June 15, 2009
So How's Chu Doing At Revamping Doe?
In this month's Rolling Stone, Jeff Goodell has a terrific profile of Energy Secretary Steven Chu. Sadly, it's not online, but Charlie Petit managed to scrounge up a bootleg PDF, so you can go read it over at his site. One of the subplots of the piece is that Chu came into office with the incredibly daunting aim of remaking the country's trillion-dollar energy economy—trying to ramp up the clean-tech sector and cutting U.S. emissions in order to help avert dangerous climate change.
How Does Sheila Bair Do It?
If you've been following the coverage of the administration's plans for financial market reform, you may have noticed two emerging themes: 1.) All the regulators not named Sheila Bair (the FDIC chairman) seem to dislike Sheila Bair and wish she had less authority. This nugget from yesterday's New York Times is typical: But at the Treasury and the Federal Reserve, Ms. Bair is viewed as someone who pushes her and her agency’s interests rather than someone who finds common ground with other policy makers. Besides Mr. Dugan, she has antagonized many other leaders in Washington.
...is this, which Tim Geithner and Larry Summers propose in their Washington Post op-ed today: The administration's plan will impose robust reporting requirements on the issuers of asset-backed securities; reduce investors' and regulators' reliance on credit-rating agencies; and, perhaps most significant, require the originator, sponsor or broker of a securitization to retain a financial interest in its performance. The problem is that banks expanded credit to overly-risky borrowers because they knew they could turn around and sell those mortgages to investors via securitization.
Is The Dollar Doomed To Crash?
Despite signs that the U.S. has avoided a repeat of the 1930's, it may be unrealistic to get overly optimistic about the country's economic future. That's the message from Nobel economist Paul Samuelson, who fears that the U.S. dollar is in for a dramatic fall: Up until now, China has been willing to hold her recycled resources in the form of lowest-yield U.S. Treasury bills. That's still good news. But almost certainly it cannot and will not last. Some day -- maybe even soon -- China will turn pessimistic on the U.S. dollar. That means lethal troubles for the future U.S.
Following Obama's Lead
Jonathan Martin has a piece about those pesky Dems teed up to buck the White House by challenging incumbents from their own party for Senate seats. In it, Joe Trippi (expected to be the chief strategist in Upper-East-Side Rep. Carolyn Maloney's quest to unseat Hillary-Senate-replacement Kirsten Gillibrand) raises an amusingly compelling point: “Who do they think inspired these people to run?” asked Trippi. “They started this. They took on the established order of the party.
"Naive, hypocritical, or simply dishonest?" That's Washington Post columnist Robert Samuelson talking about the Obama administration and its pursuit of health care reform. His argument in a nutshell: Health care costs too much money and Obama isn't serious about trying to take care of that problem. I agree wholeheardtly with the first premise. It's the second one I don't get. It's true that, in the world of health care reformers, there are those who focus on coverage almost exclusively. But Obama very clearly is not one of them.
Writing in the Washington Post this morning, Tim Geithner and Larry Summers outline a five point plan for dealing with the underlying problems in our financial system, titled "A New Financial Foundation." The authors are not completely clear on what they think caused the current crisis, but you can back out some points from their reasoning--and the implicit view seems quite at odds with reality. Their view: Regulation is overly focused on safety and soundness of individual banks. Reality: There was a complete failure of safety and soundness supervision. This must be fundamental to any financ
The Key Iran Debate For Obama
NYT: [T]he senior administration official said there was some debate within the administration about how openly to question the result. While some political operatives in the administration wanted to be more open about American unease with the election result, those from diplomatic backgrounds were portrayed as pressing for the United States to say as little as possible, so as not to disrupt the engagement process, which Mr. Obama has made one of his foreign policy priorities.
Dennis Ross, Out As Special Envoy To Iran; Was He Ousted Because He's A Jew Or A Bit Hawkish On Nukes?
The news that Dennis Ross, long time State Department strategist and peace processor, is being bounced as special envoy to Iran comes from an article by Barak Ravid in the reliable (at least on these matters) Ha'aretz. The story seems to assume that Ross was declared persona non grata by Tehran either because he was a Jew or because he believes that Iran should not be permitted to acquire nuclear weapons. If the Obama administration so readily capitulated to Dr.
OBAMA PAYS A HOUSE CALL: The big news today is President Obama's speech to the annual convention of the American Medical Association. Although the AMA is not the monolithic giant it once was--more on that here, and perhaps to come later today--it's still important symbolically. As Marc Ambinder reported last week, the administration wants physicians as validators of its reform efforts. That means keeping the AMA from going ballistic or, better still, winning its endorsement. But don't expect Obama to avoid potential areas of disagreement in his remarks.