Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. Ask Dr. Dollar at the JP ForumWe have the audio from an event we co-sponsored at the Jamaica Plain Forum a couple of Fridays ago—an evening with Arthur MacEwan, who writes our "Ask Dr. Dollar" column. We'll soon be posting the full audio, including both Arthur's excellent talk on the financial crisis and a lively Q&A period.In the meantime, Radio With a View on WMBR, Cambridge, ran a segment on this past Sunday's show featuring excerpts from Arthur's talk. You can find the audio for that segment here. Labels: Arthur MacEwan, bailout, financial crisis, Radio with a View, WMBR Reid Names Elizabeth Warren to TARP BoardAccording to Politico, Senate Majority Leader Harry Reid has named Harvard Law prof Elizabeth Warren to the oversight board of the Troubled Assets Relief Program (TARP). This is the program that was established by the Emergency Economic Stabilization Act of 2008, aka The Bailout, and regular readers of the D&S blog know that it is sorely in need of oversight.Warren is a great (and surprising) pick. She's a bankruptcy expert, and has been outspoken on the issue of the "middle-class squeeze." Back in March, we posted a video of her appearance on the University of California TV's public affairs program "Conversations with History." Politico also reports that Reid and House Speaker Nancy Pelosi jointly appointed Damon Silvers, AFL-CIO Associate General Counsel, to the TARP board. This is a nice contrast to the utter lack of labor folks among the economic advisers pictured behind President-Elect Obama in news reports last week. Hat-tip to Michael Pollak on lbo-talk. Labels: bailout, financial crisis, TARP program AIG Reputation Destruction VideoOur recent post More AIG Fun With Bailout $$ was featured in a terrific Flash animation titled Social Media Guns on AIG, produced by VizEdu, which looks like a great company (and we like their politics).The final bit of the animation is especially good: "Your Brand Is Now Owned By The People." Labels: AIG, bailout, financial crisis, VizEdu $10 million gets you $billions!Several insurance and financial service companies are reportedly buying up small S&L's, for as little as $10 million, in order to qualify for billions of dollars from the TARP bailout fund.According to Bloomberg News, Hartford Financial Services Group Inc.,Genworth Financial Inc. and Lincoln National Corp. plan to buy lenders, a move that may entitle the three insurers to billions of dollars from the Treasury's bank rescue fund. Labels: bailout, financial crisis bailout, TARP program The Bank of Michael PerelmanFrom Michael Perelman's blog, Unsettling Economics.I am happy to announce that I have changed my name. As of now, you may address me as The Bank of Michael Perelman. I am not greedy. If Secretary Paulson would grant me only a couple hundred million, I would not trouble him for one of the billion dollar bailouts. Labels: bailout, Henry Paulson, Michael Perelman, Unsettling Economics More AIG Fun With Bailout $$AIG execs just want to have fun, even if it means they have to sneak around mean old Uncle Sam to do it.Local news crews got wind of another AIG retreat, this time at a posh resort in Phoenix. The cost for rooms alone was a reported $300,000. Now, it's not like the company has no shame. After being lambasted for a $440,000 retreat at a California spa, followed up by an $86,000 corporate hunting trip to England, the Phoenix event organizers had the good sense to issue a memorandum urging hotel workers to keep a low profile:
Perhaps the company felt that it was time to loosen the purse strings, as the news of the latest corporate shindig broke on the same day the government announced a restructuring of the bailout package that increased the total taxpayer financing available to AIG by $50 billion. Company officials claim that they have canceled all unnecessary retreats, although this didn't stop them from
Meanwhile, back in the world of financial meltdown, a Canadian law firm has filed a class-action lawsuit against AIG for $550 million in damages on behalf of Canadian investors. Labels: AIG, bailout, financial crisis bailout Transcript of NewsHour Interview with PaulsonFrom the NewsHour with Jim Lehrer, to be aired tonight.JIM LEHRER: Mr. Secretary, welcome. SECRETARY HENRY PAULSON: Good to be here. MR. LEHRER: Is it correct to say, at this point, Mr. Secretary, that the $700 billion rescue plan has not worked? SEC. PAULSON: Oh, I wouldn't say that at all; I would say quite the opposite, that what we've been able to do since that legislation has been passed is stabilize our financial system. And I think that was very important; the financial system was at the tipping point. The credit—inter-bank credit market was frozen—banks weren't lending to each other—that situation has resolved itself, when you look at the Fed funds rates and the inter-bank rates and so on, it's—that market is working better. Now, I would say that the economy has some very significant challenges and the financial markets have some significant challenges and they will for some time; we're not going to work through these stresses until the biggest part of the real estate price correction is over. And it's going to take—it took a long time to build these things up, and it's going to take a while to work through them. MR. LEHRER: But the expectation, wouldn't you agree, Mr. Secretary, when in September, when you and others—everybody was saying, hey, we've got to pass this rescue plan. If we don't, things are going to get worse. The plan was passed, and things have gotten worse in the financial markets—in the economy—everything—every measurement is worse, is it not? SEC. PAULSON: Yeah, well, I think in the economy, that's right. The economy has worsened, but I think what we sure tried to say is that if this isn't passed, things are really going to get worse, because we need a stable financial system that is functioning. And so part of the issue we always had was, I think, to the American people, generally, they look at the equity markets—some of them going up and down; they're not focused on the inter-bank funding or the credit markets or the banking system. But what we saw, when we went to Congress, was we saw that the markets were frozen, lending had stopped, the economy was turning down—so we could see all this happening and we knew how severe it was going to get if we didn't stabilize the system. But I never intended to say, nor did I ever say, that the process of recovery and repair was going to be a quick one. This is—the situation we've confronted is the kind of thing that happens once or twice every hundred years. MR. LEHRER: But the lending, for instance—that was a key part of the rescue plan—I almost said bailout, I know that's a bad word, but—at any rate, they're still not lending. People still can't borrow money. They can't buy a house, buy a car—all those things. SEC. PAULSON: Well, let's go back—lending is going to be a key part of this. And what happens when you're in a period of financial stress, banks pull in their horns, regulators reinforce it as banks are concerned about continuing slowdown in the economy and credit losses, that is restricted. What we have done by taking steps to make sure the banks are well-capitalized—and let's remember that we are still in the process of getting that money out—the nine big banks have $125 billion and they account for 55 percent of the assets, and we've got another 20 or so out the door, but we've got much more to go, there. But, again, to get back to your point, the thing that I will say—if this works, lending will be much more than it would have been, okay, that it would have been. But the key is that—if the banks are confident and people are confident in dealing with the banks, there's going to be more lending. But the first benefit is the stability to the system. But let me say one other thing about lending, which I think is very important, and it happened this week—that I can exhort banks to lend, but I'm not a regulator. And what happened this week, which was for the first time I've ever heard of, we had a statement come out signed by the four regulators in this country—the Fed, OCC, OTS and FDIC—that addressed four things. It addressed the lending; it addressed compensation practices; it addressed dividend policy and the area of mitigating foreclosures. And it was a strong statement focused on the need for prudent lending. Now, for that statement to come out is one thing, and then when you look at what the regulatory supervisors do, I think it will make a meaningful difference. But, again, you should not take my comment as meaning that this credit is immediately going to become available like it used to be and that the economy is going to turn around right away. MR. LEHRER: All right. And yesterday, you announced a whole change in your approach. You said the first part was not working and so now you – SEC. PAULSON: No, I did not say that. MR. LEHRER: Well, all right. Say what you did say. SEC. PAULSON: Okay, because it was very clear; I didn't say the first part wasn't working. When we went to Congress, we pointed to the fact that there was a great deal of illiquid assets in financial institutions and – MR. LEHRER: Illiquid assets means money that can be lent, right? SEC. PAULSON: Holding mortgages—mortgage-related assets—money tied up in this. And we said something at that time which was a very good idea, and it still is a good idea, which is, if we bought those assets—invested in them—this would put capital into the banks and there would be a price discovery process that would cause more capital to go into the banks. But what happened is, the situation worsened as it took a good while to get through Congress, the situation worsened. By the time we had that legislation passed on October 2nd, I had concluded that when you looked at the finite amount of resources we had, that the more powerful way to deal with the issue—because the problem was of a greater magnitude, and to protect the taxpayer—was to go the capital route, and so – MR. LEHRER: Which means put the money directly in the banks? SEC. PAULSON: Put the money directly in the banks, which then puts them in a stronger position to sell the illiquid assets and continue lending. The money will go further. So what we said—so what I said yesterday, so we—right out of the legislation, we moved with lightning speed to being implementing this program. Ten days after legislation, getting the money in the nine largest banks—we're working on that. So what I said yesterday was, after, again, looking at the problem we have before us and looking at the TARP resources, how best to use – MR. LEHRER: TARP, that's the name of the bill. SEC. PAULSON: Yeah, for the rescue package. And what they also say on these investments, this is money the taxpayer will get back; these are investments. These are preferreds in these banks are well-protected and I believe that will be a good investment. But what we said is, looking at what we've got before us, the best thing we can do is have additional money, ample additional money to continue to put equity into financial institutions, if needed, and also equity to put into institutions if there's a systemic event and it needs to be a rescue. And so, what we said is, we want to evaluate this first plan once it's done and then determine the best way to go forward as needed with additional capital programs. MR. LEHRER: And it correct to say, is it not, Mr. Secretary, that everything that's been done, up until now, has not resulted in the kind of lending that this whole thing was designed to freeze? SEC. PAULSON: I take big issue with that because what I say is, we were clear from day one that we were talking about stability of the system, that this system was at a tipping point and this plan, thank goodness Congress enacted it. And I also am very grateful that we were able to see the size of the issue in front of us and move as quickly as we did to stabilize the financial system with the actions the FDIC took in terms of hardening their bank guarantees and the capital program. Now, what you are saying, which I agree with, is that the economy is having a tough time, that credit is being restricted, we're not seeing the kind of lending we'd like to see and that is clear. Now, I will say to you, it's going to take a while. The banks just got these funds and, even if this is working better than expected, you're still going to see lending restricted more than we would like given the severity of what's going on in the economy. MR. LEHRER: All right, in the general thing of the economy, the financial system, everything, as we sit here right now, are things continuing to get worse? SEC. PAULSON: Well, here's what I would say to you. In terms of the financial system—and I'm repeating myself—there's—the system has been stabilized and that is a huge positive here and around the world. So that's been stabilized. In terms of the economy, okay, in terms of the economy, this is a tough period and our focus has got to be on recovery. MR. LEHRER: But what I'm getting at is this, Mr. Secretary, most of the folks don't know the difference between a financial system and an economy if they can't buy a car, if their house is being foreclosed and they're losing their jobs. What's the difference? SEC. PAULSON: Well, I would say this – MR. LEHRER: It's a technical difference. SEC. PAULSON: It is. It's not just a technical difference, because if the banking system had failed, they would know the difference, okay, because it would be much, much worse. And so what—and I do empathize and I do say that there's no doubt that we're going through a real challenge. And, consequently, we made another suggestion, not something that we are prepared to roll out yet, but something we're working on, which will take a relatively smaller amount of TARP assets, which is the rescue plan funds, to invest in a Federal Reserve program which would provide big amounts of liquidity for credit for consumers because, in this country, 40 percent of the lending takes place through a securitization market outside of the banking system. So when you look at people who borrow to buy a car, there are—there's AAA-rated auto-loan paper, there's AAA-rated credit card, there's AAA-rated student loan. That market has all but collapsed and when that collapses, it's hard for the American people to get the money they need to get the economy going. And so that will be—that's another program we're working on. It isn't as systemically important, but it's very important to the economy. MR. LEHRER: And if it's important to the economy, that means it's important to everybody in the country. SEC. PAULSON: You betcha. MR. LEHRER: So, you mean, it isn't just a little bit over here; the financial system, a little over here, it's called this. That's my main point. SEC. PAULSON: Yes, and I want to come back to you on that because it's all—all of this is about the economy and the American people. We don't want to do anything to do something for the banks' sakes; this is about the American people. But here's a distinction I'm making; the TARP or the rescue package was never intended to be the panacea for the whole economy, okay? It wasn't intended for that; there were other plans. This was intended to stabilize the financial system and it's done that. MR. LEHRER: Now, there are a lot of people who believe, a lot of experts, who believe that the key to this, from the very beginning, was not the financial system so much as it was the housing problem. And that's what started all of this. And one of the end results of it was a bad financial system, but it began with housing. Why has—why have you and the other rescuers not done more about that? SEC. PAULSON; Well, I think, I, again, take issue with that. I think that's been a huge focus because one of the things that we did at Treasury—let me step back and say that in this country, we do have government guarantees for securitized mortgage financing. We have Fannie Mae and Freddie Mac. MR. LEHRER: But those systems collapsed. SEC. PAULSON: Yes, and what happened? This was a flawed system. We had a flawed congressional charter. We had a system where the regulator was set by law and the regulator had no authority. I went to Congress before those companies collapsed. I got the authority to deal with it. We moved very, very quickly to come in and stabilize that situation. And they are providing a lot of mortgage finance. And I would say this—that while the cost of other credit has gone up a lot, the cost of Fannie Mae and Freddie Mac-insured mortgages has been relatively constant, has been insulated from that. I'd like to see those rates lower. But that was, I think, a very strong statement. And the other thing I would say, the more we can do to help the financial system and lending, and have lending going, that's the number-one thing we can do for the housing. But I think it's very hard to—when you look at how long it's taken for these excesses to build up and for these home prices to appreciate, to suddenly say maybe government could push some button and make it all go away and solve the problem. So I think we've dealt with it in as effective a way as – MR. LEHRER: But again, it isn't—the value of the average home in America goes down as we sit here right now. SEC. PAULSON: You're absolutely right. MR. LEHRER: The ability to get a loan is harder now every day as we sit here. And so, what—until that is fixed, can the rest be fixed? That's really what I guess I'm asking. SEC. PAULSON: Well, I have always said that at the heart of the problem is the housing correction. And until the biggest part of the price decline in houses is behind us, we will have stresses in the financial markets and in the economy. MR. LEHRER: When is that going to get better? SEC. PAULSON: I can't give you a date for when that's going to get better. But I can tell you because we're dealing with that and we're dealing with that as effectively as anyone can come up with an idea, stabilizing Fannie and Freddie. And while we're dealing with that, we sure as heck better stabilize our banking system, which we did. And so, we didn't come forward with the TARP and say—or the rescue plan and say vote for this and all the economic problems will be behind us. And the housing correction will be over and credit will be easy. We said do this because the situation is at the tipping point. We need to stabilize it. MR. LEHRER: I take your point, Mr. Secretary. I'm just talking from the ordinary folk on the street, saying, hey come on. You know, rescue this, bail out, and things continue to get worse. But one other question—very specific question that's on the table right now—the automobile industry. Everybody says, if the United States automobile industry is about to go down the tubes, if it does, it's going to be a huge thing to everybody in this country. You do not believe anything should be done about this? SEC. PAULSON: I have said quite the opposite, okay? What I've said repeatedly is I think the auto industry is a very important industry. I think it would be harmful to see a bankruptcy of a major auto manufacturer, particularly during this period. And I've said that I think anything that is done should show a path to long-term viability. And I've said that I've cited a auto bill that was passed by Congress, $25 billion, Department of Energy bill. And I've suggested that one idea for Congress would be to modify that to make that money available to lead to a viable auto industry. The only thing that I've said about the rescue plan is that the intent of that—again, getting back to my earlier point—Congress didn't pass that and say, go take those resources and use them on whatever you feel like. That was passed to deal with our financial system, the viability of our financial system, the strength of our financial system, to get lending going again and stabilize that. And so, clearly, I am of a view you should do something for the auto industry – MR. LEHRER: But not through the rescue plan. SEC. PAULSON: Yeah, I'm just saying that is not the congressional intent. MR. LEHRER: Finally, Mr. Secretary, I take it from what you've said on all these things, you're comfortable with what your role has been and how you have performed in your capacity as secretary of the Treasury in this crisis? SEC. PAULSON: Yes, I am. You know that we've had a lot of challenges. We've dealt with some unprecedented events. We've taken some unprecedented actions. We dealt with a number of these on a case-by-case basis. When it became clear that you needed to take a broader, systemic approach, we went to Congress. Some people have said to me you should have gone to Congress earlier. And I said, well, it wasn't real easy to get something through Congress even when we were in the middle of a crisis. And if we'd gone to Congress earlier, the challenge was how do you go to Congress if you know you're not going to be able to get something done? So as soon as we saw that we needed to go, and it was clear to us and to Chairman Bernanke and me, when it was clear, we went. Do I wish we had got the rescue package done earlier? Yes. And as you've shown right here with me, maybe my greatest strength is not communicating broadly with the American people. But again, it's a challenge when you're up there and when people say, tell us how grave and how severe the problem is and all the bad things that are going to happen if we don't pass the legislation. And I don't like to talk that way and don't like to scare people. And so, Ben and I had a interesting challenge. But we got the legislation and the system is stabilized. And we've got a lot of challenges ahead of us as you've pointed out. But you don't get yourself into a situation like this overnight and you don't get yourself out of a situation like this overnight. And the last thing I'd say to you that I'm never going to apologize ever for changing an approach when the facts change. My job is to look at this trust that's been given to me and look at these resources, this $700 billion to invest to protect the system, and use them in a way that I believe they will have the biggest impact for the American people. MR. LEHRER: Mr. Secretary, thank you very much. SEC. PAULSON: Thank you. (END) Labels: bailout, financial crisis, Henry Paulson, Jim Lehrer, NewsHour Dialectic of ExaggerationsThis posting is from D&S collective member and frequent blogger Larry Peterson. To see more of his posts, click here.Yesterday the Dow Jones average had yet another 400-point day (this time downward), as the TARP program underwent the final step of its spectacular unraveling. Today, it has more than reversed direction, as investors bought into energy shares, of all things. From ad-hoc to one-size fits all and back again, it is clear that the policymakers have no clue not only in coming up with constructive ways to deal with the crisis, but even as to where the chief problems lie. In this they are not altogether at fault. A perusal of today's Financial Times indicates several areas that will get in the way of dealing with the clear deflationary trend that is only beginning to exert its full power on simultaneously deleveraging economies (for more on this, see another post of today, of Anatole Kalesky's Times piece, "It's an Emergency: Long-Term Cures Must Wait"). First of all, the TARP program itself: it's gone from being a means to provide a floor under mortgage debt that would, conceivably anyway, revive a still-essential, if overpriced housing market, to a selective recapitalization (sans voting rights) of banks. But the remit of the recap program has come to potentially include so many firms, financial (non-bank, insurance, credit-card, what have you) and even industrial (auto firms), that the effect has been an unprecedented bloating of the Fed's balance sheet, and that without loans making it out into the wider economy at all. So it became necessary to shrink the program. Et voila: no more buying-up of distressed assets, which, after all, is what the program was named for (Troubled Assets Relief Program) in the first place. Now, according to the FT's Krishna Guha, who spoke with Treasury Secretary Henry Paulson, the administration wants to "leverage the public funds," by matching companies' capital infusions from the private sector with taxpayer-supplied funds. The fact such leverage will be taking place amidst a veritable torrent of deleveraging, and in an environment characterized by exceedingly poor consumer demand--and hence profits (unless the government picks up the slack and then some, which will take far more than public leveraging of the few selected winners who might be favored in the current clime)--suggests that the already-dead corpse of the TARP program retains some phantom limbs that still need to be killed off. On top of the giant contradictions and confusion at the heart of policy, which will no doubt continue to erode investors'--not to mention consumers'--confidence, two other likewise twisted themes deserve mention, both of which featured in strangely juxtaposed stories in today's FT. First of all, the International Energy Commission's Nobuo Tanaka said it "would be possible, but very hard" to cut greenhouse emissions such that atmospheric concentrations remain below the critical 450 parts per million threshold (which would be consistent with a rise in global temperatures of an "acceptable" 2 degrees centigrade), and, consequently, that technologies not yet commercially developed would have to be somehow implemented to prevent such a temperature increase. Right next to this ("IEA Warns on Severe Climate Cost of 'Business as Usual Policy") story (I can't find these stories online) was another ("Crash in Oil Exploration Puts World 'on Bad Path")on the continuing decline in oil exploration, which has continued despite the recent, unprecedented spike in oil prices, and which will be enhanced by its equally rapid plunge. So, energy costs look set to continue to be a nuisance, especially if energy retains its status as a commodity prone to bouts of intense speculation (especially if its inverse relationship to the US dollar holds up), even if the ultimate aim is to convert to more efficient technologies: for these probably aren't commercially available yet, and the world economy will need a lot of energy to recover from the economic downturn, which will only exacerbate the environmental degradation, and so on. For global recovery to be sustainable, global trade will need to revive (though this will also contribute mightily to ecological deterioration), especially given the fact that it, too, is now subject to a credit crunch (the drying up of "letters of credit" financing). But another FT story ("Tax Rebates Raised for Chinese Exporters") shows that attempts to revive China's bloated export sector are calling forth protests from trade competitors, just as attempts to stimulate its consumer sector with subsidies did so during the inflationary uptick early this year. No matter how you look at it, and even with the global duel between inflation and deflation settled with a clear victory on the part of the latter, there are enough kinks and remaining complications in key global markets that will hamstring policymakers worldwide, and at every turn, even if the next lot turn out to be a lot more competent, and even responsible, than those who brought us this cataclysmic mess. Labels: bailout, environmental crisis, financial crisis, Financial Times, Henry Paulson, Krishna Guha, Larry Peterson, trade policy Outstanding Analysis by Anatole KaletskyFrom today's Times. Here's a nugget:"The answer, to return to my medical analogy, is that the world was suddenly hit by a second, more dangerous disease in mid-September that was quite distinct from the chronic, but manageable, illness from which it had been suffering for the previous year. Correctly diagnosing these two separate ailments is absolutely crucial because they require different, and to some extent contradictory, cures." For the record, I don't agree that the problems were quite as separate (or as manageable) as Kaletsky makes out before September, but they certainly have become so, and Kaletsky is right on target in pointing to the added complexity that now characterizes the situation. -Larry Peterson From The Times November 13, 2008 Anatole Kaletsky It's an emergency. Long-term cures must wait The world economy is suffering from two quite separate problems. Unfortunately they need contradictory solutions Unemployment is soaring. Property and share prices are collapsing. Gordon Brown's borrowing plans are accused of driving Britain towards bankruptcy. Mervyn King, the Governor of the Bank of England, says that it is impossible to predict when the recession will be over and is pilloried for "losing touch with reality". What is to be done? When a patient is seriously sick--as the British and world economies clearly are at present--it is wise to make a careful diagnosis before prescribing the cure. The first step in this, as the Bank of England prepares for its next interest-rate cut and Mr Brown flies off to Washington for the global economic summit this weekend, is to decide who is qualified to make the diagnosis and who isn't. Should we disqualify all those who failed to foresee the gravity of this crisis--a group that includes Mr King, Mr Brown, Alistair Darling, Alan Greenspan and almost every leading economist and financier in the world with the partial exceptions of Warren Buffett and George Soros? Speaking as a junior member of this confederacy of dunces, my answer is, not surprisingly, an emphatic "no". The reason for continuing to take seriously the views of the many so-called experts wrong-footed by this crisis is, however, more complex, and more enlightening, than the self-justification offered yesterday by Mr King. The Governor excused the Bank's past misjudgments on the grounds that economic performance is inherently unpredictable and "the world changed completely" in mid-September after the Lehman Brothers collapse. This is perfectly true, but not very helpful. The question raised by Mr King's refrain that "the world changed in September" is why this happened and whether this sudden transformation was inevitable. Read the rest of the article Labels: Anatole Kaletsky, bailout, financial crisis, The Times Paulson Changes Tack Yet Again on TARPIt's a good thing (for him) this guy doesn't have to face elections.From Reuters: Treasury backs away from plan to buy bad assets Wed Nov 12, 2008 11:51am EST WASHINGTON (Reuters) Treasury Secretary Henry Paulson on Wednesday said he was backing away from buying troubled mortgage assets using a $700 billion bailout fund, instead favoring a second round of capital injections into financial institutions that would match private funds. Paulson, in an update on the Treasury's financial rescue efforts, said his staff has continued to examine the benefits of purchasing illiquid mortgage assets under the so-called Troubled Asset Relief Program. "Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role, relative to other potential uses of TARP resources," Paulson told a news conference. When Treasury was selling the $700 billion bailout plan to Congress, it initially promoted it as a vehicle that would purchase illiquid mortgage assets from banks and other institutions to cushion potential losses. But it became quickly apparent that setting up such purchases would take time, and Treasury opted for the faster method of injecting capital directly into banks by buying preferred stock. The Treasury has allocated $250 billion of the fund to such purchases so far. Paulson said the Treasury is evaluating a second program that would provide government investments that would match private investments in capital raisings. "In developing a potential matching program, we will also consider capital needs of non-bank financial institutions not eligible for the current capital program," Paulson said. He also said support was needed for the markets that securitize credit outside the banking system for products such as car loans, credit cards and student loans. The Treasury and Federal Reserve are exploring the development of a potential liquidity facility for highly rated AAA asset-backed securities. "We are looking at ways to possibly use the TARP to encourage private investors to come back to this troubled market, by providing them access to federal financing while protecting the taxpayers' investment," Paulson said. (Reporting by David Lawder, Editing by Chizu Nomiyama) Labels: bailout, financial crisis, Henry Paulson, housing bubble, Reuters, TARP program Fannie/Freddie Relief Plan for HomeownersFrom International Herald TribuneFannie Mae and Freddie Mac plan to help U.S. homeowners By Edmund L. Andrews Tuesday, November 11, 2008 WASHINGTON: Fannie Mae and Freddie Mac, the mortgage-finance giants now controlled by the U.S. government, said Tuesday that they planned a broad new effort to reduce the loan burdens of homeowners facing foreclosure. The program will be offered to people who are at least 90 days behind on their payments, according to government officials. The goal will be to modify the mortgage - most likely by reducing the interest rate - so that the monthly loan payment is no higher than 38 percent of the borrower's monthly income. The government plan could help as many as 300,000 families that are delinquent in their mortgage payments, and the costs would ultimately be picked up by taxpayers. But people with knowledge of the details said Tuesday that it was more limited than a program advocated by Sheila Bair, chairman of the U.S. Federal Deposit Insurance Corp. The plan may apply only to so-called conforming mortgages that Fannie Mae and Freddie Mac have guaranteed. While there are trillions of dollars worth of those loans, they are far more conservative than, and generally separate from, the bulk of subprime loans that are at the heart of the nation's foreclosure crisis. The foreclosure rate on loans owned by Fannie Mae is about 1.72 percent. By contrast, the foreclosure rate on adjustable-rate subprime loans is nearly 20 percent, according to the Mortgage Bankers Association. Nevertheless, officials said the new program amounted to the biggest ever government-funded effort to refinance people with substantially less-expensive mortgages in order to keep them in their homes. Read the rest of the article Labels: bailout, Fannie Mae, financial crisis, Freddie Mac, housing bubble, International Herald Tribune Credit Losses To Exceed 10% of US GDP?From Reuters:Credit losses may surpass 10 percent of U.S. GDP Wed Nov 12, 2008 12:07pm EST Reuters By Walden Siew NEW YORK (Reuters) - Credit losses from the financial crisis may exceed even dire estimates of $1.4 trillion, or more than 10 percent of U.S. economic output, according to the chief strategist of research firm CreditSights. Financial and non-financial loss estimates by the International Monetary Fund and World Bank may be too conservative as the economy weakens and companies and consumers focus on repaying debt, Louise Purtle said on Wednesday. "What does life after leverage look like?" asked Purtle, during a credit conference in New York. "We're not prepared for it. The great danger looking into 2009 is being too optimistic." Most indicators suggest no easy fix, she said. U.S. existing home sales indicate there are about 1 million extra homes that can't be sold. Defaults and delinquencies for home loans continue to climb, adding to the 6.9 million foreclosures over the past three years. U.S. consumer confidence is at its worst levels, exceeding pessimism seen during the 1970s, she said. "The impact is rolling from the finance sector into the real economy," said Purtle, who said growth trends point to a 1970s or 1980s-type recession. "We are facing something that is quite different" in terms of the type of recession the U.S. is entering, she said. One aspect of the current crisis is the slump in consumer sentiment that will weigh on any short-term recovery or rise in home sales. A second characteristic is the difficult unraveling of the huge debt binge undertaken by corporations and consumers over the past decade. Purtle said the question of whether credit markets are experiencing a reversion to trend in terms of leverage has already been answered. "The answer is not 'yes we can,' but the answer is "yes we are," she said. (Reporting by Walden Siew; Editing by Tom Hals) Labels: bailout, credit crisis, financial crisis, Reuters Billionaires and the 'Great Recession'From Bob Feldman:Should 'Great Recession' Burden Be Borne By U.S. Billionaires? As more layoffs of U.S. working-class people and U.S. middle-class people are announced by the transnational corporations, the local, state, or federal government agencies and the tax-exempt "non-profit" sector private institutions of the United States in late 2008, it again looks like the burden of a U.S. economic crisis is being placed on the backs of U.S. working-class and middle-class people--instead of on the Super-Rich folks who most profited from the global and U.S. economy during the 1990s. Yet in an authentically democratic society, the economic burden of the "Great Recession of 2008 and 2009" would be borne by the upper-class people who are most able to afford to make some economic sacrifices in their living standards: the U.S. Billionaires and Multi-Millionaires whose daily business activities helped cause the current global economic crisis. In written testimony submitted by the Executive Director of the Foundation for the Advancement of Monetary Education, Lawrence Parks, before the House Banking and Financial Services' Subcommittee on Capital Markets, Securities and GSE's on May 24, 2000, for example, the multi-millionaire "principals" of hedge funds and billionaire George Soros were mentioned as having played a role in contributing to the global economic crisis of the late 1990s and early 21st century. According to the Foundation for the Advancement of Monetary Education's executive director's May 2004 testimony: For several years John Meriwether's Long-Term Capital hedge fund garnered many hundreds of millions, perhaps more than a billion, dollars annually in 'profit' from currency and derivative trading. Consider the 3,000 other hedge funds along with major banks and brokerage firms doing the same thing. All told...I reckon these folks are pulling around $50 billion out of the markets each year. Citibank alone, according to its 1997 annual report, garnered $2 billion from this activity. --bf Labels: bailout, Bob Feldman, financial crisis, George Soros, Lawrence Parks The Worst Is Far from Over (Meredith Whitney)This FT.com interview with Oppenheimer's analyst is well worth listening to. Some of Whitney's observations follow:"For a bank to sell into the Tarp, they are going to have to write down their assets differently from how they are currently carrying it and the capital implement will cause them to gobble up the existing money...so some banks see it as too dear. I don't think a lot of people will use the Tarp because the terms and consequences are going to be too disruptive over the near term." "If you're draining liquidity from the system, you know the losses are going to be worse and that's why it's so significant that the aggregate mortgage market is going to show actual contraction for the first time as you are choking off more and more consumers. The next shoe to drop is the credit card industry." Labels: bailout, financial crisis, Financial Times, Meredith Whitney, Oppenheimer Funds A Financial Meltdown 30 Years in the MakingThis is from the fantastic Labor Notes:By Mark Brenner They break it, and we're stuck with the bill. In less than two weeks Congress lined up $700 billion to bail out the nation's bankers, leaving millions of homeowners on the sidelines, facing foreclosure, bankruptcy, or both. Somehow the argument that "it may seem unfair, but it was necessary" just doesn't cut it. It’s no wonder that the most popular sign at labor's September 25 protest on Wall Street said "Bailout = Bullsh*t." For union members, it sounds all too familiar. Management's perennial argument for concessions—take the cuts or say goodbye to your job—hasn't exactly saved U.S. manufacturing, whether in the 1980s or today. In past recessions, it's been each union for itself, and the companies always came out ahead. Corporations are already using the deep hole they've dug for themselves to demand even more from workers. Teamsters at the Minneapolis Star Tribune bucked the trend, refusing mid-contract concessions on September 10 and prompting newspaper executives to suspend a $9 million payment to their creditors. "The company is asking us to slash our own throats to save their profits," said Kevin Bialon, a 27-year pressman who served on the bargaining committee. "Management made the mistakes and they want workers to pay for it." Read the rest of the article. Labels: bailout, financial crisis, Labor Notes, Mark Brenner Wall Street and the Return of the RepressedFrom TomDispatch.com; hat-tip to Claire for this one.The Specter of Wall Street Wall Street's Comeback as the Place Americans Love to Hate By Steve Fraser Wall Street sits at the eye of a political hurricane. Its enemies converge from every point on the compass. What a stunning turn of events. For well more than half a century Wall Street has enjoyed a remarkable political immunity, but matters were not always like that. Now, with history marching forward in seven league boots, we are about to revisit a time when the Street functioned as the country's lightning rod, attracting its deepest animosities and most passionate desires for economic justice and democracy. For the better part of a century, from the 1870s through the tumultuous years of the Great Depression and the New Deal, the specter of Wall Street haunted the popular political imagination. For Populists it was the "Great Satan," its stranglehold over the country's credit system being held responsible for driving the family farmer to the edge of extinction and beyond. Read the rest of the article. Labels: bailout, financial crisis, Steve Fraser, TomDispatch.com, Wall Street Bailedout Cash for Acquisition, Not LoansJoe Nocera, New York Times business columnist, has a particularly interesting piece today. We all suspect that the money being injected by the Treasury Department in order to recapitalize banks is more likely to fund acquisitions than to ease the credit crisis by getting banks to lend again. In fact, we suspect that was part of the plan all along--to encourage (further) consolidation in the banking industry. Nocera helps confirm these suspicions, first by pointing us to the fine print in the bailout bill, which gives a tax break to banks that acquire other banks:In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. As Mark Landler reported in The New York Times earlier this week, "the government wants not only to stabilize the industry, but also to reshape it." Now they tell us. Nocera also managed to listen in on an employee-only phone conference over at JPMorgan-Chase, in which an executive tipped his hand on how the $25 billion injection the bank just took might be used. When someone asked the obvious question: "Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?", here's how the executive responded: "Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase," he began. "What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop." Joe the journalist observes: Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: at another point in the conference call, the same executive (who I'm not naming because he didn’t know I would be listening in) explained that "loan dollars are down significantly." He added, "We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side." In other words JPMorgan has no intention of turning on the lending spigot. Read the full article. Labels: bailout, financial crisis, Joe Nocera, JP Morgan Chase, recapitalization More Bad News For AutomakersBillionaire investor Kirk Kerkorian is cutting his losses by shedding part of his 6.49% stake in Ford Motor Company, and has announced that he will sell of the remainder of his holdings in the near future. Starting in April, Kerkorian began buying up about $1 billion worth of Ford stock. As of Tuesday, his holdings were worth less than $290 million, a loss of 71%.Like other US automakers, Ford is facing trouble from all sides: tightened consumer spending, a growing distaste for gas-guzzling SUVs, and a frozen credit market. According to the LA Times, Ford and GM are each burning through $1 billion a month in scarce cash just to keep going. Adding another blow to Detroit's desperate hope for a quick fix, the Washington Post reports that US automakers may not see any of the recently approved $25 billion government loan program for more than a year. The emergency loan, the largest government support of the US auto industry since the 1979 Chrysler bailout, was enacted to help Detroit automakers switch to more energy-efficient vehicles. However, carmakers have been counting on it to tide them over until the credit markets begin to thaw. Labels: auto industry, bailout, Chrysler, credit crisis, ford, GM, Kirk Kerkorian CEOs cause meltdown, take 10% cut of bailout"Pay yourself first" goes the personal finance maxim. Apparently the current and former captains of America's failed finance system appear to be heading this all too well. In a nice post by Magnifico at the Daily Kos, 10% of $700 billion bailout to cover Wall Street banker pay and bonuses.The top execs at Morgan Stanley have, in fact, received $10.7 billion in compensation for the year to date, an amount greater than the current net worth of the company. The CEOs defended their action, noting that it is generally considered rude to tip waiters less than 10%, even when the service is bad. Labels: bailout, Daily Kos, financial crisis bailout, Golden Parachutes, Morgan Stanley The Wall Street Coup (Ismael Hossein-zadeh)From the fantastic MRZine.The Wall Street Coup and the Bailout Scam by Ismael Hossein-zadeh The "rescue" plan is not only fraudulent, it is also the wrong medicine for the ailing economy. The Wall Street took the US (and the world) hostage and extracted a heavy ransom. But while the enormous ransom was successfully extracted, there are no guarantees that the hostages will be set free from the shackles of trickle-down economics. On the contrary, there are strong indications that the fraudulent (and perhaps criminal) bailout may turn the current crisis into a protracted agony of a long-bleeding economic depression. Why the Bailout Scam Is More Likely to Fail than to Succeed The bailout scam is doomed to fail because it avoids diagnosis and dodges the heart of the problem: the inability of more than five million homeowners to pay their fraudulently inflated mortgage obligations. Instead of trying to salvage the threatened real assets or homes and save their owners from becoming homeless, the bailout scheme is trying to salvage the phony or fictitious assets of Wall Street gamblers and reward their sins by sending taxpayers' good money after the gamblers' bad money. It focuses on the wrong end of the problem. The apparent rationale for the bailout plan is that, while the injection of tax payers' money into the Wall Street casino may not be fair, it is a necessary evil that will free the "troubled assets" and create liquidity in the financial markets, thereby triggering a much-needed wave of lending, borrowing, and expansion. There are at least five major problems with this argument. Read the rest of the article. Labels: bailout, financial crisis, Ismael Hossein-zadeh, MRZine, Wall Street Conservative Mag: End of Laissez-Faire FinanceA tip from our friend Ian Fletcher:Here's a good article in which the magazine The American Conservative essentially calls for an end to laissez-faire finance, not just a patch to fix current problems. The author is Eamonn Fingleton, a Tokyo-based Irish financial journalist who is one of the most trenchant non-socialist critics of capitalism alive. His book Blindside is probably the most important work of economics you've never heard of. Best Regards, Ian Fletcher Labels: American Conservative, bailout, Eamonn Fingleton, financial crisis, Ian Fletcher Beware BanktronJust when you thought it was safe to go back to your ATM... Labels: bailout, financial crisis, sinfest.net It feels good to be an insurance exec too!Executives at insurance behemoth AIG must have been really stressed after getting an $85 billion bailout from the government. That seems to be the logical explanation for why executives at the failed company held a week-long retreat at the luxury St. Regis Resort in Monarch Beach, CA right after the Treasury agreed to stop the company from imploding.Congress's chief curmudgeon, Henry Waxman (D-CA), chided the executives for running up a tab including $200,000 for rooms, $150,000 for meals, and $23,000 for the spa. News reports did not indicate whether anyone took advantage of the resort's "Pamper Your Pooch" package. The package consists of an overnight stay in a Resort view guestroom, a personalized welcome letter to the pet, the exclusive St. Regis doggy bed, pet amenities including “Sniffany & Co.”, “Bark Jacobs”, “Dog Perignon”, or “Jimmy Chew” toys, personalized silver food and water bowls, an array of treats, biscuits, and bones, along with an issue of Hollywood Dog! Pricing for this package begins at $545 per night. (two-night minimum required) As they did yesterday with ex-Lehman Brothers CEO Richard S. Fuld Jr., Waxman and others (seemingly in need of some R&R themselves) taking a careful look at thousands of documents from the failed insurer and raising concerns about what appear to be hastily-crafted golden parachutes for top company executives while the company was in freefall: According to the Washington Post:
But the board agreed to ignore the losses from the financial products division and gave Sullivan a cash bonus of over $5 million. The board also approved a new compensation contract for Sullivan that gave him a golden parachute of $15 million, Waxman said. Joseph Cassano, the executive in charge of the company's troubled financial products division, received more than $280 million over the last eight years, Waxman said. Even after he was terminated in February as his investments turned sour, the company allowed him to keep up to $34 million in unvested bonuses and put him on a $1 million-a-month retainer. He continues to receive $1 million a month, Waxman said. Labels: AIG, bailout, financial crisis bailout, Golden Parachutes, Henry Waxman, Lehman Brothers, Richard Fuld Jr, St. Regis Resort, Washington Post Damn It Feels Good to Be a Banksta!Hat-tip to Jordan Hayes on lbo-talk for this gem. See the whole cartoon. Labels: bailout, financial crisis Why Fed Policy is Failing (Tom Palley)The Federal Reserve and U.S. Treasury continue to fail in their attempts to stabilize the U.S. financial system. That is due to failure to grasp the nature of the problem, which concerns the parallel banking system. Rescue policy remains stuck in the past, focused on the traditional banking system while ignoring the parallel unregulated system that was permitted to develop over the past twenty-five years.This parallel banking system financed vast amounts of real estate lending and consumer borrowing. The system (which included the likes of Thornburg Mortgage, Bear Stearns and Lehman Brothers) made loans but had no deposit base. Instead, it relied on roll-over funding obtained through money markets. Additionally, it operated with little capital and extremely high leverage ratios, which was critical to its tremendous profitability. Finally, loans were often securitized and traded among financial firms. Read the rest of the article. Labels: bailout, financial crisis, The Fed, Thomas Palley Perdition PostponedThis posting is from D&S collective member and frequent blogger Larry Peterson. To see more of his posts, click here.Stocks worldwide suffered huge losses again Monday, after the worst week for US shares since September of 2001. The Dow fell below the psychologically-significant level of 10,000 (as did the Nikkei in Japan), but the final number was a vast improvement on the 700 odd point loss the index showed earlier in the day, with the index closing a mere 389 points down. And it was probably only the prospect that the Fed would be forced to cut interest rates perhaps by half a percentage point in an emergency (i.e. before the scheduled meeting of the Federal Reserve Board of Governors late in the month) that prevented the slide from eclipsing a record slide--which it did only last week. In addition, oil dropped to about $85 a barrel, a level unseen for a year. Clearly the markets are not impressed by the passage of the Treasury plan, passed on Friday, to buy the toxic assets on the books of the banks: instead, they fear worldwide recession, one thing (amongst many) the Treasury plan is singularly ill-equipped to deal with. Meanwhile, bond yields are falling, but, as cash continues to be hoarded by banks, borrowing costs continue their relentless upward advance. It is clear that markets are no longer anywhere near as concerned about the toxic assets on the books of the banks as they are about the possibility--which increases by the day, so long as the crisis remains in its seemingly terminal phase--that bank and even shadow-bank counterparties may go bust before they can meet their short-term obligations. The banks, faced with rapidly increasing costs of capital (and insurance against default), shareholder flight, and paying off agreed emergency credit lines of firms who can't access funds on the wholesale market (due to the jamming up of the commercial paper market), are looking more and more desperately to governments to guarantee deposits beyond the levels they already do. This, of course, was one of the central points of the Troubled Asset Relief Program, which increased deposit insurance in the US from $100,000 to $250,000, and of regulations in the US which guaranteed money market funds, which, though considered risk-free, bore no government guarantee. In Europe, however, Ireland's move to guarantee the deposits of all depositors of its six largest banks has given rise to a kind of race to the bottom, with the initially reluctant Germans now providing a like guarantee, and the positively mortified British poised to do the same at any moment. In the end, though, it seems clearer and clearer that, only a blanket public guarantee of all financial liabilities, even those held by hedge funds and their ilk, can stop the downward spiral. But it's hard to imagine, after the drama of last week, that such an outcome will be politically feasible. Labels: bailout, financial crisis, Larry Peterson Born-Again Democracy (William Greider)From the current issue of The Nation magazine:Comment By William Greider Our country is at a rare and dangerous juncture. The old order is crumbling, and virtually all the centers of power that govern us have been discredited by events. The president is irrelevant, weak and unbelievable, even to his own party. The Democratic majority controlling Congress is stalled by its own shortcomings. The treasury secretary, given his arrogant approach to the financial crisis, is not to be trusted as a steward of the public interest. Nor are the conservative Federal Reserve and its chairman. The private power of Wall Street is utterly disgraced and desperate. This condition of vulnerability is sure to prevail for at least the next three months, until a new president and new Congress take office. In the meantime, the governing elites are clinging to the old order, trying to salvage it by delivering massive amounts of relief from taxpayers to the failing financial institutions. The American people correctly see this approach as a historic swindle that rewards the villains at the expense of the victims. A Nevada real estate broker asked the Washington Post, "Instead of having a bailout, why don't we have indictments?" Indictments can wait, along with fundamental reforms. Right now the country needs to confront the fire raging through the financial system and engulfing people and productive assets in the real economy. Aroused and angry, the public, for a change, can play a decisive role in the political arena, as it did when the House rejected the bailout package. That shock to the system was valuable therapy. People can drive politicians to begin facing reality and to develop a more forceful strategy for national recovery, an approach that serves the country as a whole and has a far better chance of succeeding. The sooner our leaders recognize that the old order is gone, the sooner Americans can begin reconstructing a more viable and equitable economy. The calamitous unwinding of financial institutions in recent months has an ominous resemblance to events that unfolded after the stock market crash of 1929, when three years of recurring waves of bank failures and economic contraction led to massive suffering. The government, led by the Federal Reserve, was scandalously derelict during that crisis. This time Washington has reacted more aggressively but still hasn't found a strategy to stabilize finance or reverse the gathering recession. Read the rest of the article. Labels: bailout, financial crisis, The Nation, William Greider Roll Over or DieThis posting is from D&S collective member and frequent blogger Larry Peterson. To see more of his posts, click here.Well, yet another apocalyptic week has passed on the markets, and the global financial system still appears to have enough life in it to allow for the possibility of more of the same in the weeks ahead. The week has ended with Congress passing, and President Bush signing, the revised revision of the Troubled Asset Relief Program. The bill's passage, however, prospects of which had sustained market advances Friday, could not prevent significant falls on all major US indices by the closing bell on Friday. This is because of two things: first, horrible economic data continued to pour in, with the all-important monthly jobs report for September showing a loss of some 150,000 jobs, far more than was forecast. On top of this the US service sector put in a poor, if slightly positive performance, magnifying concerns about severe economic slowdown given the horrific reports on manufacturing activity and consumer spending that came out earlier in the week. Second and more significantly, though, it is becoming clear that investors are more concerned about the the breakdown of the commercial paper and interbank markets than they are about the various fixes proposed to get them going again. As well they might be. Commercial paper basically consists of short-term bonds issued by companies to meet working capital outlays, including payroll and rent. These loans tend to be for very short periods, and require frequent rollovers, which was no problem in the days before banks started hoarding cash to cover potential losses they couldn't even trace in their books, and money market funds started to become suspect (inasmuch as they invested in some other short-term securities, like, you guessed it, subprime loans, and started to "break the buck", or hold less than they took in from investors). Now, of course, these problems are so great that even huge multinational firms, like GE, are having trouble raising money in the commercial paper market. If this continues, even for a short time, lots of vendors--and even possibly employees--will not be able to be paid. And while GE can borrow for very short periods, other smaller firms are finding it virtually impossible to raise money at all. And this is for working capital requirements: this point cannot be emphasised enough. If this thing shuts down and stays down, the macroeconomic impact will be vast, horrific and extremely sudden. Needless to say, the, the bill's passage didn't do much to sooth the CP market, or the interbank market (which deals with banks lending amongst themselves)--the latter rate actually rose. The markets clearly think the TARP package is too little, too late, at least right now: we'll see what happens next week. But the situation right now is extremely dire, and there isn't much time to get it sorted before, as I noted above, the propect of lots of ordinary people not gettting paid will become a real possibility. And consumer spending, which accounts for a rather bloated 70% of the US economy, is already hitting the skids, and will, regardless of what happens in the CP market, probably take a big hit due to increasing credit card defaults (and that's on top of the bad mortgage situation...). Oh-before I forget: Governor Schwarzenneger of California, the largest state economy in the country (and still fifth largest in the world?), has informed Washington that California, which is one of the states in which the subprime mania really got out of control, of $7 billion within weeks. Finally, to end this post--and I could keep going on about alot of other things), the situation with hedge funds is contuing to deterioirate. Hedge funds has a horrible September, and while few of us have any sympathy for them class-wise, the fact that they are being forced to liquidate their positions so quickly to pay off investors who are heading for the exits (remember, these extremely wealthy investors or well-endowed pension and other--including other hedge--funds pay exorbitant fees and expect massive outperfomrance, and will not tolerate for long the kind of losses so many of the funds are now suffering) means that equities, particularly in financial firms, will continue to be pressured. And that means they'll continue to hoard cash, regardless of the prospect of being able to sell their dud assets to the Fed. This thing has taken on a life of its own, like the proverbial monster. Labels: bailout, financial crisis, Larry Peterson Is This the End of US Capitalism? (Gerald Friedman)This is the response that Gerald Friedman, of the UMass-Amherst econ department and the Center for Popular Economics, gave to Al Jazeera English in response to the qu |
