Paul Mason has a nice article on how the on-going crisis has imbued many with a feeling of powerlessness. Crisis is the new state of economic being and there is absolutely nothing we can do about it. We therefore become resigned to crises and increasing inequality. Mason raises interesting questions about the long-term consequences of powerlessness and he also alerts us to the dangers of powerlessness by pointing out how the rise of fascism, nationalism and Hitler quickly followed the crisis of the 1930s.
Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne