Will The Banks Come Clean On Their Own?
February 17, 2009

One thing struck me as a little goofy from that second FT piece I cited: In early April, big institutions will publish their first-quarter results. If the intervening Treasury stress tests have not by then revealed the true state of their balance sheets, then their first-quarter results may do so. "The first week in April - that's when the children's party is over," says Chris Whalen, co-founder of Institutional Risk Analytics.

Assembly Line
November 21, 2008

If you've been following the auto industry's crisis, then you've probably read or heard a lot about overpaid American autoworkers--in particular, the fact that the average hourly employee of the Big Three makes $70 per hour. That's an awful lot of money. Seventy dollars an hour in wages works out to almost $150,000 a year in gross income, if you assume a forty-hour work week. Is it any wonder the Big Three are in trouble?

A Suspended Apocalypse
October 27, 2008

We are living in an extraordinary time. The world has been badly shaken. In the space of a few days a system that we thought was as secure and assured as the air we breathe lost all its landmarks, its clarity, and was seemingly swallowed up by a black hole. Money--essential to the spirit of peace--congealed, like blood in veins. Credit--this fine word is also expressive of people's faith in others--like a machine that jammed, and then stopped. Confidence--the famous "confidence" that is also integral to the pact among citizens and the reasons it must be perpetuated--like a spell that is evapor

527 Watch: American Future Fund
October 22, 2008

Here's a transparently shameless approach to skirting campaign-finance law. This slick spot by the American Future Fund is simply an attack ad that slams Colorado's Mark Udall on education--until right at the end, when it tells voters that Udall should support an arcane Senate bill that has stalled in committee. (Most of the bill's provisions were rendered moot by the bailout package.) Since 501(c)4 groups are only allowed to act as issue advocates, the final second serves as a highly implausible fig leaf.

From The Business Pages: October 21, 2008
October 21, 2008

An OECD report out this morning shows that the United States isn't the only country experiencing a widened rich-poor gap--on average, inequality is increasing across the developed world.

Wall Street's Lemmings
October 11, 2008

st1\:*{behavior:url(#ieooui) } Some of the most interesting work in modern economic theory explores a pervasive social phenomenon: the informational cascade. The concept, first elaborated in a brilliant 1992 paper by Sushil Bikhchandani, David Hirshleifer, and Ivo Welch, illuminates countless social and economic surprises. It is impossible to understand the real estate bubble, or the current financial crisis, without exploring the dynamics of informational cascades.

Narrow Minded
July 09, 2008

In 2006, at the end of his first term on the Supreme Court, John Roberts told me and other journalists that his goal as chief justice would be to promote unanimity and collegiality by encouraging his fellow justices to converge around narrow decisions with few dissents. During his first term, Roberts succeeded impressively: More than half of the Court's opinions were unanimous, and only 13 percent were decided by a 5-4 vote. The polarized Supreme Court term that ended last June, however, looked very different.

Is There Really A Rise In American Incompetence?
March 17, 2008

Throughout the week, Clay Risen, the managing editor of Democracy, will be covering economic developments for us on The Plank. Here's his first post:   I have a lot of respect for Dan Gross over at Slate, and I enjoyed his new book Pop immensely. That said, I have some significant reservations about his article currently headlining the site, "The Rise of American Incompetence." Dan posits that America's failure to get its financial house in order is causing foreign investors in our currency to look elsewhere. So far so good.

February 27, 2008

The financial markets are in a state of bewilderment, taken by surprise almost daily. We are, in short, in the midst of a crisis without precedent--a crisis of credit so fundamental to the working of the economy that it may take years to unwind.  Consider the almost unbelievable story of the 31-year-old junior trader at Societe Generale, one of France's largest banks. He bet nearly $75 billion of the bank's money, on an unhedged basis, that European and German stock indexes would rise.

Robert Rubin, Traitor To His Class
June 21, 2007

A few months ago, my old boss Robert Kuttner wrote a harsh article in the American Prospect about former Clinton era Treasury Secretary Robert Rubin. Part of the article was a familiar criticism of the notion that Clinton's economic program contributed to the 1990s prosperity. But other parts of the article were more personally unflattering.