The 2010 Economic Model

One can wonder about Geithner’s trip to Beijing, especially as almost nothing has really been fixed at Home. The Monetary policy behind the TARP and Fed action has produced little response from the economy, forestalled little Unemployment, and actually kept no business from Bankruptcy in real terms; Government buying Stakes in the companies has meaning only in denial that Bankruptcy has occurred. What was seen as a mark of success for businesses is Now perceived by the Business world and Investors as a hollowness in business structure; a necessary Government intercession outlining crippled performance. It is no wonder Corporations want out from Under the supervision of Washington Politicians and Bureaucrats. It becomes even more embarrassing as the world witnessed the understood ineptitude of the federal government. Geithner’s trip to China can only be a Sign of weakness, as Tim attempts to make sure that the Chinese Government does nothing to repudiate Administration policy, under Conditions where the Administration needs China to buy another $100 bn of US Treasuries this year.

Mish points to material that proves the financial world is adopting loan policy to do relatively the same as was planned before the TARP, which was supposed to entice Bankers to quickly write the mortgage alterations necessary. The TARP, though, only repaid financial institutions for past losses which they so righteously deserved; at no time was there existent upon their part any desire to extend or modify the mortgage program, Bankers in fear of maintaining the viability of mortgages still solvent. It is revealing that the only real accomplishment of the TARP became defeat of all Benefit Clawback provisions against the financial structure itself. Debtors, Investors, and Stockholders all came out with huge losses or loss of Credit; but the management of these financial institutions avoided eating a bullet. They are back in business again, not even wanting TARP money again, because the federal funds brought a new line of Suckers, and stupid Politicians would try to limit their performance payments to themselves.

I sometimes worry about Paul Krugman, asking myself if he simply ignores unpleasant things. He knows the great difference between the American model of Today, and the Japanese model of the 1990s; the Japanese were selling insufficient technology into an expanding World economy. The current American model is trying to sell State of the Art technology into a shrinking World economy; one where there is a multitude of technological Products which will do the Job at much lower Cost and Capitalization. Paul thinks We can ride upon our reputation in a World bereft of loose Capital to spend on fancies; the Market to sell used American cars Overseas is quickly being replaced with sales of used American Tech which will do the Jobs desired. I still utilize Windows XP, and feel no great need to upgrade anytime soon. I do believe that Paul Krugman needs to upgrade his economic models soon. lgl