GRITtv: The F Word: Economy is in the Eyes of the Beholder

Check out this video - Beauty's in the eye of the beholder, especially, apparently, the beauty of bailouts. In the US right now, some see robust growth, others a limping progress. Some see unemployment edging down, others see it spiking up. It's all about the beholder. The US Treasury is now estimating the cost of the bailout at $89 billion, considerably less than what's been reported since the fall of 2008. The $89 billion figure fits nicely into the vision of Treasury Secretary Tim Geithner who, as head of the New York Fed, was the point-man under Bush, overseeing the hand-out of dough to Wall Street. But where Geithner sees gentle waves, New York Times business reporter Gretchen Morgenson sees tsunamis -- counting it all up in the $1 trillion range. For one, there's the cost of lending to banks at near zero interest rate set that against what banks charge us -- which is to say an average 14% on credit cards -- and what they pay back in interest to depositors -- far too little, most of us think. Morgenson points to FDIC losses in taking over failed banks, including loss-sharing costs shouldered by taxpayers. That she puts at $400 billion. Against that, Geithner's $89 billion starts to fade fast. There's just one more thing left out of Geithner's figures: implied government guarantees; what one bank analyst calls the "noxious byproduct" of systemic risk. A "deliberate low-balling that underestimates damage to the wider economy," that analyst observed, obscures $4 trillion in lost output ... What do you think? Leave your comments below...

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From: lauraflanders
Keywords: grittv, grit tv, laura flanders, bailouts, Banks, economy, f word, FDIC, federal reserve, Geithner

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