Krugman was one of many economists to serve as a consultant for an advisory board for Enron; he did this in 1999, being paid $37,500[55] before New York Times rules required him to resign when he accepted an offer to be an op-ed columnist in the fall of 1999. He stated later the consulting was to offer “Enron executives briefings on economic and political issues,” and that it had required him to “spend four days in Houston.”[55]

When the story of Enron’s corporate scandals broke, critics[who?] accused him of having a conflict of interest and the job of having been a bribe to control media coverage, charges he denies forcefully, referring to it as “a game of gotcha” and “tabloid journalism.” He states that the payment from Enron did not “cause me to write anything I would not have written otherwise.” For one thing, he says, he was not a journalist at the time: “when Enron approached me there was no hint that a Times connection lay in my future. As soon as I shook hands with the Times, I resigned from that board.” Further, his “normal fee for a one-hour business speech in Boston or New York was $20,000 – more if the speech involved long-distance travel. The Enron board required that I spend 4 days in Houston”; thus the sum involved was not large, in his view. He says that in columns written before and after the scandal, he disclosed his past Enron relationship when he wrote about the company.[55][56] He was critical of the company: he was one of the first writers to argue that deregulation of the California energy market had led to market-manipulation by energy companies (in a column in the New York Times on December 10, 2000 called “California Screaming”); Enron was the largest in this market – “I have been criticizing Enron since January 2001, long before everyone else started bashing the company.”[57]

He writes in The Great Unraveling that:

I was no more perceptive than anyone else; during the bull market years [of the late 1990s] some people did send me letters claiming that major corporations were cooking their books, but – to my great regret – I ignored them.

MY POINT IS GEITNER, LARRY SUMMERS, ROBERT RUBIN, FORMER CLINTON ADVISORS BELIEVE IN FREE TRADE,NOT FAIR TRADE AND THEY HELPED DEREGULATE THE COMMODITIES MODERNIZATION ACT (DERIVITIVE REGULATION) AND ANT-SHERMAN ACT, AND GLASS SEAGULL ACT. THESE WERE IMPLEMENTED BY ROOSEVELT TO PREVENT BANKS FROM DESTROYING THEMSELVES OR BECOMING TO BIG TO FAIL. THEY ARE NOW ADVISING OBAMA AND GIVING HIM BAD ADVICE. YOU ARE CORRECT ABOUT CURBING SPENDING, BUT PRODUCTION IN THE US(MANUFACTORING) IS THE ONLY SOLUTION TO GAINING WEALTH AND GETTING AMERICANS WORKING.

BY THE WAY I DON’T HATE YOU GUYS, I JUST THINK TALKING ABOUT ISSUES IS GOOD FOR DEBATE AND REMEMBER WE ARE THE SAME WORKING CLASS UNLESS YOU ARE A BILLIONAIRE. THESE CORPORATIONS DONT GIVE A SHIT ABOUT YOU OR ME. AT LEAST WE HAVE THAT IN COMMON.

In an example Treasury officials used, a bank decides it wants to sell off a pool of bad mortgages with a face value of $100. The government auctions the mortgages, and the highest bid is $84 (which means the bank loses $16, instead of the whole $100 on the line now). The FDIC backs $72 worth of loans for the public/private fund to buy the mortgages, meaning the public/private fund has to come up with $12. Treasury kicks in $6 and private investors kick in $6. If the mortgage can eventually be sold for more than $100, everyone wins — the private investors get a big gain after risking only $6 of their own money, the Treasury gets the same gain, and the FDIC never has to take on the $72 in loans it guaranteed because they’re repaid once the mortgages are resold for a profit. But if the mortgage winds up losing money, the private investors are only on the hook for $6. The FDIC has to repay the $72 in loans regardless.

paul krugman:Geithner scheme… isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets…

[T]the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.

Geithner continues to accept the banks’ argument that this huge bid/ask spread is just a temporary condition: The market just doesn’t understand that the assets are actually worth 60 cents on the dollar. When it realizes this, everything will be fine. The majority of smart economists (at least the ones we read) think this is a crock. The banks are hallucinating (or worse), and most of the assets are worth what the market says they are worth.

In any event, the only way banks can be induced to sell those assets is if someone agrees to pay 60 cents (or more) on the dollar, because otherwise the banks will have to take more writedowns and require more capital. The only way someone will pay 60 cents or more on the dollar is if someone gives them a boatload of free money to be reckless with. That’s where Geithner and the taxpayer come in.

what do you guys think?do you agree with krugman?

I deleted your last comment.

Take your death threats somewhere else, they are not welcome here.

The National Security Archive
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Annual Report for 2007

May 2007: On May 3 Archive senior analyst Peter Kornbluh posted key documents from
Venezuelan legal archives on the case of Cuban exile and indicted terrorist Luis Posada Carriles.
The lead document was a “scouting report” written by one of Posada’s Venezuelan employees
on targets “tied to Cuba” for potential terrorist attacks throughout the Caribbean. Among the
information included in the report was the route and schedule of Cubana flight 455, which was
eventually blown up in mid air on October 6, 1976 after taking off from Barbados. The
document was found by police authorities on Posada’s property after the plane was destroyed.
The posting also included handwritten confessions by another Venezuelan employee of Posada
describing how plastic explosive was molded into a toothpaste tube for use as a bomb to destroy
the plane. The public posting of the document for the first time generated substantive news
coverage in Venezuela, the United States, and Cuba. But on May 8 Posada returned to Miami a
free man after a federal judge dismissed the immigration-related charges against him. IMMIGRATION CHARGES? WHAT ABOUT ALL THE INNOCENT PEOPLE HE BLEW UP????????????