Top of the News: President Obama told 60 Minutes that he “did not run for office to be helping out a bunch of fat cat bankers on Wall Street.” Funny, could have fooled us. Matt Taibbi of Rolling Stone details the incestuous ties between Wall Street and the administration is an incendiary, must-read.
Obama wanted to do a Herbert Hoover this morning and get the lords of finance to the White House to talk them into reform. It didn’t quite work out. The CEOs of Goldman Sachs, Morgan Stanley and the chairman of Citigroup couldn’t attend because the weather grounded their jets in New York.
What? These brilliant minds that must be so lavishly compensated couldn’t figure out they could take Amtrak’s Acela to D.C.? Citigroup’s CEO Vikram Pandit was “busy negotiating a deal,” so stiffed the president. (Apparently JPMorgan Chase CEO Jamie Dimon figured out how to get to D.C., once again showing he’s the smartest boy in class.)
Meanwhile, a much watered-down financial regulation measure has passed the House, and will no doubt be Liebermaned in the Senate. It does little to address systemic risk, fully regulate derivatives, separate the investment banking casino from commercial banks, or break up the too-big-to-fail institutions now.
In the first three quarters of this year, the “financial services” sector has spent $344 million on lobbying to protect its interests.
One might say the president is writing checks he can’t cash. Those fat cats control the accounts. Even as unemployment continues at a crisis level and the real economy moves, at best, sideways, the banks have been saved. By you. Until their next crisis, waiting in the wings with old toxic assets, new risky “trading activity” and derivatives — and the certainty that the taxpayers will once again cover the bets.
The Back Story: My colleague Drew DeSilver looks at the jobs forecast for Washington state and finds a decidedly murky outlook. Washington may be better positioned for growth early next year — but not all economists agree.
The simple answer is that nobody knows because we’ve never gone through a recession like this before, so deep, systemic and coming after years of anemic national job growth and deindustrialization. The Great Depression is a limited lesson because the economy has changed so much since then — same thing for the so-called Boeing recession of the 1970s.
In addition to being held back by limited credit for businesses and the consumer pullback, hiring faces other obstacles. Among them: globalization that has created two previous “jobless recoveries” after the most recent previous recessions; companies restructuring to become even more lean; the anemic nature of the recovery; the lack of major spending to invest in infrastructure and new industries, and the huge hole nationally that we have to fill in terms of jobs. The American economy has no more jobs now than in 1999, even though the population has increased.
My guess: Washington’s diverse, global and high-quality economy is better positioned to add jobs — depending on the sector — than that of most states. But unless the picture changes radically, the growth will be slow and halting.
Today’s Econ Haiku:
Tiger gets slammed; the bankers
Are still on the course