{"id":129921,"date":"2009-12-31T12:20:35","date_gmt":"2009-12-31T17:20:35","guid":{"rendered":"tag:business.theatlantic.com,2009:\/\/3.32818"},"modified":"2009-12-31T12:11:16","modified_gmt":"2009-12-31T17:11:16","slug":"obamas-most-important-decision-of-the-year","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/129921","title":{"rendered":"Obama’s Most Important Decision of the Year"},"content":{"rendered":"

Late in December, when inspiration for new articles runs dry, we journalists love getting boozed on  “SOMETHING<\/i> of the Year” spirits. So here’s an aperitif to cap off 2009. What was Obama’s most important economic decision of the year? Noam Scheiber has an answer<\/a>. Passing the $787 billion stimulus package? No. Picking Tim Geithner? No. Taking over General Motors? Heavens, no.<\/p>\n

It was … the stress tests?<\/p>\n

Here’s Noam<\/a>.
\nPer usual, this is clear-headed, straightforward thinking and you
\nshould read the whole article. For my two cents, Dan and I have said
\nfor a while that one of the most important things the government did
\nearly when the recession was still mostly a financial crisis was we
\nstood behind the banks and essentially said: Armageddon will not
\nhappen, and we have the trillions to back that promise up. The Federal
\nReserve opened wide its balance sheet to buy bad assets. The Treasury
\nswung open its doors with hundreds of billions of dollars of TARP to
\nthrow at struggling banks. We put AIG and Citi on government crutches.
\nWe arranged a semi-forced marriage between Merrill Lynch and Bank of
\nAmerica. These steps told investors that the United States was not in
\nthe business of managing large-scale nationalization or allowing
\nlarge-scale bank failure. We were in the firefighting business.<\/p>\n

The stress tests, whether they were honest or not, were the damage
\nreport. They told investors that the house that was once on fire was
\ngoing to stand. When history judges this year, it will probably
\ncharacterize the bailouts as a double-edged sword. On the one had, the
\ngovernment’s implicit guarantee to save Wall Street probably averted a
\ndepression. On the other hand, by setting a floor on bank losses we
\ndeepened our troubling tradition of moral hazard, which encourages top
\ntier bank institutions to bet big, knowing the government will have to
\nbail them out if they lose. But those implications are next year’s debate<\/a>. This year, I agree with the Noam that the stress tests are something to be thankful for.


\n

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Late in December, when inspiration for new articles runs dry, we journalists love getting boozed on  “SOMETHING of the Year” spirits. So here’s an aperitif to cap off 2009. What was Obama’s most important economic decision of the year? Noam Scheiber has an answer. Passing the $787 billion stimulus package? No. Picking Tim Geithner? No. […]<\/p>\n","protected":false},"author":1534,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-129921","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/129921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1534"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=129921"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/129921\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=129921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=129921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=129921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}