In this interview, MIT Sloan's Simon Johnson says, "The paradox of thrift is the idea that you try -- everyone tries to increase their savings, so desired savings goes up, thrift being savings, but the act of trying to save pulls down the entire economy, gives you a big recession or maybe even a depression, and total savings don't go up. Maybe they even go down. So everyone trying to save leads to a big slowdown and less savings. That's a paradox."

Banks are raising account fees because of a "mix of market power and opportunism," says Simon Johnson, a former chief economist for the International Monetary Fund who teaches at MIT Sloan. "They are supposed to act in the interest of shareholders, so they're gouging consumers."

"People look back now and say they overdid it; they should have raised rates earlier," MIT economist Simon Johnson says. "This is kind of a rerun. They could make mistakes on both sides."

Some economists, including MIT Sloan Prof. Simon Johnson, say our financial system would be healthier if we jettisoned massive banks, instead relying on a network of regional banks and community banks

MIT Sloan Prof. Simon Johnson believes that, in the context of low income countries having been severely affected by the global economic downturn, the G20 summit, by contributing to the stabilization of the world's financial system, has had a "positive effect."

In an opinion piece, Simon Johnson writes, "The biggest risk now is that the Federal Reserve and the Treasury try to re-leverage our way out of a Japanese-style prolonged recession by flooding the economy with cheap credit -- like they did in 2002, but to an even greater degree."

"Banks that are too big to fail must now be considered too big to exist," says MIT Sloan Prof. Simon Johnson.

Most experts don't think a swine-flu outbreak by itself would eliminate many U.S. jobs or severely worsen the economy. MIT Sloan Prof. Simon Johnson envisions only a "small hit" to economic activity in the United States -- just a few tenths of 1 percentage point.

In this blog posting, MIT Sloan Prof. Simon Johnson writes, "By choosing instead forbearance and 'earn out' through high profits, the Treasury has made it much easier for financial interests to oppose re-regulation of any kind. Presumably this means we'll end up -- again -- with less regulation than is prudent or fair."

MIT Sloan Prof. Simon Johnson writes that banks will continue to receive a great deal of financial support in the form of credit from the Federal Reserve and debt guarantees from the Federal Deposit Insurance Corporation. This is good for bank stockholders, but not necessarily helpful for the economic recovery.

In this opinion piece co-authored by MIT Sloan Prof. Simon Johnson, he writes that "Bernanke has become the country's economist in chief, the banker for the United States and perhaps the world, and has employed every weapon in the Federal Reserve's arsenal."

During this one-on-one interview with Bill Moyers, MIT Sloan Prof. Simon Johnson says, "The government has a broader set of public policy initiatives. One of them is save the banks. Others are help consumers and some auto companies."

The U.S. could use its antitrust laws to dictate the right size for banks, says Simon Johnson, now a professor at MIT's Sloan School of Management in the May issue of The Atlantic magazine.

Most experts don't think a swine-flu outbreak by itself would eliminate many U.S. jobs or severely worsen the economy. MIT Sloan Prof. Simon Johnson envisions only a "small hit" to economic activity in the United States -- just a few tenths of 1 percentage point.

The Fed asked banks not to reveal their results during quarterly earnings announcements earlier this month. Regulators worry investors might punish banks without good news to announce. "Mostly, it was a buying-time strategy," says MIT Sloan Prof. Simon Johnson.

In a congressional hearing this week, MIT economist Simon Johnson argued that Europe may have a weaker economic recovery than the United States because its bank assets are more concentrated in very large firms.

In this interview, MIT Sloan's Simon Johnson says, "The point is you don't throw banks into Chapter 11 because that is destructive. But you manage a bankruptcy process -- it's not nationalization, it's a government-run receivership.

Deflation is not just a Spanish concern. "It doesn't mean it will spread here to the U.S., but we need to look closely at Spain and other places to understand the dynamic," says MIT Sloan Prof. Simon Johnson, "It's like the front line of a new virus outbreak."

Converting preferred stock into common stock could show lawmakers how far regulators will go to buy time for financial firms that need more capital, according to MIT Sloan Prof. Simon Johnson. "In some ways, it's an appeal for money. The stress test is going to say they need capital. ... So at some level, they're communicating with Congress."

MIT Sloan Prof. Simon Johnson points out that a key gauge of investor confidence -- the market for credit default swaps -- shows that some investors have been making big bets that the risk is growing that struggling banks like Citigroup and Bank of America will collapse.

It was announced that remarks from MIT Sloan Prof. Simon Johnson would be featured at the Smart Globalization conference, hosted by the University of Maryland's Robert H. Smith School of Business, on April 23.

In this interview, MIT Sloan Prof. Simon Johnson states that "The IMF was set up as part of a U.S.-run postwar system and those traditions last. So, the IMF would always be extremely reluctant to do anything that would seem like criticism of any current administration."

MIT Sloan Prof. Simon Johnson says that despite the banking collapse, financial leaders such as Warren Buffett have retained surprising control over the government. "There's this general presumption that Wall Street knows best. But they may not know best for the taxpayer," he says.

In addition to his hefty agenda at home, Obama "is trying to prevent the rest of the world from imploding," says Simon Johnson, a former International Monetary Fund economist who is now a professor at MIT Sloan.

Europeans and Americans don't always see eye to eye -- and how to solve the global financial crisis is no exception. "The Europeans think there's a danger of overdoing it," says Simon Johnson, a former International Monetary Fund chief economist, now a professor at MIT Sloan.

Simon Johnson, economist and professor at MIT Sloan School of Management, says he's in favor of FDIC-style takeover resolutions, "which is different from coming in and taking the situation as is and putting in a crony."

The Washington Post today launches "The Hearing," a blog that discusses the key economic policy questions being debated in Washington. Simon Johnson and James Kwak will write the blog.

Simon Johnson, as a professor at MIT, says that the BRIC coordination is both noteworthy and a good sign. "If the BRIC came together, they'd be stronger relative to the G7."

MIT Sloan Prof. Simon Johnson questions whether leading financial institutions have enough capital to muddle through, or if, instead, their solvency problems are so serious that we will experience continuing reduction in lending (often known as deleveraging), a deeper recession and a slower recovery.

MIT Sloan's Simon Johnson argues that the U.S. should invoke anti-trust laws to break up Wall Street, whose power poses a material threat to the American economy.

A blog posting reads: In a fascinating piece in the latest issue of The Atlantic, Simon Johnson, former chief economist at the International Monetary Fund, outlines what he sees as the alarming influence of Wall Street firms over the American economy. He expounds on his thesis in our interview, making several points.

Joint Economic (9:30 a.m.): Holds a hearing on "Too Big to Fail or Too Big to Save? Examining the Systemic Threats of Large Financial Institutions." Joseph Stiglitz, 2001 Nobel Prize recipient, professor at Columbia University and former chairman of the Council of Economic Advisers; Simon Johnson, professor of entrepreneurship at MIT's Sloan School of Management; and Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, testify.

The International Monetary Fund's forecast is a "bottom up" aggregation of macroeconomic views on specific countries, put together in a mutually consistent manner by experienced economists, blogs MIT Sloan Prof. Simon Johnson.

An article that cites MIT Sloan Prof. Simon Johnson's piece in The Atlantic is listed as one of the top stories of the week.

The IBM collaboration with MIT Sloan tracked the electronic communications of over 7,000 volunteers for three years. The aim of the work was to put a dollar amount on the effect of those electronic and virtual relationships.

MIT Sloan's Simon Johnson expounds on his recent article in The Atlantic, explaining how Wall Street and Washington, D.C., have come together to form the "most advanced oligarchy" in the world, why the stress tests on the nation's biggest banks fall short, how he thinks nationalization will take place, and why we're most likely to suffer an "L" shaped recovery.

"In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again)," writes MIT Sloan's Simon Johnson in this opinion piece.

Simon Johnson writes, "Even before the G20 summit begins, world leaders have decided not to address the major questions of the day: how to adjust monetary policy around the world, how to save Europe from itself (difficult but still doable), and how to break the political and economic power of major banks."

In this opinion piece, co-writer Simon Johnson asserts, "The problem in the market today is that the prices demanded by the banks are much higher than the prices that private buyers (hedge funds, private equity firms, sovereign wealth funds) are willing to pay."

In this opinion piece co-written by Simon Johnson, he says, "The argument that AIG's traders are the people that we must depend on to save the United States economy is as weak and self-serving as it was in Thailand, Korea or Indonesia. AIG is essentially advocating survival of the weakest. Thankfully, the American people are not buying it."

MIT Sloan's Simon Johnson spars with host Stephen Colbert Simon Johnson while explaining why America's economy resembles an unstable, emerging market.

Given the inevitability that these countries will have a growing influence, the London summit meeting is likely to be remembered "as the last hurrah for the U.S. and Europe rescuing the world economy," says Simon Johnson, a professor at MIT.

MIT Sloan's Simon Johnson is slated to share his view on the global financial crisis in a conference call hosted by Wall Street Access.

Increasingly during the current financial crisis, reporters have been banking on Simon Johnson of MIT Sloan for analysis and advice.

"The political reality has changed," says Simon Johnson, a former chief economist at the International Monetary Fund who is now at MIT. "The new bailout climate is troubling. It could make it difficult for the Obama team to sell its plan."

MIT Sloan Prof. Simon Johns believes the TALF program could help revive the consumer credit market, but at this point, "most Wall Street bankers would rather be attacked by wild dogs than take part."

"If I were running a country, I wouldn't want the IMF in a headline unless it's something like, 'Poland tells the IMF to stuff it,' says Simon Johnson, a former IMF chief economist who is now a professor at MIT."

There's widespread agreement among the world's biggest countries that the current global financial and economic crises require global solutions. But as leaders from twenty of those countries gathered to offer solutions, that may be about all they can agree on. "I think they're pretty disunified," says MIT Sloan Prof. Simon Johnson. "But they don't obviously want to present that too publicly."

"I'm worried about what happens when you see that a Greece or an Ireland that might need bailouts," says Simon Johnson, an MIT economics professor and former IMF chief economist. "Where is the money going to come from?"

MIT Sloan Prof. Simon Johnson says, "This country is very good at producing great engineers and recruiting them from all around the world. I'm predicting a wave of entrepreneurship. It will kick in right away, but you won't see the full impact for five years."

Letting insolvent institutions linger results in a "massive destruction in value [of the banks and a] looting in these companies by management," says MIT Sloan's Simon Johnson.

Simon Johnson, an MIT professor and former IMF chief economist, has been particularly smart and scary on both upcoming policy decisions and wider structural problems that still need to be addressed in the economy.

A chart by Simon Johnson of MIT shows the price you have to pay if you want insurance against a company such as Citigroup who is defaulting on a bond you might own. The higher the price, the worse shape the market thinks that company is in.

In an interview with Bill Moyers, MIT Sloan Prof. Simon Johnson says that the U.S. financial system reminds him more of the embattled emerging markets he encountered in his time with the International Monetary Fund than that of a developed nation.

MIT's Simon Johnson says, "What many Indians really need is access to the kinds of technology, capital, infrastructure, that would allow them to increase productivity ten times. They would still be considerably poorer than we are, but this would lift hundreds of millions out of poverty and save many children's lives."

MIT's Simon Johnson says, "I'd like to give people money. And if they choose to save it, or use it to reduce their credit card debt, that would be fine with me. Remember that we have a pretty serious 'balance sheet' problem in this economy."

Last year, private-equity firm Lone Star Funds bought up nearly $6.7 billion of Merrill Lynch's credit debt obligations at 22 cents on the dollar. Could that be the private model the Treasury Department wants others to duplicate? Simon Johnson, a professor at MIT and a former chief economist at the International Monetary Fund, offers his insights.

MIT's Simon Johnson thinks that if the government didn't overpay for the bad assets, the "Bad Banks" idea has some merit.

MIT economist Simon Johnson warns that we're in for an 'L-shaped' recession that could, if we're lucky, become a 'bathtub-shaped' recession.

MIT Sloan Prof. Simon Johnson says that it's definitely tougher to get a loan these days. "If you think of there being three types of borrowers: Really creditworthy, medium creditworthy, and somewhat dubious."

Simon Johnson says, "The main Chinese concern is with exchange rate policy rather than voting weights."

The Treasury Department, the Federal Reserve, and other banking regulators say they can convert the government's stock in the banks from preferred shares to common shares. "I don't think this is the end solution. It is a very haphazard way of trying to deal with the problems and simply postponing the inevitable -- more bank failures and takeovers by the FDIC," says MIT Sloan Prof. Simon Johnson.

According to MIT Sloan Prof. Simon Johnson, "It's one big trans-Atlantic money market out there, and these banks lend money to each other all the time. Deutsche Bank and UBS and Goldman Sachs and Citi are all intertwined."

Simon Johnson, a former IMF chief economist at MIT, says: "We are seeing the consequences of the lack of IMF resources. Programs are probably undersized because the IMF is worried about running out of money."

"It's a European issue, but the U.S. can show leadership," said Simon Johnson, a former chief economist at the International Monetary Fund and now a professor at MIT.

MIT Sloan Prof. Simon Johnson expects more students will become entrepreneurs, especially those with a "tech story," mirroring a trend seen in 2001.

Simon Johnson, an economics professor at MIT and a former chief economist at the International Monetary Fund, says many people might take a dim view of the TALF program because it provided government subsidies to investors like hedge funds.

Simon Johnson, former chief economist at the International Monetary Fund, now a professor at MIT, says the G7 was "asleep at the wheel", adding: "[The meeting] was a great opportunity for this group of leading industrial countries to reassert its leadership in the global economy."

MIT Sloan Prof. Simon Johnson says, "When I talk to experts, after about two minutes they say, 'We should just nationalize'. That tells me that the consensus is moving in this direction, and we are all just afraid to say it."

Simon Johnson, an economist at MIT, estimates that the United States banks have a capital shortage of $500 billion. "In a more severe recession, it will take $1 trillion or so to properly capitalize the banks"

MIT Sloan Prof. Simon Johnson says the term "depression" refers to a significant contraction that lasts around five years.

MIT Sloan Prof. Simon Johnson says that to be successful, the Obama administration's program needed to be simpler and more transparent than the stabilization measures taken by the Bush administration under the unpopular TARP program. "Unless you are transparent, you'll get a massive backlash against the scheme."

President Obama unveiled his plan to prohibit firms getting emergency aid from paying top execs more than $500,000 annually in cash. "This plan doesn't look very meaningful," says MIT Sloan Prof. Simon Johnson. "The issue at these companies is the lack of effective owners, and things like pay limits don't change that.

In a live online chat, Simon Johnson of MIT says, "Nationalization means different things to different people, or different countries. In its pure form, it means government ownership and control, of a firm or bank."

"You're going to see a lot more rhetoric out of leaders against protectionism, but what really matters is their policies," says MIT Sloan Prof. Simon Johnson. "And there are worrying signs right now that they may not be so serious about stopping protectionism."

"You're going to see a lot more rhetoric out of leaders against protectionism, but what really matters is their policies," said Simon Johnson, former chief economist at the International Monetary Fund and a professor of economics at MIT.

"They must disclose fully exactly what the government is buying, or insuring, or providing financing for," says Simon Johnson, a professor at MIT and former chief economist of the International Monetary Fund.

MIT Sloan Prof. Simon Johnson says, "If you clean up the banks' balance sheets and create some better banks to resume lending to the real economy, that's the heart of the strategy".

MIT Sloan Prof. Simon Johnson describes his testimony to Senate Budget Committee on 1/29/09 in which he noted that the Senators expressed frustration that while substantial further amounts will most likely be needed to shore up the banking system, little has been done for the underlying issues in housing.

In an opinion piece, MIT Sloan Simon Johnson says that the government has already essentially guaranteed the system's liabilities, bank assets at market value must be massively lower than liabilities and a severe global recession may yet turn into the Greatest Depression.

Simon Johnson is quoted in an NYT article about steps the Obama team can take to resolve the banking crisis.

The U.K. government "is gambling that the global economy improves and they don't have to go all the way to nationalize, but that is the direction in which they are heading," says MIT Sloan Prof. Simon Johnson.

MIT Sloan Prof. Simon Johnson believes it will take $1 trillion to really do the trick -- money, presumably, the government will get back once the banking system is healthy again, and private capital comes in to replace the government's capital. "It's not rocket science," Johnson says. "When you do a recap, you need overkill. But then, you also have to take the bad assets off the books."

"The government has got itself in a position where they have to do something, and they have to help close this deal, so they have to provide additional subsidy to Bank of America," says MIT Sloan Prof. Simon Johnson.

MIT Sloan Prof. Simon Johnson says, "We had a feeling that we had understood how bad it was... but now people fear the losses are going to be much greater than anticipated."

In an opinion piece MIT Sloan Prof. Simon Johnson lists five things that beyond Mr. Obama's control as he formulates an economic stimulus package.

MIT Sloan Prof. Simon Johnson explains why countries may or may not create government-funded economic jump starts.

In an interview, MIT Sloan Prof. Simon Johnson says, "All sorts of things we thought we could take for granted have been thrown into question, and we desperately need to get some stability back. Some positive, more assertive measures from the government would be helpful. I think we'll regain the psychological equilibrium in January or February.'"

MIT Sloan Prof. Simon Johnson helps put listeners' personal situations into a larger global context

MIT Sloan Prof. Simon Johnson is interviewed about the G20 gathering.

Simon Johnson thinks the Treasury should start purchasing common equity instead, as the British government has done. Johnson suggests creating an arm's length control board to oversee the government's ownership, free of political meddling.

MIT Sloan Prof. Simon Johnson says Tim Geithner, President Elect Obama's new treasury secretary appointment, has been at the center of all the efforts to handle the problems on Wall Street over the last 18 months.

Home mortgages, credit card loans, commercial real estate debt -- all are likely to deteriorate further now that a recession is at hand. Banks that have already lost billions of dollars could lose billions more. "All the danger signs are flashing red," says MIT Sloan's Simon Johnson.

MIT Sloan Prof Simon Johnson says that while housing prices do have to fall to rational levels, it is in everyone's interest for prices not to overshoot on the downside.

"There was some valuable symbolism in having leaders from emerging markets at the same table as leaders from industrialized countries--apparently for the first time ever on these issues," says MIT Sloan Prof. Simon Johnson about the G20 Summit.

"This is plain-vanilla stuff they could have agreed on without holding a meeting," says Simon Johnson, an economist at MIT and a former chief economist of the International Monetary Fund. "What's new, except that this is the G-20 instead of the G-7?"

"Are the Europeans or the Chinese going to take advantage of this interregnum in the U.S. to set the tone for the future of financial regulation?" asks Simon Johnson, an economist at MIT and a former chief economist of the IMF.

MIT Sloan Prof. Simon Johnson says European officials have been behind the curve in understanding the severity of the financial crisis and its impact on the broader economy. "The European banks are recognizing the problem, but they're recognizing it late," he says.

"I think we probably have a month or perhaps two months to really see the direction of the economy. I would agree completely with people who think that now is the time to prepare a large fiscal stimulus," says MIT Sloan Prof. Simon Johnson.

Following the fresh declines in markets, MIT Sloan Prof. Simon Johnson argues that the Troubled Asset Relief Program is no longer succeeding in stabilizing markets.

In a story on billionaire Mark Cuban's insider trading charges, a reader posted a link to BaselineScenario.com, calling it a "great non- partisan information source written by MIT Sloan School of Management professor Simon Johnson."

The G-20 was created in 1999 as a more permanent international economic body that includes representation from emerging countries. "I don't think it's a club you can join except by having a lot of economic growth," says MIT Sloan Prof. Simon Johnson.

MIT Sloan Prof. Simon Johnson is quoted in a story about the widening financial crisis.

MIT Sloan Prof. Simon Johnson is quoted in a story regarding the IMF, an organization he previously led.

MIT Sloan Prof. Simon Johnson is quoted in a story about European reaction to the financial crisis.

MIT Sloan Prof. Simon Johnson writes an opinion piece regarding European markets.

In an opinion piece, MIT Sloan Prof. Simon Johnson writes, "Highly leveraged countries are at risk of substantial private or public defaults. They need to assess their ability to cover their debts and decide which entities to protect and which to let fail."

MIT Sloan Prof. Simon Johnson is quoted in a story regarding the fear that as the economy falters humanitarian aid will dry up.

"European central banks and governments have refused to see that there was any systemic problem," says MIT Sloan Prof. Simon Johnson. "If the Europeans keep mishandling this, a big nasty global recession is coming."

MIT Sloan Prof. Simon Johnson has spent the past couple of months tirelessly analyzing events and hammering out policy proposals aimed at restoring confidence in the credit markets.

MIT Sloan Prof. Simon Johnson said that during the financial crisis "it's important for people to remain calm and go about their lives and to persuade people in political power to do the right thing."

MIT Sloan Simon Johnson says that in order to turn things around, governments need to put together a huge fiscal stimulus to try to jump start the world economy.

MIT Sloan Prof. Simon Johnson examines the factors driving the recession speculation and offers possible solutions to the crisis on the NewsHour.

MIT Sloan Prof. Simon Johnson described the proposal made by the Bush administration. "Seven hundred billion dollars of taxpayer money has been put on the table at the express request of a Republican administration to bail out banks, bank managers, bank shareholders, bank creditors," Johnson said.

MIT Sloan Prof. Simon Johnson writes that while the US government has moved dramatically to counteract serious problems in the financial system, and to reduce the risk of a serious recession or worse, the Eurozone policymakers are far more reluctant to intervene.

European central banks and governments have refused to see that there was any systemic problem," says MIT Sloan Prof. Simon Johnson. He is quoted in a Boston Globe story about the financial crisis: "If the Europeans keep mishandling this, a big nasty global recession is coming."

"It looks pretty ugly down the road," MIT Sloan Prof. Simon Johnson tells the New York Times. "Everybody is going to get caught up in this."

"I think the mortgage-backed security auction is a sideshow," said MIT Sloan Prof. Simon Johnson in a Wall Street Journal article. "I think we're beyond that."

For all the shortcomings of Paulson's recent efforts, few political leaders have shown any insight into how to fix the nation's economic problems, says MIT Sloan Prof. Simon Johnson to CNN Money.

"The crisis of confidence is spreading, but the Europeans don't get it. They need to act, and act decisively," MIT Sloan Prof. Simon Johnson is quoted in the New York Times.

"The crisis of confidence is spreading, but the Europeans don't get it. They need to act, and act decisively," said MIT Sloan Prof. Simon Johnson in the Dallas Morning News.

By taking securities off the banks' hands, the bailout plan seeks to restore confidence in the financial system and ensure that banks can still carry on their fundamental role of handling payments and offering credit to the masses. "Maybe they can restore confidence with the program," said MIT Sloan Prof. Simon Johnson. "It may work, and it could get us through the election in November," Johnson said to the New York Times.

"[The government] is saying that there are no alternatives to [its] plan, but the reality is that there are plenty of alternatives out there," said MIT Sloan Prof. Simon Johnson.

A proposal suggested by MIT Sloan Prof. Simon Johnson is cited. The proposal suggests the lending of money to troubled financial institutions with taxpayers getting interest in return along with warrants.

MIT Sloan Prof. Simon Johnson says it would be better to adopt a two-stage process, in which the government initially acquired illiquid assets at a price determined by private bids then recapitalized the banks as needed in a transparent way.

With regard to the government bailout plan, MIT Sloan Prof. Simon Johnson, said, "I think the main problem is what they have on the table is not truly comprehensive, and I think it's probably not decisive for that reason."

"They presented this as a comprehensive, decisive solution, but it's clearly not comprehensive and probably not decisive," said MIT Sloan Prof. Simon Johnson of the proposed government bailout plan.

Some economists said the proposed $700 billion may not be enough to address all the problems stretching across the financial landscape. "You only show up if you can win, and this is not that package," said MIT Sloan Prof. Simon Johnson.

MIT Sloan Prof. Simon Johnson reports that The Federal Reserve set new currency swap lines worth $30 billion with central banks in Scandinavia and Australia to boost short-term U.S. dollar liquidity and help drive down interbank lending rates.

MIT Sloan Prof. Simon Johnson said, "it would be better to have long-term repo arrangements" that would allow banks to exchange problem assets for government securities for a few years as in the U.K."

"The impact of the financial crisis on the real economy can be divided into two periods: before September 15, and after September 15," writes professor MIT Sloan Prof. Simon Johnson on the financial-crisis.

MIT Sloan Prof. Simon Johnson blogs that the government plans to bail out the banking sector by buying up to $700bn (for now) of "impaired assets" ... but at what price?