I love Paul Krugman. He’s clearly just a bright guy. His column today in The New York Times hits a strong chord with me. I would have liked him to go a step further. Not that he couldn’t or wouldn’t – but I will.
Krugman points to the Obama administrations vacillations on how the fix the banks. He calls the response by the young Obama team “dithering” and explains how, at this point, they seem to cough up one rerun after another from the Geithner/Bernanke tag team. Investors – and the rest of us Americans who are too busy trying to keep or find a job to watch anything more than the Fall of Wall Street day 100 - can’t find much inspiration and don’t buy.
There is one telling statement in Krugman’s piece. He quotes Geithner, who speaks of the “basic inherent economic value” of troubled assets. It’s at that point that many of us say, “wait a minute….” Or perhaps something a bit more flowery. Like “what the….”
The reason most of us respond this way is because, unlike Mr. Tim Giethner, multi-millionare, and Mr. Bernanke, multi-millionaire, we didn’t make all that money on Wall Street. Most of us work for companies that, among other things, don’t actually make anything anymore. The companies we work or worked for sell “services.” That’s what we Americans largely produce these days. The company I just got laid off from has “Services” in their name. They pride themselves in not making anything, not owning any dirty machines that make stuff.
We look at people like Geithner and Bernanke and we understand that they, too, don’t make anything. All those folks on Wall Street don’t make anything at all. OK, they know how to make cool spreadsheets in Excel and really groovy Powerpoint presentations. (Actually they probably have people to do those things. The really rich guys don’t get their hands dirty with Excel…..wait, that’s not a dirty job….)
But at the end of the day, they can’t go out to the shop floor and actually see something they’ve made. That’s because they don’t make anything. They sell “services”. Or they “consult”. Or “broker”. All of which means they make nothing.
Since I live in the Rust Belt capitol or the Western World – Detroit – people like me understand that crucial distinction. And one reason many folks like me have a hard time understanding why the Big Three must beg for a dollar while the Wall Street hustlers get a million isn’t because we think the Big Three are so great. We all got the irony of watching the CEO’s of the Big Three flying to DC to beg for billions in their private jets.
But Michiganders working for one of the last remaining manufacturing strongholds in the U.S. really make something. When they leave work at the end of a shift, they could tell you how many autos they had a hand in making that day. And those workers understand that the cars and trucks they make really have a tangible value. When you buy a new vehicle, it actually exists, right out there in the garage, or parked in the driveway, or nestled up against the curb. All the neighbors can really see that new car or truck. It really exists.
Geithner and Bernanke can’t do that because they don’t make anything. And those “assets” that Geithner alludes to don’t really exist beyond the powerswitch of an Excel spreadsheet. Turn off the switch and the money disappears. Gone.
Thus we have a central problem. Most of us who voted for Obama did so because we thought he, for once, would actually DO something – at least something good, unlike the War On Terrorism or the Iraq War. Then the young president saddles up with the likes of Geithner and Bernanke, who, to most of us, seem like quintessential snake-oil con artists. All these folks seem so good at selling “services” and “assets” that amount to nothing. They’re so good at the bet on the bet. But when they go home at night and the sink is clogged they call someone else who can actually DO something.
Our president has a very limited time to get this right. Most or us Americans are shaking in our boots at this point. The fear that so many hardworking people share right now is very real, very tangible. Things looked so bad last year – till 2009 came along. The fact is the Geithner is simply a liar when he refers to these assets as having some “inherent” economic value. He knows it. We know it. Perhaps this mantra is something he must tell himself to allow himself to sleep at night. If so, that’s nice. I’m sure the silk sheets make that easier.
Just keep it to yourself, Tim. Hire a therapist to help you work through your projection issues, since you’re obviously delusional about the nature of “inherent” value. It could be that you, sir, need those “assets” to have some “inherent” value because you wonder about your own inherent value. When we see the salaries you folks make, we out here in the real world wonder the same thing.
But we have only one response to your pronouncements about this ‘inherency”, this fantasy you want US to believe. We just don’t believe you. And if President Obama expects us to do so, he’d better wise up soon, because that pig just won’t fly. Ever.
Hiring a pimp to solve the problem of hookers in the neighborhood may not be the smartest thing to do. Even if he’s smart enough to simply move the hookers a mile away, he’s still just a pimp.