On the shores of the Potomac By this river’s murky waters Policy is shaped and crafted Opposition views ignored. In the chambers of the mighty Where once issues were debated When the deficit is mentioned Legislators just look bored. Will such policies so ditzy Be allowed to last forever Will our Asian banker lenders And the markets turn blind eyes To a spending binge so flagrant Only Beltway types will marvel When these lenders pull the debt plug And the fun time ups and dies. http://www.wallstreetpoet.com...

On Friday a report from the government found the U.S. economy had shrunk 5.7 percent in the first quarter of 2009. GM, once this country’s largest company, will go into bankruptcy on Monday, according to another report. More than 12 percent of U.S. homes are at least one month behind on mortgage payments or actually foreclosed, said yet another report, the worst showing since offical records started being kept in the 1970s. The Dow nonetheless rose another 96 points on Friday. Why? In part...

I think present optimism about an improving economy is far, far too optimistic. But that’s me. Let’s look at what the experts have to say, the ones in Washington and on Wall Street. Experts who seem strangely in tune about a lot of things these days when it comes to prospects for better times. None of these experts is saying things are actually improving in the overall economy, merely that the “fall off the cliff” episode has ended and “things are stabilizing.”...

Politically speaking, environmentalism has been part of a laundry list of good causes since the 1960s. If you thought protecting nature was an important priority, it has long been assumed you also support higher minimum wages, gender parity, lifting up oppressed minorities, and kindred causes. But as the reality of a new environmental economics takes hold, such a moral and ego-gratifying synergism faces increasing intellectual challenges. Yes, greening is certainly a more evolved form of economic...

Sure, the marketplace is swayed a great deal by psychology. And all the recent golly talk about recovery, green shoots, glimmers, turnarounds, no longer falling off a cliff, et. al. have made many people a bit more optimistic, while turning some investors positively glassy-eyed and slack jawed with glee. But when push comes to shove, there’s only one that that brings an economy alive: Spending. Seventy percent of spending in our economy comes from individuals, 30 percent from businesses, mostly...

What’s the most immediate Middle East worry? With Israel’s new right-wing PM, Benjamin Netanyahu, now in Washington, some people might think it’s that country’s intransigence over peace talks with the Palestinians. No. That’s a problem that will drag along for some time to come. With the growing concern about Iran’s nuclear ambitions, some people might think this issue will come to the fore very soon. No. This one will also likely be percolating for months to come. And...

Talk about a party that’s out of touch with the times! This morning on Public Radio I heard a blip from Charles Boustany, a Republican congressman from Louisiana, giving his party’s view on health care policies. And his big pitch was that any new legislation must keep health care decisions in the hands of patients and their doctors, and out of the hands of “government bureaucrats.” Forgetting for the moment that all too many health care decisions today are actually made by...

Planet Earth to Economist World. Planet Earth to Economist World. Come in Please. Planet Earth to Economist World. Can you hear me? We’ve been getting regular communications from you for a long time, but you seem to have lost all contact with us. For years we were picking up signals from you telling us how good our economy was going, when it really was just puffing up a giant bubble. In recent months we’ve been getting promises from you that our economy is bottoming out and beginning...

The market went down yesterday because people are getting a little nervous about those bank stress test results. Specifically, about the fact that the banks had a chance to negotiate the findings of government auditors and fudged test results in ways that better suited their own interests. Banks with better looking books can raise capital in the market from private investors, pay off their TARP money, and be free to do what American megabanks do best—overpay their top executives. Some people, of...

I hate spring. I hate it because it means the end of an exciting basketball season and the start of a dreadfully long and intensely dull baseball season. I hate it because it means summer reruns, which now begin long before summer arrives. Most of all, I hate spring because its most distinctive and wide spread characteristic is the reawakening of plant lust. Don’t get me wrong. I’m not a killjoy or a prude. I don’t get angry when someone else (or something else) is having a better time than...

Dear Federal Reserve: I would like to borrow a billion dollars on the same terms you’re giving commercial banks. My recent financial performance is better than these other borrowers, and I also have a business plan that guarantees this loan will be properly serviced. I understand you are making these special commercial bank loans at a no interest rate for some borrowers and a half percent rate for others. As a new customer, I naturally understand you would apply the higher rate to my own loan....

Taken out of context, statistics that seem to show improvement in some aspect of the economy may actually simply mask the fact that things are getting worse. In this regard consider the number released today showing new claims for unemployment insurance last week. It was 601,000, a huge number certainly, but the lowest weekly number in several months, indicating that companies may be laying off workers at a slower pace. By itself this statistic seems like good news. In fact, it’s virtually...

Two economists recently authored a piece in the Wall Street Journal titled “We Can’t Subsidize Banks Forever.” It contained numbers and estimates from world banking officials and independent sources suggesting that the extent of liabilities of major lending institutions was so great that it would be impractical, indeed, crazy, to keep filling the black hole these outfits have dug for themselves. It was a very good article. Its arguments were cogent and sensible. But of course such...

There’s a lot of talk these days about “reforming” the way business is done on Wall Street with more regulation and greater transparency. And sure, some real changes are coming. But when the smoke clears and the mirrors are put away, how different will things really be? Washington’s Moves To Reform Wall Street When Wall Street gamesters over-reach, Their false promises clear to gainsayers, And greed and cons that built Street wealth Are revealed, stacked layer...

Yesterday the World Health Organization declared that an influenza pandemic was “imminent.” The U.S government reported that in the first quarter of this year the Gross Domestic Product fell 6.1 percent. The number of unemployed continues to rise, and foreclosures continue to increase. Six of the country’s 19 largest banks failed the government’s stress test and will need more capital to survive a continued financial crisis. Chrysler is about to declare bankruptcy and GM still...

I know how politics works. I know that, from the perspective of Democrats in Washington, the just-announced defection of Senator Arlen Specter to their party is a coup. In practical terms I can see why Democratic officials in Pennsylvania are also queuing up to welcome the man to their fold and promising to back him in next year’s primary and senatorial election. But… I live in Pennsylvania. I’m a registered Democrat. And I really hope there will be a strong primary challenge to...

Everybody likes alternative energy. How could you not like “live” sources of energy from the sun, the wind, the heat of the earth itself, from running water, more than “dead” energy from coal and petroleum derived from rifling the burial grounds of long deceased creatures. Many economists and other deep thinkers lament, however, that the transformation from dead to live energy sources to power our way of life involves costs so huge that it will only come about very slowly...

The stock market in the first quarter of this year has gone up a whopping 23 percent. In this same period, however, the actual economy hasn’t improved at all. In fact it’s getting worse by almost any meaningful, real life measure, though the worsening may have slowed a bit. An economy that’s not improving. An economy just getting worse a bit slower. Yet we nonetheless have this huge stock market surge, the biggest jump since 1933. A surge not generated by small investors queuing...

Yes, there’s something unseemly about someone in this day and age defending the use of torture. Perhaps even grotesque. Officially sanctioned torture, after all, is closely associated with the Spanish Inquisition, and with activities by regimes headed by Stalin and Hitler. The efforts of former Vice-President Dick Cheney to justify its use by a country that has always officially damned the practice may thus appear to be rather…rather…alright, I’ll say the word, rather disgusting. Still,...

Because some federal Wall Street bailout money comes with strings that limit executive pay, some formerly very big earners at recipient firms may have to settle for compensation packages that top out at $500,000 per annum, a mere 2 1/2 times the average annual income of brain surgeons, according to Labor Department numbers. In consequence, many of the Street’s best and brightest are jumping ship, leaving firms that may be saddled with these compensation limitations for unsaddled firms, or...

Pity the poor bill collector He loved to call and snarl and hector To pester ’bout an unpaid debt ‘Bout payments that you haven’t met. Pity the poor bill collector He loved to diddle and dissect ya Get you feeling beat and small Just to get you in his thrall. Pity the poor bill collector The long-time ego vivisector Alas these days to get his slice The poor man finds he must make nice. http://www.wallstreetpoet.com  

On Earth Day it’s worthwhile considering the relationship of humanity to the natural environment. Personally, I see it as a kind of very troubled marriage in which one partner (us) has finally come to understood how bad its behavior has been and is finally resolved to do better. Though not completely better, and certainly not just yet. Carrying this relationship analogy forward, perhaps we might also consider the possibility that this relationship can never really be resolved in a way that...

To get a real feel for which way the economy is headed, imagine if the things analysts and government officials have been saying about the economy of late were applied to your personal financial situation. For example, these experts say that after falling off a cliff at the end of last year and the start of 2009 the economy has finally bottomed out. Visualize that in your own personal life. You’ve just fallen off a cliff and are now bottomed. You’ve hit the ground, in other words, and...

Yesterday a Greek-flagged tanker was almost hijacked by Somali pirates. With the help of a Dutch naval frigate, however, the attack was beaten off. The frigate than followed the pirates to their mother ship, a previously hijacked fishing vessel with a crew of twenty. These twenty captives were freed. Then the Dutch let the pirates go. Today pirates tried to hijack a Norwegian tanker and were beaten off by a NATO naval craft. It followed, captured the pirates, and let them go. Let them go? Again?...

Listening to some bank executives these days, you might get the idea that their institutions are good credit risks, borrowers who repay their loans promptly and willingly. We took government TARP (Troubled Assets Relief Program) money unwillingly, they say. We did it as a kind of public service, they say. But darn it, they say, we’re going to pay it back with interest now because we don’t want our businesses run by the government. My, my. Doesn’t that sound public-spirited. Heroic...