G.E. and JPMorgan Got Lots of Fed Help in ’08 by Sewell Chan and Jo Craven McGinty

The two companies received help even as their chief executives, Jeffrey R. Immelt of G.E. and Jamie Dimon of JPMorgan, sat on the nine-member board of the Federal Reserve Bank of New York.

Neither executive was involved in creating the emergency programs, which were approved by the Fed’s board of governors in Washington. Both companies also disclosed that they were among scores of institutions that received support from the Fed. Nevertheless, some policy experts expressed discomfort with the situation.

"In my view, it is an obvious conflict of interest for C.E.O.’s of banks and large corporations who serve on the Fed’s board of directors to have received cheap loans from the Fed," Senator Bernard Sanders, a Vermont independent who wrote the legal provision requiring the Fed to make the disclosures, said in a statement on Sunday.

...

Goldman, previously an investment bank, became a Fed-regulated bank holding company during the crisis. It tapped the Fed program to help investment banks 52 times, owing $18 billion to the Fed at one point -- receiving far greater support than JPMorgan.

The chairman of the New York Fed at the time, Stephen Friedman, was a Goldman director and former chairman of Goldman. The Fed granted Mr. Friedman a waiver so he could continue serving as chairman of the New York Fed.

While awaiting the waiver, Mr. Friedman bought shares of Goldman around the time the bank received Fed support. After The Wall Street Journal reported on the purchases, Mr. Friedman stepped down, saying the Fed "does not need this distraction." The New York Fed’s top lawyer said at the time that Mr. Friedman "did not violate any Federal Reserve statute, rule or policy."

Mr. Friedman’s successor as chairman of the New York Fed was Denis M. Hughes, president of the New York State A.F.L.-C.I.O. Fed observers say it is unlikely that a former banker will serve as the agency’s chairman any time soon.

Jamie Dimon: America’s Least-Hated Banker by Roger Lowenstein in the New York Times Magazine:

TARP became a symbol of bailout policy gone awry. Actually, the program has succeeded for banks and, thus far, for the government. Taxpayers earned $795 million on the J. P. Morgan stake. Dimon is upset that people think he was bailed out. But there is at least some truth to the view of Christina Romer, a former economist for President Obama, who notes that Dimon "was part of the system that gave rise to the crisis. He certainly benefited. If the system went south, he’d have gone south with everybody else."

Christina Romer on uncertainty in the economy

The deepest and most destructive uncertainty we face centers on the overall health of the economy and its prospects for growth. Unlike other postwar recessions that were caused by tight monetary policy and high interest rates, the recent downturn resulted from the bursting of a housing bubble and a financial crisis. Because we are in largely uncharted territory, figuring out how and when the economy will recover is much harder than usual.

I think we know what to do, it's Republican opposition that is the problem (see for example the lunacy Rep. Mike Pence of Indiana and Senator Corker of Tennesse about how the Fed shouldn't concern itself about unemployment. And so Republican Bernanke has to go on 60 Minutes to defend the Fed.) Othewise I agree strongly with Romer's Op-ed.

Also in the New York Times Magazine, Daniel Bergner on John Pendergrast:

"I do human rights the way I played basketball," John Prendergast said. We were sitting in the outdoor restaurant of an unfinished hotel in Juba, a boomtown of mud and shanties beside the White Nile in southern Sudan. It’s a restaurant where the South’s liberation leaders tend to gather, and these days they are in a buoyant mood. They have traded their fatigues for dress shirts and suits. A half-century of civil war seems to be culminating in independence. If a referendum on Jan. 9 goes as expected, the map of Africa will be redrawn " with a new nation around the size of Texas. But for the moment, Prendergast, who is America’s most influential activist in Africa’s most troubled regions and who huddled on a White House patio with President Barack Obama a few days earlier, talked about basketball guards.

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One way to understand Prendergast’s influence, suggested Samantha Power, who is the National Security Council’s senior director for multilateral affairs and human rights and who counts Prendergast among her close friends, is not to see Obama as lacking a sense of urgency on Sudan were it not for Prendergast’s recent activism, but rather to view the president as long-engaged on Sudan partly because of the highly successful advocacy movement Prendergast helped to start several years ago around the crisis in Darfur. And now, she continued, on North-South peace, Prendergast is "creating a political space; he’s putting political wind in the sails of people who care about this issue: the president, Denis" -- she nodded toward McDonough, the deputy national security adviser -- "me. He’s elevated Sudan to Himalayan proportions on the mattering map in Washington." While this may be an overstatement, Prendergast has surely helped to pull an expanse of scrub and swamp, and the people who live upon it, into American sightlines.(emphasis added)