• Following on the heels of an optimistic piece in the New York Times about green jobs in the Rust Belt comes a Financial Times report that investors are fleeing the energy sector. This means less money to improve the country’s ailing power infrastructure, and probably even less to push into renewable power generation. Which only underlines the need for an infrastructure stimulus package from Washington.
  • The Wall Street Journal provides new details about the FDIC’s aggressive management of banking-sector mergers. The agency, best known for insuring bank deposits, forced Wachovia to find a buyer on the threat of a government takeover, then shepherded it through offers and counter-offers from Citigroup and Wells Fargo, ultimately settling with the latter. All this is part of the feds’ strategy to wring underperformers from the sector.
  • The Washington Post has an interesting, if flawed, piece on the failing AIG bailout. As you might recall, many moons ago the feds gave the foundering insurance giant a huge amount of money to cover its debts, then extended even more money when it ran out. (Meanwhile, AIG bigwigs spent half a million on a company retreat.) No one seems to think the bailout is going well, though they differ on why. The Post draws too big a conclusion, arguing that the firm would have been better served by going bankrupt. After all, the real question was never whether the bailout would save AIG per se, but whether the alternative would contribute to the mass panic then hitting the investment community. (To be fair, the piece does offer a buried comment to this effect from insurance-industry observer David Schiff: “The point isn't to save AIG; it's to save the U.S. financial system. I think they were afraid to find out who else goes under if you let AIG fail.”)
  • It seems there is, in fact, a limit to the government’s recent largesse: The Treasury has denied GM’s request for help in acquiring Chrysler. That also reverses, or at least puts the brakes on (get it!), the possibility that Washington’s $700 billion bank bailout will be expanded to other industries.
  • Finally, over at Forbes, NYU economist Nouriel Roubini has a column predicting stagflation in the coming six months. Aside from his mini-celebrity as a Gawker flameball, Roubini also has a penchant for making extreme claims and having them proved exactly right, so give this a good read.

--Clay Risen