I always thought so anyway.
_____________________
(http://krugman.blogs.nytimes.com/2009/04/16/reconsidering-a-miracle/)
April 16, 2009, 4:28 PM
Reconsidering a miracle
In preparation for some recent teaching, I went back to something that was a hot topic not long ago, and will be again if and when the crisis ends: the apparent lag of European productivity since 1995. One recent, seemingly authoritative study is van Ark et al; and I noticed something that gave me pause.
In their paper, van Ark etc. identify the service sector as the main source of America's pullaway - which is the standard argument. Within services, roughly half they attribute to distribution - roughly speaking, the Wal-Mart effect. OK.
But the other half is a surge in US productivity in financial and business services, not matched in Europe. And all I can say is, whoa!
First of all, how do we even measure output of financial services? If I read this BEA paper correctly, we more or less use "checks cashed" - or, more broadly, the number of transactions undertaken. This may be the best we can do, but it's a pretty weak measure of actual work done by the financial system.
And given recent events, are we even sure that the expansion of the financial system was doing anything productive at all?
In short, how much of the apparent US productivity miracle, a miracle not shared by Europe, was a statistical illusion created by our bloated finance industry?
Dean Baker has argued for some time that, properly measured, the productivity gap between America and Europe never happened. I'm becoming more sympathetic to his point of view.

What is that?

//A++++++++++++++//

How many Obama cheerleaders are left now that he has made the turn and elected to sell out the nation to save a few bankers. He's destroying what remained of this country that Bush failed to destroy.

I'll take Paulson any day over the Traitor and tax cheat Geithner. Obama is a naive fool to listen to Geithner, Bernake and Summers, the architects of the looting

Comrades Obama and Geithner should have done it on May 1!

"I'll take Paulson any day over the Traitor and tax cheat Geithner."

What? These clowns were cut from the same bad banker cloth. That you expect different results from either surprises me.

[you expect different results from either surprises me.]

Agree he's a crook. But, At least Paulson hammered AIG with 10% on the loan and pushed LEH over the cliff, forced $2 for BSC. Had some toughness about him.

He at least didn't have a marshmallow spine.

I doubt they anticipated the rise in equities when they were planning what to report in the stress tests. If the report sets off another 20% rally it could ultimately be quite bad for the administration in the long run.

the banks are really stressed, cut them some slack

It will be interesting to see what information they choose to disclose and what they choose to omit. I think the administration has completely underestimated market participants' and followers' appetite for detail and ability to think for themselves. If they try too hard to control the information, it is probably going to backfire. I'm not sure how many times they have to learn the lesson that they are better off being transparent from the beginning, rather than letting the market force them to cough up information!

I agree. It's going to be very difficult for them to produce positive numbers that are consistent with other data. If the numbers stray from what the credit markets are saying, it will be a very negative sign.

Re: transparency

The irony is almost unbearable: http://my.barackobama.com/page/community/post/president/gGxHny

Government should be transparent. Transparency promotes accountability and provides information for citizens about what their Government is doing. Information maintained by the Federal Government is a national asset. My Administration will take appropriate action, consistent with law and policy, to disclose information rapidly in forms that the public can readily find and use. Executive departments and agencies should harness new technologies to put information about their operations and decisions online and readily available to the public. Executive departments and agencies should also solicit public feedback to identify information of greatest use to the public.

I expect the stress test report to reveal no new information. The S&P has been restored to it's pre-inauguration levels and for team Obama that's mission accomplished.

Can you imagine how they would fare if they behaved this way with Enron, etc.?

It benefited GS = it benefited the USG

The Securities and Exchange Commission, which sets rules for what publicly traded companies must disclose to investors about their financial condition, is involved in the talks, the person said.

Somebody is reading the comments here.

I repeat again. It is an abrogation of everything implicit in an open trading environment to do anyhing except release avery bit of the stress tests as soon as possible. There's just no scenario where the results are not material and the alternative; national security concerns is a cure worse than the disease.

Bond Girl (member) wrote on Thu, 04/16/2009 - 8:12pm.
Can you imagine how they would fare if they behaved this way with Enron, etc.?

everything wasn't at stake then

Ron Paul Supporters Responsible for Tax Tea Party Protest Origins
http://www.youtube.com/watch?v=-80gi2MZ530

i support nearly the rest of obamas program and hoping he will dump geither and summers

Should Obama continue the present course, will you support him in 2012?

Should Obama continue the present course, will you support him in 2012?

Depends on the alternatives.

michael

im not saying im for or against the tea baggers...(actually a little of each)

but the idea that this has not been orchestrated from the top is a little disingenuous

dick armey has been a financial and organizational force on this for several weeks and fox news has been advertising for even longer

just 3 samples

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#
Dick Armey's tea baggers - Fox News, Politics
Mar 16, 2009 ... Dick Armey's tea baggers - David Shuster at the top of his game, ... Shuster: If You're Planning Tea Bagging Across The Country, ...
beltwayblips.dailyradar.com/story/dick_armey_s_tea_baggers/ - Similar pages
#
Tea Bagging Requires a

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YouTube - Dick Armey and Sean Hannity Talk Tea Bags
7 min - Apr 14, 2009 -
Rated 3.3 out of 5.0
Dick Armey and Sean Hannity Talk Tea Bagsvisit: http://firedoglake.com.
www.youtube.com/watch?v=i8TSslxuVI0

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A Teabagger Timeline: Koch, Coors, Newt, Dick Armey There From The ...
February 1 -- FedUpUSA calls for people to send tea bags to members of .... Listed admins include Odom and Brendan Steinhauser of Dick Armey's Freedomworks. ...
www.alternet.org/blogs/video/136970/a_teabagger_timeline:_koch,_coors,_n... - 14 hours ago - Similar pages

"Obama is a product of the "every player gets a trophy" movement."

....When they start giving out "Best Swing" Awards, you'll know we're in trouble.....

It's odd that the stress tests are a special event.
Shouldn't stress tests be standard operating procedure for banks and regulators, all the time?

Tell me mock, do you keep up with what's going on in the world on a regular basis, and I don't mean MSM? Let me show you a world hidden from you

I'm disappointed in Obama because I never expected him to understand what was going on in the economy. I think it's clear that with the possible exception of Ron Paul, no one considered for President had a clue how bad it was. I was taking the longer view,...if we're screwed anyway, might as well vote based on other considerations. Do you think if McCain had won the Fed and Treasury would magically be fixed?

Joseph Stiglitz on Bloomberg

Stiglitz Says White House Ties to Wall Street Doom Bank Rescue

A sample of quotes

While the strategy might put a floor under housing prices, it won't do anything to speed the recovery, he said. "It's a recipe for Japanese-style malaise."

Thank you, Joe - I will sleep better tonight

Ron Paul Tea Party 07 LiberTea
http://www.youtube.com/watch?v=juTE_W9-ZKI&feature=related

"Do you think if McCain had won the Fed and Treasury would magically be fixed?

Of course not. The man had no business running for President. I like the idea Obama was elected. We'll get "there" a lot quicker now.

Oooops, I'm Not disappointed.

yeah i correcteed three mis spellungs. im stupid

Ron Paul: A New Hope
http://www.youtube.com/watch?v=FG2PUZoukfA&feature=related

BEST Ron Paul TV ad. The campaign needs to use this!
http://www.youtube.com/watch?v=kRO8m7iUlTY

NO! There is a write in button at the bottom of those voting machines. USE IT!

lets see

some here would have obama

prosecute cia agents
while
taking on the banking oligarchs
while
prosecuting the bankstas too
while
investigating bush and cheney for authorizing torture
while
taking on the oil industry and promoting alternative energy
while
supporting rights for immigrants and gays and other not expecially well liked by many
while
finally trying to win the war would should have given our maximum effort in afghganistan
while
balancing a budget that bush totally effed
while
dealing with the worst financial crisis since the great depression
and finally
lower carbon emissions while around half the country doesnt even believe that a near doubling of the CO2 level has anything to do with climate change

doing all that at once will leave him a constiotuency of uh 1
the NRA... as long as he vetoes all of nancy pelosi's and dianne feinsteins gun control legislation

Ron Paul agitates Jim Baker over War Powers during hearing 03/05/2009
http://www.youtube.com/watch?v=tfS79EbKtTU&feature=related

This bust took a lot longer to show up than I believed possible, and the end will take longer than most think possible.

Hope you're right AllenM. Gotta enjoy how good it is right now, because I don't think it's going to get better anytime soon.

Broward

thanks for taking a stand...id like to see prosecution too

but my fear is that obama can only cross so many interest groups before he is toast, plus im concerned about the nut cases out there

does anybody really believe a president can cross the military, the banks and the CIA and remain ok??

i think obama is wrong about tarp etc but still believe he is trying to do the most good for the country while surviving politically

Michael, tell the truth... do you like Ron Paul?

mock, don't make excuses. Obama fulfilling his promise of government transparency would accomplish much of that list.

If he has time to dick around with the new family dog + answer ignorant dog-related questions he has time to release the GD stress test results.

Oh, and dismissing the marijuana question at the virtual town hall meeting was a really bullshit maneuver.

So let me get this straight: because in less than 3 months he not solved a problem that goes back....almost a decade...Obama is a loser?

Okay genius boys: what would you do 3 months into a job where literally every choice creates more CDS/credit event counter-party risk on a
global scale is a big shit pile in a world full of shit.

Ugh. I hate that we have any tax dollars into frickin' bank or bank-like companies or car manufacturers or ......[add latest].

The party is over and someone has to clean up the mess and all the party animals have a gun pointed at your head. You have to decide
which party animals' gun is actually loaded and then say "pull the trigger."

Have fun being the life of the party that you walked into the day after with everyone hung over and covered in their own filth.

Phone in those brilliant ideas (call your Congressional representative) or attend a TEA party and join all the other genius boys with posters that state "Legalize the Constitution" and "Socialism Means Slavery."*

The stress test was well intended and now just stupid and the benchmark moving too fast to be of any use (12% UE right here in OR baby). Should President Obama considered fresh faces? Perhaps. But I do take some, not a lot, of comfort in having advisers who actually understand these complex debt instruments as they were involved in their architecture on the regulatory end. One can only hope that Larry Summers and Tim Geithner are trying to close the lid on Pandora's financial weapons of mass destruction box out of basic atonement and regret their folly and belief that securtized debt, and forms of hedging against it, constituted a mode of production under capitalistic societies.

It is the false consciousness associated with capitalism, and the political risk therein, which prevent Nationalization of zombie banks. One is held hostage by the oligarchs and the common folks.

One can infer that making the methodology public before the results is an attempt to appease critics on both sides. Which it will not of course. Come June, it will be damned if do and damned if don't. The Great Unwind has only just begun and we are living in the shit and have been well before January 20th.

My guess, the President and his advisers are trying to unwind this mess as slowly and orderly as possibly. Who really knows if this is a good decision or not. What is not a good decision is just being forthcoming about that direction and making your political will self-evident. The President in trying not to be Mr. I'm the Decider, makes himself weaker politically. I voted for him to decide and lead because he is, by most accounts, head and shoulders above the brick and his mason we had in office for the last eight years.

*No kidding I read a several dozen of these witticisms right here in downtown granolaville yesterday. Genius. Pure and simple.

I thought it odd to have a PE manager run the Detroit bailout. This can't help matters.

The man leading the Obama administration's efforts to restructure the auto industry has been described in Securities and Exchange Commission documents as having arranged for his investment firm to pay more than $1 million to obtain New York State pension business.

The person who received most of the $1 million-plus payment has been indicted, accused of selling access to the fund.

I'm missing Joe Shmoe right now. I still believe it's all a gigantic master plan that I am too imperfect to understand. And I know those trains are part of it. I'll be be wracking my brain all night trying to figure out how all this fits together. Boy, when O springs the trap, it's really gonna be something.

The obligatory denial of wrongdoing.

I'm missing Joe Shmoe right now. I still believe it's all a gigantic master plan that I am too imperfect to understand.

i think joe shmoe was astroturfing for some short funds...

here is a link showing the TARP funds and how much dedicated under Bush vs. Obama:

http://projects.nytimes.com/creditcrisis/recipients/table

scroll all the way down. the back up to Jan 23rd. then up from there.

then get a clue. your reply is a classic example of false consciousness.

here is the total bailout to date and where the money is going:

http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-...

r_t_o presumes to preach thusly:
'a continuation of the Bush II policies'
Not in regards to torture ...

Ohhhh, that's why Gitmo was closed. Yeah, got it. If there had been a continuation of Bush II policies it would still be operating.

Passing the stress tests is nice, but please don't mistake it for winning Olympic gold. Given the assumptions used, it is more like they have won one of the trophy's they give out to 6 year olds for playing T-ball. Everyone gets one for just showing up.