Some readings

Will the Geithner Plan Work? from The New York Times

This is a discussion/debate by leading economists – Paul Krugman, Princeton University; Simon Johnson, MIT; Brad DeLong, UC Berkeley; and Mark Thoma, University of Oregon about Geithner’s toxic asset plans.  I don’t see the debate yet as being intense; most of them agree on many similar points.  Krugman doesn’t believe it would work while Johnson thinks it could but it’s unlikely.  Brad DeLong says having a plan is better than nothing while Thoma is similarly skeptical.

The Geithner Plan Won’t Work, by James Galbraith (The Daily Beast)

The title says it all. “At first glance, in that case, the plan would look like a big success. Geithner would be a hero. Paul Krugman and I would have to shut up. Until, after a bit, it became clear that the assets were not actually worth 60cents on the dollar, but only 30 cents, or nothing. Then the FDIC would take its losses. But the banks would be home free.”

Here’s A Slogan for the G20 Mob: What Do We Want? Free Trade! by London City Mayor Boris Johnson (Telegraph)

Following the collapse of the Doha Round in July last year, Johnson is calling for the the recognition of the gravity of the problem.  Specifically he mentioned the problem of subsidies, where those coming from developed countries are trampling upon the livelihood of countries who don’t receive much from their government.  “But unless we have the political courage to do a deal, we seem to be legitimating the current disastrous trend towards economic nationalism and protection.”

Why Are We Bailing Out the Foreigners? by Andrew Leonard (Salon)

We’ve all heard about the anger concerning ‘bailouts’ given to foreign companies.  One striking example is the money received by Societe Generale and other European banks serving as counterparties to AIG.  But Leonard argues, it is necessary especially if we want recovery.  Ah, he also spoke about the hearing in Congress yesterday where Bernanke and Geithner among others appeared (and where Bernanke gave a remarkable response to a congressman who idiotically thought every question can be restricted to a simple yes-or-no answer).

A Deduction from Charity, Martin Feldstein (Washington Post)

Former Harvard President and chairman emeritus of NBER argues that with charitable donations already down so much from stock losses, the reduction in tax deductibility of those donations would make it even worse for the charities.

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