All Blog Posts from Econwatch

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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I'm getting sick and tired of everyone talking about how much worse shape we would be in, but for (fill in the blank: TARP, stimulus, auto bail outs...) Even if it's true, it doesn't make anyone feel better. That's what I keep thinking when Obama Administration officials sound like cheerleaders claiming victory over job creation that occurred as a result of the $787 billion stimulus.


A White House report will be released later today and it's expected to show that the stimulus plan helped create or save 650,000 jobs through September 30th. One might want to take these numbers with a grain of salt, after digesting the AP report, which suggested that the folks who are providing the data to the White House can't seem to add or subtract too well. The AP analysis calls into question any of the official numbers, though the White House countered it by saying that the AP examination only represented 2% of Recovery Act spending. Kind of like how political polls only represent only a sliver of the population, from which we extrapolate larger trends, but that must different, right?

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With Federal Reserve Chairman Ben Bernanke's term expiring in January, the White House faces a big decision on whether to reappoint him.

Bernanke has taken hits among lawmakers for his handling of the federal bailout of the financial system, but he's enjoying solid support on Wall Street, according to a Wall Street Journal report Thursday ($).

Forty-three of 46 private sector economists support Bernanke's reappointment, according to a Journal poll, though some polled noted his decisions have not been flawless.

Bernanke supporters cite his bipartisan efforts to lift the country out of a severe financial crisis as well as a desire not to "change horses midstream." But his reappointment will require Senate confirmation, where he's drawm criticism from key figures on both sides of the aisle.

So as President Obama considers Bernanke's future, the Journal looked at some possible alternatives:

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The White House is moving closer to recommending the creation of a single agency to regulate all banks, according to a Wall Street Journal report Wednesday.

That would move the U.S. away from the network of federal regulators that was seemingly powerless to protect the country from the financial crisis that has choked the economy since last year.

Treasury Secretary Timothy Geithner and other officials are expected to include the recommendation in a proposal to Congress in the next few weeks, according to the report.

Under the plan, which the Journal say is still in flux, the Federal Reserve and Federal Deposit Insurance Corp. would be stripped of their supervisory roles, though both agencies would gain other powers. The Office of the Comptroller of the Currency and the Office of Thrift Supervision would be also consolidated.

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The Obama administration is weighing a "controlled bankruptcy" for General Motors Corp. if the floundering auto giant cannot meet government standards for viability by June 1, the New York Times reports Wednesday.

The move would fall somewhere between a prepackaged bankruptcy and a potentially chaotic legal battle between the company and creditors. It would involve persuading only some creditors to agree to a plan that would split the company into two pieces, sources familiar with the discussions told the Times.

In most prepackaged bankruptcies, all the creditors must agree terms, but the White House may circumvent that by financing the sales using taxpayer money, reports the paper.

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Heads of the country's financial services firms met today with President Obama to discuss the financial meltdown and the road to recovery.

Many of the companies that these business leaders represent have been hard hit by the economic crisis - which they helped bring about through risky investments - and they have received billions of dollars in bailout funds from the federal government.

This largess has not always gone over well with the American taxpayer: The meeting came in the wake of an outpouring of populist anger over the $165 million in bonuses that American International Group, Inc. (AIG) gave to employees after receiving government aid.

With calls for greater regulation of bailout funds echoing through the halls of Congress and harsh statements of condemnation over executive abuses coming from the White House in recent days, many of the 15 CEOs from the nation's largest banks who traveled to Washington, DC today must have been bracing for the worst.

Yet the business executives emerged from the 90-minute plus meeting relatively optimistic and pledging to work with the administration to fix the economy.

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The White House has some economic advice for the rest of the world – spend, spend, spend.

Larry Summers, President Barack Obama's top economic adviser, is urging world leaders to increase public spending in hopes that a coordinated increase of global demand will lay the groundwork for an economic recovery, reports the Financial Times.

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