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From The Business Pages: Oct. 15, 2008

Starting this morning I’ll be posting links to must-read articles and reports around the web. Because some of them--the Wall Street Journal, for example--are behind firewalls, I’ll try to give a sense of their key points as well. One subscriber-only site I’ll be referencing a lot is the Financial Times. Fortunately, you can register for free to read up to 30 articles a month, obviating the need to pay their exorbitant subscription fees.

  • Deborah Solomon and David Enrich at the Wall Street Journal have a great piece dissecting the difficult details of the $250 billion bank bailout. The biggest risk, they point out, is that banks--outside the nine Paulson has already dragooned--will blanch at the idea of giving the government leverage over their operations. “Will the government be looking over my shoulder and second-guessing my lending policies and compensation policies?” asks American Banking Association President Edward Yingling.
  • Along those same lines, Peter Boone, Simon Johnson, and James Kwak have a great op-ed in the Washington Post discussing whether the plan will work and what it means for the economy. Most notably, they call on the Treasury to abandon the Troubled Asset Relief Program--the original Paulson plan--and set aside the entire $700 billion for future capital infusions.
  • At least Paulson was able to wrangle industry leaders into participation, thus reducing some of the stigma of taking government handouts. As the Financial Times points out, France and Germany aren’t so lucky--the likes of BNP Paribas and DZ Bank are staying out.
  • The International Monetary Fund is out with its latest Global Financial Stability Report. While the report recommends, and clearly doesn’t take into account, the past week’s capital-injection programs in Europe and the United States, it’s still a pretty good primer on where things are likely headed over the next few years, and what governments need to do to respond.
  • Meanwhile, in the real economy, House Democratic leaders are preparing a plan to inject $300 billion into infrastructure, unemployment, tax cuts, and aid to ailing states; there’s also serious talk about better financial-industry regulation and updated mortgage rules. Unlikely to get much discussion before the election, let’s hope an improved majority can make something like this work come January.

--Clay Risen