Corbett B. Daly

On Monday, Nobel-laureate Paul Krugman wrote that Treasury Secretary Timothy Geithner's plan was not only doomed to fail, it was, in fact, filling him with despair.

But life can't be all despair for the Princeton prof. Earlier this month, an enterprising songwriter named Jonathan Mann wrote a catchy little diddy wondering why the New York Times columnist wasn't in the corner office at 1500 Pennsylvania Avenue.

Tell us what you think. Should Obama dump Tim and put in Paul?

Need a job? AIG needs workers and the money is good.

American International Group CEO Edward Liddy was under the klieg lights Wednesday for paying $165 million dollars in retention bonuses to employees who are "winding down" the company's notorious Financial Products division, known as AIG FP.

Liddy said he knew the company would be attacked for paying the bonuses, but he decided it would be better to pay them because the firm needed workers who understood the complex transactions on AIG FP's "book" to make sure the contracts could be closed out.

Many lawmakers wanted AIG to fire everybody working for AIG FP and hire new ones to close the AIG FP unit.  But Liddy said it wasn't that easy.

"People don't want to work at AIG. They are not cheap if you try to get them," Liddy told the outraged members of Congress.

So Liddy decided to keep the existing employees and pay them extra money for staying at the firm instead of walking out the door.

"If we keep those people, we have a higher probabilty of running this book down and not costing the American taxpayer more" than the $78 billion already dispensed to AIG from Uncle Sam, Liddy told the panel.

The pols weren't buying it.

"Can you understand the American people might think you paid way too much to get that bargain?" one lawmaker asked incredulously.

 (Reuters photo by Kevin Lamarque)

In the late 1990s, when the Asian Financial Crisis was in full swing, Time Magazine dubbed then Treasury Secretary Robert Rubin, his deputy Lawrence Summers and then Federal Reserve Board Chairman Alan Greenspan as "The Committee to Save the World."

On Saturday, a new committee convened in Washington, only this time the crisis is global, and now there are 20 members. Leaders from the 20 richest countries came together and backed a 10-page plan for the global economic crisis, agreeing on the need for measures to spur growth, better financial market rules and more say for emerging countries.

Sexy stuff, right?

Here's a sample paragraph:

"Regulators should develop enhanced guidance to strengthen banks' risk management practices, in line with international best practices, and should encourage financial firms to reexamine their internal controls and implement strengthened policies for sound risk management. * Regulators should develop and implement procedures to ensure that financial firms implement policies to better manage liquidity risk, including by creating strong liquidity cushions. * Supervisors should ensure that financial firms develop processes that provide for timely and comprehensive measurement of risk concentrations and large counterparty risk positions across products and geographies. * Firms should reassess their risk management models to guard against stress and report to supervisors on their efforts. * The Basel Committee should study the need for and help develop firms' new stress testing models, as appropriate. * Financial institutions should have clear internal incentives to promote stability, and action needs to be taken, through voluntary effort or regulatory action, to avoid compensation schemes which reward excessive short-term returns or risk taking. * Banks should exercise effective risk management and due diligence over structured products and securitization."

Eyes glazed over yet?

But don't discount it, because if it works, it could help get us all out of the worst global economic situation since the Great Depression.

As one senior administration official told reporters at the White House, "this is the stuff of financial markets reform."

"A number of these may sound very technical, or very mundane. I can assure you they are not," he added.

This is the stuff that could get your house price back to where it was, your ability to get a loan, and your 401(k) to the point where you might want to open the envelope.

Another official pleaded with reporters to focus on the specifics.

"This is my life, I've been living this stuff. I want you to get all excited about it," he said.

It may not be exciting, but important is another matter. Tell us what you think of the plan.

Governments threatening to cap the pay of bank bosses in the wake of the financial market crisis might be better off linking their earnings to the more humble salaries of the central bankers now cleaning up the mess.

Politicians from Berlin to Canberra are up in arms about the multi-million dollar bonuses and lavish perks earned by bank executives now that the high-risk debt they allowed to proliferate has brought the global financial system to its knees and forced taxpayers to pledge an estimated $3.2 trillion to fix the mess.

Germany plans to block access to its bank rescue scheme to banks whose executives earn more than 500,000 euros ($673,800) a year -- more than the amount earned by the world's top two central bankers put together.

U.S. Federal Reserve chief Ben Bernanke's $191,300 a year looks like loose change when compared with $22 million bonus pocketed by Lehman's fallen head Dick Fuld in March or the 14 million euros earned by Deutsche Bank CEO Josef Ackermann last year, even if he and the rest of the Deutsche Bank management team are foregoing their bonuses this time around as a mark of respect.

European Central Bank chief Jean-Claude Trichet is only slightly better off with 345,252 euros a year. Bank of England governor Mervyn King earns a mere 275,340 pounds a year or roughly 355,000 euros, while the 35.78 million yen salary of Bank of Japan Governor Masaaki Shirakawa is worth about 265,400 euros.

Democratic presidential nominee Barack Obama and Republican nominee John McCain meet tonight at Hofstra University in New York, their final scheduled appearance together before election day.

The third encounter was meant to be the debate to focus the economy and domestic issues. But the economy couldn't wait.

The $700 billion government bailout was the first topic at the almost-didn't-happen-first-debate with PBS moderator Jim Lehrer.

Tom Brokaw of NBC News selected his first question from Allen Shaffer, who asked about on the economic downturn and retirees at the Town Hall meeting.

CBS anchor Bob Schieffer moderates tonight's debate, hours after the Dow Jones Industrial Average and the benchmark S&P 500 suffered their worst one-day percentage drops since the 1987 stock market crash .

And Federal Reserve Board Chairman Ben Bernanke told a group of economists in New York that policymakers may need to use their regulatory authorities to predict and curtail asset bubbles in the future so that we don't see such wild swings in the economy.

What would you ask if you were in Schieffer's seat?

The U.S. Treasury Department expects to name asset managers for its $700 billion financial rescue plan within days and is working "around the clock" to thaw credit markets, the program's new chief, Neel Kashkari , announced Monday.They've tapped investment consultants Ennis Knupp and lawyers Simpson Thatcher to help out. Reuben Jeffrey, a State Department official, is going to be interim chief investment officer while chief financial officer for the Office of the Comptroller of the Currency, Tom Bloom, will serve as the program's CFO.The Treasury's Troubled Asset Relief Program, known as TARP, also has provisions for limiting executive pay packages.Treasury Secretary Henry Paulson (L) and Neel KashkariWhat advice would you give to officials at the Treasury?If you want to read Kashkari's speech in its entirety, click here

Josef Ackermann, Chairman of the Institute of International Finance and the head of Deutsche Bank, says he's confident leaders from around the world will take needed steps to bringing normality to the world's struggling financial system.

"I am pretty sure that the governments will guarantee parts of the whole sale funding and that should actually tell people that there is no risk and you don't lose money while investing in other banks and I think that is important," the head of Germany's largest bank said Sunday.

John Taylor, former Treasury Undersecretary of International Affairs in the Bush administration, says more countries need to be involved in decision making about the financial system, but "we already have the G20," referring to the Group of Twenty leading economies.

Italian Finance Minister Giulio Tremonti says Italy will push for broadening membership in the Group of Seven when it takes over leading the rich nations' club next year.

Josef Ackermann , the top dog at the association representing the world's multinational financial institutions, had just finished taking questions from reporters at a press conference for more than an hour.

As he stepped off the stage, dozens of journos, including yours truly, surrounded him.

So many, in fact, he didn't know who to answer:

Finally, Ackermann, who's also the head of Germany's largest bank, was asked if he was confident Germany would come through with a rescue package of its own.

Click to see what he had to say:

John Taylor, former Treasury Undersecretary for International Affairs in the Bush administration, speaks with Thomson Reuters Markets Washington Bureau Chief Corbett B. Daly about Republican White House hopeful John McCain's $300 billion plan to help struggling homeowners.