Sunday, October 25, 2009

Points of View - October 25

China & America - The Odd Couple - The Economist - "The heart of the problem is a profound uncertainty in both countries about where the relationship may lead. In many respects the two countries are in the same bed. Their economies have become interlocked, especially in the past decade. America is the world’s biggest debtor and China its biggest creditor. From climate change to the economic recovery, the world faces problems that demand China and America work in concert."

Financial Reform

Washington's Plans May Result in Even Higher Executive Pay - By Jonathan Macey - The Wall Street Journal - "Executive pay has emerged, once again, as a major issue in Washington. This week Treasury and the Federal Reserve announced new regulations designed to oversee and limit executive pay at thousands of financial institutions. This is deeply ironic, because today's pay woes are the direct result of prior government intervention. In 1992, Congress decided it would use the tax code to 'improve' (i.e., reduce) executive compensation in publicly traded companies."

The State of Financial Reform - The New York Times - "It sounded good when the Treasury’s pay czar, Kenneth Feinberg, announced that top executives at Citigroup, Bank of America and the other five institutions surviving at taxpayers’ expense would see their compensation packages cut in half this year and their cash salaries reduced by 90 percent."


Credit Card Chicanery - The New York Times - "The Credit Card Accountability, Responsibility and Disclosure Act would end a great many odious practices. The companies, for example, could no longer deluge broke and unemployed teenagers with credit cards, driving them deeply into debt that they have no way of paying off. Credit card companies will have to verify the young person’s ability to pay or get a signature from a responsible adult before credit is issued."

The Bad Debt Dance - By Jan Boucek - The Wall Street Journal - "It takes two to tango. For most bad loans, there's an irresponsible lender and an irresponsible borrower. But two years since the start of the credit crunch, and lenders are suffering all the opprobrium. That's easy to do: Bankers are slick, cocky and rich. Of course, this was overlooked before the crunch as bankers greased the over-reaching ambitions of governments, companies and consumers. Now that all have been caught out, those indentured to the banks are crying foul: 'The devil made me do it!'"

Why Congress Must Now Abolish Its Debt Limit - By Bruce Bartlett - Financial Times - "Any day now there is going to be a uniquely American political crisis when Congress must raise the limit on how much the federal government may borrow. If it fails to do so, the Treasury department loses the legal authority to issue new bonds."

Health Care

Public Opinion and Health Reform - By David Brady & Daniel Kessler - The Wall Street Journal - "Earlier this month, President Barack Obama said that an "unprecedented consensus has come together behind" health-care reform. As recently as June, public opinion polls supported such a proposition. That month a CBS News/New York Times poll found that 64% of Americans agreed that the federal government should guarantee health insurance for all."

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