[Guest post by Noam Scheiber:] The rumors are flying that Bill Daley--the former Clinton Commerce Secretary, current JP Morgan executive, and longstanding member of that Daley family--is under consideration for a senior White House position, "most likely chief of staff," as the Washington Post puts it.
[Guest post by Noam Scheiber:] If you’ve spent much time talking to Treasury officials over the past two years, you’ve probably heard them joke that Gene Sperling, a counselor to Secretary Tim Geithner, is the department’s in-house populist. What makes this funny (insofar as wonk humor can be funny) is that Sperling isn’t exactly your classic pitch-fork wielder. He was director of Bill Clinton’s National Economic Council (NEC) in the late ‘90s, a period when the White House got pretty good marks for its understanding of business and the broader economy.
[Guest post by Noam Scheiber:] My favorite paragraph in the McConnell op-ed Chait mentioned earlier: Some Democrats have responded to the election by reaffirming their belief in government’s ability to solve our problems. But many others have acknowledged with their votes on the tax bill that the policies of the last two years have fallen short, and that it’s time to move in a different direction.
[Guest post by Noam Scheiber:] Anyone interested in this question has no doubt read about Altman's multiple White House visits to discuss relieving Larry Summers as head of the National Economic Council (NEC). And yet, here we stand, just days from Summers's planned departure--NEC staffers have been busy writing exit memos, as I understand it--without an announcement about his replacement.
Two weeks after a mid-term election in which the U.S. Chamber of Commerce helped thwart Barack Obama and the Democrats, the group’s CEO, Tom Donohue, gave a speech that read like a doubling down of sorts. “We cannot allow this nation to move from a government of the people to a government of the regulators,”he said.
[Guest post by Noam Scheiber:] The idea's been bouncing around for a while, but Politico suggests some Senate Dems are now seriously considering it, even if many of their colleagues aren't wild about it: Senate Democrats struggled Thursday to figure out what that next step would be.
Last week, in between leading a graduate seminar on Proust and delivering a long-scheduled lecture on mass spectrometry, former Alaska Governor Sarah Palin ventured a few ticks beyond her acknowledged area of expertise and reflected on monetary policy at a convention in Phoenix. The occasion for her unexpected soliloquy—I’m actually serious about the economics speech—was the Fed’s decision to buy some $600 billion in long-term government securities, a practice known as quantitative easing. “We shouldn’t be playing around with inflation,” Palin said, in a typically Delphic pronouncement.
Over in the comments section for our editorial about the deficit commission, several readers have taken umbrage with our claim that the mortgage-interest deduction overwhelmingly favors the wealthy. One makes his case by citing this paragraph from a recent Paul Krugman column: Actually, though, what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class.
There were many factors that led us to the financial crisis of 2008—dangerous derivatives, irresponsible ratings agencies, negligent regulators—but one was more important than the rest. We now know it as the “too big to fail” problem. What brought the economy to the edge of disaster wasn’t only that financial institutions had made rash bets on lousy investments, but that those institutions were so massive that when their bets went bad, they threatened to take the rest of the economy down with them.