The banking crisis as a foreign policy issue

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Tyler Cowen:

Here is some simple background:

If we let A.I.G. fail, said Seamus P. McMahon, a banking expert at Booz & Company, other institutions, including pension funds and American and European banks “will face their own capital and liquidity crisis, and we could have a domino effect.” A bailout of A.I.G. is really a bailout of its trading partners — which essentially constitutes the entire Western banking system.

No one wants to say it, but essentially the Fed has been bailing out European banks.


The inflation-adjusted cost of the Marshall plan has been estimated at about $115 billion in current dollars. If we end up spending $250 billion on AIG, how much of that sum will go to European financial institutions and might it someday exceed the scope of the Marshall plan? (I do not, by the way, think that central banks ought to treat foreign creditors differently.)

More from the Economist.

More Evidence on the Power of Gratitude

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Bob Sutton:

I wrote a few months back about some intriguing research on the power of gratitude, showing that people who kept “gratitude journals,” (keeping track of the good things that happen to them and things that they appreciate in life) not only reported better physical and mental health, their partners also noticed it as well (including reports that they slept better). A new study shows that the positive effect of gratitude on signs of well-being such as mastery, relationships with others, and self-acceptance happen over and above personality factors. Similar to the study of gratitude journals, this study by Alex Wood and his colleagues suggests, that regardless of one’s personality, taking time to notice and appreciate the good things in life can help all of us. This strikes as me as an especially important finding given the difficult times.


Here is the source and the abstract for those of you who want to know more:

Obama Speech TV Audience Lags Clinton (1993) and Bush (2001)

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Andrew Malcolm:

For his maiden congressional address, Obama cleaned President Bush’s clock in terms of TV viewers willing to watch him speak to a bunch of stuffed congressional suits in the House chamber. Which isn’t saying much. But it is something for a new president to cling to, especially when you’re otherwise up against the sleuths of “NCIS.”

Obama got 52.4 million viewers last night (rounded off for those visiting the bathroom) in 37.2 million homes for a 49 share and 32.5 rating. In his last joint address in 2008 GWB got 37.5 million in 27.7 million homes for a 38 share and 24.7 rating. Bush did top Obama in 2003 with 62 million and a 56 share and we didn’t even have the Iraq reality show going then. (But it was coming.)

Bush’s first joint session appearance drew nearly 39.8 million and a 42 share.

However, Obama still lags the audience-drawing power of one President Bill Clinton. Sixteen years ago this week, when there were millions fewer Americans, Big Bill drew nearly 15 million more viewers — 66.9 million for his first congressional speech in 44.2 million homes for a 44.3 rating.

An Email to Congresswoman Tammy Baldwin and Senators Russ Feingold and Herb Kohl

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Dear [ ]:
I hope this message finds you well.

I am writing to express my great concern over this information. Please investigate and determine if it is true.

DoD Officials Vow Secrecy on Budget

http://federaltimes.com/index.php?S=3957786

If so, this is very disappointing and wrong.

I also would like you to investigate the amount of private jet use by elected officials (both government aircraft and those provided by campaigns and lobbyists). Dilbert has it right:

http://www.dilbert.com/strips/comic/2009-02-25/

Website and contact information: Tammy Baldwin, Russ Feingold and Herb Kohl.

Barack Obama Tells Germany Not To Abandon Their Auto Industry

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Robert Farago quoting President Obama:

“As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices.



“But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.”

A Scion Drives Toyota Back to Basics

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Norihiko Shirouzu & John Murphy:

Toyota Motor Corp.’s incoming president, Akio Toyoda, has a sobering message for the giant company founded by his grandfather: It has gotten too fancy for its own good.



On Monday, three top executives who helped lead Toyota the past four years — including Mitsuo Kinoshita, one of the primary architects of the company’s global expansion — announced their retirement. The departures clear the way for Mr. Toyoda’s planned makeover of the world’s biggest auto maker.



He is expected to focus, most of all, on abandoning kakushin, or “revolutionary change,” current president Katsuaki Watanabe’s term for changing the way Toyota designed its cars and factories. It spawned technological advances, but led to cars that were often costlier to produce.



The 52-year-old Mr. Toyoda is also working to fix a pricing strategy that put the company at odds with some U.S. dealers, who felt its cars were getting too expensive, according to people familiar with the situation.

108 Road Trips from Southern California

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LA Times:

There’s nothing quite as all-American as a road trip, especially in the West, where a wealth of culture, natural beauty and excitement unfolds before you. Coyote Buttes awaits in Arizona. General Grant Tree beckons from the Sierra Nevada.



To help you tap the region’s cache of getaways, we’ve compiled a list of 108 road trip spots. Distance to each destination is one-way from downtown Los Angeles. Cost of gas is for a round trip.*

An Interview with FedEx CEO Fred Smith

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SF Chronicle:

Frederick W. Smith, the founder, president, chairman and CEO of FedEx, built the first overnight express delivery company in the world, starting in 1971. Today, FedEx, based in Memphis, has service in more than 220 countries and territories.


Like most other businesses, FedEx is encountering economic turmoil and is operating by Smith’s belt-tightening orders. He cut his own salary by 20 percent.


Legend has it that Smith, 64, outlined his concept for FedEx in a paper in an economics class at Yale University for which he earned a C. (He corrects the record in this interview.) At Yale, he was a friend and fraternity brother of former President George W. Bush, to whom he believes history ultimately will be more kind.



In the Marine Corps in Vietnam, Smith received the Silver Star, the Bronze Star and two Purple Hearts as a platoon leader and forward air controller. It was there that he observed military procurement and delivery procedures and thought he could improve on them.



Smith is unwavering in his belief that U.S. corporate tax policy must change, but practical enough to know that the new administration and Congress will not go along with the idea. He still believes one aspect could be enacted – accelerating the expensing of capital investment that would put money into corporate hands sooner.