The big news today is that Obama plans to propose a freeze on domestic discretionary spending in Wednesday's State of the Union address. For what it's worth, I talked to some administration officials about the thinking behind this in December, not long after the idea was first floated. Here's the gist of what I found: Within the administration, White House budget director Peter Orszag appears to have settled on another solution.
The Wall Street Journal reports that a lot of the bank executives who shunned last year's World Economic Forum in Davos are quietly returning this year. Which could get a little awkward, since the execs will rubbing elbows with the global glitterati right around the time the average American is fulminating against their outrageously high bonuses. How's a banker to deal with the potential PR problem? According to the Journal, the answer is ...
The White House background briefing is that their proposals would freeze biggest bank size “as is”--this makes no sense at all. Twenty years of reckless expansion, a massive crisis, and the most generous bailout in human history are not a recipe for “right” sized banks. There is a lot of work the administration hasn’t done on the details--this is a classic policy scramble, in which ducks have not been lined up.
So Bernanke may be in even worse shape than I thought. The Times says Harry Reid isn't sure he has 60 votes for confirmation. In fact, he's not even sure he'll support Bernanke himself. The most telling detail in the piece: Senate Democrats leaders had contemplated trying to hold a vote on Mr. Bernanke’s nomination to a second term this week, but were forced to hold off after several senators unexpectedly voiced opposition to his confirmation at the party’s weekly luncheon on Wednesday. Democratic leaders asked for a show of hands and though aides would not provide a precise count, Mr.
If I had to guess as I write this, I'd say no. But the trendlines for the Fed chairman aren't moving in the right direction. Today's Wall Street Journal had a piece noting that the Fed chairman was headed toward a closer than expected vote in the Senate next week, with Dems Byron Dorgan and Jeff Merkley joining Bernie Sanders, the Senate's chief Bernanke-hater on the left, as opponents of a second term.
Update: the Senate needs to hold a new hearing for Ben Bernanke--here’s the full proposal. Ben Bernanke’s reconfirmation as chair of the Federal Reserve is in disarray. With President Obama having launched, on Thursday morning, a major new initiative to rein in the power of--and danger posed by--our leading banks, key Senators rightly begin to wonder: Where does Ben Bernanke stand on the central issue of the day? There are three specific questions that Bernanke must answer, in some convincing detail, if he is to shore up his weakening cause in the Senate. (1) Does he support the President’s pr
Paul Volcker, legendary central banker turned radical reformer of our financial system, has won an important round. The WSJ is now reporting: President Barack Obama on Thursday is expected to propose new limits on the size and risk taken by the country’s biggest banks, marking the administration’s latest assault on Wall Street in what could mark a return--at least in spirit--to some of the curbs on finance put in place during the Great Depression. This is an important change of course that, while still far from complete, represents a major victory for Volcker--who has been pushing firmly for e
At this stage in the electoral cycle, Democrats should be running hard against big banks and their consequences. Some roots of our current economic difficulties lie in the Clinton 1990s, but the real origins can be traced to the financial deregulation at the heart of the Reagan Revolution--and all the underlying problems became much worse in eight years of George W.
One obvious question when Connecticut Senator Chris Dodd announced his retirement last week was what impact it would have on the effort to reform Wall Street. Dodd is chairman of the Senate Banking Committee, and the bill he wrote last year is the most ambitious regulatory initiative pending in Congress.
On the first day of the Financial Crisis Inquiry Commission, Phil Angelides demonstrated a gift for powerful and memorable metaphor: accusing Goldman Sachs of essentially selling defective cars and then taking out insurance on the buyers. Lloyd Blankfein and the other CEOs looked mildly uncomfortable, and this image reinforces the case for a tax on big banks--details to be provided by the president later today. But the question is: How to keep up the pressure and move the debate forward? If we stop with a few verbal slaps on the wrist and a relatively minor new levy, then we have achieved basi