This page-one Journal story on the bailout doesn’t really add much we didn’t know already, but another page-one story has a good angle—the dismal state of the retail industry means those desperately needing jobs can’t depend on it for a last resort anymore.
Circuit City is the latest of at least 14 major retail chains, including Linens ‘n Things and Mervyn’s LLC, to file for bankruptcy protection in the past 12 months. Many, such as Linens, are discovering that they can’t find financing and are liquidating, slashing tens of thousands of jobs…
Roughly one of every 10 Americans is employed in the retail sector. But since November 2007, about a fourth of all jobs that have been lost — about 320,000 in all — have been in retail.
This is some good context:
The layoffs expose the thin economic safety net available for many Americans who have long depended on part-time or second retail jobs to make ends meet. Front-line retail jobs are among the primary sources of employment for those without a college education. For better-educated, full-time employees, retail jobs also filled a void left by the decline of U.S. manufacturers. Retail jobs could become more competitive still as unemployed workers with college degrees enter the market.
And good for the Journal for calling Circuit City out for sacking its employees last year for cheaper ones—something it and others didn’t do last week when the chain announced it was closing a bunch of stores.
Until early this decade, store-level jobs at Circuit City were considered some of the better retail jobs because they paid commissions. But about five years ago, the company phased out commission jobs. Last year it fired 3,400 of its better-paid retail employees, replacing them with less-experienced workers and suffering a backlash in customer service.
Here’s a solid ProPublica/LA Times joint effort on Goldman Sachs advising clients to bet against bonds it was arranging for the state of California.
The giant investment firm did not inform the office of California Treasurer Bill Lockyer that it was proposing a way for investment clients to profit from California’s deepening financial misery. In Sacramento, officials said they were concerned that Goldman’s strategy could raise the interest rate the state would have to pay to borrow money, thus harming taxpayers…
Some experts said the investment bank’s actions, while not illegal, might be inappropriate. “That’s not a good way to do business,” said Geoffrey M. Heal, professor of public policy and business responsibility at Columbia University. “They’ve got a conflict of interest and they’re acting against the interest of their customers… . You act in the interests of your clients. You don’t screw them, to put it bluntly.”
That Goldman has conflicts of interest is an understatement.
Bloomberg’s Jonathan Weil hammers Barack Obama for bringing in “more of the same.”
Take a good look at some of the 17 people our nation’s president-elect chose last week for his Transition Economic Advisory Board. And then try saying with a straight face that these are the leaders who should be advising him on how to navigate through the worst financial crisis in modern history…
So, by my tally, almost half the people on Obama’s economic advisory board have held fiduciary positions at companies that, to one degree or another, either fried their financial statements, helped send the world into an economic tailspin, or both…
The president-elect needs some new advisers — fast. We are in a crisis of confidence in American capitalism. These aren’t the right people to re-instill its sense of honor.
Many of them should be getting subpoenas as material witnesses right about now, not places in Obama’s inner circle. Did Obama learn nothing from the ill-fated choice of James Johnson, the former Fannie Mae boss, to lead his vice- presidential search committee?
I would be remiss if I didn’t point out Gretchen Morgenson’s long piece in the Sunday Times on the fall of Merrill Lynch. She gets a couple of JP Morgan bankers on the record talking about how the derivatives they invented came to be misused by companies like Merrill.