News

Are We Getting Suckered?

When I was a little girl, I loved going to the bank with my mom because they always had suckers. Today I’m wondering if we are the suckers after the results of yesterday’s bank stress tests. The Treasury department gave all 19 major banks a passing grade based on economic assumptions that many find a wee bit cheerier than we have any right to expect in terms of housing prices, unemployment, and other factors. Did the public get hoodwinked into thinking that all is well in bank-land?

Some are taking the stress tests as a sign that the recession is slowing. In a New York Times op-ed, Geithner sounded confident, crowing that the tests “should advance the process of repairing our financial system and provide a better foundation for recovery.” But market analyst and commentator Marshall Auerback is calling the tests merely a confidence trick, while Dean Baker, co-founder of the Center for Economic and Policy Research, is suggesting that we’re just “kicking the can down the road.”

There’s plenty of talk circulating about how the stress tests may make us feel good in the short-term, but could cost us in the long run. The Onion nailed the suspicions many of us are harboring: “Nation Ready To Be Lied To About Economy Again.”

With all the unanswered questions, we’re feeling a little, well, stressed.

Tags: banks, Geithner, stress tests