Weekly Economic News Digest

WSJ writes that “King Barack the Mild” is having trouble running his out-of-court bankruptcy for Chrysler and GM. “He wants Chrysler’s secured lenders to give up their right to nearly full recovery in a bankruptcy in return for 15 cents on the dollar. They’d be crazy to do so, of course, except that these banks also happen to be beholden to the administration for TARP money. Wasn’t TARP supposed to be about restoring a healthy banking system? Isn’t that a tad inconsistent with banks just voluntarily relinquishing valuable claims on borrowers? Don’t ask.”

U.S. inspector general told Congress today that a private-public partnership designed to rid financial institutions of their “toxic assets” is tilted in favor of private investors and creates “potential unfairness to the taxpayer.”

“Kids Today Don’t Know How Good They Have It” — Reason Mag’s Mangu-Ward comments on the past 15 years of no tax hikes, now ended by President Obama

The Economist writes, “Governments spent a fortune encouraging people to buy houses. That was a mistake they now risk repeating”

States with high unemployment have high income taxes or high unionization… both.

On why forced federal mortgage restructuring is a bad idea (this is comments on a Fed study, its really fascinating and its some research that hasn’t been done yet to this point)

On illegal immigration numbers (via MR)

Megan McArdle discusses how the bailout is forcing unnecessary bankruptcies

How bad has the market gotten? Some might say that AR-15 assault rifles are now a better investment than your 401(k) (via MR)

A Tyler Cowen financial crisis update and much praised review of the film “The End of Poverty”

Obama to tap Fannie Mae CEO to head TARP … some how this seems like a bad idea, given the history of success (or lack thereof) that GSE has had in recent memory