Stress Tests: Economics and Politics
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Stress Tests: Economics and Politics

So-called "stress tests" on nineteen big banks have postponed decisions that could be politically unpopular for the Obama Administration. Now that the results are due, we hear what the consequences might be. Also, Secretary Clinton returns to Capitol Hill, and California is at it again with new regulations on global warming.  This time, the result could be fuel made from garbage.


Banner image: Treasury Secretary Geithner Testifies before the Congressional TARP Oversight Panel. Photo: Win McNamee/Getty Images

Making News

Secretary Clinton Back on Capitol Hill ()

The military Taliban have seized control of another district of Pakistan, just 70 miles from Islamabad, the capital city. Secretary of State Hillary Clinton told Congress today that more people ought to be worried. Clinton's testimony was her first before Congress since she was confirmed in January. Farah Stockman is foreign affairs correspondent for the Boston Globe.

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Main Topic

Banks Still Pose a Significant Headache for Obama ()

The Obama Administration does not want to nationalize banks that appear to be failing, and Congress is not likely to come up with more bailout money. Yesterday, Treasury Secretary Tim Geithner brushed aside concerns, saying that there's enough bank bailout money left so he won't have to ask Congress for more. But what about those "stress tests" now being conducted on the nineteen biggest banks? If the economic crisis gets worse, will they have enough money to lend? If the stress tests are set up so that nobody fails, will they have credibility? If they reveal basic problems, will result be panic rather than reassurance?

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Reporter's Notebook

California Green Fuel Standards Lead the Way ()

Corn-based ethanol plants are closing down, but the race to produce fuel that doesn't produce greenhouse gases is still on. This week, California's Air Resources Board is expected to enact the world's first regulation to reduce the carbon footprint of fuel. It would measure the impact of various fuels from "cradle-to-grave," and entrepreneurs are ready to capitalize as Margot Roosevelt reports in today's Los Angeles Times.

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