John Cassidy's Blog, page 126

Postscript: Paul Samuelson

In the fall of 1996, I arranged to interview Paul Samuelson in his office at M.I.T. for an article I was writing on the state of economics, which is available online to subscribers. At the allotted time, 12:00 if I remember rightly, there was no sign of Samuelson, who was then eighty-one. A few minutes went by. Then he bounced in on the soles of his feet, a diminutive man dressed in a light gray suit, a red-and-white-striped shirt, and a snazzy bow tie. He had gray, frizzy hair, shaggy...

No He Can't! Why Obama Won't Tax Bank Bonuses

The chances of the U.S. following the U.K. in imposing punitive taxes on bank bonuses appear to be slim to none. "You'll see politicians talk about it, but they won't actually do it," a senior investment banker told the Wall Street Journal today. Earlier this year, when the furor over Wall Street greed was at its height, Congress actually considered such a move but quickly backed away from it.

What nobody has explained is why the Obama Administration and Congress are so skittish about doing ...

Will Obama Tax the Banksters?

With his approval ratings dropping below fifty per cent, can it be long before President Obama looks across the pond for some advice on how an unpopular government can attempt to rally its supporters?

In a sop to public anger at greedy financiers paying themselves small fortunes a year after receiving big taxpayer bailouts, the British government today announced it would tax bank bonuses at a rate of fifty per cent. The banks that issue the bonuses would pay the new tax, and the recipients w...

Come Back Hank Paulson: All Is Forgiven?

In my unaccustomed role as the bearer of good economic news, here is some more: the Treasury Department has reduced the estimated price of last year's bank bailouts by nearly sixty per cent. With Bank of America joining the list firms that have repaid the capital injections they received from the taxpayer, the net cost of the TARP—Trouble Asset Relief Program—is likely to be $200 billion, as opposed to a previous estimate of $341 billion, according to a Treasury official quoted by Reuters...

Score Another One for the Banksters

So, Bank of America is preparing to repay the government forty-five billion dollars it received in last year's TARP bailout. Good news for the embattled Ken Lewis, who gets to remove the Treasury Department overseers from BofA's hallways before he toddles off with his multi-million dollar "retirement package" at the end of the year, but what about for the rest of us? Four quick points:

1) This is another sign that, on its own terms, the Paulson/Bush bailout has worked. Banks are once again f...

Obama in China: The Real Story

By far the most significant news from Obama's trip to the Far East came before he got there. Speaking at a conference in Beijing just hours before Air Force One arrived, a top Chinese financial official attacked the Federal Reserve, and, by extension, the rest of the American government for stoking another speculative bubble, which could have disastrous consequences for the global economy.

As the Financial Times reported yesterday, Liu Mingkang, China's top banking regulator, said the Fed's ...

Reviews of "How Markets Fail"

My new book, "How Markets Fail," is out this week, and so far it has attracted three positive reviews in major publications: The Times, The Economist, and Business Week. I'm now on my way to Washington, D.C., to discuss the book at Politics and Prose, 5015 Connecticut Avenue NW, at 7 P.M. tonight.