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Thursday, June 11, 2009

Great Recession Roundup — June 11, 2009

Items of Interest:

Rep. Barney Frank seeks further limits on executive paychecksAP / Washington Examiner:
Rep. Barney Frank seeks further limits on executive paychecks -- As the Obama administration takes a half-step toward taming executive pay, Congress might consider a fuller stride.

The administration, which has maintained that excessive compensation in the private sector contributed to the nation's financial crisis, has rejected direct intervention in corporate pay decisions.

Instead, Treasury Secretary Timothy Geithner announced Wednesday that the administration plans to seek legislation that would try to rein in compensation at publicly traded companies through nonbinding shareholder votes and less management influence on pay decisions.

To Rep. Barney Frank, the chairman of the House Financial Services Committee, Geithner's plan doesn't go far enough. . .

Sister Toldjah: Barney doesn't want to get frank
The Barrister / Maggie's Farm: This is your federal government on drugs
Rob / Say Anything: Obama: We Need To Control Private Sector Pay
Russell Roberts / Cafe Hayek: The Einstein of compensation
Don Surber: Maximum wage law
Stephen Labaton / NY Times:
Treasury to Set Executives’ Pay at 7 Ailing Firms -- A federal proposal to restrict executive pay has the potential to humble seven large institutions that have received billions of dollars in bailout money. . .
Scared Monkeys:
Obama to Appoint Pay Czar Kenneth Feinberg … More Socialism You can Believe In
Obama Administration has gone Czar crazyObama Administration has gone Czar Crazy

Jonathan Hoenig / SmartMoney:
Economic Freedom or Czarist Rule? -- the administration has appointed a new “pay Czar” with wide-ranging discretion over executive compensation . . .

The whole notion of a czar dictating how free individuals can interact and trade is so unmistakably contrary to the American principles of liberty and individual rights. Czars after all, were dictators who dealt with others through force, not free trade. And while he does not resemble Russia’s Ivan the Terrible, the president’s efforts do not respect the rights of free individuals to handle their own affairs, but forces them to be governed as he…or the czar…or any other politician sees fit. . .
Basil / IMAO:
Czar Czar Galore -- The Obama Administration is not the first administration to appoint someone with broad powers to oversee a function. You know. A “czar.”

Previously, we’ve had Drug Czars, Energy Czars, and so on. But, Barack Obama has gone Czar crazy. As best as I can tell, here are Obama’s czars:

  1. Af-Pak (Afghanistan-Pakistan) Czar: Richard Holbrooke
  2. Bailout Czar: Herb Allison
  3. Border Czar: Alan Bersin
  4. Car Czar: Steven Rattner
  5. Climate Czar: Todd Stern
  6. Cyber Security Czar: vacant
  7. Drug Czar: Gil Kerlikowske
  8. Economic Czar: vacant
  9. Energy Czar: Carol M. Browner
  10. Faith-based Czar: Joshua DuBois
  11. Great Lakes Cleanup Czar: Cameron Davis
  12. Green Jobs Czar: Van Jones
  13. Guantanamo Closure Czar: Daniel Fried
  14. Health Reform Czar: Nancy-Ann DeParle
  15. Health Infotech Czar: David Blumenthal
  16. Middle East Czar: George Mitchell
  17. Non-Proliferation (WMD) Czar: Gary Samore
  18. Pay (Compensation) Czar: Kenneth Feinberg
  19. Persian Gulf & Southwest Asia Czar: Dennis Ross
  20. Regulatory Czar: Cass Sunstein
  21. Science Czar: John Holdren
  22. Stimulus Accountability Czar: Earl Devaney
  23. Sudan Czar: Scott Gration
  24. TARP Czar: Elizabeth Warren
  25. Technology Czar: Vivek Kundra
  26. Terrorism Czar: John Brennan
  27. Urban Czar: Aldolfo Carrion, Jr.
Mish / Global Economic Analysis:
Initial Unemployment Claims Dip Slightly; Continuing Claims Rise 19th Consecutive Week — Last week in Continuing Claims Dip Slightly Snapping Streak at 17 I commented: "Continuing claims hit 6.788 million last week, setting a 17th consecutive record (revised slightly lower to 6.750 million). Today's number is 6.735 million, breaking the streak (assuming the number is not revised up later)." The Department of Labor number revised the ...
Calculated Risk:
Fed: Household Net Worth Off $14 Trillion -- According the Fed, household net worth is now off $14 Trillion from the peak in 2007. . .
Tim Cavanaugh / Reason: America: Now $8-to-$14 Trillion Poorer
Shane Goldmacher / Los Angeles Times:
Schwarzenegger threatens to shut down state government -- Gov. Arnold Schwarzenegger vowed Wednesday to let California government come to a "grinding halt" rather than agree to a high-interest loan to keep the state afloat if he and the Legislature do not close the yawning budget gap in coming weeks. . .
Nita Lelyveld / L.A. Now: Morning Scoop: A ‘grinding halt,’ paparazzi at preschool, fat nonprofit paychecks
Fed Would Be Shut Down If It Were Audited, Expert Says -- The Federal Reserve's balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant's Interest Rate Observer, told CNBC.

With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.

"If the Fed examiners were set upon the Fed's own documents—unlabeled documents—to pass judgment on the Fed's capacity to survive the difficulties it faces in credit, it would shut this institution down," he said. "The Fed is undercapitalized in a way that Citicorp is undercapitalized." . . .
Controlled Greed: Jim Grant on the Federal Reserve
Paul Krugman / NY Times:
Private borrowing is still negative-- Flow of funds data out today. I won’t have time to do a careful analysis for a few days, but a quick check shows that the Setser point — high government borrowing is more than offset by net negative borrowing from the private sector — remains true. . .
Andrew Jeffery / Minyanville:
Keepin' It Real Estate: Where Have All the Houses Gone? -- And as price discovery works its way through well-to-do areas, the mix of homes sold will continue to revert to more expensive sales, pushing up median- and average-sales-price data. This dynamic will present the misleading conclusion that the country's housing market is recovering, even as actual prices continue to fall.

Frustrated buyers wondering where all the houses have gone most would be wise to sit tight for a few months until banks get around to unleashing a mountain of supply back onto the market -- they'll soon find out. . .
Mish / Global Economic Analysis:
Airlines Squeezed: Fares Drop and Revenues Shrink as Fuel Costs Rise; Job Cuts Announced -- Airlines are having a rough go of it. Passengers are traveling less and fares are dropping even as expenses rise. In response, AMR Plans 1,600 Job Cuts, Delta Air May Follow . AMR Corp.’s American Airlines will shed 1,600 jobs and Delta Air Lines Inc. may pare its payroll again as waning travel demand spurs deeper cuts in seating capacity. The ...

Calculated Risk

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