I read every page of today's Financial Times while eating dinner in the Brasserie 1904 in Grenoble. Did I find a single moment of insight coming from Obama's new-old economists. Sadly, I did not.
I watched Grenoble's Tram A and Tram B glide by every few minutes, and noted for the hundreth time that rich America has nothing like this, and my hometown Los Angeles will not have multi-class, multi-racial public transit in my lifetime. I will have to come to Grenoble to see working trams - or 200 other cities in Europe. Why?
I thought about trying to find the great Addams Family Thanksgiving scene on You Tube.
I thought about the students I met with today at our study center, and about how one I especially like had exactly 20 Euro with which to go to Spain for fall break - until I loaned her 100 E, which she paid back the next week with 5 twenties.
I thought about another student in Lyon who I met with last night for an hour or so. She started in the beginning French program and clawed her way into being good enough to stay for the year. She has expenses of about 1100 Euros a month, or 12,000-14,000 a year - not too comfortable or relaxing, really a poverty income. What about her income? She has several loans and grants that give her $450 a month. She has a monthly shortfall that means that she will have to borrow another $6000 to stay the rest of the academic year. What do you normally do, I asked? "I work - 30 hours a week." As a full-time student.
Citibank has $309 billion in toxic assets. It gave the govt $27 billion in preferred stock. That is around the maximum amount it can lose on its toxic assets ($29 billion). The government insures the rest, meaning it is exposed for 90% of the losses. The gov gets dividend payments - but no control of Citibank assets or decisions.
So here's how it works. Make up a bunch of assets and sell them to people desperate for higher returns. Earn 20% plus each year in an economy that grows at 1/10th the pace, while 80% of wages don't grow at all. Pay your top people tens of millions a year. Militate the entire time in a weird, tireless way against worker and environmental protections, wage increases, pension funds, unemployment insurance, and government programs. Predict rising prices forever. When suddenly prices fall, and you turn out to be wrong in fact, wrong in theory, and the BIGGEST LOSER OF ALL TIME - go collect $309 billion from the government. Give them $29 bil in exchange in "stock" - i.e your own special printed money. No strings. no apologies. No agreement to pay actual taxes. no ownership, compensation, nothing. Just a bunch of comments about how the future of civlization depends on you getting free government handout money.
I wish I could give my student $309 for her rent in Lyon - 309 billion I mean.
Why say it myself when others have said it for me?
Essential reading: great roundtable on Democracy Now - Bob Kuttner, Michael Hudson, and Naomi Klein.
Bloomburg: the tab is already $7.7 trillion. With no bailout for things like pension funds.
That was the weekend. Today was another day, and another $800 billion bailout - 600 bil more for Fannie and Freddie.
I'm sleeping up under the roof in a hotel in Grenoble. There isn't a sound. I wish it would snow.