An Interview with Outgoing FDIC Chair Sheila Bair

Jo Nocera:

‘They should have let Bear Stearns fail,” Sheila Bair said.

It was midmorning on a crisp June day, and Bair, the 57-year-old outgoing chairwoman of the Federal Deposit Insurance Corporation — the federal agency that insures bank deposits and winds down failing banks — was sitting on a couch, sipping a Starbucks latte. We were in the first hour of several lengthy on-the-record interviews. She seemed ever-so-slightly nervous.

Buffett on the Economy

Bloomberg:

Buffett on today’s job numbers and why he’s confident we’ll get the 2.5 million jobs lost in the current recession back:

“Because the American economy works that way. We have gone through, I don’t know how many recessions, perhaps 15 in the history of this country.”

“But, our system over-shoots periodically. And in this particular case we had a huge bubble. So the fact that there’s a correction after that should not be unexpected. But our system always comes back and it will this time. And it already is.”

On whether the country will recover most of the 2.5 million lost jobs by the 2012 elections:

“I think there’s a good chance of that. We will come back big-time on employment when residential construction comes back. And we way over-produced in houses. I mean we were forming a million or 1.2 million households and we were building close to two million residential units.”

“Big surprise, we ended up with too many houses. We’re not going to blow them up. We’re not going to have kids start getting married at 12 or something. There’s a natural correction. The only way a correction takes place is to have households formation exceed new construction by a significant amount for a significant period of time.”

“We’ve had it for quite a while. And when you see these figures of five or 600,000, that means we’re sopping up housing inventory and I don’t know exactly when that hits equilibrium, but it isn’t five years from now I know that. And I think it actually could be reasonably soon.”

Making it in America A man and a firm with a plan to revive American manufacturing

The Economist:

“THE remarkable juxtaposition of American heartland, Midwest values and a whole lot of foreign accents” is what makes Midland, Michigan, a beacon of hope for the country’s manufacturing sector, reckons Andrew Liveris. His is one of those accents, though he no longer sounds crocodile-wrestlingly Australian. The boss of Dow Chemical has lived on and off for years in the company town that grew up around the brine wells that Herbert Dow first tapped in 1897 for his pioneering electrolysis process. The chemical firm still employs 5,500 of the town’s 42,000 inhabitants. (The second-biggest employer is Dow Corning, a silicone-making joint venture.) Dow’s success has delivered the nice homes, good schools and ball parks that make up the American Dream.

Like many immigrants, Mr Liveris shares that dream. But he now fears it is under threat. He has become one of the leading voices calling on the American government to embrace industrial policy. Last July Dow launched a plan to revive American manufacturing, which Mr Liveris then expanded into a book, “Make It In America”. On June 24th President Barack Obama appointed him co-chair of a new “Advanced Manufacturing Partnership” that brings together government, academia and business to “build a roadmap” for a more competitive manufacturing sector.

Clash of the Titans, Part 1

Ed Wallace:

The history of the Ford Motor Company has rarely been told accurately. The moments when facts trump myth are rare; and then immediately, with the sweep of an indifferent hand, the wave of historical misinformation wipes out the truth, reinstating and protecting the legend. Bottom line, “what everybody knows” about Ford is hardly ever all true.

That’s how it is with the creation of Ford’s third car company and its early years. For the truth is that once Ford and his staff of engineers created the original Model A in 1902, the company was organized and primarily run by James Couzens, a minority shareholder foisted onto Ford to keep an eye on the investors’ monies. What no one imagined happening was that from their very first meeting, Ford decided that Couzens and he would partner up against the investment group – and his junior partner didn’t mind going along.

521 – CARTOGRAPHY’S FAVOURITE MAP MONSTER: THE LAND OCTOPUS

Frank Jacobs:

Over the centuries, the high seas have served as blank canvas for cartographers’ worst nightmares. They have dotted the globe’s oceans with a whole crypto-zoo of island-sized whales, deadly seductive mermaids, giant sea serpents, and many more heraldic horrors. As varied as this marine bestiary is, mapmakers have settled on a single species as their favourite for land-based beastliness: the octopus.
Real octopi are sea creatures, of course. But the Cartographic Land Octopus – CLO for short – need not worry about being in the right ecosphere. Being fictional, it is not restrained to any biosphere, and has only one iconic function: instilling readers with fear and revulsion. The CLO does have a link to the ocean, though. It is clearly descended from an older fictional monstrosity: the Kraken, a sea-bound giant squid whose enormous tentacles dragged whole ships down to their watery graves.

America’s Forgotten Prisoners of War

David Feith:

Ahmed Altaie and Bowe Bergdahl—one born 1965 in Baghdad, the other two decades later in Hailey, Idaho—wouldn’t seem to have much in common. But this weekend, as Americans take to beaches and barbeques to celebrate our independence, Messrs. Altaie and Bergdahl share a unique, practically unknown bond: They are the only two U.S. soldiers currently held captive as prisoners of war.

Over the past decade, the U.S. has deployed more than two million troops abroad, with hundreds of thousands in war zones at any one time. Yet in a sign of how much warfare has changed since the time of Thucydides, Grant or even Westmoreland, prisoners of war in Afghanistan and Iraq have been few in number and low in profile. Today there is one in each theater, an unusual symmetry that seems to magnify the solitude and difficulty of their plights.

Sgt. Bowe Bergdahl has been a captive of the Taliban for two years, since June 30, 2009. He was a 23-year-old private at the time, about a half-year into his first deployment. The circumstances of his capture remain murky, but one way or another he fell into enemy hands in rural Paktika province, a mountainous region along Afghanistan’s border with Pakistan.

Frank Rich on Obama: Something’s Rotten

Frank Rich:

“SOMETHING ROTTEN: Obama’s failure to right the wrongs of the crash has haunted his presidency, and could undo it”: “What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. … Chronic unemployment remains a constant, painful reminder of the havoc inflicted on the bust’s innocent victims. … For all the lurid fantasies of the birthers, … the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys.”

Insider dealing continues, unabated.

App Quality vs Quantity

Leander Kahney:

As my colleague Mike Elgan points out, the iPhone has changed the world in profound ways.

Now an ex-colleague, Brian Chen of Wired.com, has just published one of the first books to take an in-depth look at how, exactly, the smartphone world is shaping up.

Always On: How the iPhone Unlocked the Anything-Anytime-Anywhere Future — and Locked Us In is an excellent overview of how the iPhone is changing the computing landscape.

I follow Apple closely, yet I was surprised at how much I learned about the world of mobile from Chen’s well-reported book (Full disclosure: I provided a blurb).

On US Car Sales

Ed Wallace:

“Many analysts, dealers and executives believe the industry is actually healthier selling far fewer cars.” — Auto Industry Adjusts to New Normal: Low Sales, NPR, June 24, 2011

Everyone, it seems, wants to comment on the country’s new car sales lately. Among last week’s plethora of opinions, many argued that the auto industry is better off today selling fewer cars. Some comments explained how consumer spending fell back for the first time in nearly 18 months in May – partly because new car sales dropped. Certainly everyone reflected that just a decade ago Americans purchased 17.3 million new vehicles, but last year struggled to produce and sell just 11.5 million.

What was truly stunning about NPR’s reporting on the subject was that their expert was Jeremy Anwyl, CEO of Edmunds.com. True, Edmunds.com has become an extremely popular car-shopping Web site. With traffic estimated at 6.6 million unique individuals per month, no one can question its Internet credentials. But what Mr. Anwyl said does seem problematical, because it reveals that he lacks grounding in the industry’s historical trend. Moreover, in that NPR story Mr. Anwyl suggested that our new car market just wasn’t normal at 16 to 17 million sales a year; with population growth, he thought, we might someday see 16 million sales again.