Can anyone explain why GM and Chrysler say they'll need $100 billion and $25 billion in financing respectively if they have to file bankruptcy, but far far less if they stay out under the latest hat-in-hand plans they've brought to DC? The enormous difference in magnitudes feels like it's part of Detroit's rhetorical blackmail to get the fix it wants (i.e. not bankruptcy), but maybe I'm missing something. More »
A new report from my colleagues at the Center for American Progress shows that 100,000 people are losing health insurance each week in this recession. Only in America does a president need to seek "emergency" funding as part of an economic stimulus to try to stem this calamity that comes with rising unemployment -- all because America remains uniquely in the grip of the dead idea that health care should be tied to one's job. For those who say we can't afford to do… More »
The WSJ reports that a number of top mutual fund managers did very well for themselves in 2008 even as those who invested with them lost their shirts. Some CEOs and chief investment officers pulled down $4 to 5 million while their funds were off 16% and 38%. Always nice to see merit rewarded in the free market.... More »
I heard an NPR report this morning that gloomily lamented the fact that housing starts were down some record amount last month, but I don't understand the arm-waving about this. Don't we need fewer new homes until the housing market in general settles down? When prices have been plummeting and are seeking a bottom, MORE new houses is the last thing we need -- boosting supply would just push prices down even more. More »
...looks like a horse's ass. What else can one say? How can he not have thought this through before he sought -- affirmatively sought -- the Commerce job? As I wrote when this first came up, the idea that he'd do this was mystifying in the first place. Several people wrote to say that he was desperate to reinvent himself as New Hampshire swung Democratic and he faced certain defeat next time. Fair enough. But it's very bad form to jerk a president around like this.… More »
My wife Jody has the perfect answer to how we can get some crazy bank executives to disgorge the ill-gotten bonuses they've paid themselves even while they're on the taxpayer dole: the feds need to hire Bill Lerach to bring their case. Lerach, you'll recall, is the premiere shareholder suit litigator/corporate shakedown artist in the country. The only problem is that he's in jail right now, serving time because his law firm paid plaintiffs illegally in his assorted… More »
If reports are right that New Hampshire Republican Judd Gregg will be named Commerce secretary, the only question is: why is Gregg doing this? Commerce is typically a backwater cabinet post far from the action on anything. Even the most creative reinvention of the job would leave it nowhere near the thick of key issues like the budget and the future of Social Security and Medicare, which Gregg's Senate posts give him a real voice in. Plus, if Al Franken is finally… More »
About those taxpayer funded bonuses on Wall Street: it's hard to believe there's no legal theory that would let shareholders or creditors claw back some of these billions in ill-gottens gains. But even if not, there ought to be creative ways to shame these folks for their behavior. Not just for these year end bonuses, mind you, but for the whole financial meltdown. After all, it's probably only a few thousand people at these top banks (and maybe far less) who got… More »
Another fun factoid from a letter to the FT this week: The hot new word in Japan is KY. An abbreviation for kuuki-yomenai, it literally means "unable to read the air."Very useful in explaining why, e.g., John Thain initially asked for a $10 million bonus even as he decorated his office lavishly with taxpayer funds. As the letter writer puts it, "he was astoundingly KY." More »
Peter Boone and Simon Johnson in the FT:If you want to end up with the economy of Pakistan, the politics of Ukraine and the inflation rate of Zimbabwe, bank nationalization is the way to go. More »
Essential piece in Politico yesterday by Bruce Bartlett, the former Bush I and Reagan aide who makes a cameo appearance in my book, The Tyranny of Dead Ideas, as the last honest Republican when it comes to taxes. Bartlett, who comes from the libertarian wing of the party, but who is an intellectually honest analyst, was basically banished from the GOP a few years back when he started writing that taxes would need to rise to fund the boomers' retirement, and that… More »
Gretchen Morgenson in Sunday's NYT floats some potential fixes for the credit default swap hangover -- worth reading.How detached from reality did we become as this world of derivatives grew ever larger and profitable for those who peddle them? Here's a story one Fortune 500 CEO told me when I shared my fears that credit default swaps could be the next big shoe to drop: More »
