June 17, 2010
Did Obama just dump his best friend on Wall Street?
Am I Too Hard on Financial Reform?
May 27, 2010
[Guest post by Noam Scheiber:] The morning after the Senate approved its financial reform package last week, I wrote a piece suggesting that while the legislation should mitigate the too-big-to-fail (TBTF) problem, it isn’t likely to solve it. Not long after, I spoke with a Treasury official who protested that I was being uncharitable. After mulling over our conversation, I’ve decided he was right—I was a bit uncharitable. Perhaps more importantly, my critique was a little muddled, which made me sound more critical than I actually am.
May 10, 2010
Last Wednesday, Arkansas Senator Blanche Lincoln took to the Senate floor and delivered about as fiery a speech as you’ll hear in the chamber, at least on the subject of financial reform. “Currently, five of the largest commercial banks account for ninety-seven percent of the [derivatives market],” she said.
Of course, scapegoats are intrinsic to the language of politics. And scapegoats are particularly useful to ignorant politicians. The fact is that most politicians do not know the slightest about how finance—public or private—actually operates. It is for them a matter of good and evil—mostly good when prosperity reigns, mostly evil when prosperity collapses.
April 20, 2010
Some two dozen executives from large corporations will be descending on Capitol Hill today to make the case against over-regulating derivatives. The “fly-in” is being organized in part by the U.S. Chamber of Commerce through a group called the Coalition for Derivatives End-Users, according to the Chamber’s Ryan McKee. Many corporations use derivatives to hedge against fluctuations in the price of their inputs—for example, an airline might sign a contract to lock in future fuel prices, thereby passing the risk along to someone else.
Meet Bob Rubin's PR Guy
April 09, 2010
[Guest post by Noam Scheiber:] The Times' Sewell Chan and Eric Dash have a great little piece about Bill Thomas, the volatile former Republican chairman of the House Ways and Means Committee, now vice chairman the the congressionally-chartered Financial Crisis Inquiry Commission (FCIC). In a nutshell, Thomas is--how to put it?--a preening, self-righteous bully* who seems more interested in scoring rhetorical points than figuring out what caused the crisis.
April 04, 2010
Last week, Alabama Republican Richard Shelby, the ranking member of the Senate Banking Committee, floated a compromise on the consumer financial protection agency that’s currently stalled in the Senate. Under the bill Chairman Chris Dodd moved through the committee in March, the consumer agency would effectively have its own budget and an independent, White House-appointed director. It would also have significant (but not unchecked) authority to write and enforce rules protecting consumers from abusive bank practices, like deceptive mortgages.
“CEOs See Pay Fall Again,” Wails The Wall Street Journal.
April 01, 2010
Now, mind you, the median income (including “salaries, bonuses, long-term incentives, and grants of stock and stock options”) of chief executive officers of 200 major American corporations, according to the WSJ, dropped by fully 0.9% to a measly $6.95 million. And, in the long-term incentive category, the median fell 4.6% to $5 million. But $7 million (or even $5 million) are not, as my uncle used to say, bupkes. These horribly depressed pay statistics include Steve Jobs at $1 and Warren Buffett at $100,000, which means that they are also artificially depressed.
What's Gotten Into Tim Geithner?
March 23, 2010
[Guest post by Noam Scheiber:] I've long been of the view that the Treasury secretary gets a bad rap despite some rather impressive accomplishments. That's true even when it comes to reforming Wall Street, where, despite some reservations, I think the administration dropped a pretty solid reform proposal last year. (In fact, to the extent the reform effort has been weakened in Congress, it's generally because it's drifted away from the principles the administration laid out.) Still, you don't normally see Geithner get worked up about reform in public--or really about anything for that matter.
Geithner's Top Financial-Markets Adviser to Leave
March 04, 2010
The Wall street Journal reports today that Lee Sachs, a counselor to Treasury Secretary Tim Geithner, will be leaving the administration in April. Since the early days of the transition in 2008, Sachs has generally been the senior Treasury aide in charge of overseeing the administration’s response to the financial crisis.