Limiting $$$

Senate Democrats have taken the first step to limit pay for workers at companies receiving federal bailouts. Senator Claire McCaskill of Missouri introduced legislation to cap compensation at such companies at $400,000, the equivalent of the U.S. president’s salary. Another measure being proposed would create a court to restrain executive compensation, according to Bloomberg.

“We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer” by taking multimillion-dollar bonuses.” -Senator Claire McCaskill

• Jan 30, 2009 2:21 PM PT — Doug Krizner
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The Street's losses hurt NYC

Wall Street firms are expected to lose more than $47 billion for 2008, according to New York City Mayor Michael Bloomberg. He expects this year to be worse. The figures have forced the mayor to cut previously planned spending by $1 billion, as the city works to close a nearly $4 billion budget deficit, according to The Wall Street Journal:

…his administration might need to reduce its work force by more than 20,000. The largest reductions would come in the city’s homeless department, the children’s welfare agency and the education department.

• Jan 30, 2009 12:56 PM PT — Doug Krizner
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Fighting "Buy American"

Supporters of free trade, including The U.S. Chamber of Commerce, are trying to kill the “Buy American” provision in the economic stimulus plan, according to Reuters. Critics have called the Chamber’s opposition “economic treason,” but the group’s president fired back:

“Try economic patriotism. Such provisions would cost American jobs, trigger retaliation from our trading partners, slow economic recovery by delaying shovel-ready infrastructure projects and cede our leadership role as a longstanding proponent of free and fair trade and global engagement.”

• Jan 30, 2009 11:51 AM PT — Doug Krizner
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GDP dives

The economy shrank 3.8% in the fourth quarter, according to the government’s initial estimate. While the drop was not as bad as some economist had feared, it’s the worst showing in 26 years, as consumer spending and business investment all but disappeared. The New York Times quotes economist Alan Levenson:

“It was basically a train wreck for the economy in the fourth quarter.”

• Jan 30, 2009 5:49 AM PT — Doug Krizner
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Ponziman

Connecticut toymaker Emil Vicale, who manufactures action figures out of his home workshop, has a new character is his lineup: Bernie Madoff. Retailing for $149.99, the “limited edition” Madoff doll features a fistful of $100 bills and a luxury wristwatch painted with real 24-karat gold, according to Dealbreaker.

“He’s wiped out people’s life savings, he’s destroyed their kids’ lives and their grandchildren’s lives. In other cultures, wouldn’t they just cut his head off?”

(dealbreaker.com)

• Jan 29, 2009 10:50 AM PT — Doug Krizner
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The Fed's mea culpa

In September, the central bank quietly took the unusual step of hiring consumer advocate Allen Fishbein. The move may have been the Fed’s way of admitting failure to see the problems which created the financial crisis. For years, Fishein sounded the alarm about abuses in subprime lending and the dangers of deregulating the banking industry, according to Mother Jones.

…Fishbein’s arrival there is one of several hints that real change is indeed afoot. Recent developments suggest that the Fed is cracking open the doors of the temple and may be taking a more aggressive approach to banking regulation on behalf of consumers.

• Jan 29, 2009 9:11 AM PT — Doug Krizner
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