Krugman – JPMorgan and Solyndra

12 May

 More insight from Dr. Krugman”s blog.         

 Understandable that conservative republicans dislike the man,…. he sees through them.

 This JP Morgan Chase gaffe is getting a lot of press at the moment,… as it should.

 But I’m hoping it doesn’t fade into the background in a few weeks like these things have the unfortunate tendency to do. Because it’s very 2008- like. Anybody remember?

 Is there anyone left out there that questions why big finance advocates deregulation? I can’t imagine how many of these types of things are going on at any given time. This gets attention because of its sheer size.

May 12, 2012, 8:42 am

JPMorgan and Solyndra

I haven’t weighed in on the JPMorgan stuff, because I haven’t had time to figure out the whole thing. I would say that I’ve always wondered why Jamie Dimon had such a reputation for smarts, since nothing I’ve seen seemed to justify the reverence; maybe nothing did.

But an interesting parallel struck me here: I wonder whether the people who go on and on about the much smaller loss at Solyndra, the case that launched a thousand hearings, will get comparably worked about on this case (actually I don’t wonder — they won’t).

The obvious objection is that the government lost money on Solyndra, but hasn’t (yet?) on JPMorgan. But that’s less true than meets the eye. Solyndra was a small part of a broad program of loan guarantees, which inevitably ran the risk of loss — otherwise those guarantees wouldn’t have been worth anything, would they? And it was the only loss.

And JPMorgan is also part of a broad program of guarantees, explicit on deposits, implicit through the general aspect of too-big-to-fail. There have been government losses on these programs, and will be in future — and misbehavior like what seems to have happened here feeds such losses. And as best I can tell, JPMorgan’s story looks a lot more like actual malfeasance.

But of course JPMorgan wasn’t doing do-gooder liberal stuff like solar, it was just engaging in financial tricks of little or no social value. That makes it all OK.

1 Comment

Posted by on May 12, 2012 in Economy, Politics


One response to “Krugman – JPMorgan and Solyndra

  1. G

    May 12, 2012 at 10:42 am

    Keep in mind that the Tea Party movement was born (without that moniker yet) when Bush and all the establishment (including Obama and McCain who were running for the presidency at the time) were pushing for TARP and the first bailouts. The government needs to get out of the guaranteed loan and subsidization business. It needs to quit attempting to micro-manage the economy (impossible) and picking winners and losers in the “free” markets. Big business don’t mind all the complex regulations (including tax regulations) because they have the money to navigate them while those same regulations decrease the likelihood of competitors entering into the market. Also, big businesses often can be granted special dispensations from those regulations where smaller companies can not. My point is not against big business, as companies that are large often got that way through sound business decisions and often lead to innovation and better products at lesser prices. My point is against big government and all the establishment politicians who rig the game.


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