Steve Liesman's Modest Proposal: America Must Bail Out Europe

Tyler Durden's picture




 

Yesterday, the progressive "think-tankers" from the CEPR first voiced the idea that it is time for America to finally come to the aid of Europe, because you see, the liberals, ever so generous with other peoples' money, have had enough of a sinking financial system brought to its knees by the intersection of a financial system perpetually bailed out at the taxpayers' expense, and a insolvent global welfare state, and just wish it was all back to where it was a decade ago, where everyone lived in perpetual bliss and stupidity. We truly hope Messrs Baker and Weisbrot lead by example and dispose of all their net worth, by dispatching it in Europe's direction, post haste: after all, anything less would be just seem so very hypocritical. Today, to nobody's shock at all, the "think tank" is joined by everyone's favorite TV hobby economist: Steve Liesman, who in an op-ed on CNBC writes: "  It’s time to change the narrative and for the United States to step up and abandon its policies of praising Europe’s incremental progress, gently prompting it to action and insisting that it be a Euro only solution... The US should lead the world in creating a large pot of money available to the Europeans to recapitalize their banks. A $2 or $3 trillion fund should get the market’s attention." It should Steve. And just like in the case of CEPR, we hope you can lead the US by creating a large pot of all your money that you would send to Spain and Greece first. Then everyone promises to follow in your so very generous footsteps.

From CNBC:

Europe's Mess: Time for the US to Clean It Up

 

When it comes to Europe, incremental and mealy mouthed haven’t worked. It’s time for big and bold.

 

Waiting for Europe to get its act together to solve its financial problems has become an even more insufferable drama than "Waiting for Godot." They keep talking but a financial solution never comes. Former deputy Treasury Secretary Roger Altman, writing in today’ Washington Post, warned of a Euro-led global economic slump and said: “The reason markets are battering the euro zone is that its hesitant leaders have not developed the tools for countering such pressures.”

 

It’s time to change the narrative and for the United States to step up and abandon its policies of praising Europe’s incremental progress, gently prompting it to action and insisting that it be a Euro only solution. Here, for example, is what a US Treasury official said yesterday: “We’re hoping to see accelerated European action over the next several weeks…” Be still my beating heart.

 

It's time for the US to express its dismay at the lack of progress and to begin corralling world resources to incentivize Europe to solve its problems

 

Several facts have led me to this conclusion:

  • Since the turn of the last century, Europe has never shown an ability to solve its problems without the United States.
  • Germany is economically the size of California, Texas and North Carolina. It cannot bail out Europe just as surely as those three states could not (and would not) bail out the United States.
  • The lack of trust in Germany among European countries means even if it could bail out Europe, it could never get political agreement for the necessary concessions.
  • Much needs to be done in Europe, but the focus for now needs to be on stability and the world should take a page out of the US response: Massive funds made available that never need to be used.
  • The US, despite its deficit problems, remains the only global power with the ability to rally the world toward a solution.

Collective action in times of panic is what governments are supposed to do. Be it response to a natural disaster like an earthquake or a financial crisis, governments should step up when the market or the individual can’t act. Two years of sclerotic responses by Europe, culminating in the latest panic, should be enough evidence that Europe doesn’t have the political means to solve its problems, even while it does have the financial means. As the TARP program showed (only when it comes to the banks) if you make enough money available quickly enough, you can stem the tide and it won’t cost you a penny.

 

So here’s a plan:

 

The US should lead the world in creating a large pot of money available to the Europeans to recapitalize their banks. A $2 or $3 trillion fund should get the market’s attention. Whatever the number, about one-third of this should come from the IMF. Two-thirds should come from Europe. European money should be in the first loss position, that is, the IMF, as is always the case, should not suffer a dime of losses until all the European money is wiped out. This money could be used as a sovereign rescue fund, to bail out sovereign institutions and for deposit insurance—all the programs that stanched the US panic. Whatever the use, it would not be available without a 2/3rd Europe portion and would be conditional—the way all IMF programs are—on European progress towards financial consolidation and fiscal union.

 

You can argue—and you would be correct—that this is Europe’s problem and they should pay for it. The place we are in now, however, is that we are all paying for it and waiting for European progress has proven a losing strategy. Even when they take action, like the European Central Banks’ Long-Term Repo Operations—they bungle it by saying “there won’t be a third” convincing the shorts that there’s profit in betting against the central bank. The key to collective action is to dare the shorts to come at you and ensure that it’s at least two-way trade, if not a loser for the challenger. Fed Chief Ben Bernanke and then Treasury Secretary Hank Paulson fundamentally understood this.

 

While Altman said the world needs European leaders to step up, my point is that the world needs its leaders to step up. The US remains the global financial leader and the international community will not step up without US leadership. That would mean US diplomacy to rally China and other emerging market countries to contribute (so far, we have been sort of indifferent). And that could mean commitment of additional US resources. I don’t think that commitment needs to be massive. There needs to be some symbolic amounts (we are already the largest fund contributor). But I believe it could be cost effective. It would assert US global leadership, and it could start a real process of solving Europe’s problems.

 

As for the domestic politics and a certain isolationist outcry, at this point, what’s the difference for President Obama? Europe, together with the anemic US recovery, already seems to be guaranteeing a one-term presidency. Asserting US economic leadership and financial commitment toward a European solution couldn’t make the financial situation much worse, and it just might make it better.

What is most ironic is that all these paragons of humanistic generosity (with other people's money of course) forget that this is precisely what the Fed has done each and every time Europe entered the toxic vortex of unsustainable debt: or otherwise we may have misunderstood what those hundreds of billions in Fed FX swaps to the rescue world's central banks (most recently here), or those trillions in secret Fed loans to each and every global bank by the Fed, actually represent...

Finally, here are Santelli and Liesman discussing this very topic.

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Tue, 06/05/2012 - 13:55 | 2496521 RSloane
RSloane's picture

Could someone please shove a rag into his big gaping mouth and ignite it? Thank you.

Tue, 06/05/2012 - 13:56 | 2496537 Richard Chesler
Richard Chesler's picture

Make sure to remove the bankster's cock first.

 

Tue, 06/05/2012 - 14:00 | 2496562 Troll Magnet
Troll Magnet's picture

I'll chip in some dimes and quarters.  I'm keeping my nickels, tho.  

Tue, 06/05/2012 - 14:06 | 2496592 NotApplicable
NotApplicable's picture

Create a large pot of money?

Now why didn't someone think of that already?

 

Okay, somebody need to fuel up the fleet of choppers!

Tue, 06/05/2012 - 14:23 | 2496697 knukles
knukles's picture

As but a casual observer of the human condition, by my own feeble attempts to read between the tea leaves, it seems to me that the powers that be for the moment are somewhat distressed with what is happening about the globe.
Anecdotal evidence; CNBS World channel on cable runs well past the US open with the European Close.  Only happens when something Big is in the Air.  Like a newly or about to be newly laid turd.
The talking heads are trotted out for distraction and associated Bernaysian propaganda ("Trust me, I'm in advertising." -Don Draper)
To wit:  Steve-O-Reamo is spouting the status quo business as normal, nothing to see, everything's coming up roses, move along horseshit with the "It's time for the US to Save the World Act Part 2." 
Steveie doesn't even have that much credibility left so......  Hmmm maybe Santellui wouldn't go that route.
Cramer was on the morning report talking about the Newly Found Problems and Challenges Facing FacePlant.  Little late for that shit, Jim?
The G-7 released a statement that said...   Ah, what was it again?
Muzomi Mizoumi or whatever his name is, the Japanese Minister of Finance said that Japan stands by willing to help.  Whatever the fuck that means.
Fuck-U-Shittin-Me? 

And so it goes, day in day, day out.
What is Important to Take Away from all this is to Never Underestimate the Power of A Normalcy Bias. 
Folks, this is what the World Looks Like with but an Imaginary Nash Equilibrium

Tue, 06/05/2012 - 14:25 | 2496712 Comay Mierda
Comay Mierda's picture

And CNBC wonders why their ratings are plummeting

Tue, 06/05/2012 - 14:38 | 2496788 The Big Ching-aso
The Big Ching-aso's picture

 

 

Why just Europe?  Why not the entire world while we're imploding?

Tue, 06/05/2012 - 14:53 | 2496877 Peter Pan
Peter Pan's picture

The big question that springs to mind is if the USA can bail out Europe then why can't it bail out itself?

When a rag is placed and lit in this idiot's mouth can you place another at the other end? We need to minimize the possibility of more shit being produced by this ignoramus.

Tue, 06/05/2012 - 15:17 | 2496979 flacon
flacon's picture

Visualize these numbers with the one hundred million dollar penny:

 

Skip forward to 3:50

 

 

One Hundred Million Dollar Penny

 

http://www.youtube.com/watch?v=3dl1y-zBAFg

 

 

1 penny = $100,000,000
2 Bailouts. 
$700,000,000,000 Tarp Bailout: 7000 pennies ($70)
$16,000,000,000,000 Secret Federal Reserve Bailout: 160,000 pennies ($1600)

 

Tue, 06/05/2012 - 15:45 | 2497116 HoofHearted
HoofHearted's picture

"Go to Europe with one million copies of Atlas Shrugged."

Can we seriously get this guy elected to something, either here in the US or in Europe? Nigel Farage needs a counterpart.

Tue, 06/05/2012 - 19:06 | 2497766 UP Forester
UP Forester's picture

More money to Europe?

"That's like walking into an AA meeting with a case of whiskey!"

 

Classic.

Tue, 06/05/2012 - 14:56 | 2496890 Crack-up Boom
Crack-up Boom's picture

Heck, why not everyone in the world - not just banks and governments.  While we're "creating a big pile of money", why don't we make it big enough to build the world a house and furnish it with love?  Then we can buy the world a coke. 

Is he high??

 

 

Tue, 06/05/2012 - 19:19 | 2497808 thepigman
thepigman's picture

How fucked are we when TV assclowns think they have finally been called upon to LEAD?????   Real fucked....

Tue, 06/05/2012 - 17:42 | 2497514 smb12321
smb12321's picture

You hit the nail on the head and it relates to the popular notion (by Pelosi and pals) that for ever dollar the government spends, two (or is it three?) are created.   If that's the case - why stop at Europe?. Why not print and give every citizen of the US (or if you want, of the planet) a million dollars?  

I hope Santelli continues ranting that a problem caused by massive debt, demographics and structural inefficiencies cannot be cured by piling on more debt.  The idea is utterly insane.

Tue, 06/05/2012 - 15:02 | 2496927 Freddie
Freddie's picture

More f****g Hope and Change.  We bailed out the UAW socialists, CA and Detroit - now we need to "bail out" govt workers in Europe. 

Democrats are already screaming racism this afternoon in Wisconsin's vote.  Pure evil but the RINOs are only marginally better.,

Tue, 06/05/2012 - 15:19 | 2496999 Bananamerican
Bananamerican's picture

Yeah, the REAL Republicans will save us ALL!!!

and get a haircut you fucking nimrod

Tue, 06/05/2012 - 20:13 | 2497936 PrinceDraxx
PrinceDraxx's picture

I love comments by such obviously retarded people like you. If we could get a few real Republicans, you know, people who support the Republic and all that shit, we could put an end to this ignorant shit.

 

But, not before we get a public or private education system to put an end to the rampant stupidity that seems to flow endlessly from the mouths of people like you.

 

Before you get angry, please look up nimrod to see what it means. While you are at it, perhaps you should get a trim. Make you look more intelligent even though looks can be deceiving.

Tue, 06/05/2012 - 16:05 | 2497202 Disenchanted
Disenchanted's picture

 

 

knukles said:

"It's time for the US to Save the World Act Part 2." 

 

 

I was gonna say, haven't we been there and done that? And not just Europe...

 

From almost a year ago now according to Senator Bernie Sanders:

 

An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

 

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

 

http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-...

Tue, 06/05/2012 - 22:05 | 2498152 Hulk
Hulk's picture

Drowning man trying to save another drowning man, I think that about sums up the situation...

Tue, 06/05/2012 - 18:26 | 2497657 Problem Is
Problem Is's picture

"Like a newly or about to be newly laid turd."

Speaking of newly laid turds...

Enter Useful Idiot Lies-man -- Stage Left...

Tue, 06/05/2012 - 16:24 | 2497276 Overfed
Overfed's picture

Just print up a couple of trillion $. Great idea. I'm sure that will fix the problem once and for all.

That guy gets paid for this shit? Fuck me, I'm in the wrong line of work.

Tue, 06/05/2012 - 17:57 | 2497561 Don Keot
Don Keot's picture

$2,000,000,000,000  do you have an account number, then just press send.  Everything will be fine.

Tue, 06/05/2012 - 14:22 | 2496685 francis_sawyer
francis_sawyer's picture

The bank won't change any more paper notes into nickles for me, so I have to send an 85 year old man in there to do it...

Wed, 06/06/2012 - 07:01 | 2498678 StychoKiller
StychoKiller's picture

Do you live in a small town?  Our population is around 2200 and we have 3 banks in town.

Tue, 06/05/2012 - 14:40 | 2496797 Benjamin Glutton
Benjamin Glutton's picture

CNBC’s parent company General Electric has taken at least $139 billion in government-backed loan guarantees to keep GE Capital Corp from going belly-up and taking the whole company, including Rick Santelli, with it.

 

And yes Mr. Santelli was for the Bankster bailouts before he was against homeowner bailouts.

 

At least Liesman is consistent though wrong unlike the fake hypocrite Santelli.

Tue, 06/05/2012 - 14:03 | 2496574 MsCreant
MsCreant's picture

Why? You got something against banker wanker roasts?

Tue, 06/05/2012 - 14:10 | 2496615 1100-TACTICAL-12
1100-TACTICAL-12's picture

Let me hear you squeel like a pig boy....

weeeeeeeeweeeeeeeeweeeeeeee!

Tue, 06/05/2012 - 14:21 | 2496679 Offthebeach
Offthebeach's picture

He's got a pur'dy mouth!

( start Deliverance dueling banjos music )

Tue, 06/05/2012 - 14:18 | 2496659 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

Its the pink shaft that is inserted in all our behinds. We will have to pay it back in the form of...wait for it...TAXES! YAAAAA!

Tue, 06/05/2012 - 20:19 | 2497952 PrinceDraxx
PrinceDraxx's picture

That is a racist comment. Why does it have to be a pink shaft?

Tue, 06/05/2012 - 13:57 | 2496545 101 years and c...
101 years and counting's picture

....gasoline soaked rag into...

Tue, 06/05/2012 - 13:59 | 2496554 AL_SWEARENGEN
AL_SWEARENGEN's picture

Liesman LIES MAN!!!

Tue, 06/05/2012 - 14:19 | 2496666 jus_lite_reading
jus_lite_reading's picture

And he's Jewish... now who woulda thunk that?

Tue, 06/05/2012 - 15:02 | 2496922 samwell
samwell's picture

leave it to collectivist, bolshevik jews to want the rest of us goy to bail out their criminal jew bankster friends in europe.  jews like "lies"man give jews the world over a bad name.  why don't they shut this guy up?  its like the jew controlled media is deliberately trying to incite the populace to extreme anger with this sort of ridiculous talk.  it also shows how desperate the jews are to cover up their crimes against humanity.  that's right paper it over with more of your worthless paper debt while we export the jobs to china.  you prole goy should be happy with your food stamps and welfare and if you are lucky enough to have a job a walmart working till you are 80-85 yrs old to pay off the debts we signed you on to.

Tue, 06/05/2012 - 14:13 | 2496583 fightthepower
fightthepower's picture

Steve Liesman will be one of the people dragge into the streets and hung from a lamp post.  His globalist banker buddies won't be able to help him.  Nor will they care to.  What is it worth to gain a spot as a banker shill on CNBC and lose your soul?

Tue, 06/05/2012 - 14:14 | 2496637 TheFourthStooge-ing
TheFourthStooge-ing's picture

His globalist banker buddies won't care enough to be bothered to help him.

 

Tue, 06/05/2012 - 14:24 | 2496691 Rusticus
Rusticus's picture

size XXL noose to fit over Liesman's head: check 

Tue, 06/05/2012 - 14:37 | 2496781 LFMayor
LFMayor's picture

or a bald  33" TSL super swamper filled with gasoline.  Necklaces, bitches.

Tue, 06/05/2012 - 16:36 | 2496815 Pegasus Muse
Pegasus Muse's picture

Such a big head on that boy; so much empty space between the ears.  Liesman has yet to produce an original thought.  His job is to parrot whatever line the Gangster Banksters want him to promote.  

Tue, 06/05/2012 - 14:11 | 2496620 mayhem_korner
mayhem_korner's picture

 

 

Is stupidity contagious, and can one contract it by watching or reading stupid people?  I'm afraid I've been exposed...

Tue, 06/05/2012 - 14:56 | 2496894 Matt
Matt's picture

If you want to get biblical:

"Whoever walks with the wise becomes wise, but the companion of fools will suffer harm." - Proverbs 13:20

"The tongue of the wise commends knowledge, but the mouths of fools pour out folly" Proverbs 15:2

Tue, 06/05/2012 - 18:39 | 2497699 Problem Is
Problem Is's picture

"Is stupidity contagious, and can one contract it by watching or reading stupid people...?"

And that is why I have permanently disembowelled the TeeVee...

And shall render any Corporate Whore Propaganda Media clips inoperable...

Until such time the complete Moron-in-Chief...

Teleprompter to the Bankster Stars...

That Useful Idiot Barry Soetoro...

Has in fact been gagged and removed from the public stage...

The stupidity of Obama Bin Lyin' is in fact contagious...

Tue, 06/05/2012 - 14:12 | 2496623 TheFourthStooge-ing
TheFourthStooge-ing's picture

What is really funny is that Liesman actually believes he's one of the insiders. He thinks his paper promises (investments) will hold a value higher than worthless when everything falls apart at the seams. He also believes his paymasters will reward him for being a good little toady and whisk him away with them to their island compounds and/or mountain bunkers.

However, the people whose bidding he does see him as nothing more than another muppet. While he's useful to them for the moment, when his time comes his wealth will be absorbed and he'll be cast aside like a cigarette butt. He'll be left surrounded by people who remember him only as a lying betrayer.

 

Tue, 06/05/2012 - 14:21 | 2496671 5880
5880's picture

I doubt he has any investments.

You would be surprised (as I was) to find the fed types just have cash.

Hence the lack of understanding of markets

Tue, 06/05/2012 - 14:27 | 2496718 Offthebeach
Offthebeach's picture

He could of already borrowed to buy EU distressed /trashed paper and wants future generation Muppets to slave off the debts by working inhospitable kids estates.

Tue, 06/05/2012 - 18:42 | 2497707 Problem Is
Problem Is's picture

The Corz let Lies-man in on that famous MF Global long euro-trash trade...

Tue, 06/05/2012 - 14:23 | 2496687 mayhem_korner
mayhem_korner's picture

What is really funny is that Liesman actually believes he's one of the insiders.

 

Quoting Elmo Blatch, "that's the best part!"  (see 0:45 below).  The string-pullers love these sock puppets, 'cuz they carry the water unknowingly.

http://www.youtube.com/watch?v=MtnDFS0RhuY

Tue, 06/05/2012 - 14:23 | 2496688 Bansters-in-my-...
Bansters-in-my- feces's picture

They should stick a rag up his ass and light it at the same time.

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