Overdevelopment, Overpopulation, Overshoot
Container City: Shipping containers, indispensable tool of the globalized consumer economy, reflect the skyline in Singapore, one of the world’s busiest ports.
Topics: Tim Geithner, Timothy Geithner, Treasury Secretary Tim Geithner, Paul Krugman, The New York Times, Mortgage debt relief, Austerity, house of debt, Atif Mian, Amir Sufi, Media News, Business News, News, Politics News
In his latest column for the New York Times, celebrated economist and best-selling author Paul Krugman slams former Treasury Secretary Tim Geithner for presenting an exceptionally positive self-assessment in his new memoir, “Stress Test.”
While Krugman is happy to grant that Geithner’s post-2008 record is better than that of his European Union counterparts, he still thinks the Obama administration’s chief financial crisis manager fell well short of expectations.
“Mr. Geithner can indeed blame much though not all of what went wrong on scorched-earth Republican obstructionism,” Krugman writes. “But there’s also something else going on.”
That “something else,” Krugman claims, is a mistaken belief that the interests of the world’s most powerful bankers are more or less identical to those of the everyday worker. “In both Europe and America,” Krugman laments, “economic policy has to a large extent been governed by the implicit slogan ‘Save the bankers, save the world’ — that is, restore confidence in the financial system and prosperity will follow.”
Geithner did well enough at the first half of that unofficial slogan, Krugman says, but his record on the second half is considerably worse. Citing Geithner’s widely reported resistance to enacting significant mortgage debt relief for millions of struggling Americans — whose debt was, in turn, hurting the larger economy — Krugman claims that the former treasury secretary “was … all for bailing out banks but against bailing out families.”
That was a big mistake, Krugman argues, and one that speaks to the larger rot in Western society, the implicit belief that bankers and regular people should be judged by different standards:
“Stress Test” asserts that no conceivable amount of mortgage debt relief could have done much to boost the economy. But the leading experts on this subject are the economists Atif Mian and Amir Sufi, whose just-published book “House of Debt” argues very much the contrary. On their blog, Mr. Mian and Mr. Sufi point out that Mr. Geithner’s arithmetic on the issue seems weirdly wrong — order of magnitude wrong — giving much less weight to the role of debt in holding back spending than the consensus of economic research. And that doesn’t even take into account the further benefits that would have flowed from a sharp reduction in foreclosures.
In the end, the story of economic policy since 2008 has been that of a remarkable double standard. Bad loans always involve mistakes on both sides — if borrowers were irresponsible, so were the people who lent them money. But when crisis came, bankers were held harmless for their errors while families paid full price.
And refusing to help families in debt, it turns out, wasn’t just unfair; it was bad economics. Wall Street is back, but America isn’t, and the double standard is the main reason.
Man Covering His Mouth: A shepherd by the Yellow River cannot stand the smell, Inner Mongolia, China
Angry Crowd: People jostle for food relief distribution following the 2010 earthquake in Haiti
“Black Friday” Shoppers: Aggressive bargain hunters push through the front doors of the Boise Towne Square mall as they are opened at 1 a.m. Friday, Nov. 24, 2007, Boise, Idaho, USA
Suburban Sprawl: aerial view of landscape outside Miami, Florida, shows 13 golf courses amongst track homes on the edge of the Everglades.
Toxic Landscape: Aerial view of the tar sands region, where mining operations and tailings ponds are so vast they can be seen from outer space; Alberta, Canada
Ice Waterfall: In both the Arctic and Antarctic regions, ice is retreating. Melting water on icecap, North East Land, Svalbard, Norway
Satellite Dishes: The rooftops of Aleppo, Syria, one of the world’s oldest cities, are covered with satellite dishes, linking residents to a globalized consumer culture.
Child Brides: Tahani, 8, is seen with her husband Majed, 27, and her former classmate Ghada, 8, and her husband in Hajjah, Yemen, July 26, 2010.
Megalopolis: Shanghai, China, a sprawling megacity of 24 Million
Big Hole: The Mir Mine in Russia is the world’s largest diamond mine.
Clear-cut: Industrial forestry degrading public lands, Willamette National Forest, Oregon
Computer Dump: Massive quantities of waste from obsolete computers and other electronics are typically shipped to the developing world for sorting and/or disposal. Photo from Accra, Ghana.
Oil Spill Fire: Aerial view of an oil fire following the 2010 Deepwater Horizon oil disaster, Gulf of Mexico
Airplane Contrails: Globalized transportation networks, especially commercial aviation, are a major contributor of air pollution and greenhouse gas emissions. Photo of contrails in the west London sky over the River Thames, London, England.
Fire: More frequent and more intense wildfires (such as this one in Colorado, USA) are another consequence of a warming planet.