Mojo - April 2009

This Just In: Bush Justice Department Incompetent

| Wed Apr. 1, 2009 7:50 AM PDT

The withdrawal of charges against former Alaska Sen. Ted Stevens serves as more proof of what we already knew: the Bush DOJ couldn't do anything right. Attorney General Eric Holder has decided that "it is in the interest of justice to dismiss the indictment and not proceed with a new trial," according to a statement he released this morning. Why drop the charges? Because the Bush Justice Department, which handled the prosecution, couldn't, well, handle the prosecution. DOJ lawyers were accused (rightly, according to Holder) of withholding crucial information from the defense, and the trial subsequently degenerated into a series of embarrassments for an already-demoralized department. At one point, the DOJ lawyers were even held in contempt of court. Holder has asked the DOJ's Office of Professional Responsibility to look into the matter. Thankfully, the one thing the DOJ has been good at recently is releasing damning OPR reports (PDF, PDF, PDF) about how corrupt, incompetent, and politicized it became during the Bush years.

Advertise on MotherJones.com

Should We Really Be Marking to Market?

| Wed Apr. 1, 2009 7:38 AM PDT

Kevin still likes the idea in general, but Joseph Stiglitz doesn't like it when it's applied to Timothy Geithner's public-private investment plan:

Paying fair market values for the assets will not work. Only by overpaying for the assets will the banks be adequately recapitalized. But overpaying for the assets simply shifts the losses to the government. In other words, the Geithner plan works only if and when the taxpayer loses big time.

I get the sense Geithner knows this, too. Last week I was speaking with a Congressional staffer who said quite bluntly that the big problem with marking these assets to market was that there was no market for them. So Geithner had to create that market, and the only way to make it worthwhile for the banks and investors is to allow banks to overvalue those assets, even if the banks are unloading their worst, most risky ones. If the asset tanks, the bank—and perhaps the economy in the long run—still wins, the private investor loses a little, and the taxpayer loses big.