UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

April 22, 2009

CRASH TALK

Dean Baker, Prospect - The NYT discussed the possibility that the Obama administration may seek to shore up the core capital of the major banks by converting its preferred shares that it purchased last fall into equity shares. The article does not discuss the very important issue of the rate of conversion.

At the time the government converted its preferred shares in Citigroup to common shares, the conversion ratio was far below the market value. By accepting a ratio below the market value, the government was essentially just giving money to Citigroup and its shareholders. It will be important to examine the price for any future conversions to determine if they are also government giveaways to the banks.

Joseph Stiglitz - One of the reasons why our economy is weak is that we have growing inequality in our society. That means that people who would spend the money don’t have it. We sustained their consumption by lending but that lending was unsustainable and so unless we do something about the underlying inequalities both within our countries and across the world, it may be difficult to restore the global economy to the kind of prosperity that we would hope.

FOUND: SOMEONE ACTUALLY TRYING TO REPRESENT OUR INTEREST IN THE BAILOUT: John Stewart interviews Elizabeth Warren

0 Comments:

Post a Comment

<< Home