Private Banking in Asia
“If we weren’t seeing ‘green shoots,’” Olivier Sarkozy of the Carlyle Group told a Bloomberg/Vanity Fair panel over the weekend, “we should all just be shooting ourselves.”
Mr. Sarkozy (half brother to the French fellow who married Carla Bruni) was responding to the question of whether he saw reason for optimism in the markets, especially given the turnaround of the past couple of months. Not much to speak of, according to him.
And what about cash stimulus equal to 18% of GDP that the government (both under Bush/Paulson and Obama/Giethner) has dolled out over the past six months? Shouldn’t that steer us in the right direction?
“It may delay and may buttress, which is what’s happening at the moment,” said Mr. Sarkozy. “But at the end of the day, we just have 18 percent of GDP more in debt to pay, and that’s reality.”
We don’t watch much television, Rude reader, but we are always surprised that comments like Mr. Sarkozy’s are considered the “exception” to the norm. Why is it so shocking to us to hear that taking on more debt means…er…more repayments in the future? That more of the same fuel on the fire only makes it burn more brightly…that the same idiots who got us into the mess are probably not the ones to guide us out? Had we forgotten these inconvenient realities?
To be sure, Mr. Sarkozy’s comments were pretty spot on. It’s just a shame they belong on an expert panel rather than in the common sense part of every human brain.
Do people really believe that spending three times more (as a percentage of GDP) over the last six months than the five years following the Great Depression is a good idea? Surely not…or so we thought.
May the prosecution present as “Exhibit A” one Austan Dean Goolsbee, senior White House economic adviser to the Obama Administration.
After an onslaught of well-reasoned indictments from the likes of Sarkozy and Meredith Whitney, folks who actually called the current mess early and correctly, Goolsbee had the following spectacularly telling response:
“The fact that we are here to bitch about the economy and about this policy and that and the budget forecasts for GDP growth are 1 percent too low, I’m thrilled, I’m overjoyed that we aren’t all out of our jobs and we prevented the Great Depression. That in itself is an overwhelming accomplishment.”
Here at the Rude Awakening, we choose not to stoop to the level of personal character attacks. Instead, we let characters like Goolsbee attack themselves. Here he is again, a little while further in the discussion, giving himself a few more uppercuts:
On citizens evaluating the policies of a government that just projected the largest budget deficit in history…after making an “adjustment” larger than any previous TOTAL deficit:
“I think actually the American people are pretty realistic. In polls they ask what do you think of the president’s policies. Is he on the right track? They say yes.”
On how American taxpayers might expect to recoup $50 billion spent failing to jump-start GM:
“I mean, it seems relatively obvious how it would happen, that the government would get back the money is that they’re loans. The companies would restructure… I don’t think it’s super-complicated. It’s not a case where it’s a – this is just a case where the hard work of restructuring the company is the fundamental thing that has to happen.”
On future protectionism, trade constraints, China’s position as a major holder of U.S. debt and unrest in the developing world as the crisis unfolds:
“It’s somewhat hard to answer that – a) because it’s speculative and b), because it gets out of the realm of economics which is the only thing that I even know a modest amount about…”
Thanks for those insights, Mr. Goolsbee. Now we recall why we try to avoid television.