Top of the News: Former Washington Gov. Gary Locke’s confirmation hearing today before the Senate Committee on Commerce, Science and Transportation was a bit of a snoozer, unless you were the most devoted of policy geeks. A good thing, too. Locke is going for a position that has been snake-bit for President Obama, with his two previous choices, Bill Richardson and Judd Gregg, pulling out. And how do you compete with the other show in the building: The grilling of the AIG chief executive?
The hearing did showcase the range of Commerce’s responsibilities, from the Census and Internet security, to healthy oceans and, of course, trade. Locke was soothing about being a “fair trader” while also being for “free trade.” Hmmmmmm. Can you have it both ways in a world with rising nations gaming the system to be export powerhouses, and American living standards struggling against the pull of workers in developing nations who will work for a few dollars a day?
The trade picture darkened, with a new World Bank report cutting China’s growth forecast to 6.5 percent this year vs. the Chinese projection of 8 percent. That difference can be substantial in a nation whose growth is essential to the world economy — including traffic at Washington ports and business for Washington companies — and its own internal stability. Inflows of private capital have also slowed sharply into Asia as banks have cut lending, investors have de-leveraged and become more risk averse.
Mid-Week Nibbles: The suburban neighborhood of Hunts Point comes in at No. 18 in Business Week’s top 20 wealthiest ZIP codes. Average income: $280,525. This is admittedly down-market from No. 1 Brookville, N.Y., where the average income is $328,404. Most of these top areas are concentrated around New York. Wonder how many have AIG executives hiding out there?
Richard Florida raises a thoughtful question about the bailout on his blog. Are these measures saving us from a Depression? We’re certainly having to pay for the huge distortions and misallocations caused by the bubbles. “On the other hand, there is the classic question: What better and more effective things might have been done with these trillions?” China, for example, is investing much more of its stim in becoming a more potent competitor, including with more research and better infrastructure, including efficient rail.
U.S. credit-card defaults have reached a 20-year high. The biggest losers: American Express and Citigroup. Add this to the vortex hitting Americans: falling house values; foreclosures; decimated 401(k)s; rising health-care costs, if one can obtain it; high debt levels; low savings, and layoffs or the threat of layoffs.
Today’s Econ Haiku:
We paid to retain
Some took the money and ran
And we think they’re dumb