SCOTT SIMON, host:
Of course the president began the week in London at the G-20 Summit, where the world's largest economies pledged $1.1 trillion to help boost capital to the International Monetary Fund, this in the same week when the U.S. stock market showed glimmers of hope but unemployment numbers reached new lows.
Joining us now, our friend from the business world, Joe Nocera, in New York. Thanks very much, Joe.
Mr. JOE NOCERA (New York Times): Thanks for having me, Scott.
SIMON: How do you see how the G-20 went, that pledge of $1.1 trillion?
Mr. NOCERA: Not so bad, all in all. It could've been more acrimonious, which would've been troublesome for the world's confidence in the economy. The 1.1 trillion to the IMF is supposed to go towards helping emerging markets, which is an area that the West really hasn't spent a lot of time thinking about in this economic downturn.
You know, they talk the talk on protectionism, which is important. So - and the president, you know, made, I think, a good first impression on the world stage, and that was - that's not a bad thing either. So all in all I would say it was a pretty successful summit as far as summits go.
SIMON: The Financial Accounting Standards Board - maybe the story's been underreported this week - changed a rule that alters how banks will report the value of mortgage securities. Explain this to us if you can.
Mr. NOCERA: Oh, what a mess. It has been underreported. The banks have been yammering about the need for a different standard so that they wouldn't have to write down the securities as they lose value. And their argument basically is, look, we're not going to sell this stuff tomorrow; we're going to wait. So, why should we have to mark it to what it is today when, you know, maybe six months or a year from now it has increased value?
There are so many problems with this, I don't know where to start. But the first problem is, the country is desperately trying to get these assets off the banks' balance sheets so they can start lending again. And this is going to make the banks say, hey, we don't want to sell this stuff. We're going to wait for it to come back. And it really is not a helpful thing.
But there was enormous pressure on the FASB - the Accounting Standards Board -from Congress, which has, of course, been pressured by the banks. And so there was a certain inevitability to this. You know, my only hope is that it does less damage than I think it's going to do, 'cause I think it's going to do a lot of damage.
SIMON: I've got to follow up on that. What kind of damage? I mean, enlarging possibilities for fraud of inflation?
Mr. NOCERA: No, no, no. More along the lines of making it yet more impossible to know - to have confidence in banks, because you have an understanding of what's on their balance sheets. Mark to market at least was supposed to give you some idea of what's on their balance sheets. And by eliminating that, by saying we're going to have this vaguer, looser standard, you know, you're not helping the economic system and the banking system get back on its feet because you're disguising reality.
SIMON: And we noted, Joe, the Dow finished above 8,000 for the first time since February. But there was that - unemployment numbers released on Friday -663,000 more jobs lost in March across every sector. Unemployment rate is 8.5 -worst since 1983. Where are new jobs going to come from?
Mr. NOCERA: Boy, that's a good question. Historically in this country they come from small business. You know, I noticed that President Obama in one of his speeches recently mentioned Caterpillar, and that's a big company and they've had a lot of layoffs. And a lot of big companies have had big layoffs, and that's a true fact.
But job growth is almost always generated lower down the food chain with small businesses. And that's why you really have to hope that some of these programs work with the banks. Because far more than a General Electric or a Caterpillar, small businesses are completely dependent on bank loans and they're the ones getting squeezed right now by the system.
So you know, basically if we get job growth anytime soon, which I'm afraid we probably won't, it's going to come from small businesses, and that's really what you have to watch for when you think about job growth.
SIMON: Joe Nocera writes the Talking Business column for the New York Times, joining us from the Radio Foundation in New York. Thanks so much, Joe.
Mr. NOCERA: Thanks for having me, Scott.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.