The New Republic

Senator Tom Harkin and Representative George Miller have introduced a bill to raise the minimum wage from $7.25 per hour to $10.10. READ MORE >>

Jonathan Chait has a good post up about how Republicans don't really care about tax reform. I'd go further and say they aren't all that interested in deficit reduction, either. Let's review the contours of the current dispute between President Obama and House Republicans over ending the sequester. Here is what the president has put on the table: READ MORE >>

Gene Sperling once intimidated me.  READ MORE >>

On the eve of the sequester, there's more bad news about the economy. Just last month, Berkeley economist Emmanuel Saez reported that during the first two years of the recovery (2009-2011) average market income for the top one percent in the income distribution grew by 11.2 percent while it shrank by 0.4 percent for everyone else. Saez didn't yet have distribution data for 2012 (and likely won't for many months). READ MORE >>

With $85 billion in budget cuts set to take effect Friday, when the sequester kicks in, there's been plenty of debate about whether the economy will spiral back into a recession. In search of some clarity, The New Republic asked economists from across the political spectrum a simple question, "Will the sequester start another recession?" The answers were a bit more complicated.It could. And either way, it's dumb policy. READ MORE >>

The question is no longer whether the automatic spending cuts of budget "sequestration" will start to take effect on Friday. The question is how long lawmakers are willing to let those cuts stay in place. That, in turn, will depend on how quickly—and how severely—the cuts affect people's lives. READ MORE >>

President Obama's State of the Union speech will reportedly address the problems of the middle class, which has not fared well in this economy. Practically the only people who have fared well are the notorious one percent. To paraphrase the late New York City Mayor Ed Koch: How are they doin'? READ MORE >>

Barack Obama's pre-presidential manifesto, The Audacity of Hope, has only one extended riff on gun control—not a homily on behalf of the cause or even a meditation on the deep divisions opened by the debate, but a story of crummy luck. READ MORE >>

 LA: Your predecessor Hank Paulson in his book describes how at the height of the crisis he would have sleepless nights, worrying that a giant financial collapse was going to occur on his watch and that he would go down in history as the Herbert Hoover of the current era. Your colleagues all say you are remarkably calm, even in the middle of a crisis.TG: Well I was very worried throughout that period of time. Starting in August of ’07 I had moments of deep, serious concern about the future. The hardest part for me was that period between when we knew we faced an existential threat of collapse but before we figured out what we were going to be able to do. Before we figured out the contours of our plan.LA: Was that from Lehman onwards?TG: I would say from the end of December of ’07, there was a great sense of foreboding, gathering storm, forces beyond our control. Even as early as back in August of ’07. But it dramatically worsened in the fall of ’08, of course.LA: When you took office in January, we had had TARP, we had had all of those guarantees in place, and yet they still didn’t seem to be working. There was still a run on Citi, still a run on Bank of America.TG: When I first met the President in October of ’08, when he was then a senator, a candidate running, I remember saying to him that the steps that Hank Paulson, Bernanke and I and others took earlier in the fall had broken the financial panic. But at that stage the economy was still eroding at an accelerating pace and the financial system was still completely frozen. So yes, it was getting worse. When the President took office, when I came in in January, at that point we were still at the edge of the abyss. And we now know in retrospect that the economy was shrinking at an annual rate of 9 percent and the global economy was in a state of near freefall too. It felt pretty bad.LA: The way you dealt with the financial crisis will go down as your signature achievement. It turned out to be remarkably successful economically. But you yourself have said that while you saved the economy, you lost the public. Was there any way of making politics of this work?TG: I think that’s a great question. I think it’s hard for any of us to know. My own view was that it was going to be very hard, if not impossible to design a financial rescue that was going to be effective in protecting all the innocent victims hit by the crisis and still satisfy the completely understandable public desire for justice and accountability. Those things were in direct and tragic tension, never resolvable at that time. I always felt that the only preoccupation for people in policy at the time should be to fix the problem as quickly as we could, as effectively as we could, and only after that would other things be possible, including how to figure out not just how to clean up the mess, but reform the financial system.LA: One of the ways that people have figured out in the past to reconcile the politics was to go populist. That was what Roosevelt did. You, on the other hand, had been resolutely against that. You refer to it as Old Testament justice, implying that while it may be emotionally satisfying, it doesn’t serve any purpose.TG: I never used that phrase as a pejorative description. I just used it as a simple shorthand to refer to the understandable need people had for justice. But the President didn’t ask me to come do this to be the architect of a political strategy. I never felt that was my thing. I had some views on the issue, but I didn’t give them much weight. I thought my job was to figure out the financial parts.LA: Was the talk about “fat cat bankers” counterproductive?TG: I’m biased but I felt that in the basic strategy that the President embraced and that we put into effect, we did something that was incredibly effective for the broad interest of the economy and the financial system. I feel the President’s rhetoric over that period of time was very moderate relative to the populist rage sweeping across the country. And I never quite understood why the financial community took such offense at what was such moderate rhetoric relative to what we have seen in other periods in history. READ MORE >>

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