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Archive
Freelancers Lack Safety Net When Jobs Are Scarce
November 6, 2009 |
Editor's note: Tonight on the NewsHour, Paul explores the changing nature of work in a tough economy: Companies may be shedding jobs left and right, but they are increasingly looking for short-term employees to provide work they still need to
... » Continue reading
Reinhart and Rogoff Answer Questions on the History of Financial Crises
November 5, 2009 |
Editor's note: Paul recently sat down with economists Kenneth Rogoff and Carmen Reinhart, authors of a new book chronicling an incredible eight centuries of financial crises around the world, This Time Is Different: Eight Centuries of Financial Folly. The
... » Continue reading
Student Questions: The Unemployment Outlook
November 5, 2009 |
Editor's note: This week and next, the Business Desk will feature questions from students in three high schools around the country. Question: Unemployment seems to be far worse than the government's statistics show (currently just below 10 percent). Why
... » Continue reading
Student Questions: Health Care and Education
November 4, 2009 |
Editor's note: This week and next, the Business Desk will feature questions from students in three high schools around the country. Question: If every other major economy in the world has universal health care why doesn't the United States?
... » Continue reading
Paul Solman Goes Back to School
November 3, 2009 |
Editor's note: This week and next, the Business Desk will feature questions from students in three high schools around the country. To kick off the special series, two questions from high school seniors at Central High School in Phoenix,
... » Continue reading
Ask Rogoff and Reinhart Questions About the History of Financial Failures
November 2, 2009 |
Editor's note: Tonight on the NewsHour, Paul sits down with economists Kenneth Rogoff and Carmen Reinhart, authors of a new book chronicling an incredible eight centuries of financial crises around the world, This Time Is Different: Eight Centuries of
... » Continue reading
Making Sen$e of New Credit Card Rules and More
October 30, 2009 |
Editor's note: Need a fun distraction on a fall Friday afternoon? Paul has just launched the latest edition of his financial literacy site, Making Sen$e. In the latest edition, you can listen to a podcast with Paul and credit
... » Continue reading
In Case You Missed It: AFL-CIO's Trumka Faces Dwindling Ranks
October 29, 2009 |
Editor's note: Paul recently sat down with newly elected AFL-CIO President Richard Trumka to discuss how Trumka plans to lead organized labor through a series of current challenges - from health care reform to the excesses of big business -
... » Continue reading
How Will the Fannie and Freddie Takeovers Affect U.S. Debt?
October 28, 2009 |
Question: Can you explain how the U.S. government's take over of Fannie Mae and Freddie Mac affect interest on the debt now and in coming years? Paul Solman: No. Actually, I CAN explain, but I think you want me to
... » Continue reading
Inside the AFL-CIO's Health Care Lobbying Efforts
October 27, 2009 |
Editor's note: Tonight on the NewsHour, Paul profiles Richard Trumka, the newly elected president of the AFL-CIO, the labor federation representing 57 unions and 11.5 million members across the country. Trumka, who was elected in September, hopes to expand and
... » Continue reading
Why Doesn't the Govt. Sponsor Jobs Programs Like Those During the Depression?
October 26, 2009 |
Question: Why doesn't the government sponsor jobs programs similar to those by Roosevelt during the Great Depression, such as rebuilding infrastructure, building new energy grids, alternative transportation, a decent bus system or train system? Paul Solman: But that's what
... » Continue reading
What Can We Do About "Too Big to Fail"?
October 23, 2009 |
Question: What needs to happen so that we will have no companies "too big to fail"? Paul Solman: Come up with incentives that induce big companies to slim down, or disincentives that punish them if they don't. What's startling at
... » Continue reading
Which Is Better for the Economy: Spreading Money Around or Spending It in One Place?
October 22, 2009 |
Question: I have a "nanoeconomy" question. Most of us go to the grocery store once a week. Which would be better for the economy overall if everyone did it: to go to the same store every time, or to
... » Continue reading
What's the Difference Between a Recession and a Depression?
October 21, 2009 |
Question: What is the difference between a recession and a depression? I have been out of work since last November. It seems like a depression for me. I worked for a civil/structural consulting engineering firm for the past 11
... » Continue reading
How Can the Economy Be Growing While Unemployment Is Rising?
October 20, 2009 |
Question: Your work on the economy is discussed at our dinner table, with my 15 and 16 year old sons, almost every night. You have made such a difference to our family in understanding the Global Economic Meltdown. My
... » Continue reading
Retraining Workers Sounds Great. But For What Jobs?
October 19, 2009 |
Question: Why does nobody discuss the fact that all the working and many middle class jobs have gone to China and the rest of Asia? Retrain workers -- great -- but retrain them for what? Paul Solman: You know
... » Continue reading
Frank Friday: A Bonus Economic Naturalist Post
October 16, 2009 |
Editor's note: From time to time, we get questions here at the Business Desk that feel designed for our frequent guest blogger Robert Frank, author of The Economic Naturalist: Why Economics Explains Almost Everything. Today, we're happily giving him
... » Continue reading
Are the Latest Foreclosure Numbers Good News or Bad News?
October 15, 2009 |
The Business Desk: The headline on Bloomberg's foreclosure story this morning: "U.S. Foreclosure Filings Jump 23% to Record in Third Quarter." The headline on Reuters: "Foreclosures Fall for Second Straight Month." Both it turns out, are correct. But don't mistake
... » Continue reading
Ask Alyssa Katz, Author of 'Our Lot', About Foreclosures and the Housing Crisis
October 15, 2009 |
Editor's note: The U.S. foreclosure crisis shows little sign of abating; while foreclosure filings fell last month, they remain near a record high, according to a report released today by real estate firm RealtyTrac. Journalist Alyssa Katz has written
... » Continue reading
Inner Workings at the NewsHour, or The Tale of a Keynes Rap Video
October 15, 2009 |
Paul Solman: Caveat lector: What follows may be more than you want to know. That said, a blog post about us and TV talk show booking practices, The Perils of a Talking Head, appeared yesterday. I thought it might
... » Continue reading
Can We Identify Bills that Led to Deregulation Over the Past 30 Years?
October 14, 2009 |
Question: I'm amazed that we have not seen an historical listing of the series of federal bills from Reagan's administration, as well as Clinton's and Bush II, that would identify a series of "deregulating" events that contributed to the
... » Continue reading
What Is a Jobless Recovery?
October 13, 2009 |
Question: You have talked about a jobless recovery. What does it mean? Paul Solman: Boy, have we ever! Indeed, we did a whole series on the so-called "jobless recovery" back in 2003, one of whose stories was our first
... » Continue reading
Battle of the Stand-Up Economists
October 12, 2009 |
Paul Solman: The NewsHour and then the Business Desk were, so far as we know, the first national stages for the self-professed "world's first and only stand-up economist," Yoram Bauman. We have henceforth taken what might be called a paternal
... » Continue reading
Why Is the Price of Gold So High?
October 9, 2009 |
Question: Why is the price of gold at a record high? And how does that affect the dollar? Paul Solman: Gold is denominated in dollars. So if gold goes up, it means the dollar has gone down, because it
... » Continue reading
Will the New G-20 Eclipse the United Nations?
October 8, 2009 |
Question: Your exuberance the other day in discussing the addition of several countries to the G-8 -- now G-20 -- led me to speculate whether the new G-20 could, in a real sense, eclipse the United Nations. Can the
... » Continue reading
How Does Global Financial Regulation Affect the Doha Round?
October 7, 2009 |
Question: World leaders at the G-20 Summit issued plans for reregulating the financial industry to help solve the economic crisis. Yet, bizarrely those same leaders will push for completion of the current WTO negotiations - called the Doha Round -
... » Continue reading
Is the High Jobless Rate Due to the Return of Discouraged Workers to the Pool?
October 6, 2009 |
Question: Is there any [truth to the] idea that the jobless rate might have increased due to return of discouraged workers to the pool vs actual lost jobs? Paul Solman: None. Not in the data. "Discouraged workers" come in
... » Continue reading
The Great Recession Through an Economist's Walk to Work
October 5, 2009 |
Editor's note: Harvard economist Richard Freeman recently sent us a fascinating slideshow he'd created of empty storefronts around the Boston area. We liked it so much that Paul sat down with Freeman a few days ago for an audio tour
... » Continue reading
More Grim News in the Sept. Jobs Numbers
October 2, 2009 |
Paul Solman: Today's unemployment data are grim. I began to write "startlingly grim" but then realized that, for those of us on-the-record pessimists with regard to green shoots and recovery, the numbers aren't startling at all. Having been on
... » Continue reading
Portrait of B of A's Ken Lewis, Soon to Be Retired
October 1, 2009 |
Editor's note: You may remember artist Geoffrey Raymond from our Lehman Brothers story last month. Raymond was painting portraits of the wizards of Wall Street even before the market went into a tailspin. After the crash, he started allowing Manhattan
... » Continue reading
Paul's Full Interview with Pres. Lula da Silva
September 30, 2009 |
Editor's note: We were only able to air sections of Paul's wide-ranging interview with Brazilian President Lula da Silva at the G-20 late last week. In the interest of letting viewers see Lula's complete takes on global warming, the situation
... » Continue reading
Jeffrey Sachs on the New World Economic Order
September 29, 2009 |
Paul Solman: When in Pittsburgh last week for the G-20 meetings, we interviewed Columbia University economist Jeffrey Sachs, 23 years after our first interview with him. In all these years, Sachs has been a champion of both the verities of
... » Continue reading
Back Home From Pittsburgh (and the G-20)
September 28, 2009 |
Paul Solman: Meetings like the G-20 can be astonishingly ungratifying to cover. Top officials are, for the most part, intent on talking to one another and impossible to buttonhole. Legions of subalterns try to protect their bosses (and bosses'
... » Continue reading
Paul Interviews Brazilian President Lula da Silva
September 25, 2009 |
Editor's note: On last night's NewsHour, Paul spoke with Brazilian President Luiz Inacio Lula da Silva on the sidelines of the G-20 meeting in Pittsburgh. Lula weighed in not only on the legitimacy of meetings like the G-20 and where
... » Continue reading
In Case You Missed It: Ahead of the G-20, How Are World Economies Faring?
September 24, 2009 |
Editor's note: In anticipation of the G-20 summit that begins today in Pittsburgh, Paul's segment last night took a look at how the world's economies are faring a year into the financial crisis. Along the way, he gets some global
... » Continue reading
Joe Stiglitz on How the G-20 Should Tackle Global Financial Reform
September 23, 2009 |
Editor's note: Paul recently sat down with economist and Nobel laureate Joseph Stiglitz to talk about the financial reform agenda at the G-20 meetings that begin tomorrow in Pittsburgh. Beyond offering thoughts on just what the G-20 countries can and
... » Continue reading
Are Older Workers More Vulnerable in this Recession?
September 22, 2009 |
Question: I lost my job in April. I have yet to find any new position. I get this feeling that age plays a big part in the hiring process. I am 48 ...soon to be 49 years old. Are
... » Continue reading
Reflections on the Week of 'Almost Armageddon'
September 21, 2009 |
Paul Solman: Now that so many of our favorite economists have spiritedly weighed in here on the Business Desk on the first anniversary of "Almost Armageddon Day," I thought I'd comment on theirs. First Simon Johnson. Simon says his
... » Continue reading
Lehman's Lawyer on the Decision to Let It Fail
September 18, 2009 |
Editor's note: Paul also recently sat down with Harvey Miller, lawyer for Lehman Brothers during its descent into bankruptcy, for an insider's look at what it was like meeting with government regulators as Lehman faced collapsed. <!-- _pap_embed_small('news01s30c0q87f'); //--><!]]>
... » Continue reading
Former Regulator on Lehman's Collapse
September 18, 2009 |
Editor's note: Paul recently sat down with Robert Glauber, former Treasury undersecretary under George H.W. Bush and the leader of the taskforce under Reagan charged with reporting on the 1987 stock market crash, to discuss what Glauber would have done
... » Continue reading
What Has Been the Most Surprising Effect of the Financial Crisis?
September 17, 2009 |
Editor's note: All this week on the Business Desk, we have been featuring contributions from economists, financial journalists, and other experts on the origins and impact of the financial crisis. Today, we asked a few of our favorite experts
... » Continue reading
What Financial Reforms Do We Still Need?
September 16, 2009 |
Editor's note: All this week on the Business Desk, we are featuring contributions from economists, financial journalists, and other experts on the origins and impact of the financial crisis. Today, we asked several experts to weigh in on the
... » Continue reading
In Case You Missed It: Losing Lehman Brothers
September 15, 2009 |
Editor's note: Last night on the NewsHour, Paul filed a compelling report on the fall of Lehman Brothers one year after the firm's descent into bankruptcy. He traces Lehman's fall from storied Wall Street investment bank to catalyst for the
... » Continue reading
A Year Later: Which Reforms Have Made a Difference?
September 15, 2009 |
Editor's note: All this week on the Business Desk, we'll be featuring contributions from economists, financial journalists, and other experts on the origins and impact of the financial crisis. We asked several experts to weigh in on the single
... » Continue reading
A Year After Lehman: Lessons Learned
September 14, 2009 |
Editor's note: All this week on the Business Desk, we'll be featuring contributions from economists, financial journalists, and other experts on the origins and impact of the financial crisis. Today, nearly a year after the collapse of Lehman Brothers
... » Continue reading
Reporting the Crisis
September 14, 2009 |
Paul Solman: This week marks the anniversary of the collapse of Lehman Brothers and one of the most extraordinarily tumultuous weeks Wall Street has ever had. So, in reflecting on those events and the subsequent year, I thought I'd
... » Continue reading
If the FDIC Asks for More Credit from Treasury, What Happens to Inflation?
September 11, 2009 |
Question: With the FDIC's funds diminishing, what are the chances it will tap its credit line to the Treasury? And what does that mean for inflation? Paul Solman: The more the FDIC borrows from Treasury, the more Treasury must
... » Continue reading
How Can I Preserve, Protect, and Grow My Savings?
September 10, 2009 |
Question: How should 65-year-olds be preserving their finances in order to make it to 90 without going into the poor house? We've lost a big chunk in the market; the savings we have is getting no interest. How can
... » Continue reading
What Has Been Done to Insulate the U.S. From Systemic Risks Overseas?
September 9, 2009 |
Question: Chairman Bernanke mentioned in the News Hour forum back in July that the key trigger to Depression 1.0 was the failure of a large central European bank. With Austrian and other banks in deep distress (I believe Austrian banks
... » Continue reading
In Case You Missed It: The Realities of the Recession
September 8, 2009 |
Editor's note: Yesterday on the NewsHour, Paul looked at a few of the faces and places that illustrate the realities of the recession. With 15 million Americans out of work, the report drives explains why many Americans don't see the
... » Continue reading
How Do We Compare Unemployment Across Decades If More People in a Household Are Working Now?
September 4, 2009 |
Question: Economic reports routinely compare current unemployment statistics against historical unemployment statistics. However, I haven't seen any discussion of the significant increase in the number of household members who are employed or looking for employment and its impact on
... » Continue reading
In a Difficult Job Market, Settling for Less
September 4, 2009 |
Editor's note: In a report that aired earlier this week about a Manhattan job fair, Paul spoke at length with Philip Mereday, a former executive who had been out of work for about a year. Mereday, a college graduate and
... » Continue reading
Can the Economy Truly Recover With So Many States in the Red?
September 3, 2009 |
Question: We keep hearing phrases such as "when the recession/depression is over," but none of the analysis (that I've read or heard, anyway) addresses the relationship of the current and impending government insolvencies. Surely our economy can't recover while
... » Continue reading
If Big Banks Were Allowed to Fail, Would the FDIC Need a Bailout?
September 2, 2009 |
Question: Some have said that big banks, like Citi or Bank of America, should have been allowed to fail. Given their size, could the FDIC really have covered the insured deposits? Or would the FDIC have to have been
... » Continue reading
What Sectors Will Keep America an Economic Superpower?
September 1, 2009 |
Question: I'd love to see a discussion on future growth in the American economy. As we've witnessed, the financial services sector clearly has a limits to what it can yield. What are the sectors that can keep America an
... » Continue reading
Sudhir Venkatesh on the New Meaning of Recovery
August 31, 2009 |
Editor's note: On tonight's NewsHour, Paul visits a New York City job fair to get a sense of how many Americans who have been out of work for extended periods of time are coping with their job searches. There's been
... » Continue reading
Would Shortening the Workweek Stimulate the Economy?
August 28, 2009 |
Question: Why doesn't the federal government stimulate the economy by reducing the length of the workweek (the number of hours after which employees receive time-and-a-half pay)? Employers would respond by spreading the work load, which means more hiring and
... » Continue reading
Simon Johnson Previews Next Month's G20 Meeting in Pittsburgh
August 27, 2009 |
Editor's note: Next month, on September 24 and 25, world leaders will convene in Pittsburgh for the annual G20 summit. Atop the agenda: how to get the world economy firmly on the path to recovery. In today's video conversation, economist
... » Continue reading
Simon Johnson on Consumer Protection
August 26, 2009 |
Editor's note: Today's segment in our continuing series of video conversations with economist Simon Johnson, author of the popular Baseline Scenario blog, focuses on the Obama administration's plan to reform consumer protections for financial products. At one point, Simon and
... » Continue reading
Why Isn't Single Payer on the Table in the Health Care Debate?
August 26, 2009 |
Question: I am the slightly nervous person who you interviewed recently on Broadway and 30th Street. We spoke briefly about jobs, the economy, and when and if the green shoots will sprout. I wanted to tell you that the
... » Continue reading
Simon Johnson on Bank Bonuses and 'Too Big to Fail'
August 25, 2009 |
Editor's note: The clip today in our continuing series of video conversations with economist Simon Johnson, author of the popular Baseline Scenario blog, which Paul Krugman calls a "must read," concerns whether bank bonuses are deserved and whether anything can
... » Continue reading
Simon Johnson on Jobs in the Recovery
August 24, 2009 |
Editor's note: As part of our continuing series of video conversations with economist Simon Johnson, author of the popular Baseline Scenario blog, which Paul Krugman calls a "must read," today's clip features a discussion between Paul and Simon over whether
... » Continue reading
More on Our Correction to Friday's Segment
August 24, 2009 |
Paul Solman: There's more to add to our earlier correction to Friday's segment: We have heard from Social Security and it is indeed the case that benefits do NOT go DOWN, as I reported Friday, even if inflation does. The
... » Continue reading
Author of 'Cheap' Answers (More of) Your Questions
August 24, 2009 |
Editor's note: Paul recently sat down with author and professor Ellen Ruppel Shell to discuss her new book, Cheap: The High Cost of Discount Culture. At the heart of Shell's premise is the idea that our love of discount
... » Continue reading
Correction to Friday's Segment on Inflation
August 23, 2009 |
Paul Solman: On Friday night's program, in a story on inflation (you can see the clip below), I reported the following: "The traditional measure of inflation, the Consumer Price Index, is DOWN over the last year, which may have seniors
... » Continue reading
Simon Johnson on the Falling Dollar
August 21, 2009 |
Editor's Note: This week, we're featuring video conversations with Simon Johnson, former chief economist at the IMF, now at the Peterson Institute and MIT, and author of the must-read blog on the global economy, The Baseline Scenario. In today's clip,
... » Continue reading
Taking a Lesson from Cash for Clunkers, Why Don't We Recycle Old Cars?
August 21, 2009 |
Question: With the success of the cash for clunkers program coupled with all of the auto plants that had to close this past year, why doesn't the auto industry, the government, or some young entrepreneur reopen some of these
... » Continue reading
Simon Johnson on Economic Green Shoots
August 20, 2009 |
Editor's Note: For the next week, we'll be featuring video conversations here on the Business Desk with one of our favorite economists, Simon Johnson, former chief economist at the IMF, now at the Peterson Institute and MIT, and author of
... » Continue reading
Is GDP a Good Metric for Gauging Economic Health?
August 20, 2009 |
Question: Do you consider GDP a realistic metric for gauging economic health and prosperity? I have some skepticism because two of the three main factors are consumer and government spending, and both can be artificially manipulated or stimulated by
... » Continue reading
Is the Stimulus Working?
August 19, 2009 |
Question: Is the stimulus working? Paul Solman: Hard to argue otherwise, if what you mean is: Would things be worse right now if there were no stimulus? In the long run, maybe the stimulus will be seen as just having
... » Continue reading
Why Do Medical Costs Vary So Much Across the Country?
August 18, 2009 |
Question: Why do medical procedure costs vary so much by region of the country? Paul Solman: I think the best answer I've come across is a piece in the June 1 New Yorker by the ever-excellent Atul Gawande, The
... » Continue reading
Have the Wars in Iraq and Afghanistan Hurt the Economy?
August 17, 2009 |
Question: I often hear that WWII finally ended the Great Depression. How can it be that a relatively short war (WWII) was so helpful to the economy but our current wars (Iraq and Afghanistan) are hurting the economy? Paul
... » Continue reading
Who Gets the Interest on U.S. Government Debt?
August 14, 2009 |
Question: We have a $12 trillion dollar debt and add to it pretty much every year. How does that work? I take on debt to buy, say, a car and I pay interest to the bank that loaned me
... » Continue reading
When Did Formerly Safe Bonds Become Unsafe?
August 13, 2009 |
Question: My question is: What about U.S. bond holders? I've seen bailouts of incompetent banks and businesses and some selective shareholder groups. Investment grade bonds were considered to be the safest investment next to FDIC-insured CDs, but the bondholders
... » Continue reading
Where Are Toxic Assets Now?
August 12, 2009 |
Question: TARP was originally proposed to deal with "toxic assets" to unclog the books of financial institutions and prevent them from becoming insolvent. The toxic assets to date have not been bought up, so where are the toxic assets
... » Continue reading
Did Hank Paulson Just Want to Save Goldman Sachs?
August 11, 2009 |
Question: [In the Bernanke on the Record forum hosted by the NewsHour,] Chairman Bernanke did not mention the bailout of Goldman Sachs -- the first bank to receive such funds. Was it more critical to the survival of the
... » Continue reading
Ask Ellen Ruppel Shell, Author of 'Cheap', Your Questions About the High Cost of Discounts
August 10, 2009 |
Paul Solman: Tonight's NewsHour will feature an interview with Ellen Ruppel Shell about her new book, Cheap: The High Cost of Discount Culture. Our brains are practically hard-wired to love a bargain. But do we then end up with
... » Continue reading
What Are Warrants Issued by Financial Institutions?
August 10, 2009 |
Question: If you have not already done so, would you please explain the warrants that seem to be troubling the financial institutions at the moment? If you've already done so, I apologize for asking unnecessarily. Paul Solman: Hey, even
... » Continue reading
Is the "Perfect Storm" Metaphor Appropriate for the Economic Crisis?
August 7, 2009 |
"The metaphor of the perfect storm is inapt. The captain's action does not influence the height of the waves. Fed Chairman Bernanke, in contrast, participated in making and implementing interventions that worsened the financial crisis last year." - from
... » Continue reading
Are Credit Card Companies Raising Rates to Repay the Government?
August 6, 2009 |
Question: I received a call from my sister this morning asking me for help regarding her credit card debt. According to her bank and credit card issuers, they are raising their credit card interest rates because they have to
... » Continue reading
If Banks Just Changed Their Accounting Rules, Why Do They Need Bailout Money?
August 6, 2009 |
Question: If the banks are doing just hunky-dory due to the change in accounting rules, then why do they need any bailout money? Paul Solman: Hunky-dory? You might find this online etymology of the term amusing. I have to
... » Continue reading
Should We Have Dealt With 'Too Big to Fail' in the 1980s?
August 5, 2009 |
Question: If you go back and look at the recession of 1982, you will see that the Fed bailed out large banks mainly due to bad LDC loans. I think the precedent of moral hazard was established then. I know
... » Continue reading
Why Does the Govt. Pay Farmers to Not Grow Crops?
August 4, 2009 |
Editor's Note: Robert Frank, who recently guest-blogged for several weeks here at the Business Desk with answers to some of life's economic ironies, once again answers questions posed by viewers. Question: Why does the government pay farmers not to
... » Continue reading
Why Do Cars Have Fuel Doors on Different Sides?
August 3, 2009 |
Editor's Note: Robert Frank, author of The Economic Naturalist's Field Guide: Common Sense Principles for Troubled Times, recently guest-blogged for several weeks here at the Business Desk with answers to some of life's economic ironies: why brides buy dresses
... » Continue reading
What's the Basic Function of the Stock Market?
August 3, 2009 |
Question: I would like to ask you two simple (some might say "simple-minded") questions, which may be variants of a single question. No one has yet given me a clear, straightforward answer. Perhaps you can and will. 1) Why
... » Continue reading
Tales From the Fed: Blinder on Greenspan
July 31, 2009 |
Paul Solman: The last in our extended interviews on the Fed: Alan Blinder, who served as the vice chairman of the Fed Board of Governors between 1994 and 1996, weighing in on Alan Greenspan's legacy and what it was like
... » Continue reading
Tales From the Fed: Blinder on Fed Transparency
July 30, 2009 |
Paul Solman: The Federal Reserve has long had a reputation for being secretive. Its closed-door policy has fueled suspicions and countless conspiracy theories since the central bank was established nearly a century ago. And since the Fed has moved rapidly
... » Continue reading
Tales From the Fed: Rivlin on Fed Independence
July 30, 2009 |
Paul Solman: Tonight on the NewsHour, we're airing a piece exploring the suspicions some people have about the Federal Reserve and the the Fed's efforts to be more transparent. Amid all the talk of auditing the Fed or having Congress
... » Continue reading
How Can the Repaid TARP Money Be Used?
July 30, 2009 |
Question: Is the $68 billion that big banks are paying back in TARP money going back to the taxpayer or can it be reused by the Treasury in some of its other schemes (e.g. subsidizing hedge funds into buying
... » Continue reading
Tales From the Fed: Rivlin on Popular Misunderstandings of the Fed
July 29, 2009 |
Paul Solman: The Federal Reserve is one of the least understood government entities in the United States. When I spoke to Alice Rivlin, former vice chair of the Fed Board and now a senior fellow at Brookings, about what people
... » Continue reading
What About Banks That Didn't Take TARP Money?
July 29, 2009 |
Question: Thank you for your illuminating illustration of the fiasco involving our banks on PBS. How many banks in this country did not take TARP money and why is so little attention given to them? Shouldn't they be some
... » Continue reading
Making Sen$e of the Federal Reserve
July 28, 2009 |
Paul Solman: The newest edition of Making Sen$e, our site devoted to demystifying economics, is now up. As cutting-edge cyberspace cadets, we're calling it "Making Sense 3.0," but it really could be termed Making Sen$e of the Fed, as
... » Continue reading
Tales From the Fed: Blinder on the Fallout from Lehman's Failure
July 28, 2009 |
Paul Solman: All this week, we're posting excerpts of interviews we did with former Fed officials on the economic crisis and the Fed's evolving role in the economy. The series is in conjunction with the NewsHour's hour-long public forum with
... » Continue reading
Thaler Responds to Posner on Consumer Protection
July 28, 2009 |
Paul Solman: Earlier this month, I was pleased to learn that one of the most intriguing economists of my career span, the University of Chicago's Richard Thaler, had entered the rotation of the NYT's weekly "Economic Scene" column. His
... » Continue reading
Tales From the Fed: Rivlin on the Perfect Storm
July 27, 2009 |
Paul Solman: In preparation for our NewsHour event with Ben Bernanke in Kansas City last night, we interviewed a variety of former Fed officials to discuss the past, present, and future of the central bank. Two especially intriguing interviewees were
... » Continue reading
Should the Government Set Up a National Lottery?
July 24, 2009 |
Question: No one wants to pay higher taxes. But at the same time, many people don't think twice about spending a few dollars a week on a lottery ticket. Why doesn't the government set up a National Lottery to
... » Continue reading
Is Unemployment Any Guide to Future Growth?
July 23, 2009 |
Question: How reliable is unemployment data as a guide to future economic growth? Paul Solman: Not much at all, I wouldn't think. For one thing, employment tends to FOLLOW growth -- for the obvious reason that as spending and
... » Continue reading
Are Geithner and Summers Too Close to Wall Street?
July 22, 2009 |
Question: Are Timothy Geithner and Larry Summers too close to the players that produced this economic crisis -- so close that they will not have the vision, values, or mindset that will allow them to take the difficult steps
... » Continue reading
Why Do CEOs Make So Much Money?
July 21, 2009 |
Question: Why do CEOs make so much money? The answer must be supply and demand, but I would like to hear a good analysis of the cost benefit. I do realize too however: Would I really entrust billions of
... » Continue reading
Is Madoff's Sentence a Deterrent for Future Swindlers?
July 20, 2009 |
Question: I wonder whether the Madoff sentence is a sufficient deterrent for future potential criminals. If he is rumored to have stolen approximately $60 billion, then $60billion/150 years comes out to about $400 million per year. That figure is
... » Continue reading
Ask Fed Chief Ben Bernanke About the Economy
July 20, 2009 |
Paul Solman: My longtime motto: There is no big time. But if there were, this might be your chance to become part of it. You can pose an economic question here -- not to me or even one of
... » Continue reading
A Little Poetry for California's Crisis
July 17, 2009 |
Paul Solman: Questions keep coming in about the likelihood and consequences of a California default on its bonds. One unexpected result might be anger for the ages. Here's Lake Poet William Wordsworth on the 1842 bond default of Pennsylvania,
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Simon Johnson on the Future of the U.S. Auto Industry
July 16, 2009 |
Paul Solman: The fourth in this week's series of conversations with economist Simon Johnson concerns the future of the suffering American auto industry. Johnson weighs in on whether the new GM will make it and responds to the idea, offered
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How is the U.S. Savings Rate Determined?
July 16, 2009 |
Question: How is the U.S. savings rate, which has gone from near zero percent in the past to 6.9 percent recently, determined? And a more elaborate question: Is it truly the difference between what is earned and what is
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Simon Johnson on Cap and Trade
July 15, 2009 |
Paul Solman: The third in this week's series of conversations with economist Simon Johnson has to do with the cap and trade debate -- whether cap and trade is a good idea, the feasibility of a carbon tax, and the
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Reader Response: What Will Drive America's Future Growth?
July 15, 2009 |
Paul Solman: Viewer John David wrote these questions in an email back in April, responding positively to an interview with marketing expert Paco Underhill, which aired again last night. I only just got around to answering him, which began the
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Simon Johnson on China and the U.S. Economy
July 14, 2009 |
Paul Solman: The second in this week's series of video exchanges with Simon Johnson of the Peterson Institute of Economics, MIT, and (formerly) the IMF, concerns China. We talked last month, on the occasion of Treasury Secretary Tim Geithner's visit
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Simon Johnson on Whether Wall Street Has Changed
July 13, 2009 |
Paul Solman: MIT's Simon Johnson, former chief economist at the IMF, is a frequent contributor to the NewsHour and this page. He's also coauthor of a blog on the financial crisis, The Baseline Scenario, which has, in the words of
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Is California Printing Its Own Money?
July 13, 2009 |
Question: Is California printing its own money? Paul Solman: Funny you should ask. The State of California Franchise Tax Board website currently features this statement: "We will accept registered warrants...towards the payment of tax liabilities." State taxes, of course,
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Staying Positive in a Down Job Market
July 10, 2009 |
Yesterday, we posted the latest segment from Paul's Making Sen$e series. In it, he spoke to two very distinct groups -- laid-off white collar executives and ex-cons looking for work -- and was struck by what he heard from both
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By Saving on Cheap Goods and Services, Do We Pay More in the End?
July 10, 2009 |
Question: During a recent story about the demise of the auto industry, there was clip of a Model T Ford driving through the Ford Museum. The narration made the point that one of the things that made Henry Ford
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Why Do Tube Drivers Earn More than Bus Drivers in the UK?
July 9, 2009 |
Robert Frank: A British reader posted the following query on my UK publisher's web site: "Why do tube drivers get paid so much more than bus drivers?" An American economist trying to field questions about markets in the UK
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In Case You Missed It: Finding Work in a Down Market
July 9, 2009 |
On last night's NewsHour, Paul Solman got some perspective on the difficult job market from two very distinct groups: former executives and former prison inmates. What was striking when he met with the two groups of job seekers was just
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Why Does the London Tube Charge More If You Use a Paper Ticket?
July 8, 2009 |
Robert Frank: Why does the public transport system in London charge significantly more for a tube or bus journey if you buy a paper ticket than it does if you use their Oyster prepaid card? In most cities around
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The Cap & Trade Debate
July 8, 2009 |
Paul Solman: Sometimes described as a "centrist" Democrat, Congressman Eric Massa, a former Republican, represents a district of New York state that includes Rochester. Recently, this press release of his came our way. Since part of what we're trying
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Send Robert Frank Your Questions
July 7, 2009 |
Whether it's tackling why brides buy outfits and grooms rent to explaining why drive-up ATMs have Braille dots and freezers don't have lights, Robert Frank has been guest blogging fascinating answers to the world's economic ironies for the past
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Why Is the iPhone on a Single Network?
July 7, 2009 |
Robert Frank: Why has Apple restricted its popular iPhone to just a single wireless network in both the United States and the United Kingdom? Apple was shrewd to take this step. When it first hit the market in the
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Why Are Christmas Tree Stands Different in NYC?
July 6, 2009 |
Robert Frank: Economic naturalists often find that many interesting new questions are stimulated by the experience of living in an unfamiliar environment. That's always been my experience during sabbaticals spent away from Ithaca. One Saturday last December during my
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Reader Response: The Uncounted Unemployed
July 5, 2009 |
Paul Solman: A provocative response, via the PBS Ombudsman, to Thursday's story about undercounting unemployment. The emailer said it was okay if her name was posted. I assume that means it's okay to post her email here and use it
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Why Are Newspapers Sold in Vending Machines That Allow You to Take More Than One?
July 3, 2009 |
Robert Frank: Here's another product-design question, this one posed by my former student Brendan Quigley. "Why," he asked, "are newspapers, but not soft drinks, sold in vending machines that allow customers to take more units than they paid for?"
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Why Does Your Refrigerator Have a Light, But Not Your Freezer?
July 2, 2009 |
Robert Frank: Today's question was posed by my former student Karim Abdallah. "Why," he asked, "does a light come on when you open the refrigerator but not when you open the freezer?" The cost-benefit principle offers a promising framework
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Why Do Brides Buy Dresses While Grooms Rent Tuxes?
July 1, 2009 |
Robert Frank: Jennifer Dulski had been married for six months when she enrolled in my introductory economics course in 1997, which may explain the topic she chose for one of her two economic naturalist papers: "Why," she asked, "do
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Why Do Drive-Up ATM Machines Have Braille Dots?
June 30, 2009 |
Robert Frank: As promised yesterday, today's economic naturalist question is one of my two all-time favorites from among the many thousands submitted over the years by former students. "Why," Bill Tjoa wanted to know, "do the keypad buttons on
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What Do You Make of the Madoff Sentence?
June 29, 2009 |
Question: What do you make of the Madoff sentence? Paul Solman: I'm tempted to say that, at 150 years, he may have gotten off lightly. In today's email came the regular newsletter of one of the world's most provocative
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Guest Host: Robert Frank as the Economic Naturalist
June 29, 2009 |
Paul Solman: As many NewsHour viewers and Business Desk readers know, Cornell's Bob Frank is a great favorite of ours. I'll spare you the usual economiums (encomia?) and links: if you're intent on "drilling down," just Google our names
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Did U.S. Tax Policy Contribute to the Housing Bubble?
June 26, 2009 |
Question: How much does (did) federal tax policy contribute to the housing bubble? If it was a contributing factor, how should that policy be reformed? Paul Solman: Not much, I wouldn't think. Tax deductibility of mortgage interest has been
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How Regulatory Reforms Will Affect Consumers (Cont.)
June 25, 2009 |
Paul Solman: Last week, we featured a number of economists (and a journalist) responding to the new financial regulations proposed by the Obama administration. But no economic historians were among them. We've remedied that omission by asking Eugene White of
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Will the Actions of the Fed and Treasury Keep Asset Prices Artificially High?
June 25, 2009 |
Question: It seems to me like the Fed and the Treasury are trying very hard to keep asset prices high. The Fed has vastly increased the money supply, partly by lowering interest rates to zero, and partially through quantitative
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In Case You Missed It: The Shape of the Recovery
June 24, 2009 |
On last night's NewsHour, Paul examined the debate raging over which shape the economic recovery might take. Some economists are predicting a V-shaped recovery -- a steep period of decline followed by an equally steep period of growth. Others are
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What's the Relationship Between Inflation and Interest Rates?
June 23, 2009 |
Question: I am confused about the cause/effect relationship between inflation and interest rates. Many economic talking heads claim that interest rates will rise if present monetary policy produces inflation. But the principle of supply and demand suggests that if
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Making Sen$e 2.0
June 19, 2009 |
Attention all teachers, viewers, readers, skimmers, and occasional passersby: The second edition of our Economics-for-Everyone Web site, Making Sen$e, is now up and running. Please visit and please, please respond with suggestions as to what you'd like to see
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Instead of Capping Pay, Could the Government Police Banks' Risk Models?
June 19, 2009 |
Question: Instead of the government trying to prevent risky behavior by limiting bonuses and other compensation for the best performers in the finance industry, would it be possible for the government to review risk models that banks use? Paul
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How Will the Regulatory Reforms Affect Consumers?
June 18, 2009 |
Paul Solman: We asked a number of people in the personal finance business and others close to the credit crisis to weigh in on the Obama administration's new consumer protection proposal. I'm struck by Doug Elliott's admonitions, especially his
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Will the Administration's Regulatory Overhaul Work?
June 17, 2009 |
Question: How serious is the administration about true reform of the financial system? Are its plans likely to work? Or is regulation a can of worms, a Pandora's box, and every other cliche that might be subsumed under the
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Why Doesn't the Government Simply Give Households Lots of Money to Stimulate the Economy?
June 16, 2009 |
Question: One of the most popular suggestions I've heard for stimulating the economy is the federal government should give every household one or two million dollars. Would that work or would it create hyperinflation? Paul Solman: Let's not be
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Why Is the Cost of Gasoline Increasing?
June 15, 2009 |
Question: With U.S. oil stocks high and refiners at a low production rate, why is the cost of gasoline increasing at such a high rate? It makes you think that there is more to it than supply and demand.
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Could the Government Limit the Number of Layoffs a Profitable Company Could Make?
June 12, 2009 |
Question: Obama and Geithner said they would act aggressively to fix the economy. So, why hasn't the administration limited the number of employees that profitable companies may lay off? That could help significantly by keeping the unemployment rate down,
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What Happens to California State Bonds if the State Goes Bankrupt?
June 11, 2009 |
Question: I live in California and own California State Bonds. What happens to state bonds if the state goes bankrupt? Paul Solman: They stop paying, both interest and principal. That's what a default IS. Last September 15, Lehman Brothers
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If China Pulls Away From the Dollar, What Happens to the U.S. Economy?
June 10, 2009 |
Question: There's been speculation that China will lessen its ties to the U.S. dollar and U.S. debt. Some countries would also like oil to be priced in something other than dollars. If these events were to happen, what might
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If Banks Still Followed Mark-to-Market Rules, What Would Their Losses Look Like?
June 9, 2009 |
Question: What is the actual amount that banks have "lost" if banks still had to follow mark-to-market rules? My understanding is that our large banks would be insolvent by almost a trillion dollars if they had to declare what
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How Do the Social Security and Medicare Trust Funds Work?
June 8, 2009 |
Question: How do the Social Security and Medicare trust funds work? My understanding is that there is no money there, so that general government revenues have to be tapped to answer calls on them. Thus they are insolvent now?
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What's Your Take on the New Unemployment Numbers?
June 5, 2009 |
Question: What's your take on the new unemployment numbers? Paul Solman: First Friday: That time of the month again. Time for the official unemployment number, that is. Today's is being trumpeted as yet another "green shoot." A net job
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Which Taxes Offer an Opportunity to Be Progressive?
June 4, 2009 |
Question: What other taxes offer an opportunity to be progressive besides income and inheritance taxes? Paul Solman: Great question. I hope school is still in session. One alternative tax would be a progressive CONSUMPTION tax, as advocated by economist
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What's the Collateral Damage of GM's Bankruptcy?
June 3, 2009 |
Question: What's the collateral damage or ripple effects of GM's bankruptcy? Paul Solman: Funny you should ask. We're in the process of scripting a brief story for tonight's NewsHour addressing this very question. (Brief for us, that is: For
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Geithner in China: How Is China Weathering the Economic Crisis?
June 2, 2009 |
Question: How is China weathering the economic crisis? And does China want to remain the United States' largest creditor? Paul Solman: With Treasury Secretary Tim Geithner in Beijing for the past few days, the financial world has been watching
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Viewer Responses: Slamming Gettelfinger (And Us)
June 2, 2009 |
Paul Solman: Thursday's interview with UAW president Ron Gettelfinger elicited some strong reactions from viewers, of which these email excerpts are but a sample: Viewer 1: I have respected The NewsHour for years. I watched McNeil/Lehrer before that. To
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Retired Auto Workers Ask Union Chief Ron Gettelfinger Their Questions
June 1, 2009 |
In shooting a story on the GM bankruptcy that will air tonight, we asked a group of United Auto Worker retirees to put their questions directly to UAW President Ron Gettelfinger. Here are their questions and his responses, which we
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How Might GM's Bankruptcy Work?
May 29, 2009 |
Question: How might GM's bankruptcy work? Paul Solman: For answers, I can't improve upon this exchange with Wayne State law professor Laura Bartell, whose interview we'll feature in our GM bankruptcy story, slated to run on Monday's NewsHour. This
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What Led to the High Interest Rates of the 1980s?
May 29, 2009 |
Question: What were the causes and circumstances that led to the high interest rates in the 80's? Was it inability to effect a change or inaction in addressing the issue? Paul Solman: If by "interest rates" you mean the
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Preview: UAW Chief Ron Gettelfinger on the GM Deal
May 28, 2009 |
Editor's note: Paul Solman sat down today with United Auto Workers chief Ron Gettelfinger for a wide-ranging interview about the future of the GM, how the union may fare in any reorganization deal, and how Gettelfinger responds to critics who
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Which New Deal Projects Have Ended Up Costing a Bundle Down the Road?
May 28, 2009 |
Question: I recently watched your report on the Newshour about New Deal infrastructure projects in St. Louis. You mentioned the New Deal brought us the Triborough Bridge in New York, but you didn't mention that it is currently one
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A Final Thought on the Andrews-McArdle Affair
May 27, 2009 |
Paul Solman: The blizzard of response to the Andrews/McArdle affair has thinned to a flurry, but flakes keep coming, affording me an opportunity to respond to the persistent inclemency and continue the multi-logue, a first for this page. The problem
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Do Mutual Funds Count as Savings?
May 27, 2009 |
Question: You recently did a piece on savings, and it made me wonder. Every month, I shunt some money automatically into mutual funds (nothing to do with an official retirement account). The portion that is in a money market
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Is There Any Talk of Reinstating Glass-Steagall?
May 26, 2009 |
Question: Is there any talk of reinstating the Glass-Steagall Act? Paul Solman: For those who can't remember as far back as 1933, Glass-Steagall was an act of Congress passed only three months after President Roosevelt took office and declared
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Response to Andrews-McArdle
May 25, 2009 |
Question: How do you react to the unseasonal blizzard of emails in response to the Megan McArdle post/the Ed Andrews parry/the McArdle riposte? Paul Solman: Fascinating to see the strength of sentiment -- on both sides. Enough of the facts
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Ed Andrews Responds to Criticism in the Blogosphere
May 22, 2009 |
Paul Solman: Yesterday, free-market enthusiast Megan McArdle, who describes herself as "the tallest female econoblogger" but is more often identified in the blogosphere as a libertarian, devoted a post on theAtlantic.com to Ed Andrews, the NYT reporter whose story
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What Are the Chances the Government Will Profit on the Bank Bailouts?
May 22, 2009 |
Question: It seems that almost all of the news we hear about the government's bailout of the banks is negative, as if the American taxpayer will never see another dime of the bailout money again. But isn't it true
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How One Economics Reporter Experienced His Own Mortgage Meltdown
May 21, 2009 |
Paul Solman: Who knew? I've been reading Ed Andrews since he took over the New York Times patents column back in the late 1980s, and I followed him following the housing crisis. But until the NYT magazine excerpted his
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Ask Behavioral Economist Dan Ariely Your Questions About the Economic Crisis and Human Behavior
May 20, 2009 |
Editor's Note: Dan Ariely, a noted behavioral economist at Duke University and author of Predictably Irrational, is different from many of his economist colleagues. Ariely studies irrationality in economic behavior -- despite the fact that economics is largely premised on
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Why Were Banks Allowed to Bet on Derivatives?
May 20, 2009 |
Question: How did the dollar volume of U.S. mortgages get to be such a huge dollar problem? Did derivatives do that? Why are investment banks allowed to bet 34 dollars for only one they have? Paul Solman: First, a
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Why Are Credit Card Companies Raising Rates on Good Borrowers?
May 19, 2009 |
Question: My wife's credit card has been paid off in full, every month, for at least 10 years running (since we have been married). In fact, there usually is a 2-3 dollar "credit" balance every month. (I always round
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How Does Cutting Dealers Save the Automakers Money?
May 18, 2009 |
Question: I keep hearing that GM has to shed brands and cut dealerships, but I don't understand it. Is the logic simply that GM makes too many distinct carlines to be profitable given its total sales volume? Economies of
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How Does Executive Pay Compare Around the World?
May 15, 2009 |
Question: How does U.S. executive compensation compare to their counterparts around the world, such as Japan, Europe, Russia, Turkey? Paul Solman: I don't know what constitutes executive compensation in Russia, but compared to Japan, Europe, Turkey (Turkey?) and pretty
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What's the Story With Regulating Derivatives?
May 14, 2009 |
Question: What's going on with the just-announced regulatory reform of derivatives? Paul Solman: Plenty. And you could say it's about time. One of the leading scandals of recent years (and that's no easy feat, considering how crooked a track
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Why Doesn't the Government Set Up a New Bank to Get the Economy Moving Again?
May 13, 2009 |
Question: I've been watching the difficulties the government has had propping up the banks -- the lack of control, the salaries, the fact that they're trying to fix entities with a lot of toxicity on their balance sheets. The
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What's the Real Madoff Math?
May 12, 2009 |
Tonight, FRONTLINE tackles the Bernard Madoff affair, attempting to decipher the puzzle of the financier's multi-billion dollar Ponzi scheme. The program delves into the cast of characters involved in the case, including the story of Michael Bienes, one of
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Who Owns the Credit Card Companies?
May 12, 2009 |
Question: Who owns the credit card companies? Once upon a time, Bank of America owned Visa, but I'm not sure if it's been spun off. So, if the stress tests have shown that the banks are not as healthy
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What's the Argument FOR Tax Havens?
May 11, 2009 |
Question: I understand that President Obama is going after the use of offshore tax havens by U.S. corporations. My gut feeling is that he's right to do this, but I've never really heard both sides of the argument. Is
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In Case You Missed It: A Racial Divide in Unemployment in East St. Louis
May 8, 2009 |
Tonight on the NewsHour, Paul Solman traveled to East St. Louis, Illinois, to report on the racial disparity in unemployment. East St. Louis is a case study in African-American unemployment -- 16 percent for men there, as it is nationwide
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Making Sen$e of Business, Finance, and Economics
May 8, 2009 |
No more posts for today or the weekend as we debut (drum roll here, even trumpets, perhaps, or maybe a French overture)...our new Making Sen$e Web site, made possible by a grant from the Alfred P. Sloan Foundation, which
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What Is a Stress Test? Why Are They Being Done?
May 7, 2009 |
Question: What are the stress tests? And why are they being done? Paul Solman: A stress tests is simply an analysis of a bank's balance sheet. To determine what? Whether the bank is viable as a business. Or likely
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Are Examiners Preventing Banks from Lending?
May 6, 2009 |
Question: I am a commercial mortgage broker in California. I have had nearly every bank recently advise that their examiners are preventing them from lending. How can we get out of this mess if the examiners, in effect, prevent
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Reader Response: Robert McElvaine on the Great Depression
May 5, 2009 |
Comment: The coverage of the Great Depression by Robert McElvaine was so one sided it was unbelievable. [Editor's note: You can watch the segment below.] Yes, the Great Depression was horrible, millions of people were out of work and
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How Are Banks Profiting on Mortgage Refinancing?
May 4, 2009 |
Question: Banks like Wells Fargo and JP Morgan recently announced better-than-expected profits. The given reason is that they are making money on the refinancing of mortgages. Doesn't mortgage refinancing imply lower rates of interest and repayment? How can they
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Is the Auto Crisis Just a Lack of Demand?
May 1, 2009 |
Question: I don't understand the auto industry crisis. I infer that it is because we're in a recession, and not many people are buying cars. Is that all of it, or is there something more? Paul Solman: Are you
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How Do We Regulate Credit Rating Agencies?
May 1, 2009 |
Question: How do we supervise and regulate the credit rating agencies which, so poorly and perhaps illegally overrated so many derivatives? Paul Solman: I don't know. One proposed reform has been that the investors pay the ratings agencies for
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Why Is the Gold Standard a Bad Idea?
April 30, 2009 |
Question: Why is the gold standard such a bad idea? I know it is a discredited system, but having never studied economics, I don't understand why. Right now, is our money just some arbitrary amount issued by the Federal
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Reader Responses: The Paradox of Thrift
April 30, 2009 |
You can watch one of Paul's recent Making $ense pieces, The Paradox of Thrift, below. Here are a few reader reactions and Paul's responses. Question: I have a question related to your recent segment, Paradox of Thrift: Aren't the
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What Are Quants?
April 29, 2009 |
Question: What are 'quants'? Paul Solman: Quantitative experts, or if you prefer, "number jocks" or "math whizzes" who have gone to "Wall St." (ie, the world of finance). They construct formulas for investing and packaging investments. Take their prescriptions
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Reader Responses: In St. Louis, Comparing the Stimulus to the New Deal
April 29, 2009 |
On Monday, Paul's segment comparing the New Deal and the stimulus in St. Louis aired (you can watch it below), and as usual, a number of viewers wrote in. The topics ranged from okapi to jaywalking. Here are a
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Paul Hosts St. Louis Economic Forum
April 28, 2009 |
As part of the NewsHour's Spotlight City series on St. Louis this week, Paul traveled to the Gateway City for his piece on how today's stimulus compares to the legacy of New Deal projects. While he was there, he
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In Case You Missed It: St. Louis, the Stimulus, and the New Deal
April 28, 2009 |
On last night's NewsHour, Paul investigated how stimulus funds are being spent in St. Louis and compared today's projects with those funded by the New Deal during the Depression. Don't miss a special slideshow showcasing iconic New Deal investments from
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When Will Any Housing Recovery Reach Small Businesses and Contractors?
April 27, 2009 |
Question: The housing downturn has affected not only large builders, but also small businesses and contractors that support and supply them. How long will any recovery take for these sort of businesses? Paul Solman: I'm sort of a broken
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How Does InBev's Purchase of Anheuser-Busch Affect St. Louis?
April 27, 2009 |
Question: For nearly 150 years, Anheuser-Busch was locally owned here in St. Louis. Now, it's owned by someone in Belgium. Does this really mean anything for St. Louis beyond those who work for Anheuser-Busch/InBev? Paul Solman: It certainly might.
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What Role Do Cultural Institutions Play During the Downturn?
April 24, 2009 |
Question: St. Louis has a long-standing tradition of support for and pride in its cultural institutions such as the St. Louis Botanical Gardens and the Saint Louis Zoo. What role, if any, do these sort of institutions play in
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How Does the Downturn Affect Urban Renewal?
April 24, 2009 |
Editor's Note: As Barack Obama's presidency reaches the 100-day mark, the NewsHour is examining how the president's policies and the economic crisis are affecting one city - St. Louis, where Obama will mark the milestone April 29. Paul's segment
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If GM Is Restructured, What Happens to Shareholders?
April 23, 2009 |
Question: If General Motors is "restructured" (either through the bankruptcy courts or outside the bankruptcy courts), will the shareholders lose all of the stocks they currently own? Or, as long as GM is a viable company traded on the
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Where Can I Find Updates on the U.S. Money Supply?
April 22, 2009 |
Question: The money supply of the United States is such a key economic indicator, why don't we get a reading of it on a daily basis? It seems like it would be a lot more valuable gauge of the
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How Significant Are the Latest Earnings from Wells Fargo?
April 21, 2009 |
Question: Wells Fargo just announced quarterly financials in very positive position. Do you think this is a really significant event? How should we evaluate the latest numbers? Paul Solman: Your guess is as good as mine, Sheldon. I'll quote
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If AIG Uses Its Bailout to Pay Off Other Debts, Is That a Ponzi Scheme?
April 21, 2009 |
Question: If we are shoveling money into AIG and they are pushing it out the back door to pay off bad debts and then banks announce profits, does this mean we are in a new kind of Ponzi scheme?
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How Should We Interpret the String of Positive Earnings Reports from U.S. Banks?
April 20, 2009 |
Question: After three major banks - Citigroup, JP Morgan, and Goldman Sachs - announced better-than-expected earnings last week, Bank of America announced more than $4 billion in first-quarter profits today. How should we interpret this string of good earnings
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Who Pays the Rating Agencies?
April 20, 2009 |
Question: Who pays the rating agencies, like Moody's? What is the source of their income? Paul Solman: That's been the scandal. They're paid by the issuers of the bonds and stocks they rate. They thus have a huge incentive
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Why Doesn't the Yuan Trade Like Other Currencies?
April 17, 2009 |
Question: Why don't we let the yuan trade like other currencies? Even now, the yuan has an 20 percent or higher edge on other currencies because of the existing rules. Paul Solman: Now, now, Maya, as my dad used
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Is Congress to Blame for Failing to Regulate the Financial Sector?
April 16, 2009 |
Question: On the Newshour a few weeks ago, there was a piece about the bonuses being paid to AIG's Financial Products Division. In that coverage, one guest mentioned regulators were blocked from overseeing derivatives. I assume that was done
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In Case You Missed It: The Paradox of Thrift
April 16, 2009 |
Editor's Note: On last night's NewsHour, Paul examined the paradox of thrift. Here's MIT's Simon Johnson explaining the phenomenon in the segment: SIMON JOHNSON, MIT Sloan School of Management: Paradox of thrift is the idea that you try -- everyone
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Are Americans Becoming Savers?
April 15, 2009 |
Tonight's NewsHour features a piece called "The Paradox of Thrift." The phrase refers to the potential downsides of squirreling money away, especially if all of us do it at once. While saving is often a good thing - and something
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Can We Prepare for Inflation?
April 15, 2009 |
Editor's Note: The government reported Wednesday that consumer prices fell in March, indicating a weakened demand for goods and services. But while this price drop raises the specter of deflation, many economists contend that the real risk to the
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Why Don't We Tax the Buying and Selling of Stocks?
April 14, 2009 |
Question: How much revenue would a 1 percent federal tax on the buying and selling of stocks produce? We have federal taxes on gasoline, so why not the selling of stocks? Surely, someone who is spending $1,000 can afford
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Where Is the Bailout Money Hiding?
April 13, 2009 |
Question: You did a great job explaining where the money for the bailouts comes from. Can you now tell us where, exactly, it is going? If there are so many trillions of dollars sloshing about, how come the banks
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In Case You Missed It: Clawbacks and CEO Pay
April 11, 2009 |
On Friday's NewsHour, Paul Solman reported on the continued anger over extravagant CEO pay at companies receiving billions in bailout dollars and the options being explored to regain some of the money. <!-- _pap_embed_small('news01s241eq87e'); //--><!]]> And don't miss the related
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"We Want Our Money Back"
April 10, 2009 |
A story about clawbacks slated to run on the NewsHour tonight features a protest disrupting a speech by Goldman Sachs CEO Lloyd Blankfein. Yesterday, the protesters struck again during a session with Larry Summers, unfurling a big pink banner behind
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Why Doesn't the Treasury Turn Over Banks to the FDIC for Inspection?
April 10, 2009 |
Question: Why didn't the U.S. Treasury turn over the banks to the FDIC and let the FDIC do an audit and dispose of the rotten assets? Paul Solman: "Turn over"? You mean TAKE over. This is the question being
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What Is the Rate of Hidden Unemployment?
April 9, 2009 |
Question: What is the current rate of hidden unemployment in the United States, and is it trending upwards? Paul Solman: It's not very hidden. Every month, the U.S. government reports a range of unemployment measures. The most inclusive is
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As the Amount of Money in Circulation Increases Rapidly, How Does the Fed Prevent Hyperinflation?
April 8, 2009 |
Question: If the Fed and Treasury have increased the amount of money in circulation by $1.6 trillion in an effort to stave off deflation in the near term, how does the Fed take this money back out of circulation
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Why Is Deflation Bad?
April 7, 2009 |
Question: Why is deflation so bad? I have certainly benefited from the drop in gas prices, so I wonder what is wrong with things becoming cheaper in general? And wouldn't that make up for previous inflation? Paul Solman: Another
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Why Does the United States Have to Borrow Money From Other Countries?
April 7, 2009 |
Question: If the federal government (and/or Treasury) can just create money, why does it have to borrow it from other countries? Paul Solman: Great question. Because it's so cheap to do so right now, the thinking goes, why NOT
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Where Does Money Go When It's Taken Out of the Stock Market?
April 6, 2009 |
Question: As the Dow continues to fall, I keep wondering where the money is going. Obviously, money is being pulled out of the stock market, even though we all are still buying and using products, and companies are still
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How Are You Sharing the Pain at Work During This Economic Downturn?
April 3, 2009 |
The economic downturn has left few industries untouched, and companies across the country are resorting to drastic cutbacks in jobs and spending. But many organizations are also encouraging workers to "share the pain" of the downturn -- by accepting lower
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The Share Economy at Work
April 3, 2009 |
The U.S. economy has lost millions of jobs over the past year. And in order to avoid further layoffs, many organizations are asking employees to make painful sacrifices - wage cuts, fewer benefits, and unpaid leave. We'll explore this in
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How Does the Student Loan Landscape Look?
April 2, 2009 |
Question: With the way things are right now, how does it look in the future for taking out student loans? For instance, if I take out a student loan in the next two years, how much is that going
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If a Bank Has Toxic Assets, Can Another Division of That Bank Invest in the Toxic Asset Program?
April 1, 2009 |
Question: Is it possible for a division of the bank holding toxic assets to participate in the [toxic asset] program? Paul Solman: Supposedly not, but there's lots of buzz about how banks might in practice get around the obstacle
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What's the Purpose of the G20 Meeting?
March 31, 2009 |
Question: What scenarios are associated with the G20 conference for the U.S. and global economy? Paul Solman: We want the rest of the world to spend more money stimulating their economies. Except for China, most countries seem to be
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Why Is the Trade Deficit Important?
March 30, 2009 |
Question: Please explain the trade deficit. What is it? Why is it important? Is it an indicator like taking someone's temperature or is it a debt that has to be paid? Does it relate directly to our national debt?
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Will We Still Reject Materialism After the Downturn?
March 30, 2009 |
Question: I enjoyed your recent interview with Robert McElvaine. (Editor's note: Watch the interview below.) His thesis that the downturn will lead us away from consumption as a way of life to what really matters is interesting. Am I
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Was Depression-Era Debt as High as It Is Now?
March 27, 2009 |
Question: When we hear comparisons between today's economy and that of the Great Depression, I wonder: Had as many people and institutions been as highly leveraged then as now? Were personal and institutional debt as high then as they
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How Can Assets Be Toxic If They Were Insured?
March 27, 2009 |
Question: Why does everyone avoid discussions about PMI (Personal Mortgage Insurance), which protects the lenders from loss and is required on all loans with less than 20 percent down (except VA & Federal Housing Administration loans)? How can there
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Can Individual Investors Participate in the New Toxic Asset Plan?
March 26, 2009 |
Question: Is there an opportunity for individual investors who are not super-rich to participate in the new Toxic Asset plan? Maybe something like a mutual fund, or the Treasury's non-competitive bid process? Paul Solman: Supposedly yes. From an AP
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Who Was Buying Stocks as the Market Crashed?
March 26, 2009 |
Question: At the stock exchange, every time someone sells stock, someone else is buying it. Last fall, when the Dow dropped from 16,000 to 8,000, mutual funds, retirement funds, insurance companies, etc. were selling. Who was buying? Who owns
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Can We Bring Back Jobs by Retooling Factories?
March 25, 2009 |
Question: You recently had a segment about the loss of jobs in Elkhart, Ind. I was watching it on KRCB, a station that was not having a pledge drive that day. To fill in, there was a report on
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Can the Dow Fall Into Negative Numbers?
March 25, 2009 |
Question: My high school daughter asked me a question I can't answer. Can the Dow fall to zero or into negative numbers? Paul Solman: Ah, at last. A question I can definitively answer: ABSOLUTELY NOT! (Those capital letters feel
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Who Qualifies as Middle Class These Days?
March 24, 2009 |
Question: What dollar figure or income is in mind when all the politicians and news media speak of the middle class? Who is the middle class at this point in time? Paul Solman: "Middle class" has long been a
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The Toxic Asset Plan Explained
March 23, 2009 |
After the Treasury Department released its plan today to rid banks of so-called "toxic assets" by enticing private investors to partner with the government, Paul Solman answered questions on the basics of the plan. What exactly are toxic assets
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Should the Government Break Up Big Banks Into Smaller Ones?
March 23, 2009 |
Question: Can the government loan the FDIC money (which banks will pay back through the FDIC) to take over Citibank and Bank of America, et al., pay off the customers, and break up the banks into regional banks that
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How Worried Are You About the National Debt?
March 20, 2009 |
Question: How concerned should we be about (1) our level of national debt and (2) China holding a large portion of our national debt? Paul Solman: These are among the great debates of our time, of course. Short-term, if we're
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Should the U.S. Adopt the German Auto Plan?
March 20, 2009 |
Question: I am curious how you believe we should balance helping big companies with also helping their customers. The number one basic business principle is: Businesses don't do well without customers. Solution: Provide customers. Here's a case in point.
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Interest Rates on Credit Cards Are Going Up. Won't That Further Hurt Average Joes?
March 19, 2009 |
Question: About four weeks ago, my Chase credit card informed me that the interest rate on my current balance was changing from 5.99 fixed to 10.99 variable so that Chase could "maintain profitability" on my account. I knew that
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Is the Federal Reserve Public or Private?
March 19, 2009 |
Question: Is the Federal Reserve "federal" as the name implies, or is it as "federal as Federal Express," meaning a private, for-profit corporation? I've heard it both ways and would like the answer clarified by a hard-hitting reporter whose
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How and Why Is the Fed Creating $1 Trillion?
March 18, 2009 |
Question: How and why is the Fed creating $1 trillion in new funds to buy securities? Paul Solman: They've been calling Fed chairman Bernanke "Helicopter Ben" since he told conservative economics icon Milton Friedman, in a speech a few years
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Why Are Pension Funds Investing in Hedge Funds?
March 18, 2009 |
Question: Why were pension funds allowed to "invest" in a hedge fund? Hedge funds are nothing more than gambling. Paul Solman: Because pension funds are supposedly big enough and therefore sophisticated enough to know what they're doing and take
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How Do We Get Banks Lending Again?
March 17, 2009 |
Question: Given our collective financial plight and our need for credit to survive, how do we get banks to be banks again (read: lend)? Can it be legislated - and if not, how can we surmount our impasse? Paul
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Should the Stimulus Be Spent on R&D Instead?
March 16, 2009 |
Question: What is the approximate rate of return on investment in the National Institutes of Health, National Science Foundation, and other agencies that sponsor research in this country? At one time, I read that it was something like 1:17
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How Much Responsibility Do Boards of Directors Bear?
March 16, 2009 |
Question: It seems the press is ignoring the elephant in the banking bath tub: Members of each board of directors had responsibility to their shareholders, yet I never hear that being discussed. And I've only had a whiff of
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If China Is Worried About U.S. Debt, How Worried Should We Be?
March 13, 2009 |
Question: China's Premier Wen Jiabao said today he was "worried" about China's $1 trillion investment in U.S. securities. So, should the United States be worried about his worry? Paul Solman: In response to any economic problem these days, I'm
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Why Are So Many Companies Collapsing So Suddenly?
March 13, 2009 |
Question: Can you explain why, when these huge companies collapse, the bleeding isn't slow and steady? Is it that they cannot forecast months ahead of time and see the end approaching? Or, have they just been operating with leveraged
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How Are Losses on Mortgage Derivatives Calculated?
March 12, 2009 |
Question: If there is no way to currently value the mortgages on which the value of derivatives (collateralized mortgage obligations, etc.) depend, how are losses on those derivatives -- such as AIG $62 billion loss -- calculated? If you
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What Are Mark-to-Market Rules?
March 11, 2009 |
Question: What are mark-to-market rules? And should they be changed? Paul Solman: When it comes to the current crisis, this is the question (or one major question): To "mark to market" or not to "mark to market"? Consider a
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What's Happening to Manufacturers Who Don't Lower Their Prices?
March 11, 2009 |
Question: How did that guy who owns Not Your Daughter's Blue Jeans (Editor's Note: Here's Paul's segment profiling the company in March 2008) wind up after the holiday purchase time? I saw a pair of the blue jeans in a
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Is It Realistic for the President to Cut the Deficit in Half?
March 10, 2009 |
Question: Is it realistic for the president to cut the deficit in half in four years, even while spending on the war [in Iraq] and moving [troops] to Afghanistan? Paul Solman: The skepticism seems clear and well-taken. The most
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What Are the Benefits of the Stock Market?
March 9, 2009 |
Question: How does having a stock market benefit the entire country? To the extent that IPOs represent a mechanism for gaining funds for projects that increase profits, it is very useful. But don't stocks also represent debt that now
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What's the Total Wealth of the United States?
March 9, 2009 |
Question: With all this economic turmoil and talk of trillions of dollars, my question is: What is the total wealth of the United States? If the total U.S. wealth is, say, $100,000 trillion, then spending $1 trillion to help
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Does Negative News Contribute to the Downturn?
March 6, 2009 |
Question: I would love to see you do a story on the impact of media coverage on the recession. Over the last two years, there has been a steady drumbeat of "the recession is coming, the recession is coming!"
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Do We Need a Kinder, Gentler Bubble?
March 6, 2009 |
Question: Is the answer to the crisis a kinder, gentler bubble? Paul Solman: I'm posing this question to myself, but let me pass the buck from the outset on this one - to the eerily astute Adam Smith --
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Is Anyone Still Hiring?
March 6, 2009 |
Question: Is anyone still hiring? Paul Solman: The number is now in: 651,000 jobs shed in February. Also, from the Bloomberg story this morning: "The payroll drop in January was revised up to 655,000 from 598,000 and December now
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What Would Happen if Washington Let Big Banks Fail?
March 5, 2009 |
Question: What would happen if the government let Citibank and Bank of America, et al., just fail? Paul Solman: The possibilities are various, intriguing, and terrifying. Let's say Citi goes under. The government has to honor all of the
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Does the FDIC Really Protect My Deposits?
March 4, 2009 |
Question: With as much debt as our government is in, does the FDIC really make my bank deposits safe? And if the FDIC had to pay millions of people $100,000 all at the same time, where would the money
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What's the Significance of the Dow Dropping Below 7,000 Points?
March 3, 2009 |
Question: What's the significance of the Dow dropping below 7,000? Paul Solman: Just another number. To the extent that people focus on it, however, it can have the effect of increasing the anxiety over stock prices, and lead to
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Why Does AIG Need Yet Another Bailout?
March 3, 2009 |
Question: Why does AIG need yet another bailout? Paul Solman: As Joe Nocera and Frank Partnoy explained on Monday's show, it's all about the "counterparties." These are the large financial institutions with whom AIG has contractual arrangements. The fear
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Do Slum Kids Stand a Chance in Our Global Economy?
March 2, 2009 |
Question/Comment: A few years back, I made a documentary about an Indian high-tech firm that was offering free Internet access to semi-literate slum children in Delhi, The Hole in the Wall. Now it turns out that project was the
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Why Don't We Offer Earlier Retirement Incentives to Open Up Jobs for the Unemployed?
March 2, 2009 |
Question/Comment: Someone must have already considered this idea for the economic stimulus, but I haven't heard anything about it: Why don't we offer earlier retirement incentives for people still working at retirement age because they want to get their
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What is the Process for Reprivatization of Banks?
February 27, 2009 |
Question/Comment: If the banks are nationalized and become healthy again, what is the process for reprivatization? Do stockholders on record as of the date of nationalization have any priorities when the banks are reprivatized? How did Sweden manage this
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What Are "Targeted Jobs"?
February 27, 2009 |
Question/Comment: Paul, can you explain what "targeted jobs" are? Are these something different from the type of jobs that people are losing now? It seems to me that $30,000 spent on retaining a librarian would have the same economic
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What About the Recession's Effects on the Arts?
February 26, 2009 |
Question/Comment: Is there a possibility that you would do a piece on the Brandeis decision to close the Rose Art Museum and sell the collection? I know you're a graduate, as I am. It strikes me a bad decision in
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What Would Be the Energy Cost of Electric Cars?
February 25, 2009 |
Question/Comment: Paul, I am wondering about the new restrictions that are being forced on the car manufacturers for bio-fuel/electric/ethanol cars. Why isn't there any mention about the cost of producing the electricity for the car batteries and ethanol? In
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Are We Overreacting to Unemployment Numbers?
February 25, 2009 |
Question/Comment: In the early '80's unemployment was over 10 percent. I'm old enough to remember what the economy was like at that time. It wasn't pretty given interest rates, but on the other hand we weren't considering massive government
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Is There a Connection Between Reducing Taxes and Creating Jobs?
February 24, 2009 |
Question/Comment: Simple question. President Obama and all members of Congress say the "stimulus bill must contain only monies targeted directly for job creation". Given that the stimulus bill now has 60 percent allocated for tax reductions, please explain the
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What Would My Investments Look Like if the Government Nationalized Banks?
February 23, 2009 |
Question/Comment: I'm retired and considering investing in Citigroup and BAC. However, I keep hearing the word "nationalization." Would my prospective investment be lost should the Government nationalize Citigroup and BAC? What is the likelihood that the Government will nationalize?
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Will the Next Generation Be Better Off?
February 23, 2009 |
Question/Comment: Will the next generation be better off? Paul Solman: Who knows? But an interesting skeptic is Dallas Salisbury, head of the Employee Benefits Research Institute. I interviewed him recently for a story on what's known as "the paradox
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In Case You Missed It: The Upside of the Downturn
February 20, 2009 |
On Friday's NewsHour, Paul Solman examined how some are finding the bright side of the economic downturn. You can listen to the audio or read the transcript of the segment here. <!-- _pap_embed_small('news01s1fecq772'); //--><!]]>
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Web Extras: Upside of the Downturn
February 20, 2009 |
Editor's Note: On Friday's NewsHour, we aired another in our series of reports on making sense of the recession. The segment is about the "upside of the downturn," which looks at the silver lining of the economic slump. Paul Solman:
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Why Can't We Make Better Economic Predictions?
February 20, 2009 |
Question/Comment: Why isn't economics more of a science? I've seen pundits on TV say the Great Lesson of the Great Depression is to have jobs programs and get people back to work, but other pundits say the Depression would've
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In Case You Missed It: The Amazing Adventures of 'Savings Man'
February 19, 2009 |
Paul Solman speaks to the founder of an organization funding creative public service ads on saving money. You can listen to the audio or read the transcript of the segment here. <!-- _pap_embed_small('news01s1fd2q76c'); //--><!]]>
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Web Extra: Finland's Unusual Take on the Recession
February 19, 2009 |
And now for something almost completely different: an advertising campaign that urges consumers to SPEND their way out of the recession, instead of save their way through it. We ran a snippet of it in our story on "$avingsman" Thursday,
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Why Should We Save Big Banks?
February 19, 2009 |
Question/Comment: I am a traditional liberal democrat who is in favor of a large stimulus package that focuses on job creation and helping out states. I can not understand the need for further bank bailouts. I do not understand the
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What Causes Mortgage Rates to Rise and Fall?
February 18, 2009 |
Question/Comment: What causes mortgage rates to rise and fall? Will the stimulus or the remaining TARP money have any affect on mortgage rates? I heard of an attempt to temporarily lower rates to four percent but nothing since. Paul
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At What Point Does Increasing Productivity Damage a Consumption-Based Economy?
February 18, 2009 |
Question/Comment: At what point does increasing Productivity damage a consumption-based economy? Can this be discussed with respect to the recent historically high levels of productivity in "modern industrialized" economies with relatively inelastic labor pools? Paul Solman: Most economists will
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Should the Government Spend or Give Out Tax Cuts?
February 17, 2009 |
Editor's Note: Paul recently answered "Five Good Questions" on the economy for the PBS Engage blog. You will also be able to find those answers here on the Business Desk all week. Question/Comment: There seems to be two dominant
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Why Won't Banks Lend Money?
February 16, 2009 |
Editor's Note: Paul recently answered "Five Good Questions" on the economy for the PBS Engage blog. You will also be able to find those answers here on the Business Desk all week. Question/Comment: I heard on a news program
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In Case You Missed It: Society's Ability to Weather Crisis Largely Depends on Leaders' Positions
February 13, 2009 |
As the country struggles through an economic crisis, Paul Solman talked to author Jared Diamond about his book "Collapse: How Societies Choose to Fail or Succeed" on Friday's NewsHour. Read the transcript here. <!-- _pap_embed_small('news01s1f56q74d'); //--><!]]>
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If Our Economy is More Global, Does That Change Our Strategies?
February 13, 2009 |
Editor's Note: Paul recently answered "Five Good Questions" on the economy for the PBS Engage blog. You will also be able to find those answers here on the Business Desk all week. Question/Comment: How does our economy being more
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Should the Government Give Money to Consumers to Pay Off Credit Cards, Mortgages?
February 13, 2009 |
Editor's Note: Paul recently answered "Five Good Questions" on the economy for the PBS Engage blog. You will also be able to find those answers here on the Business Desk all week. Question/Comment: What is your response to Jon
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How Do We Rebuild the Middle Class?
February 12, 2009 |
Editor's Note: Paul recently answered "Five Good Questions" on the economy for the PBS Engage blog. You will also be able to find those answers here on the Business Desk all week. Question/Comment: How do we rebuild the middle class?
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What is the Worst Case Scenario if the Consumer Becomes a Saver?
February 12, 2009 |
Question/Comment: What is the worst case scenario if the consumer becomes a saver? Or if nations, including United States, raise trade barriers? Or if the financial bailout fails? Paul Solman: Hmmm. Well, the first is happening as we speak:
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Will Any Plan That Puts People Back to Work Actually Stimulate the Economy?
February 11, 2009 |
Question/Comment: Everyone seems to have an opinion on what will stimulate the economy and what won't. Won't anything that puts people to work stimulate the economy, and are there entities, and their analyses, that can project stimulatory effects of
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Forecasting Our Economic Future
February 11, 2009 |
Paul Solman: Historians sing of what has passed; journalists, of what is passing; economic forecasters, of what is to come. Over the years, and especially during presidential campaigns, we've featured the forecasting model of Yale economist Ray Fair here
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As a Stimulus, Would it Work to Give Money to Americans to Cover Their Mortgage or Credit Debt?
February 10, 2009 |
Question/Comment: As a stimulus to the economy, would it work to give money to Americans to cover their mortgage or credit debt? Paul Solman: Any spending is a stimulus. You might take a few minutes to read, as I
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Are Companies Able to Function Without Loans?
February 10, 2009 |
Note from Paul Solman: We haven't had a "guest vetter" here at the Business Desk for some months. But interviewing MIT's Simon Johnson the other day for a piece on 'good bank vs. bad bank' and being an enthusiast
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More from 'Bad Bank vs. Good Bank'
February 9, 2009 |
While awaiting a response to my answers to your questions from MIT's Simon Johnson, who is about to become this quanda's newest guest vetter, perhaps it would be interesting to read a bit more of our interview with him
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In a Finite World, Can We Really Have Infinite Growth?
February 9, 2009 |
Question/Comment: Given we live in a finite world, how can economists explain the viability of an economic system which demands infinite growth? Paul Solman: They'd be hard-pressed, I guess. But not necessarily stumped. I can think of three responses. 1)
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In Case You Missed It: Bad Bank vs. Good Bank
February 6, 2009 |
Paul Solman explores a solution to the financial crisis that's gaining steam: creating "bad banks" and "good banks." <!-- _pap_embed_small('news01s1f78q123'); //--><!]]>
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Does it Make Economic Sense for Homeowners to Immediately Pay Off Their Mortgage?
February 6, 2009 |
Question/Comment: Given that U.S. banks appear to need cash to stabilize themselves and begin extending credit, would it not make economic sense for homeowners with mortgages to pay off the balance of their loans as soon as possible if
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How Can City, County and State Governments Become Fiscally Sound Again?
February 5, 2009 |
Question/Comment: Allowing for the current reduction in home valuations and thus reduced property tax revenues generated to local governments in general, what combination of revenue(s) would most likely restore city, county and state governments to fiscal solvency? I understand
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Why Do We Encourage Mergers of Large Companies?
February 5, 2009 |
Question/Comment: We live in a time of unparalleled economic crisis; a time when failure of a large company such as GM or a large financial institution could have catastrophic effects throughout the county and beyond. Why does our government
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Why is Credit Extended to Companies and How Do They Make Their Payments?
February 4, 2009 |
Question/Comment: Can you explain the how and why of credit that is extended to companies and how they make their payments? I understand credit to start new ventures, buy new equipment, hire a workforce, and the like but how
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Will a Stimulus Fix Our Problems?
February 4, 2009 |
A question from various sources: "Will a stimulus fix our problems?" Paul Solman: Let's begin with a prior question: What's the economic justification for a stimulus? The answer is that an economy's annual output -- its Gross Domestic Product
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Was the Wall Street Money Real or Imagined?
February 3, 2009 |
Question/Comment: Could you explain where all the money went that supposedly vanished during the Wall Street meltdown? Who has it? Was it imaginary or did it really exist? Paul Solman: All Wall Street values are imaginary. All money is
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How Much of My Investments Should Be in Gold?
February 3, 2009 |
Question/Comment: How much of my investments should be in gold? Paul Solman: Unfortunately, I can't possibly give you an answer to your question, except to say that none of my investments are in gold (or ever have been). Thus,
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Special Online Video: Tummy Tuck Jeans in a New Economic Landscape
February 2, 2009 |
In a special online-only video, Paul Solman examines how the company "Not Your Daughter's Jeans" is faring as currency values, trade alliances and consumer spending shift in the global economic crisis. <!-- _pap_embed_small('news01s1e62q715'); //--><!]]> You can find the answers to
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In Case You Missed It: The End of Globalization?
January 31, 2009 |
Paul Solman revisits the port of Long Beach, Calif., just a year after first reporting there, and finds fields of unsold Mercedes and tracts of Toyotas. Read the transcript here. <!-- _pap_embed_small('news01s1e20q123'); //--><!]]>
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Are We Headed to a Shorter Work Week?
January 30, 2009 |
Question/Comment: The Independent mentions that the United Kingdom might move to a three day work week. While some companies have resorted to this kind of solution, most have not. Would this kind of measure be of any help if
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Who is Right? Krugman or Mankiw?
January 29, 2009 |
Question/Comment: Paul, please help me understand who is more correct when it comes to the multiplier as applied to tax cuts, versus increased government spending. Professor Greg Mankiw believes that the stimulus package should have more tax cuts, while
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Some Businesses Might Go to Offshore Accounts, But Wouldn't Most Want to Stay?
January 29, 2009 |
Question/Comment: It's been said that money flows like water. In an economy with a labor pool as talented as America's, wouldn't it be a good time to regulate the market so that as money finds its way back into
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Why Should We Call Them Economists if They Couldn't Predict the Economy's Fall?
January 28, 2009 |
Question/Comment: If economists cannot see that an economy that is two-thirds consumption based with consumer debt rising and savings falling is not completely unsustainable, why don't we call them idiots instead of economists? Some would call it mercantilism. Paul Solman:
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Are There Conflicts of Interest in the Credit Industry?
January 28, 2009 |
Question/Comment: A business advice columnist in The Oregonian recently answered a question about canceling a credit card when the issuer changes the terms. One of her comments was that it always has a negative impact on one's credit score
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With the Economic Downturn and Wages Stagnant, What Economic Rationale Prevails for Increasing Prices?
January 27, 2009 |
Question/Comment: In the New York Times recently, it was stated that there has been a drop in consumer prices. Here is NYC I have found that prices have risen. For example, a half gallon of milk that was $1.89
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What Would Happen if the Fed Decided to Raise Interest Rates?
January 26, 2009 |
Question/Comment: A stupid question, perhaps, but here goes. Okay, lowering the overnight rate to 0.25 percent doesn't seem to have worked very well. What would happen if the Fed decided to RAISE the rate by a percentage point or
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When Do You Stop Putting Money Down on a House and Start Putting it in a Bank Account?
January 26, 2009 |
Question/Comment: Dave and I want to know: Pretend you want a house that costs $500,000. You have $500,000 saved up. In this market, when you can get a five percent interest rate (at least) on your 30-year mortgage, is
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Why Are People Now Encouraged To Buy?
January 25, 2009 |
Question/Comment: Is this economic downturn really related to so many U.S. citizens buying themselves into big debt with credit cards? Why then, are people now encouraged to buy? Paul Solman: Citizens, corporations and government ALL bought themselves into big
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Is There An "Economic Event" That Will Change the Economics Profession?
January 22, 2009 |
Question/Comment: Dear Mr. Solman, Is there an "economic event", or re-discovery of economic history that can impact the incredible ideological stranglehold on the economics "profession?" In my opinion we have sacrificed rigorous econometrics on the altar of existence theorems,
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How Do You See Medicare and Social Security Being Changed to Accommodate Future Generations?
January 21, 2009 |
Question/Comment: What is the future of Social Security and Medicare in the next 20-years and how do you see it being changed to accommodate future generations? Paul Solman: Medicare is a much bigger problem than Social Security. I think
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Are You Moving in With Friends to Save Money?
January 16, 2009 |
Question/Comment: I heard Paul Solman say yesterday... wait, you are Paul Solman... that the economy is so bad, lots of people are now moving in with friends to save money. Is this really true? Paul Solman: In the interests
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In Case You Missed It: Economists Place Their Bets With Predictions for 2009
January 15, 2009 |
Last night on the NewsHour, we did a story on economic predictions for the future, featuring two economists who'd correctly called the current crisis: Martin Feldstein and Ken Rogoff. You can watch the piece here. We ended the story with
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Can We Really Compare Today's Unemployment Numbers With Those During the Great Depresssion?
January 13, 2009 |
Question/Comment: After the rebroadcast of your interview with Robert Solow I had a discussion with my daughter, who is a high school junior. She noted that Solow mentioned the unemployment rate in the Great Depression was 25 to 30
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Why Can't We Bail Out Americans Who Have Overcharged Their Credit Cards?
January 12, 2009 |
Question/Comment: Sir, I am curious why no one is talking about a sure-fire way to assist over one hundred million Americans and put over one hundred billion dollars back into the economy every month. I am talking about a
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In Case You Missed It: Economists Explain Why Hints of the Economic Crisis Eluded Them
January 9, 2009 |
Paul Solman reports from San Francisco on a conference for economists and why hints of a recession were missed. <!-- _pap_embed_small('news01s1c08q667'); //--><!]]>
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Why Has the Price of Oil Decreased So Significantly?
January 7, 2009 |
Question/Comment: Why has the price of gas decreased so significantly? This seems way more than an incremental adjustment to supply and demand. Is there something non-linear going on? Paul Solman: Brace yourself for a very long answer. The price
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What is the Economic Impact of Military Spending?
January 5, 2009 |
Question/Comment: I would like to know the impact of military spending on our economy. It seems like it's a pretty hefty percentage of the annual budget, almost equal to that spent on Social Security; more than is spent on Medicare.
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Find More of Paul's Thoughts on Twitter and His New Online Article.
January 2, 2009 |
It's the weekend again and with the NewsHour dark, there's no chance to answer questions. So I thought I'd post a couple of things that might interest you. I'm in San Francisco for the annual meeting of economists for a
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Can You Explain Why Our Economy Seems to Only Work As Long As We Buy Lots of Cars and Other Consumer Goods?
January 2, 2009 |
Question/Comment: Can you help me understand why our economy seems to work only as long as we buy lots of cars and other consumer goods, some of which aren't really necessities? Isn't there some other way, at least in
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Could You Explain the Differences Between a "Recession," "Depression" and "Repression"?
January 2, 2009 |
Question/Comment: Could you please explain the differences between "recession," "depression" and "repression"? I understand that recession has a text book definition, but the other two terms seem vague. Paul Solman: "Recession" is two successive quarters of "negative growth" - i.e.,
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Are Ethics Taught in Finance and Business?
December 31, 2008 |
Question/Comment: At one point during your report on teaching job skills to at-risk urban youth, I noticed a wall behind a student displayed a list of qualities to embrace: be honest, be accountable, among others. It almost seems cruelly
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Where Should I Spend My Hard Earned Money?
December 29, 2008 |
Question/Comment: Ok, so being a good dog, I need to keep spending to help the economy. What are some of the best things to spend my hard earned, devalued money on? Paul Solman: That's a very interesting question and
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How Do Senate vs. Detroit Worker Wages Compare on an Hourly Basis?
December 25, 2008 |
Question/Comment: Hi Paul! I've heard certain senators opining about our 'hourly' wage earners here in Detroit. I've also heard senators earn tiptop health & retirement bennies. How do Senate vs 'Detroit worker' wages compare, converted to an hourly basis?
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How Do Some Businesses Remain Prosperous While Others Fail?
December 24, 2008 |
Question/Comment: I hear plenty about businesses that are failing or have failed in the recent financial turmoil. I heard little about businesses that remain stable or even prosperous. What is making the difference between the two? Paul Solman: If you
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In Case You Missed It: Innovative Program Uses Business Methods to Teach Job Skills
December 24, 2008 |
On Tuesday, Dec. 23, Paul Solman examined an innovative social entrepreneurship program that uses business methods to achieve social change for at-risk urban youth. You can find the transcript here. <!-- _pap_embed_small('news01s1ad6q61d'); //--><!]]>
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Do You Believe FDR's Big Government Investment Efforts in Fact Helped End the Great Depression, And if So, Would Such Efforts Help Now?
December 24, 2008 |
Question/Comment: A friend of mine disputes the notion that FDR's New Deal rescued the nation from the Great Depression; he argues that the war effort was the major contributor. Do you believe FDR's big government investment efforts in fact
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I'm Not Sure It's My Responsibility to Go Out and Shop to Keep Businesses Afloat.
December 23, 2008 |
Question/Comment: It seems to me there's been a shift in market thinking in the recent past. I'm not sure that it's my responsibility to go out and shop to keep businesses afloat; I always thought that it was business'
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In Case You Missed It: Infrastructure Projects and Economic Growth
December 23, 2008 |
On Monday's NewsHour, Paul Solman examined whether big infrastructure projects, such as the one being considered by President-elect Barack Obama, are an effective way to create new jobs and stimulate the economy. <!-- _pap_embed_small('news01s1ab5q612'); //--><!]]>
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Why Ease Credit, But Not Increase Wages?
December 22, 2008 |
Question/Comment: A basic truth in economics is that wages drive demand. Yet for the last 30 years wages have been stagnant or decreasing. Why do I hear only talk of easing credit, not increasing wages? Easy credit is what
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What Needs to Happen For the Recession to Be Short?
December 19, 2008 |
Question/Comment: I have heard guests on the NewsHour say that the recession will last into 2009 or 2010. What is it that is supposed to happen in this short time period that will result in happy days being here
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Which Is It: Spend or Save?
December 19, 2008 |
Question/Comment: We're told that lower consumer spending will make economic recovery much more difficult. We're admonished that we don't save nearly enough, and are among the lowest among industrialized nations. So which is it: spend or save? Paul Solman:
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People Keep Spending. Has Anything Changed?
December 18, 2008 |
Question/Comment: I have been amazed by how we've been told of a crisis since 9/11. It was going to ruin the U.S. economy, then it was Afghanistan, Iraq, Katrina, the Midwest floods, the fires, the hurricanes, oil prices, the
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Are Banks Really Making Short Term Loans to Other Banks for Zero Interest?
December 18, 2008 |
Question/Comment: When people speak of the Fed funds rate being zero, does that mean that banks are literally making short-term loans to other banks for NO INTEREST WHATSOEVER? Why would any bank do that, since there is some risk of
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Is the Bernard Madoff Financial Fiasco Tied to the Global Economic Meltdown?
December 17, 2008 |
Question/Comment: How is the Bernard Madoff financial fiasco tied to the global economic meltdown? Is it just a timely coincidence? The thought of a connection somehow seems important. Paul Solman: Let's see if I can resist the urge to
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In Case You Missed It: Low Consumer Confidence Limits Holiday Spending
December 17, 2008 |
<!-- _pap_embed_small('news01s1a40q5f7'); //--><!]]> On Tuesday, Dec. 16, Paul Solman looked at the psychological causes and effects of low consumer confidence through the holiday season.
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How Much Globalization Versus Nationalism/Protectionism is Needed Right Now to Resolve the Economic Crisis?
December 16, 2008 |
Question/Comment: How much globalization versus nationalism/protectionism is needed right now to resolve the economic crisis? Paul Solman: Interesting. Your question prompts a warning. The Smoot-Hawley Tariff Act of 1930, an attempt to protect American industry only eight months after
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Regarding the Bailing Out of Corporations, What is the Role of Their Board of Directors?
December 15, 2008 |
Question/Comment: Regarding the bailing out of corporations like the automakers, what is the role of their board of directors? Do these board members not have any fiscal responsibilities for keeping their companies afloat? Non-profit board members have a fiscal
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Why Aren't the Big Three Automakers More Successful?
December 12, 2008 |
Question/Comment: The Big Three seem to be successful in the rest of the world yet not here. Is it the fault of our government regulations, the costs associated with labor agreements here, or what? Paul Solman: I sent your
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What is the "Real Economy"?
December 11, 2008 |
Question/Comment: I'm confused by the term "real economy." Lots of people are using it, but no one has explained it that I can find. It's something different than what Wikipedia defines as not the "virtual economy." What's going on?
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What is Free Trade?
December 10, 2008 |
Question/Comment: What is free trade? I know the simple answer, no tariffs. But if a government subsidizes the production of a product or provides subsidies to farmers isn't this interfering with the intent of the process? Paul Solman: Free trade
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What Are the Top U.S. Industries?
December 9, 2008 |
Question/Comment: There's been a lot of talk recently about saving the financial industry, the auto industry. What are the top U.S. industries, in terms of total dollar value, number of employees, etc? I tried Googling it, but did not use
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If Big Companies Need Help, Then Why Do the CEO's Still Get Huge Bonuses?
December 8, 2008 |
Question/Comment: I am writing this with my mom's permission. I am 12 years old and my question is if companies like Freddie and Fannie needs government help to bail them out, then how come the CEO's of these company
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Could You Help Me Understand Credit Default Swap in Terms of Purchasing a Car?
December 8, 2008 |
Question/Comment: The lease is up on my Lexus and I inquired about buying it. Lexus financial said that I'd have to pay the residual value from the lease. That amount is $10,000 over market value. It was later explained to
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The Economy, Your Pocketbook and the Recession
December 5, 2008 |
Paul Solman: Forgive me for not responding to questions for a few days, but among other things, I've been trying to analyze the results of poll posted here recently: How is the Economy Affecting Your Pocketbook? Click on "Comments"
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The Whole World is Drowning, How Long Before Somebody Turns Off the Faucet?
December 3, 2008 |
Question/Comment: Yesterday I saw a TV ad for mortgages to people with no credit history, job or social security number. The whole world is drowning, how long before somebody turns off the faucet? Paul Solman: There's got to be a
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Why Didn't Bankruptcy Work For Lehman Brothers?
December 2, 2008 |
Question/Comment: Dear Mr Solman, Many of the "experts" I hear on PBS and NPR think that bankruptcy would be a workable solution for the auto companies. I agree, but why did it NOT work for Lehman Brothers? Paul Solman:
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Are These Economic Problems Caused By Too Many People on Earth?
December 2, 2008 |
Question/Comment: Is the final answer to all these economic problems the fact that there are now too many people on Earth? For example, how can U.S. labor make any money when Chinese workers will work for a nickel an
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Should We Raise the Price of Gas and Use the Extra to Fund the Big Three Bailout?
December 1, 2008 |
Question/Comment: There was an article in the New York Times suggesting we peg gas prices at $3.50 and use the income to fund the Big Three bailout and future alternative energy research. This would also keep the pressure on
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What is Islamic Banking?
November 26, 2008 |
Question/Comment: I was reading an article about Islamic banking in Malaysia, and I was surprised to find out that these Islamic banks were affected little if any with this bad lending that is going on in U.S. and in the
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Have We Ever Been This Close to Socialism Before?
November 25, 2008 |
Question/Comment: Have we ever been this close to socialism before? Referring, of course, to all of the bail outs and attempted influence on the "free" market. Paul Solman: It's an intriguing question, Dave. Yes, I think the New Deal
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Could You Explain How Deflation is Different From Companies Setting Prices to Reflect Input Costs and Efficiencies?
November 24, 2008 |
Question/Comment: Dear Mr. Solman, I've read several articles recently discussing the risk of deflation. I think I understand broadly why deflation is bad for the economy in general. Could you explain how deflation is different from companies setting prices
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In Case You Missed It: A Report From Detroit
November 22, 2008 |
Editor's Note: Paul Solman reports on the impact to auto workers. <!-- _pap_embed_small('news01s1851q573'); //--><!]]>
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In Case You Missed It: A Conversation With Nobel-winning economist Robert Solow
November 20, 2008 |
Editor's Note: Paul Solman spoke with Nobel-winning economist Robert Solow on the financial crisis. <!-- _pap_embed_small('news01s1831q56d'); //--><!]]>
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If There Isn't a Bailout of the Big Three Auto Firms, What is the Overall Effect on the Government and on Our Economy?
November 20, 2008 |
Question/Comment: If there isn't a bailout of the Big Three auto firms, what is the overall effect on the government and on our economy? Paul Solman: Well, in a time of fearsome recession or worse, the loss of another
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How is the Economy Affecting Your Pocketbook?
November 18, 2008 |
Paul Solman: In the spirit of turnabout being fair play, I've got questions for YOU. All of you. They're for a TV story I'm doing. As an exclusive bonus for zealous Business Desk readers, I'll publish the results and
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An Election Economics Post-Mortem
November 17, 2008 |
Paul Solman: Here's an email I received from Yale economist Ray Fair, whose presidential prediction model we featured on the site a few weeks ago: Ray Fair: The vote equation did well in predicting the 2008 election. The following
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When the Government Issues New Treasury Debt and Puts it into the Banking System, Does That Mean More Dollars in the World, and Thus Inflation?
November 17, 2008 |
Paul Solman: Several weeks ago, former Fed Chairman and economic boom cheerleader Alan Greenspan said this before Congress: "Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a
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What Can Our Government Actually Do to Reduce Extreme Financial Inequality?
November 14, 2008 |
Question/Comment: What can our government actually do to reduce extreme financial inequality after the fact (assuming that such reduction is desirable)? Once extreme wealth has been created, don't those chosen "elite" have considerably more opportunity than the rest of
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Can You Address the Consequences of Selecting a Treasury Secretary?
November 13, 2008 |
Question/Comment: Can you address the consequences of selecting a Treasury Secretary? What are the salient policy and personality differences between the different candidates? Are there other notable candidates not on the short list that should be? Paul Solman: By
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Can Anything Good Come From the Crisis?
November 7, 2008 |
Paul Solman: In anticipation of the weekend, when I don't get many questions from you folks to answer, I sometimes pose rhetorical questions. And because they come from me, I'm in a unique position to answer them. As is the
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And Now For Something Not Completely Different
November 7, 2008 |
Paul Solman: For those who just can't get enough of my explanations, and like them in video form, you can go to the the home of the weekly PBS show called 'The Newsmakers,' in Evansville, Indiana. It's hosted by the
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What is the reasoning behind having the Fed, rather than the market, set short term interest rates?
November 7, 2008 |
Question/Comment: Dear Mr. Solman: I'm hoping you will answer my question as to the reasoning behind or justification for having a committee (i.e., the Federal Reserve) setting the price of money, i.e., interest rate. It is generally accepted that
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Will we ever pay down or even pay off the national debt?
November 6, 2008 |
Question/Comment: Given the history of the ever increasing U.S. national debt and our fluctuating economy, how realistic is it that we will ever pay down or even pay off the national debt? We have never managed to maintain the
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Do you think Alan Greenspan really thought that the "bubble" would never burst?
November 5, 2008 |
Question/Comment: It is my belief that Alan Greenspan is a strong follower of Ayn Rand's philosophy of a free and unfettered economy. Do you think Greenspan really thought that the "bubble" would never burst? Paul Solman: Greenspan IS (or
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My conservative friends are convinced that this economic mess is the result of changes to Fannie and Freddie's lending policies forced on them by the Democrats.
November 5, 2008 |
Question/Comment: My conservative friends are convinced that this economic mess is the result of changes to Fannie and Freddie's lending policies forced on them by the Democrats. My own theory identifies our chronic balance of payments as the chief
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When Economic Shifts and Elections Intersect: An Interview With Economist Ray Fair
October 31, 2008 |
Paul Solman: Every presidential election year for awhile now, we've paid a visit to Yale professor Ray Fair. His computer model for predicting the race, based largely on economics, has become something of a national phenomenon since we first started
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In Case You Missed It: Lessons of Great Depression Apply to Current Meltdown
October 31, 2008 |
Editor's Note: On Thursday, October 30, Paul Solman sat down with economist Eugene White and author Amity Shlae to talk about The Great Depression and what lessons can be gleaned from that era. Shlaes' book is titled 'The Forgotten Man:
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Is it correct to assume that the credit crisis is mostly psychological?
October 29, 2008 |
Question/Comment: Is it correct to assume that the credit crisis is mostly psychological? Banks hold bad paper which needs to be exposed and somehow that debt needs to be paid or securitized again, so that banks regain confidence in
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If the inflation rate is calculated too low, will the economy seem to be growing when it is not?
October 28, 2008 |
Question/Comment: I am wondering if the government is calculating the inflation rate correctly. If the inflation rate is calculated too low, will the economy seem to be growing when it is not? Is there any measure of how accurate the
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Do you have any assessment of the probability that Nassim Taleb's hypothesis will be realized?
October 28, 2008 |
Question/Comment: When I watched your segment on the NewsHour the other evening I was riveted by Nassim Taleb's prediction and his wish that he was wrong. I understand that supposedly Kevin Phillips, the economist, and George Soros, the entrepreneur predicted
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The government hopes the $700 billion bailout will get banks to lend again. Why not require them to do so?
October 27, 2008 |
Question/Comment: So the government hopes the $700 billion bailout will get banks to lend again. Why not require them to do so? According to the Wall Street Journal some of the banks are using the money for possible acquisitions,
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Now that governments have to inject billions into world banks, do you think monetary policy should be adjusted to better maintain a balance between currency in circulation and bank funds?
October 27, 2008 |
Question/Comment: The ratio between commercial bank money and currency in circulation has been widening for decades. While the Federal Reserve's monetary policy has protected our economy from runaway inflation, it may have been starving the market for currency. Now
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If America is losing money, who's gaining? Does there have to be balance?
October 23, 2008 |
Question/Comment: If the world today has all the same resources it had yesterday and America is losing money there must be someone somewhere gaining from this crisis in order for there to be a balance. Am I right? If I
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If this is a "financial storm", are we in the "eye of the hurricane"?
October 23, 2008 |
Question/Comment: Paul, I record the NewsHour and just saw your -- shall we say "sobering" -- conversation. I was reminded of a radio interview -- probably on NPR -- I heard (while driving) sometime during the past few years. Benoit
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What does the current crisis say about communism and capitalism?
October 23, 2008 |
Question/Comment: The difference between Communism and Capitalism is one could admit that it was wrong. It seems greed is the ultimate downfall of Capitalism and ironically one of its founding precepts. With all the nationalizing going on, maybe it's time
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Can temporary total nationalization avoid the doomsday scenario?
October 23, 2008 |
Question/Comment: Paul, I benefit from your explanations of complicated ideas, especially, the financial woes we're now encountering. I wonder, however, why the doomsday scenario posed by the author of The Black Swan cannot be avoided by the government nationalizing the
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In Case You Missed It: Top Theorists Examine Rippling Economic Turbulence
October 22, 2008 |
Editor's Note: You can watch or read a transcript of Paul Solman's October 21 report with economist Nassim Nicholas Taleb and his mentor, mathematician Benoit Mandelbrot, here. Nassim Nicholas Taleb's 2007 book is titled: The Black Swan: The Impact of
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When the Treasury Department is repaid the money it lent, shouldn't that be used to pay down the national debt?
October 21, 2008 |
Question/Comment: When the day comes that the banks and other financial institutions start to repay the vast amounts of money that have been borrowed by the Treasury Department, shouldn't that money be used to pay down the additional national debt
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Why are we not focusing on stimulating consumer spending?
October 21, 2008 |
Question/Comment: Hello, Paul. I am certainly no economist (as my question will show), but I learned in business school (to my surprise at the time) that two-thirds of GDP is the result of consumer spending, not corporate or government
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A response to viewer questions and comments on my segment about Los Alamos, N.M.
October 15, 2008 |
I received many responses on my segment on Los Alamos, N.M. the other night. I wanted to respond to some of them. No names are used because the emailers wrote to the NewsHour, not this page. There were several
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If the stock markets of the world all drop 10-20 percent simultaneously, are we as Americans significantly worse off?
October 15, 2008 |
Question/Comment: Would you please clarify something for me that I am struggling to understand? If the stock markets of the world all drop 10-20 percent simultaneously, are we as Americans, or any other nationality, significantly worse off? If, relatively
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It seems to me that FDR may have saved the traditional banking system. What do you think?
October 14, 2008 |
Question: First, it seems to me that FDR saved the traditional banking system. I've checked the account of the plan they came up with during the "bank holiday" in the second Schlesinger book and I think it bears out
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Is it time to admit that the world is already in a recession?
October 11, 2008 |
Question/Comment: Over the past few weeks, we have gone to extreme measures to save economies around the world. Treasuries and central banks to date have used multiple tools to ease this crisis such as, lowering Interest rates, pumping billions
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If the amount of $62 trillion is owed for credit default swaps, who or what entity eventually pays that?
October 11, 2008 |
Question/Comment: If the amount of 62 trillion dollars is owed for credit default swaps, who or what entity eventually pays that? Not even the U.S. government can make up for an amount which is 13 times our GDP. Paul Solman:
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Isn't much of the $55 trillion dollar market made up of hedge funds and other institutions betting that bonds and other debt products fail?
October 11, 2008 |
Question/Comment: I watched your piece on credit default swaps, which was illuminating but I think missed one point. Isn't much of the $55 trillion dollar market made up of hedge funds and other institutions betting that bonds and other debt
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What would you do with your money if you had a high tolerance for risk?
October 10, 2008 |
Question/Comment: If you had a high tolerance for risk, and you had a mutual fund, which you purchased in one lump sum, and it was down 33 percent, would you put more money into it to make it more
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Did anyone ever propose regulation or restrictions on credit default swaps?
October 10, 2008 |
Question/Comment: Excellent report on credit default swaps. Did anyone, Congress or the Administration, or the Clinton Administration, ever propose any regulation or restrictions on these financial instruments? Paul Solman: Ah, regulation. The "genius" of these contracts was that they functioned
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A response as the markets close below 9,000 for the first time in five years.
October 9, 2008 |
Paul Solman: This afternoon's question comes from the steward of The Business Desk who wrote, moments ago: "I don't know how you feel about this, but I thought maybe you could do another response to the day? The market
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How could a U.S. domestic problem become a global liquidity crisis?
October 9, 2008 |
Question/Comment: How could a U.S. domestic problem (the housing bubble) become a global liquidity crisis between banks putting all banks and consequently the economies worldwide in trouble? What needs to be done to prevent a global economic meltdown? Paul
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If banks do not have money to lend, how can they buy up finance firms and other failing banks?
October 9, 2008 |
Question/Comment: If banks do not have money to lend, how can Citicorp, Wells Fargo, etc. come up with billions to purchase failing banks and finance firms? Paul Solman: They aren't forking over any cash. "Purchase" means subsume. Wachovia becomes
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Is there any way to protect the U.S. or world markets?
October 8, 2008 |
Question/Comment: Your presentation last night was clear and lively. Thanks. My question is: Is there ANY way to protect the U.S. or world markets from individuals and/or huge companies who may be lurking in the greedy wealthy underworld, waiting
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Are there really $64 trillion of bad mortgages out there?
October 8, 2008 |
Question/Comment: You mentioned in your report that there are $64 trillion in CD swaps out there. AIG only had a few hundred billion. Who has the rest? Are there really $64 trillion of bad mortgages out there? Paul Solman:
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How much of investment banks' portfolios are tied up in the stock market?
October 8, 2008 |
Question/Comment: What are the connections between investment banks/houses and the stock market? How much of these investment banks' portfolios are tied up in the stock market, and how much is in other places (like loans to businesses)? Paul Solman:
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Why were there no checks on these fraudulent practices and unscrupulous mortgage brokers?
October 7, 2008 |
Question/Comment: I have a hard time understanding how some of these mortgages were ever permitted to happen. In particular, mortgages for which absolutely no documentation for verifying income or anything else were required. This allows borrowers to lie on
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For those of us who are not accountants, can you help explain how bad mortgages work?
October 7, 2008 |
Question/Comment: For the non-accountants among us: Hypothesize that a bank has $1000 in bad mortgages (cdos, etc) that have dropped to $100 in value. How does this adversely affect the bank if it simply holds onto them and no
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Are there any banks or investment houses not involved in risky practices?
October 6, 2008 |
Question/Comment: Are there any banks or investment houses not involved in risky practices? I would like to deal with a financial institution that has integrity. Where can I find it? Paul Solman: No, banks and investment banks are in
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Can you explain, simply, what a credit default swap is?
October 6, 2008 |
Question/Comment: Can you explain, simply, what a credit default swap is? Paul Solman: I sure hope so. Basically, a credit default swap or "CDS" is an insurance contract to protect against bankruptcy. Say you own a lot of Ford Motor
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Wouldn't mortgage-backed securities gain value if homeowners could refinance their homes?
October 3, 2008 |
Question/Comment: This is what I don't get: If the problem is that the mortgage-backed securities hold little value because a lot of people are unable to pay their mortgages, wouldn't those securities gain value if homeowners were allowed to refinance
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Should I move now whatever money I can to federally insured savings accounts?
October 3, 2008 |
Question/Comment: I am 62, hoping to retire at 67. I have no debt and my money is invested (following the advice of a pricey financial adviser) in both equities and guaranteed income. I've lost a big chunk of dough
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Is this event the Berlin Wall of Free Market Economics?
October 2, 2008 |
Another email from an old friend: "Is this event the Berlin Wall of Free Market Economics? Or even, as the press backs away from the hotness of the story, the Berlin Wall of Free Market Economics crashing not with
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What would happen if the government gave every American one million dollars so people could pay off all their mortgages and bills?
October 2, 2008 |
While waiting for more of your emails (they come in via the Online NewsHour in Virginia), I've been fielding a few from friends and neighbors. I thought I'd share them, and my answers, this afternoon. First, from my earliest
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What regulations do you think would possibly fix this situation? And could you assess a few of those who disagree with the need for regulation?
October 1, 2008 |
Question/Comment: I'm concerned that your viewers are going to come away from this discussion thinking that the market is to blame. The risky investments you refer to at the root of this problem were ones that the government mandated, ones
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What would happen if we did nothing to fix the credit crisis?
October 1, 2008 |
Question/Comment: I just listened to your explanation of the credit crisis on the NewsHour. I'm wondering why I should care. I am a renter, have no savings to speak of, no stocks and work for a small family business with
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If many people have a stake in my mortgage, what happens when I make a payment?
October 1, 2008 |
Question/Comment: I enjoyed the tutorial tonight. What I want to learn is how these mortgage backed securities pay the folks that hold them. They are pieces of many mortgages, so say I am a homeowner with a mortgage and send
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Why is a bailout being considered, not massive loans?
October 1, 2008 |
Question/Comment: Why not loans, instead a "bailout"? Also, why do we have to do this in a week - why not two weeks? Did Paulson make it worse by saying it had to be done this week so that now
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What do you think about Allen Meltzer's views on rescue plan?
October 1, 2008 |
Question/Comment: How do you feel about Professor Meltzer's solution? He's with Mellon Institute, and was interviewed just before your segment. He's against any government involvement, but if we must, then loan money to companies who wish to borrow and repay
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Which was the only stock in the S&P 500 to go up yesterday, according to Bloomberg.com?
September 30, 2008 |
Paul Solman: Rhetorical question, posed by myself: Which was the only stock in the S&P 500 to go up yesterday, according to Bloomberg.com? Answer: Campbell, the soup company. If the goals of the Conquistadors in the "New" World were
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With the world shifting under our feet, a response to the day's record events.
September 29, 2008 |
Paul Solman: With the world shifting under our feet as I write (2 pm), today's question came from the editor of The Business Desk, who asked for a response to the events of the second: Dow down 500+ (and
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Could property prices be temporarily "set" at the value of the total mortgage on the property?
September 29, 2008 |
Question/Comment: If real estate is indeed the basis of our current economy, surely we cannot let it free fall. Could property prices be temporarily "set" at the value of the total mortgage on the property? And on any new
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Is the principle of "buyer beware" the dominant principle in the American system?
September 26, 2008 |
Question/Comment: Are you willing to argue that the subprime mortgage practices that started this problem can be deemed to be fraudulent in any way? Should anyone be convicted of anything for the devastation wreaked upon so many home buyers
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Is the American dream of home ownership and subsequently loaning money to unqualified home buyers a major cause of this crisis?
September 26, 2008 |
Question/Comment: Lack of transparency and regulation appear to be at the heart of the current financial crisis. Didn't the Senate Banking Committee and the Republicans attempt to ward this off with a reform bill in 2005? Is the American
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What regulations do you think would possibly fix this situation?
September 25, 2008 |
Question/Comment: I'm concerned that your viewers are going to come away from this discussion thinking that the market is to blame. The risky investments you refer to at the root of this problem were ones that the government mandated,
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I'm wondering, why I should care about this credit crisis?
September 25, 2008 |
Question/Comment: I just listened to your explanation of the credit crisis on the NewsHour. I'm wondering why I should care. I am a renter, have no savings to speak of, no stocks and work for a small family business
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Kindly explain just how the U.S. taxpayer will be asked to cough up nearly $ 1 trillion to pay for this bailout?
September 24, 2008 |
Question/Comment: Kindly explain just how the U.S. taxpayer will be asked to cough up nearly $ 1 trillion to pay for this bail out? Nobody has spelled this out in detail as far as I know. Can we expect our
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With all of the trouble on Wall Street, is it the end of the world as we know it?
September 24, 2008 |
Paul Solman: As Lehman was melting down on Sept. 14, I wrote the following "answer," which remains my best effort to explain what's been going on. We're going to keep it as the lead item on this page for
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Isn't the tumbling marketplace a result of the various regulations?
September 23, 2008 |
Question/Comment: Hi Paul, isn't the tumbling marketplace a result of the various regulations? Whether we had fewer regulations recently than in the past, it's not as though this meltdown is occurring in a free market. If our property, current
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If someone said to you, I have $100,000 of hard earned money saved, where would you invest it?
September 22, 2008 |
Question/Comment: If someone said to you, I have $100,000 of hard earned money saved, where would you invest it? Paul Solman: In U.S. government TIPS, Treasury Inflation-Protected Securities, I suppose. They pay an interest rate equal to the Consumer
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Is it too much to ask that the top CEOs of a big corporation be paid no more than five to 10 times the wage of the lowest paid full-time employee?
September 22, 2008 |
Question/Comment: Is it too much to ask that the top CEOs of a big corporation be paid no more than five to 10 times the wage of the lowest paid full-time employee? Radical, but the pay scale of so
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Where do the funds for the bailouts and related rescue efforts in fact come from?
September 22, 2008 |
Question/Comment: I have 2 naive questions: 1. This is a nuts and bolts/dollars and sense (pun intended) question: Where do the funds for the bailouts and related rescue efforts in fact come from? What is the source of the
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Why has the Fed repeatedly lowered interest rates?
September 21, 2008 |
Question/Comment: Repeatedly, the Fed has lowered interest rates, and repeatedly, the market has responded, and repeatedly, it has continued its downward trend. It is obvious that that does not work. Do they want simply to lower interest rates and find
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Does the current financial meltdown prove that our economy is based more on just smoke and mirrors and not on true productivity?
September 19, 2008 |
Question/Comment: Paul: Does the current financial meltdown prove that our economy is based more on just smoke and mirrors (risky investments) and not on true productivity (ie. goods and services)? And what will be necessary for our economy to
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Could you explain what a derivative is and how this is part of the Wall Street problem?
September 19, 2008 |
Question/Comment: On the NewsHour tonight, the speaker stated that some the problem with the fall of Wall Street is related to use of derivatives and lack of regulation of this. Could you explain further what a derivative is and how
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What is the source of the money for rescuing large financial firms?
September 19, 2008 |
Question/Comment: Thank you for your simplified, insightful, and humorous segments on the NewsHour explaining economic complexities. My question: With the federal government $9.5 trillion in debt, this year's budget deficit projected at $410 billion, and tax revenues insufficient over
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Are our problems limited to the corrupt actions of individual investment firms? Or does this crisis go deeper?
September 19, 2008 |
Question/Comment: You explain the investment aspect of this crisis very well. I'd like to know more about how the market's collapse reflects the structural problems of the U.S. economy. Are our problems limited to the corrupt actions of individual investment
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Is it possible, as a worst case scenario, for the Feds to close the banks as FDR did in the 1930's?
September 19, 2008 |
Question/Comment: I hope you will not think me too crazy for asking this question. Is it possible as a worst case scenario for the Feds to close the banks as FDR did in the 1930's? I am a 63 year
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Can the recent market fallout be traced back to Reagan's deregulation of these types of institutions?
September 19, 2008 |
Question/Comment: Can the recent market fallout be traced back to Reagan's deregulation of these types of institutions? Is it also a reflection of a Republican/Bush White house that has purposely discouraged regulators from doing their jobs? Paul Solman:"Deregulation" as
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What if the brokerage firm that handles my IRA fails?
September 19, 2008 |
Question/Comment: Everyone seems to be concerned about the financial institutions failing. I have three questions: If institutions such as Fanny Mae, Freddie Mac, AIG fail and others fail or taken over by the government, how am I affected? What if
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What is responsible for the daily rise and fall of the value of the dollar?
September 18, 2008 |
Question/Comment: What is responsible for the daily rise and fall of the value of the dollar ? Paul Solman: The DAILY rise and fall? As many factors as you can name. As in the market for anything that's bought
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How deeply has the home foreclosure problem affected retirees?
September 18, 2008 |
Question/Comment: How deeply has the home foreclosure problem affected retirees? Paul Solman: Wasilla? THE Wasilla? (Indeed, there IS a Marian Elliott in Wasilla, according to Zaba Search, so I suppose so.) Welcome. Small town; short question. So I'm tempted to
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Last year Lehman Brothers' CEO made $71 million. Now his company has collapsed. How much will he make this year?
September 17, 2008 |
Question/Comment: Last year Lehman Brothers' CEO Richard Fuld, Jr. made $71 million. Today his company collapsed. How much will he make this year? Paul Solman: I don't know about this year. You've covered last. In 2006, according to Forbes.com,
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How will the taxpayers pay if Fannie and Freddie Mac fail?
September 11, 2008 |
Question/Comment: Fannie Mae and Freddie Mac, we are told, are so big, we can't allow them to fail. We taxpayers could end up footing the bill for as much as $200 billion. Where will that money come from? How
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When running as intended, what cost difference does Fannie and Freddie make to the mortgage payment of the average house?
September 11, 2008 |
Question/Comment: How do other nations subsidize housing (to the same end that Fannie and Freddie do in the U.S.)? When running as intended, what cost difference does Fannie and Freddie make to the mortgage payment of the average house?
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Has anyone ever done a study of household income?
September 3, 2008 |
Question/Comment: Has anyone ever done a study of medium household income to compare what households think they can save to what economists think those households can save? Maybe even further broken down by age group, hopefully indicating wisdom/discipline? Can
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Does the U.S. export domestic oil? If so, how much, to where and why?
August 22, 2008 |
Question/Comment: Does the U.S. export domestic oil? If so, how much, to where and why? Paul Solman: U.S. oil exports are up to 1.6 million barrels a day, according to a recent Reuters report. That's 9 percent of total refining
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The "Whale Oil Myth"
August 20, 2008 |
This post is hopelessly long-winded, and not even prompted by a viewer question, but by a criticism I stumbled upon while scouring the Internet. As I searched for something economist Lester Lave had said about oil prices in one of
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How do speculators affect the price of crude oil?
August 15, 2008 |
Question/Comment: I would like to understand how speculators affect the price of crude oil. I'd like to know who these people are (in general) and how they operate. Paul Solman: I'm on record on this page (and elsewhere) as
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How can the U.S. government be continuously providing billions of dollars to various countries (we have trillions of dollars in debt)?
August 15, 2008 |
Question/Comment: I have always enjoyed your professional discussions and news coverage. Could you please help me understand how the U.S. government can continuously be providing billions of dollars to various countries (we have trillions of dollars in debt)? Also,
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Can you explain "moral hazard" in how it increases the cost of health care?
August 12, 2008 |
Question/Comment: Your report on "moral hazard" was really outstanding. Now, try explaining how it increases the cost of health care. Paul Solman: As with any insurance, if you're covered for your health, you might take more risks than otherwise.
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What can be done about today's unemployment statistics?
August 11, 2008 |
Question/Comment: What can be done about the fact that in today's unemployment statistics, there are only four times as many whites unemployed as blacks, despite there being six times as many whites in the labor force? Paul Solman: According
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The "experts" all seem to be on the side of the status quo. Why can't we hear from people inside the industry who really want to reform it?
August 5, 2008 |
Question/Comment: With all the discussion of the mortgage crisis, there is still hardly any mention of actually cleaning up the mortgage industry. The "experts" all seem to be on the side of the status quo, but maybe this is contributing
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Do you believe that some of the run up in oil prices is based on speculation in the commodoties markets?
August 5, 2008 |
Question/Comment: Do you believe that some of the run up in oil prices is based on speculation in the commodities markets? My understanding is that the amount of funds et al. playing in oil futures has risen more than 70
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Why didn't the private mortgage insurance avert the current banking and credit crisis?
August 4, 2008 |
Question/Comment: Not long ago, writing mortgages required private mortgage insurance (PMI) if the borrower's equity in the property was below a certain percent of market level. Usually, PMI could be discontinued when the borrower's equity in the property rose
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How exactly did the banks lose money?
August 1, 2008 |
Question/Comment: My question about the mortgage crisis is this: how exactly did the banks lose money? It seems that people who put deposits on the loans that were foreclosed upon lost their money, not the banks. The banks just
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As a graduating high-school student, I am concerned about the future. What can I expect to see in the next few years?
August 1, 2008 |
Question/Comment: As a graduating high school student, I am concerned about what the future has in store. With the economy changing the way it is, what can I expect to see in the next few years? What would be the
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Why do some people refer to the current price of oil as a "bubble"?
July 31, 2008 |
Question/Comment: Why do some people refer to the current price of oil as a "bubble" Paul Solman: Because the nature of bubbles is that they inflate, but inevitably pop. Those who refer to the "oil bubble" expect the price
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The Health Care Debate: Eliminate the for-profit middle man and all is solved?
July 23, 2008 |
Question/Comment: When the NewsHour does segments on health care, I would love for you or any of the staff to ask the health care administrators, economists and especially the politicians why people support a health care system that requires a
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Why can't the U.K.'s fuel efficient vehicles be sold in the U.S.?
July 23, 2008 |
Question/Comment: Car companies such as Ford, GM and Toyota sell cars throughout the world. In examining the U.K. Web sites for these companies, even in cases where the car model is the same as the U.S. model, the U.K.
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Is capitalism the best arangement under which greed will do the least harm?
July 22, 2008 |
Question/Comment: Is this true?: The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system. (Milton Friedman) Paul Solman: Could be. But the tougher
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What is the future of home loans?
July 22, 2008 |
Question/Comment: What do you think is the future of home loans: higher interest for lenders' safety or lower interest to attract borrowers? Paul Solman: You force me to trot out yet again what I once heard the late economist John
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Is there any way we can hedge against the energy and commodities as an individual investor?
July 18, 2008 |
Question/Comment: As an individual investor/consumer, it's really hard to adjust to sudden increases in gas and food prices. Is there any way we can hedge against the energy and commodities as an individual investor? Paul Solman: It might be a
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Why are many oil-producing countries still unable to solve their chronic poverty problem?
July 9, 2008 |
Question/Comment: With the record world petroleum prices, why is it that many oil-producing countries, such as Mexico, Venezuela, Nigeria, are still unable to solve their chronic poverty problem? Shouldn't the oil boom generate more jobs for the masses and revenue
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For retailers, cash or credit?
July 8, 2008 |
Question/Comment: Maybe 10 years ago I heard that cash was the costliest payment to exchange or process by a retailer. Also credit was costlier than debit for a retailer to have processed by a bank. Lately, I've heard just the
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Are the stimulus checks only a loan?
July 2, 2008 |
Question/Comment: My accountant told me the government's gift of money for taxpayers (to help stimulate the economy?) is actually a loan that most middle/upper income citizens will have to repay within a year. Paul Solman: America spends more than it
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Why don't we hear government and private businesses pressuring to revitalize the U.S. rail system to help reduce the oil crisis?
June 26, 2008 |
Question/Comment: Why don't we hear the government and private businesses pressuring to revitalize the US rail system to help reduce the oil crisis? I thought the rails were the most fuel-efficient form of transportation. Paul Solman: From a little
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Can you help explain how commodity exchanges and "commodity futures" and "index futures" work?
June 24, 2008 |
Question/Comment: Can you help explain how commodity exchanges and "commodity futures" and "index futures" work? Apparently both some members of Congress, and the Commodities Futures Trading Commission, are looking into how speculators affect oil and food prices. As the typical
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What are the pros and cons for denominating oil worldwide in U.S. dollars?
June 17, 2008 |
Question/Comment: What are the pros and cons for denominating oil worldwide in U.S. dollars, versus in some other currency or basket of currencies? Paul Solman: For whom? The big pro, from the US point of view, is that if
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Would you consider doing a report on the carbonated beverage industry and its impact on global warming?
June 10, 2008 |
Question/Comment: Much has been said about the potential costs to the oil and auto industries regarding global warming/CO2 greenhouse gas tailpipe and smokestack emissions. Perhaps overlooked is the detrimental effects the carbonated beverage industries would suffer, if the people concerned
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How much of the recent rise in oil price is caused by the decline of the dollar?
June 5, 2008 |
Question/Comment: How much of the recent rise in oil price is caused by the decline of the dollar? Paul Solman: The easiest answer - but it's a crude one - is the amount by which the dollar has declined
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How does the global economic boom of other countries effect the U.S.' debt?
June 5, 2008 |
Question/Comment: Recently you stated that the global economic boom (China's especially) allowed the U.S. to go on a debt bender, which allowed us to grow faster than we really could. Would you please explain how this process works? Paul Solman:
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How does the U.S. "export" its inflation to other countries?
May 29, 2008 |
Question/Comment: How does the U.S. "export" its inflation to other countries? And a second question: Frequently pundits say the U.S. can and does print money to achieve some economic or financial goal. However, my economics professor says the government does
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With the economy changing the way it is, what can I expect to see in the next few years?
May 23, 2008 |
Question/Comment: As a graduating high school student, I am concerned about what the future has in store. With the economy changing the way it is, what can I expect to see in the next few years? What would be the
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Revitalizing coal is the solution to our energy crisis
May 23, 2008 |
Question/Comment: Your item on green jobs was very informative. While I knew that many towns in the coal and manufacturing belt in western Pennsylvania are shadows on their former selves, I did not know how much Pittsburgh has shrunk. I
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What triggered Frontier Airline's bankruptcy filing?
May 9, 2008 |
Question/Comment: I would like to have a better understanding of what triggered Frontier Airline's bankruptcy filing. How do credit card processors do business? Why would they suddenly change the rules so drastically? Was it a sign of lack of
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Wars increase production and employment, but this time the US is in a recession. Can we blame globilization?
May 9, 2008 |
Question/Comment: Wars are inflationary, because goods are being produced in order to be destroyed. Wars increase production and employment but this time around the U.S. is at war and in a recession. Is this the result of globalization? Paul Solman:
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The housing market has made a major jump in the last thirty years, why?
May 7, 2008 |
Question/Comment: Paul, in 1965, my dad bought our house in a suburb of Los Angeles for about $3,000. In 1979, he sold it for about $80,000. Why did the market jump so much in just 14 years? This has been
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Aren't production jobs the foundation of a healthy economy?
May 7, 2008 |
Question/Comment: Having grown up around workers and plant managers in western New York, and knowing the vibrant history there, one factor stands out as fundamental to our current economic problems today: the massive loss of production jobs here. Since
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Will oil ever be priced in a currency other than dollars?
April 29, 2008 |
Question/Comment: Has there been a shift from petrodollars to petroeuros in world energy trading? I read that such a shift would result in less demand for the dollar, resulting in a drop in the dollar's value. Paul Solman: "Petrodollars" was
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Can Fed come up with a better system for encouraging long-term savings?
April 29, 2008 |
Question/Comment: I inherited some money, retired, and moved to Portland, Ore. Now that I have money in the bank, and the Fed has been lowering interest rates, I've been wondering exactly how our banking system actually works. When the Fed
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Medicare's trust fund to run out by 2019? Then what?
April 25, 2008 |
Question/Comment: Typically the Paul Solman features on the NewsHour are always among the show's most trenchant and perceptive. That is why I have been hoping that you could do a feature explaining the present financial situation of the Medicare Program.
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Doesn't Bear Sterns hiding of their problems while continuing to sell mortgage-backed securities as if all was well constitute fraud?
April 25, 2008 |
Question/Comment: Bear Sterns did not go under overnight. Unless they are incompetent, the executives must have known what was happening for at least a year, maybe longer. So how come they took hundreds of millions in salary and bonuses (maybe
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In this current financial mess, why do we not hear anything being said about the repeal of Glass-Steagall?
April 23, 2008 |
This installment's "guest vetter" is Robert Glauber of Harvard University. He led the Brady Commission in studying the 1987 stock market crash, was undersecretary of the Treasury for the first President Bush and, until recently, served as chairman of the
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How can any elected official do anything about the economy?
April 18, 2008 |
Question/Comment: How can any elected official do anything about the economy when 90 percent of the budget goes to the military, entitlement programs, earmarks and the national debt? Paul Solman: She or he can vote to spend less (or more)
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How much of a drag is the current deficit on GDP growth?
April 17, 2008 |
Question/Comment: Can you elaborate on the pro and con arguments behind our current account deficit? How much of a drag is it on GDP growth? Paul Solman: Pro: We get to buy more now than it costs us now. Con:
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How does the FDIC bailout work?
April 16, 2008 |
Question/Comment: How does the FDIC bailout work? If I have an account in a failing bank, how much money must I have in the account to get the $100,000 bailout? Is it true that the bailout pertains to one $100,000
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Do you see the housing market return to fair market values (not inflated prices) within a year to year and a half?
April 11, 2008 |
Question/Comment: I need to sell my house. Do you see the housing market return to fair market values (not inflated prices) within a year to year and a half? Paul Solman: Thanks for giving me the opportunity to again quote
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If deficit spending stimulates the economy then won't imminent plans to wind down the war and trim spending offset any stimulus packages?
April 7, 2008 |
Question/Comment: If deficit spending stimulates the economy then won't imminent plans to wind down the war and trim spending offset any stimulus packages? Paul Solman: Hmmm, interesting point: an argument for continuing the war might be its stimulating effects.
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Why is the price in oil rising and who is getting the money?
April 4, 2008 |
Question/Comment: Oil has gone up in price per barrel a huge amount during the last few weeks. Neither the cost of producing that oil nor our falling dollar value could have made much of a difference in that short term.
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Did the credit agencies, such as S&P, overrate the bundles of mortgages?
April 4, 2008 |
This installment's "guest vetter" is Larry Koltikoff with Boston University. He is perhaps the best-known American economist on the issue of intergenerational conflict over entitlement spending on programs like Social Security and Medicare. You can check out his full bio
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Will JPMorgan Chase have to assume all of Bear Stearns' debt?
April 1, 2008 |
Question/Comment: Will JPMorgan Chase have to assume all of Bear Stearns' debt? Paul Solman: Nope. The Fed covers the first $30 billion dollars of Bear Stearns losses -- $30 BILLION! That's in the ballpark of what we spend a year
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I've heard the Federal Reserve is not actually federal and has no reserves, it's a private banking cartel that looks out for the interests of Wall Street, not most Americans.
April 1, 2008 |
This installment's "guest vetter" is Larry Koltikoff with Boston University. He is perhaps the best-known American economist on the issue of intergenerational conflict over entitlement spending on programs like Social Security and Medicare. You can check out his full bio
... » Continue reading
How much weight does the U.S. president have on interest rate changes?
March 21, 2008 |
Question/Comment: How much weight does the U.S. president have on interest rate changes? The news talks about the Federal Reserve, but it seems it was Bush's idea to bring them down low, so everyone can own a home. I know
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How much national debt is a good thing?
March 21, 2008 |
Question/Comment: Paul, please keep up your enlightening NewsHour segments. My question: How much national debt is a good thing? Generational fairness clearly calls for limits, but despite the many voices weighing in on this issue, I have yet to hear
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Do you think that overproduction or declining profit rates have contributed to the present subprime loan crisis?
March 4, 2008 |
Question/Comment: Karl Marx, in his work "Capital," alluded to the idea that overproduction contributed to a general historical tendency of capitalism to be undermined by declining returns on capital. Do you think that overproduction or declining profit rates have contributed
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Do I receive a rebate if my only income is social security?
March 4, 2008 |
Question/Comment: The only income I have is social security. Do I have to file my social security in order to get the rebate or will I get it automatically? Do I receive a rebate? Paul Solman: This Internal Revenue Service
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Do countries such as China react to counter downward trends in the U.S. economy?
February 22, 2008 |
Question/Comment: Do countries such as China, which are so dependent on a healthy stable U.S. economy, react to counter downward trends in the U.S. economy (e.g., recession)? If so, what kinds of steps do they take? Paul Solman: Yes, they
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How much of the U.S. economic problems are caused by the deficit and what percentage of the deficit is the Iraq war?
February 19, 2008 |
Question/Comment: 1. How much of the U.S. economic problems are caused by the deficit? 2. What percentage of the deficit is the Iraq war? 3. How can the U.S. ever pay off the deficit, and how long will it take?
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If excess liquidity has caused these investments that are now going bad, how does the Fed increasing liquidity with lower interest rates help the economy?
February 19, 2008 |
Question/Comment: If excess liquidity has caused these investments that are now going bad, how does the Fed increasing liquidity with lower interest rates help the economy? Paul Solman: Because it prevents the system from freezing up entirely. It's a calculated
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What is better, inflation or a recession?
February 15, 2008 |
Question/Comment: I am a saver whose income is mostly CDs. We seem to be facing both a recession and inflation. Which of those two is better for me? I assume it is recession? Paul Solman: Neither is better for you
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It's been a long time since I took Econ. 101, but as I remember, if you keep printing ever-greater amounts of currency, inflation takes on a life of its own.
February 15, 2008 |
Question/Comment: It's been a long time since I took Econ. 101, but as I remember, if you keep printing ever-greater amounts of currency, inflation takes on a life of its own. Isn't that what we've been doing at the rate
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If I hear one more presidential (or candidate) speech about the imperative to rescue those poor subprime home owners, I will scream.
February 14, 2008 |
Question/Comment: Paul, If I hear one more presidential (or candidate) speech about the imperative to rescue those poor subprime home owners, I will scream. Not one economist, not one candidate, no one ever addresses the painfully unregulated and rogue rental
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How can such enormous debt be sustainable and what happens to the world economy if the U.S. defaults?
February 13, 2008 |
Question/Comment: I am a Canadian. Unfortunately, 87 percent of our trade is with America. Consequently, U.S. recessions are felt more deeply in Canada. However, my questions are about the American debt. My understanding is that the debt could reach $10
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Where is the Fed rate cut felt in the economy?
February 11, 2008 |
Question/Comment: A Fed rate cut presumably has a cost; where is that felt? Paul Solman: Encouraging folks who made bad decisions before - invested stupidly, say, in mortgage-backed securities - to invest stupidly again, since the Fed will bail them
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If the Dow Jones goes up by 200 points how are these 200 points measured?
February 8, 2008 |
Question/Comment: If the Dow Jones goes up by 200 points how are these 200 points measured? Paul Solman: Roughly, the sum of the stock prices of the 30 companies in the Dow Jones industrial average, companies chosen as the biggest
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How can a nation with manufacturing employment being replaced by "service" jobs expect to have a trade balance with the rest of the world?
February 5, 2008 |
Question/Comment: Did you ever hear about the two old ladies who made a precarious living taking in each other's laundry? My question is this: how can a nation with manufacturing employment being replaced by "service" jobs expect to have a
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Is it possible that Boomers are not spending as we used to do?
February 1, 2008 |
Question/Comment: Is it possible that Boomers are not spending as we used to do? I know that my purchases of clothing, food, and what is known as durable goods, are not something that I purchase as much as I used
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Should we have a central registry of mortgage lending so that trading can be more transparent?
January 30, 2008 |
Question/Comment: As it is with all financial crisis, I guess, a lot of the damage stems from uncertainty. No one knows how much bad debt is out there and who's holding it. My question is: why is it not possible
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A correction from Paul Solman:
January 29, 2008 |
I want to apologize for misunderstanding a former professor and not checking myself the assertion I made with such assurance on the Friday, January 25, 2008 program that the stock market had gone up in the wake of the Kennedy
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How effective have stimulus packages been in the past?
January 28, 2008 |
Question/Comment: How effective have past stimulus packages been at achieving their objectives and their impact against the estimated consequence of taking no active stimulating role? Paul Solman: Depends what you mean by "achieving their objectives." Last time around, people spent
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Is there anything positive for the small investor in Wall Street these days?
January 28, 2008 |
Question/Comment: Can you give any positive commentary to help reassure small investors that there is a reasonable chance to expect integrity when dealing with Wall Street? Paul Solman: More than in the past, say? I don't see why. Here's an
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Why don't auto-manufacturers sell cars built to the customers' needs?
January 28, 2008 |
Question/Comment: As long as I can remember, automobile companies have always pushed their products, by, in one way or another, indicating that they are burdened by surplus inventory. So, given that all the auto-manufacturers now have Web sites where the
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How much can I expect from the economic stimulus plan's tax rebate?
January 25, 2008 |
We've received dozens of questions about the proposed economic stimulus plan and the rebates for taxpayers and businesses. The deal includes rebate checks for most U.S. taxpayers, but it must still be approved by the Senate and signed by President
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I always hear about the Chinese keeping their currency at an artificial rate to help exports. Where would the cost of doing that show up?
January 23, 2008 |
Question/Comment: I always hear about the Chinese keeping their currency at an artificial rate to help exports, but I know from trying to hold a lid on a boiling pot that the pressure is going to come out somewhere. If
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Could you explain to us novices what long term effects will the subprime lending debacle have on our economy?
January 17, 2008 |
Questions/Comment: Could you explain to us novices what long term effects will the subprime lending debacle have on our economy? What remedial measures need to be taken by the government and investors to limit the damage? Finally, which branch of
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How does China control the exchange rate of its currency?
January 11, 2008 |
This installment's "guest vetter" is Martin Neil Baily, now with the Brookings Institution. He was chairman of President Bill Clinton's Council of Economic Advisors and is a certified VKP (very knowledgeable person). If you wish to be even more suitably
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Do you have any information on white collar jobs such as computer programmers being outsourced?
January 10, 2008 |
This installment's "guest vetter" is Martin Neil Baily, now with the Brookings Institution. He was chairman of President Bill Clinton's Council of Economic Advisors and is a certified VKP (very knowledgeable person). If you wish to be even more suitably
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I think Congress needs tighter control over the credit card industry.
January 9, 2008 |
As this 'bQandA evolves, I've taken to asking real economists (i.e., ones with Ph.D.s) to read both your questions and my answers, and comment on any or all of them. This installment's "guest vetter" is Martin Neil Baily, now with
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Is there is a chance of rejuvenation of the American textile industry, or is it too late and gone forever to China, Korea, India and Pakistan?
January 2, 2008 |
Question/Comment: I felt so encouraged by talk of Rust Belt life improving and of the death of U.S. manufacturing being greatly exaggerated! I am a textile designer and I wonder if you feel there is a chance of any such
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When the U.S. enters into free-trade agreements, are there any rules prohibiting manipulation of foreign exchange rates?
January 2, 2008 |
Question/Comment: When the U.S. enters into free-trade agreements, are there any rules prohibiting manipulation of foreign exchange rates? I thought the purpose of floating rates set by the market was to adjust for imbalances in trade. Obviously, that is not
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My understanding is that it takes .75 gallons of fuel to make one gallon of ethanol. If this is true, why is this fuel source so widely acclaimed as a great idea?
December 20, 2007 |
Question/Comment: There are two issues I'd like to see you tackle that I have not seen anyone in the media deal with. The first has to do with the sensibility of ethanol as a renewable fuel source. My understanding is
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Could you please explain the long-term decline of the dollar and predict the long-term implications of this trend?
December 20, 2007 |
Question/Comment: Please explain the long-term decline of the dollar and predict the long-term implications of this trend. As an aside, you are a great reporter. You present complicated economic issues in an intelligent and understandable manner. I always perk up
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How is the Fed to be blamed if financial institutions are reckless and greedy during periods of low interest rates?
December 14, 2007 |
Question/Comment: Many commentators have blamed the Fed for the mortgage mess. How is the Fed to be blamed if financial institutions are reckless and greedy during periods of low interest rates? Paul Solman: You're cheating, Lloyd. This is two e-mails
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It is often said that tax cuts help the economy because the taxpayer spends the money. I do not see how that works.
December 14, 2007 |
Question/Comment: It is often said that tax cuts help the economy because the taxpayer spends the money. I do not see how that works. After all, the government spends money, too. So what does it matter who spends the money?
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Once companies securitize an asset and remove it from the books, are there provisions by which a company can obtain (purchase back) the asset from the special purpose entity?
December 14, 2007 |
Question/Comment: Once companies securitize an asset and remove it from the books, are there provisions by which a company can obtain (purchase back) the asset from the special purpose entity? Since the market for collateralized debt obligations (CDOs) has been
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With so many consultants and service providers who essentially fly for a living, what is the trade off between efficiency and superior talent pool sourcing?
December 12, 2007 |
Question/Comment: I just saw your story on the Nov. 29 NewsHour and was curious about the short supply chain advantage in terms of services vs. manufacturing. With so many consultants and service providers who essentially fly for a living, what
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I read that the drop of sales in the RV market could signal the possibility of a recession. How?
December 10, 2007 |
Question/Comment: I read that the drop of sales in the RV market could signal the possibility of a recession. How? Paul Solman: At the simplest level, a drop in the sales of anything could signal a recession. RVs = leisure
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Harley Davidson was a success story in your "Rust Belt" series, but I understand that their workers were recently given unpaid leave. How do you reconcile this?
December 10, 2007 |
Question/Comment: You used Harley Davidson as a success story in your "Rust Belt" series, but I understand that their workers were recently given unpaid leave. How do you reconcile this?Paul Solman: Because the workers still have good-paying jobs. Unpaid leave
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Where do hedge funds get the stock that they [sell] short in the stock market?
December 7, 2007 |
Question/Comment: Where do hedge funds get the stock that they [sell] short in the stock market? If, as I suspect, they acquire it from the 401(k) accounts of hard-working individuals who rely on the concept of going "long" in the
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You seemed disbelieving (in your report on American Manufacturing, which aired on Nov. 29) that a merchant vessel could sink, or that it happens very often.
December 7, 2007 |
Question/Comment: You seemed disbelieving (in your report on American Manufacturing, which aired on Nov. 29) that a merchant vessel could sink, or that it happens very often. Check out this as one source for information on world marine casualties. Actually,
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What's up with the stock market? Can we have a bull market and a bear market in different sectors at the same time?
December 5, 2007 |
Question/Comment: What's up with the stock market? I thought it was supposed to be a leading indicator of economic conditions. But over the last months, the market seems to respond more to interest rate levels in addition to insignificant economic
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I was surprised to hear that the Pabst brewery was razed. Do great American beers have any significant presence overseas?
December 5, 2007 |
Question/Comment: I was surprised to hear on your NewsHour piece that the Pabst brewery was razed. It made me think that in recent years a number of excellent American beers have been produced, some even better than highly touted foreign
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Has the "short supply chain" movement has caught on?
December 5, 2007 |
Question/Comment: I was wondering if the "short supply chain" movement is also a movement into lean production techniques. I know that several companies (e.g., Toyota) have done it for years, but I was interested to know whether it has caught
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There seem to be different rates that the Fed raises or lowers. What are they?
November 28, 2007 |
Question/Comment: Last month, the stock market dived about 380 points in one day, then recovered the same day. That same day, the Fed lowered its rate .5 percent. Now I just heard it's lowering its rate for the first time
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Why all the focus on just Fed policy? I'm with Alan Greenspan on also looking at our fiscal policy.
November 28, 2007 |
Question/Comment: Why all the focus on just Fed policy? I'm with Alan Greenspan on also looking at our fiscal policy. Just lowering interest rates without raising revenues could just lead to more inflation. Thank you.Paul Solman: What Robert is saying
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I'd like to know more about Fed -- and how it is neither a federal agency, nor does it have any reserves.
November 28, 2007 |
Question/Comment: I've seen now several of your segments on the Federal Reserve and I encourage you, on your next segment, to go deeper. There is much information available regarding the Fed and how it is neither a federal agency, nor
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What will make the LIBOR rate come down and what indicators should we look for to make it go down to "normal" levels?
November 28, 2007 |
Question/Comment: Mr. Solman: You are one of those few who makes economics as interesting as Paris Hilton's love life (just kidding!) to the ordinary American. The LIBOR rate is higher than the 15-year mortgage rate right now. What will make
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Why should the taxpayers bailout the major lending institutions due to poor lending practices?
November 28, 2007 |
Question/Comment: Housing prices skyrocketed to double in 3 years and everyone thought they were rich, and went out and spent the money. Now the market corrects 30 percent and everyone discovers that it wasn't real. Why should the taxpayers bailout
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Now that it appears rates will be dropping, where is the best place to keep the bulk of my savings?
November 28, 2007 |
Question/Comment: As a long time observer of the mortgage market, particularly the subprime segment, I have been anticipating the current economic crunch for some time. Accordingly, I have been keeping a large amount of my savings ($85K) in an FDIC
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When can we expect to break even, or at least recover some of the value that we lost due to the declining real-estate market?
November 28, 2007 |
Question/Comment: Everyone mentions all of those unfortunate people who are defaulting on their home loans due to the sluggish economy. Nobody mentions, however, the many hardworking Americans who saved and struggled to buy their dream homes and they are now
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