Economy

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.

The Network
October 09, 2009

The shock of the financial meltdown has had congressional committees scrambling for their gavels for the better part of a year. Politicians have been discussing how to make sure that such a near-cataclysm never happens again, and, for the most part, they've focused on the need for new regulation.

Worth Reading
October 08, 2009

The Fed's inflation-fighting credibility is rock-solid. But you can't say the same for America's strong-dollar policy. Is FHA headed the way of Fannie and Freddie? High frequency trading and the revival of technical analysis. The real value of Twitter.

What Washington Should Do to Create Jobs
October 08, 2009

Rob Shapiro is the chair of the NDN Globalization Imitative and chairman of Sonecon, LLC. Policymakers and pundits who finally are worried about a "jobless recovery" should consider this: Our actual prospects are worse than that term suggests.   The initial expansion we may already be experiencing will be notable not for a lack of new jobs, as the phrase "jobless recovery" suggests, but for substantial, continued job losses.   Total employment will continue to decline for many months and perhaps as long as two years, as it did after the 2001 recession.   Nor will it be enough to aim for simpl

Tim Geithner's Small Circle of Friends
October 08, 2009

Over the past 30 years Wall Street captured the thinking of official Washington, persuading policymakers on both sides of the aisle not to regulate (derivatives), to deregulate (Gramm-Leach-Bliley), to not enforce existing safety and soundness regulations (VaR), and to stand idly by while millions of consumers were misled into life-ruining financial decisions (Alan Greenspan). This was pervasive cultural capture or, to be blunter, mind control. But when the crisis broke it was not enough. Having powerful people generally on your side is not what you need when all hell breaks loose in financia

Did the Bank Bailout Increase Lending?
October 08, 2009

U of Chicago's Casey Mulligan, pointing to an audit issued this week by the TARP inspector general, says no: Economic theory casts significant doubt on the claim that public purchases of bank equity would cause banks to lend more. Now the government’s own watchdog confirms the theory. Unforunately, the inspector general stays mum on how it arrived at its conclusion: Federal Reserve Board officials provided institution-specific data and an analysis of the state of the U.S. economy that was deemed sensitive, confidential, and, restricted.

Worth Reading
October 07, 2009

Study: Calorie posting in NYC restaurants hasn't changed behaviors. Krugman: Why does the Fed insist on reviving shadow banking? Bill Clinton: Bush should have rescued Lehman. Does a tax credit for boosting employment make sense? More signs of a thaw: Sales at eBay rose in Aug. and Sept.

Explaining Job-Creation to the Small Business Lobby
October 07, 2009

There are a number of reasons to be wary of the job-creation tax credit now gaining traction in the White House and on the Hill--chiefly, that it would provide a windfall to companies that were about to hire people anyway.

When Will the Fed Raise Rates?
October 07, 2009

The Kansas City Fed's Thomas Hoenig made some news Tuesday claiming that the Fed should tighten "sooner rather than later." This was in stark contrast to NY Fed president Bill Dudley, who echoed the FOMC's line that rates will stay low for an "extended period." Who to trust? Although both men are sufficiently vague about their timelines, I'll side with Dudley here. All signs point to the current recovery being a jobless one.

Where Will Unemployment Be in 2012?
October 06, 2009

According to this piece from yesterday's Journal, it's going to be a long, long time before unemployment returns to its pre-recession levels: The U.S. has shed 7.2 million jobs since the recession began in December 2007. How long will it take for the economy to replace them? ... In addition to replacing 7.2 million lost jobs, the economy needs an additional 100,000 a month to keep up with population growth. If the job market returns to the rapid pace of the 1990s -- adding 2.15 million private-sector jobs a year, double the 2001-2007 pace -- the U.S.

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