Why AIG and Jim Cramer Matter →

In the last months, because of the economic crisis a number of stories about the nature of American business have been brought to the attention of many Americans. These anecdotes include not only banks using bailout money for spas, travel and redecorating, CEOs of automobile companies flying on private jets to come to the Washington to ask for bailout money, and the current story of the AIG paying bonuses to top executives while being bailed out by the US government, but also stranger stories such as the ongoing silliness, to be generous, of business journalism and the bizarre television feud between Jim Cramer and Jon Stewart.

Managing Expectation and Understanding the Financial Crisis →

The expectations calculation is not so simple for Obama because the tone coming from the White House is viewed as having an effect on the country's economic performance. So, if the economy only improves slightly in the next 18-20 months, during a period when Obama carefully reduces expectations for a recovery, many will undoubtedly blame the tepid recovery on the failure of Obama to instill confidence in markets or consumers, leading to reduced support for Obama which will make it increasingly difficult for the administration to pass additional legislation. If Obama becomes a cheerleader for the economy, there is a chance that this will have some short term impact on confidence of investors and consumers and begin a short term economic recovery, but it will also have the added effect of raising expectations to a level which the recovery will almost certainly not meet. So, from a partisan strategic angle, it is not clear what the best course for the president should be.

Beacon of Democracy or Khachapuri Republic

Immediately after the crackdown on November 7, 2007, the Western media, in addition to the inevitable puns about roses, thorns and withering, offered two different narratives. The first, perhaps best seen in Anne Applebaum's piece in The Washington Post, was that democracy had failed in Georgia partially because of wrongheaded U.S. policies. The second was that this was a mistake, but otherwise things were going well in Georgia and if the January 5 elections went well, democracy in Georgia would be back on track. Interestingly, this latter narrative seems to be in the ascendancy and seems to reflect US policy. The truth lies somewhere in between and is worth thinking about.

Lincoln Mitchell