Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Responding to a John Quiggin post lamenting the fact that the financial disasters of the late 90s produced no real regulatory action, Matt Yglesias says:

Whatever you think of Greenspan’s overall legacy […] I think it’s a bit hard to regret that he acted swiftly and decisively to keep the world out of a major recession at the turn of the millennium….Letting things fall apart would have led to millions of additional unemployed people, state budget crises, cutbacks in critical social services, etc., etc., etc.

But it really does seem that the success of these operations was taken as a reason to avoid any serious systematic reform. And you can feel the same kind of thing happening today. It’s disturbing.

You can say that again.  Part of the reason for this might be the fact that even now, with wild figures being routinely thrown around about the size of the bailout ($17 trillion! $23 trillion! 3 years of GDP!), most people still don’t truly understand the size and scope of the government action that was required to keep the private sector from melting down completely.  And the reason is pretty simple: the vast, vast majority of it was done behind the scenes by the Fed.  TARP and the stimulus bill were the only parts that really got any public scrutiny.  All the rest was done without congressional debate via an alphabet soup of loan guarantees, term facilities, interest rate reductions, conservatorships, currency swaps, commercial paper backstops, interest on reserve balances, liquidity pumps, collateral forbearance, asset stop-loss guarantees, and more.  This stuff is never going to add up to the astronomical sums people have been tossing out, but it’s still a huge amount of money.  And without it, the entire financial industry would have collapsed.

But in the event, the Fed did do all this stuff, and the result is that what most people see is a bad recession but nothing more.  Just part of the business cycle, thankyouverymuch, and like other recessions it will end soon and life will go on.  And needless to say, the financial industry will be lobbying its ass off to make sure that Congress is inclined to see things the same way.  Disturbing indeed.

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate