Austan Goolsbee on MSNBC:
There are glimmers of hope, in various parts of the economy where things are starting to pick up, where slowdowns are not as bad…. When you throw your back out, it’s a good thing when you can stand up again!
Maybe. Some things are picking up – Goldman Sachs is attempting to raise capital without government assistance – but some things are also distinctively not picking up – retail sales down 1.1% in March. Yglesias hedges on the recent good news, and reminds readers that even Wells Fargo, which ran a record profit in the last quarter, is still not doing great, and shouldn’t be congratulated (or seen as a marker of economic recovery):
It’s true that given very bank-friendly monetary policy it’s easy for banks to run an operating profit. But most of these large banks are zombies—insolvent. They’re only able to run an operating profit because they’re not going out of business and being liquidated. And the reason they’re not being liquidated is government guarantees. It’s as if I had a profitable business selling cookies, except I didn’t actually have any cookies to sell and was just putting government-provided cookies in boxes, then bragging about how profitable my company is and how the government should stop hassling me about paying myself a bonus.
I especially like that last part – this is why I’ve had very little sympathy for the people clamoring over bonuses/high-level compensation for the people working at these financial institutions. If it wasn’t for huge-scale governmental intervention, none of those people would have jobs. The economy would also be a complete mess, and who knows what would be happening politically, but it’s important to remember it’s not Joe Banker’s hard work that’s keeping the banks afloat, it’s government dollars.