Wednesday, April 22, 2009

Elizabeth Warren Grills Geithner

During a Congressional hearing yesterday Elizabeth Warren pointedly asked Treasury Secretary Tim Geithner about the plan for assisting homeowners who have substantially negative value in their homes. So, their mortgage is worth $400k, their house worth $300K, and supposedly the government has to help the 'homeowner'. At the very least, this suggests a $100K writedown so the owner has some option value. She also made a statement, that simultaneously called for banks reducing interest rates and increasing lending, which nicely highlights her naive view of business and economics.

She's an unqualified advocate for the little guy in the most direct way. So, anything that would cost such individuals more, or take away their power in a negotiation, is considered bad. Such thinking is antithetical to economics, because good economics looks at the unseen as well as the seen, indirect effects, which are often effects on future behavior via the incentives of the rules. Her arguments always have the flavor of intelligent but ignorant earnest students in High School sociology classes: businesses should be forced to lower prices and raise wages and benefits. I guess her template is India or Venezuela. She is a caricature of a simple minded do-gooder because the solution to every problem as merely having a large organization write a check or give stuff away. She takes the size of the economy, its production of goods and services, as a given.

She's on TV shows all the time because journalists and left-wingers agree with her conclusions, and she's from Harvard, so she can make an absurd statement and get away with it because we all know Harvard contains only the Best of the Best in thought. She contributed to John Edward's book, Ending Poverty in America published in early 2007, which argued for more home ownership in America via what came to be known as NINJA loans. The consequence of that objective, in her mind, is merely another random opportunity for the government to help the little guy.


Anonymous said...

We need more people like Chris Cox and Hank Paulson and Dick Cheney in government.

I think in an eight week period Uncle Hank gave $500 billion in taxpayer funds to GS, MAC, MER, C, WFC, BAC, and AIG.

Of course, who can forget (except the mainstream media), that it was when Dick was SecDef that the Wahabi Fundamentalists otherwise known as the Govt. of Pakistan got the A-Bomb from the Chinese.

If John McCain we would surely would have had John Thain running Tsy and hiring Neil Bush to manage TARP.

Anonymous said...

Elizabeth Warren is a fool who makes Chavez look smart

Anonymous said...

Chavez, Castro, Kim Il Jung only dream of destroying the wealth of millions to give $500 billion to four or five chosen firms.

N N said...

Paraphrasing from hearing:

Congressman: You've been in banking your whole career.
Geithner: I've never worked in banking.
Congressman: Well, Investment Banking.
Geithner: I've never worked at an Investment Bank.
Congressman: um....
Geithner: I've worked at the NY Fed my whole career in public service.

Look it up, its pathetic frankly.

Anonymous said...

i'd tap liz warren like a beer keg at a frat party

- Chubbz DeLinquente

Mean Mister Mustard said...

Umm, no. Her template might be Sweden, but certainly Venezuela or India. The public needs to start seeing your template as what it is: Guatemala, Pakistan, or if you want to stretch (but still not reach 1st world status) Chile. Dude, I have said it before and I will say it again, you *need* to leave the least once.

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