When President Obama looked in the mirror on Wednesday morning, he must have wondered whether things could get any worse for the limber, graying fellow staring back at him. According to one new poll, his approval rating had hit a new low; his Democratic predecessor, Bill Clinton, had joined the chorus criticizing him for misleading the American people about keeping their existing health-care policies; the Washington Post was reporting that healthcare.gov, the benighted Web site that is the source of most of his problems, won’t be fully fixed by the end of the month—something the White House had promised a few weeks ago; and Kathleen Sebelius, the Secretary of Health and Human Services, was about to announce that fewer than twenty seven thousand people have enrolled in new insurance plans through the federal online exchange.
The situation is dire alright—arguably the worst moment of Obama’s five-year tenure. But the Hawaiian Houdini still has one thing going for him, and that’s the uncanny tendency of some of his Republican enemies to turn opportunities into calamities. And none is more adept at this party trick than Darrell Edward Issa, the San Diego loudmouth whose House Committee on Oversight and Government Reform held a public hearing today, which backfired almost immediately.
I just got back from London, where I ran into a senior British official I hadn’t seen in some time. I asked him what was going on. “Another housing bubble,” he said, only half-jokingly. After being depressed for a few years, house prices in the English capital are rising at an annual rate of about ten per cent, and in some trendy areas the rate of increase is much higher than that. In the British media, there is already talk of the Bank of England raising interest rates sometime soon to head off another boom-bust cycle.
At least we don’t have that problem in the United States, I thought to myself. Or do we? At breakfast this morning, my wife informed me that our home, which we purchased a decade ago, in a gentrifying section of Brooklyn, has risen in value by another hundred thousand dollars. Over the past twelve months or so, prices on our once-modest street have jumped by about a third. And it’s not just brownstone Brooklyn. Listening to the radio the other day, I heard that in parts of Hoboken, across the Hudson in New Jersey, prices have jumped by forty per cent in a year.
Friday’s employment report, which shows that payrolls rose by two hundred and four thousand jobs in October, indicates that the economy was a bit stronger in the past three months than most people thought. But we won’t know the full impact of the government shutdown and the debt-ceiling crisis for a while yet, and it is fanciful to suggest that one better-than-expected jobs report will persuade the Federal Reserve to change course and start withdrawing some of its monetary stimulus.
Trying to sort the signals from the noise in the jobs report is a tough task in the best of times: the margin of error for the payroll figures is plus or minus ninety thousand jobs. So instead I’ll say a few things about a new research paper by three economists at the Federal Reserve, which is getting a lot of attention because it suggests that the recession and its aftermath have not only done terrible things to the U.S. economy in the immediate sense—high rates of joblessness, tepid gross-domestic-product growth, falling incomes—but also seriously undermined the economy’s capacity for future growth. Gavyn Davies, of the Financial Times, drew attention to the study earlier this week; Reuters published a story about it; and, in today’s New York Times, Paul Krugman devoted an entire Op-Ed to it, which was perfectly justified. It deserves to be discussed widely.
As expected, Twitter’s stock shot up Thursday morning when it started trading on the New York Stock Exchange. On Wednesday evening, Goldman Sachs, the lead manager of the I.P.O., priced the stock at $26. The first trade in the public market took place at $45.10.
Depending on how the stock trades over the next day or two, I’ll have more to say about what it means for the company, the market at large, and worries that we are witnessing the inflation of a third asset price bubble in fifteen years. But for now, here are some questions that people who are thinking of buying some Twitter stock should ask themselves before piling on:
Last night, as I left Bill de Blasio’s victory party at the Park Slope Armory, the sound of the Beastie Boys’ “No Sleep Till Brooklyn” was streaming through the loudspeakers, which seemed fitting. When I first moved to New York, almost thirty years ago, the white-boy rappers were setting out to put their home borough on the rock-music map. (At the World, in Alphabet City, I was lucky enough to see some of their early gigs.) And now, another Brooklynite, not a native but not exactly a blow-in, either, has won the biggest landslide by a non-incumbent since the five boroughs were united, in 1898.
Much can be said, and has been said, about de Blasio’s remarkable rise to City Hall. But the Brooklyn angle still bears inspection. In many ways, de Blasio embodies the transformation of a borough that was long considered a poor relation to Manhattan, a place many Brooklynites still refer to as “the City.” For a while now, it’s been clear that much of New York’s cultural and artistic energy has moved across the East River, vacating Manhattan—or the lower two-thirds of it—to its fate as an urban theme park and empty nesters’ retreat. Meanwhile, the home of Rhea Perlman, Vic Damone, and Mike Tyson has become an international brand name, a signifier of all things cool and urban. (“Trés Brooklyn,” the French say.) It has Jay Z, the Nets, and enough artisanal restaurants to feed an army of hipsters with Civil War beards. And now Brooklynites are setting the city’s political agenda.
In the past half century, the United States has had five Presidents who were elected to two terms in the White House: Richard Nixon, Ronald Reagan, Bill Clinton, George W. Bush, and Barack Obama. (I’m not counting Lyndon Johnson, who was only voted in once.) All five won reëlection handily, but none of them enjoyed trouble-free second terms—and that’s putting it mildly. At this point in Nixon’s second four years, November of 1973, the Watergate scandal was raging. It took a bit longer for Reagan and Clinton to run into trouble. Eventually, though, both of their second terms were dragged down in embarrassing scandals: the Iran Contra affair and the Monica Lewinksy saga. Bush Jr., unlike his predecessors, managed to escape the attentions of an independent counsel or prosecutor, but the disastrous progress of the war in Iraq did so much damage to his reputation that, according to a new book by Peter Baker, of the Times, he got to the stage where he didn’t know how to react to good news. CONTINUE READING >>
Back in March, when the Securities and Exchange Commission agreed to settle a big insider-trading case involving SAC Capital Advisors, one of the biggest hedge funds in the country, I mischievously suggested that Steven A. Cohen, SAC’s mercurial and publicity-shy boss, was effectively buying off the U.S. government for six hundred and sixteen million dollars. (That was the size of the fine that the S.E.C. levied on SAC.) It turns out that I was wrong. Cohen is laying out a lot more than six hundred big ones to try to make the feds go away. To be exact, he’s paying them $1.8 billion.
Make no mistake, though: this could still be a sweet deal for Cohen, who set up shop twenty years ago with just twenty-five million dollars under management. Assisted by a battalion of high-priced lawyers, he has reached a “global resolution” with the Justice Department that allows him to keep the bulk of the vast fortune—some nine billion dollars, according to the New York Times—that he made running a firm at which insider trading was “substantial, pervasive and on a scale without known precedent in the hedge fund industry.” And, at least for now, Cohen won’t face any criminal charges or the prospect of any jail time.
On Monday night, Alan Greenspan was on Charlie Rose discussing his new book, “The Map and the Territory: Risk, Human Nature, and the Future of Forecasting.” At that point, I hadn’t yet read it, and not just because the title makes it sound like something a dentist might give you as a substitute for novocaine. Having written extensively and critically about Greenspan over the years, in the magazine and in two books, I had a jaundiced feeling that I’d already heard what he had to say. But when I switched over to PBS after the Cardinals-Red Sox game, and the former Fed chairman’s unmistakable mug appeared on the screen, I decided to give him another listen.
The news that the National Security Agency was monitoring the telephones of the German Chancellor, Angela Merkel, and many other foreign leaders is less shocking than the revelation that, for the first four and a half years of his Presidency, Barack Obama, the Commander-in-Chief, didn’t know anything about it. Can this be true?
Evidently, it is. According to a story in the Wall Street Journal on Monday, the spying program targeted as many as thirty-five world leaders, but it didn’t come to Obama’s attention until this summer when, in the wake of Edward Snowden’s revelations, the Administration carried out an internal review of the N.S.A.’s activities. “These decisions are made at N.S.A.,” someone described as “a senior U.S. official” told the Journal. “The President doesn’t sign off on this stuff.”
Here are two things I learned today about Obamacare: it’s getting more popular, and it’s working reasonably well in Kentucky, a state that went for Romney over Obama by sixty to thirty-eight per cent.
According to a new Gallup poll, forty-five per cent of Americans approve of the health-care reforms, up from forty-one per cent in in August, even though the new poll was taken in the midst of all the publicity about the disastrous rollout of the Web site for the national insurance marketplace. That change is within the margin of error, but as Gallup put it, “The results suggest that the problems with the health exchanges have not negatively affected Americans’ overall views of the law, at least to this point.”