Citigroup shareholders have voted down the bank's $15 million pay package for its chief executive, Vikram Pandit. It's the first time that stock owners have united in opposition to outsized compensation at a major bank. Is this a new era of bank backlash? Eleanor Bloxham is the CEO of The Value Alliance, a board advisory firm, and Peter Morici is a macroeconomist and professor of international business at the University of Maryland. He is also the author of several books, including "Antitrust in the Global Trading System."
The main focus of Tuesday’s State of the Union address was the economy and income inequality. Along with his ideas about taxation and protecting homeowners, president Obama also expressed a desire to bring manufacturing jobs back to the U.S. Since the 1980s, the U.S. economy has shifted away from manufacturing and towards intellectual property and services. This has been due in part to the perceived expenses involved in production based in the U.S., as well as labor laws.
The Labor Department's jobs report for July, released last Friday, showed overall unemployment stayed the same at 9.5 percent, but that the economy lost 5,600 temporary jobs. This ended nine months of gradual increases. Concerned economists say temporary jobs can be seen as a leading economic indicator of how businesses will proceed in the hiring of permanent workers.
Citigroup announced its earnings this morning, ending a three-quarter profit streak with a $7.6 billion loss during the final three months of 2009. This as consumers still struggled to repay loans and the bank managed to repay its government bailout money.
The economy received some positive news on Sunday from President Obama's top economic adviser, Larry Summers, who said that the recession is over on 'This Week with George Stephanopoulos.' But even if you agree with Summers, it's still hard for many to forgive and forget the role Wall Street played in creating the current economic mess. Even President Obama recently said, "I did not run for office to be helping out a bunch of ... fat cat bankers on Wall Street." On the heels of those harsh words, Obama will be hosting the heads of those same banks at the White House Monday. Peter Morici, an economist and business professor at the University of Maryland, says this is just another publicity stunt. We're also joined by Eric Dash, a banking reporter for The New York Times, who has also been covering this story.
We talk with our friend, University of Maryland economist and business professor Peter Morici, about what this morning's slightly-reduced unemployment numbers say about the state of the economy.
The Bureau of Labor Statistics releases its monthly unemployment numbers this morning. To tell us what the numbers mean, we’ve got University of Maryland economist and business professor Peter Morici. We’ll also talk with those whose jobs and businesses are represented in these numbers. Michael Powell, the president and founder of Powell’s Books in Portland, Ore., joins us to tell us how his business is making it through the recession. We also speak with Sandy Cole, an unemployed office manager who lives in St. Joseph, Mich., and is currently looking for work.
The Frankfurt Motor Show is not a happy place this year. The international car industry is reducing production as the global recession causes demand to drop sharply. Adding insult to an injured industry, Fiat CEO Sergio Marchionne told reporters that their new purchase, a small car company called Chrysler (maybe you've heard of it?) is in far worse shape than they thought. Receiving the blame for the sorry state of Chrysler is Cerberus, a private equity firm who owned the company for two years, ostensibly thinking they were making improvements. Peter Morici, professor of international business at the University of Maryland, joins us with a look at cars and the inner workings of private equity.
On the one-year anniversary of the Lehman Brothers bankruptcy, President Obama visited New York City to make a case for expanding federal regulation of Wall Street. To parse the President's speech and the impediments to regulatory reform as the economy's nosedive slows, we speak with Arthur Levitt, a senior advisor at the Carlyle Group and former chairman of the U.S. Securities and Exchange Commission. We also speak with Peter Morici, an economist and business professor at the University of Maryland.
"We have institutions, banks, who are too big to fail. The government has taken the position of salvaging just about every major financial institution in America. That has a vast, vast danger to the system. "
—Arthur Levitt, senior advisor with the Carlyle Group and former Chairman of the Securities and Exchange Commission, on the danger inherent in saving large financial institutions
As we wait for the latest unemployment numbers to be released tomorrow, Peter Morici, a professor at the University of Maryland's business school, joins us with his forecast. We also talk to Jozen Cummings, who was an articles editor at the now-closed Vibe Magazine, about why he won't look for work in a different field, despite the challenge of working in a diminishing sector of the economy. We also speak with Wayne Cooper, a recently laid off pre-press printing technician from Clearwater, Florida, about the challenge of figuring out your next step.
Those numbers simply have to come down or Barack Obama's in a lot of trouble not just on restoring recovery but getting things like his health care policy through. It's becoming increasingly apparent that he's been focusing on the wrong ball --dividing up the pie instead of worrying about the fact that the pie is disappearing completely!
—Prof. Peter Morici on the unemployment numbers impact on economic recovery
"There is always pressure present when a private company negotiates with the government."
— University of Maryland Professor Peter Morici
"If they're too big to fail, they're often too big to sell, even in their pieces."
— Economist Peter Morici on U.S. banks