Stories by Daniel Gross

  • Banks May Bail Out the Bailout Bailing Out the Banks

    Say that three times fast. Reports today suggest senior regulators, including the FDIC's Sheila Bair, are thinking about tapping the nation’s healthy banks to lend billions of dollars to rescue the insurance fund that protects bank depositors. The fund, overseen by the FDIC, is rapidly running out of money because of a wave of bank failures, and Bair would rather go hit up the banks themselves than go hat in hand to Tim Geither--who is, by all accounts, not her favorite person. There are a few reasons why this could be smart--for Bair and for the administration:...
  • Obama to Wall Street: Don't Make Me Come Here Again

    The left has rapped Obama and his administration for being too cozy with Wall Street, for being too tight with the perpetrators of the debacle, and for being too unwilling to come down hard on the financial system that nearly bankrupted the nation through a combination of greed, arrogance, and incompetence. There’s some accuracy to that point of view, and to the general sense you’ll see in the analysis of the one-year anniversary of the Lehman Brothers debacle that not much has changed on Wall Street. Banks are still using leverage, paying big bonuses, and figuring out ways to game the system to profit.But President Obama, speaking at the heart of historic Wall Street in Federal Hall, is surveying an industry and financial system that has changed significantly in the past year. And his tone isn’t exactly conciliatory and fawning. In essence, he’s saying: don’t make me come back here again:“Unfortunately, there are some in the financial industry who are misreading this moment....
  • Are Media Reluctant to Discuss Race as Factor Driving Obama Opposition?

    Reading coverage of Wilsongate (Hecklegate?) and other recent coverage of conservative Southern politicians, it seems that articles like "What's the Matter With South Carolina" in Politico, or the New York Times piece about how the brothel-visiting Louisiana senator David Vitter manages to remain popular in Louisiana, "Obama Factors Plays to Vitter Advantage," are ignoring what strikes me as an obvious answer to the question they raise. ...
  • New Economic Trend Against Freebies

    "You can make money giving things away," says Chris Anderson, author of the bestseller Free: The Future of a Radical Price (price: $26.99). "There really is a free lunch." But powerful economic trends generate equal forces pushing in the other direction. Google may prosper by giving away services and data. But the technological revolution Anderson celebrates—and the challenging economic environment—are pushing many enterprises to ask customers to shell out for goods and services that used to come gratis. Paid is rapidly becoming the new free.When he acquired The Wall Street Journal in August 2007, Rupert Murdoch considered liberating the paper's digital journalism, even though 1.06 million people pay to subscribe to WSJ.com. But as the advertising that supports his many media platforms dried up like the Outback in January, the wily media mogul performed a backflip. "We intend to charge for all our news Web sites," he said in August. Customers of airlines—one of the few industries...
  • Economy: What Is a Cupcake Bubble?

    Better enjoy that vanilla cupcake with espresso-ganache icing today. This sugar rush is going to end with a crash.
  • U.S. Outpacing Japan's 1990s Economic Response

    Avoiding Japan’s 1990s-era macroeconomic mistakes is job one for U.S. policymakers. So far, so good. Japan’s poky, unimaginative response to bursting credit and real-estate bubbles turned what should have been a recession into a decadelong malaise. Most economists predict the U.S. will be growing again within the next 12 months. While there is a “remarkable resemblance…between the U.S. crisis and Japan’s ‘lost decade,’ ” Kiyohiko Nishimura, deputy governor of the Bank of -Japan, tells NEWSWEEK, the good news is that the tape of Japan’s financial swoon that we’re watching is running on triple-fast forward. Over the past year, “one month in the U.S. is equal to six or seven months in Japan,” Nishimura says. America’s central bank and political system are wired to act more rapidly than Japan’s calcified bureaucracy. But U.S. policymakers clearly learned from Japan’s example. Japan’s central bank didn’t adopt a zero-percent interest-rate policy until February 1999, more than eight years...