Oy. Coming on top of new GDP numbers showing a mere 1.9 percent uptick in the first quarter, today’s jobs report is a real bummer. The headline number speaks for itself—an anemic 69,000 jobs, or about half what economists were expecting (though how they set those expectations remains a bit of a mystery). But the internal numbers were even worse.
When we last left Morgan Stanley, the company was taking all manner of abuse for botching the biggest IPO of the millennium. Alas, that turns out to be the least of its problems. Far more pressing is the fact that Moody’s may be on the verge of massively downgrading Morgan Stanley’s bond rating, which could cost the company billions of dollars (perhaps tens of billions) in collateral and increased borrowing costs. Then yesterday’s Financial Times brought even worse news.
If you read enough coverage like today’s Politico piece on how much conservative groups plan to spend in 2012, you quickly realize the Obama campaign faces a deep psychological problem in addition to a financial one. The Politico headline is that outside groups will spend $1 billion on top of the billion or so Mitt Romney and the RNC will have at their disposal.
Reading Dan Gross’s new book, Better, Stronger, Faster, was a strange experience for me. Gross’s account of America’s recovery from the worst financial crisis 80 years is relentlessly upbeat (not to mention terrifically engaging—the guy’s prose really moves). Having written my own, decidedly less sanguine, book, I was curious to see the evidence Gross used to justify his optimism. But it turns out his data points mostly overlap with mine: We have similar takes on the effectiveness of the government’s response to the crisis and the recession that followed.
When JP Morgan announced its $2 billion trading loss a few weeks back, a handful of smart conservatives saw an opportunity for Romney to get to Obama’s left: Call for an end to too-big-to-fail. As AEI’s James Pethokoukis put it: In one fell swoop, Romney would undercut the charge that he’s a creature of Wall Street and the financial superelite. And given how many hedge fund managers and other investment pros dislike the mega-banks, Romney probably wouldn’t even take a fundraising hit.
I’m on record claiming that Team Obama is playing a tougher form of bean bag this time around than in 2008. But, even so, I agree with Jon Chait that this election won’t really be that nasty. I just think so for different reasons. Chait argues that it’s all about elites. As he puts it: The socially liberal, economically conservative sensibilities of the party elites are working in tandem to hold back Republicans from attacking Obama on cultural grounds, and to at least complicate Obama’s populist attacks on Romney’s business career. I’m not sure I agree, at least on the right.
Since news broke about JP Morgan’s multi-billion dollar black eye a few weeks back, we’ve pretty thoroughly rehearsed the arguments against too big to fail and too big to manage, both of which apply to JP Morgan even more obviously now than they did beforehand. This morning, a former administration official well-versed in these matters suggested another indication of JP Morgan’s excessive girth: too big to hedge.
As soon as we learned that the trader largely responsible for JP Morgan’s $2 billion-and-counting loss had been nicknamed “the London Whale,” it was pretty much inevitable that we’d find a squid on the other side of the trade. And whaddya know. It turns out there was a squid involved! Better yet, it wasn’t just any squid, but a great vampire squid—the kind that wraps itself around the face of humanity and jams its blood funnel into... well, you know the rest. Over to you, Wall Street Journal: A group of about a dozen banks, including Goldman Sachs Group Inc.
Like any Woody Allen fan, I’ve been waiting my entire adult life to re-enact the Marshall McLuhan scene from “Annie Hall.” Today, Mitt Romney and Jonathan Chait finally gave me the excuse I needed. Here’s the backstory: On Friday, Romney told a crowd in New Hampshire that he was reading my recent book on Obama and the economy. The book’s take-away, according to Romney, is that Obama deliberately slowed the recovery to focus on health care reform. “In this book, they point out that they said the American people will forget how long the recovery took,” Romney said.
Any taxonomy of first friends includes a few familiar types. There’s the amiable glad-hander destined for the outer Cabinet, like George W. Bush crony Don Evans. There’s the scheming, scandal-prone loyalist, like the Clinton hanger-on Harry Thomason, of Travelgate infamy. And then there’s the discreet consigliere who serves alternatively as fixer, sounding board, chief surrogate, and all-around defender of the faith. Personal friends with such outsize influence are actually quite rare in presidential politics. Within recent administrations, only Valerie Jarrett really fits the profile.