Goldman Sachs to Acquire Treasury Department

In what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed today that it was in talks to acquire the U.S. Department of the Treasury.

According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is "a good fit" because "they're in the business of printing money and so are we."

 That is the report from Andy Borowitz, which means you ought to know that it is a satire :-) And he ends his report with this:

Elsewhere, conspiracy theorists celebrated the 40^th anniversary of NASA faking the moon landing.

And in South Carolina, Gov. Mark Sanford gave his wife a new diamond ring, while his wife gave him an electronic ankle bracelet.

Two down; the third is in Obama's administration!

Difficult to imagine Alan Greenspan being invited to many parties any more, given that we are all in a drive to cancel all celebrations.

Robert Rubin is now on his way out of Citigroup.  I don't think he will be invited to join any corporate boards any time soon.

Larry Summers is still around--in quite a powerful position in the Obama administration.  He will find great company with yet another Rubin-school product: the nominee to be the treasury chief.  I suppose this is like coaches in the NFL--as soon as they get fired by one team, they get picked up by another team, and their coaching lives continue on .....

An economic martial law in the US?

George W. Bush and Dick Cheney have not, as far as anyone can tell, been steering the ship. According to The Wall Street Journal, Bush was briefed on the rescue after it was in play. And even then, he was only "briefed." There's been no effort on the part of the White House to even advance the idea that Bush is an engaged participant who's actively signing off on these actions, possibly because suggesting his involvement in a crisis of this complexity would cause the stock market to run and hide in a corner.
Congress, too, has been cut totally out of the loop. The AIG bailout -- in fact, all of the bailouts -- have been conceived entirely without their involvement. Indeed, the Federal Reserve and the Treasury Department have been acting, over the course of this crisis, as if they are the sum total of the government. And that may be the correct approach: Neither the president nor the legislative branch possess the expertise or speed to be involved in the real-time crisis management that Bernanke and Paulson are trying to manage. They could, presumably, reverse decisions after the fact or change the contours of the law, but for now, the ship is being steered by the Chairman of the Federal Reserve, the Treasury Secretary, and an informal working group of Wall Street CEOs and banking powerhouses. And the government, as we normally think of it, has basically accepted their temporary authority. You've heard of martial law? We're currently in a state of market law.

That was EzraKlein Archive The American Prospect via Brad DeLong.

I am not at all ok with the idea that we are under some kind of an economic martial law. Paulson and Bernanke are the economic martial law administrators? There is something in this analysis that bothers me, but I can't quite figure out what exactly that is. Anyway, DeLong responds to that with the following comment:

This is how things have been since 1979--when Carter appointed Volcker to head the Fed, Volcker decided he was going to stop inflation no matter what the cost and would dare anyone else to try to block him, and congress and the president decided that challenging the Fed meant taking responsibility for inflation and thus blame if anything went wrong. Congress and the president occasionally show up to pass tax cuts--and twice, in 1990 and 1993, to take action to try to balance the budget. But otherwise the technocrats at the Fed and the Treasury run things.
This is the Age of Central Bankers.

Certainly not the Age of Aquarius!
But, aren't we granting too much of "war powers", so to say, to Paulson and Bernanke? Of course, they will not misuse it unlike the president who misused the war powers that Congress gave. But, are we putting too much of faith in Paulson, Bernanke, et al? Very troubling. Somehow this does not resonate well with how democractic societies are supposed to respond.
BTW, if we think that Paulson and Bernanke can steer the ship, how come the same people then distrust any form of "management" of the economy? The bottom line seems to be that government should let businesses rake in all the profits--legal and illegal--and not do anything about it. But, the same government ought to steer the economic ship when those same businesses run into icebergs. Aaaaaah!!!