The Election Before the Election
October 12, 2009
Political circumstances can change unexpectedly, of course, but at the moment the Democrats seem very likely to lose seats in the 2010 midterms, and possibly quite a few of them. What's a little harder to predict is what will happen in the 2010 Republican primaries, where the number of insurgent, tea-party-propelled challenges to establishment candidates continues to multiply.
Explaining Geithner's Call Log
October 09, 2009
Simon Johnson raises a fair question in response to this AP scoop about the bankers Tim Geithner was in touch with early in the Obama administration. Here's the AP: The calendars, obtained by the AP under the Freedom of Information Act, offer a behind-the-scenes glimpse at the continued influence of three companies -- Citigroup Inc., JPMorgan Chase & Co.
Trouble in Beantown
September 29, 2009
A month-old labor dispute in Boston has taken a curious twist. It began when on August 31, a hundred housekeepers at three Hyatt hotels in Boston were fired and replaced by workers from a Georgia company, Hospitality Staffing Solutions. The housekeepers, some of whom had worked for Hyatt for over twenty years, were making between $14 and $16 an hour plus health, dental, and 401(k) benefits. Their replacements were to make $8 an hour with no health benefits.
Citigroup's Pandit: Making $100 Million Ain't Right
September 18, 2009
The Citigroup CEO apparently made the comment in response to a question at a 92nd Street Y event last night. The question was about his star commodities trader, Andrew Hall. Interestingly, the Journal piece adds this detail: "The response elicited murmurs from the audience, which included Citigroup employees." One wonders if those were murmurs of agreement or disagreement...
Call of the Wolf
September 16, 2009
Long before Martin Wolf became the chief economics columnist for the Financial Times, he wrote the newspaper letters--lots and lots of letters. It was the early 1980s, the height of the Thatcher era, and Wolf was running research at a think tank in London that was sympathetic to the government's pro-trade agenda.
Obama and the Ghost of Louis Brandeis
September 15, 2009
President Obama’s speech yesterday was disappointing. As a diagnosis of the problems that let us into financial crisis, it was his clearest and best effort so far. He didn’t say it was a rare accident for which no one is to blame; rather he placed the blame squarely on the structure, incentives, and actions of Wall Street. But then he said: Our regulatory reforms will fix that. This is hard to believe. And even the president seems to have his doubts, because he added a plea that--in the meantime--the financial sector should behave better. The audience was composed of our financial elite, but
The City That Pork Built
September 04, 2009
In today's The Wall Street Journal, Tyler Grimm takes a trip to Johnstown, PA, where he reports despondently on the John Murtha Johnstown-Cambria County Airport, which services roughly 30 people a day and has received over $130 million in federal assistance over the course of 20 years thanks to earmarking efforts of Representative John Murtha. It's easy to condemn Murtha a corrupt pork-barreler. But as Jason Zengerle argues in his recent piece for The New Republic, Johnstown has become dependent on Murtha's earmarks and defense contracts.
Arne Duncan's Seductions--And Why Schools Need Them
August 26, 2009
Education Secretary Arne Duncan proposed today that $3.5 billion in grants dedicated to improving Title I schools--or those with at least 40 percent of students from low-income families--should go to school districts committed to "turnaround" strategies.
The Key To Understanding Aig's New Ceo
August 04, 2009
That would be this detail from today's Wall Street Journal write-up: "Mr. Benmosche also gained experience overseeing international insurance operations and led MetLife when it won approval for a joint venture in China, where AIG has a major presence." AIG's extensive overseas presence is probably the single most important feature of its corporate identity (or at least it was before everyone got to know those high-rollers at AIG Financial Products). The company was actually founded in China between the world wars before being thrown out by the Communists in 1949.
July 16, 2009
At the end of the day, CIT had nothing. Their asset quality was poor, their systemic risk implications seemed limited, Sheila Bair dug in her heels, and Jeffrey Peek (CEO) didn't have sufficiently strong connections to get her overruled. CIT had friends, but not enough--and maybe this tells us something about the shifting political sands. The Financial Services Roundtable (top financial CEOs) came out in force, the House Committee on Small Business reportedly made worried noises, and Barney Frank sounded supportive. But the American Bankers Association (the broader mass of bankers) publicly st