We’re still appalled by Tim Geithner’s lastest gift to banks and Wall Street at taxpayer expense, but it’s important to keep everything in perspective.
As Joe Nocera notes, the US continues to move relatively quickly to address the banking crisis. That puts us in stark contrast to the moribund country to which we are now often compared: Japan.
When I asked Thomas F. Steyer, the head of Farallon Capital Management, the big West Coast hedge fund, whether he thought America was acting like Japan during its lost decade, he scoffed. “We were interested in some of the assets in Japan, but whenever we asked them when they were going to start dealing with them, the answer was always ‘in two years,’ ” he replied. “Japan fell apart in 1989, and we were having those conversations in 1998 and 2000. Our country is moving on this. This administration has only been in office for a little more than two months, and they are already grappling with this.”
In sum, we’ve thrown more at the banking problem in 18 months than Japan did in a decade. We’re bailing out executives, shareholders, and bondholders who don’t deserve a dime, but at least we’re acknowledging that there’s a problem. Hopefully that will knock a few years off our lost decade.
(Nocera views the plan as a step in the right direction…)