For the last three years we have been told repeatedly by government officials that funneling hundreds of billions of dollars to large and teetering banks during the credit crisis was necessary to save the financial system, and beneficial to Main Street.

But this has been a hard sell to an increasingly skeptical public. As Henry M. Paulson Jr., the former Treasury secretary, told the Financial Crisis Inquiry Commission back in May 2010, “I was never able to explain to the American people in a way in which they understood it why these rescues were for them and for their benefit, not for Wall Street.”

The American people were right to question Mr. Paulson’s pitch, as it turns out. And that became clearer than ever last week when Bloomberg News published fresh and disturbing details about the crisis-era bailouts.

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In 2008 the world economy was saved from depression by a bold and co-ordinated plan to shore up banks and counter the slump with fiscal and monetary stimulus. Today there is no boldness (the euro-zone crisis is the epitome of politicians doing too little too late). There is no co-ordination. And, to the extent that policies have a common theme, it is the wrong one: politicians across the rich world are taking too short-term a view of fiscal austerity””a bout of budget-cutting which will only increase the risk of another recession.

It does not have to be this way. Echoing the spirit of 2008, policymakers could adopt a co-ordinated strategy to boost growth. Two priorities stand out. First, a recalibration of fiscal and (in some places) monetary policy. Second, a big push on supply-side reforms, from freeing trade to slashing red tape.

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… let me say that in English: the European Union is cracking up. The Arab world is cracking up. China’s growth model is under pressure and America’s credit-driven capitalist model has suffered a warning heart attack and needs a total rethink. Recasting any one of these alone would be huge. Doing all four at once ”” when the world has never been more interconnected ”” is mind-boggling. We are again “present at the creation” ”” but of what?….

As for America, we’ve thrived in recent decades with a credit-consumption-led economy, whereby we maintained a middle class by using more steroids (easy credit, subprime mortgages and construction work) and less muscle-building (education, skill-building and innovation). It’s put us in a deep hole, and the only way to dig out now is a new, hybrid politics that mixes spending cuts, tax increases, tax reform and investments in infrastructure, education, research and production. But that mix is not the agenda of either party. Either our two parties find a way to collaborate in the center around this new hybrid politics, or a third party is going to emerge ”” or we’re stuck and the pain will just get worse.

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See how many you can guess and then check out the slideshow.

Squeezed into a corner, Ben S. Bernanke tried a classic escape tactic: Create a diversion.

With financial markets hoping for something of substance in the Federal Reserve chairman’s speech on the economy Friday, Bernanke instead cooked up some comfort food. The near-term outlook is a struggle, he allowed, but over the long term the U.S. has the wherewithal to return to a healthy pace of growth.

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Google chairman Eric Schmidt has said education in Britain is holding back the country’s chances of success in the digital media economy.

He made his comments at the MacTaggart Lecture at the Edinburgh International Television Festival.

Dr Schmidt said the UK needed to reignite children’s passion for science, engineering and maths.

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In preparation for the 77th General Convention of the Episcopal Church in July 2012, the year-long budget preparation process for funding the mission and ministry of the Episcopal Church has begun, according to a press release from the church’s Office of Public Affairs.

The Executive Council Aug. 25 announced a new approach to solicit input broadly from across the church on what the church’s funding priorities ought to be and what the program section of the draft budget.

“Changing and challenging financial realities at the churchwide level and for dioceses and congregations demand that a reassessment be done,” the release said.

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Picture this: You stop in front of a digital advertising display at a mall and suddenly an ad pops up touting makeup, followed by one for shoes and then one for butter pecan ice cream.

It seems to know you’re a woman in your late 20s and, in fact, it does. When you looked at the display, it scanned your facial features and tailored its messages to you.

Once the stuff of science fiction and high-tech crime fighting, facial recognition technology has become one of the newest tools in marketing, even though privacy concerns abound.

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Brian Young had big plans for his church’s IT strategy. But his vision suffered a serious setback this summer after Google Inc. altered its nonprofit program to prohibit all churches and religious organizations from participating.

For years, the search and software giant individually offered some of its products””including its office software and popular Gmail””for free or discounted use to qualifying nonprofits. Eligibility requirements varied by product, but churches and faith-based groups were welcome to use some.

All of that changed in mid-March when the company launched “Google for Nonprofits.” The new initiative united a robust set of Google’s tools into one program, but it also came with new guidelines that excluded numerous entities, including schools, political thinktanks, churches, proselytizing groups, and any organization that considers religion or sexual orientation in hiring decisions.

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New signs of stress are piling up in the ailing European banking system.

Commercial banks boosted their reliance on the European Central Bank, borrowing €2.82 billion ($4.07 billion) from an emergency lending facility on Tuesday, while other banks continue to park unusually large amounts with the central bank, according to data released Wednesday.

While the amount of borrowing is tiny relative to the multitrillion-euro European banking system, it, and the increase from €555 million a day earlier, nonetheless suggest that some lenders are struggling to borrow from traditional funding sources, such as the capital markets or other banks.

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The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

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The economy will grow by less than 3% through 2012, and unemployment will remain above 8% until 2014, the non-partisan Congressional Budget Office projects.

In its semiannual update of budget and economic data, the agency ”” which serves as the official scorekeeper for President Obama and Congress ”” projects painfully slow progress on the economic front through next year’s election and beyond.

Economic growth will remain slow but steady, it says, increasing by 2.3% this year and 2.7% next year. In a blog post on the agency’s website, director Douglas Elmendorf notes those projections were made in early July ”” before financial market gyrations and some lackluster economic indicators.

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Apple Inc. Chief Executive Officer Steve Jobs, who built the world’s most valuable technology company, resigned. He is succeeded by Chief Operating Officer Tim Cook.

Jobs took a medical leave of absence Jan. 17 as a rare form of cancer he’s been battling since 2004 and a more recent liver transplant worsened his health, a person with knowledge of the matter said at the time.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs said in a statement. “Unfortunately, that day has come.”

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Boeing’s aircraft assembly has long been done by its unionized labor force in Puget Sound, Wash. Most of the new Dreamliners will be built in Puget Sound as well. But with the plane so far behind schedule, Boeing decided to spend $750 million to open the South Carolina facility. Between the two plants, the company hopes to build 10 Dreamliners a month.

That’s the plan, at least. The Obama administration, however, has a different plan. In April, the National Labor Relations Board filed a complaint against Boeing, accusing it of opening the South Carolina plant to retaliate against the union, which has a history of striking at contract time. The N.L.R.B.’s proposed solution, believe it or not, is to move all the Dreamliner production back to Puget Sound, leaving those 5,000 workers in South Carolina twiddling their thumbs.

Seriously, when has a government agency ever tried to dictate where a company makes its products? I can’t ever remember it happening.

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Nearly one in 10 midsize or large employers expects to stop offering health coverage to workers once federal insurance exchanges start in 2014, according to a survey from a large benefits consultant.

Towers Watson also found in a survey completed last month that an additional 20 percent of companies are unsure about what they will do.

Another big benefits consultant, Mercer, found in a June survey of large and smaller employers that 8 percent are either “likely” or “very likely” to end health benefits once the exchanges start.

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Following a stinging rebuke by the Anglican Church, the state-run Urban Development Corporation (UDC) appeared yesterday to be backing off what appeared to be a veiled threat to forcibly acquire the church-owned Nuttall Hospital lands near Cross Roads, Kingston.

UDC general manager, Joy Douglas was quoted in television reports as suggesting that the agency was eyeing the sprawling Nuttall lands as part of redevelopment plans for the capital city.

Douglas was further reported as saying “there are plans by the prime minister to amend the UDC Act, that will do away with a clause that forces the Corporation to acquire land before engaging in redevelopment activities”.

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A proposed pipeline to convey oil derived from “tar sand” in Canada across the American heartland is facing strong opposition from environmentalists ”“ including faith-based groups ”“ staging nonviolent sit-in protests this week in front of the White House in Washington D.C.

Since the protests began Aug. 20, some 150 activists have been arrested, according to 350.org, one of the organizations involved in the demonstrations, which are planned to continue for two weeks.

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In this year’s speech, he is likely to put particular emphasis on what needs to be done to repair the U.S. economy over the longer run, including lowering long-term deficits. The title of the speech, in fact, is “Near- and Long-Term Prospects for the U.S. Economy.”

While Bernanke has said that Congress should not cut the budget deficit too quickly, lest this austerity undermine the weak economic recovery, he has previously argued that a long-term plan to put the government’s spending in line with its revenue could help instill confidence. Indeed, Deutsche Bank chief economist Peter Hooper said in a research note that the need for longer-term adjustments in the economy could be another argument against new Fed intervention.

“Any action the Fed takes at this point may give the markets no more than a temporary lift and would not resolve the more fundamental problems that are weighing on the economy,” Hooper said.

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Experts say the parsonage allowance was originally included as a way to minimize taxes on clergy members, whose compensation was often meager. It still is widely used for that purpose, church officials said, although the IRS doesn’t track usage of the benefit.

“For most of them the housing allowance is modest because their compensation is modest,” says Daniel Gary, an attorney with the United Methodist Church in Nashville.

Similarly, D. August Boto, general counsel of the Executive Committee of the Southern Baptist Convention, says for leaders of the organization’s 46,000 churches “the housing allowance is critically important for making ends meet””it is not a luxury.”

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The one-two punch of soaring real estate prices followed by the housing meltdown has reduced homeownership across South Carolina. First came a rise in real estate prices that far outstripped incomes, making homeownership harder to attain.

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Nearly half of Americans say that they definitely or probably couldn’t come up with $2,000 in 30 days, according to new research, raising concerns about the financial fragility of many households.

In a paper published by the National Bureau of Economic Research, Annamaria Lusardi of the George Washington School of Business, Daniel J. Schneider of Princeton University and Peter Tufano of Harvard Business School used data from the 2009 TNS Global Economic Crisis survey to document widespread financial weakness in the U.S. and other countries.

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…the issues confronting parents today can’t be dismissed as mere generational prejudices. There is reason to believe that childhood itself is now in crisis….

the 20th century also witnessed another momentous shift, one that would ultimately threaten the welfare of children: the rise of the for-profit corporation. Lawyers, policy makers and business lobbied successfully for various rights and entitlements traditionally connected, legally, with personhood. New laws recognized corporations as legal ”” albeit artificial ”” “persons,” granting them many of the same legal rights and privileges as human beings. In an eerie parallel with the child-protective efforts, “the best interests of the corporation” was soon introduced as a legal precept.

A clash between these two newly created legal entities ”” children and corporations ”” was, perhaps, inevitable. Century-of-the-child reformers sought to resolve conflicts in favor of children. But over the last 30 years there has been a dramatic reversal: corporate interests now prevail. Deregulation, privatization, weak enforcement of existing regulations and legal and political resistance to new regulations have eroded our ability, as a society, to protect children.

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Genna Saucedo supervises cashiers at a Wal-Mart in Pico Rivera, California, but her wages aren’t enough to feed herself and her 12-year-old son.

Saucedo, who earns $9.70 an hour for about 26 hours a week and lives with her mother, is one of the many Americans who survive because of government handouts in what has rapidly become a food stamp nation.

Altogether, there are now almost 46 million people in the United States on food stamps, roughly 15 percent of the population. That’s an increase of 74 percent since 2007, just before the financial crisis and a deep recession led to mass job losses.

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I have spoken to this many times in public. Those with the capacity to hire American workers”•small businesses as well as large, publicly traded or private”•are immobilized. Not because they lack entrepreneurial zeal or do not wish to grow; not because they can’t access cheap and available credit. Rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy. In an environment where they are already uncertain of potential growth in demand for their goods and services and have yet to see a significant pickup in top-line revenue, there is palpable angst surrounding the cost of doing business. According to my business contacts, the opera buffa of the debt ceiling negotiations compounded this uncertainty, leaving business decisionmakers frozen in their tracks….

…put yourself in the shoes of a business operator. On the revenue side, you have yet to see a robust recovery in demand; growing your top-line revenue is vexing. You have been driving profits or just maintaining your margins through cost reduction and achieving maximum operating efficiency. You have money in your pocket or a banker increasingly willing to give you credit if and when you decide to expand. But you have no idea where the government will be cutting back on spending, what measures will be taken on the taxation front and how all this will affect your cost structure or customer base. Your most likely reaction is to cross your arms, plant your feet and say: “Show me. I am not going to hire new workers or build a new plant until I have been shown what will come out of this agreement.” Moreover, you might now say to yourself, “I understand from the Federal Reserve that I don’t have to worry about the cost of borrowing for another two years. Given that I don’t know how I am going to be hit by whatever new initiatives the Congress will come up with, but I do know that credit will remain cheap through the next election, what incentive do I have to invest and expand now? Why shouldn’t I wait until the sky is clear?”

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“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”

It wasn’t just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. They included Edinburgh-based Royal Bank of Scotland Plc, which took $84.5 billion, the most of any non-U.S. lender, and Zurich-based UBS AG (UBSN), which got $77.2 billion. Germany’s Hypo Real Estate Holding AG borrowed $28.7 billion, an average of $21 million for each of its 1,366 employees.

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(The figures are from May, the most recent available).

No fair clicking until you make your answer.

We discussed this in yesterday’s Adult Sunday school–KSH.

Like many South Carolinians facing surging medical costs, [Ken] Riddle wants to know why premiums keep rising. Here, annual premiums for private health insurance have risen about 85 percent for individuals and 75 percent for families in the past decade, federal data show.

South Carolina regulators can take at least some of the blame. Many factors contribute to soaring health care costs, but lax state regulation — an area increasingly scrutinized as national health care reform takes effect — has contributed to the problem, critics said.

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This July was no better than the last for South Carolina job-seekers, and the unemployment rate is rising again.

Across the state and in the greater Charleston area, joblessness is back up to about where it was last summer. South Carolina is now tied with Michigan for third-highest unemployment rate in the nation, behind housing meltdown epicenters Nevada and California.

“It doesn’t give you a lot of hope,” said West Ashley resident Mary Catherine James, 51, who has been job-hunting since April. “It’s very stressful.”

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Q. Was the application process difficult?

A. We had to sign so many documents that my hand hurt after I was done. I had to pledge not to open a zoo, swimming pool or aquarium. It struck me as strange. Yes, it’s the bank’s duty to do due diligence, but this was just a silly restriction.

Q. But there was a happy ending, right?

A. Yes, after being turned down by 15 banks, it was a personal relationship that introduced us to a regional bank in New Jersey that gave us a $200,000 loan.

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