What we're missing beyond AIG
Edward Liddy, chairman and CEO of the American International Group, testifies during a House Financial Services Committee hearing on Capitol Hill in Washington, D.C.
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Kai Ryssdal: Today might have been the most high-profile hearing the House Financial Services subcommittee on capital markets ever did have. But when you've got the guy at the center of the storm in the witness chair that does tend to focus the mind. AIG CEO Ed Liddy did what he could both to defend the bonuses and to dodge Congressional anger.
But away from the television cameras and political point-scoring, there is still that matter of a multi-trillion-dollar financial crisis to deal with. From Washington, Marketplace's Steve Henn reports now on worries we're taking our eye off the ball.
STEVE HENN: Collectively, Americans have lost more than $6 trillion in housing wealth in two years and more than $8 trillion in the stock markets. Our largest banks are teetering.
And Dean Baker at the Center for Economic Policy Research says before this is over we may need another stimulus package plus more aid for banks.
DEAN BAKER: Clearly we are looking at a much bigger bailout than we've seen to date, and it could involve hundreds of billions, and quite possibly over a trillion dollars of the public's money.
But Simon Johnson at MIT says what happened over the weekend at AIG could make that impossible.
SIMON JOHNSON: Good luck persuading Congress. I think it's over. I don't think there is any more money available for bailouts of any kind.
If Congress doesn't appropriate the money to save the banks, the Fed may have to print it, even if that means inflation.
JOHNSON: My greatest fear is the consequence of that -- that we get too much inflation now, that inflation runs out of control.
And it's not just the U.S. banking system that needs help.
C. Fred Bergsten: This is a global crisis.
C. Fred Bergsten at the Peterson Institute says it requires a global response. He says Europe and some other countries needs to spend more on stimulus packages at home and then join with the U.S.
Bergsten: To provide lots of money for the International Monetary Fund to help poorer rescue poorer countries who are themselves being clobbered by the crisis. That's very much in our interest.
Because developing countries account for half the global economy. But more foreign aid isn't likely to top Congress's to-do list.
In Washington, I'm Steve Henn for Marketplace.