or Marc Andreesen or any of Trump's new techbro fans to say something like "I trust Republicans more on [taxes / wokeness / antitrust / whatever it is they care about] but it's probably bad for the president to pick individual winners and losers in the economy" but they just can't bring themselves to do it.
I superlike™️ this comment, which also describes my view about this regrettable reality.
When I was in grad school a decade ago, some of my fellow students advocated for violence against "gentrification" and of course "evil developers" are the bogeymen in most every planning project. At the time, I thought this was just post-adolescent silliness (I was a midcareer student). Now, after seeing the pandemic era rioting/looting and of course the United Healthcare murder, as well as other recent phenomena, I'm on team "moral rot."
Well, we used to not really have it amplified to each other. I don't think the emotional impulse didn't exist, but social media didn't exist so it was the domain of the porch conversation, rather than the public conversation.
I think people have difficulty distinguishing between what they see online and the real world. So it's not that many people do want to have real people murdered, it's that they view bankers and insurance executives as avatars of the systems they despise rather than real people, and it's perfectly fine to delete avatars of oppressive systems. So I think the people talking about it online genuinely are happy to see these things happen. I haven't seen anything that would indicate to me that they aren't.
Yeah in the 1970s in Germany and Italy and here a bit you had student types who bought guns to kidnap and kill prominent executives or politicians they thought were fascists. I sometimes have the thought "if you were consistent, you would..." but then I decide it is probably best to keep my mouth shut.
Freddie deBoer is the king of bad faith comments. His MO is posting something misinformed or irrelevant and then refusing to engage with any of the thoughtful and informed responses he gets.
I mean, I'll take Freddie to be saying that it's somewhat unclear exactly how far people will operationalize this kind of sentiment. Clearly for some people it's cheap talk, and clearly very few people are actually going to go out and assassinate CEOs, but I think it is reasonable to wonder if many people (even if not a majority) might, say, jury-nullify convictions for assassinating CEOs, or assist a sort of Weatherman kind of bombing operation even if they weren't going to build or place bombs themselves.
It’s not just progressives. 68% of Americans think capitalism is not working for the average American.
I really wish these people could see how the average Italian lives. A month of no air conditioning, driving a motor scooter and having a 7 cubic foot refrigerator would be educational. Capitalism is working much better than the workers understand.
there’s a big difference between german/dutch/danish and italian/spanish living standards. france is somewhere in between, basically paris is as rich as northern europe and the provinces are not
as a vegetarian, i prefer italy. i would also feel sexy on a motor scooter. the only thing about a middle class italian life style that would piss me off is not being able to go the speed limit on the autostrada, and being passed by people who could afford a quality compact car or better. i feel sorry for the dudes in their subcompacts who can’t go over 120 km/hr and have their status pummeled by people with real cars
I'd argue that even the Northern European countries don't live an equivalent lifestyle to that of Americans. I've worked for a Dutch company for almost 3 years and the lifestyle just isn't comparable - The European mind truly can't comprehend houses larger than 1500 SQ FT, Amazon Prime and readily available ice.
I think it depends on what you value most in a standard of living. I live in a 1200 square foot house and I would trade at least 200 feet of it for not having some of my neighbors living on the streets or lacking access to behavioral health services and the impact that has on my life in terms of both moral injury and public safety. To me quality of life is more impacted by safety, health, access to nature, access to arts, and connection to community than to having more stuff that I can buy on Amazon. I don't think that Denmark is a paradise but they do seem to have embraced a sort of hedonistic sustainability where they have a lot of intangible things that make life pleasant and fun. (Skiing on the slopes of your zero emissions waste management structure in the middle of a huge city sounds pretty cool.) I would trade that for a world with bigger cars and houses.
Swiss economic policy is closer to American than mainline European in many regards, Norwegians are sitting on a mid-sized lake of oil per capita, Denmark and the Netherlands are still 20% poorer than the US even after accounting for rent-seeking in American healthcare and tertiary education markets, Sweden closer to 30% poorer.
And to the extent that American urban progressives love their *cities,* it is precisely because all four of those countries are absolute sudden death on urban disorder and the people who cause it, with a limited exception in Sweden, which has basically stopped policing certain immigrant neighborhoods and ceded them to local informal authorities.
you see europe very clearly. one quibble. norway pumps more oil per capita than saudi arabia. it’s a full on petro state that also has non petro sectors.
As I said, a mid-sized lake of oil per capita... reserves on the order of 1500 barrels per person.
That said, O&G are roughly 25% of GDP, so it is still an advanced economy without that. Just one that has to pay for infrastructure and pensions via taxation instead of with a massive pot of gold sitting on a rainbow, i.e. a normal European country.
I feel like that folks in the progressive middle have done a poor job of distinguishing between "well-regulated capitalism" and "small business capitalism" vs unfettered capitalism. The problems that they see in terms of labor exploitation, environmental damage, degradation of democratic institutions, and lack of universal access to basic services are not ones that can't be fixed while maintaining capitalism. It would just require a more robust regulatory framework, public provision of basic services through taxes, and repealing laws that give corporations the same rights as individuals. I know plenty of people who rail against capitalism who are realistically imagining any future that doesn't involve some actual capitalism.
The anti-trust argument is sort of like the libertarian belief that ditching fiat money will transform the economy. Ecuador could adopt a completely optimal monetary policy and it would still have shitty infrastructure and capital.
Really cynical part of me feels like their antitrust gambit is essentially “it’s unfair that tech ppl, who I don’t think is that smart, makes a lot of money while I don’t make the money I deserve for my intelligence” (to be fair, tech has its own share of “it’s unfair that me with a CS degree from CMU/MIT/Stanford/Berkeley and a position at Google/Meta/Apple is not experiencing a success I deserve including romantic one - I hate women”)
I increasingly feel like these catastrophization and extreme lack of risk tolerance(left) and desire to destroy everything(right) are just manifestations of mental health issues exacerbated by technology of the companies they loathe
>it’s unfair that me with a CS degree from CMU/MIT/Stanford/Berkeley and a position at Google/Meta/Apple is not experiencing a success I deserve including romantic one - I hate women
Having been in the industry for decades, this is pretty much a vile caricature of the industry, mostly perpetuated by a media that also hates us for our successes (and, you know, for destroying their business models root and branch). While the internet has made it easy to find sad and lonely people, they are no more common in tech than anywhere else I've seen (and largely less so, as money itself leads to some level of romantic success).
Synthesis: Arts degree me is well impressed with my irl friends in the tech space, but Andreesen, Sacks, Thiel, Altman, masculine energy Mark, and Twitter rando are S-tier amoral robber barons here to simply suck the goodness out of society; and are visibly captaining the industry. My CS friends are clever and capable and it’s not hard to imagine them thriving in a better tech paradigm.
Wait, what? I work in tech and this list of people absolutely have outsized influence. What meets the bar for captaining the industry from your perspective?
I remember in law school being taught that the Constitution functions as a restraint on government, and the Sherman Anti Trust Act operates as a restraint on big business, passed in reaction to a time when Big Business or “Trusts” or whatever was looking more powerful than government. We are in another such era with some of the tech stuff, but it’s not the nineteenth century anymore and “anti-trust” seems like an antiquated weapon to deal with 21st century shenanigans. But when all you’ve got is a hammer (and Congress is dysfunctional, so you’re not getting anything new), everything looks like a nail.
With respect to anti-trust and the general "gilded age" narrative, it's important to remember that the history you're reading was written by the winners of that particular battle. That was first time in history it was possible to get wealthy without basically stealing it, and a whole bunch of people hated that fact
Not even close to true. Huge commercial fortunes were made in ancient times, the middle ages, the Renaissance, the early modern period of the great trading empires...
Does "monopoly" have a strict definition? Like, it is possible to create strict definitions to it, but we've seen in the last 10 years a mutation in what the operational definition of monopoly is.
Antitrust law says nothing of the kind. It does not measure "bigness", it measures market dominance achieved through anti-competitive practices, both of which have clear definitions.
I do think that there is a component of the problem of big tech that is related to antitrust issues. There is not a lot of options for folks to choose from when it comes to social media platforms and that does make it harder for folks to vote with their dollar, as it were, for safer or more responsible platforms. If there was an actual equivalent to Facebook on the market because Facebook had to divide, I would get to choose which of the least toxic markets, I wanted to go to. It also gives the folks, like Musk, an insane platform compared to others in a marketplace of ideas. I don't think breaking up big tech is a some sort of silver bullet but it would help.
The "trust" part of "Antitrust" is a relic, but the rest is still relevant. Anti-competitive practices lead to (surprise) less competition, to everybody's detriment.
That's just silly. "Antitrust framing" is there to point out that competition is good and necessary for the survival and flourishing of a dynamic free market. Aggressive antitrust creates more tech fortunes, not fewer. People who defend the anti-competitive business practices of Amazon, Alphabet, Apple and Meta are anti-capitalists -- defenders of entrenched corporate incumbents who use their political and media influence to defend and expand their fiefs.
I mean, are you asking for a data dump of the hundreds of textbooks and volumes of case law describing and defining this term? You have an internet connection, so I am confident you can do your own research. The targeted practices by the companies mentioned above are listed in the complaints filed against them. You can start with US v. Google (2023) and US v. Apple (2024).
I don’t think so. It is, in fact, one of the only tools government has to attack big business as such (which isn’t doing anything wrong). Since people don’t like big business, that is what gets used even if that’s not what it (should) be for.
And 10-7 revealed that many of them want to butcher innocent women and children because they belong to the “wrong” group in their version of Blood and Soil politics.
In the Eisenhower sense of it being theft. The US system has a lot of middlemen that don't add anything to patient care and siphon money away. The US, unlike most countries, looks at healthcare like a national industry.
On this blog and others, people have rightly excoriated the California high speed railway for bragging about how many people they employ... that's not the point, the point is the train.
In the US, we have a mess of insurance and providers and a cartel of doctors limiting their own supply.
We could do the Swiss system, the Taiwan system, the Israeli system, the Dutch system, the Singapore system, and any one of them would have better results (as in lives saved) and lower costs.
To take an example, the market for Electronic Health Records is 30 billion dollars in the US. Many fortunes have been made, some patients have been helped, and I am sure a lot of innovations have come about. But that's not the train.
In Taiwan, they have had National Single Payer Insurance since 1995. In 2002, they added a little 64 kb (it's bigger now) chip to the insurance card that everyone carries. This has all of the patient's medical records and any doctor or hospital can read it. That was 23 years ago.
Now, if the EHR market in Taiwan was proportional by population to the US, it would be 2.875 billion dollars. Except it isn't, because Taiwan built the train 23 years ago and it works. That is 2.875 dollars they can use on actual patient care, rather than support a network of hospital suppliers.
There are so many things in the US health system that are not the train and too many Americans are proud of how much all of these things cost. The people who suffer are the patients.
I really don't understand your point, yes it is a bad healthcare system, but middle men aren't theives, they are carrying out legal actions for a bunch of reasons some good and some bad.
This is an argument for why the American health care system is bad, not why it's a crime. I think just about everyone would agree with the former, but I'm struggling to understand why you think its the latter.
I would understand Matthew to be using it in the colloquial sense IF he hadn't responded to a specific question asking "how would that make it a crime?" If he just wanted to make the general point that it's a disgusting and horrible system then he can say that, but that's not the context he was commenting within.
Middlemen add a lot to patient care! If everyone was just going directly to heart surgeons, the heart surgeons would have no time to figure out which people would benefit from heart surgery and which ones would benefit more from cholesterol medicine or Prozac or aspirin. Middlemen are essential for routing people effectively in ways that saves the valuable time of practitioners and specialists.
Of all the rent seeking bogeymen you could have chosen, you picked digitization? Wow, an island nation with half the population of California managed to get everyone into a single database, very impressive. If they have all that money kicking around, why don't they build a better healthcare system so rich asians get care there instead of in the US?
But the point isn't about digitization, it's about how the laudable goal of digitization was turned into an opportunity for rent seeking in the American context.
In the Obama era act that provided money for digitizing health, there was language that mandated that systems should be interoperable, achieve a common format in X years, and some basic good governance stuff.
That all got stripped out of the final bill. Remember when the EU mandated that all phones had to use USB C and the consumer experience of buying a smart phone got radically better? You could use your existing chargers and cables between different phones.
The EHR systems in the US aren't a big problem among US health system problems, but they are a symptom.
Providers and doctors buy one EHR system. Then they want to send the records to a different hospital... Which uses a different system. The records have to be manually re entered. A hospital can't switch systems because they then have to manually shift over all the records. It is a massively wasteful as these ehr companies purposely reduce interoperability in order to protect market share.
It's great for supporting an EHR corporate sector but it's awful for patients and providers.
That's why I contrasted it with Taiwan who's first goal was making an EHR that served patients and providers, rather than prioritizing the creation of a competitive EHR market.
I did EMR implementations for about five years and a dozen healthcare systems (hey, it was where the money was!) so I have an understanding of the complexities of interconnection. A health system does not have to be on the same EMR to receive healthcare records to another system; standards like FHIR exist and outcomes are better for patients than the pre-HITECH solution of toting a box of your medical records between hospitals.
I'm not familiar with Taiwan's chip system (what level of detail could you maintain on a user-portable system? Are people carrying around the raw images of their MRIs between providers?) but you have an overly rosy view of US government capacity if you think the federal government could have built a centralized database of every patient's healthcare records. This is the same government that needed an extra 2 years and $2B to launch a website to let people buy insurance, much less make medical decisions.
The USB-C example is a good one because as someone who just got a new iPhone I do not remember the consumer experience of buying a smartphone getting radically better. I do remember having to buy a new USB outlet because I need to run Lightning cables for my Apple accessories and USB-C for my iPhone.
I also remember doing implementations of my American EMR at hospitals in the Netherlands and Denmark, and I have colleagues that worked at implementations at NHS hospitals in Britain. I don't recall hearing of any Taiwanese solution being implemented in America, or from any other country for that matter (Siemens (German) used to have a platform Soarian before it was acquired and deprecated by a different American EMR company).
That seems to be the common thread. America is creating and exporting new software, health care, and technology, and other countries are happy to free ride and impose regulations on the rough edges that bother them the most.
Rich people buy Maseratis and Lamborghinis. That doesn't say anything about the cars of average Italians. The US has some great doctors and hospitals, but that doesn't help the average American.
Because results matter. The AI made many more mistakes, a 90% error rate based on how many claims were reversed on appeal. Of course, this resulted in many people suffering needlessly due to delays in care while being forced to litigate this with the insurance company.
That so called "office drone" is still an actually intelligent entity, and gets it right more often than not. Generative AI is pretty cool, sometimes, and has its uses. But the fact that it still sometimes takes insane amounts of compute and time to determine that 9.9 is indeed larger than 9.11 should give people some pause, especially when it comes to making life or death decisions.
This was not GenAI. The lawsuit you’re referring to involved someone who was (allegedly) denied care in July 2022. GenAI hype began with ChatGPT in November 2022; models existed before then but were used for research or as curiosities. So you’re talking about some sort of traditional AI algorithm.
More to the point, while it’s certainly possible that UHC used some sort of poorly functioning AI tool in a reckless or malicious way, we really need to be cautious of our intuition that humans are necessarily fair in a way that algorithms aren’t. An obvious example here is the “algorithm” of credit scores. It turns out that a soulless machine spitting out a number based on some set of data is both better and fairer at predicting credit risk than the old system where you got a mortgage if the loan officer liked the firmness of your handshake.
Do you have a cite for the 90% reversal rate? Those figures can be tricky to decipher. If you're getting overturned more often on appeal but generating fewer appeals then does that mean the denials are better or worse? If every so often the AI makes an egregious mistake (which then generates an appeal because the denial is so problematic) but is otherwise doing an excellent job then is it better or worse than the individual who generates 10x the appeals but in areas where it won't be reversed as often (potentially because the company has the discretion to go the way the reviewer did even though a better system would have made a different decision)?
All of which is just to say that making evaluations based on appealed decisions can skew your results. What you'd want to do is an audit of a random sampling of all decisions to review and determine how accurate the decider is.
*To be clear, I don't support the AI here. I have no knowledge of how it operates or whether it's doing a good job, but my prior would be that it's too early to be utilizing AI for these purposes so it's likely to be a poor replacement for a human reviewer, especially if it's operating and making decisions on its own with no human review/input before finalizing it's call. But I do work in healthcare, specifically oversight, so I've seen situations where a specific data point can appear to be one thing but a deeper dive makes it clear why it's not telling you what you think it is.
It's the only way for the claimants to seek damages in a world where using AI to deny tens of thousands of claims per month isn't yet specifically illegal. The law often trails behind novel forms of activity that cause harm, which eventually the public will agree should be regulated.
I guess I'm not really sure of your point here. Would you have seen no problem with meat packers selling diseased meat or home builders using lead paint just because they weren't yet regulated? You have to believe that something causing harm should be illegal before it actually does become illegal. Hopefully this suit will succeed and put pressure on the use of these tools.
The word "crime" has a specific meaning, it does not denote harmful acts ot things one can be sued for.
I have no idea when selling dodgy meat is or isn't a crime, it would depend on the specifics of the law and the actions taken, my guess is that the vast majority of the time it would not be crime.
This is an odd comment, but particularly so in response to today's article from MY where he discussed the state of the law as it related to banking in 2008-2009. The whole thesis is that just because something is bad doesn't mean it's a crime or illegal- it's a crime in situations where it violates a criminal statute. So just because something is bad and you think that it should be illegal does not mean it actually is. The stuff you're upset about in this context will be come criminal once criminal statutes are revised to cover the conduct, but it won't be a crime today just because you think it should be, nor will it be a crime when/if a civil suit determines that it violated some duty.
The care and treatments that are available to some individuals in the best in the world. My mother recently received treatment at the Mayo Clinic and it was truly exemplary. I could easily be persuaded that the care there rivals or surpasses the care available anywhere in the world. But that's very different than the care and treatment that average people are receiving in your average doctor's office across the country.
Which country would you say has better care overall?
I see many people repeat what you do, but we're not competing against every other country combined. If 30 other countries are great at one or two things, but terrible at others that wouldn't mean they were better than the US.
Everyone is dunking on an obvious turn of phrase. Our healthcare system is, in fact, worse than every other developed country, and many that aren't. Matt used to have a podcast that covered this regularly.
Tying healthcare to your employer makes zero sense. Going bankrupt due to medical expenses is an American phenomenon.
Well, maybe they’d be more popular if we had adequate white collar enforcement to prevent their industries from being cesspits of corruption and fraud.
"Insurance fraud" is very common but, despite the name, this is not actually insurers committing fraud but rather them being defrauded, usually by providers. Most of the actually-illegal fraud in the healthcare system is committed by various provider-side entities (doctors, ambulance companies, clinics, even hospitals)
It is very annoying when your insurance denies a claim that they should accept but this is typically not criminal fraud, it's a civil breach of their agreement with their customers.
Number one unpopular reality of US healthcare: For basically all issues, it turns out that providers/suppliers/vendors are the bad guys, near-100% of the time. Insurers are just the hired middleman who acts as a cut-out and play-acts at being the villain.
This is the great truth that all of America needs to learn. No one thinks their mechanic is supposed to treat you like a family member - they just fix your car. The guy who sells him his OEM parts? Fixes your car. They don't comfort you over the fender bender.
Over-treating, over-charging, insurance fraud, patent thickets, deliberate inflation of information asymmetry, outright lying to patents, study falsification, wildly differential reimbursement rates and charges... yea, "bad guys" seems fine to me.
This doesn't mean all providers and vendors are bad guys, just that they're the main source thereof.
And medical errors, of course. But "suppliers / vendors" covers too much ground to be a very useful, and the distinction between "insurer" and "provider" is blurring rapidly. United Healthcare (an insurer) has purchased hospitals and physician practices comprising about 10% of all doctors in the country. More than half of all doctors work for a corporation owned or controlled by a hospital group or insurer group or a PE roll-up. Treatment regimes, charges, information management, fraudulent practices etc are increasingly set by corporate policy designed to optimize corporate profits, and delivering on divisional and practice-based "targets" consistent with these policies are tied to provider compensation. The system and the incentive structures are "bad"
I'm guessing a lot of people are thinking of "insurance fraud" as wrongly denying legitimate claims in a way that makes sense as something to be angry about, but using the wrong term. (But then they understand what "insurance fraud" means when someone fakes a disability for insurance money.) It's like the 1992 presidential debate where a voter asked the candidates how the budget deficit had directly affected them, not knowing her question didn't make sense and she meant the economic recession.
Doesn't Medicare replace the role of insurance companies where it applies? Does United Health also operate as a healthcare provider at the same time or something?
While I suspect this is more true than I'd like to think, I also highly suspect it is influenced by a lot of "online sphere" talk. Specifically, I'd wager most of the energy behind supporting him was manufactured specifically to drive discord.
I think it's specifically health insurance executives that everyone (not just progressives) would like to shoot, or at least, see shot. These companies play a huge negative role in normal peoples' everyday lives, typically at moments of crisis and extreme vulnerability. The positive reaction to Luigi's actions was totally unsurprising to me.
It’s just like the people who want to see the IRS defunded because filing taxes is so onerous. They don’t realize that the IRS are the people who are trying to *help* them file taxes, and decades of defunding are why the forms are so annoying.
Well, this would be more like if the IRS was deliberately rejecting people's legitimate deductions.
On his assassination bullets, Luigi cited that book "Delay, Deny, Defend" which is about how the health insurance industry deliberately rejects or sabotages legitimate claims in order to increase its profits. I think that's good evidence he was objecting to malfeasance, not just the mere existence or idea of health insurance.
I think I just shows frustration with the system. I doubt most people would go and do it, but they cheer when an insurance CEO dies because the system itself sucks (despite some progressive darlings like doctors and government regulators having a hand in this too). Insurance companies are just the easiest targets because they're the owns that you pay to cover your healthcare needs.
I think the Great Recession birthed the progressive economics movement on the left of the Democratic party in a different way.
After the Great Recession, a lot of people in the US were angry that the powers that be failed them so badly. The fact that no heads rolled made them even angrier towards the financial system and a government that was viewed as partially complicit. This generated some energy behind Occupy Wall Street, Bernie, Warren, etc. But eventually everyone got over it. The Great Recession started to disappear into the rearview mirror.
The left's big mistake was to assume that this anger towards banks represented something else: the awakening of a dormant anti-capitalist spirit across American society. When concerns about banks faded, the left thought it would be a good idea to channel this energy into going after Big Tech, which basically no one seems to care about.
This mistake is what led the left to assert that just going all the way left on economics would bring everyone off the sidelines to vote for Democrats. I think they'll keep believing this at least until we get a hard left nominee who loses.
Could we have a causes of the recession post some? Really I’m asking for your opinion on Sumner which I know is somewhat hard to do confidently as a non-economist but still.
They are empirical and linguistic nihilists like the GOP. They ignore evidence that their positions are deeply unpopular and then they claim Democrats are “right wing” and denied all the leftist appeasement Biden carried out.
And I think that anger wasn’t about legality per se. My mother in law (far from a progressive) is to this day livid about how the bankers took excess returns throughout the early 2000s, and spread the risk across society. And when it came time to bail them out, they made out like bandits in the bail out. Her point is not that they broke any laws, and not that we shouldn’t have bailed them out, but that we failed to extract a pound of flesh when we had leverage as a society. (They needed the bail out)
See, this is where I'm always a little bit perplexed. My politics would have been fine with a pound of flesh, or a ceremonial remove a sword-hand sort of thing, or bill of attainder and imprisoned for like 15 years.
But is this what normal people actually wanted in America? What did your mother-in-law actually want to happen to the men and women engaged in pretty small slices of banking activity?
This is why we need reasonable conservatives. People who want to, you know, conserve things, rather than decriminalize crime for selected elites and concentrate despotic power in a few hands, who promise their supporters that they will never have to vote again. (see, for instance, Trump's speech at Turning Points Action: https://youtu.be/ghEIj7jS6qI?t=3632 )
But in a proper Fed response some heads would have rolled. The shareholders of the most leveraged firms woud have lost everything. But there would have been less --unemployment, lost income, foreclosures -- to be mad about.
And they may not even be the “right” ones. The “right” ones are those who go non-bailout bust even though the the Fed IS plumping out enough liquidity to prevent actual and expected inflation not to fall below target.
Somehow I, a professional writer/editor and frequent SB comments pedant, was unaware of this Weird Al masterpiece until now. Thank you for making my day!
Let's see if I've got this straight. Lefties hate Obama for not having bankers arrested by the police they want to defund and thrown in the prisons that they want to abolish.
You can steelman it. To a leftist, the criminal justice system built under capitalism is about waging class warfare against the working class, on behalf of the capitalist class. Its proper role is to wage class warfare in the opposite direction. A real leftist would use it for that purpose, but in our fallen world, that will not happen until the ̶r̶a̶p̶t̶u̶r̶e̶ ̶ revolution.
I think this is backwards - both religious and non-religious worldviews make use of the same features of human psychology in shaping their visions of how the world could/should/would be.
Leftists hate Democrats for failing to meet their ever changing goalposts. They hate the work of democracy, persuasion, compromise, and legislating. They feel their are inherently correct and thus morally justified in abusing others.
The lion’s share of the fraud that caused the great recession was committed by consumers. Millions of Americans told whoppers to qualify for loans. This was, in fact, criminal. Under Georgia law, any person who counsels, encourages, aids or abets the commission of a felony is guilty of that crime. A fraudulent loan application sent by email is wire fraud under federal law. Two or more predicate acts (which include wire fraud and a bunch of other things) are all you need to prove a RICO conspiracy under federal law.
It would have been very easy to prosecute a few hundred loan officers and middle managers for wire fraud. Quite a few loan officers and managers went rogue and were approving obviously false applications to pad their bonuses and commissions. I can’t say how high up the chain of command this sort of behavior went because I don’t know of any investigation. It’s certainly true that systemic risk is more important than the decisions of greedy loan officers whose lending authority is probably low eight figures.
The fraud at the heart of the financial crisis were the loan officers and borrowers, and it would have only pleased Republicans to go after the Liar Loans people (remember the Rick Santelli rant on CNBC?).
There just weren't as many cases where illegal behavior could be proven beyond the simple fraud of lying about income and creditworthiness on a loan application.
No, at the heart of the financial crisis were the fraudulent financial devices the firms used to leverage crap products into enormous profits for themselves until the housing bubble (based in part on worthless mortgages) popped.
People seem to think that the fact that they blew up is proof enough that the "financial devices" that blew up were fraudulent, but what they were was very well disclosed and understood by industry participants. "Fraudulent" is a word with a meaning and it requires someone to have lied about what exactly a CDO or a NIM tranche or whatever was, but no one really lied about those things. Even in the civil suits that Plaintiffs won the accusations were basically just "these DTI ratios were a little higher than stated if you did a bunch of extra diligence that no one required and represented that they did" or "this small loan broker in Florida that went out of business probably granted a few too many exceptions to its underwriting guidelines and didn't document them properly from the perspective of someone looking at the file eight years later." People want to believe that just because something didn't work that it should have been illegal, but it simply wasn't.
I don't really care if it was legal or illegal. They took actions that created huge profits for themselves while putting the nation at enormous risk. Whether or not they could be prosecuted (probably not), some form of retribution -- yes, retribution -- was needed.
That's some Trump-ass nonsense. We don't punish people with the power of the state in this country unless we can prove, in court, that they broke an actually existing law.
We could certainly make bailouts -- which the government was under no obligation to actually do -- contingent on some amount of "punishment" or "retribution" or whatever.
I'm not talking about jail, but reforms that had some bite.
"Punish" is such a harsh word. When marginal tax rates were 90% was that punishment? Would increasing the marginal rate to 40% now be "punishment"? The state does plenty of justifiable things that can hurt people without hauling them into court or have anything to do with violating the law.
For example, the legislation passed by Congress that Obama railed against would have used tax laws to roll back the AIG bonuses that left everyone purple with rage.
The packaging and selling of mortgage backed securities spread the results of the core fraudulent (and likely illegal) behavior. But those securities were not fraudulent in the legal sense of that word.
It is definitely the case that players in the system misunderstood or willingly ignored the systemic and correlated risks of people defaulting on their mortgages. That was bad, it destroyed people's lives and put the banking system at risk. But that didn't make those mistakes criminal.
Do you include in that list of devices the rating agencies that the banks were compelled to use to evaluate the risks of the securities they were selling?
Oh absolutely. Completely corrupt collusion. The rating agencies, who were hired by the financial institutions, gave them the high ratings they wanted, lest they not be hired again.
Financial deregulation in the 90s under Clinton was stupid. Not doing more to police the firms during the housing bubble under Bush was equally stupid.
I’m pretty sure even people with income were encouraged to do irresponsible things like use variable rate credit lines for downpayments on variable rate mortgages; it’s crazy that was ever tolerated. Hoocoodanode!
And nearly all of them (remember they, by and large, didn't work for banks, but for mortgage brokerages which went out of business in the bust) did in fact lose their jobs.
The independent mortgage brokerage model is perhaps another example of small businesses which exist largely to arbitrage the fact that some rules (de jure or de facto due to the low probability of being caught) don't apply to small businesses.
My rough recollection is JP Morgan Chase was in the strongest position among all banks and financial institutions throughout the crisis and came out in a relatively stronger position than before. Because I'm lazy, here's ChatGPT's fact check...
Yes, your comment is factually correct.
Key facts:
• JPMorgan Chase was widely seen as one of the strongest major U.S. banks during the 2008 financial crisis.
• It avoided many of the worst mortgage-backed securities exposures that crippled other banks.
• Under Jamie Dimon’s leadership, JPMorgan acquired Bear Stearns (with government assistance) and later Washington Mutual, further strengthening its market position.
• By most accounts, the bank emerged from the crisis relatively stronger compared to peers like Citigroup, Bank of America, and Lehman Brothers (which failed).
So your recollection is accurate: JPMorgan Chase was seen as one of the best-positioned large banks during and after the crisis.
Would you prefer I share misinformation based upon my vague recollection of events that happened over 15 years ago? What we might call an Human Hallucination?
I could've requested credible sources, browsed them, and included those to increase the accuracy and legitimacy. Maybe I could even leave out the disclaimer of AI assistance. Just thinking it's useful to provide those AI-source statements, which match my understanding, and provide details on JPM's trajectory through this event.
I'm kind of mixed on the use of ChatGPT in this way. I do feel like I've run into some people where I'm essentially just arguing against ChatGPT, but put through a dumbness filter. However, I think it can serve somewhat of a purpose in presenting prima facie evidence of something.
I'd compare it to Wikipedia. It isn't 100% accurate, and reading a Wikipedia article isn't going to make you an expert on it, but it serves a good way to quickly check your priors in a debate. You should rely on either over stronger evidence, but you also shouldn't disregard either without reason to do so.
A housing crash would not have led to the worst recession since the Great Depression. It would not have caused a financial crisis. What did cause those things was the corruption of the major financial firms in leveraging bad mortgages to make exorbitant profits until it all crashed down around them, bringing the entire economy with them.
It's so crystallizing to read a lot of the commentary above. I understand much more clearly the world view of some posters. And it's not a judgement, honestly.
The story we tell ourselves about what happened is funny. But it's clear here most people feel that no state-oriented punishment was in order for those who packaged junk and pushed leverage and rated securities as A because there was no appropriate law on the book.
I would say that it would have been illiberal to punish them, but it would not have been unjust. I would also say, a great deal of the political disorder we're reckoning with in the United States boils down to President Obama's unwillingness to be a bit more of a democrat and less of a liberal.
Well yes, prosecuting people who haven’t broken any laws or writing deliberately vague laws so that you can prosecute people you don’t like backfires horribly when a President you don’t like wins office. That doesn’t make it “unjust”, it just makes it a really bad idea if you’re planning on having more elections in the future.
I really am sympathetic to this, but I think liberals need to reckon with the power behind politics a little bit more. Law doesn't solve politics - it's just a tool to seek justice.
Let me ask then, the election you mention is a tool we use to legitimate our leaders via democracy. If you had put every bank CEO's fate up to a vote, what would have happened?
A bunch of people who feel vaguely negatively about bank CEOs would have voted for terrible things to happen to them, even if the executive had nothing to do with the crisis, and then anyone who might ever become the victim of public ire, including celebrities, minorities, and politicians, would look to flee the country. There’s a reason there aren’t any functioning direct democracies - it’s a really bad form of government!
How do you reconcile this with elections for House seats, or elections for governors, or juries?
The power to be excluded by the majority is just a function of democracy. The threat of the state's power to turn against you exists no matter what system you use.
In the case of the 2008-2009 financial crisis, the majority clearly felt a way, it's been working out it's anger through our political system for some time now.
Whether that's good or bad depends on your politics, but it's indisputable that our political leaders were not interested in punishing a class of people in the minority. Would our current form of representative democracy be called "good"?
How many progressive narratives need to turn out to be based on "things that aren’t true" before there's a systemic discrediting? At the least, each time it happens, the burden of evidence on the next sensational but implausible assertion should rise, and the focus should be on why this movement keeps deploying falsehoods alongside debunking the latest specific example.
Which is why a functioning society needs both sides. They need a liberal side to push things forward, and a conservative side to say NO that shit is stupid don't do that.
And ideally a whole lot of people in the middle that aren't blinded by partisanship and can take a bit from both sides and come up with a sensible compromise. Sometimes pushing forward, sometimes not.
We really need to be more careful with definitions here. The modern hard left doesn’t get to own the label “progressive” just because they take the most extreme left positions on everything. There is no particular coherent ideology they can be said to stand for that is recognizably “progressive” up and down the line.
I like to think that I'm a progressive. I want policies that will continue to push society forward to a place where more and more people across the globe flourish and enjoy the bounty of modernity.
I agree with this, but don't see how this doesn't apply to all such labels - liberal, conservative, etc. I think we need to accept that there are some fuzzy boundaries within which we can use these terms.
Oh, totally. But then, we can’t just go around saying that “progressive” ideology has been “systematic[ally] discredited”. The hard left? Sure! They lack a lot of credit in my book. But I think that precisely because of the labeling question, it’s more accurate to identify their specific niche of discreditedness as “hard left” than to lump all other forms of progressivism — small-p and big alike — in with them.
I'm a nitpick at the details person, so totally get where you are coming from. That being said, there is definitely a balance between what you describe and "no true scotsman."
Agreed. To be fair, they are the only ones in the spectrum willing to call themselves “progressives”.
Now, I personally believe that that doesn’t entitle them to be the ultimate arbiters of progressivism, and that the vast majority of the country can reasonably be described as small-p progressives. And I’m just one person! But I’m not invested in bailing out the actual lefty progs — they can get fucked for all I care — so much as I am just trying to defend my own little postage stamp of con-prog thought over here.
That's totally fair. But as to "sensational but implausible" narratives, along the lines of, to take a very recent example, "America's first ever trans Representative is throwing trans people under the bus", I think at this point the default reaction should be "there's probably a bit more to it than that".
As with most ideologies — libertarianism and hardcore deregulation being another famous example — their most fervent supporters should never be trusted with actually implementing the best ideas of the ideology.
Often there is a systemic discrediting a Google away and progressives are much better than any other groups at this, the false things they believe at least vaguely could be true and require thinking and googling to discredit.
It is fascinating when you find a well established fact and policy based on things that were never true. The UK banned plastic straws because asian rivers were full of plastic pollution, despite no obvious link between british straws and asian rivers.
You can not understand the environmentalist movement without understanding that a large share of its constituency is actively looking for a modest penance that they can personally pay in order to be spiritually free of their collective sin.
This is a bad post because it doesn't deal with the essence of the objection or assertion.
Remember at the end of the Big Short where Steve Carell says the only person prosecuted for this whole systemic fraud thing was one guy in Switzerland.
That's what people remember.
There was a moment of widespread anger at the banks and the executives and Obama had the opportunity to take some scalps.
I am hearing about these specific cases for the first time in this random blog post 17 years after the fact. Imagine if the Obama administration had made these trials and cases a "cause" for his administration.
Matt yglesias writes a ton about the importance of Democrats talking about the right things and being angry about what voters are angry about.
An Obama that said, "We should throw these crooks in jail, but our existing laws are unfortunately rigged." would not give rise to the impression that he let bankers get off scot free.
I hate to say it, but no one will ever believe Trump is soft on immigration. Yes, the supreme court and other courts blocked some of his illegal orders but he gave the very strong impression that his administration was doing everything it could to "punish" immigrants.
Obama's administration absolutely did not give that impression and didn't seem to care to try. It was "What cases can we probably win and those we will pursue. Done. Whats next on the agenda."
For someone who cares a ton about rhetoric and how Democrats should seize the bully pulpit on their best issues, you are letting Obama off the hook for not doing so with the banks.
it is absolutely possible for a charismatic president to stir up hate when the opportunity presents itself. obama could have done this here. bush could have done this against muslims after 9-11. this is what you are asking for if you say ``our laws aren't enough, these guys should pay a price''.
I don't think it's at all fair or reasonable to equate Muslims qua Muslims, after 9/11, with bank senior management after a financial crisis. Muslims as such were not responsible for 9/11 and bank C-suites, while not solely responsible, did bear a lot of the blame for 2008.
When people do bad things, they should be blamed for them.
"...stirring up populist anger against people who have not committed a crime...."
two questions:
1) is it ever responsible to stir up anger against a group?
2) If it is, what are the conditions of permissibility?
I doubt that the conditions for 2) are going to line up with the current state of criminal law. If there are behaviors that deserve public condemnation, then they may merit it even before there are laws on the books to criminalize it.
you can stir up anger when you have no power to get the attention of those in power or stir up anger to increase the power you already have. both can lead to trouble, but i'm more sympathetic to the former. obama was the president, he wasn't a protestor organizing a sit-in outside a citbank, or whatever.
"...you can stir up anger when you have no power...."
So then it sounds like your view is: presidents should never stir up anger against anyone. That's an okay answer to question 1), but then the reference to "have not committed a crime" in your first comment is no longer needed. Your view is: whether people have committed a crime or not, presidents should not stir up anger against them.
That was my point about how the conditions of permissibility are probably not going to line up with the crime/no crime line.
It depends on whether the results of the "stirring up anger" gets people thrown in prison or killed. Since this is what everyone seems to want, I would vote "fuck yes"
Like... if you want people to just be generally pissed off at bankers, they already were. If you want people's lives to get ruined, please clear a high bar.
I think that this whole line of argument is confused. The claim here is that Obama missed a chance to stir up popular anger at the bankers so... the people turned against Democrats because... they were... angry at bankers?
I want them to be so mad that no one obeys in advance to Trump, that law firms give him the middle finger, that his approval polls fall so much that Republicans discover heretofore untapped reserves of courage, that the voters treat the Republicans in the next election like they did in 1932.
"Bank C-suites" did NOT "bear a lot of the blame for 2008". You already acknowledge that they didn't violate laws. And now you are letting your ignorance of economics spill into emotional anger against a mysterious "other" that you want to lynch. It feels good to be angry at others, and then powerful if you can make them suffer. Right?
But not only did they (vast majority) not actually commit any crimes ... they weren't even responsible for the economic pain of the 2008 recession! Do you care about the facts? Or do you just want someone rich and smug to suffer, so that you can feel better?
(Are your emotions all that far away from standard anti-Semitic "the Jews did it!"? After all ... isn't there a long history of many bankers being Jewish?)
The primary cause of the 2008 Great Recession was excessively tight monetary policy from the central bank (US Federal Reserve). That explains 95% of what happened, economically, in 2008 and for the decade after.
Not only did the "bank c-suites" not break any laws at the time ... there aren't even any good laws that should be passed that would criminalize their behavior in hindsight. You seem to be imagining that their behavior was obviously immoral, and it's just an unfortunate coincidence that we happened not to have passed the relevant laws ahead of time. That's just wrong.
"The Big Short" was dramatic fiction, not economic, legal, or moral truth.
I'm certainly willing to listen to reasoned argument, if I misjudged you. You appear to hate the bankers, and blame them for the 2008 recession, and want them to be prosecuted and jailed.
Can you help educate me about what specific actions you think bank executives took, that is morally worthy of jail time? I'd like to know.
What I said: “they bear a lot of the blame” and “should be blamed.” What I did not say: baying for blood, demanding illegal jail terms if not warranted, advocating to shred the constitution to get said jail terms.
You made that up, put a lot of words in my mouth that other people may have said that I did not say and in the process accuse me of being various contemptible bigoted things. You should stop engaging like this if you don’t want people to tell you to fuck off.
That is not what is being proposed here, the proposal above is for the Obama administration to have said "We should throw these crooks in jail, but our existing laws are unfortunately rigged", and "What cases can we probably win and those we will pursue". That is not the same as "Our laws aren't enough".
i object to ``we should throw these crooks in jail, but our existing laws are unfortunately rigged’’ coming from the person in charge of the us government
We don't get our laws from some stone written by God. People elect representatives who write the laws. Hopefully, in a way that matches the sentiments of the population.
Now, if a judge said something like "We should throw these crooks in jail, but our existing laws are unfortunately rigged," that would be a problem.
But presidents and congress people are expected to be involved in writing and changing the law so it is absolutely appropriate for them to have an opinion.
if it was clear beforehand that the existing laws were inadequate, then there would have been a push to change them before the financial crisis. but there wasn't.
There were people who said the laws were inadequate before the crash.
There was also, and I have to look this up, a metric ocean of finance money who had a very vested interest in making sure said inadequate laws stayed on the books.
My hot take is the population mostly moved on and didn’t/doesn’t care and the only people who are still burning mad are a small group of progressives. Obama handily won reelection and continues to be really popular.
And that would have been bad how? I’m sorry, these bankers knew, especially Angelo Mozilo, and he truly left a trail of destruction in his wake.
Executives can be the least value-added and most entitled sons of bitches out there. Look at the golden parachutes of the past few CEOs of Boeing and tell me it doesn’t make you want to get pitchforks and march on their headquarters. It’s a complete failure of state capacity that their heads aren’t on pikes!
"Obama had the opportunity to take some scalps..."
No he didn't. The whole point of having laws is that you need to make the bad things illegal before they happen, you can't just decide that things are illegal after the fact if they turn out badly. There's a reason we passed new financial regulation after the crisis, and it's because the overwhelming majority of what the banks were doing was perfectly legal.
I don't know, I may be biased because I started practicing law in 2011 and like many of my peers I spent the first few years of my career shoveling through the endless piles of litigation that the crisis spawned, but having spent years of my life learning about the extremely gory details of what happened the worst you could say about people at the big banks was that they were lackadaisical about risk management. There just wasn't any big conspiracy to steal billions of dollars (and if there had been there were like 200 state attorneys generals and US Attorneys etc. that would have loved to make a career out of exposing it, the idea that they didn't try is ridiculous).
Stupidity is a defense to financial fraud because of the mens rea standard. Everyone who isn’t a securities lawyer doesn’t get this. We needed better laws to deal with mass stupidity.
It is bad for the president to suggest that people who have not broken the law be punished for losing in the court of public opinion. We enforce the letter of the law, not the spirit.
I think if you read the comments honestly you will have to admit that no one has said anything like “will no one think of the financial executives.” No one here is appealing to sympathy with those people. The claim is that the actions the left is saying Obama should have taken would have been counterproductive instead of valuable.
At the point the comment was written the top comments were literally “banks did nothing wrong”, including one about how it’s the public that was to blame.
I might be being pedantic but I promise I’m in good faith and always am here. The online cliche where when someone doesn’t favor prosecuting or otherwise going after some chosen target they are mocked as saying “what about the poor [x]”, even when they aren’t at all, annoys me and I was disagreeing with it. But obviously if you find what I’m saying unimportant that’s your prerogative.
The challenge to that is Obama wasn't, and shouldn't have been, in the habit of lying. The banks and bankers were not crooked, they were stupid.
At the heart of the crisis was the lending of money to people to buy houses they couldn't afford, and then treating those loans as if they were the same bog standard mortgages that hadn't gone bad in the fifty years leading up to that.
You don't have to be criminal to be stupid, you just have to be ... stupid. And that's what they collectively were, to the detriment and ruin of all of us.
Yep. I remember that period. After the crash, there were plenty of underwriters and analysts coming forward to say that they knew the risks but were told to never mention them again.
I have one very conscientious friend who feels a great deal of blame for the financial crisis because he worked in the treasury department at a large NW bank and saw that they were buying bundles of subprime loans from places with more volatile housing markets like Florida and California and treating them and reporting them as if they were the same value as if they were standard loans in our own area which has very strong housing value stability. He was concerned that treating these less valuable assets as if they were standard mortgage backed securities meant that they would be in a bad position if the housing market in those places fell and folks couldn't sell to get out of the subprime loans and started to default. He shared his concerns with his boss, who ignored him, and his boss's boss, who also ignored him. When his bank eventually failed and laid off thousands of people in our area he was in an actual state of depression because of his guilt that he hadn't been brave enough to take his concerns further up the ladder. There were folks who knew and tried to get others to see it and couldn't and folks who refused to see it when warned. There is such as thing as willful blindness. I think there was a lot of that.
I wish we "Dems" had been more willing to let go of terms like "rigged" which appeal to the most conspiracy theory folks. I wish instead we had said that "this was caused by stupidity, greed, and willful blindness. We can't prosecute folks the way that might feel very satisfying to people who have been hurt because what they did wasn't yet against the law. Part of why it wasn't against the law is because we have based on laws on lobbying by this same industry that was based on the premise that we didn't need financial regulations to prevent things like this because these folk brilliant and that their brilliance and enlighten self-interest would keep them from driving our economy off a cliff. I think we have all seen here that the emperor has no clothes. Being rich doesn't keep you from being stupid and it doesn't keep you from being stupidly greedy. So we are going to be putting in some new strong regulations so that the next time this industry gets this stupid and greedy there will be something to stop them before they hurt us all and a way to jail them if they do." I think it would have been a a good populist way to address the regulations that Obama did work so hard to put in place.
But it might have also helped to burst the bubble that exists in the received narrative of our country that the rich and particularly rich businessmen are some sort of class of ubermeche geniuses who should be put in charge of everything. Part of why we have this mess with Trump and Musk is because we have allowed that myth to go unchallenged.
What is really frustrating, or enraging, is that we put safeguards in place that constrain the financial folks and for a long time therefore all is stable. But memories fade and because there are no financial crises, the big boys work with Congress to whittle away at the protection -- hey, things are fine! -- and so we're left unprotected the next time they get a super bright idea.
Like how they probably want to join in the crypto money train, leverage the hell out of it, and put their financial stability at risk. And if (cough, *when*) the crypto Wile E. Coyote realizes he's past the cliff and plunges, we'll have a repeat of 2008.
It's like how people turn against vaccines because no one gets those diseases so why do we need a stupid vaccine?
I agree in spirit but just want to add the disclaimer that the Big Short is not a good source for understanding the causes of the Great Recession. It’s not as bad as Flash Boys but overall Lewis doesn’t know what he’s talking about.
“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”
This is good pushback. That said, I disagree and think the article is good—and one of your main assertions is that Obama could have “taken some scalps” which is directly contradicted by the evidence in the article itself, and is indeed the main point of the article.
That said: “OK, maybe Obama couldn’t throw these guys in jail but surely he could have made lives miserable with a bunch of pre-textual government efforts to do so—the feds are very powerful—and certainly he could have done a bunch of fiery popular speeches about how the bankers are evil and rotten in a fair world they’d be thrown in prison and we are going to change our rotten crooked laws to let us do just that the next time one steps out of line” is probably true. I happen to like that Obama is a measured and smart guy and not a firery populist who lies and stokes public anger by reducing complex issues to simple morality plays. But he definitely could have been that guy instead and very much went the other way—you are 100 percent right.
Look, to secure appeal-proof convictions for past actions on the basis of future laws, Obama merely needed to reverse the causal arrow of time, but he Didn’t. Even. Try.
Unless the physics of time travel only permit you to move through time in discrete chronological steps (e.g., in logarithmic increments) or apply some other parameter (e.g., within your own lifetime) such that you are limited to traveling a specific distance in time from your own "present." Not that I'm a huge sci-fi nerd or anything.
1. Obama also chose not to prosecute Bush for “war crimes” relating to War on Terror excesses. I remember Glenn Greenwald being super pissy about it, even found a video of him fighting with Harvard professor Lawrence Lessig over it: https://youtu.be/KZukAowuAZw?si=tSEyF_rCc278ky5U
2. I think one of the reasons this “Obama sold out” narrative sticks around is because the revolving door that existed between Big Tech and Obama admin didn’t really exist between socially democratic parties in Europe and Big Business/Big Luxury Brands whatever. Probably it’s because it’s a parliamentary system but Dems are not an ideologically left party but an interest group brokerage party no matter how much leftists whine about it. Second reason is because Obama has spent his post presidency mingling with the rich and famous further cementing the narrative of him selling out.
It wasn’t so much not prosecuting Bush, it was that Obama ended up retaining virtually all of the post-9/11 policies that people were complaining about before he was elected. Remember people bragging that he was a “constitutional lawyer”? There was a notion that he would rein in security state excesses and, well, not so much. Can you imagine the reaction if the Bush administration had killed an American citizen without due process? Or if Trump did it?
People who cared about that stuff more than they care about electing Democrats had perfectly predictable reactions.
But why is anyone surprised that Obama operated as a normal Democratic president? Was there are serious expectation he would be vastly more progressive than the Democrats, the country and the average of other countries?
It seems odd to compare him to a standard he was never ever going to meet.
Yes Obama was a mixed bag on foreign policy. IMO he genuinely did nurture a more restrained/diplomacy focused element of his foreign policy team with people like Ben Rhodes who tried lifting useless sanctions on Cuba, got the Iran deal etc. But the drone expansion and the precedent of striking an American citizen was atrocious. I had always believed he was constrained and the new element he was nurturing would grow to be the next blob, one of the reasons I supported Bernie over Hilary even though I thought some of Bernie’s domestic spending ideas were wacky. I thought he would’ve followed on the footsteps of Obama’s foreign policy and expanded it whereas Hilary was genuinely more hawkish and interventionist than even a standard replacement level Dem at the time. If you read her book after stepping down as SES, the only thing she criticizes Obama is for not being hawkish enough! It was always bizarre to me that Obama chose her as Secretary of State given that one of the reasons he won in the primary against her in 2008 was her disastrous record of foreign policy (Iraq mainly).
I was an Obama voter who was deeply disappointed that he didn't change Bush-era war policies more sharply. Like, I didn't want him to prosecute Bush for war crimes, but I did want us to unwind our middle east military adventures with utmost haste.
The war crimes / torture point is telling. Obama was a good President. But his administration really didn't want to use the criminal justice system to go after elites, and his people spent a lot of time thinking up excuses as to why this wasn't possible which we see here.
The purpose of prosecuting isn't to maintain a perfect win-loss record. If you aren't losing some cases, you are letting bad people go and almost certainly not prosecuting some cases you might win.
Right. But if you can’t even convict the people involved in Enron, one of the most obvious frauds in recent decades, then there’s no point in trying on substantially weaker cases.
Andy Fastow and his wife were convicted, as they should have been. They committed actual felonies, were prosecuted and jailed. Andy was the "brains" behind the fraud.
The tougher part was convicting Ken Lay and Jeff Skilling, as they failed to oversee Andy, failed to put in controls and created an environment where Andy's fraud could thrive. But those failures were harder to prove as crimes.
There actually is a point, in that (1) you don't know you won't win until you try and (2) bringing prosecutions expresses the community's judgment that this was wrong.
And also, it says something about the GOVERNMENT and those who serve in it. These bankers are their buddies! They went to Harvard together! It says something that you are willing to lose some lucrative friendships with rich people to try and do the right thing and send the right message.
I have suspicions of prosecutors and certainly think some things are overprosecuted, but for instance, I agree with our host on the need to enforce urban disorder laws. Prosecutors are necessary things even though we have to make sure we regulate their powers.
Because then they would be prosecuted for their acts in office and eventually no one would ever do anything without fear of prosecution. A lighter version of this fear of crossing the law is why California can't build.
If you’ve spent the past ten years trying to make, say, better online services for veterans, or clearer ways to understand your Medicare benefits, or even better ways to support warfighters, you’ve sat in countless -– and I mean countless — meetings where you’ve been told that something you were trying to do was illegal. Was it? Now, instead of launching your new web form or doing the user research your team needed to do, you spend weeks researching why you are now branded as dangerously lawless, only to find that either a) it was absolutely not illegal but 25 years ago someone wrote a memo that has since been interpreted as advising against this thing, b) no one had heard of the thing you were trying to do (the cloud, user research, A/B testing) and didn’t understand what you were talking about so had simply asserted it was illegal out of fear, c) there was an actual provision in law somewhere that did seem to address this and interpreting it required understanding both the actual intent of the law and the operational mechanics of the thing you were trying to do, which actually matched up pretty well or d) (and this one is uncommon) that the basic, common sense thing you were trying to do was actually illegal, which was clearly the result of a misunderstanding by policymakers or the people who draft legislation and policy on their behalf, and if they understood how their words had been operationalized, they’d be horrified. It is absolutely possible to both respect the rule of law, considering the democratic process and the peaceful transfer of power sacred, and have developed an aversion to the fetishization of law that perverts its intent. The majority of public servants I know have well earned this right.
A big part of this is that when you go after elected officials, those officials' base see it as going after them. I disagree with the eventual Ted Kennedy turnaround on the Nixon pardon, but this type of thing was likely part of their thinking. Who knew the Republicans were going to go this crazy regardless?
I don't think prosecuting George W. Bush would have been a good idea. But prosecuting John Yoo and others in the chain of command would have been a very good idea.
"one of the reasons this'Obama sold out' narrative sticks around" - you get at some reasons here, but the core one is that it's not a narrative, it's true! The revolving door was in full effect during/after his administration, and the man has spent his post-presidency jet-setting around and running a media production company. The main thing his foundation is doing is setting up his presidential library.
Yes, but this is still selling out. The question is whether Obama sold out, not whether presidents generally do so. And other presidents besides Clinton and Trump have stayed out of the limelight, or been very heavily involved in legitimate charity like Carter.
His campaign books sold better than most campaign books ever do; Michelle’s have probably sold even better. Over 20 years, a good manager can EASILY turn that ~5-10 mil into a hundred as long as you’re calm and collected about it, which… yep, tracks.
If memory serves, they also got a pretty nice payday from Netflix, though I don’t think the actual amount was disclosed. He and Michelle were also paid jointly for their memoirs, an estimated $65 million.
"Over 20 years, a good manager can EASILY turn that ~5-10 mil into a hundred as long as you’re calm and collected about it, which… yep, tracks."
A one off leveraged bet that turns out great - maybe. Over 20 years with reasonable risk profile - that manager would be considered one of the greatest of all time.
See my response to David Abbott. My point was merely that as a ballpark of a ballpark, it’s within an order of magnitude of plausibility, which IMO is an acceptable heuristic to use short of spending all morning reviewing his financial history.
It’s only a factor of ten. If I’m underestimating their income by a factor of 2-5, and David Abbot is overestimating their spending by a factor of 2-5, then maybe it explains the difference.
Again, I’m not saying this is some sort of definitive proof that they didn’t “sell out”; just that “a couple of extremely famous decimillionaires became centimillionaires over the course of 17 years” is not an outlandish story.
It is simply not true that a good manager can "easily" turn $5-10 million into $100 million, and you should not claim that it is. If you meant something more like, "Well, maybe he actually had $20-$30 million and maybe he got lucky," then you can say, "I wrote a little hastily and what I meant was...."
I read the whole thread before posting the above and feel like what you actually said was, like, "Hey man what I said had truthiness, it's unreasonable for anyone to be upset that I said something straightforwardly and substantially incorrect."
Look, I’m not a finance guy. I’m an engineer. I ballpark stuff because it’s a good way of getting a handle on numbers. If you’re off by an order of magnitude, it at least helps you get in the right neighborhood so you can figure out what else you got wrong in the details.
So I honestly DGAF if I used the wrong combination of jargon to get a ballpark point across. Try to be more fucking charitable, dude. We’re all just a bunch of fucking assholes speculating about shit on the internet that we’re mostly too chickenshit to do anything about in our daily lives, so there’s a lot more leeway than if I was trying to pass this off as work product at Goldman FFS.
10% return on $10M is $1M. They aren’t exactly known for their profligacy. I’m not saying they *aren’t* “playing with the big fish”, I’m just saying that doesn’t need to necessarily imply anything untoward.
It’s also a ballpark of a ballpark estimate. I haven’t reviewed their finances. I’m just saying they’re within a reasonable order of magnitude of where they should be even if they’re 100% on the up and up.
It should not be shocking that people are willing to pay to hear one speak, read one's books, watch one's films, etc.
Obama did not need any handouts to get wealthy, any more than any other ex-president. To imply that there is something nefarious going on here really gives away the game that you are playing.
Happy to acknowledge that bona-fide criminal accountability wasn’t going to happen, but was that the only tool? Huge amounts of financial assistance went out to the banks and other financial institutions- couldn’t that have been conditional on them firing their top leadership? I think that would have helped the politics a lot AND helped with the general moral hazard issue.
Many of the executives would've rejected the funding if such conditions were attached. Notably, Paulson and Bernanke wanted every bank to take funds, even those in a relatively strong financial position, so that counterparties wouldn’t interpret some banks as being at higher risk of insolvency. That would've caused depositors (particularly institutions) to withdraw funds from perceived weak banks. So TARP funding was structured on particularly favorable terms. The CEOs recognized the logic of collective action, saw the chance for cheap funding on good terms, and they all agreed.
The collapse of Lehman is insightful to what could’ve happened. Paulson tried to engineer some acquisitions, but CEO Dick Fuld kept pushing acquirers for better terms. He really lived up to his name! He waited too long and eventually only Barclays was still at the table.. Fuld reluctantly agreed to tough terms, but the British government blocked the deal; and for good reasons.
Many more vulnerable banks would’ve gone the way of Lehman if the Federal Gov attempted to push harsh terms for accepting TARP.
It is *arguable* that we should have done it anyway and empowered the Fed and FDIC to mitigate the impact to the citizenry as best possible while still allowing individual banks to fail in larger quantity.
It’s easy to say that now, after the fact, in talking through hypotheticals. In the moment of unpredictable financial chaos, it’s a lot harder to ponder that, let alone engineer something that would justly penalize the financial institutions while minimizing collateral damage. Moreover, it may not even be apparent which firms and leadership were reckless actors and which were victims. And of course there is the legality of such action (ie, the Takings Clause of the Constitution) and long term ramifications of a government that acted recklessly to capriciously penalize perceived scapegoats.
I’ll also add that this was a position among the proto-Tea-Party Republicans that opposed the TARP funding bill put forward by W Bush and his Treasury Secretary Paulson with input from their Republican Fed Chair Bernanke. As a Reason 2014 article explains, these Republicans were responding to rising populist sentiments within their party with the 2008 elections just a month away. [1]
> Karl Rove explained that Republicans literally feared for their political futures over this one vote.
> Some of the grassroots fervor is evidenced in the 60,000+ signatures collected at NoWallStreetBailout.com in the fall of 2008. A sampling of the petition signers' comments sounds a lot like the eventual tea party movement:
>> "No Wall Street or auto bailouts! Maybe Americans should boycott paying 2008 federal income tax—no income tax revenue, no bailout."
>> "This bailout could end up breaking the spirit that underlies the true American way. The key word is "RESPONSIBILITY!" WHERE IS IT?!
If it wasn’t for Pelosi’s leadership and pragmatic approach to a highly technocratic financial crisis, then our global financial system would’ve melted down while Republican politicians worried about appeasing their increasingly ornery populist base.
"And of course there is the legality of such action (ie, the Takings Clause of the Constitution) and long term ramifications of a government that acted recklessly to capriciously penalize perceived scapegoats."
Wait, what?
The banks have some sort of constitutional right to a recapitalization program constructed on extremely friendly lines?
Thanks for polarizing me directly against your side of this argument...
I think he's assuming that you're forcing them to take the funding in some way, in exchange for an ownership stake, which would be a taking, though not necessarily an illegal one (after all, it's no taking without appropriate compensation, not no taking).
The market conditions were such that like 15% of banks would have folded without recapitalization, and the correct response for other banks would have been to let them and then part them out rather than paying a premium for intact banks.
There would have been plenty of takers under stricter terms, eventually, but it would have taken longer and allowed the impacts on the real economy to be worsened without significant countervailing measures from the Fed, FDIC, and Congress.
I'm just saying I am not convinced of the merits of either course of action.
The main way the Fed can mitigate the impact of banking system issues is by offering large amounts of funding to entities that would otherwise be forced to default on their obligations, which is effectively what the TARP program already did.
The banking system is not a "market" in the way you are using that word. It is a government-created, highly regulated industry that operates as an extension of the federal government. Competition exists at the end of the process to foster innovation, efficiency and service. But that competition doesn't transform the system in total to a market.
Your view held some sway inside the Bush Administration until Lehman failed. The aftereffects of its failure were enough to convince those who held the "let them collapse" view to stare into the abyss and realize their error.
I'm very open to the case that there are banking functions that aren't supposed to be subject to the market. I'm not gonna come out swinging against FDIC any time soon. But the private investors that got rich on the housing bubble absolutely were market actors who needed to lose their shirts. If the Feds regulatory fuckups meant that was gonna cost them a shitload underwriting the deposits of collapsed banks then so be it, that's how the system was set up. "It's cheaper to pretend these banks didn't fail by printing money and giving it to them" wasn't a legitimate exercise of government power. The market absolutely must be allowed to discipline incumbent interests, because the political system is absolutely never going to.
The political system -- through regulations including Dodd-Frank -- is fully capable of disciplining the banking system.
And you are wrong. The printing of money and funnelling it through the banking system is a very "legitimate exercise of government power". Every functioning government does it, and has for hundreds of years.
>The market absolutely must be allowed to discipline incumbent interests
I think the political economy issue here though is that individual employees of a bank/financial institution don't care *that* much about their bank going out of business. I mean, they'd rather it not, but it's mostly not *their* money and they can probably get jobs doing something else after it collapses. For example I just looked up Dick Fuld's Wiki page, apparently after Lehman he just pivoted to running another financial firm.
I.e. say you're a trader, an executive compensated for hitting quarterly targets, whatever. They win no matter what happens- they swing for the fences and take big risks, either they make a lot of money if the risk works out- or if doesn't work out the bank just collapses and they go get another job elsewhere. Unless you make all executives equity holders you have a principal-agent problem, so 'discipline' doesn't really work
Just because that’s how markets work doesn’t make it yield good outcomes for most people. I would prefer a government that tries to yield good outcomes for people rather than a government that tries to enforce market discipline for good or for ill.
So your analysis is that TARP purchases were voluntary on the part of the selling banks, so in order to get all the large banks to participate so as to prevent a run on the weaker ones, the terms had to be sufficiently favorable that all banks would consent?
Well, couldn’t TARP have been made rather less voluntary, then?
I can see a response that this was politically infeasible, given that the law was originally passed under late Bush, and by early Obama with a more favorable Congress, the most acute part of the crisis was over (and pure executive action was limited because we hadn’t yet descended into Trumpian lawlessness).
But even if this political analysis holds, I think it was a clear missed opportunity to at least try some sort of revision to TARP with more teeth, given that Obama could have correctly pointed to conservative intransigence as being to blame if it didn’t pass
If you did TARP in a non-voluntary way, I assume that the banks would've had standing to sue to prevent it (perhaps because it violated the Takings clause), and that there was a high risk that some injunctions would prevent it from happening immediately.
Yea, I really wish Matt would get into the parallel thing people were/are mad about. The perception was that the government incentivized all this fuckery with mortgages, turned a blind eye while the bankers obscured the time bomb behind opaque financial instruments, and then printed a bunch of cash to make sure the corrupt politician/banker class didn't pay the price when their political scheme exploded the economy. The problem most people have isn't so much that we didn't throw the bankers in jail, it's that the people responsible didn't even go broke! The taxpayers ate the bill! The politicians lied about their own responsibility! Obama was supposed to be guy who could see the mistakes of the past and address them, and instead he plastered over the whole thing. The country really needed some serious disruption from a fuck up that big. Instead the politicians rallied around perpetuating incumbent interests by sheltering them from the market at the expense of economic recovery.
Yes, there was a lot of anger at the financial and political elite involved. Yet that doesn’t imply that there were specific villains to single out and penalize. Moreover, the populist outrage was encouraged by sloppy and biased political commentary and activists. Eg, John Steward and Glenn Beck as well as Occupy Wall Street and the Tea Party.
We humans have a natural bias to personalize such disasters and are easily taken in by such narratives of evil elites conspiring to enrich themselves at our expense. Unfortunately, the reality was far messier and even reckless actors were first and foremost deluding themselves and their compatriots. There were no chief villains nor any master plan.
Yes, we can argue through the nuances of the evolution of financial regulation and the decisions by key actors in private and public institutions. Yet that is highly technocratic, open to interpretation and judgment calls, and not at all emotionally satisfying. But even worse would be to give into to populist outrage and lash out at the institutions core to our material prosperity.
As mentioned in this article, 2010 Dodd Frank—a massive restructuring of financial regulation—was the long term solution to prevent future incidents and the financial sector certainly perceived it as punishment. It has made much of finance, particularly banking, far less profitable by reigning in risk taking. Bankers, notably Jamie Dimon of JP Morgan Chase, have been complaining relentlessly about their new constraints. And this all worked in allowing the global financial system to survive both the pandemic and the highest interest rates since the GFC.
Too bad only WSJ, FT, and Bloomberg well communicated the implications of Dodd Frank to their informed audiences. Maybe Bernie (or at least Warren) could have celebrated this punishment? Nope, that isn’t aligned with their everything-sucks world view nor advantageous for their political marketing and fundraising projects. Maybe we could claim Dodd Frank was a conspiracy by Big Tech w/ their Big Law allies to supplant Finance as the rulers of our world? Add some aliens and maybe at least Rogan will popularize this.
I totally agree that the search for "villains" is silly and misguided. It's absolutely a long chain of independent decision makers acting with imperfect information. That's how markets work. That's why so many people got to get rich making those decisions. The problem was that when it became clear that they fucked up and it was time to pay the piper suddenly it wasn't a market anymore. Suddenly it was politics and the feds yanked them out of the fire with the taxpayers money. That's not how markets work. The most fucked line in all of 20th century American political discourse is "too big to fail". Absolutely fuck that shit sideways. No one is too big to fail.
If Americans would have suffered more without the bailouts than with them, it seems inaccurate to suggest that this was just for the benefit of the executives.
Well...no. No one SHOULD be too big to fail, but that's a different statement and I'm unclear if its been fixed. Don't think so. This is one place where anti-trust based on size makes sense to me.
Yes, the government nominally got "it's" money back because it propped up the assets of bad actors at the expense of everyone else. It's all accounting fictions.
November 2008: QE1. In late November 2008, the Federal Reserve started buying $600 billion in mortgage-backed securities.[40] By March 2009, it held $1.75 trillion of bank debt, mortgage-backed securities, and Treasury notes; this amount reached a peak of $2.1 trillion in June 2010.
QE is way different from TARP. The latter was to rescue banks, the former was to stimulate the economy. the FED wouldn't buy *treasuries* to prop up assets.
Printing cash and disbursing it more directly to people via postal banking or something was probably the correct way to deal with this without recapitalizing the existing banks.
Not really feasible here, but I think there's an argument for "the risks caused by short-term deposit funding mismatched with long-term investment obligations should be dealt with by a publicly-owned 'utility' banking corporation that then lends at scale to other banking institutions." I.e. "The Fed should take deposits"
God knows we've all but nationalized the retail banking industry with significant regulatory requirements on one side, deposit insurance on another, and the surety of a bail-out on the third. Why not just finish the job so consumers can capture a bit more surplus dealing with the Fed directly. By all means, allow private competition so it doesn't ossify, but the private competition is pretty ossified today.
Agree, I think there is a middle ground here, and even though the technocratic rationale for mot pursuing prosecutioms Matt lays out is rock solid, maybe it’s also true that Obama’s DOJ should have tried a few cases and lost in court. Not a great thing to do, but maybe the Sandersites wouldn’t have revolted had Obama made more rhetorical nods to their position.
I’m a Democrat and I hate property crime! Someone broke into our apartment once when I was a teenager and stole a bunch of my parents’ stuff that they couldn’t afford to replace. It wasn’t just a financial loss; it hurt emotionally. The safety of our home had been violated.
In what way are the killings extrajudicial? Are you implying that if someone invades a home, and is killed, there is no investigation of the killing? That no one attempts to confirm that what preceded the killing was, in fact, a home invasion?
I'm not a lawyer, but it doesn't seem correct to me to label something as "extrajudicial" just because it is allowed by law.
Seems just as ridiculous as claiming Obama was letting white collar criminals off the hook.
Every time I hear someone harping about white collar crime in a political context, I immediately recognize what they actually want - the regulation and criminalization of more white-collar activities based on class resentment.
The knee capping of the IRS seems like pretty good evidence of them loving white collar criminals. As is the consistent goal post moving of bribery and fraud by the right leaning judiciary.
This is disingenuous. The correct way to reduce taxation is to legislatively lower tax rates, not to kneecap the agency in charge of enforcing them. The Occam’s razor expanation of the latter really is “we want tax fraud to be easier.”
I think a much more fair-minded and reasonable Occam's razor explanation is that they believe that audits are a massive imposition on people who have done nothing wrong and it's not worth subjecting half a million people to them each year to try to bring in a few more billion dollars of revenue.
Going by Google’s estimate of 153.8 million tax returns filed per year, Half a million people getting audited is a 0.3% chance of an audit, and that’s if you totally ignore the prospect that returns that are audited are not an unselected set.
(Ed.: Also nothing about the Trump administration suggests anything to me about favoring people who have done nothing wrong as opposed to explicit solicitude for criminal behavior by Trump-favoring constituencies, but YMMV I guess.)
Freddie’s stopped giving him as much shit, so now Matt feels the need to pick beefs with Matt #2 (Stoller) and the anti-monopoly folks, I guess. Like rapper feuds, but about macroeconomics
Didn't they go to college together? The best beefs are the ones that go way back.
Stoller first broke out on the "netroots" scene in the '00s as the guy who was supporting Wesley Clark when everyone else on the left was for Dean. He's sort of a ideological entrepreneur, who isn't even motivated by sincere leftism so much as just wanting to find a niche or an "angle" that belongs to him and can be the first line on his obit.
I don’t agree with everything he says, but I like reading the other Matt as well. Both Matts make me think about stuff I wouldn’t have known about otherwise.
Like many other commenters, I think Matt Y kind of missed the point on this one.
I'm old enough to have been an adult during the 2008 financial crisis, and the recurring refrain was that the government "bailed out Wall Street, not Main Street." This wasn't about "how unfair that the government didn't retroactively punish big banks for practices that were legal at the time" (although I'm sure there were some lefties who thought that way); this was about "how f**king unfair that some douchebag CEO with a golden parachute gets to live in wealth and comfort, while my poor mom who's on a fixed income lost her house and has no recourse."
It was the unfairness of "rich people screw up, poor/regular people have to deal with the fallout."
I find this odd tho, because that’s not what happened! The Obama administration made loans to banks/organizations, took on bad mortgages and they were required to pay the government back. And the US government made a *profit* from its loans, and Fannie Mae/Fredie Mac are currently extremely valuable.
I think everyone agrees that the Obama stimulus was too small, but at the time the administration was worried about inflation. Given what happened with Biden, it was probably a solid worry.
I often think an underreported thing about 2008 crisis was that millions of homeowners lied about their ability to pay mortgages to own houses. It wasn’t just Wall Street - it was main street too
Obama could have taken some of the interest on the TARP loans and cut a stimmy check for everyone. Might have helped with the inflation too. Ah well, better luck next timeline
One thing I have reevaluated in the start of Trump 2 is the Obama answer Biden use of executive orders. I never sweated it because I never had any doubt they would follow a court order.
But Trump seems more and more likely to try to break some. Assuming we get through this in more or less one piece there should be some real restructuring and legislating around what executive orders can and can't do.
The never ending progressive whine that “Obama let the big banks get away with” doing something that was not illegal when they did it always annoys me. What they’re saying, effective, is they want to apply Dodd-Frank in ways that go beyond the original legislative intent as some type of ex post facto law or bill of attainder. It’s the lefty version of when Trump says “We should take the oil. We should just go in, and take the oil.”
As always, the fundamental problem both the far left and the far right have with America is that it functions according to law, and sometimes the law frustrates their ends. They are illiberal defectors so it makes sense. It would be nice if they would just admit that their main problem with Trump is that he is not ideologically aligned with them, though. The whole thing where they pretend to be scandalized by "illegal" things when in actuality they don't care about that at all, they just have substantive disagreements, is quite annoying.
Being around in 2008, this anger on the left, and right, at Obama's perceived kid gloves with bank execs was a real time thing. There was a lot of skepticism that Geithner's Stress Tests were BS. I think it was mostly the right way to go, but from a symbolism point of view it never sold great.
“And the accusation has been repeated enough that a writer can now casually drop it into a magazine article without being asked to provide any evidence for this nuclear-strength assertion.”
This is a significant proportion of “content” now - nuclear-strength assertions with no evidence presented or required. My “media diet” has shrunk accordingly but it’s difficult at this point to maintain a basic but accurate understanding of what’s going on in the world.
That would make a great post. Other assertions are that healthcare and college costs are rising when they aren’t. And in the case of college they have fallen quite considerably. But many writers just drop those accusations in articles without a thought.
https://www.statnews.com/2023/12/21/health-care-costs-inflation-affordable-care-act/
https://www.forbes.com/sites/davidrosowsky/2024/10/24/burying-the-lede-college-tuition-has-been-in-a-decade-long-decline/
My guess is that the cosmopolitan audience that is primarily the target for such news articles is an alumni/recent grad/ or parent sending their kid to a private school that is now absurdly expensive.
But agree, there are very affordable college options available and the idea that you need to go into massive debt to even attend one is factually untrue!
“ parent sending their kid to a private school that is now absurdly expensive.”
Nope private has plunged as well. What they’ve done is increase sticker price and then they offer $25k or $50k in “merit” aid which has nothing to do with merit - it’s just a straight up discount.
I mean yes. I got merit in that range to attend my school. But that was GW, a good private school that gets you into DC and access to unparalleled opportunities in politics and government, but otherwise isn't particularly prestigious.
Does the next tier up regularly do that for students? Ivys? This is merit we're talking about here, not financial aid. I think a lot of parents, especially those of means, are expected to pony up the full tuition.
Harvard is free for anyone from a family making less than $200k and they offer substantial discounts on HHI up to (IIRC) $350k.
I'd like to note that I am not standing up for the claim that higher education is impossible expensive for low and middle income Americans.
Just noting that for a certain dual income homes that make up a significant swath of the audience for the NYT, WSJ, etc. They do end up paying absurd amounts of money for private universities. That's on them, but I think that is the context for why there are so many pieces that focus on the sticker price of the university, without diving deeper into the actual cost many parents end up paying.
MIT hasn't _dropped_ it's headline tuition but the increases definitely slowed WAY down (now less than inflation I think). They have increased way more slowly than I expected 10 years ago when my kids were born.
But we aren’t talking about the sticker price - we’re talking about if your family makes 1/4 of a million a year MIT will take $25k off the top.
The more nuanced opinion is "price discrimination has increased at the same time that median price has decreased."
The average American lives from meager paycheck to meager paycheck (when our capitalist imperialist overlords bother to pay him at all) and is on average only EIGHT MINUTES from abject penury!
What changed my thinking on college is the realization that the degree premium for a bachelor's degree is roughly $36k/year for the rest of your working life. So yes, college is expensive, but it's a hell of a deal. For college to not be worth the money, it would have to cost like $600k-$700k.
https://www.bankrate.com/loans/student-loans/average-college-graduate-salary/#median-salary
Granted, I don't know how much of this is sheepskin effect versus how much of this is "these are smart people who would be making more money anyways." Probably some of both. Still, the idea that college is a rip-off seems wildly overblown and graduates should not whine about their student loans unless they're one of the rare few who were tricked in to getting an actually useless degree.
This is a really effective way of thinking about the NPV of college. Obviously hugely depends on what major and to a lesser degree which college. Underwater basket weaving at Southwest Panera Bread State is not gonna be the same as engineering or business at a State flagship but the general point stands. There is very good college debt and very bad college debt. It isn't a monolith.
This depends so much on what field you go into. The problem with college costs is there are many societally-valuable things people do that require degrees that don’t pay enough to make it a good deal to peruse them.
That said, I have my masters from a lower cost state university and have no disadvantage over people who paid twice what I did to get their degrees.
Social workers are a classic example of this. Why would someone get an MSW to go on to make $45k a year for taxing work?
I’m an LPC who works in substance use treatment serving a population with significant homelessness. Theoretically, in 2 years, I’ll be eligible for a federal program that cancels my debt after 3 years of service. I’m skeptical that will happen
This is just a normal lag. It takes several years after a trend reverses before it’s clear that it has actually reversed, and takes several more years before the kind of people who had been concerned about the trend are willing to accept that it has reversed.
I don’t know - I see folks bringing up concerns about healthcare that were addressed by the ACA almost 20 years ago.
Which concerns that were actually solved are people still bringing up? The ones I see are the fact that health insurance keeps getting more expensive, and that nearly 10% of people are uninsured, and those are both true, even though the rate of increase is much less than it was 15 years ago, and so is the uninsured rate.
I sometimes see people complaining about pre-existing conditions, although the ACA prohibits policies that discriminate in rates or coverage based on the patient's prior health.
But then, Republicans did try to repeal that, and maybe they will again. America can't free itself from distinctively American problems for good, even if few people want them back.
It's much worse now but this has been going on for a while. When I started working in niche service journalism in the mid-late 2000s, when I tried to chase down stories about even mundane topics (like the regulation of stormwater runoff), I found that the spin on the issues - including very much in academic journals - was just wrong, or extrapolated beyond reason. Now it's largely the default.
With College fees they increased 8 fold as share of median income from 1970 to 2010 and then levelled off. Both perspectives can be right depending on what time frame you use, though the idea it is increasing seems outdated.
My healthcare premiums have literally tripled over the past ten years. And I never go to the doctor.
Curiously enough, people who never go to the doctor are exactly those hurt by reforms like the ACA. It used to be that health insurers could offer great deals to those who make no claims (good health and no habit of seeing the doctor) while refusing to take patients with chronic illnesses (who are guaranteed to claim a lot, and are expensive to cover). It was good for the insurers, and good for people who could be assured of excellent health -- but terrible for people with the misfortune of actually needing coverage.
Now they have to take everyone regardless of health, which means the healthiest patients cross-subsidize sicker ones. Which also happens in every other country where health insurance exists. (Americans also pay exceptionally high prices, and many people take a cut along the way, but that is a separate matter and would require different reforms to address.)
The best risk pool is the entire country. I would never go back to a system where people were segregated by risk.
I haven't paid much attention in the past couple years, but my premiums went up significantly when Trump ended CSRs. I'm on the ACA, and California responded by raising premiums on everyone with Silver level coverage. They've kept rising well over inflation over every year, and they exploded against last year, while my prescription drug coverage got worse.
This is a big problem on Twitter and a reason why, I think, MY enjoys an enduring competitive advantage in the punditry business.
A specific example is this socialist economist Marshall Steinbaum who I was always interested in because he would have lefty takes against YIMBYism and things like that. But....he just never actually explained or argued for anything! Just some knowing snark. And like, I'm not an economist so I'm not going to be able to dig around in his papers he published or something and try to reverse engineer his snark. So after a while I just stopped paying attention because what's the point.
Anyway, to any pundits out there, my advice if you want to persuade people: actually go through the trouble of persuading them! Like, lay down the argument.
Eric Holder did testify under oath to a Congressional Committee that the large banks are too big to jail:
https://thehill.com/policy/finance/144235-holders-remarks-on-banks-too-large-to-prosecute-reignites-controversy/
When you combine that with the kind of chicanery that was going on at Lehman Brothers, it seems like an overstatement to call the criticisms of the Holder Justice Department for not even trying to prosecute the bank fraudsters a "conspiracy theory." This is from Dick Fuld's Wikipedia profile:
"The Report of Anton R. Valukas, the official court-mandated investigation into the Lehman bankruptcy, concluded that "While the business decisions that brought about the crisis were largely within the realm of acceptable business judgement, the actions to manipulate financial statements do give rise to 'colorable claims', especially against the CEO and CFOs but also against the auditors. In the opinion of the Examiner, 'colorable' is generally meant to mean that sufficient evidence exists to support legal action and possible recovery of losses." "Regarding liquidity, throughout 2008 Lehman made false claims of having billions of dollars in available cash to repay counterparties when in reality, significant portions of the reported amounts were in fact encumbered or otherwise unavailable for use. On September 12, 2008, two days after reporting $41 billion in liquidity, true available funds totaled only $2 billion." Lehman filed for bankruptcy on September 15. "
See also Angelo Mozilo's slap on the wrist for his insider-trading and chicanery at Countrywide.
Finally, read Neil Barofsky, the Inspector General for TARP. His books provides the receipts of how Geithner, et al undermined his attempts to hold the bank fraudsters accountable.
All of this stunk to high heaven and people saw what was going on. We paid a huge political price in 2010 for letting these guys walk.
The reaction to Luigi Mangione has shown that a lot of progressives want to shoot bankers and insurance executives for merely existing. The existance of banks and insurance is a crime in and of itself.
I don’t think that many people do actually want to do this, but they sure enjoy talking about it on the internet.
I think people want to do it but don’t want to deal with the consequences and sort of admire Luigi for having bigger balls than them. I also think human brains are poorly integrated and often ambivalent.
It’s still makes me very uncomfortable and feel unsafe knowing how many people fetishize “just” violence.
Everybody fetishizes 'just' violence, they get a kick out of watching a bomb blow up their chosen enemies.
I think you're right in the narrow sense that this is a fairly basic human impulse to feel emotional satisfaction when a person you believe is bad is harmed.
But it used to be the case that moving beyond this was considered one of the things that made a person civilized. Going even all the way back to ancient Greece the basic idea was that unrestrained violence against the enemy was barbarism and regulated violence was civilization. That the same victim could be both justly and unjustly harmed, and the distinction was not the nature of their crimes but rather the process by which violence was distributed.
It is disturbing and, in my opinion, a sign of profound moral rot that this is just not something many people believe in our country today, and it's part of a broader issue about a whole range of things (not just violence) where people seem to increasingly be equating "this feeling I am having is a natural human emotional impulse" with "therefore it is fine". This basic attitude characterizes most of the right and also, increasingly, the left as well.
"It is disturbing and, in my opinion, a sign of profound moral rot that this is just not something many people believe in our country today, and it's part of a broader issue about a whole range of things (not just violence) where people seem to increasingly be equating "this feeling I am having is a natural human emotional impulse" with "therefore it is fine"."
I cannot agree with this comment more. It's been especially apparent in the context of the Trump administration's deportation of students who were lawfully here but who engaged in protests against Israel. People who support the administration aren't responding to objections by saying things like "under appropriate precedent, the 1A protections at issue here don't apply to the individuals in question, and therefore the deportations are legally justified and the level of due process provided is legally and ethically sufficient." No, they're just saying that these students engaged in rhetoric they disagreed with so good riddance- WHATEVER is done to them is justified and fine solely because they have been ACCUSED of having engaged in problematic protests. For some (all?) of the individuals in question the administration hasn't even attempted to allege that they actively supported Hamas or anything nearly that egregious- it's just that they don't like these students and therefore want them gone. Any pretense of restraint or conformity to rule of law is discarded, but their supporters gleefully and wholeheartedly support the actions. Same with the Venezuelans deported to a torture prison in El Salvador. These are bad people so any level of pain and suffering imposed on them by the state is celebrated.
It's frightening to witness people's celebration of the removal of any moral or ethical safeguards against the unmitigated use of authoritarian power by our government. Principles are entirely absent from these discussions.
It seems to be a particular problem on the right that support for Trump is completely all or nothing; if you're on the Trump side you can't publicly criticize anything his administration does. The silence from the business community on tariffs has been deafening. It seems like it should be perfectly possible for someone like Zuck or Marc Andreesen or any of Trump's new techbro fans to say something like "I trust Republicans more on [taxes / wokeness / antitrust / whatever it is they care about] but it's probably bad for the president to pick individual winners and losers in the economy" but they just can't bring themselves to do it.
I superlike™️ this comment, which also describes my view about this regrettable reality.
When I was in grad school a decade ago, some of my fellow students advocated for violence against "gentrification" and of course "evil developers" are the bogeymen in most every planning project. At the time, I thought this was just post-adolescent silliness (I was a midcareer student). Now, after seeing the pandemic era rioting/looting and of course the United Healthcare murder, as well as other recent phenomena, I'm on team "moral rot."
+100000
I can tell you lots of people have conditioned and socialized themselves away from this impulse.
Well, we used to not really have it amplified to each other. I don't think the emotional impulse didn't exist, but social media didn't exist so it was the domain of the porch conversation, rather than the public conversation.
Social media made it acceptable for people to indulge in their worst impulses.
Support for terrorism does not mean that the person actually wants to do it. It means that they support it when it happens
I think people have difficulty distinguishing between what they see online and the real world. So it's not that many people do want to have real people murdered, it's that they view bankers and insurance executives as avatars of the systems they despise rather than real people, and it's perfectly fine to delete avatars of oppressive systems. So I think the people talking about it online genuinely are happy to see these things happen. I haven't seen anything that would indicate to me that they aren't.
Yeah in the 1970s in Germany and Italy and here a bit you had student types who bought guns to kidnap and kill prominent executives or politicians they thought were fascists. I sometimes have the thought "if you were consistent, you would..." but then I decide it is probably best to keep my mouth shut.
I can think of one guy who did more than talk about it on the Internet
Probably why Matt said “I don’t think many people do actually want to do this” rather than
A few commentators cannot resist the urge to dunk, even when they need to first identify an imaginary hoop.
Freddie deBoer is the king of bad faith comments. His MO is posting something misinformed or irrelevant and then refusing to engage with any of the thoughtful and informed responses he gets.
I mean, I'll take Freddie to be saying that it's somewhat unclear exactly how far people will operationalize this kind of sentiment. Clearly for some people it's cheap talk, and clearly very few people are actually going to go out and assassinate CEOs, but I think it is reasonable to wonder if many people (even if not a majority) might, say, jury-nullify convictions for assassinating CEOs, or assist a sort of Weatherman kind of bombing operation even if they weren't going to build or place bombs themselves.
It’s not just progressives. 68% of Americans think capitalism is not working for the average American.
I really wish these people could see how the average Italian lives. A month of no air conditioning, driving a motor scooter and having a 7 cubic foot refrigerator would be educational. Capitalism is working much better than the workers understand.
"All Europeans live in paradise" is another progressive myth that won't go away.
I liked living in Denmark and it wasn’t Copenhagen. Winters sucked. Slugs sucked. Food was bad.
But lots of nature and lots of public trails and parks. Low pressure society.
there’s a big difference between german/dutch/danish and italian/spanish living standards. france is somewhere in between, basically paris is as rich as northern europe and the provinces are not
if you adjust for food quality, then it pencils out
as a vegetarian, i prefer italy. i would also feel sexy on a motor scooter. the only thing about a middle class italian life style that would piss me off is not being able to go the speed limit on the autostrada, and being passed by people who could afford a quality compact car or better. i feel sorry for the dudes in their subcompacts who can’t go over 120 km/hr and have their status pummeled by people with real cars
I'd argue that even the Northern European countries don't live an equivalent lifestyle to that of Americans. I've worked for a Dutch company for almost 3 years and the lifestyle just isn't comparable - The European mind truly can't comprehend houses larger than 1500 SQ FT, Amazon Prime and readily available ice.
I think it depends on what you value most in a standard of living. I live in a 1200 square foot house and I would trade at least 200 feet of it for not having some of my neighbors living on the streets or lacking access to behavioral health services and the impact that has on my life in terms of both moral injury and public safety. To me quality of life is more impacted by safety, health, access to nature, access to arts, and connection to community than to having more stuff that I can buy on Amazon. I don't think that Denmark is a paradise but they do seem to have embraced a sort of hedonistic sustainability where they have a lot of intangible things that make life pleasant and fun. (Skiing on the slopes of your zero emissions waste management structure in the middle of a huge city sounds pretty cool.) I would trade that for a world with bigger cars and houses.
do you live in the ranstad or the country?
No one believes "all Europeans". It's Danes, Swedes, Norwegians, and Swiss people.
It's pretty sweet.
Swiss economic policy is closer to American than mainline European in many regards, Norwegians are sitting on a mid-sized lake of oil per capita, Denmark and the Netherlands are still 20% poorer than the US even after accounting for rent-seeking in American healthcare and tertiary education markets, Sweden closer to 30% poorer.
And to the extent that American urban progressives love their *cities,* it is precisely because all four of those countries are absolute sudden death on urban disorder and the people who cause it, with a limited exception in Sweden, which has basically stopped policing certain immigrant neighborhoods and ceded them to local informal authorities.
you see europe very clearly. one quibble. norway pumps more oil per capita than saudi arabia. it’s a full on petro state that also has non petro sectors.
As I said, a mid-sized lake of oil per capita... reserves on the order of 1500 barrels per person.
That said, O&G are roughly 25% of GDP, so it is still an advanced economy without that. Just one that has to pay for infrastructure and pensions via taxation instead of with a massive pot of gold sitting on a rainbow, i.e. a normal European country.
don’t forget the dutch
It's abundantly clear if you've spent any time outside of the US that the US is truly the only first world country in the world.
Yeah. I've basically abandoned the US for Europe at this point, but it's not for the living standards.
The 68% are probably thinking of the time they wanted to buy a Ford F-150 with a V8 engine but had to settle for the V6.
I feel like that folks in the progressive middle have done a poor job of distinguishing between "well-regulated capitalism" and "small business capitalism" vs unfettered capitalism. The problems that they see in terms of labor exploitation, environmental damage, degradation of democratic institutions, and lack of universal access to basic services are not ones that can't be fixed while maintaining capitalism. It would just require a more robust regulatory framework, public provision of basic services through taxes, and repealing laws that give corporations the same rights as individuals. I know plenty of people who rail against capitalism who are realistically imagining any future that doesn't involve some actual capitalism.
I think the “antitrust” framing is just there to add some fake intellectual heft to an emotional argument.
The anti-trust argument is sort of like the libertarian belief that ditching fiat money will transform the economy. Ecuador could adopt a completely optimal monetary policy and it would still have shitty infrastructure and capital.
Bitcoin fixes this.
This!!!
Really cynical part of me feels like their antitrust gambit is essentially “it’s unfair that tech ppl, who I don’t think is that smart, makes a lot of money while I don’t make the money I deserve for my intelligence” (to be fair, tech has its own share of “it’s unfair that me with a CS degree from CMU/MIT/Stanford/Berkeley and a position at Google/Meta/Apple is not experiencing a success I deserve including romantic one - I hate women”)
I increasingly feel like these catastrophization and extreme lack of risk tolerance(left) and desire to destroy everything(right) are just manifestations of mental health issues exacerbated by technology of the companies they loathe
>it’s unfair that me with a CS degree from CMU/MIT/Stanford/Berkeley and a position at Google/Meta/Apple is not experiencing a success I deserve including romantic one - I hate women
Having been in the industry for decades, this is pretty much a vile caricature of the industry, mostly perpetuated by a media that also hates us for our successes (and, you know, for destroying their business models root and branch). While the internet has made it easy to find sad and lonely people, they are no more common in tech than anywhere else I've seen (and largely less so, as money itself leads to some level of romantic success).
Synthesis: Arts degree me is well impressed with my irl friends in the tech space, but Andreesen, Sacks, Thiel, Altman, masculine energy Mark, and Twitter rando are S-tier amoral robber barons here to simply suck the goodness out of society; and are visibly captaining the industry. My CS friends are clever and capable and it’s not hard to imagine them thriving in a better tech paradigm.
The folk you list are nowhere near actually captaining the industry.
Wait, what? I work in tech and this list of people absolutely have outsized influence. What meets the bar for captaining the industry from your perspective?
I remember in law school being taught that the Constitution functions as a restraint on government, and the Sherman Anti Trust Act operates as a restraint on big business, passed in reaction to a time when Big Business or “Trusts” or whatever was looking more powerful than government. We are in another such era with some of the tech stuff, but it’s not the nineteenth century anymore and “anti-trust” seems like an antiquated weapon to deal with 21st century shenanigans. But when all you’ve got is a hammer (and Congress is dysfunctional, so you’re not getting anything new), everything looks like a nail.
With respect to anti-trust and the general "gilded age" narrative, it's important to remember that the history you're reading was written by the winners of that particular battle. That was first time in history it was possible to get wealthy without basically stealing it, and a whole bunch of people hated that fact
Not even close to true. Huge commercial fortunes were made in ancient times, the middle ages, the Renaissance, the early modern period of the great trading empires...
The problem with anti-trust law is there is no fundamental principle behind it except "big is bad." And "big" and "bad" have no strict definitions.
“Monopoly” does have a strict definition, but it’s a poor fit for “big tech.”
Does "monopoly" have a strict definition? Like, it is possible to create strict definitions to it, but we've seen in the last 10 years a mutation in what the operational definition of monopoly is.
Antitrust law says nothing of the kind. It does not measure "bigness", it measures market dominance achieved through anti-competitive practices, both of which have clear definitions.
I do think that there is a component of the problem of big tech that is related to antitrust issues. There is not a lot of options for folks to choose from when it comes to social media platforms and that does make it harder for folks to vote with their dollar, as it were, for safer or more responsible platforms. If there was an actual equivalent to Facebook on the market because Facebook had to divide, I would get to choose which of the least toxic markets, I wanted to go to. It also gives the folks, like Musk, an insane platform compared to others in a marketplace of ideas. I don't think breaking up big tech is a some sort of silver bullet but it would help.
The "trust" part of "Antitrust" is a relic, but the rest is still relevant. Anti-competitive practices lead to (surprise) less competition, to everybody's detriment.
That's just silly. "Antitrust framing" is there to point out that competition is good and necessary for the survival and flourishing of a dynamic free market. Aggressive antitrust creates more tech fortunes, not fewer. People who defend the anti-competitive business practices of Amazon, Alphabet, Apple and Meta are anti-capitalists -- defenders of entrenched corporate incumbents who use their political and media influence to defend and expand their fiefs.
What “anti-competitive business practices”?
I mean, are you asking for a data dump of the hundreds of textbooks and volumes of case law describing and defining this term? You have an internet connection, so I am confident you can do your own research. The targeted practices by the companies mentioned above are listed in the complaints filed against them. You can start with US v. Google (2023) and US v. Apple (2024).
No, you named a small number of specific firms were engaged in “anti-competitive business practices” and I asked you what practices those were.
Do you know?
Yes - see citations
I don’t think so. It is, in fact, one of the only tools government has to attack big business as such (which isn’t doing anything wrong). Since people don’t like big business, that is what gets used even if that’s not what it (should) be for.
Is bloodlust an emotion?
And 10-7 revealed that many of them want to butcher innocent women and children because they belong to the “wrong” group in their version of Blood and Soil politics.
There is at least a 900 year history of fanatical hatred of people who lend money leading to violent anti-semitism and probably vice versa.
The existence of the American health system is a crime. It is worse than literally any other of the 30+ developed world health systems you could name.
How would that make it a crime?
You know. You just say it. And it sounds good. Then it's true.
Like Michael Scott declaring bankruptcy.
In the Eisenhower sense of it being theft. The US system has a lot of middlemen that don't add anything to patient care and siphon money away. The US, unlike most countries, looks at healthcare like a national industry.
On this blog and others, people have rightly excoriated the California high speed railway for bragging about how many people they employ... that's not the point, the point is the train.
In the US, we have a mess of insurance and providers and a cartel of doctors limiting their own supply.
We could do the Swiss system, the Taiwan system, the Israeli system, the Dutch system, the Singapore system, and any one of them would have better results (as in lives saved) and lower costs.
To take an example, the market for Electronic Health Records is 30 billion dollars in the US. Many fortunes have been made, some patients have been helped, and I am sure a lot of innovations have come about. But that's not the train.
In Taiwan, they have had National Single Payer Insurance since 1995. In 2002, they added a little 64 kb (it's bigger now) chip to the insurance card that everyone carries. This has all of the patient's medical records and any doctor or hospital can read it. That was 23 years ago.
Now, if the EHR market in Taiwan was proportional by population to the US, it would be 2.875 billion dollars. Except it isn't, because Taiwan built the train 23 years ago and it works. That is 2.875 dollars they can use on actual patient care, rather than support a network of hospital suppliers.
There are so many things in the US health system that are not the train and too many Americans are proud of how much all of these things cost. The people who suffer are the patients.
I really don't understand your point, yes it is a bad healthcare system, but middle men aren't theives, they are carrying out legal actions for a bunch of reasons some good and some bad.
This is an argument for why the American health care system is bad, not why it's a crime. I think just about everyone would agree with the former, but I'm struggling to understand why you think its the latter.
I know the phrase "is a crime" to be a turn of speech, not a literal statement. Like "Going to the BBQ and not having the brisket is a crime".
I would understand Matthew to be using it in the colloquial sense IF he hadn't responded to a specific question asking "how would that make it a crime?" If he just wanted to make the general point that it's a disgusting and horrible system then he can say that, but that's not the context he was commenting within.
Middlemen add a lot to patient care! If everyone was just going directly to heart surgeons, the heart surgeons would have no time to figure out which people would benefit from heart surgery and which ones would benefit more from cholesterol medicine or Prozac or aspirin. Middlemen are essential for routing people effectively in ways that saves the valuable time of practitioners and specialists.
Of all the rent seeking bogeymen you could have chosen, you picked digitization? Wow, an island nation with half the population of California managed to get everyone into a single database, very impressive. If they have all that money kicking around, why don't they build a better healthcare system so rich asians get care there instead of in the US?
But the point isn't about digitization, it's about how the laudable goal of digitization was turned into an opportunity for rent seeking in the American context.
In the Obama era act that provided money for digitizing health, there was language that mandated that systems should be interoperable, achieve a common format in X years, and some basic good governance stuff.
That all got stripped out of the final bill. Remember when the EU mandated that all phones had to use USB C and the consumer experience of buying a smart phone got radically better? You could use your existing chargers and cables between different phones.
The EHR systems in the US aren't a big problem among US health system problems, but they are a symptom.
Providers and doctors buy one EHR system. Then they want to send the records to a different hospital... Which uses a different system. The records have to be manually re entered. A hospital can't switch systems because they then have to manually shift over all the records. It is a massively wasteful as these ehr companies purposely reduce interoperability in order to protect market share.
It's great for supporting an EHR corporate sector but it's awful for patients and providers.
That's why I contrasted it with Taiwan who's first goal was making an EHR that served patients and providers, rather than prioritizing the creation of a competitive EHR market.
I did EMR implementations for about five years and a dozen healthcare systems (hey, it was where the money was!) so I have an understanding of the complexities of interconnection. A health system does not have to be on the same EMR to receive healthcare records to another system; standards like FHIR exist and outcomes are better for patients than the pre-HITECH solution of toting a box of your medical records between hospitals.
I'm not familiar with Taiwan's chip system (what level of detail could you maintain on a user-portable system? Are people carrying around the raw images of their MRIs between providers?) but you have an overly rosy view of US government capacity if you think the federal government could have built a centralized database of every patient's healthcare records. This is the same government that needed an extra 2 years and $2B to launch a website to let people buy insurance, much less make medical decisions.
The USB-C example is a good one because as someone who just got a new iPhone I do not remember the consumer experience of buying a smartphone getting radically better. I do remember having to buy a new USB outlet because I need to run Lightning cables for my Apple accessories and USB-C for my iPhone.
I also remember doing implementations of my American EMR at hospitals in the Netherlands and Denmark, and I have colleagues that worked at implementations at NHS hospitals in Britain. I don't recall hearing of any Taiwanese solution being implemented in America, or from any other country for that matter (Siemens (German) used to have a platform Soarian before it was acquired and deprecated by a different American EMR company).
That seems to be the common thread. America is creating and exporting new software, health care, and technology, and other countries are happy to free ride and impose regulations on the rough edges that bother them the most.
Rich people buy Maseratis and Lamborghinis. That doesn't say anything about the cars of average Italians. The US has some great doctors and hospitals, but that doesn't help the average American.
What would it say about the Italian auto industry if the richest Italians didn't drive Italian cars?
As a whole, it's a tough claim to prove.
In the specific case of UnitedHealth, their use of AI products to mass auto-deny claims caught a class-action suit, so I guess we'll see.
Is there a theory of why an office drone following a flowchart denying a claim is OK but an AI doing the same thing isn’t?
Because results matter. The AI made many more mistakes, a 90% error rate based on how many claims were reversed on appeal. Of course, this resulted in many people suffering needlessly due to delays in care while being forced to litigate this with the insurance company.
That so called "office drone" is still an actually intelligent entity, and gets it right more often than not. Generative AI is pretty cool, sometimes, and has its uses. But the fact that it still sometimes takes insane amounts of compute and time to determine that 9.9 is indeed larger than 9.11 should give people some pause, especially when it comes to making life or death decisions.
This was not GenAI. The lawsuit you’re referring to involved someone who was (allegedly) denied care in July 2022. GenAI hype began with ChatGPT in November 2022; models existed before then but were used for research or as curiosities. So you’re talking about some sort of traditional AI algorithm.
More to the point, while it’s certainly possible that UHC used some sort of poorly functioning AI tool in a reckless or malicious way, we really need to be cautious of our intuition that humans are necessarily fair in a way that algorithms aren’t. An obvious example here is the “algorithm” of credit scores. It turns out that a soulless machine spitting out a number based on some set of data is both better and fairer at predicting credit risk than the old system where you got a mortgage if the loan officer liked the firmness of your handshake.
Is 90% more or less than the reversal rate for human decisions?
Do you have a cite for the 90% reversal rate? Those figures can be tricky to decipher. If you're getting overturned more often on appeal but generating fewer appeals then does that mean the denials are better or worse? If every so often the AI makes an egregious mistake (which then generates an appeal because the denial is so problematic) but is otherwise doing an excellent job then is it better or worse than the individual who generates 10x the appeals but in areas where it won't be reversed as often (potentially because the company has the discretion to go the way the reviewer did even though a better system would have made a different decision)?
All of which is just to say that making evaluations based on appealed decisions can skew your results. What you'd want to do is an audit of a random sampling of all decisions to review and determine how accurate the decider is.
*To be clear, I don't support the AI here. I have no knowledge of how it operates or whether it's doing a good job, but my prior would be that it's too early to be utilizing AI for these purposes so it's likely to be a poor replacement for a human reviewer, especially if it's operating and making decisions on its own with no human review/input before finalizing it's call. But I do work in healthcare, specifically oversight, so I've seen situations where a specific data point can appear to be one thing but a deeper dive makes it clear why it's not telling you what you think it is.
"Claims that are appealed" is not a random selection of all claims that were denied.
How is the class action suit relevant to whether it is a crime?
It's the only way for the claimants to seek damages in a world where using AI to deny tens of thousands of claims per month isn't yet specifically illegal. The law often trails behind novel forms of activity that cause harm, which eventually the public will agree should be regulated.
I guess I'm not really sure of your point here. Would you have seen no problem with meat packers selling diseased meat or home builders using lead paint just because they weren't yet regulated? You have to believe that something causing harm should be illegal before it actually does become illegal. Hopefully this suit will succeed and put pressure on the use of these tools.
The word "crime" has a specific meaning, it does not denote harmful acts ot things one can be sued for.
I have no idea when selling dodgy meat is or isn't a crime, it would depend on the specifics of the law and the actions taken, my guess is that the vast majority of the time it would not be crime.
This is an odd comment, but particularly so in response to today's article from MY where he discussed the state of the law as it related to banking in 2008-2009. The whole thesis is that just because something is bad doesn't mean it's a crime or illegal- it's a crime in situations where it violates a criminal statute. So just because something is bad and you think that it should be illegal does not mean it actually is. The stuff you're upset about in this context will be come criminal once criminal statutes are revised to cover the conduct, but it won't be a crime today just because you think it should be, nor will it be a crime when/if a civil suit determines that it violated some duty.
Does this mean I can start saying the American permitting regime is a crime
Yes, depending on what's being permitted. Though in this case it is harder because the amount of direct personal harm is less than with healthcare.
American healthcare, as in the care and treatments people receive, is the best in the world. All the arguing is over the price and who pays for it.
*citation needed.
The care and treatments that are available to some individuals in the best in the world. My mother recently received treatment at the Mayo Clinic and it was truly exemplary. I could easily be persuaded that the care there rivals or surpasses the care available anywhere in the world. But that's very different than the care and treatment that average people are receiving in your average doctor's office across the country.
It isn't, there are lots of measures of quality and US healthcare is rarely near the top.
Top 30 is near the top.
That's fair, but "the best in the world" also suggests it should be #1 in more of them.
Which country would you say has better care overall?
I see many people repeat what you do, but we're not competing against every other country combined. If 30 other countries are great at one or two things, but terrible at others that wouldn't mean they were better than the US.
Everyone is dunking on an obvious turn of phrase. Our healthcare system is, in fact, worse than every other developed country, and many that aren't. Matt used to have a podcast that covered this regularly.
Tying healthcare to your employer makes zero sense. Going bankrupt due to medical expenses is an American phenomenon.
Well, maybe they’d be more popular if we had adequate white collar enforcement to prevent their industries from being cesspits of corruption and fraud.
"Insurance fraud" is very common but, despite the name, this is not actually insurers committing fraud but rather them being defrauded, usually by providers. Most of the actually-illegal fraud in the healthcare system is committed by various provider-side entities (doctors, ambulance companies, clinics, even hospitals)
It is very annoying when your insurance denies a claim that they should accept but this is typically not criminal fraud, it's a civil breach of their agreement with their customers.
Number one unpopular reality of US healthcare: For basically all issues, it turns out that providers/suppliers/vendors are the bad guys, near-100% of the time. Insurers are just the hired middleman who acts as a cut-out and play-acts at being the villain.
This is the great truth that all of America needs to learn. No one thinks their mechanic is supposed to treat you like a family member - they just fix your car. The guy who sells him his OEM parts? Fixes your car. They don't comfort you over the fender bender.
Roger Goodell's ears perk up
I'm not going to cheat and Google but IIRC... commissioner of one of our major sports leagues... was it the NFL or MLB?
Current NFL
"Bad guys" might be too strong, but if defined as "primary sources of over-treating and over-charging", then yes.
Over-treating, over-charging, insurance fraud, patent thickets, deliberate inflation of information asymmetry, outright lying to patents, study falsification, wildly differential reimbursement rates and charges... yea, "bad guys" seems fine to me.
This doesn't mean all providers and vendors are bad guys, just that they're the main source thereof.
And medical errors, of course. But "suppliers / vendors" covers too much ground to be a very useful, and the distinction between "insurer" and "provider" is blurring rapidly. United Healthcare (an insurer) has purchased hospitals and physician practices comprising about 10% of all doctors in the country. More than half of all doctors work for a corporation owned or controlled by a hospital group or insurer group or a PE roll-up. Treatment regimes, charges, information management, fraudulent practices etc are increasingly set by corporate policy designed to optimize corporate profits, and delivering on divisional and practice-based "targets" consistent with these policies are tied to provider compensation. The system and the incentive structures are "bad"
I'm guessing a lot of people are thinking of "insurance fraud" as wrongly denying legitimate claims in a way that makes sense as something to be angry about, but using the wrong term. (But then they understand what "insurance fraud" means when someone fakes a disability for insurance money.) It's like the 1992 presidential debate where a voter asked the candidates how the budget deficit had directly affected them, not knowing her question didn't make sense and she meant the economic recession.
The UnitedHealthCare CEO wasn't committing any crimes.
We don't know that, and there is reason to believe the company has / is engaged in Medicare fraud over-billing. But those are not capital offenses.
Doesn't Medicare replace the role of insurance companies where it applies? Does United Health also operate as a healthcare provider at the same time or something?
What fraud?
While I suspect this is more true than I'd like to think, I also highly suspect it is influenced by a lot of "online sphere" talk. Specifically, I'd wager most of the energy behind supporting him was manufactured specifically to drive discord.
I think it's specifically health insurance executives that everyone (not just progressives) would like to shoot, or at least, see shot. These companies play a huge negative role in normal peoples' everyday lives, typically at moments of crisis and extreme vulnerability. The positive reaction to Luigi's actions was totally unsurprising to me.
Don't say "everyone". I'm disgusted at the thought of being lumped in with the people making your argument.
It’s just like the people who want to see the IRS defunded because filing taxes is so onerous. They don’t realize that the IRS are the people who are trying to *help* them file taxes, and decades of defunding are why the forms are so annoying.
Well, this would be more like if the IRS was deliberately rejecting people's legitimate deductions.
On his assassination bullets, Luigi cited that book "Delay, Deny, Defend" which is about how the health insurance industry deliberately rejects or sabotages legitimate claims in order to increase its profits. I think that's good evidence he was objecting to malfeasance, not just the mere existence or idea of health insurance.
I care little who we shoot or don't shoot, but I do think that by and large, banks and national-scale insurance companies should be publicly owned.
I think I just shows frustration with the system. I doubt most people would go and do it, but they cheer when an insurance CEO dies because the system itself sucks (despite some progressive darlings like doctors and government regulators having a hand in this too). Insurance companies are just the easiest targets because they're the owns that you pay to cover your healthcare needs.
I think the Great Recession birthed the progressive economics movement on the left of the Democratic party in a different way.
After the Great Recession, a lot of people in the US were angry that the powers that be failed them so badly. The fact that no heads rolled made them even angrier towards the financial system and a government that was viewed as partially complicit. This generated some energy behind Occupy Wall Street, Bernie, Warren, etc. But eventually everyone got over it. The Great Recession started to disappear into the rearview mirror.
The left's big mistake was to assume that this anger towards banks represented something else: the awakening of a dormant anti-capitalist spirit across American society. When concerns about banks faded, the left thought it would be a good idea to channel this energy into going after Big Tech, which basically no one seems to care about.
This mistake is what led the left to assert that just going all the way left on economics would bring everyone off the sidelines to vote for Democrats. I think they'll keep believing this at least until we get a hard left nominee who loses.
This is a good point, just redirecting the anti-bank sentiment at the tech industry.
Could we have a causes of the recession post some? Really I’m asking for your opinion on Sumner which I know is somewhat hard to do confidently as a non-economist but still.
They are empirical and linguistic nihilists like the GOP. They ignore evidence that their positions are deeply unpopular and then they claim Democrats are “right wing” and denied all the leftist appeasement Biden carried out.
Bernie has run and lost twice. They don't accept that as evidence.
It was rigged! It was stolen from him! Don't you see?!
/s
Russ Feingold's twin losses in 2010 and 2016 should also be evidence of how far left economically the median voter actually is.
And I think that anger wasn’t about legality per se. My mother in law (far from a progressive) is to this day livid about how the bankers took excess returns throughout the early 2000s, and spread the risk across society. And when it came time to bail them out, they made out like bandits in the bail out. Her point is not that they broke any laws, and not that we shouldn’t have bailed them out, but that we failed to extract a pound of flesh when we had leverage as a society. (They needed the bail out)
See, this is where I'm always a little bit perplexed. My politics would have been fine with a pound of flesh, or a ceremonial remove a sword-hand sort of thing, or bill of attainder and imprisoned for like 15 years.
But is this what normal people actually wanted in America? What did your mother-in-law actually want to happen to the men and women engaged in pretty small slices of banking activity?
A Corbyn-style drubbing might be necessary to convince the left that their ideas are broadly unpopular.
This is why we need reasonable conservatives. People who want to, you know, conserve things, rather than decriminalize crime for selected elites and concentrate despotic power in a few hands, who promise their supporters that they will never have to vote again. (see, for instance, Trump's speech at Turning Points Action: https://youtu.be/ghEIj7jS6qI?t=3632 )
It was always curious to me that we didn't make a bigger deal about how the gov made a great profit on the TARP bailouts.
But in a proper Fed response some heads would have rolled. The shareholders of the most leveraged firms woud have lost everything. But there would have been less --unemployment, lost income, foreclosures -- to be mad about.
The shareholders of the most levered firms (Bear, Lehman, Countrywide, AIG, Fannie, Freddie) did lose everything (or almost everything).
And they may not even be the “right” ones. The “right” ones are those who go non-bailout bust even though the the Fed IS plumping out enough liquidity to prevent actual and expected inflation not to fall below target.
The government was complicit, though.
The original sin in the whole thing was bailing out the banks, which infuriated literally everyone.
I was not infuriated
I was angry at the necessity of it, and wish they'd taken a bigger pound of flesh in return, but necessary it was.
Do you think letting the system crash would have caused less human misery?
Because you’d have been happy giving bankers money were it unnecessary?
I was not infuriated
This comment does infuriate me, on the other hand. See ``word crimes'' for an explanation: https://www.youtube.com/watch?v=8Gv0H-vPoDc
Somehow I, a professional writer/editor and frequent SB comments pedant, was unaware of this Weird Al masterpiece until now. Thank you for making my day!
it is a good one.
What would have been the pros and cons of not bailing out the banks in 2007-2008?
Put this on Twitter and BlueSky, because it’s too powerful to just put here
Let's see if I've got this straight. Lefties hate Obama for not having bankers arrested by the police they want to defund and thrown in the prisons that they want to abolish.
It is a point Matt has made a few times about gun crime, anti-gun activists often oppose the enforcement of existing gun laws.
You can steelman it. To a leftist, the criminal justice system built under capitalism is about waging class warfare against the working class, on behalf of the capitalist class. Its proper role is to wage class warfare in the opposite direction. A real leftist would use it for that purpose, but in our fallen world, that will not happen until the ̶r̶a̶p̶t̶u̶r̶e̶ ̶ revolution.
Isn't it amazing how many people who think of themselves as purely secular still have worldviews that are shaped by religious mythology.
I think this is backwards - both religious and non-religious worldviews make use of the same features of human psychology in shaping their visions of how the world could/should/would be.
I agree. You can have dogma without the divine.
Leftists hate Democrats for failing to meet their ever changing goalposts. They hate the work of democracy, persuasion, compromise, and legislating. They feel their are inherently correct and thus morally justified in abusing others.
The lion’s share of the fraud that caused the great recession was committed by consumers. Millions of Americans told whoppers to qualify for loans. This was, in fact, criminal. Under Georgia law, any person who counsels, encourages, aids or abets the commission of a felony is guilty of that crime. A fraudulent loan application sent by email is wire fraud under federal law. Two or more predicate acts (which include wire fraud and a bunch of other things) are all you need to prove a RICO conspiracy under federal law.
It would have been very easy to prosecute a few hundred loan officers and middle managers for wire fraud. Quite a few loan officers and managers went rogue and were approving obviously false applications to pad their bonuses and commissions. I can’t say how high up the chain of command this sort of behavior went because I don’t know of any investigation. It’s certainly true that systemic risk is more important than the decisions of greedy loan officers whose lending authority is probably low eight figures.
+100, David.
The fraud at the heart of the financial crisis were the loan officers and borrowers, and it would have only pleased Republicans to go after the Liar Loans people (remember the Rick Santelli rant on CNBC?).
There just weren't as many cases where illegal behavior could be proven beyond the simple fraud of lying about income and creditworthiness on a loan application.
No, at the heart of the financial crisis were the fraudulent financial devices the firms used to leverage crap products into enormous profits for themselves until the housing bubble (based in part on worthless mortgages) popped.
People seem to think that the fact that they blew up is proof enough that the "financial devices" that blew up were fraudulent, but what they were was very well disclosed and understood by industry participants. "Fraudulent" is a word with a meaning and it requires someone to have lied about what exactly a CDO or a NIM tranche or whatever was, but no one really lied about those things. Even in the civil suits that Plaintiffs won the accusations were basically just "these DTI ratios were a little higher than stated if you did a bunch of extra diligence that no one required and represented that they did" or "this small loan broker in Florida that went out of business probably granted a few too many exceptions to its underwriting guidelines and didn't document them properly from the perspective of someone looking at the file eight years later." People want to believe that just because something didn't work that it should have been illegal, but it simply wasn't.
I don't really care if it was legal or illegal. They took actions that created huge profits for themselves while putting the nation at enormous risk. Whether or not they could be prosecuted (probably not), some form of retribution -- yes, retribution -- was needed.
That's some Trump-ass nonsense. We don't punish people with the power of the state in this country unless we can prove, in court, that they broke an actually existing law.
We could certainly make bailouts -- which the government was under no obligation to actually do -- contingent on some amount of "punishment" or "retribution" or whatever.
I'm not talking about jail, but reforms that had some bite.
"Punish" is such a harsh word. When marginal tax rates were 90% was that punishment? Would increasing the marginal rate to 40% now be "punishment"? The state does plenty of justifiable things that can hurt people without hauling them into court or have anything to do with violating the law.
For example, the legislation passed by Congress that Obama railed against would have used tax laws to roll back the AIG bonuses that left everyone purple with rage.
The packaging and selling of mortgage backed securities spread the results of the core fraudulent (and likely illegal) behavior. But those securities were not fraudulent in the legal sense of that word.
It is definitely the case that players in the system misunderstood or willingly ignored the systemic and correlated risks of people defaulting on their mortgages. That was bad, it destroyed people's lives and put the banking system at risk. But that didn't make those mistakes criminal.
Yes, the fraud wasn't criminal. It's a case where the crime is what was legal.
If someone at Moody’s knew there were significant, correlated risks and gave something a AA+ rating, I think that is criminal.
“the fraudulent financial devices”
Do you include in that list of devices the rating agencies that the banks were compelled to use to evaluate the risks of the securities they were selling?
Oh absolutely. Completely corrupt collusion. The rating agencies, who were hired by the financial institutions, gave them the high ratings they wanted, lest they not be hired again.
All of this was done under the supervision of the federal government. Is the federal government corrupt, too?
Financial deregulation in the 90s under Clinton was stupid. Not doing more to police the firms during the housing bubble under Bush was equally stupid.
I’m pretty sure even people with income were encouraged to do irresponsible things like use variable rate credit lines for downpayments on variable rate mortgages; it’s crazy that was ever tolerated. Hoocoodanode!
Prosecuting middle managers is not emotionally satisfying.
firing then can be
And nearly all of them (remember they, by and large, didn't work for banks, but for mortgage brokerages which went out of business in the bust) did in fact lose their jobs.
The independent mortgage brokerage model is perhaps another example of small businesses which exist largely to arbitrage the fact that some rules (de jure or de facto due to the low probability of being caught) don't apply to small businesses.
Sure. Making dumb business decisions is a firable offense. But it is not a criminal offense.
I'm amazed JPMorganChase's shareholders let Jamie Dimon continue as CEO after 2008.
My rough recollection is JP Morgan Chase was in the strongest position among all banks and financial institutions throughout the crisis and came out in a relatively stronger position than before. Because I'm lazy, here's ChatGPT's fact check...
Yes, your comment is factually correct.
Key facts:
• JPMorgan Chase was widely seen as one of the strongest major U.S. banks during the 2008 financial crisis.
• It avoided many of the worst mortgage-backed securities exposures that crippled other banks.
• Under Jamie Dimon’s leadership, JPMorgan acquired Bear Stearns (with government assistance) and later Washington Mutual, further strengthening its market position.
• By most accounts, the bank emerged from the crisis relatively stronger compared to peers like Citigroup, Bank of America, and Lehman Brothers (which failed).
So your recollection is accurate: JPMorgan Chase was seen as one of the best-positioned large banks during and after the crisis.
> here's ChatGPT's fact check
Jesus Christ, we're not going to live through this.
Would you prefer I share misinformation based upon my vague recollection of events that happened over 15 years ago? What we might call an Human Hallucination?
I could've requested credible sources, browsed them, and included those to increase the accuracy and legitimacy. Maybe I could even leave out the disclaimer of AI assistance. Just thinking it's useful to provide those AI-source statements, which match my understanding, and provide details on JPM's trajectory through this event.
I'm kind of mixed on the use of ChatGPT in this way. I do feel like I've run into some people where I'm essentially just arguing against ChatGPT, but put through a dumbness filter. However, I think it can serve somewhat of a purpose in presenting prima facie evidence of something.
I'd compare it to Wikipedia. It isn't 100% accurate, and reading a Wikipedia article isn't going to make you an expert on it, but it serves a good way to quickly check your priors in a debate. You should rely on either over stronger evidence, but you also shouldn't disregard either without reason to do so.
A housing crash would not have led to the worst recession since the Great Depression. It would not have caused a financial crisis. What did cause those things was the corruption of the major financial firms in leveraging bad mortgages to make exorbitant profits until it all crashed down around them, bringing the entire economy with them.
It's so crystallizing to read a lot of the commentary above. I understand much more clearly the world view of some posters. And it's not a judgement, honestly.
The story we tell ourselves about what happened is funny. But it's clear here most people feel that no state-oriented punishment was in order for those who packaged junk and pushed leverage and rated securities as A because there was no appropriate law on the book.
I would say that it would have been illiberal to punish them, but it would not have been unjust. I would also say, a great deal of the political disorder we're reckoning with in the United States boils down to President Obama's unwillingness to be a bit more of a democrat and less of a liberal.
Well yes, prosecuting people who haven’t broken any laws or writing deliberately vague laws so that you can prosecute people you don’t like backfires horribly when a President you don’t like wins office. That doesn’t make it “unjust”, it just makes it a really bad idea if you’re planning on having more elections in the future.
I really am sympathetic to this, but I think liberals need to reckon with the power behind politics a little bit more. Law doesn't solve politics - it's just a tool to seek justice.
Let me ask then, the election you mention is a tool we use to legitimate our leaders via democracy. If you had put every bank CEO's fate up to a vote, what would have happened?
Not every exercise of power is bad.
A bunch of people who feel vaguely negatively about bank CEOs would have voted for terrible things to happen to them, even if the executive had nothing to do with the crisis, and then anyone who might ever become the victim of public ire, including celebrities, minorities, and politicians, would look to flee the country. There’s a reason there aren’t any functioning direct democracies - it’s a really bad form of government!
How do you reconcile this with elections for House seats, or elections for governors, or juries?
The power to be excluded by the majority is just a function of democracy. The threat of the state's power to turn against you exists no matter what system you use.
In the case of the 2008-2009 financial crisis, the majority clearly felt a way, it's been working out it's anger through our political system for some time now.
Whether that's good or bad depends on your politics, but it's indisputable that our political leaders were not interested in punishing a class of people in the minority. Would our current form of representative democracy be called "good"?
Think of how much of the problem was caused by Countrywide, but they've been largely forgotten post-2008 after they were absorbed by Bank of America.
Shit rolls downhill
How many progressive narratives need to turn out to be based on "things that aren’t true" before there's a systemic discrediting? At the least, each time it happens, the burden of evidence on the next sensational but implausible assertion should rise, and the focus should be on why this movement keeps deploying falsehoods alongside debunking the latest specific example.
I will be even handed and note that the same thing can be said about many conservative narratives (e.g., tax cuts will always pay for themselves).
Which is why a functioning society needs both sides. They need a liberal side to push things forward, and a conservative side to say NO that shit is stupid don't do that.
And ideally a whole lot of people in the middle that aren't blinded by partisanship and can take a bit from both sides and come up with a sensible compromise. Sometimes pushing forward, sometimes not.
We really need to be more careful with definitions here. The modern hard left doesn’t get to own the label “progressive” just because they take the most extreme left positions on everything. There is no particular coherent ideology they can be said to stand for that is recognizably “progressive” up and down the line.
I like to think that I'm a progressive. I want policies that will continue to push society forward to a place where more and more people across the globe flourish and enjoy the bounty of modernity.
"...push society forward to a place where more and more people across the globe ... flourish and enjoy the bounty of modernity...."
Interesting. I'd like to subscribe to your newsletter.
Ahh but WHICH policies do that.
The neoliberal ones
SHILL! 🤣🤣🤣
I agree with this, but don't see how this doesn't apply to all such labels - liberal, conservative, etc. I think we need to accept that there are some fuzzy boundaries within which we can use these terms.
Oh, totally. But then, we can’t just go around saying that “progressive” ideology has been “systematic[ally] discredited”. The hard left? Sure! They lack a lot of credit in my book. But I think that precisely because of the labeling question, it’s more accurate to identify their specific niche of discreditedness as “hard left” than to lump all other forms of progressivism — small-p and big alike — in with them.
I'm a nitpick at the details person, so totally get where you are coming from. That being said, there is definitely a balance between what you describe and "no true scotsman."
Agreed. To be fair, they are the only ones in the spectrum willing to call themselves “progressives”.
Now, I personally believe that that doesn’t entitle them to be the ultimate arbiters of progressivism, and that the vast majority of the country can reasonably be described as small-p progressives. And I’m just one person! But I’m not invested in bailing out the actual lefty progs — they can get fucked for all I care — so much as I am just trying to defend my own little postage stamp of con-prog thought over here.
That's totally fair. But as to "sensational but implausible" narratives, along the lines of, to take a very recent example, "America's first ever trans Representative is throwing trans people under the bus", I think at this point the default reaction should be "there's probably a bit more to it than that".
https://www.reddit.com/r/lgbt/comments/1gwidfi/on_sarah_mcbride/
As with most ideologies — libertarianism and hardcore deregulation being another famous example — their most fervent supporters should never be trusted with actually implementing the best ideas of the ideology.
Reading your comment, Jussie Smollett looks sheepishly away.
Often there is a systemic discrediting a Google away and progressives are much better than any other groups at this, the false things they believe at least vaguely could be true and require thinking and googling to discredit.
That is absolutely not the fuck true about any ideology besides perhaps Nazism.
At least its an ethos.
It is fascinating when you find a well established fact and policy based on things that were never true. The UK banned plastic straws because asian rivers were full of plastic pollution, despite no obvious link between british straws and asian rivers.
You can not understand the environmentalist movement without understanding that a large share of its constituency is actively looking for a modest penance that they can personally pay in order to be spiritually free of their collective sin.
The whole movement was started by a nine-year old who just made up numbers.
We are not a serious people.
I mean people still think James Madison had real insight and manage to deploy those kinds of falsehoods, so here we are.
This is a bad post because it doesn't deal with the essence of the objection or assertion.
Remember at the end of the Big Short where Steve Carell says the only person prosecuted for this whole systemic fraud thing was one guy in Switzerland.
That's what people remember.
There was a moment of widespread anger at the banks and the executives and Obama had the opportunity to take some scalps.
I am hearing about these specific cases for the first time in this random blog post 17 years after the fact. Imagine if the Obama administration had made these trials and cases a "cause" for his administration.
Matt yglesias writes a ton about the importance of Democrats talking about the right things and being angry about what voters are angry about.
An Obama that said, "We should throw these crooks in jail, but our existing laws are unfortunately rigged." would not give rise to the impression that he let bankers get off scot free.
I hate to say it, but no one will ever believe Trump is soft on immigration. Yes, the supreme court and other courts blocked some of his illegal orders but he gave the very strong impression that his administration was doing everything it could to "punish" immigrants.
Obama's administration absolutely did not give that impression and didn't seem to care to try. It was "What cases can we probably win and those we will pursue. Done. Whats next on the agenda."
For someone who cares a ton about rhetoric and how Democrats should seize the bully pulpit on their best issues, you are letting Obama off the hook for not doing so with the banks.
it is absolutely possible for a charismatic president to stir up hate when the opportunity presents itself. obama could have done this here. bush could have done this against muslims after 9-11. this is what you are asking for if you say ``our laws aren't enough, these guys should pay a price''.
I don't think it's at all fair or reasonable to equate Muslims qua Muslims, after 9/11, with bank senior management after a financial crisis. Muslims as such were not responsible for 9/11 and bank C-suites, while not solely responsible, did bear a lot of the blame for 2008.
When people do bad things, they should be blamed for them.
stirring up populist anger against people who have not committed a crime is bad, and not something a president should do.
"...stirring up populist anger against people who have not committed a crime...."
two questions:
1) is it ever responsible to stir up anger against a group?
2) If it is, what are the conditions of permissibility?
I doubt that the conditions for 2) are going to line up with the current state of criminal law. If there are behaviors that deserve public condemnation, then they may merit it even before there are laws on the books to criminalize it.
"1) is it ever responsible to stir up anger against a group?"
foreign adversaries
you can stir up anger when you have no power to get the attention of those in power or stir up anger to increase the power you already have. both can lead to trouble, but i'm more sympathetic to the former. obama was the president, he wasn't a protestor organizing a sit-in outside a citbank, or whatever.
"...you can stir up anger when you have no power...."
So then it sounds like your view is: presidents should never stir up anger against anyone. That's an okay answer to question 1), but then the reference to "have not committed a crime" in your first comment is no longer needed. Your view is: whether people have committed a crime or not, presidents should not stir up anger against them.
That was my point about how the conditions of permissibility are probably not going to line up with the crime/no crime line.
The committing of crimes is the only thing that justifies populist anger?
It depends on whether the results of the "stirring up anger" gets people thrown in prison or killed. Since this is what everyone seems to want, I would vote "fuck yes"
Like... if you want people to just be generally pissed off at bankers, they already were. If you want people's lives to get ruined, please clear a high bar.
I think that this whole line of argument is confused. The claim here is that Obama missed a chance to stir up popular anger at the bankers so... the people turned against Democrats because... they were... angry at bankers?
I want them to be so mad that no one obeys in advance to Trump, that law firms give him the middle finger, that his approval polls fall so much that Republicans discover heretofore untapped reserves of courage, that the voters treat the Republicans in the next election like they did in 1932.
"Bank C-suites" did NOT "bear a lot of the blame for 2008". You already acknowledge that they didn't violate laws. And now you are letting your ignorance of economics spill into emotional anger against a mysterious "other" that you want to lynch. It feels good to be angry at others, and then powerful if you can make them suffer. Right?
But not only did they (vast majority) not actually commit any crimes ... they weren't even responsible for the economic pain of the 2008 recession! Do you care about the facts? Or do you just want someone rich and smug to suffer, so that you can feel better?
(Are your emotions all that far away from standard anti-Semitic "the Jews did it!"? After all ... isn't there a long history of many bankers being Jewish?)
The primary cause of the 2008 Great Recession was excessively tight monetary policy from the central bank (US Federal Reserve). That explains 95% of what happened, economically, in 2008 and for the decade after.
Not only did the "bank c-suites" not break any laws at the time ... there aren't even any good laws that should be passed that would criminalize their behavior in hindsight. You seem to be imagining that their behavior was obviously immoral, and it's just an unfortunate coincidence that we happened not to have passed the relevant laws ahead of time. That's just wrong.
"The Big Short" was dramatic fiction, not economic, legal, or moral truth.
I passionately resent the implication that if we disagree about the causes of the 2008 financial crisis, that that makes me an anti-Semite.
Fuck off and never talk to me again.
I'm certainly willing to listen to reasoned argument, if I misjudged you. You appear to hate the bankers, and blame them for the 2008 recession, and want them to be prosecuted and jailed.
Can you help educate me about what specific actions you think bank executives took, that is morally worthy of jail time? I'd like to know.
What I said: “they bear a lot of the blame” and “should be blamed.” What I did not say: baying for blood, demanding illegal jail terms if not warranted, advocating to shred the constitution to get said jail terms.
You made that up, put a lot of words in my mouth that other people may have said that I did not say and in the process accuse me of being various contemptible bigoted things. You should stop engaging like this if you don’t want people to tell you to fuck off.
Now like I said, have a nice life.
That is not what is being proposed here, the proposal above is for the Obama administration to have said "We should throw these crooks in jail, but our existing laws are unfortunately rigged", and "What cases can we probably win and those we will pursue". That is not the same as "Our laws aren't enough".
i object to ``we should throw these crooks in jail, but our existing laws are unfortunately rigged’’ coming from the person in charge of the us government
Legality and morality are not the same.
Marital rape used to not be a crime.
We don't get our laws from some stone written by God. People elect representatives who write the laws. Hopefully, in a way that matches the sentiments of the population.
Now, if a judge said something like "We should throw these crooks in jail, but our existing laws are unfortunately rigged," that would be a problem.
But presidents and congress people are expected to be involved in writing and changing the law so it is absolutely appropriate for them to have an opinion.
if it was clear beforehand that the existing laws were inadequate, then there would have been a push to change them before the financial crisis. but there wasn't.
There were people who said the laws were inadequate before the crash.
There was also, and I have to look this up, a metric ocean of finance money who had a very vested interest in making sure said inadequate laws stayed on the books.
Is your position that the President can't advocate for a change in laws? That seems weird.
(I would agree with a different position that is, "The President should not advocate for extra-legal punishment or the creation of post-facto laws.")
the later
I don't think Obama had to stir up hate against the banks. Channel it, maybe. It wasn't like people were happy with banks.
But he did channel it! Dod-Frank cost a lot of political capital and was a genuinely good law!
It's a great law. It did nothing to satisfy the anger lust of the population. Sometimes you do need to throw out some red meat.
My hot take is the population mostly moved on and didn’t/doesn’t care and the only people who are still burning mad are a small group of progressives. Obama handily won reelection and continues to be really popular.
Oh for sure we've moved on. At the time people were really mad and it probably hurt the Democrats in the 2010 midterms.
And that would have been bad how? I’m sorry, these bankers knew, especially Angelo Mozilo, and he truly left a trail of destruction in his wake.
Executives can be the least value-added and most entitled sons of bitches out there. Look at the golden parachutes of the past few CEOs of Boeing and tell me it doesn’t make you want to get pitchforks and march on their headquarters. It’s a complete failure of state capacity that their heads aren’t on pikes!
"Obama had the opportunity to take some scalps..."
No he didn't. The whole point of having laws is that you need to make the bad things illegal before they happen, you can't just decide that things are illegal after the fact if they turn out badly. There's a reason we passed new financial regulation after the crisis, and it's because the overwhelming majority of what the banks were doing was perfectly legal.
I don't know, I may be biased because I started practicing law in 2011 and like many of my peers I spent the first few years of my career shoveling through the endless piles of litigation that the crisis spawned, but having spent years of my life learning about the extremely gory details of what happened the worst you could say about people at the big banks was that they were lackadaisical about risk management. There just wasn't any big conspiracy to steal billions of dollars (and if there had been there were like 200 state attorneys generals and US Attorneys etc. that would have loved to make a career out of exposing it, the idea that they didn't try is ridiculous).
Stupidity is a defense to financial fraud because of the mens rea standard. Everyone who isn’t a securities lawyer doesn’t get this. We needed better laws to deal with mass stupidity.
It is bad for the president to suggest that people who have not broken the law be punished for losing in the court of public opinion. We enforce the letter of the law, not the spirit.
Fucking finally.
I had to scroll way too far to see this. Everything else is “will no one think of the financial executives?!”
Obama should have gone after bankers hard. They should have regretted every choice that had led to that moment even if they never saw a jail cell.
I think if you read the comments honestly you will have to admit that no one has said anything like “will no one think of the financial executives.” No one here is appealing to sympathy with those people. The claim is that the actions the left is saying Obama should have taken would have been counterproductive instead of valuable.
At the point the comment was written the top comments were literally “banks did nothing wrong”, including one about how it’s the public that was to blame.
But that still isn’t the same as invoking pity for the executives.
Yeah, I’m not really interested in this sort of weird bad faith thing you’re up to.
I might be being pedantic but I promise I’m in good faith and always am here. The online cliche where when someone doesn’t favor prosecuting or otherwise going after some chosen target they are mocked as saying “what about the poor [x]”, even when they aren’t at all, annoys me and I was disagreeing with it. But obviously if you find what I’m saying unimportant that’s your prerogative.
Persecute the capitalist dogs! I bet they are *imperialists,* too!!
The challenge to that is Obama wasn't, and shouldn't have been, in the habit of lying. The banks and bankers were not crooked, they were stupid.
At the heart of the crisis was the lending of money to people to buy houses they couldn't afford, and then treating those loans as if they were the same bog standard mortgages that hadn't gone bad in the fifty years leading up to that.
You don't have to be criminal to be stupid, you just have to be ... stupid. And that's what they collectively were, to the detriment and ruin of all of us.
They weren't stupid. They just didn't want to look to closely at the golden goose that was paying for their private schools and homes in the Hamptons.
Yep. I remember that period. After the crash, there were plenty of underwriters and analysts coming forward to say that they knew the risks but were told to never mention them again.
I have one very conscientious friend who feels a great deal of blame for the financial crisis because he worked in the treasury department at a large NW bank and saw that they were buying bundles of subprime loans from places with more volatile housing markets like Florida and California and treating them and reporting them as if they were the same value as if they were standard loans in our own area which has very strong housing value stability. He was concerned that treating these less valuable assets as if they were standard mortgage backed securities meant that they would be in a bad position if the housing market in those places fell and folks couldn't sell to get out of the subprime loans and started to default. He shared his concerns with his boss, who ignored him, and his boss's boss, who also ignored him. When his bank eventually failed and laid off thousands of people in our area he was in an actual state of depression because of his guilt that he hadn't been brave enough to take his concerns further up the ladder. There were folks who knew and tried to get others to see it and couldn't and folks who refused to see it when warned. There is such as thing as willful blindness. I think there was a lot of that.
I wish we "Dems" had been more willing to let go of terms like "rigged" which appeal to the most conspiracy theory folks. I wish instead we had said that "this was caused by stupidity, greed, and willful blindness. We can't prosecute folks the way that might feel very satisfying to people who have been hurt because what they did wasn't yet against the law. Part of why it wasn't against the law is because we have based on laws on lobbying by this same industry that was based on the premise that we didn't need financial regulations to prevent things like this because these folk brilliant and that their brilliance and enlighten self-interest would keep them from driving our economy off a cliff. I think we have all seen here that the emperor has no clothes. Being rich doesn't keep you from being stupid and it doesn't keep you from being stupidly greedy. So we are going to be putting in some new strong regulations so that the next time this industry gets this stupid and greedy there will be something to stop them before they hurt us all and a way to jail them if they do." I think it would have been a a good populist way to address the regulations that Obama did work so hard to put in place.
But it might have also helped to burst the bubble that exists in the received narrative of our country that the rich and particularly rich businessmen are some sort of class of ubermeche geniuses who should be put in charge of everything. Part of why we have this mess with Trump and Musk is because we have allowed that myth to go unchallenged.
Many many likes for this comment, GCM.
What is really frustrating, or enraging, is that we put safeguards in place that constrain the financial folks and for a long time therefore all is stable. But memories fade and because there are no financial crises, the big boys work with Congress to whittle away at the protection -- hey, things are fine! -- and so we're left unprotected the next time they get a super bright idea.
Like how they probably want to join in the crypto money train, leverage the hell out of it, and put their financial stability at risk. And if (cough, *when*) the crypto Wile E. Coyote realizes he's past the cliff and plunges, we'll have a repeat of 2008.
It's like how people turn against vaccines because no one gets those diseases so why do we need a stupid vaccine?
I agree in spirit but just want to add the disclaimer that the Big Short is not a good source for understanding the causes of the Great Recession. It’s not as bad as Flash Boys but overall Lewis doesn’t know what he’s talking about.
Do you have any recommended reading that covers it better than The Big Short?
Both of these are very good.
https://www.amazon.com/Brink-Inside-Collapse-Global-Financial/dp/0446561932
https://www.amazon.com/After-Music-Stopped-Financial-Response-ebook/dp/B008EKORIY/ref=tmm_kin_swatch_0
I remember thinking, "wow, it's so refreshing that Adam McKay can make something beyond a Will Ferrell comedy," and I wish I could take that back.
“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”
This is good pushback. That said, I disagree and think the article is good—and one of your main assertions is that Obama could have “taken some scalps” which is directly contradicted by the evidence in the article itself, and is indeed the main point of the article.
That said: “OK, maybe Obama couldn’t throw these guys in jail but surely he could have made lives miserable with a bunch of pre-textual government efforts to do so—the feds are very powerful—and certainly he could have done a bunch of fiery popular speeches about how the bankers are evil and rotten in a fair world they’d be thrown in prison and we are going to change our rotten crooked laws to let us do just that the next time one steps out of line” is probably true. I happen to like that Obama is a measured and smart guy and not a firery populist who lies and stokes public anger by reducing complex issues to simple morality plays. But he definitely could have been that guy instead and very much went the other way—you are 100 percent right.
Look, to secure appeal-proof convictions for past actions on the basis of future laws, Obama merely needed to reverse the causal arrow of time, but he Didn’t. Even. Try.
not yet
"not yet"
True! It's never too late to change the past.
Unless the physics of time travel only permit you to move through time in discrete chronological steps (e.g., in logarithmic increments) or apply some other parameter (e.g., within your own lifetime) such that you are limited to traveling a specific distance in time from your own "present." Not that I'm a huge sci-fi nerd or anything.
1. Obama also chose not to prosecute Bush for “war crimes” relating to War on Terror excesses. I remember Glenn Greenwald being super pissy about it, even found a video of him fighting with Harvard professor Lawrence Lessig over it: https://youtu.be/KZukAowuAZw?si=tSEyF_rCc278ky5U
2. I think one of the reasons this “Obama sold out” narrative sticks around is because the revolving door that existed between Big Tech and Obama admin didn’t really exist between socially democratic parties in Europe and Big Business/Big Luxury Brands whatever. Probably it’s because it’s a parliamentary system but Dems are not an ideologically left party but an interest group brokerage party no matter how much leftists whine about it. Second reason is because Obama has spent his post presidency mingling with the rich and famous further cementing the narrative of him selling out.
There was never any chance at all of Bush being prosecuted for war crimes.
It wasn’t so much not prosecuting Bush, it was that Obama ended up retaining virtually all of the post-9/11 policies that people were complaining about before he was elected. Remember people bragging that he was a “constitutional lawyer”? There was a notion that he would rein in security state excesses and, well, not so much. Can you imagine the reaction if the Bush administration had killed an American citizen without due process? Or if Trump did it?
People who cared about that stuff more than they care about electing Democrats had perfectly predictable reactions.
That is moving the goalposts.
But why is anyone surprised that Obama operated as a normal Democratic president? Was there are serious expectation he would be vastly more progressive than the Democrats, the country and the average of other countries?
It seems odd to compare him to a standard he was never ever going to meet.
Yes Obama was a mixed bag on foreign policy. IMO he genuinely did nurture a more restrained/diplomacy focused element of his foreign policy team with people like Ben Rhodes who tried lifting useless sanctions on Cuba, got the Iran deal etc. But the drone expansion and the precedent of striking an American citizen was atrocious. I had always believed he was constrained and the new element he was nurturing would grow to be the next blob, one of the reasons I supported Bernie over Hilary even though I thought some of Bernie’s domestic spending ideas were wacky. I thought he would’ve followed on the footsteps of Obama’s foreign policy and expanded it whereas Hilary was genuinely more hawkish and interventionist than even a standard replacement level Dem at the time. If you read her book after stepping down as SES, the only thing she criticizes Obama is for not being hawkish enough! It was always bizarre to me that Obama chose her as Secretary of State given that one of the reasons he won in the primary against her in 2008 was her disastrous record of foreign policy (Iraq mainly).
I was an Obama voter who was deeply disappointed that he didn't change Bush-era war policies more sharply. Like, I didn't want him to prosecute Bush for war crimes, but I did want us to unwind our middle east military adventures with utmost haste.
The war crimes / torture point is telling. Obama was a good President. But his administration really didn't want to use the criminal justice system to go after elites, and his people spent a lot of time thinking up excuses as to why this wasn't possible which we see here.
If the convictions against Skelling and Arthur Andersen couldn’t hold up then these seem like more than excuses.
The purpose of prosecuting isn't to maintain a perfect win-loss record. If you aren't losing some cases, you are letting bad people go and almost certainly not prosecuting some cases you might win.
Right. But if you can’t even convict the people involved in Enron, one of the most obvious frauds in recent decades, then there’s no point in trying on substantially weaker cases.
Andy Fastow and his wife were convicted, as they should have been. They committed actual felonies, were prosecuted and jailed. Andy was the "brains" behind the fraud.
The tougher part was convicting Ken Lay and Jeff Skilling, as they failed to oversee Andy, failed to put in controls and created an environment where Andy's fraud could thrive. But those failures were harder to prove as crimes.
There actually is a point, in that (1) you don't know you won't win until you try and (2) bringing prosecutions expresses the community's judgment that this was wrong.
And also, it says something about the GOVERNMENT and those who serve in it. These bankers are their buddies! They went to Harvard together! It says something that you are willing to lose some lucrative friendships with rich people to try and do the right thing and send the right message.
I don't think I can remember you advocating for more zealous and aggressive prosecutors before. I agree with your new stance!
I advocated for it at the time in 2008.
I have suspicions of prosecutors and certainly think some things are overprosecuted, but for instance, I agree with our host on the need to enforce urban disorder laws. Prosecutors are necessary things even though we have to make sure we regulate their powers.
Because then they would be prosecuted for their acts in office and eventually no one would ever do anything without fear of prosecution. A lighter version of this fear of crossing the law is why California can't build.
These two things literally have nothing to do with each other.
Jennifer Pahlka makes this point a lot:
If you’ve spent the past ten years trying to make, say, better online services for veterans, or clearer ways to understand your Medicare benefits, or even better ways to support warfighters, you’ve sat in countless -– and I mean countless — meetings where you’ve been told that something you were trying to do was illegal. Was it? Now, instead of launching your new web form or doing the user research your team needed to do, you spend weeks researching why you are now branded as dangerously lawless, only to find that either a) it was absolutely not illegal but 25 years ago someone wrote a memo that has since been interpreted as advising against this thing, b) no one had heard of the thing you were trying to do (the cloud, user research, A/B testing) and didn’t understand what you were talking about so had simply asserted it was illegal out of fear, c) there was an actual provision in law somewhere that did seem to address this and interpreting it required understanding both the actual intent of the law and the operational mechanics of the thing you were trying to do, which actually matched up pretty well or d) (and this one is uncommon) that the basic, common sense thing you were trying to do was actually illegal, which was clearly the result of a misunderstanding by policymakers or the people who draft legislation and policy on their behalf, and if they understood how their words had been operationalized, they’d be horrified. It is absolutely possible to both respect the rule of law, considering the democratic process and the peaceful transfer of power sacred, and have developed an aversion to the fetishization of law that perverts its intent. The majority of public servants I know have well earned this right.
https://www.eatingpolicy.com/p/bringing-elon-to-a-knife-fight
I'm claiming it is unrelated to whether we brought prosecutions for 2008 financial shenanigans.
A big part of this is that when you go after elected officials, those officials' base see it as going after them. I disagree with the eventual Ted Kennedy turnaround on the Nixon pardon, but this type of thing was likely part of their thinking. Who knew the Republicans were going to go this crazy regardless?
I don't think prosecuting George W. Bush would have been a good idea. But prosecuting John Yoo and others in the chain of command would have been a very good idea.
"one of the reasons this'Obama sold out' narrative sticks around" - you get at some reasons here, but the core one is that it's not a narrative, it's true! The revolving door was in full effect during/after his administration, and the man has spent his post-presidency jet-setting around and running a media production company. The main thing his foundation is doing is setting up his presidential library.
Which is what every president does?
Yes, but this is still selling out. The question is whether Obama sold out, not whether presidents generally do so. And other presidents besides Clinton and Trump have stayed out of the limelight, or been very heavily involved in legitimate charity like Carter.
Carter sold his charities a LOT. Both Bushes were already generationally wealthy. Reagan was too senile to sell out.
I’ll admit here, I’m just generally skeptical that “selling out” can be defined in anything but the eye of the beholder.
Isn’t Obama a centi-millionaire? I doubt he did that with small dollar gifts, he’s playing with the big fish.
His campaign books sold better than most campaign books ever do; Michelle’s have probably sold even better. Over 20 years, a good manager can EASILY turn that ~5-10 mil into a hundred as long as you’re calm and collected about it, which… yep, tracks.
If memory serves, they also got a pretty nice payday from Netflix, though I don’t think the actual amount was disclosed. He and Michelle were also paid jointly for their memoirs, an estimated $65 million.
"Over 20 years, a good manager can EASILY turn that ~5-10 mil into a hundred as long as you’re calm and collected about it, which… yep, tracks."
A one off leveraged bet that turns out great - maybe. Over 20 years with reasonable risk profile - that manager would be considered one of the greatest of all time.
See my response to David Abbott. My point was merely that as a ballpark of a ballpark, it’s within an order of magnitude of plausibility, which IMO is an acceptable heuristic to use short of spending all morning reviewing his financial history.
Sure, but there's a big difference in taking $10 million and turning it $20 million while living on it, and turning it into a couple hundred million.
It’s only a factor of ten. If I’m underestimating their income by a factor of 2-5, and David Abbot is overestimating their spending by a factor of 2-5, then maybe it explains the difference.
Again, I’m not saying this is some sort of definitive proof that they didn’t “sell out”; just that “a couple of extremely famous decimillionaires became centimillionaires over the course of 17 years” is not an outlandish story.
It is simply not true that a good manager can "easily" turn $5-10 million into $100 million, and you should not claim that it is. If you meant something more like, "Well, maybe he actually had $20-$30 million and maybe he got lucky," then you can say, "I wrote a little hastily and what I meant was...."
I did say that downthread. Maybe read downthread before you yell at me?
I read the whole thread before posting the above and feel like what you actually said was, like, "Hey man what I said had truthiness, it's unreasonable for anyone to be upset that I said something straightforwardly and substantially incorrect."
Well now you’re just being pedantic.
Look, I’m not a finance guy. I’m an engineer. I ballpark stuff because it’s a good way of getting a handle on numbers. If you’re off by an order of magnitude, it at least helps you get in the right neighborhood so you can figure out what else you got wrong in the details.
So I honestly DGAF if I used the wrong combination of jargon to get a ballpark point across. Try to be more fucking charitable, dude. We’re all just a bunch of fucking assholes speculating about shit on the internet that we’re mostly too chickenshit to do anything about in our daily lives, so there’s a lot more leeway than if I was trying to pass this off as work product at Goldman FFS.
who paid the $65 million? that seems more of a pretext than an investment
I honestly DGAF. Whatever innuendo you’re trying to insinuate against Obama isn’t even a trillionth of Trump’s own moral turpitude.
Did they get 10M after taxes from their books? Did they don’t spend any of it? Did they not spend any of the income on it?
10% return on $10M is $1M. They aren’t exactly known for their profligacy. I’m not saying they *aren’t* “playing with the big fish”, I’m just saying that doesn’t need to necessarily imply anything untoward.
10% for 17 years without taxes or any draws is a 5.05x return
It’s also a ballpark of a ballpark estimate. I haven’t reviewed their finances. I’m just saying they’re within a reasonable order of magnitude of where they should be even if they’re 100% on the up and up.
It should not be shocking that people are willing to pay to hear one speak, read one's books, watch one's films, etc.
Obama did not need any handouts to get wealthy, any more than any other ex-president. To imply that there is something nefarious going on here really gives away the game that you are playing.
I think a centi-millionaire would be someone worth tens of thousands of dollars ($1,000,000 / 100 = $10,000).
Do you mean hecto-millionaire?
that’s what the greeks would say, but i’ve heard the term cent(?)millionaire a lot. maybe it’s cento based upon the french cent
Prefixes are inconsistent I guess, like how a millipede should be a kilopede.
The odd thing is, most Americans don’t think Obama sold out and he is consistently one of the most popular political figures
Happy to acknowledge that bona-fide criminal accountability wasn’t going to happen, but was that the only tool? Huge amounts of financial assistance went out to the banks and other financial institutions- couldn’t that have been conditional on them firing their top leadership? I think that would have helped the politics a lot AND helped with the general moral hazard issue.
> couldn’t that have been conditional on them firing their top leadership?
No. Reusing my past explanation about why bailout terms (TARP funding) had to be figured out quickly and favorable to bank leadership and shareholders, with few conditions. https://www.slowboring.com/p/bring-back-the-revolving-door/comment/65209354
Many of the executives would've rejected the funding if such conditions were attached. Notably, Paulson and Bernanke wanted every bank to take funds, even those in a relatively strong financial position, so that counterparties wouldn’t interpret some banks as being at higher risk of insolvency. That would've caused depositors (particularly institutions) to withdraw funds from perceived weak banks. So TARP funding was structured on particularly favorable terms. The CEOs recognized the logic of collective action, saw the chance for cheap funding on good terms, and they all agreed.
The collapse of Lehman is insightful to what could’ve happened. Paulson tried to engineer some acquisitions, but CEO Dick Fuld kept pushing acquirers for better terms. He really lived up to his name! He waited too long and eventually only Barclays was still at the table.. Fuld reluctantly agreed to tough terms, but the British government blocked the deal; and for good reasons.
Many more vulnerable banks would’ve gone the way of Lehman if the Federal Gov attempted to push harsh terms for accepting TARP.
It is *arguable* that we should have done it anyway and empowered the Fed and FDIC to mitigate the impact to the citizenry as best possible while still allowing individual banks to fail in larger quantity.
Not sure, for myself.
It’s easy to say that now, after the fact, in talking through hypotheticals. In the moment of unpredictable financial chaos, it’s a lot harder to ponder that, let alone engineer something that would justly penalize the financial institutions while minimizing collateral damage. Moreover, it may not even be apparent which firms and leadership were reckless actors and which were victims. And of course there is the legality of such action (ie, the Takings Clause of the Constitution) and long term ramifications of a government that acted recklessly to capriciously penalize perceived scapegoats.
I’ll also add that this was a position among the proto-Tea-Party Republicans that opposed the TARP funding bill put forward by W Bush and his Treasury Secretary Paulson with input from their Republican Fed Chair Bernanke. As a Reason 2014 article explains, these Republicans were responding to rising populist sentiments within their party with the 2008 elections just a month away. [1]
> Karl Rove explained that Republicans literally feared for their political futures over this one vote.
> Some of the grassroots fervor is evidenced in the 60,000+ signatures collected at NoWallStreetBailout.com in the fall of 2008. A sampling of the petition signers' comments sounds a lot like the eventual tea party movement:
>> "No Wall Street or auto bailouts! Maybe Americans should boycott paying 2008 federal income tax—no income tax revenue, no bailout."
>> "This bailout could end up breaking the spirit that underlies the true American way. The key word is "RESPONSIBILITY!" WHERE IS IT?!
If it wasn’t for Pelosi’s leadership and pragmatic approach to a highly technocratic financial crisis, then our global financial system would’ve melted down while Republican politicians worried about appeasing their increasingly ornery populist base.
[1] https://reason.com/2014/10/03/the-birth-of-the-tea-party-movement-bega/
"And of course there is the legality of such action (ie, the Takings Clause of the Constitution) and long term ramifications of a government that acted recklessly to capriciously penalize perceived scapegoats."
Wait, what?
The banks have some sort of constitutional right to a recapitalization program constructed on extremely friendly lines?
Thanks for polarizing me directly against your side of this argument...
I think he's assuming that you're forcing them to take the funding in some way, in exchange for an ownership stake, which would be a taking, though not necessarily an illegal one (after all, it's no taking without appropriate compensation, not no taking).
The market conditions were such that like 15% of banks would have folded without recapitalization, and the correct response for other banks would have been to let them and then part them out rather than paying a premium for intact banks.
There would have been plenty of takers under stricter terms, eventually, but it would have taken longer and allowed the impacts on the real economy to be worsened without significant countervailing measures from the Fed, FDIC, and Congress.
I'm just saying I am not convinced of the merits of either course of action.
Ron Paul was right.
The main way the Fed can mitigate the impact of banking system issues is by offering large amounts of funding to entities that would otherwise be forced to default on their obligations, which is effectively what the TARP program already did.
The "high risk" banks should have been allowed to collapse. That's the way markets work.
The banking system is not a "market" in the way you are using that word. It is a government-created, highly regulated industry that operates as an extension of the federal government. Competition exists at the end of the process to foster innovation, efficiency and service. But that competition doesn't transform the system in total to a market.
Your view held some sway inside the Bush Administration until Lehman failed. The aftereffects of its failure were enough to convince those who held the "let them collapse" view to stare into the abyss and realize their error.
I'm very open to the case that there are banking functions that aren't supposed to be subject to the market. I'm not gonna come out swinging against FDIC any time soon. But the private investors that got rich on the housing bubble absolutely were market actors who needed to lose their shirts. If the Feds regulatory fuckups meant that was gonna cost them a shitload underwriting the deposits of collapsed banks then so be it, that's how the system was set up. "It's cheaper to pretend these banks didn't fail by printing money and giving it to them" wasn't a legitimate exercise of government power. The market absolutely must be allowed to discipline incumbent interests, because the political system is absolutely never going to.
The political system -- through regulations including Dodd-Frank -- is fully capable of disciplining the banking system.
And you are wrong. The printing of money and funnelling it through the banking system is a very "legitimate exercise of government power". Every functioning government does it, and has for hundreds of years.
Brother, demurrage and seigniorage has been around since the Romans and the Qin. What state allows itself to die at the hands of not acquiring specie?
>The market absolutely must be allowed to discipline incumbent interests
I think the political economy issue here though is that individual employees of a bank/financial institution don't care *that* much about their bank going out of business. I mean, they'd rather it not, but it's mostly not *their* money and they can probably get jobs doing something else after it collapses. For example I just looked up Dick Fuld's Wiki page, apparently after Lehman he just pivoted to running another financial firm.
I.e. say you're a trader, an executive compensated for hitting quarterly targets, whatever. They win no matter what happens- they swing for the fences and take big risks, either they make a lot of money if the risk works out- or if doesn't work out the bank just collapses and they go get another job elsewhere. Unless you make all executives equity holders you have a principal-agent problem, so 'discipline' doesn't really work
The first investment bank to go down, Bear, had a culture of holding on to stock they got from compensation and not selling it.
The secret truth of banking crises is that, in a crisis, all the banks are high risk.
Just because that’s how markets work doesn’t make it yield good outcomes for most people. I would prefer a government that tries to yield good outcomes for people rather than a government that tries to enforce market discipline for good or for ill.
This was all discussed at nauseam at the time too. You’d think these supposed intellectual leaders would at least be aware of it.
So your analysis is that TARP purchases were voluntary on the part of the selling banks, so in order to get all the large banks to participate so as to prevent a run on the weaker ones, the terms had to be sufficiently favorable that all banks would consent?
Well, couldn’t TARP have been made rather less voluntary, then?
I can see a response that this was politically infeasible, given that the law was originally passed under late Bush, and by early Obama with a more favorable Congress, the most acute part of the crisis was over (and pure executive action was limited because we hadn’t yet descended into Trumpian lawlessness).
But even if this political analysis holds, I think it was a clear missed opportunity to at least try some sort of revision to TARP with more teeth, given that Obama could have correctly pointed to conservative intransigence as being to blame if it didn’t pass
If you did TARP in a non-voluntary way, I assume that the banks would've had standing to sue to prevent it (perhaps because it violated the Takings clause), and that there was a high risk that some injunctions would prevent it from happening immediately.
Yea, I really wish Matt would get into the parallel thing people were/are mad about. The perception was that the government incentivized all this fuckery with mortgages, turned a blind eye while the bankers obscured the time bomb behind opaque financial instruments, and then printed a bunch of cash to make sure the corrupt politician/banker class didn't pay the price when their political scheme exploded the economy. The problem most people have isn't so much that we didn't throw the bankers in jail, it's that the people responsible didn't even go broke! The taxpayers ate the bill! The politicians lied about their own responsibility! Obama was supposed to be guy who could see the mistakes of the past and address them, and instead he plastered over the whole thing. The country really needed some serious disruption from a fuck up that big. Instead the politicians rallied around perpetuating incumbent interests by sheltering them from the market at the expense of economic recovery.
Yes, there was a lot of anger at the financial and political elite involved. Yet that doesn’t imply that there were specific villains to single out and penalize. Moreover, the populist outrage was encouraged by sloppy and biased political commentary and activists. Eg, John Steward and Glenn Beck as well as Occupy Wall Street and the Tea Party.
We humans have a natural bias to personalize such disasters and are easily taken in by such narratives of evil elites conspiring to enrich themselves at our expense. Unfortunately, the reality was far messier and even reckless actors were first and foremost deluding themselves and their compatriots. There were no chief villains nor any master plan.
Yes, we can argue through the nuances of the evolution of financial regulation and the decisions by key actors in private and public institutions. Yet that is highly technocratic, open to interpretation and judgment calls, and not at all emotionally satisfying. But even worse would be to give into to populist outrage and lash out at the institutions core to our material prosperity.
As mentioned in this article, 2010 Dodd Frank—a massive restructuring of financial regulation—was the long term solution to prevent future incidents and the financial sector certainly perceived it as punishment. It has made much of finance, particularly banking, far less profitable by reigning in risk taking. Bankers, notably Jamie Dimon of JP Morgan Chase, have been complaining relentlessly about their new constraints. And this all worked in allowing the global financial system to survive both the pandemic and the highest interest rates since the GFC.
Too bad only WSJ, FT, and Bloomberg well communicated the implications of Dodd Frank to their informed audiences. Maybe Bernie (or at least Warren) could have celebrated this punishment? Nope, that isn’t aligned with their everything-sucks world view nor advantageous for their political marketing and fundraising projects. Maybe we could claim Dodd Frank was a conspiracy by Big Tech w/ their Big Law allies to supplant Finance as the rulers of our world? Add some aliens and maybe at least Rogan will popularize this.
I totally agree that the search for "villains" is silly and misguided. It's absolutely a long chain of independent decision makers acting with imperfect information. That's how markets work. That's why so many people got to get rich making those decisions. The problem was that when it became clear that they fucked up and it was time to pay the piper suddenly it wasn't a market anymore. Suddenly it was politics and the feds yanked them out of the fire with the taxpayers money. That's not how markets work. The most fucked line in all of 20th century American political discourse is "too big to fail". Absolutely fuck that shit sideways. No one is too big to fail.
If Americans would have suffered more without the bailouts than with them, it seems inaccurate to suggest that this was just for the benefit of the executives.
Well...no. No one SHOULD be too big to fail, but that's a different statement and I'm unclear if its been fixed. Don't think so. This is one place where anti-trust based on size makes sense to me.
"Suddenly it was politics and the feds yanked them out of the fire with the taxpayers money."
My understanding was that the government made money off TARP? Seems like it was a good thing?
Yes, the government nominally got "it's" money back because it propped up the assets of bad actors at the expense of everyone else. It's all accounting fictions.
November 2008: QE1. In late November 2008, the Federal Reserve started buying $600 billion in mortgage-backed securities.[40] By March 2009, it held $1.75 trillion of bank debt, mortgage-backed securities, and Treasury notes; this amount reached a peak of $2.1 trillion in June 2010.
https://en.m.wikipedia.org/wiki/Quantitative_easing
QE is way different from TARP. The latter was to rescue banks, the former was to stimulate the economy. the FED wouldn't buy *treasuries* to prop up assets.
Extra like for Rogan plus aliens. You've captured my view of him.
Printing cash and disbursing it more directly to people via postal banking or something was probably the correct way to deal with this without recapitalizing the existing banks.
Not really feasible here, but I think there's an argument for "the risks caused by short-term deposit funding mismatched with long-term investment obligations should be dealt with by a publicly-owned 'utility' banking corporation that then lends at scale to other banking institutions." I.e. "The Fed should take deposits"
God knows we've all but nationalized the retail banking industry with significant regulatory requirements on one side, deposit insurance on another, and the surety of a bail-out on the third. Why not just finish the job so consumers can capture a bit more surplus dealing with the Fed directly. By all means, allow private competition so it doesn't ossify, but the private competition is pretty ossified today.
Agree, I think there is a middle ground here, and even though the technocratic rationale for mot pursuing prosecutioms Matt lays out is rock solid, maybe it’s also true that Obama’s DOJ should have tried a few cases and lost in court. Not a great thing to do, but maybe the Sandersites wouldn’t have revolted had Obama made more rhetorical nods to their position.
Better to try and lose and than not try at all.
Trying to understand why Sanderites are the problem and not the Tea Party
They did. That’s the cases Matt mentions.
Agree they should’ve done more but the outcome would’ve been the same.
"Republicans love white collar criminals"
I've never seen this totally true statement said more pithily, I love it.
Republicans love white collar crime and Democrats love property crime (see California trying to get rid of self-defense law during home invasions).
I’m a Democrat and I hate property crime! Someone broke into our apartment once when I was a teenager and stole a bunch of my parents’ stuff that they couldn’t afford to replace. It wasn’t just a financial loss; it hurt emotionally. The safety of our home had been violated.
it'S jUst stUF, dRoSoPhiLIst! [/red rose Twitter user]
That does not sound like a defense of property crime. That sounds like cracking down on extrajudicial killings.
In what way are the killings extrajudicial? Are you implying that if someone invades a home, and is killed, there is no investigation of the killing? That no one attempts to confirm that what preceded the killing was, in fact, a home invasion?
I'm not a lawyer, but it doesn't seem correct to me to label something as "extrajudicial" just because it is allowed by law.
I use the word "extrajudicial" for killings that are not carried out as executions after a legal finding of guilt.
Seems just as ridiculous as claiming Obama was letting white collar criminals off the hook.
Every time I hear someone harping about white collar crime in a political context, I immediately recognize what they actually want - the regulation and criminalization of more white-collar activities based on class resentment.
The knee capping of the IRS seems like pretty good evidence of them loving white collar criminals. As is the consistent goal post moving of bribery and fraud by the right leaning judiciary.
Yep, you got me there. Can't think of any other possible reasons that the anti-tax political party might kneecap the IRS...
Cutting taxes and letting people cheat on the amount they pay seem like different ideas to me.
This is disingenuous. The correct way to reduce taxation is to legislatively lower tax rates, not to kneecap the agency in charge of enforcing them. The Occam’s razor expanation of the latter really is “we want tax fraud to be easier.”
I think a much more fair-minded and reasonable Occam's razor explanation is that they believe that audits are a massive imposition on people who have done nothing wrong and it's not worth subjecting half a million people to them each year to try to bring in a few more billion dollars of revenue.
Going by Google’s estimate of 153.8 million tax returns filed per year, Half a million people getting audited is a 0.3% chance of an audit, and that’s if you totally ignore the prospect that returns that are audited are not an unselected set.
(Ed.: Also nothing about the Trump administration suggests anything to me about favoring people who have done nothing wrong as opposed to explicit solicitude for criminal behavior by Trump-favoring constituencies, but YMMV I guess.)
Are any audits justified?
I guess because they're too stupid to see that someone has to collect taxes, and if it's not the IRS, it'll be some other entity?
I actually think this is the real answer, unfortunately
Freddie’s stopped giving him as much shit, so now Matt feels the need to pick beefs with Matt #2 (Stoller) and the anti-monopoly folks, I guess. Like rapper feuds, but about macroeconomics
Didn't they go to college together? The best beefs are the ones that go way back.
Stoller first broke out on the "netroots" scene in the '00s as the guy who was supporting Wesley Clark when everyone else on the left was for Dean. He's sort of a ideological entrepreneur, who isn't even motivated by sincere leftism so much as just wanting to find a niche or an "angle" that belongs to him and can be the first line on his obit.
Not sure if they went to college together but I think they were both associated with Suge Knight at one point.
That last describes 90% of professional-class progressive activists and thought leaders, lol.
I don’t agree with everything he says, but I like reading the other Matt as well. Both Matts make me think about stuff I wouldn’t have known about otherwise.
Freddie DeHater be laying down so much drama. He’s gotta spread that hate like it’s cheddar.
He just became a father and I’m curious if that’ll change his perspective some.
Sleep deprivation changes a man. Makes him too tired to be angry.
Like many other commenters, I think Matt Y kind of missed the point on this one.
I'm old enough to have been an adult during the 2008 financial crisis, and the recurring refrain was that the government "bailed out Wall Street, not Main Street." This wasn't about "how unfair that the government didn't retroactively punish big banks for practices that were legal at the time" (although I'm sure there were some lefties who thought that way); this was about "how f**king unfair that some douchebag CEO with a golden parachute gets to live in wealth and comfort, while my poor mom who's on a fixed income lost her house and has no recourse."
It was the unfairness of "rich people screw up, poor/regular people have to deal with the fallout."
I find this odd tho, because that’s not what happened! The Obama administration made loans to banks/organizations, took on bad mortgages and they were required to pay the government back. And the US government made a *profit* from its loans, and Fannie Mae/Fredie Mac are currently extremely valuable.
I think everyone agrees that the Obama stimulus was too small, but at the time the administration was worried about inflation. Given what happened with Biden, it was probably a solid worry.
I often think an underreported thing about 2008 crisis was that millions of homeowners lied about their ability to pay mortgages to own houses. It wasn’t just Wall Street - it was main street too
Obama could have taken some of the interest on the TARP loans and cut a stimmy check for everyone. Might have helped with the inflation too. Ah well, better luck next timeline
One thing I have reevaluated in the start of Trump 2 is the Obama answer Biden use of executive orders. I never sweated it because I never had any doubt they would follow a court order.
But Trump seems more and more likely to try to break some. Assuming we get through this in more or less one piece there should be some real restructuring and legislating around what executive orders can and can't do.
The never ending progressive whine that “Obama let the big banks get away with” doing something that was not illegal when they did it always annoys me. What they’re saying, effective, is they want to apply Dodd-Frank in ways that go beyond the original legislative intent as some type of ex post facto law or bill of attainder. It’s the lefty version of when Trump says “We should take the oil. We should just go in, and take the oil.”
As always, the fundamental problem both the far left and the far right have with America is that it functions according to law, and sometimes the law frustrates their ends. They are illiberal defectors so it makes sense. It would be nice if they would just admit that their main problem with Trump is that he is not ideologically aligned with them, though. The whole thing where they pretend to be scandalized by "illegal" things when in actuality they don't care about that at all, they just have substantive disagreements, is quite annoying.
Being around in 2008, this anger on the left, and right, at Obama's perceived kid gloves with bank execs was a real time thing. There was a lot of skepticism that Geithner's Stress Tests were BS. I think it was mostly the right way to go, but from a symbolism point of view it never sold great.