Pension Pulse

President Obama presented a sober assessment of the state of the economy in a prime time news conference Tuesday, but he insisted his administration has a strategy in place to "attack this crisis on all fronts." I listened to the news conference and I was not impressed with the puffy questions that were being asked. I would have stood up and asked him straight out: "President Obama, according to two Nobel-Prize winning economists, your Treasury Secretary's plan is flawed and will not work. Why are you and your economic advisers pandering to the Wall Street cronies that got us into this mess?" On Monday I wrote about Krugman's criticism in my post, Hedge Fund Socialism?. On Tuesday, I read that another Nobel-Prize winning economist, Joseph Stiglitz , believes the Geithner plan will rob American taxpayers : The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the...

Wall Street got the news it wanted on the economy's biggest problems -- banks and housing -- and celebrated by hurtling the Dow Jones industrials up nearly 500 points : Investors added rocket fuel Monday to a two-week-old advance, cheering the government's plan to help banks remove bad assets from their books and also welcoming a report showing a surprising increase in home sales. Major stock indicators surged about 7 percent, including the Dow, which had its biggest percentage gain since October. Analysts who have seen the market's recent false starts are still hesitant to say Wall Street is indeed recovering from the collapse that began last fall. But the day's banking and housing news bolstered the growing belief that the economy is starting to heal, and that is what had investors buying. "It's just hard to argue that there isn't an improvement in economic activity on the horizon," said Jim Dunigan, executive vice president at PNC Wealth Management....

Earlier this week, Michael Hudson wrote an excellent comment in counterpunch, The Real AIG Conspiracy : It may seem odd, but the public outrage against $135 million in AIG bonuses is a godsend to Wall Street, AIG scoundrels included. How can the media be so preoccupied with the discovery that there is self-serving greed to be found in the financial sector? Every TV channel and every newspaper in the country, from right to left, have made these bonuses the lead story over the past two days. What is wrong with this picture? Is there not something over-inflated about the outrage led most vociferously by Senator Charles Schumer and Rep. Barney Frank, the two leading shills for the bank giveaways over the past year? And does Pres. Obama perhaps find it convenient that finally, at long last, he has been able to criticize something that he believes Wall Street has done wrong? Even the Wall Street Journal has gotten into the act. The government’s takeover of AIG, it pointed out, “u...

Before delving into tonight's topic, a few words about the AIG bonus blunder. The New York Times reports that many in government knew weeks ago about AIG bonuses : The question was direct and prescient. Representative Joseph Crowley, Democrat of New York, asked the Treasury secretary in an open hearing what could be done to stop American International Group from paying $165 million in bonuses to hundreds of employees in the very unit that had nearly destroyed the company. Timothy F. Geithner, the Treasury secretary, responded by saying that executive pay in the financial industry had gotten “out of whack” in recent years, and pledged to crack down on exorbitant pay at companies like A.I.G. that were being bailed out with billons of taxpayer dollars. The exchange took place before the House Ways and Means Committee on March 3 — one week before Mr. Geithner claims he first learned that the failed insurance company was about to pay a round of bonuses that have since caused a political...