If Glass-Steagall were reinstated, we would be recreating the short-term funding weakness that forced Bear Stearns and Lehman Brothers into insolvency.

When an insolvent AIG paid out $165 million in executive bonuses, the public was outraged. But that is peanuts compared to the $62 billion AIG has quietly paid out to settle its obligations with some of the world’s largest banks. Last week, the details of this settlement were finally disclosed.

A critical issue in the Congressional debate on healthcare is whether the new legislation will include a “public option.” Part of the problem is that there is little agreement about what the public option should be. Some see it as having the government act as a provider of last resort. Others mean a national one-payer system based on the Medicare model. Still others mean healthcare cooperatives, though they do not exist in most of the US.

When the US pay czar, Kenneth Feinberg, approved the compensation of the top executives at seven troubled financial institutions, he insisted that they all appoint an independent director as the board chair rather than the CEO.

Should the SEC adopt the proposal to require all shareholder nominees to be included on the proxy card of a company along with its slate of director nominees? Or does the Healthsouth approach go far enough?

Is the U.S. Killing Its Innovation Machine?

If we want corporate America to avoid short-termism, we need to help free portfolio managers and company executives from the tyranny of quarterly results.

Back in February, the Obama Administration committed $75 billion to make mortgages more affordable to homeowners under financial pressure. Last week, however, the Congressional Oversight Panel for the financial bailout criticized the design of this mortgage modification program, and declared that “in the best case” it would prevent half as many foreclosures as the Administration predicted.

Pozen proposes a different kind of principal reduction program instead of the current mortgage modification program.

The House Banking Committee has just finished drafting a bill intended to stop anyone in the future from putting together another Bernie Madoff scam. It’s a worthy aim that I wholly endorse, but I worry that passing the current draft will introduce more arbitrariness and cost into the regulatory system without solving the problems revealed by the Madoff debacle.

Unless we bring back the lower insurance limits for deposits, the FDIC’s rescue of failed banks could become very expensive. Taxpayers paid over $100 billion to resolve the S&L crisis, and Congress recently authorized the Treasury to lend the FDIC up to $500 billion.

Do you think that the limit on deposit insurance should go back again to $100,000?

The G-20, the group of the world’s largest economies, agreed last week to a US-led initiative called a “Framework for Sustainable and Balanced Growth.” This is an effort to rectify current global imbalances in trade and capital flows, in which the US runs huge trade deficits financed by huge Chinese investments in US Treasuries.

The solution? Chinese consumers should spend more and US citizens should save more. Progress on meeting these objectives will be monitored by the International Monetary Fund, which ..read more