LYNN NEARY, host:
As the G-20 leaders talk about ways to jumpstart the world's economy, efforts continue here to fix the U.S. financial system. Those efforts come amid criticism that the approach so far has been scattershot at best. Our friend from the business world Joe Nocera joins us from the studios of the Radio Foundation in New York. Good morning, Joe.
JOE NOCERA: Good morning, Lynn. Nice to hear your voice on a Saturday.
NEARY: Well, good to be here. So this week Treasury Secretary Henry Paulson seemed to shift gears on this $700 billion bailout package by changing the focus from buying up toxic mortgages to giving the money directly to banks. First of all, how could he do that to begin with, and why?
NOCERA: Well, that, he already has done. You know, he is giving the money to banks, and he has completely abandoned the idea of buying up toxic mortgages. He says it's because things have shifted, events have shifted. But in fact a big part of the problem was even though they announced they were going to buy up these toxic mortgages, they could never figure out how to do it or at what price, and it was very, very problematic. So the shift was probably, you know, one of pragmatism rather than, you know, shifting, you know, events - the shifting of events.
NEARY: So, what has been spent so far? And what's happening with the rest of the money?
NOCERA: Well, OK, so...
(Soundbite of laughter)
NEARY: You're laughing.
NOCERA: Yeah, let's start. They got $700 billion under the law. They have spent, so far, $290 billion. They have done it recapitalizing the nine largest banks in the country. They have spent a ridiculous amount of money shoring up AIG. They have used the money for things like when PNC bought Nat City, which was a deal the government wanted because it thought Nat City was weak. PNC got, I think, $3 billion of the money to help do that. So they've spent, as I said, $290 billion. They have 60 billion left that they can spend before they have to go back to Congress and ask for the next half. Basically, they're not going to spend anything at this point because Congress is never going to give them the right to spend the 350 billion, because they're going to wait for the next president.
NEARY: All right.
NOCERA: And the 60 billion that they've got, they pretty much need in case there are, you know, future emergencies.
NEARY: Yeah. And Congress now seems poised to back a plan floated by the FDIC. Is this a revolt of sorts?
NOCERA: Well, it's actually a revolt by the FDIC, which is very upset that the Treasury Department won't approve its plan to help people in danger of foreclosure. So, the FDIC has, basically, finally said, here's my plan. We're posting it on the website, and we want America to see what our plan is. Congress is very enamored of the FDIC and its commissioner, Sheila Bair. And they're upset that the Treasury won't approve this plan. So...
NEARY: All right, Joe. We're going to have to stop right there. Thanks so much for joining us this morning.
NOCERA: All right, thank you.
NEARY: Joe Nocera is a regular commentator for Weekend Edition and writes the Talking Business column for The New York Times.
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