The Tag Teams: Geithner & Summers vs. Krugman & Stiglitz

Tim Geithner's and Larry Summers' and careers and personal wealth benefited from the recent derivatives bubble. They are up to their armpits — again, career-wise — in support of the bank bailout plan. They are connected, you might say ... in several dimensions.

On the other hand, Paul Krugman and Joseph Stiglitz, Nobel Prize-winning economists, say the bank bailout plan is not so hot.

Krugman writes in his column America the Tarnished in The New York Times:

In an article in the current issue of The Atlantic, Mr. Johnson, who served as the chief economist at the I.M.F. and is now a professor at M.I.T., declares that America’s current difficulties are “shockingly reminiscent” of crises in places like Russia and Argentina — including the key role played by crony capitalists.

In America as in the third world, he writes, “elite business interests — financiers, in the case of the U.S. — played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive.”

Stiglitz is quoted in Stiglitz Says Ties to Wall Street Doom Bank Rescue in Bloomberg.com::

All the ingredients they have so far are weak, and there are several missing ingredients,” Stiglitz said in an interview yesterday. The people who designed the plans are “either in the pocket of the banks or they’re incompetent.

If it's tag teams, Geithner & Summers vs. Krugman & Stiglitz, we know who should win ... but in wrestling, you go by the script ...