Tag Archives: Financial Meltdown

Funny, He Doesn’t Sound Like a “Greedy Bastard”

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I’ve held my tongue about the AIG bonuses because I haven’t had the energy to take on the torch-and-pitchfork brigades. But although I can understand the populist anger, and maybe even share it a bit, the frenzied response has turned me off since the day the story broke.

Comes now an AIG executive named Jake DeSantis, who resigned today in a letter published in The New York Times. His message should give pause to the angry mobs. (Hat tip: J.G. Thayer.)

DeSantis didn’t create the credit default swaps crisis — he took a $1 salary to transfer in from another area of AIG to help fix the mess. In exchange for accepting that token salary, he was guaranteed a payout at a certain level if the company survived long enough to pay it.

This wasn’t a “bonus” in any meaningful sense of the word. It was a deferred payment — deferred at great risk by an executive who had other lucrative options.

The letter is worth reading in full, but here’s the part that jumps out at me. Addressing himself to AIG CEO Edward M. Liddy (another $1-a-year man), DeSantis writes:

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you. …

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget.

DeSantis is a titan of finance. He writes that the deferred contractual payment he received on March 16 was “$742,006.40, after taxes.” Before taxes, that means he got one of those “million-dollar bonuses.” It’s a lot of money, but it’s certainly not bizarrely high for a senior financial services executive.

I think AIG or any troubled company could use more thoughtful and talented executives like DeSantis. The company and the economy need experienced leadership, and yes, financial services leaders make a lot of money. I’d much rather trust DeSantis than any of the politicians calling for his scalp.

But the mob has had its say. Best wishes for your future endeavors, Mr. DeSantis.

Update: Holman Jenkins also weighed in on “The Real AIG Disgrace,” in today’s WSJ:

It may be that the full picture was kicked up to [Geithner] only when a political decision was needed, but by then his one decent choice was to insist on the bonuses’ legality. However politically inopportune the bonuses may be, the president only dirtied himself by authorizing a feel-good, bipartisan hate storm aimed at innocent AIG employees. And it’s hard to believe Mr. Obama would have done so, or the subsequent spectacle would have unfolded as it did, without Mr. Geithner’s seminal prevarications (and we say this fully acknowledging that he’s had a rough ride in an inhumanly difficult job).

Barney Frank, who doesn’t have the excuse of being stupid, was last seen bullying Mr. Liddy to do what on any other day Mr. Frank would flay Mr. Liddy for doing — violating the privacy rights of his employees. Charles Grassley? His early bloviating about the duty of AIG executives to kill themselves almost begins to look like a grace note, since it alerted the public to the hyperbolic playacting about to come. …

But the biggest lesson here is the old one that the price of freedom is eternal vigilance — beginning with insistence on the rule of law. Americans clearly cannot trust their elected officials to defend their rights and interests, or care whether justice is served, when the slightest political risk might attach to doing so.

Which brings us back to Mr. Cuomo, whose office has been implicitly threatening to publish names of AIG employees who don’t relinquish pay they were contractually entitled to.

Mr. Cuomo is a thug, but at least he reminds us: It can happen here.

Responsible Economic Policy is a National Security Issue

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John Bolton, who gets my vote for America’s best-ever ambassador to the United Nations (plus I love the mustache), describes how Rahm Emanuel’s never-let-a-crisis-go-to-waste mentality will weaken the security of the United States, by devaluing the dollar and making us more dependent on financing from China and other countries that do not share our values. Key quote:

“If the administration continues these proposals for massive increases in federal expenditures, massive deficits, they’ve got to find a way to fund it, and it’s either through more government debt or printing money, both of which have the impact of reducing the value of the dollar.”

Yes, we’re in a crisis, and yes, that means we need to act on an emergency basis and take chances that we would not take in ordinary circumstances. For example, I’m persuaded that to keep the financial system from seizing up entirely, the government has to funnel a lot of money to a lot of people and organizations that “don’t deserve it.”

It helps make it easier to swallow if I remind myself that in most cases, the emergency funding is not a handout, but rather an investment (albeit a highly risky one). The American people own 80% of AIG, which not long ago was a stodgy, important, profitable business. If it can become one again, the American people will participate in its recovery.

But because of the unfortunate need to shovel money into risky ventures to keep the gears of commerce turning, this is exactly the wrong time to be shoveling even more money into risky attempts to remake the healthcare system and renovate planetary climate.

Certainly there are important and useful ways that the government can and should affect healthcare and climate/energy policy. But Ambassador Bolton is right — the more we spend, the more we will devalue the currency that for decades has been one of the most powerful symbols of “American exceptionalism,” which Bolton also riffs on in the video.

The 10-minute video is worth watching despite the conspiracy-theory posturing of host Glenn Beck. At least twice during the video, Beck asks rhetorical questions along the lines of, “am I crazy to think this?” Bolton then restates Beck’s thesis in less incendiary language, and withholds whatever opinion he may have about Beck’s craziness.

Financial Follies: Plenty of Blame to Go Around

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A straightforward guide to the financial mess.

I missed it when it first came out, but the New York Review of Books last month published one of the best comprehensive explanations I’ve seen of the causes of the current economic unpleasantness. Weighing in at just over 5,000 words, it’s not a quick read — but it covers a lot of territory, as indicated by its word cloud, above, from wordle.net.

The essay, which doubles as a review of three recent books about the crisis, does a skillful job of explaining the interaction of a wide variety of factors, including securitization of mortgages, the housing bubble, the growth of unregulated hedge funds, rating agency conflicts of interest, subprime mortgages and more.

But enough praise, it’s time to find fault. Author Jeff Madrick starts and ends his essay by contending that the primary force behind the crisis is corporate greed, not government policy. It’s a defensible position, and certainly the titans of Wall Street have a lot to answer for. But governmental enabling and social engineering played a big role too, and Madrick seems to be working way too hard to let the politicians off the hook:

It was principally the investor appetite for the mortgage-based securities and the easy profits made by the banks and mortgage brokers that led to the mortgage-writing frenzy in the 2000s, not encouragement by the federal government to lend to low-income home buyers.

He neglects to mention what form this “encouragement” took — fines and other penalties against banks that did not issue “enough” mortgages to borrowers from disadvantaged groups. With the government telling them to write mortgages or else, and with a securitization system that distributed risk so widely that no institution had a meaningful stake in the performance of any individual loan, and with the widespread belief that refinancing would be possible because housing prices only go up… it’s no wonder that the ranks of home “owners” swelled well beyond the pool of people who could actually afford to own a home.

Predictably, Madrick believes the answer is more government regulation.

If solutions are to be found, the nation requires robust and pragmatic use of government, free of laissez-faire cant and undue influence from the vested interests that have irresponsibly controlled the economy for too long.

At least he acknowledges that clumsy market intervention can sometimes make the problem worse:

Another necessary component for reviving the credit system involves the self-destructive accounting rules and loan covenants that are making the crisis worse than it need be. The losses required to be taken under mark-to-market accounting, and the consequent reduction in capital, reinforce the fall in asset values. Similarly, current ratings requirements force the financial institution to sell investments to raise capital.

Summing up, Madrick says “This is, as many economists now concur, the worst economic crisis since the Great Depression.” Well, no. It’s possible that things will get worse from here, but for now all you can really say is that it’s the worst recession since 1982.

Current Recession Not (Yet) As Bad As 1982

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After repeatedly invoking the specter of the Great Depression to frighten the public into supporting the “stimulus” bill, the Obama administration has moderated its rhetoric. Professor Mark J. Perry of the University of Michigan offers statistics to show just how inappropriate it is to even talk about comparisons with the Depression:

The chart above shows the “initial jobless claims as a percent of the labor force” back to January 1980. To reach the same level as the peak in 1982 of 0.6067%, today’s jobless claims would have to be almost 936,000, or almost 50% higher than the current 628,000.

So how about we first get hysterical for awhile about the “worst economy since 1982” before we go totally hyperbolic about the “worst economy since the Great Depression.” Once we reach the 936,000 jobless claims it would take to equal the economic conditions of 1982, then let’s start talking about Great Depression II, but not before.

You might think, as I did, that initial unemployment claims is the wrong measure to use. Initial claims measures the velocity of the downturn, but surely total unemployment is a better measure of the full extent of the downturn. So I went looking for that data, and found that the most recent total unemployment rate of 8.1% is still well below the 9.7% rate of 1982. (Unemployment reached 25% at the peak of the Great Depression.)

Although we’re nowhere near a depression, the current recession probably has not hit bottom. In an interview televised yesterday, Fed Chairman Ben Bernanke said unemployment is likely to get worse before it gets better, but that he expects the recession to end “probably this year.”

Million, Billion, Trillion… Let’s Settle on "Zillion"

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I’m becoming a fan of Politico, which has intelligent writing on politics without any overwhelming left or right tilt. Today the site notes that all of the big numbers start to blur together:

Human beings have a hard time differentiating between millions and billions and trillions, let alone the numerical subsets thereof. To most of us, it just registers as “a whole lot.” …

It is hard, then, to get people excited about the difference between $787 billion and $478 billion, both of which are equally abstract if not equally large sums — which is perhaps one reason why House Republicans’ alternate stimulus proposal, which carried the latter price tag, failed to gain much traction with the public.

As a public service, All That Is Necessary is pleased to present this statistical glossary, for use in explaining federal spending to your grandchildren: billion, trillion, quadrillion, quintillion, sextillion (which will lend itself to financial abstinence messages), septillion, octillion, nonillion, decillion.

(Custom word cloud graphic from wordle.net)

Ready, Fire, Aim: Obama Signs "Stimulus" Bill

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No worries — Sasha and Malia’s kids will pay for it

Michael Gerson describes the porkulus legislation signed by President Obama yesterday:

The bill was written in monopartisan secrecy, weighed down by irrelevant spending, considered in a rushed, uninformed debate and passed on a virtually party-line vote. The law contains provisions that seem to weaken welfare reform and invite trade disputes. And it adds a massive burden of debt to existing massive entitlement obligations requiring massive borrowing from international sources — or, if such credit dries up, the massive printing of money to buy these bonds, leading to inflation. 

Sounds like Gerson opposes the bill. Well, no:

But while the legislation was deeply flawed, there was little alternative to action. The usual recession remedy — the lowering of interest rates by the Federal Reserve to loosen up credit and spending — is of little use when the credit system itself is broken and rates are already near zero. The president and Congress were left with one option: attempting a fiscal jolt to counter the economic cycle. Such efforts in the past have often been mistimed, with the cavalry arriving just after the settlers have been massacred. But one has to try. In this case, necessity was the mother of excess. 

For political reasons, I suppose it’s true that “one has to try.” But one does wish that one could be more confident about the outcome while saddling one’s grandchildren with debt.

After weeks of invoking the Great Depression, Obama performed what Politico referred to as a “rhetorical pirouette” while signing the bill:

In his remarks, Obama projected an air of confidence. “We will leave the struggling economy behind us and come out more prosperous,” he vowed. 

Well, one hopes he’s right. But since Obama brought up the Depression, let’s take a look at what has been learned from the historical record:

The recession that began in 2008 could turn out to be the worst slowdown since the Great Depression of the 1930’s. For three-quarters of a century, economists have been studying it diligently. And even now they cannot come to a definitive conclusion about the cause of that depression, the reasons for its severity and duration, or what cured it. In an introduction to a book of essays on the Great Depression he compiled in 2000, Ben S. Bernanke, then a Princeton professor and now chairman of the Federal Reserve Board, wrote, “Finding an explanation for the worldwide economic collapse of the 1930’s remains a fascinating intellectual challenge.” 

Today, of course, the challenge is more than intellectual.

My wife has threatened to stop reading my blog because it’s so depressing, so I’ve just spent 20 minutes staring at the screen, trying to think of a positive way to end this post. Here’s the best I can muster: I still think comparisons with the Great Depression are overwrought. But even after that dark period, America did “leave the struggling economy behind us and come out more prosperous.” I have no doubt we will do so again, eventually.

Sweetie, I’ll let you know when I’ve changed the subject.

(Photo: AP, via Washington Times)

"Stimulus" Bill Would Gut Welfare Reform

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Buried deep in the so-called “stimulus” bill is an appalling sneak attack on one of the most important positive legacies of the previous Democratic president. As a National Review Online headline calls it, the provision amounts to “Ending Welfare Reform as We Knew It.”

At the Heritage Foundation website, Robert E. Rector and Katherine Bradley explain:

Under the old AFDC (Aid to Families with Dependent Children) program, states were given more federal funds if their welfare caseloads were increased, and funds were cut whenever the state caseload fell. This structure created a strong incentive for states to swell the welfare rolls. Prior to reform, one child in seven was receiving AFDC benefits.

When welfare reform replaced the old AFDC system with TANF (Temporary Assistance to Needy Families), this perverse financial incentive to increase dependence was eliminated. Each state was given a flat funding level that did not vary whether the state increased or decreased its caseload. In addition, states were given the goal of reducing welfare dependence (or at least of requiring welfare recipients to prepare for employment).

The House and Senate stimulus bills will overturn the fiscal foundation of welfare reform and restore an AFDC-style funding system. For the first time since 1996, the federal government would begin paying states bonuses to increase their welfare caseloads. Indeed, the new welfare system created by the stimulus bills is actually worse than the old AFDC program because it rewards the states more heavily to increase their caseloads. Under the stimulus bills, the federal government will pay 80 percent of cost for each new family that a state enrolls in welfare; this matching rate is far higher than it was under AFDC.

It is clear that–in both the House and Senate stimulus bills–the original goal of helping families move to employment and self-sufficiency and off long-term dependence on government assistance has instead been replaced with the perverse incentive of adding more families to the welfare rolls. The House bill provides $4 billion per year to reward states to increase their TANF caseloads; the Senate bill follows the same policy but allocates less money.

On August 22, 1996, President Bill Clinton signed the Responsibility and Work Opportunity Reconciliation Act, which imposed work requirements, provided job training and education, limited the length of time an individual could spend on welfare — and perhaps most importantly, changed the funding mechanism to eliminate the “perverse incentives” described above. This fulfilled the vow Clinton made in his first inaugural speech, to “end welfare as we know it.”

I’ve grown more conservative since the days when I voted for Clinton twice, but even during his presidency I admired him for his two most conservative accomplishments — welfare reform and NAFTA. Now the first of those stands to be undone, and the “stimulus” bill also undermines the spirit of NAFTA, requiring that all iron and steel used for construction under the bill must be produced in America.

I’m not so penurious as to want to abolish welfare altogether. I just think it should be, as Clinton described it, a temporary “hand up,” not a permanent “hand out.” Welfare should not become a multigenerational way of life. I don’t think there’s anything unreasonable about requiring that any adult welfare recipient who is physically able to work should be working or training for work as a condition of participation.

Some have argued that welfare reform has hurt poor children and that the provisions should be liberalized. Fine; let’s have that debate. But don’t sneak the change into a provision buried 600 pages deep in a 1,600 page “stimulus” bill. There is nothing stimulating about giving the states a financial incentive to add more people to the welfare rolls.

Dr. Doom Is Still Prescribing, and Says Stimulus Is the Wrong Medicine

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Remember Peter Schiff, who was subjected to ridicule for years for predicting that the housing prices and stocks were in a bubble that would eventually collapse? Well, I sure hope someone can convince me that he’s wrong this time. (Hat tip: Conservative Command)

He’s ratcheting up the dire rhetoric even more than President Obama is. But while I’ve been saying that the need for a stimulus is not so urgent that we can’t take some care in how we spend the money, Schiff says the stimulus will actually make things worse. Much worse. An excerpt from the seven-minute video:

This thing [the financial crisis] is just getting started. Remember that what’s imploding is the entire phony American economy, where Americans borrow money and spend it. What’s happened right now is that the government is now taking on that mantle, the government is borrowing and spending, because Americans are too broke to do it, but what we’re doing is making the problem worse.

And when the bubble finally bursts on the bond market… if the dollar rolls over, which it should, if it begins to fall, ultimately it’s going to collapse, that’s going to knock the rug out from everything the government is doing.

Because when the bond bubble bursts, now the government needs a bailout, the government is broke, and that’s when this crisis is really going to go into a whole new gear.

I think the economy is pretty resilient, but I can’t dismiss Dr. Doom’s predictions out of hand. One blogger recently got a lot of attention by detailing numerous ways “Peter Schiff was wrong” about last year, and Schiff has responded in detail. I don’t know which one to believe. Schiff may have been wrong about some specifics of the crisis, but he was correct in saying a crisis was building. Now everyone acknowledges that we’re in a crisis, perhaps he’s pushing his argument too hard. But in any event, it seems like one more reason to move cautiously on the stimulus.

Obama, Geithner Try to Calibrate Our Anxiety Level

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Above all else, one thing was crystal clear after President Obama’s prime-time news conference last night: The President doesn’t read this blog. (What, you thought I was gonna talk about the economy?)

Despite my admonition yesterday to Stop Saying “Depression”, Obama used the D word twice, once in his opening remarks and once in response to a question. I’m not the only skeptic — the very first question he received challenged him about his apocalyptic language:

Thank you, Mr. President. Earlier today in Indiana, you said something striking. You said that this nation could end up in a crisis without action that we would be unable to reverse. Can you talk about what you know or what you’re hearing that would lead you to say that our recession might be permanent, when others in our history have not? And do you think that you risk losing some credibility or even talking down the economy by using dire language like that? No, no, no, no — I think that what I’ve said is what other economists have said across the political spectrum, which is that if you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of.

Treasury Secretary Tim Geithner took his turn at bat this morning, and he had a narrow line to walk. He’s proposing to invest a lot more money in many of the same big banks that have already gotten a lot of capital from the taxpayers. In David Brooks’s column in yesterday’s New York Times, Geithner seemed positively soothing in comparison to his boss, saying there have been worse crises in the past:

“People are enormously uncertain about the depth of the recession,” Geithner says. “They’re enormously uncertain” about how their assets will perform in this environment. But this is not like the savings-and-loan crisis of the ’80s and ’90s, or like Sweden, where banks themselves were dead, he said, adding that we’re trying to repair “a system that is largely alive and will largely survive but is still burdened by systemic market failure, systemic uncertainty.”

Today he triangulated a bit. I don’t see a transcript yet, but in his prepared remarks, Geithner had this to say:

“This is a challenge more complex than any our financial system has ever faced, requiring new systems and persistent attention to solve. But the President, the Treasury and the entire Administration are committed to see it through because we know how directly the future of our economy depends on it.”

Not the worst crisis ever, just the most complex. Given all the derivatives and exotic financial instruments that have been created in recent years, I tend to agree. (Geithner no doubt will be relieved to hear that.)

Two other things jumped out at me from Obama’s news conference. The President said a couple of times that there were no earmarks in the Senate bill, which came as a surprise to me. The AP reports that he was relying on a narrow definition of the term “earmark.” (Hat tip: Mark Hemingway.)

OBAMA: “I know that there are a lot of folks out there who’ve been saying, ‘Oh, this is pork, and this is money that’s going to be wasted,’ and et cetera, et cetera. Understand, this bill does not have a single earmark in it, which is unprecedented for a bill of this size. … There aren’t individual pork projects that members of Congress are putting into this bill.”

THE FACTS: There are no “earmarks,” as they are usually defined, inserted by lawmakers in the bill. Still, some of the projects bear the prime characteristics of pork – tailored to benefit specific interests or to have thinly disguised links to local projects.

For example, the latest version contains $2 billion for a clean-coal power plant with specifications matching one in Mattoon, Ill., $10 million for urban canals, $2 billion for manufacturing advanced batteries for hybrid cars, and $255 million for a polar icebreaker and other “priority procurements” by the Coast Guard.

Obama told his Elkhart audience that Indiana will benefit from work on “roads like U.S. 31 here in Indiana that Hoosiers count on.” He added: “And I know that a new overpass downtown would make a big difference for businesses and families right here in Elkhart.”

Also, in a blogospheric brush with greatness, it turns out Jonah Goldberg and I had similar conversations with our wives during the news conference. Goldberg wrote today:

I griped about that “create or save” line to my wife over and over again last night. It’s a new line, by the way (and it sounds like a prompt in a Microsoft word processing program). Until recently, Obama had said he wanted to create 3 million jobs (which is about the normal amount of jobs any recovery would generate, I believe). Now he says he wants to create or save 4 million jobs. Aside from the point that it will be hard to measure “saved jobs,” why is he stopping there. Let’s say there are 100 million jobs in America. Doesn’t he want to save all — or nearly all — of them? Why not say his plan will create or save 100 million jobs?

Here’s how anal I am: I looked it up. The latest Department of Labor jobs report indicates that there are more than 145 million jobs in the civilian labor force. Doubtless Obama will be able to claim having saved the vast majority of them. So I’m actually improving on Jonah’s observation here, and I came up with it independently.

But enough about me, let’s talk about you. Do you think I’m too self-absorbed?

(Photos: Getty Images, via CNN)

Slow Down on the Stimulus, and Stop Saying “Depression”

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Not even close.

My nomination for understated headline of the year goes to today’s Washington Post: “If Spending Is Swift, Oversight May Suffer.”

Gee, ya think?

The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures. At the urging of the administration, those provisions call for transparency, bid competition, and new auditing resources and oversight boards.

But under the terms of the stimulus proposals, a depleted contracting workforce would be asked to spend more money more rapidly than ever before, while also improving competition and oversight. …

“We don’t have the means to make sure we don’t blow through billions of dollars and give it to the wrong people,” said Keith Ashdown, chief investigator at the nonpartisan Taxpayers for Common Sense. “We’re on track to lose billions, if not tens of billions, to waste, fraud and abuse.”

OK, you might say, but maybe that’s the risk we have to take, if we really are faced with a “catastrophe,” as the President has said. If this crisis is “as deep and dire as any since the days of the Great Depression,” as Obama wrote in an op-ed last week, maybe throwing money at it now now now now now is the least-bad option we have.

Let’s all take a breath. In the words of the headline over Cato Institute Senior Fellow Alan Reynolds column in today’s New York Post: “It’s a Recession, not a Catastrophe.” As he documents in the table above, by many measures the recessions of 1981-82 and 1973-75 were considerably worse than what we are in now.

An average of 55 forecasters in the Jan. 15 Wall Street Journal survey expect real GDP to fall by another percentage point (a 2.1 percent drop in total) before recovering in the third quarter. If they’re right, this would be just the third deepest postwar recession by that broad measure.

Measured by unemployment, on the other hand, this might well be the second deepest recession. The current unemployment rate of 7.6 percent is quite unlikely to reach the postwar record of 10.8 percent. But the Journal forecasters expect the jobless rate to top out at 8.9 percent after the recession is technically over – making this very close to becoming the second worst recession in terms of job loss.

In other words, there’s really no excuse for Obama or anybody else using the term “Great Depression” in any discussion of the current economic situation. Unemployment in the Great Depression topped out at 25% in 1933 — making it a completely different category of event. We’re looking at unemployment that might get to be as bad as the early 70s. Meanwhile, the inflation of that era is a distant memory and mortgage rates are dramatically lower.

I favored the autumn bank rescue as a necessary evil — the credit markets really were frozen, the economy really was in danger of freezing up, time really was of the essence. I don’t see anything like the same urgency here. Remember also that in the bank rescue, the government wasn’t spending hundreds of billions of dollars, it was investing. Risky investing, to be sure, but there’s at least a theoretical chance that the taxpayers come out whole. But money spent wastefully is gone for good.

It’s time to put on the brakes. Pare the stimulus bill way back, limiting the spending to projects that really will provide a short-term stimulus, and don’t use the crisis to sneak through a decade’s worth of pork. And President Obama, if you really want to demonstrate leadership this evening in your first prime-time news conference, take a cue from Alan Reynolds:

The president needs to be a calming voice right now, a source of strength. It’s not helpful for him to be warning of a “catastrophe” and making vague, untenable allusions to the Great Depression. … [R]ecovery will require more perspective and patience than we’ve been seeing from the White House lately, because time really does heal many economic wounds.

(Depression-era photo: The Market Oracle. Table: NY Post)