The Washington Post is good this morning in reporting that the Bush Administration, which is exiting with the house falling down around it, is trying to knock out another couple of columns before it goes. After all we’ve learned in recent months, what we don’t need is more deregulation so industry can do what it wants without oversight.
The new rules would be among the most controversial deregulatory steps of the Bush era and could be difficult for his successor to undo. Some would ease or lift constraints on private industry, including power plants, mines and farms.
Those and other regulations would help clear obstacles to some commercial ocean-fishing activities, ease controls on emissions of pollutants that contribute to global warming, relax drinking-water standards and lift a key restriction on mountaintop coal mining.
As the deadlines near, the administration has begun to issue regulations of great interest to industry, including, in recent days, a rule that allows natural gas pipelines to operate at higher pressures and new Homeland Security rules that shift passenger security screening responsibilities from airlines to the federal government. The OMB also approved a new limit on airborne emissions of lead this month, acting under a court-imposed deadline…
A rule put forward by the National Marine Fisheries Service and now under final review by the OMB would lift a requirement that environmental impact statements be prepared for certain fisheries-management decisions and would give review authority to regional councils dominated by commercial and recreational fishing interests.
Self-regulation has worked out so well on Wall Street, so why not in the environment?
The Journal scoops that Wall Street bosses are looking at ways to cap their own pay because of the nasty political environment they find themselves in. The paper mostly takes the right tone here:
And as Wall Street firms examine their pay and bonuses, distinctions are being made between the highest-ranking executives and lower-level traders and investment bankers who aren’t widely known beyond Wall Street but could get plucked away by rival firms if compensation practices are significantly altered.
As a result, the most likely scenario in the firm-by-firm discussions is a sharp decline in compensation for chief executive officers, but fewer changes in how bonuses are paid to most employees, according to a person familiar with the matter.
But why should anybody get bonuses at all at companies that are losing billions of dollars, not to mention taking government funds?
In another compensation story, the WSJ looks into the big pension plans on Wall Street that are still owed to execs by companies and were already being effectively being subsidized by taxpayers because they’re tax-deferred. The Journal says the big boys owe their executives more than $40 billion for deferred compensation and pensions.
Problem is, most of these companies haven’t set aside assets to pay for these obligations, meaning they’re getting subsidized by taxpayers again through the multiple ongoing bailouts.
Floyd Norris over at the NYT digs into the negative GDP number yesterday to report how bad things really are.
This recession, in other words, is already deeper than the 2001 downturn. And there are clear signs it is, or soon will be, worse than the 1990-91 recession as well.
If only consumer purchases were counted in G.D.P., it would have fallen at a 3.1 percent annual rate in the quarter. That is the worst quarterly performance in that regard since the second quarter of 1980.
The Times continues its good reporting on AIG. Now the government is adding another $21 billion in loans to the heap. This is great context:
A.I.G.’s big borrowings underscore the company’s bewilderingly rapid decline. When it suddenly faced a cash crisis in mid-September, the original estimate of the amount it needed was just $20 billion. A few days later, the Fed stepped forward with its $85 billion credit line. And now, the stunning size of that original bailout has grown by almost 70 percent.
A.I.G.’s cash needs could grow even further. Much of the cash it needs is being used to meet collateral calls from its derivatives counterparties, and the precise collateral triggers and amounts are not public information. In general, the derivative contracts cost A.I.G. more as the real estate markets decline. The company’s financial products division did a lot of business in that type of derivative, called credit-default swaps.
The Journal has a nice on-the-ground story from a vulture-fund conference.
A large exhibit area, called Preservation Hall, overflowed with six rows of vendors peddling liquidation services, bankruptcy advice and financial analysis. Those attendees that weren’t pocketing stuffed pelicans and shot glasses often crowded around tables where investors pronounced their desire to finance distressed companies.
They will have plenty to choose from.
I like that Bloomberg put out this story about Austin residents up in arms over $64 million in city tax subsidies to corporate retailers via mall giant Simon Property Group.
The prevalence of locally owned small businesses is part of the uniqueness celebrated by the Keep Austin Weird movement, including the Cathedral of Junk, Ginny’s Little Longhorn bar and the Museum of Natural and Artificial Ephemerata.
The mall has already been built, so it seem unlikely the backlash will succeed. But there’s not enough reporting on the corporate welfare out there, especially the kind that hurts small businesses, so thanks to the Berg.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum.