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Treasury Secretary Tim Geithner at the Detroit Economic Club April 28, 2011 in Detroit, Michigan.
Today will be a day of quick hits. Call it an experiment in expanding on the "Reportings" news and opinion roundup I used to do every morning.
First up, Simon Johnson's not-so-subtle assault on Treasury Secretary Timothy Geithner, at the New York Times Economix blog. Background: In Ron Suskind's recent book about the early days of the Obama administration's response to the financial crisis, "Confidence Men," Geithner is cast as the official who wanted to prevent the breakup of the big banks, advocating for stability in the crisis.
Despite a lack of any supporting evidence, Mr. Geithner sees megabanks as essential to the functioning of the economy — and he gambled on bailing them out as a way to restart the economy.
So it would have been entirely logical for him to fear disclosures that would damage their business models and legal viability.
Whenever someone or a group of people is above the law, equality before the law is ended. This is how the megabanks, and the way they are treated, threaten to undermine democracy.
Sen. Dianne Feinstein, at the Millennium Biltmore Hotel in Downtown Los Angeles, speaks at a Town Hall event.
Sen. Dianne Feinstein sat down with Mark Baldassare, CEO of the Public Policy Institute of California, in front of a packed lunchtime audience today at the Millennium Biltmore Hotel in Downtown Los Angeles. The two discussed economic challenges facing the U.S., the Occupy Wall Street movement, tax reform, and political gridlock in Washington, D.C.
"If you elect people who want to solve problems, you can get something done," Feinstein, who has been representing California for nearly 20 years in Congress, stated. "If you elect people who pound the table, you can't get anything done."
Feinstein, a Democrat, followed this indictment of Republican intractability by pointing out that she considers it unlikely that the remaining aspects of President Obama's jobs bill will pass, including a provision that would establish an national infrastructure bank, still to be voted on.
Many students who graduate from 4-year universities have student loan debt
President Obama, to his credit, is doing what he can to address problems in two of the three big debt markets in the U.S. He's rolled out a plan to enable borrowers who are underwater on their mortgages to refinance, taking advantage of historically low interest rates. And now he's turned his attention to student loan debt, which has ballooned in recent years as the cost of higher education has risen beyond the rate of inflation.
That leaves credit card debt and to a lesser extent auto loan debt. We're unlikely to see anything on that front, however, because the government doesn't backstop that kind of lending.
The student loan initiative is being driven by the crappy economy. Students have borrowed very large sums to fund their educations, but in many cases they can't get jobs in the face of 9 percent national unemployment. If they can find work, the pay isn't enough to service the debt. And overall student loan debt is now massive, at more than a trillion bucks.
Obama can't win: "Of course, aggressively addressing capital requirements and restructuring zombie banks three years ago would have turned Wall Street against Obama—but Wall Street's now against Obama anyway. Meanwhile, blaming Wall Street for its contribution to the country's problems—and actually backing up the talk with action—would have won over the rest of the business community and Main Street." (Business Insider)
The problem of "old loans" versus "new loans" and how it relates to willingness to work. To earn money. And to spend it all paying off the old loans: "A significant fraction of households and businesses are typically so burdened with the debts they accumulated during the housing surge that they have little incentive to produce and work, because their creditors would get most, if not all, of the fruits of their labor." (NYT)
I went on KPCC's AirTalk with Larry Mantle this morning to talk about the Solyndra bankruptcy and what's turning into something of a scandal. This was hot on the heels of the Atlantic's Megan McArdle and Reason's Tim Cavanaugh going after not just the politics of this sucker, but also the very notion that the Federal government should be investing in renewable energy in the first place.
Just for background, Solyndra got a $535 million loan guarantee from the Department of Energy in 2009, four years after it was founded and well into an application process that was initiated under the Bush administration (Grist has the blow-by-blow on all this). Prior the the DOE loan, Solyndra had raised venture funding; after the DOE loan, it raised even more, eventually amounting to $1 billion. Post-bankruptcy, the Washington Post reported that the White House had been edging the DOE toward an approval, so that Joe Biden and DOE head Stephen Chu could schedule appearances. And just to make things extra juicy, a big Obama supporter and "bundler" of campaign donations, George Kaiser, has a venture fund that was heavy into Solyndra.