Bloomberg’s Jonathan Weil says the FDIC is setting a real fine example for its charges by fudging its own books. “…the FDIC has been underestimating its losses ever since the financial crisis began, which is another way of saying it has consistently overstated its insurance fund’s capital position.”
He makes a convincing case for why that’s so, and what the FDIC needs to do about it:
The surest way for the FDIC to regain its credibility is by replenishing its fund’s balance sheet with fresh capital raised from the banking industry, and by demonstrating that its financial reports can be trusted again. Until then, its reputation as a captive regulator incapable of managing its own finances will remain intact.
—Reuters’ Felix Salmon makes a provocative point on plutocracy:
Remember too that when you have a progressive tax system, especially when there are surcharges on people making seven-figure incomes, you also have a system where for any given level of national income, the greater the inequality, the greater the government’s tax revenues. And indeed federal revenues have been rising faster than median wages for decades now, thanks to the rich getting ever richer…
The government’s interests, then, are naturally aligned with those of the plutocrats — and when that happens, the chances of change naturally drop to zero.
— Earlier this week we nicked the press playing along with the hype of “Cyber Monday” Christmas sales, which were “expected” to set a record this year. As if to prove that the bigger picture is what matters: Retail sales fell in November—and that’s with the “comp” of a disastrous November selling season last year.
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 rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.