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Stephanie Pope is good for Boeing and good for America. Pope headed the parts and services business, and is now the CEO of the commercial aircraft unit. With quality defects a major issue for Boeing leading to two CEO's leaving early, the last being Mr Calhoun a finance executive leaving in December 2024, there is strong opinion that an engineer is needed, yet merely an engineer is not enough as Muilenberg an Iowa State engineer stepped down in 2019. Stephanie Pope has an accounting degree from Missouri State, joined McDonnell Douglas in 1994, which merged into Boeing in 1997.  She says "Culture beats strategy. If you have wrong culture you never succeed." and "Out of failure comes success. You can't be afraid of failure." It's rare to hear that. It also tells one that she has the right idea and practices about the process and hard work that gets results. Pros- she loves the company her grandfather was sheet metal inspector for the company, her father electrical mechanic, at McDonnell Douglas based in St. Louis, Missouri.  She has worked 30 years at the company. She aspired to be a teacher- and its good to have humility.  A VP in the parts and services unit describes how she helps out when quality issues come up in a hands on way bringing in engineers and other resources to help. The Chief Engineer says she is comfortable in the technical space.                                                  Cons- She has an accounting background. There is a sense that Boeing wanted to push planes out of he factory floor as fast as possible to meet production targets. Stephanie Pope with her humility, hands on style, her attitude in work with others, treating assembly line workers with dignity, her attention to the culture at Boeing, persistence in the face of failure,  all present a rare opportunity for Boeing and for America to engage in the task of renewal under a new leadership conscious of its responsibilities.        ...

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Timothy Geithner as New York Fed Chairman was a key person in the rescue of Bear Stearns. In an interview with the WSJ he recounts events and defends his actions on March 14 in a conference call at 5am in the morning with Ben Bernanke, Kohn, and other regulators and staffers and Treasury Secretary Paulson. By 7 am a decision was made choosing from 2 options not to do it, let Bear Stearns fail, and Fed would make an infusion of liquidity into the banking system to reduce the impact, or make a loan to to give time for Bear Stearns to make a merger. Mr Bernanke did the head count and all top officials agreed to the loan option. At 7.30 the morning of March 14 about $80 billion in short term loans would come due. If Bear Stearns went into bankruptcy protection lenders would get back collateral instead of cash and might sell the collateral en masse and pull back trillions of dollars of similiar loans to other investment banks. Also Bear Stearns had trading positions with 5000 other firms so the ripples would extend throughout the banking system. At issue in a Bear Stearns collapse with no Fed loan- a full blown run on Bear Stearns had begun on March 13 with customers and lenders pulling out billions of dollars. The man- Geithner does not have a PhD in economics and has never been a banker or trader, the background of previous chairmen of the New York Fed. He joined Treasury Department in 1988 and was an assistant to first Treasury Secretary Rubin and then his successor Sommers. Geithner was active in the rescue of Mexico, Indonesia and Korea in the Asian and Latin American banking crises. He was appointed to his position at the New York Fed in 2003, so he has 15 years of experience dealing with international banking crises. The criticism- has come from a colleague at the Fed Vincent Reinhart on the oped pages of the Washington Post, and from former Fed chairman Paul Volcker in a speech to the New York Economic Club. Geithner has asked to speak at the same club to give his account and his defense of his action. Note that Bernanke and Paulson and Kohn were in on this decision and voted in favor of it and there appears to be a consensus that all in the conference call supported it. Geithner kind of put it all together and so he is defending it. Geithner's contribution- Geithner pulled in the other players in the financial markets into close communication with the Fed. He assembled an informal advisory group including Rubin, Summers, Greenspan, Volcker, former New York Fed Chairman Corrigan and investment banker Pete Peterson. He would also phone them individually asking : what should we think about an issue? What are the best 3 arguments for or against? What do smart people think? He also initiated a series of dinners at the NY Fed's executive dining room in which 5 or 6 senior executives from a major investment firm would meet his own top people. He also calls CEO's of important banks and investment firms every week in a crisis situation to ask- Whats changed? Whats better? Whats worse? What worries you? And after the credit crisis in August ,Geithner joined Bernanke in a small group that included Fed vice chairman Donald Kohn and Kevin Warsh, a Fed governor, investment banker and White House aide. ...

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Greece is estimated to lose $30 billion in uncollected taxes each year. In an effort to make the wealthy pay their fair share in deficit reduction and austerity measures the Greek government is going after tax havens in London of Greeks shifting money abroad. This includes important members of parliament including the president of the Greek parliament.

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Some of the roots of the Alawite role in Syria go back to the colonial period. Alawites are a Muslim sect living in the coastal mountainous region of Syria in towns such as Tartus, Latakia and in the mountains. The French setup a Alawite state in 1924-1936 before it was merged with the rest of Syria. The Russians have set up a small naval base in Tartus. As the Free Syrian Army reaches Damascus and suburbs the Assad regime is expected to move to Tartus and the coastal region and mountains. This account by NYT reporters from the area reveal the unreal nature of the conflict and the Assad regime. The seaside town of Tartus swells with people fleeing Damascus and other cities, with people from the Assad regime or allied to it, and the real estate market booms. During the same week other accounts in the NYT reported accounts of cluster bombs being used against civilians by the Assad regime. The civil war brought artillery attacks and air raids by the predominantly Alawite Assad military regime on mostly Sunni civilian populations thorough most of 2012. The Russians, the Assad military and public officials, living what may be the last weeks of this civil war as it takes on a sectarian nature, in some kind of bubble. From the international community only France, Turkey, Britain, and Egypt may retain credibility in Syria after the passive role of the U.S. under president Obama to the struggle for freedom in Syria. The U.S. Democratic administration's distaste for engagements overseas may have carried it to the point of standing by as artillery was turned against a civilian population. France and Britain's role in the Libyan people's struggle, and its lower profile assistance to the freedom struggle in Syria compared to the earlier effort under president Sarkozy, still creates a measure of respect. A no fly zone by the U.S. would have prevented the destruction to civilian population that occurred and salvaged U.S. respect, at very little cost relative to the one trillion dollars spent in Iraq and Afghanistan....

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Problems GM faces as it takes the largest loss in its history in the third quarter of 2007. A string of losses in USA and Germany , GMA weakness, and the long duration of tax deferred assets were cited as reasons. The size a $39 billion charge comes from writing down the value of net deferred tax credits it could have used if it was profitable. If GM returns to steady profits GM can reclaim some or all of the $39 billion in deferred tax credits so its an accounting type of loss.

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GM has invested in a company that will make ethanol from crop wastes, wood chips, scrap plastic and including municpal garbage. Coskata will have its first pilot plant in Warrenville, Illinois. It uses a process of gasification and bacteria to produce ethanol. It doesn't use corn, uses only a gallon of water for a gallon of ethanol, uses a raw material available everywhere and is estimated to cost 0.50 cents to $1 cheaper than gasoline. The total production cost is less than $1.00 when it comes onstream by 2010, and uses techologies that are ready.

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Feldstein wants to see a stronger dollar, that is less inflation eroding the value or purchasing power of the dollar at home. Abroad he wants to see a weaker dollar in relation to Europe, Japan and Canada where about half of US imports originate. And a weaker dollar in relation to lower wage Asian countries to improve America's trade balance. Better to do this now than to wait a few years when the adjustments needed would be greater. America needs to export more and import less to improve the trade balance. A competitive dollar in relation to trading partners in Europe and Asia would provide the improvement in the trade balance that the U.S. needs for keeping economic growth. With the risks to the economy from declining housing prices improving the trade balance becomes important. During the 1985-1988 period the dollar declined in value significantly, falling 37%, but the inflation rate averaged 3.1%,says Feldstein. This is what he means by having astrong dollar at home, which is to say not eroding its purchasing value, while at the same time increasing exports and reducing imports. During this period merchandise exports increased by 40% while imports increased at half that pace. A repeat of that experience is possible and necessary to maintain growth, according to Feldstein. See the link to McKinnon, at Stanford, The Yuan and the Greenback, WSJ, August 29, 2006, which cautions against anything but a very gradual and carefully managed appreciation of the yuan, giving importance to inflation and interest rate differentials between the US and China. One point to note narrowing of interest rate differentials between the US and China is seen as backdrop for dollar weakening on exchange rate basis. McKinnon appears to consider a smaller interest rate differential as a cue for an even lower appreciation of the yuan, see his example of 2% inflation in the US and 3% interest rates. Interestingly the two approaches may complement each other. Offering a perspective of China maintaining its growth and not risking deflation or slowdown, and of the US maintaining its growth and not risking a slowdown from the housing market collapse, by strong domestic investment and exports. How to keep both economies going may be the policymakers challenge for strong global economic growth....

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An overwhelming number of readers who commented on this article by October 27, 2009, were opposed to sending 40,000 more troops to Afghanistan. Looking at all comments in detail one finds that of the 64 readers commenting only a handful, about 8-9 supported sending these troops. Ninety percent of the comments to this editorial asking Obama to fight this war with conviction seriously questioned the wisdom of doing this. Many readers asked why aren't the Europeans putting thier lives at stake, and two asked how the Economist could with astraight face say that Britain's 500 troop increase was a welcome gesture. Readers questioned the assumptions and statements made by the Economist such as" letting the region "slip into amaelstrom of conflict," or "permanent cross-border instability," and "a terrible betrayal of the Afghan people, " in many of the comments. Readers seem conscious of the fact that its not a precipitate withdrawal that is being discussed, its a war for the long haul that it inevitably becomes as the US forces get deeper into the conflict in the mountains of Afghanistan. The discussion is not about the next 6 months but of next year and the year after that and the year after that. That is also what General Colin Powell advised President Obama. He asked Obama to think clearly about the clear goals of this mission. See the link to Powell. The question arises is whether the Economist sensitive to its readers thoughts on this subject, and it is how does it account for such an absolute majority of sensible readers having serious questions, doubts, and outright opposition to a deeper conflict in Afghanistan?...

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Siemens and Alstom join together to compete effectively against China's CRRC in Asian markets. CRRC is itself the result of the merger of two large rail companies in China. China has about 12500 miles of high speed rail network, more than the rest of the world combined. Prime Minister Shinzo Abe of Japan is pushing for Japan's Shinkansen bullet trains, with billions of dollars in soft loans, including an effort to build the first high speed rail in India between Bombay and Ahmedabad.

Japan and the European companies have an edge when it comes to longer experience with high speed rail and better maintenance track record, to compete with CRRC's lower price tag.

 

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Toyota CEO Akio Toyoda, grandson of founder Kiichiro Toyoda, assumes new role just as net revenue is down 38% for the second quarter 2009, and a loss of $819 million. Akio says he is extremely frustrated with the situtaion and wants to start again from the ground up. With the restructurings at GM and Chrysler and focussed effort at Ford, efforts of Korean carmakers, and new competition from China and India looming, Toyota expects severe competition in the American and global markets. About 40% of Toyota's senior management has been retired or reassigned.Four of five executive vice presidents are new to their jobs, and only one Takeshi Uchiyamada, the product development chief is left from former CEO Watanabe's team. The outward looking Akio, whose background includes an MBA from Babson college in Massachusetts, and overseas experience including America, is likely to give the relatively insular culture at Toyota, a jolt. Under the new arrangement each of the executive vice presidents has been put in charge of a global region. One of the biggest problems Toyota will face say experts is the mundane looking lineup of vehicles bought mainly for reliability, just as competitors are making big strides in quality and new design, with new technology reshaping what the automobile might look like. The focus on the Tundra truck and SUV's like FJ Cruiser now looks misplaced. Yoshimi Inaba, a Toyota executive with experience overseas, will take charge of the American operations. Inaba says that without N. America, Toyota is unlikely to come back to global proficiency....

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The German Constitutional Court established the legality of the eurozone bailouts under German law. It also stipulated that future bailouts would require the approval of a parliamentary committee. The Court ruled out any proposal that would pool Germany's debt with that of other countries in the eurozone. This rules out the issuance of eurobonds that are supported by the pooled resources of all EU countries. With no mechanism for firm budgetary discipline in place under the current structure of the EU, this is seen as an absolute no in Germany, and is opposed by all German political parties including Chancellor Merkel's Christian Democrats. ECB president, Jean Claude Trichet, is a strong supporter of the European Union, who actively participated in its creation over three decades. He insisted on budgetary discipline for all EU member states in his recent speech at a conference in Lake Cuomo resort in northern Italy. By leaving open other solutions over time that would still move forward the idea of a united Europe, the Court's view on this point coincides with that of Merkel and the ECB's current and future presidents, Trichet and Draghi. Merkel told the German parliament on Sept. 7, 2011: "Europe must come out of this crisis stronger than it went in, just as Germay came out of the crisis stronger." Merkel compared the difficulties today with the difficulties Germany faced as it tried to rebuild after World War II. Others have compared the difficulties to that of reuniting East and West Germany with their disparate and different ecoomic structures, attitudes and demographics....

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Walt Mossberg, who writes the Wall Street Journal's consumer technology review section, watched Steve Jobs up-close over the years since 1997. They met one-on-one for product introductions, long discussions about the industry, and recently after Jobs illness, at his home in Palo Alto. Mossberg describes a long walk to a nearby park after Jobs had undergone a liver transplant. It provided an insight into the man Steve Jobs was. Persistent- he called Mossberg for 4-5 straight weekends during the dark days of 1997-1998 to convey his vision of Apple products or discuss aspects of reviews. Patience and optimism about the future- Jobs always maintained a positive tone and a vision of what could be in the digital revolution, and Apple's role in it in these discussions. There is the opening of the first retail store in the Washington D.C. area, and Jobs patiently handles Mossberg's incredulity about Apple and its inexperience with retail stores. And Jobs saying that he had taken a serious interest in the details- down to the translucency of the glass. There is the meeting with Bill Gates at the fifth All Things Digital Conference, when both made their appearance together for the first time and Jobs hands a cold bottle of water to Gates. By this time Jobs had already come to the conclusion- as he once said after accepting a $150 millon investment from Gates in 1997-1998- that it was no longer true that Microsoft had to lose for Apple to succeed....

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Otis Elevator is moving a plant based in Nogales, Mexico, back to the U.S. This plant was moved to Mexico in 1998 for cost reasons. Now Otis CEO, Didier Michaud-Daniel, says producing at a new South Carolina plant will cost less than Mexico. Logistics and freight costs are 17.3% less in the U.S. than Mexico, and an additional 20% in savings come from "efficiencies" gained by having all its white collar workers associated with elevator design and production. Most companies that manufacture in China and Mexico keep their design and engineering jobs in the the U.S. It is not clear to what extent American companies have considered all the costs of separating design and engineering from manufacturing, including the opportunities for close cooperation possible in one location that are lost when everything is so spread out. At Otis toolmakers in Dallas and engineers and designers located in Indiana and Arizona traveled to the Nogales, Mexico plant. This can be especially important when as in Otis's case the new plant in Florence, South Carolina, plans the launch of a new generation of elevator designs. In this case there is an added benefit by making it easier for customers to visit the plant and look at the product. The new plant will have more automation and use fewer workers on the factory floor. The new factory will employ 360 workers including white collar workers, the same as the Nogales, Mexico, plant with a lower number of factory floor workers. ...

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Iran's Ahmadinejad's speaks to reporters and editors in New York before his address to the UN General Assembly. He says: "During a historical phase, the Israelis come into the picture and are then eliminated." This WSJ editorial finds President Obama's response and his address at the General Assembly of the United Nations inadequate to convince Iran's government and ruling mullahs that the program has to be ended. Sanctions have not produced the needed results and have only gradually been tightened showing a lack of resolve. President Obama failed to speak up for young people and university students in Iran who held demonstrations against the Ahmadinejad regime when it changed the election results- just as he did not speak up for the young people fighting a dictatorship in Libya and Egypt, or just as has failed to do for the young people fighting today in Syria. In this respect Obama has abandoned America's role as a beacon of hope for countries around the world. It is left to American media and public opinion to vigorously express these ideas in unison, as it has already done every step of the way. Clearly Ahmadinejad does not speak for the Iranian people, especially the young generation, and Egypt's president Morsi like every other Arab leader may have problems with Israeli policy but sees the need for peaceful coexistence. It would be more accurate to say that the Iranian people, like the people of Syria, are trapped as Morsi put it to the General Assembly, in "the tragedy of our era," moving from dictatorship to dictatorship....

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It may come as a shock to the Egyptian people and freedom loving Arabs and Americans everywhere that Secretary of State Hillary Clinton called the Mubarak government "stable" and "responding to the legitmate interests of the Egyptian people," on Tuesday January 25, 2011. Vice President Biden said on Jan 27, in a night interview on PBS, that he would not call Mubarak a dictator and did not think he should step down. This Washinton Post editorial is strongly critical of the Obama administration for its statements implying that the 30 year Mubarak regime would continue. It says Mr Obama spoke with Mubarak on Friday night and after speaking to Mubarak stated that he would continue working with Mubarak, and not once mentioning elections. The Washington Post says it is dangerous to assume that the energized and enraged people of Egypt protesting on the streets of Cairo and other cities will back down and carry a dialogue with a regime that has repressed every form of assembly and free expression for three decades. It supports the moderate and democratic platform of leaders of the protests and of Mr El-Baradei. This includes lifting of a hated emergency law that bans peaceful assembly, the right to freely organize political parties, and allowing free democratic elections. The Post calls on the Obama administration to prepare for the peaceful implementation of the opposition platform, and telling the Egyptian army without qualification, that violent repression would rupture the rellationship with the United States....

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The World bank president Robert Zoellick in an interview with Sudeep Reddy of the Wall Street Journal. He says its frustrating to see Europe respond to problems in banking, sovereign debt and competitiveness that have a chance to work, but only to find that the action is a bit late and a bit short every time. He says the Germans are right in insisting that credit cannot be given away freely, and that reforms have to be made. Yet these reforms in the case of Spain and Italy to increase competitiveness will take time and in the meantime both countries will need bridge financing. A direct recapitalization of European banks by the European Financial Stability Facility is needed to avoid this slow and continuous decline in confidence from negative news and uncertainty. Because the problem now is of a longer term nature with debt issues that will take time to resolve and energy price volatility, Zoellick says simply doing short term stimulus and monetary will not work, and a longer term plan needs to be implemented. Zoellick supported the China Development Report of the World Bank and China's DRC which called for a shift in the economy away from reliance on state owned companies and heavy infrastructure spending. Here he says the new stimulus plan for China was necessary because of slowing growth. Yet he hopes China's leaders keep this in mind as they develop solutions for the long term that avoid the rampant credit expansion and investment of the 2008 Stimulus, and come up with a new policy mix....

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Under a new program to increased spending on healthcare from 1.3% of GDP to 2.5% the Indian government plans to provide free pharmaceuticals at state run hospitals. This is expected to cost $5 billion over 5 years. Initially 350 drugs would be on a list of essential medicines and would be purchased from generics manufacturers in India. Dr. K. Srinath Reddy, heads the committee advising the Indian government on healthcare. He says this will help improve access to medicines for the vast majority of the people. Estimates show 70% of out of pocket medical costs for Indians come from spending on drugs. About 40 million people are pushed into poverty each year because of the high cost of medicines, says Dr. Reddy. He said that in 1984 31% of the medicines at government run hospitals were provided free to admitted patients, dropping to 9% in 2004. For outpatients this dropped from 18% to 5%. The free medicine program would be part of a larger universal health care program to be introduced over the next decade. India's large generics pharmaceutical industry makes the provision of free medicines on a large scale a feasible option in India because of the lower prices, with additional pricing advantages when purchased in larger volumes by the government. This would also have a major impact on the quality of healthcare in the country of 1.2 billion people for a relatively small investment. It also promotes a sense of fairness and equal access because the benefits of decades of modernization have been unevenly distributed and because of widespread poverty....

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Allan Blinder gives a spirited account of what he sees in the Paul Ryan Republican deficit reduction plan. He says that with the voucher plan retirees would fall further and further behind the increasing cost of health insurance. With no explicit cost containment proposals it assumes that some kind of miracle will occur for costs to be kept in check- especially as Republicans want to repeal the cost containment proposals in the President's healthcare plan. He asks whether someone is saying, that we have to destroy Medicare so it can be saved. Ryan woulld also turn Medicaid into a block grant, then underfund it and let the states figure it out when they are in a budget squeeze. Blinder points to the estimates of the Center on Budget and Policy Priorities, that show about two-thirds of Ryan's budget cuts would come from programs that serve low and moderate income Americans. And to make matters worse the steep spending cuts go to finance tax cuts that largely benefit the wealthy. He calls this Robin Hood operating in reverse, and coming on top of 30 plus years of rising inequality. David Stockman makes a similiar point on the editorial pages of the New York Times, April 24, 2011; also adding the point that the middle class will have to pay higher taxes for the deficit to be addressed, something President Obama's plan fails to do. Blinder says that the Bowles-Simpson and Rivlin -Domenici proposals attack the deficit reduction problem in a better way, that asks something from all classes and interests. ...

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Russian and China sign a contract for Russian natural gas from undeveloped fields in Siberia during Putin's visit to Beijing in May 2014. The 30 year contract is for about $400 billion. China gets natural gas at prices about 25-40% below the current cost of importing liquefied natural gas from Australia, Qatar, Malaysia and other countries, according to RBC Capital Markets. For the last decade China and Russia have failed to agree on a price. In these negotiations a price was reached but is being kept a commercial secret. China imports large amounts of natural gas by pipeline from Turkmenistan at about $10 per million British Thermal Units (BTU's). Gazprom needs about $12 per million BTU's to break even. The two Siberian fields are the Kovykta field and Chayanda field which would remain undeveloped without the deal to supply China. Russia will spend about $55 billion for pipelines and infrastructure on its side, and China $20 billion. China's needs for natural gas were 170 billion cubic metres in 2013, growing to about six times consumption of about 30 billion cubic metres in 2000, according to China's NDRC. This is expected to reach 420 billion cubic metres by 2020. Currently 17.7 million metric tons come by pipeline mostly from Turkmenistan and 15.5 million metric tons of LNG mostly from Qatar and Australia, according to China General Customs Administration. The deal will put on hold higher cost LNG projects for Asian countries and make mores gas available at reduced prices in Asia, according to analysts....

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Richard Fisher, president of the Dallas Federal Reserve Bank, has a three part proposal for tackling the "too big to fail" problem and concentration of 70% of the U.S. banking assets in a few banks. It calls for Market Discipline to be exercized in a way that the Dodd-Frank legislation fails to do. This is to be accomplished by having deposit insurance and the Fed's discount window apply only to traditional commercial banks, not the nonbank affiliates and parent holding companies. Customers, creditors and counterparties of all nonbank affiliates and the parent holding companies would be asked to sign a disclosure accepting that there is no government guarantee. In addition the largest financial holding companies would be restructured so that all their corporate entities would fall under a speedy bankruptcy process. Fisher does not clarify how he would do this restructuring. The Fisher idea come after changes in the banking industry through internal management restructuring following trading losses, legal settlements and the passage of a Swiss referendum called the Minder Initiative on compensation. Fisher suggests the U.S. Fed and regulatory authorites in other countries should push for further restructuring and calls for action beyond the limited results from 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. He is critical of Dodd-Frank's often ambiguous and lengthy worded legislation- 849 pages for the law and 9000 pages for the regulations written to implement the law. Fisher emphasizes the point that its hard to implement a law and enforce rules when its not clear and is difficult to understand....

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Serious questions about the future of the car industry and investment in fuel efficient cars as a long term viable alternative, regardless of the specific price at the pump that reflects changing economic weakness in a global economy. Decisions that Obama will have to make in steering the auto industry in a new direction. Management and culture at the car companies remains as ever a big issue and this also will come up because fuel efficiency and making money on small cars and building the cars that the public wants and would pay good prices for, are a result of the resolve, skill and perseverance of management. The only thing that one can say for current management at GM and Chrysler is that it is entrenched and with the same culture that does things the way they have always been. It also lacks the vision and skills to make the changes to get Americans to buy more cars and small cars at prices where they are profitable to car companies. As it reminds us here for all the talk about fuel efficiency and cars, light trucks madeup 58% of GM's sales through November, 64% for Ford, and 72% for Chrysler. The market is bad for all car companies including Toyota and Honda, but things are much worse for the Big Three because of the way in which their sales are way skewed in the direction of SUV's and light trucks and the absence of winning models in the medium and small car segment that command good prices....

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Frank Rich of the NYT thinks Obama's problem is not the GOP which is losing public support very quickly as the CBS/New York TImes poll shows, or the mortgage rescue plan and the shaping of new priorities in his address to the joint session of Congress which have increased in popularity for a people nervous about the economy, but the increasing unpopularity of the banks and financial institutions. His plan for financial institutions lacks the clarity and direction of his other efforts, says Rich. And Geithner who was protegeof the old boys Greenspan, Rubin and Summers who got the country into this disaster, is not the man who can convince the people. Therein lies the President's problem. He has chosen these people to come up with the solution to the banking crisis, and he has to sell this hugely unpopular solution with his advisors too timid and too complicit in the origins of this problem, that they have not been able to craft an effective plan. And the people who run these banking institutions are still running these institutions, and the people who run these auto companies are still running these auto companies, something that is hugely unpopular with the people as the CBS/New York Times poll shows. Only a new management, a new board, and a fresh clean beginning, and a convincing plan, would convince the people that another big bailout of $750 billion in banking "asset purchases" on top of the previous $700 billion bailout is going to work....

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Krugman says that this may be the third time that Obama and Geithner are trying to find ways to let the market and banks come up with a value for these toxic assets and take them off the books of the troubled banks. Each time there is he says new bells and whistles but its essentially doing what the Paulson plans were doing, and are a rehash of the Paulson plan. Now in the latest version on March 23 weithner proposed a complicated scheme in which the government would lend money to private investors, who would then use the money to buy the toxic assets. Krugman's view is that it wil not work. The main idea says Krugman behind all these plans is that the toxic assets are worth much more than anyone is willing to pay now because of the lack of confidence and illiquid markets. If this could be changed then they would be assigned amuch higher value and many of the banks would not be in trouble. The trouble with this approach is that with each passing month things are getting worse, a loss of 600,000 jobs a month, and with more foreclosures and higher unemployment, housing prices are probably going to look alot worse a few months from now. Which essentially means that mortgage related securities will remain discounted by alarge number regardlesss of any number of Paulson type or Geithner type plans to wish the contrary. And in the process valuable time is lost. ...