James Pethokoukis

Henry Kaufman: Break up the banks

November 11, 2009

I think Henry Kaufman (in the WSJ) accurately outlines the public policy choice when it comes to financial reform: heavily regulated monster banks vs. a more decentralized, somewhat less regulated financial system TBTF creates a need for heavy regulation and less economic efficiency.

Dodd financial reform bill underestimates populist anger

November 11, 2009

The instant analysis on Senator Christopher Dodd’s aggressive financial reform plan is that it’s more about getting him re-elected than getting a bill through the Senate.

Obama’s lost year

November 5, 2009

Rahm Emanuel famously said that you “never want a serious crisis to go to waste.”  And certainly the sense of crisis earlier in the year helped the White House pass the $787 billion stimulus package. But where stands the rest of the Obama legislative agenda?

Speaking up for big banks

November 3, 2009

Former Bush WH deputy press secretary Tony Fratto gives it his best shot:

Over the decades, large, complex financial institutions —big banks— have been unquestionably beneficial to the U.S. economy, and to the global economy. Big banks efficiently facilitate cross-border trade and investment on a global scale, resulting in benefits that have consistently accrued to consumers and improved standards of living for people in all markets.

GMAC, CIT provide more reasons to roll up TARP

November 2, 2009

Treasury Secretary Timothy Geithner has the option of extending his authority to spend TARP money until October 2010. Congress should forcefully discourage him from doing so, even if it means stripping that authority.

Wall Street pay continues to be the Great Distraction

October 27, 2009

Again, all this focus on Wall Street pay distracts from more important issues.  Gary Becker summarizes:

Wall Street pay is the Great Distraction of the Great Recession

October 22, 2009

If I made of list of factors contributing to the recession and financial crisis, Wall Street pay would come in around 6th, after 1) easy monetary policy; 2) TBTF; 3) US housing policy; 4) global savings glut/China labor shock; 5) Wall Street group think.  Yet pay is where so much energy is being directed at this issue thanks to its populist appeal. America hates TARP so Washington needs to make amends by hammering execs at TARP recipients.

Winning the fight for the financial crisis narrative

October 21, 2009

In an FT piece, Daniel Yergin lists the many competing explanations for the financial crisis: 1) too much leverage; 2) rapid financial innovation; 3) wrongheaded or incomplete regulation; 4) government home ownership policies; 5) high US indebtedness; 6) too much greediness, not enough fear; 7) bubblicious easy credit; 8) hubris from years of global growth; 9) global securitization as a transmitter of crisis; 10) the oil spike; 11) intrinsic evil of capitalism.

Paul Volcker: Obama’s forgotten man

October 21, 2009

The most devastating part of the NYTimes piece on Paul Volcker’s lack of influence on WH economic policy comes into the very last sentence of the piece:

Is Geithner Wall Street’s man in Washington?

October 8, 2009

Yes, the treasury secretary talks to bankers, says the Associated Press:

The calendars, obtained by the AP under the Freedom of Information Act, offer a behind-the-scenes glimpse at the continued influence of three companies — Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. — whose executives can reach the nation’s most powerful economic official on the phone, sometimes several times a day.