Happy Friday. Here are a few things that have caught my eye so far:
We’re still losing jobs (PBS NewsHour)
The U.S. unemployment rate remained steady at 10 percent for the second straight month, according to a report from the Labor Department. Although that might signal some economic stability, U.S. employers cut 85,000 jobs cut in December, suggesting that broader recovery remains further out on the horizon.
That was just the tip of the AIG iceberg (Huffington Post) Following up on yesterday’s post about the uncovered AIG emails, it doesn’t look like this one’s going away:
As such, today we are renewing our request for the full public disclosure of all AIG documents. We believe the government should put these documents on-line, thereby establishing an open-source investigation that would allow journalists and citizens the opportunity to piece together the story of what happened at AIG and in so doing more fully understand what happened in the broader financial collapse. AIG — and more specifically its credit-default swaps exposure — was an important contributing factor to the crash of the financial markets. What sets this company apart from others that played a role in the crisis is that we, the taxpayers, own it.
And here’s more on the debate over whether the Fed broke laws by urging AIG not to reveal certain details.
The three magi of the meltdown (NYT Opinionator Blog)
As painful as it may have been at that time, the Committee to Save the World, Version 2.0, could have just as easily sent a very different message, one sent to the shareholders and creditors of poorly managed companies all the time: Too bad.
You took risks you didn’t understand? Got too greedy? Took your eye off the ball? Kept in place executives and their cronies on the board of directors who should have retired or been replaced years earlier? Well, then, you are about to learn the valuable lesson of American capitalism and what it means to take stupid risks with other people’s money. You will lose your investments, your jobs and your company. Sorry about that. Stuff happens. The market understands that message loud and clear.
Was the global financial crisis a mathematical error? (Business Spectator) Interesting article, highly wonky. Great quote:
The Post Keynesian economist Joan Robinson once described Milton Friedman as a magician who would put a rabbit into a hat in full view of the audience, and then expect applause when he pulled it out again sometime later.
Outrageous pay on Wall Street? Tax ’em (LA Times)
Low-tax (and “no-tax”) aficionados point out that most taxes are already paid by the top earners, while the rest of us pay little, if any, in taxes. True, but the bottom 50% of U.S. income earners has no money to pay for practically anything, let alone survive day to day with subsistence income. I am not suggesting a general tax increase but rather a new tax bracket, perhaps labeled “excessive compensation,” which might start at $5 million and go up to even the previous high of 94% for incomes around $100 million.
One possibility is wealth management, or helping well-heeled investors figure out what to do with their money, says Lipstein. A lot of people tried to manage their own assets during the boom, only to lose a lot of money when the crash happened, and they are now more willing to leave their portfolios in the hands of professionals, he says.
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