• Monday, January 19th, 2009
A roundup of economic news from around the Web.
Bank of America’s Deal: Writing on his Basline Scenario blog, Simon Johnson looks at the government’s deal to aid Bank of America and remains critical of the government’s approach. “This is more of the same incoherent Policy By Deal that has failed to stabilize the financial system, while also greatly annoying pretty much everyone on Capitol Hill. Hopefully, it is the last gasp of the Paulson strategy and the Obama team will shortly unveil a more systematic approach to bank recapitalization; it would be a major mistake to continue in the Citi II/BoA II vein.†Separately, the Journal’s David Wessel discusses how well TARP is working on NPR.
Tax Cuts and Stimulus: Writing for the Financial Times, Joseph Stiglitz says tax cuts shouldn’t be part of the stimulus. “We are in uncharted territory in this crisis. But household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment. The one tax cut that should be included is a temporary incremental investment tax credit; it provides a big bang for the buck, encouraging companies to invest now when the economy needs the spending. Increased investments in infrastructure, education and technology, relief to states, and help to the unemployed need pride of place.â€
Compiled by Phil Izzo
Category: Economy
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Tags: bank of america, big bang, business tax, david wessel, economic news, financial times, incremental investment, investment tax credit, izzo, joseph stiglitz, last gasp, pride of place, recapitalization, s david, secondary sources, simon johnson, stimulus, systematic approach, uncharted territory, web bank |
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• Friday, November 21st, 2008
A roundup of economic news from around the Web.
Lame-Duck Economy: In the New York Times, Paul Krugman worries about a power vacuum at the height of the crisis. “How much can go wrong in the two months before Mr. Obama takes the oath of office? The answer, unfortunately, is: a lot. Consider how much darker the economic picture has grown since the failure of Lehman Brothers, which took place just over two months ago. And the pace of deterioration seems to be accelerating.â€
Treasury Borrowing for Free: On his blog, Brad Setser says that it’s not a good thing that the Treasury can borrow for free right now. “Treasury yields aren’t hard to calculate. But they are still my favorite indicators of the scale of the current crisis. The fact that so many are willing to lend so much to the US Treasury for so little is a clear indicator of a lack of confidence in other financial asset. Dr. Krugman is right. Market analysts are more or less saying the same thing: ‘“Where the credit markets are trading, it’s all but implying a 1929 scenario,†said Joe Balestrino, fixed income strategist at Federated Investors’â€
Give Us the Money: On his maverecon blog, William Buiter puts his tongue in his cheek and says that his small company is going to apply to become a bank. “If we cannot get bank holding company status for our company, we will fly our (separate) private jets to Washington DC to appeal for congressional support for our business as a quintessential heartland enterprise. The very fact that we are not systemically important makes us systemically important. The reason is that if we can get money from the U.S. government, anyone can. And if anyone can, there is no longer any reason for fear, excessive caution and pessimism. Consumers will spend again. Banks will lend again. Companies will invest again. Just give us the money.â€
Compiled by Phil Izzo
Category: Economy
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Tags: bank holding company, brad setser, buiter, congressional support, credit markets, federated investors, financial asset, izzo, lack of confidence, lehman brothers, market analysts, oath of office, obama, paul krugman, pessimism, power vacuum, private jets, secondary sources, treasury yields, us treasury |
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