As lifted from MyDD, the caucus’ principles are:
1. Fighting for working families and the middle class through the establishment of an equitable tax structure, fair wages, proper benefits, a level playing field at the negotiating table, and secure, solvent retirement plans.
2. Providing affordable, accessible, quality health care to all Americans.
3. Ensuring accessible, quality primary education for all American children, and affordable college education for all who want it.
4. Protecting consumers, so that Americans can once again have faith in the safety and effectiveness of the products they purchase.
5. Defending American competitiveness by fighting for fair trade principles.
6. Creating and retaining good-paying jobs in America.
Seems pretty cool to me, all of it. I don’t know if the Bay Staters are put off by the language which falls short of deliriously embracing free trade, but I’m disappointed that none of our fine Representatives see fit to join this group.
What gives?
Not to be glib, but how is this at all different from the Progressive Caucus? More anger? The sidelining of distracting social issues?
One thing most of the members have in common is reputations for constituent responsiveness, public accessibility, and small-dollar fundraising, often with a significant online component.
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p>In short, they don’t just vote “the right way”, they engage their constituents and seek office the right way.
How is this different from the Democratic Party?
…Heath Shuler…and co….
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p>Probably because it seems like a redundant group, at least it seems that way to me. I can’t imagine it lasting long and/or doing much — effective caucuses are generally defined by some sort of shared identity (e.g. Congressional Black Caucus) or by something they are against within their own party (e.g. the Blue Dogs). I don’t see the value-added in this caucus, and I doubt the MA reps do either.
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p>Plus, as the right-wingers love to point out, all of us in MA are just latte-drinking, Volvo-driving elitists, right? đŸ˜‰
What I’ve been reading indicates that large portions of the banking system are insolvent. Left sides of balance sheets team with overvalued assets. Selling these assets will lower their value because it forces a correct evaluation. When enough overvalued stuff gets correctly valued, equity on the right side of the balance sheet dips below zero.
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p>Can you spell insolvent?
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p>The result of the banking system collapsing is that it destroys savings and credit. So it’s very important to face this problem. It certainly requires resisting Wall Street’s special pleading. Keep government out of the business of underwriting Moral Hazard Savings and Loan.
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p>Unfortunately, rescuing banking also seems to be helping Big Institutions and not the Little Guy.
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p>So there are two ways to go wrong. Some of the populist ranting I’ve heard lately makes me worry that we’ll puff up with moral superiority and watch a bank collapse followed by catastrophic bank runs, followed by some very real pain to Little Guys — as well as Medium Guys, Large Guys, and Extra Little Guys. I’m not sure the American public has fully understood the danger of bank runs, and it is hard to discuss them without risking one.
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p>So yes, I’m not sure what I think of this populist caucus idea is so swell.
given the $250k FDIC protection. Anyway, the caucus doesn’t seem to have defined itself with any particular banking strategy.
On September 15, money market funds almost cratered. That would have brought down the entire system.
Why can’t you be a populist and support stabilizing the banking system? You might prefer some types of solutions (foreclosure moratoriums, mortgage renegotiation, compensation caps) over others (giving banks money with few strings attached) but I didn’t see anything in the principles stated that argues against a stable banking system.
First off foreclosure moratoriums, mortgage renegotiation, and compensation caps are going to do little to fix the balance sheets of banks. None of those things will stabilize the banking system if the banking system is insolvent.
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p>Certainly giving banks money is an invitation to moral hazard. I think that the argument for nationalization is pretty strong: otherwise we (as government/taxpayers) are giving money to bankers to play a game called “If we bankers win, we bankers profit; if we bankers lose, you taxpayers cover the losses.”
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p>Populism lies much more in the land of politics than policy. It predisposes one to focus on certain things. For example, a $15,000 credit on home purchases might seem like a great idea. It’s certainly an idea that has populist appeal, but it’s predictable economic impact would only be to push up the price of houses $15,000. In other words: great politics, terrible policy.
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p>Likewise, various interventions to save the banking system can look good or bad from a populist point of view. Those optics do not always align with policy outcomes.
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p>My original comment was not that a populist caucus was ipso facto bad. It might be totally wonderful. I have some concerns about it not being such a good thing. Maybe my comments explain the reluctance of Bay Staters to join. Maybe not. Let’s see what the new caucus does.
I worry that this would send us into the land of zombie companies that has afflicted Japan for the last 20 years.
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p>If the banks are nationalized, all of their decisions become politicized. Does Congressman Dingell permit the Department of Banks to default GM? No. And every other Congressman and Senator has his own list of can’t fail companies. So the banks are not repaid, but don’t pull the plug on defaulting debtors, and this is going to fix the banking system?
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p>That is not an enticing prospect.
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p>I think we have to suck it up and help the Big Institutions, and soon. Then, have your regulatory field day almost-as-soon.
Yes, this is a huge and awful risk. Thank you for pointing it out.
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p>It’s not clear how to avoid it either. Ideas anyone?
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p>I tend to think that it is a smaller risk than turning federal funds into play money for Imprudential Capital Destruction Bank. However, the new Administration’s Treasury Department inspires me with less confidence than I’d like. So your concern seems well-placed.
… of exactly how a nationalized bank operates generates some questions, but we need to stop talking about it as if it’s automatically doomed to failure and should be taken off the table. The activity of other national banks in other western democracies at least suggests that this is doable, even if it is very tricky. If it’s a viable solution, then the trickiness of it is a challenge to us to enact good national bank policy and regulation.
Usually we expect business to be run by careful response to the demands of the market. Having the government run the bank weakens that considerably so that the demands of the market can be more readily overridden by political demands. Such demands can be obviously bad — or much more dangerously — they can look good, feel good, come from good intentions, and have terrible consequences. Financial incentives are supposed to be useful for focusing decision makers on outcomes rather than Congress pleasing.
… and I don’t know the details about how such problems are handled in the example of foreign national banks, but I’ve got to believe that it is at least possible to navigate through those waters. One thing is for sure, timidity is going to kill us this time around (see sig).
Doing deadlifts, where the barbell lies on the floor, is dangerous if one tries to gradually muscle up the weight from floor to waist. Pulling the weight up explosively turns out to be much, much safer.
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p>So too here, apparently.
If nationalization is a means of ensuring that the banks survive, but present equity reaps zero benefit, so much the better. But if it becomes a means of ensuring that painful losses be postponed, then so much the worse.
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p>Rare, though, is the US govt agency that can operate free of political interference for any length of time, while handling politically supercharged issues such as: which companies shall fail?
Can you provide a credible source of information on the claim that MM funds almost cratered? As long as the gov’t could still back up the deposit insurance, and people were reminded of that, there would not be bank runs.
… on insolvency:
That was one of the comments I was thinking of when I wrote mine. Also the Stiglitz interview on TPM, 10 interesting minutes:
they are removed from the balance sheet. The difference between the sale price and the former basis value of the asset is taken as a gain or loss on the sale, and is included on the income statement. The effect is insolvency if those losses are so large that they result in negative equity.
If the balance sheet shows an asset worth $500 and it is sold for $200, equity drops $300. Similarly, if the asset is not sold but merely has its value corrected downward to $200, equity also drops $300.
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p>In other words, selling forces a correction in the evaluation of assets. The other kind of correction must be forced by accounting principles, regulations, auditors, etc.
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p>The argument is that banks are attempting to avoid such a correction. As a result, they have an incentive to retain bad, over-valued assets.
Are they? How?
The Wikipedia article on this is rather weak, unfortunately. It even suffers from some grammatical deficiencies. The opening does seem fairly close:
It goes on to talk about the fuzziness of this term and how it does not describe a particular set of politics. The conservative movement — and not just Joe the Plumber — has tried to play on a particular kind of populism where the elites consist of Hollywood, liberal professors, Senator Kennedy, disdainful latte drinkers, and people who say “Happy Holidays!” Left-wing populism obviously chooses different targets.
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p>The populist rhetorical style does not fit very well with the good government, technocratic liberal tradition of which Michael Dukakis and Deval Patrick are a part. They care about “the people” certainly, but they don’t think that earning victories for “the people” necessarily have to come at the expense of “the elite”.
Bitten by the god of irony: but they don’t think that earning victories for “the people” necessarily have has to come at the expense of “the elite”.
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p>Gerunds. Singular or plural. Discuss.
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p>Some don’t think that when studying gerunds, changing old rules are/is cool.
I’ve been using plurals too much recently. Gerunds are singular even when they take a plural object. I know that. I do. Honest.