Comical Hypocrisy Watch

by publius

Suzy Khimm has the goods.  And they're good.  Good goods, that is.

Comments

[bedtimeforbonzo]

"They Were Against It Before They Were For It" -- Republican hypocrisy at its finest.

[Model 62]

Hypocrites? Maybe.

Or maybe they've updated their views in light of additional data.

On this issue leading GOP pols are in agreement* with publius and Hilzoy. In such circumstances, one expects to read praise rather than condemnation.

--------------
*Right. There is some daylight once the discussion moves away from describing the problem and choosing solutions and on to placing blame, with individuals lining up as expected.

[Madrocketscientist]

I can only say one thing:

Democrats and Obama were all for bonuses as well.

[Prodigal]

Model 62, when you have GOP legislators like Pete Sessions saying that the Taliban has presented an example that the Republicans can learn from in order to "disrupt and change" the process, and tosses about words like "insurgency" when discussing his party's strategy for opposing the Democrats, assuming the best of about-faces from people who have previously savaged anyone on the other side who's ever done an about-face on an important issue ... it is not easy.

[KCinDC]

Model 62, I wonder whether the leading GOP pols will have any second thoughts about their second thoughts now that Limbaugh (along with lesser lights Hannity and Beck) has come out in favor of maintaining the earlier party line.

[Model 62]

They might, KCinDC. Politicians are fickle. Hypocrisy is part of the job description. In light of that, observers should applaud pols for flopping in the right direction rather than denounce them for being fish.

[efgoldman]

KC - Only if the minority party hypocrites in question have actually criticized the bovine drug addict. Otherwise no-one cares.

[cleek]

Democrats and Obama were all for bonuses as well.

not according to the article you linked to:

Dodd, a Democrat, told CNN's Dana Bash and Wolf Blitzer that Obama administration officials pushed for the language to an amendment designed to limit bonuses and "golden parachutes" at those companies.

[bedtimeforbonzo]

"Democrats and Obama were all for bonuses"

Madrocketscientist: I think the jury is still out on that.

From your CNN link, Dodd said: "I agreed reluctantly. I was changing the amendment because others were insistent."

Also: "Dodd said he did not speak to high-ranking administration officials and the change came after his staff spoke with staffers from Treasury."

As I understand it, Dodd has been saying the way he wrote the bill gave the government the ability to control the bonuses to some extent, depending on their worthiness.

And if he's not telling the truth, I'm sure we'll find out soon enough as there seems to be a lot of heat on Dodd.

At least he's speaking up.

Why is Treasury mum?

[d'd'd'dave]

So, it turns out Geithner knew all along. Once again, the Obama administration is shown to be incompetent.

[cleek]

no cite, dddd?

forgive me if i don't take your word for it.

[xanax]

"...observers should applaud pols for flopping in the right direction rather than denounce them for being fish."

Model62 @ 12:18 wins Quote of the Day.

[d'd'd'dave]

cleek

http://politicalticker.blogs.cnn.com/2009/03/19/geithner-treasury-pushed-for-bonus-loophole/

[russell]

Once again, the Obama administration is shown to be incompetent.

Hey, Geithner is not my favorite guy either, but you better hope and pray that this is not so.

[bedtimeforbonzo]

"Once again, the Obama administration is shown to be incompetent."

Let's say Geithner goes tomorrow. So that means he'd have been in the cabinet roughly two months, didn't seem to do anything good to distinguish himself and, from here, looks over his head.

Now compare that to Donald Rumseld holding down the Defense Secretary position in the Bush Administration for six years or so. Rummy helped push us into a war that he did not plan adequately for -- a war. Untold numbers died. And no one knows how Iraq will hold up once we leave.

That's incompetence, d'd'd'dave.

(And later, if you want, we can talk about something called Katrina.)

[d'd'd'dave]

bedtimeforbonzo,

Fine, Rumsfeld was bad, whatever ... what matters to me is today, tomorrow, and the future. Obama and his people are a train wreck. Incompetent. And determined to spend every last dollar they can tax, borrow, or print.

russell,

The best thing for the country is to hobble Obama's agenda now before he completely bankrupts the country. Bankruptcies in banking and the private sector are one thing. But Obama and the democrat congress are going to bankrupt the federal government.

But they don't care. As long as they are in charge they won't care if their kingdom is a smoking ruin.

[Gary Farber]

"But Obama and the democrat congress are going to bankrupt the federal government."

President Bush inherited a budget surplus of $128 billion when he took office in 2001. He left us with a $482 billion annual deficit.

I trust you worked furiously to make sure Bush wasn't elected in either election, and that his Republican successor would not be, as well, based on your fiscal concerns.

If not, I'm unclear what standing you have to discuss the topic of deficits, and bankrupting the country.

[Gary Farber]

It's a "Democratic" Congress, btw. Darn that Repub party, and all you Repubs.

[d'd'd'dave]

OT

Did you know that the FDIC is going around systematically hobbling banks so that they can no longer lend? They are raising bank capital requirements above the statutory limits and strangling off lending to the commercial real estate sector. The talking heads in the administration and the federal reserve are saying the banks should lend but they are systematically making it impossible through the fdic.

Statutory capital requirements are about 10% (more or less based on risk rating). A friend of mine owns a bank. In December the FDIC people came through on their regular examination and said his capital was fine at 10.2% for the risks in his portfolio mix. They just finished up a review a couple of days ago and now they say the same portfolio demands 12% in capital. The proportion of bad loans is no greater ... it's just a new fdic policy. That means he has to scramble to insert $10 million of additional capital in the next two weeks. Plus, even with the new capital, he must stop growing the bank so as not to exceed the capital limit.

Bingo. No more loans.

What's more, he must shrink the proportion of his loan portfolio dedicated to commercial loans. This same command is going out to all banks. What it means is that when current outstanding loans come due there will be no lenders to renew them.

The FDIC is engineering a new crash.

This administration is absolutely incompetent.

[Andrew]

I googled 'FDIC raising capital requirements', and found not a single article to support your anecdote, d'd'd'dave. Forgive me if I am not convinced that this administration is 'absolutely incompetent' by your secondhand story.

[cleek]

Fine, Rumsfeld was bad, whatever

click.

[Gary Farber]

The Usenet term used to be "*plonk*."

[russell]

Did you know that the FDIC is going around systematically hobbling banks so that they can no longer lend?

In December the FDIC people came through on their regular examination and said his capital was fine at 10.2% for the risks in his portfolio mix. They just finished up a review a couple of days ago and now they say the same portfolio demands 12% in capital.

That's a 1.8% increase in capital reserve at your friend's bank.

Maybe, you know, something has changed between December and now. Maybe the FDIC has decided that a higher ratio of capital to debt is a good idea.

I'm sure it's a PITA. Is it also 'systematically going around hobbling banks so they can no longer lend'?

Maybe it all sucks for you, a commercial real estate developer. Guess what? You're not the only fish in the sea.

Fine, Rumsfeld was bad, whatever

Actually, Rumsfeld was insane. But, you know, whatever.

Whatever, dave.

[Anarch]

The Usenet term used to be "*plonk*."

Awww, plonk! I loved me some plonk :)

[d'd'd'dave]

Gary
"If not, I'm unclear what standing you have to discuss the topic of deficits, and bankrupting the country."

That is silly. Ok Bush was bad. How is that a reason for us to be happy with Obama screwing things up? This is the standard answer I've heard from dems lately: 'Bush was bad so we can be too.' Clever. Let's be bad from here on out. That's a good plan.

Andrew

RE: FDIC. Don't believe me. I don't care. It's what happened. In my experience the news organizations report things AFTER they happen.

Russell
"Maybe it all sucks for you, a commercial real estate developer. Guess what? You're not the only fish in the sea."

I'll survive. I've got my loan in hand.

But the point is higher capital requirements effect ALL bank lending not just commercial real estate. If a bank has $10 million of capital and the capital requirement is 10% then they can have $100 million of loans. If the capital requirement is 12% then the same bank can have only $83.3 million of loans. It is not easy for a bank to suddenly raise capital in this environment. When confronted with the new capital requirement, a bank which cannot raise additional capital is forced to call $16.7 million of outstanding loans. What this means is that the strongest borrowers (the ones with other resources) pay up and the bank keeps the weakest loans. Not only is it inconsistent with 'stimulus', it actually weakens the bank more.

[Prodigal]

Actually, 4d, it's closer to "Bush and his people were far worse than Obama and his people have shown any sign of becoming so far."

[ral]

Plonk! Off we go to Pomeroy's Wine Bar.

[Andrew]

Or maybe, d'd'd'dave, rather than the Obama administration, it was the Republican Congress that didn't allow the FDIC to collect insurance premiums from the banks for a decade that is responsible for your friend's predicament:

"WASHINGTON - The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.

The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized - and that bank failures were so infrequent - that there was no need to collect the premiums for a decade, according to banking officials and analysts."

[russell]

But the point is higher capital requirements effect ALL bank lending not just commercial real estate.

I take your point, dave, and I'm sure it is a drag for folks who were hoping for a loan and didn't get one.

Less than 2% change in the reserve requirement seems, to me, to fall somewhat short of 'systematically hobbling' the ability of banks to make loans.

And maybe things have changed since December.

[d'd'd'dave]

"less than 2% change in the reserve requirement seems, to me, to fall somewhat short of 'systematically hobbling' the ability of banks to make loans."

Here is another place where a percentage of a percentage has meaning. 2% is 20% of 10%. The capital requirement is 20% higher than it was. That is significant.

"And maybe things have changed since December"

I know what I'm talking about. This bank is in good shape. The only thing that has changed is FDIC's attitude.

[russell]

I know what I'm talking about.

On this topic, I'm sure you do. I'm happy to defer to you as to whether the increase in capital requirement makes a dent in folks' ability to borrow.

I don't know what the rationale is for the change.

[Fraud Guy]

what matters to me is today, tomorrow, and the future

The only thing that has changed is FDIC's attitude.

Well then, dave, based on my understanding of your position, since the old FDIC requirements were in the past, you have to forget about them, because what matters is today, tomorrow, and the future.

[bedtimeforbonzo]

Fraud Guy: Brilliant.

[Slartibartfast]

...but, but: today, we have the memory of past requirements.

[d'd'd'dave]

"Fraud Guy: Brilliant"

Yes, it was clever. But the point is that the federal reserve, treasury, and the administration are declaring they want to expand credit while FDIC is working to reduce credit. Seems counter productive.

[Fraud Guy]

dave,

Not to be apologetic (and an FDIC rules change caused the takeover of one of my favorite local banks some time back), the FDIC's job is to ensure that banks are solvent. Sometimes these requirements are targeted by bank, not overall. How well did your friend's bank survive a 'stress test'? Perhaps things are not as good as you are making them out to be? Too much level III assets, perhaps?

I don't know the particular circumstance, or the details of the FDIC review. Is it possible that at 10.2% your friend's bank was at or on the leverage limit, and the extra reserve requirement is to allow a cushion?

Of course, the interesting thing is that the reserve requirement is the hidden power of the Fed. They determine what the leverage limits of banks are, and those vary by size and type of institution; it's even possible that your friend's bank has increased/decreased in size sufficiently to move classes. Everyone watches the Fed Funds rate like a hawk, when the leverage requirements can have more impact.

I wonder if this is an offset for the quantitative easing that the Fed is doing, jumping in with 1,000,000 x $1,000,000 for various financial instruments to increase the money supply. Hmm, any fiscal libertarians want to jump on that possibility? Maybe a Jacksonian Bank revolt?