Top of the News: Nevermind that he’s 48 years old, Treasury Secretary Tim Geithner looks like the kid you wanted to beat up in high school — even if you were a peaceful nerd who couldn’t even get a prom date. If only that were his biggest problem.
Geithner is testifying before Congress today on the bailout, specifically the government allowing AIG’s big-bank “counterparties” to be made whole on their risky swindles — oh, I mean “innovative financial contracts” — thanks to taxpayer money. So far, the kid is holding his own, defending, denying and deflecting.
Geithner was president of the New York Fed during the panic, one of the three most important players in the rescue, along with Hank Paulson and Ben Bernanke. It stretches credulity for him to claim ignorance about specifics of the AIG talks, especially about why no effort was made to negotiate for lower payouts to the banks, as was being done in private deals. Worse, the feds tried to keep the backscratch between D.C. and Goldman Sachs et al secret.
How long before he’s thrown under the Change Bus: six weeks or six months?
The Midweek Briefing: President Obama’s problems aren’t just with the middle class. The super-rich, who abandoned the GOP to vote for him, are turning on him, reports Jamie Johnson in Vanity Fair. “…the wealthy are swiftly abandoning him and returning to more familiar political ground. His clumsy handling of health-care reform, his failure to install a candidate of choice in Ted Kennedy’s former Senate seat, and his escalating criticism of bankers all seem to be pushing affluent voters back to their conservative roots.”
— Harvard’s Umair Haque does me one better on the really, really bad idea of the Obama spending freeze. “A budget freeze in the middle of a (curiously depression-like) recession? That’s about as smart an idea, economically speaking, as gulping down a bucketful of magma just because you’re thirsty. It’s even worse than Hoovernomics, because we have, today, the benefit of hindsight.”
— Employers held 1,726 mass layoffs nationally in December, according to the federal Bureau of Labor Statistics. That affected 153,127 workers. But this only includes layoffs of more than 50, where notice must be given. And, of course, (fingers crossed) it doesn’t include new jobs created.
— Too Bad for Cascadia Dept.: It looks like Florida will be selected for the nation’s first high-speed rail line. What that means in a time of “spending freezes” and GOP ascendancy is another thing. Just build one well. The public will be clamoring for more. Too bad Northwest officials were asleep.
Today’s Econ Haiku:
Will Apple’s tablet
Be swallowed just like candy?
The past says, maybe