On today's Planet Money:
— Alex Blumberg and David Kestenbaum break down the Federal Reserve's plan to inject over $1 trillion into the economy by buying mortgage backed securities and long term Treasury bonds.
— Industries usually take years or decades to make major changes. That's not the case in today's economic climate. NPR's Frank Langfitt tells us just how fast things are moving in Michigan's auto industry.
— There are still a lot of questions about toxic assets. How many are there? What are they worth? Who has them? Mike Thompson, a managing director at Standard & Poor's, takes a stab at answering a few of ours. The good news? Some of what we thought was toxic, might not be so bad.
— The Planet Money team visited Capitol Hill this week to find out how Congress is dealing with the current crisis. Alex Blumberg sat down with California Republican Congressman John Campbell, who made a surprising admission: he's confused.
Bonus: In defense of bonuses, after the jump.
Download the podcast; or subscribe. Intro music: Handsome Furs' "I'm Confused." Find us: Twitter/ Facebook/ Flickr
Mike writes from Oakland, Calif.:
My wife works for Wells Fargo. She got a bonus.
We're not high level executives. We're a regular working family in the Bay Area. We both work and combined(!) our AGI will cross the government's threshold for the 90% tax. We're far from being flush with cash.
In the last year, we've had our 401ks and investment accounts drop by about 30%, inclusive(!) of the contributions we made. We very recently had our home appraised for an aborted refinance. It showed our house lost about 30% of its value from the peak. So, all in all, the net worth of this working family is about two thirds of what it was in 2007.
So, the lone bright spot recently was that she got a bonus from Wells for working hard all year in an area that was not responsible for any toxic assets.
Now, based on the bill as passed by the House, it look like she's going to have to pay it back. We're expecting a second child in May, and we're trying to save money so we can buy a house in a better school district.
Thanks, government. Penalize us. Good move.