You can't blame folks for being confused about this economic mess -- about what is really going on and who is to blame for outcomes that are all too real, including massive job losses, declining home values and shrinking retirement funds. Today is a prime example. Today, Treasury Secretary Timothy Geithner has come out with the latest bank bailout plan, Bank Rescue 4.0 or 5.0...we've all lost count. Like the earlier iterations, almost everybody hates it. Conservatives hate it. Liberals hate it. Ecomomists hate it. Paul Krugman hates it.
Here's what progressive blogger Jane Hamsher said today, a fairly pithy summary of how a lot of people feel:
Timothy Geithner's new TALF plan, like all his other plans, seems designed to shovel billions into the coffers of the very same bankers who got rich on the mortgage bubble. When the public gets a glimpse of the tip of this giant iceberg, as they did with the AIG bonuses, they're dismissed as angry rubes who Just Don't Understand How Things Work. But his latest scheme is proof that they are absolutely right.
So does anyone like Geithner's plan? Yes, the stock markets around the globe, which are going nuts (upwardly, for a change) over the latest rich-guy bailout. And why not, since this plan has the same basic thrust as every plan floated under Bush and now Obama: The interests of the wealthy investor class trumps the American taxpayer. Part of the problem is that over the last generation, we've allowed the stock market -- and more specifically, the Dow, which is just a basket of 30 large stocks -- to become synonymous with "the economy." So if the market goes up TODAY, then the latest Geithner-Obama plan must be great for "the economy."
Not necessarily. While it's been true that more and more middle-class Americans are vested in the stock market because of 401K plans, etc., this may be a case where what's good for the shareholders of Citigroup, Bank of America, etc., may not be so good for getting rid of zombie banks and for the type of business and lending activity that will end the recession and create new jobs. But we'll worry about that tomorrow. This is a nation where the business news TV network, CNBC, does't really cover the real economy, just the hourly gyrations on the Street.
And today Wall Street is celebrating. Try and find it on Google Maps. It's parallel to, and far away from, Main Street.