The Perils of Populist Anger: From Rick Wagoner to AIG
$152 billion is the total tally in government loans that insurance giant American International Group (AIG) accumulated over the past eight months and 90% the tax that a congressional bill proposes levying on bonuses for employees whose companies received more than $5 billion in federal bailout money.
328-93 was the final vote on that measure in the House of Representatives last Monday, and December 10th was the date that the bill’s catalyst—the story about continued AIG bonuses—broke. Fifteen is the number of weeks that President Obama allowed populist anger at Wall St. spending to mature before he forced Congress into action, and 15% is the amount his national approval rating dropped over that period.
Rick Wagoner is the name of the former General Motors (GM) CEO who was asked to resign by Mr Obama’s automobile task-force during a meeting last Friday—the same day that Mr Obama met with chief-executives from Bank of America, Wells Fargo, and Morgan Stanley, criticizing them for failing to grasp the financial crisis’ magnitude. That day, March 28th—when Mr Obama decidedly took the reins of Detroit and downtown Manhattan—will mark the president’s shift in policy toward bailed-out American companies from financially interventionist to outwardly managerial.
Click to continue reading “The Perils of Populist Anger: From Rick Wagoner to AIG”
















Fewer than three years ago the American real estate market was at an all time high; the median home cost—$245,000—had not fallen in nominal or real dollars since 1991 and low average mortgage rates—around 6%—meant homeownership was possible for many first-time buyers whose comparatively low salaries made longer term mortgages necessary.
In 1919, John Maynard Keynes hypothesized that the free-market economy was fundamentally unstable—that rises in unemployment and drops in aggregate demand would not tend to self correct, but rather to self-magnify. In 1936, in The General Theory of Employment, Interest, and Money, Mr. Keynes outlined how a government’s central bank could stabilize the economy, thereby avoiding the damaging boom-bust cycles of the late 19th and early 20th centuries.
In 2000, then Vice-President Gore defeated then Texas Governor and Republican Presidential nominee George Bush in Maine, 49% to 44%. But unlike in Iowa and Minnesota where Mr. Gore won by slimmer margins and still captured each of the states’ electoral votes, in Maine he was awarded the support of only six of ten electors.
