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More than a year after the economic crisis hit, legislators continue to work on how to reform financial regulation to stave off a future crisis. MIT Sloan's Simon Johnson along with other financial experts review the latest proposal from Sen. Chris Dodd of the Senate Finance Committee.

MIT Sloan's Simon Johnson reports that recent volatility in the stock market has led some to question the wisdom of relying on 401(k) and other defined-contribution plans, invested largely in the stock market, for our nation's retirement security.

MIT Sloan's Simon Johnson says the tax credit has helped keep home prices artificially high. Johnson suggested in a recent Washington Post column that the credit could induce a bubble-like effect on prices: "In effect, the tax credit is a way of making houses temporarily affordable that would not otherwise be affordable, and we know where that leads."

MIT Sloan Prof. Simon Johnson blogs, "China essentially pegs its currency (the renminbi, also known as the yuan) against the American dollar, which means that it rises and - most recently - falls in tandem with the greenback."

It remains unclear how the U.S. government will approach institutions currently considered "too big to fail." MIT Sloan Prof. Simon Johnson says it is the concentration of credit risk in any form, not the mixing of lending and trading, that makes big banks a threat to the system.

Advice from MIT Sloan Prof. Simon Johnson seems to run counter to the crisis-time decisions of regulators, who in arranging rescues of troubled banks effectively increased the size of companies already considered "too big to fail."

In his regular column, MIT Sloan Prof. Simon Johnson writes, "We believe it will be common knowledge that above-market performance in stock-picking mutual funds is purely a matter of chance and that today's high-priced mutual funds will be seen as the equivalent of snake oil and leeches."

The fiscal stimulus played a decisive role in reducing the depth and pain of the recession and is now helping to get a recovery under way, blogs MIT Sloan Prof. Simon Johnson.

"Ben S. Bernanke, chairman of the Federal Reserve, has stayed carefully on the sidelines while a major argument has broken out among and around senior policy-making circles," blogs MIT Sloan Prof. Simon Johnson. "Should our biggest banks be broken up, or can they be safely re-regulated into permanently good behavior?"

In this online opinion piece, MIT Sloan Prof. Simon Johnson writes, "Putting cash in pockets does have a stimulative effect because some of that cash will turn into consumption. But as far as stimulus measures go, it has a low multiplier (the ratio of new economic activity to stimulus spending)."

Financial experts blasted the [banks'] subsidy as corporate welfare. "It rewards their irresponsible behavior in the past and encourages them to do the same thing again in the future," says MIT Sloan Prof. Simon Johnson.

...MIT Sloan Prof. Simon Johnson says the plan might reduce excessive risk-taking at banks under the Fed's watch -- but not at firms beyond the Fed's authority, including hedge funds and other securities firms that trade billions of dollars in complex securities and whose collapse could hurt the economy. "This is a good start, but it's not enough."

In his blog, MIT Sloan Prof. Simon Johnson writes, "our big banks have demonstrated an unmatched ability to take over regulators and to convince politicians that a dangerous financial structure is good for America."

"Credit rating agencies have an internal tension in their business model," writes MIT Sloan Prof. Simon Johnson in this opinion piece. "To bring in revenue, they have to satisfy their customers -- the investment banks creating structured finance products. However, for their product -- their ratings -- to have any value, they have to maintain certain standards for analysis and compliance."

Banks are expected to collect a record amount from overdraft income despite recently backing away from practices such as charging consumers steep fees for overdrawing by a few dollars. Yet, the industry's changes are an acknowledgement that "banks have a serious legitimacy problem," says Simon Johnson, a former chief economist for the who now teaches at MIT's Sloan School of Management.

MIT Sloan Prof. Simon Johnson, a member of the CASE Advisory Council, suggests that emerging markets should create their own alternative to the International Monetary Fund. He argues that rather than doing the impossible and reforming its structure, and eliminating its negative stigma, a wiser alternative is to create a new institution.

In this interview, MIT Sloan Prof. Simon Johnson says, "In a crisis, when everything is up for grabs and you don't know what's going on, the people who will take your phone calls in government are the people who are going to be standing in the oval office making the key decisions. That's the heart of the system, that's the heart of how you get your agenda through."

"The Europeans are losing out," says Simon Johnson, a professor at the Sloan School of Management at MIT. "The Europeans are the biggest losers of the economic crisis, even though the home of subprime madness was the U.S."

In this opinion piece, MIT Sloan Prof. Simon Johnson writes, "The IMF's ability to stabilize the global economy may hit a wall because of resentment among emerging economies. Developing nations have long complained about the extent to which the U.S. and Western Europe dominate the 186-member group - and about the austerity the fund traditionally imposes on borrowers."

Timothy Geithner's calendars show Geithner is too close to Wall Street, says Simon Johnson, a former chief economist with the IMF and professor at MIT's Sloan School of Management. "Your worldview in the middle of a crisis depends on whom you talk to and what their perspective is, and you need a broad cross-section of opinions to truly understand what's happening," Johnson says.

In his blog, MIT Sloan Prof. Simon Johnson writes, "At about this time after the near-collapse of its banking system, any democracy goes through a phase of soul-searching regarding its broader economic model."

A quote by MIT Sloan Prof. Simon Johnson that suggests talking to the same people too often can skew a person's viewpoint is referenced. In it, Johnson says, "Your world view in the middle of a crisis depends on whom you talk to and what their perspective is, and you need a broad cross-section of opinions to truly understand what's happening."

The Federal Reserve won't have to identify companies that got loans from the central bank until a U.S. appeals court reviews a federal judge's disclosure order, according to a lawyer involved in the case...Asks MIT Sloan Prof. Simon Johnson, "What would they freak out about now? In the depth of the crisis, maybe something like that would frighten people, but now? I don't think that there is anything that would upset people particularly."

In this interview, MIT Sloan Prof. Simon Johnson says it's the structure of the financial sector that's to blame for the current crisis. He says the cause is rooted in the system of incentives and the ownership structure for banks like Wells Fargo, Citigroup, and UBS. Regulation is also a cause, according to Johnson. "It's a structural issue that has come about because of the way the U.S. economy and the financial sector has changed over the past 30 years."

"People don't focus enough on the price of housing in Shanghai," says MIT Sloan Prof. Simon Johnson. "Seriously, I think the next wave of bubbles is coming in emerging markets and is probably coming in Asia."

In an online interview, MIT Sloan Prof. Simon Johnson says, "Closing gaps in regulation is one of these things like apple pie and motherhood, of course we're in favor of closing gaps in regulations."

Simon Johnson, who teaches at MIT, says G-20 leaders simply are not grappling with the biggest issues lingering from the global financial collapse. Instead, they are drafting plans to fix problems in the "medium run"-postponing difficult choices until a time when new developments will demand a different approach still. "The G-20 is dropping the ball," Johnson says. "Not only is the glass not half-full when it comes to global coordination on economic and financial policy, I'm saying there is no glass."

In this opinion piece, MIT Sloan Prof. Simon Johnson writes, "Our financial system provides valuable services to the public, but it also poses serious risks. If we can't re-regulate more strongly to better protect public funds, the next crisis could be worse than the last one."

In this one-on-one interview, MIT Sloan Prof. Simon Johnson looks at how the finance industry has effectively captured the US government. Recovery, says Johnson, will fail unless the financial oligarchy that is blocking essential reform is broken. And, if a true depression is to be avoided, he says, we need to act quickly.

In this blog entry, MIT Sloan Prof. Simon Johnson says he feels Wall Street has become much more prudent, at least for now. "Back-to-back financial crises are rare; people are more careful," he writes. "We're in something like 2004-2005 when it comes to risk. But we'll get back up there."

In an online Q and A, MIT Sloan Prof. Simon Johnson says, "President Obama himself chose this approach, supporting bigger and more pro-bank CEO bailouts than the world has ever seen before. And yet not one of these CEOs could be bothered to show up for President Obama's speech. Arrogant bankers always mean trouble, and I've never before seen so much banker arrogance as was on display this week."

In his blog, MIT Sloan Prof. Simon Johnsons writes, "The real news from Monday was not the substance of the [Obama] speech or the stony silence of the financial elite in the audience, but rather that not a single chief executive of a major American bank was in attendance."

In July, TARP watchdog Neil Barofsky told Congress that in a worst-case scenario, all of the federal government's support rolled together could ultimately cost $23.7 trillion. "I think that number is an important number," says MIT Sloan Prof. Simon Johnson. "It tells you what the range of outcomes are, and what you should suspect with a median outcome."

In a talk hosted by MIT Sloan, Lawrence Fish, former chairman and CEO of Citizens Financial, and MIT Sloan Prof. Simon Johnson discuss banks that didn't fail, increasing consumer confidence without improving consumer protection, and the risks for both under-regulation and over-regulation of banks going forward.

In his blog, MIT Simon Johnson asks, "If the G-20 fails to deliver, is it really possible that we are doomed to repeat the same mistakes with regard to building up vulnerabilities in our financial system?"

Other economists are more skeptical about the substance of the G20 discussions. Simon Johnson, of the Sloan School of Management at MIT, says the framework would be "a pretty meaningless pledge with no teeth and no way of holding anyone to it - but it sounds good."

MIT Sloan Prof. Simon Johnson thinks Wall Street has become much more prudent, at least for now. "Back-to-back financial crises are rare; people are more careful," he said. "We're in something like 2004-2005 when it comes to risk. But we'll get back up there."

In this video interview, MIT Sloan Prof. Simon Johnson says, "Artificially stimulating, subsidizing particular kinds of activity is not the way to have broad based prosperity in which lots of people share."

MIT Sloan Prof. Simon Johnson says, "We have not yet met our Ferdinand Pecora, a figure who can create the momentum required for strong new regulation."

MIT Sloan Prof Simon Johnson sums up the key elements of the financial crisis as "large inflows of foreign capital, torrid credit growth, excessive leverage, an asset price bubble, asset price collapse and financial catastrophe."

On the NPR affiliate WBUR's On Point program, Prof. Johnson said, "We've certainly seen change. We've seen more than marginal change, but it's mostly change in the wrong direction."

"They'll say, 'Look, you regulated us and held us to a higher standard, and now we're failing and it's your job to clean it up,'" MIT Sloan Prof. Simon Johnson is quoted as saying. "It's the kind of regulation where government is on the hook when things go wrong."

In this opinion piece, MIT Sloan Prof. Simon Johnson writes, "Today, a year after the world came to the brink of financial meltdown and great pain was inflicted on millions of investors and workers, our leaders are lining us up to suffer the same horrible experiences again."

"We have lived through a tremendous crisis - and learned how close we came to a second Great Depression - yet nothing is now happening to prevent a repeat of something similar in the near future."

"The big banks now are more powerful than before," says MIT Sloan Prof. Simon Johnson. "Their market share has grown and they have a lot of clout in Washington."

MIT Sloan Prof. Simon Johnson says that if major banks are allowed to keep making bets that are ultimately backed by taxpayer guarantees, they will return to the practices that led them to underwrite trillions of dollars in bad loans. "They will run up big risks, they will fail again, they will hit us for a big check"

Prof. Johnson stresses the importance of finding ways to "engage actively in global economic debate. Don't sit back and assume that anything can be left to the 'experts'."

...Still, some think it is somewhat naive to expect governments not to cave in to rescue demands of an ailing firm, even if a tough wind-down regime were in place. Because of this, Simon Johnson of MIT thinks it might be best to address the "too-big" part of the problem and limit bank size. The problems at CIT Group, a medium-size firm, haven't destabilized the wider system, he notes.

MIT Sloan Prof. Simon Johnson asks, "How did the financial system get so fragile that this could happen? What were the guys overseeing it doing?"

An earlier statement by MIT Sloan Prof. Simon Johnson that finance has at least three serious inherent pathologies is referenced.

In his blog, MIT Sloan Prof. Simon Johnson writes, "We need finance, but finance as it currently operates in the United States has become a problem."

"The industry has gotten really organized since the crisis began to ease," says Simon Johnson, who is also a professor at MIT.

"At a time when the recession has boosted estimates of short-term budget deficits, the idea that the government cannot afford reform seems plausible. But that argument has two fatal flaws."

Prof. Simon Johnson is quoted in a recent cover story in The Investment Professional about global politics shifting during the financial crisis.

Just months after an epic banking collapse forced Iceland into the arms of the I.M.F., Iceland is locked in a fierce debate over how to pay off its creditors without ceding too much of its vaunted independence. "When you impose austerity, it becomes very painful and comes at a cost," says MIT Sloan's Simon Johnson, a former I.M.F. economist. But many Icelanders are blaming the I.M.F. and in this case, he says, that is not warranted.

CEO Lloyd Blankfein's decision to hand over the full amount sought by Treasury Secretary Timothy Geithner reflects an effort by Goldman Sachs to defuse the public's anger at firms that took taxpayer money, says Simon Johnson, a finance professor at MIT Sloan.

"My hunch is this recovery will be about consumers; businesses are going to continue hunkering down for a while," says MIT Sloan Prof. Simon Johnson.

It wasn't clear that the Treasury wanted this to be a turning point, but that's the way it's worked out," says Simon Johnson, a former chief economist with the IMF, now a professor at MIT's Sloan School of Management. Johnson says the markets took so kindly to CIT's quest for private-sector cash that the government "would feel pretty comfortable about" threatening bankruptcy for firms with less than $100 billion in assets.

The nation's biggest banks still enjoy federal support through borrowing or debt guarantees. So how far the government is willing to go with its hands-off policy is unclear. "The question is, does it only apply to the small- and medium-sized guys, or does it apply to everyone?" asks MIT Sloan Prof. Simon Johnson.

Statistics reported by MIT Sloan Prof. Simon Johnson in the May 2009 edition of The Atlantic -- that between 1948 and 1982, average compensation in the financial sector ranged between 99% and 108% of the average for all domestic private industries -- are referenced.

"By protecting large institutions and not small ones, the 'too-big-to-fail problem' gets worse," says MIT Sloan Prof. Simon Johnson. "We can expect to see that the big guys are going to keep getting bigger and the small guys are going to have to clean up their acts or go bankrupt."

"It is too small to make a difference," says Simon Johnson, an economist with the MIT Sloan School of Management, adding that the failure of the program to restore banks' health would ultimately slow the economic recovery.

Cape Coral, Florida has $615.9 million in debt, a potential $40 million shortfall for the upcoming budget year and $14.2 million in reserves, which MIT Sloan Prof. Simon Johnson says won't prevent the city from borrowing. "But the issue is going to be what they pay for it, what the interest rates are."

MIT Sloan Prof. Simon Johnson is quoted in a WSJ story about the popularity of financial news blogs.

Another potential downside of decoupling could be a tsunami of capital from developed markets washing over emerging economies and inflating values, says Simon Johnson, a former chief economist for the IMF who is now a professor at the Sloan School of Management at MIT.

"The Federal Reserve will keep interest rates very low for a long time. If you could borrow from the Fed, you have credit of a 1 percent interest rate, and there are many interesting investments around the world that offer some gains above that," says Simon Johnson, professor at MIT Sloan School of Management.

MIT Sloan Prof. Simon Johnson says he isn't surprised that bond fund manager Bill Gross is such a virulent foe of nationalization. As Johnson points out, Pimco is a major bondholder in some of the biggest banks, so nationalization would hurt his portfolio.

MIT Sloan Prof. Simon Johnson says the move by the 10 banks seeking to repay federal bailout money does signal "a restoration of their ability to raise capital, which is a crucially important development in the financial recovery."

MIT Sloan Prof. Simon Johnson says that "a whole generation of policymakers has been mesmerized by Wall Street, always and utterly convinced that whatever banks said was true."

Banks are raising account fees because of a "mix of market power and opportunism," says MIT Sloan Prof. Simon Johnson.

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."

MIT Sloan Prof. Simon Johnson says that although he thinks the economy is bottoming out, the main question is if the shape of the recovery is a "V-shape" or an "L-shape."

MIT Sloan Prof. Simon Johnson discusses the stimulus plan. "The math around the precise jobs saved is fuzzy and very much open to criticism, but the big picture is the overall financial system is stabilizing", he says.

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."

"Regulators' whole strategy is 'wait and see,' to buy time for the economy to recover. It's just stall tactics," says MIT Sloan Prof. Simon Johnson.

"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."

MIT Sloan Prof. Howard Anderson says, "If I were a Sun customer, I was starting to get nervous about Sun. I was worried about their viability. I'm not worried about that anymore. I know that Oracle is going to be there."

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.

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.

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.

Do such rallies indicate anything more than investors desperate to find good news anywhere? Or do they suggest a real return of confidence? The editors at the NYT asked MIT Sloan Prof. Simon Johnson for his analysis.

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.

"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.

In this interview, MIT Sloan Prof. Simon Johnson says that things in Great Britain and Europe are very bad.

"[Obama's] obviously got a lot of charisma and it's his first big meeting. And I think people tend to be very polite in these situations but there could also be a level of awkwardness there," says Simon Johnson, a former IMF chief economist who is now 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.

"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.

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."

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".

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.

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.

MIT Sloan Prof. Simon Johnson says trust could be a factor in some countries if the government was responsible both for running insurance programs and compiling the data that would trigger payouts.

In regards to the timing of President-elect Obama's proposed economic stimulus, MIT Sloan Prof. Simon Johnson says, "I think in this case it is right. A lot of U.S. infrastructure is run down. Compared to other rich countries, the U.S. is lagging behind".

One of the few economists of note to advocate this policy out loud is Simon Johnson, who left the chief economist post at the International Monetary Fund earlier this year and is now a professor at MIT's Sloan School of Management. Johnson believes that only a significant nominal inflation -- which will mean negative real interest rates -- will provide sufficient monetary stimulus to reflate the economy.

The Fed is buying assets and the money for them is not coming from its balance sheet. "The Fed doesn't like to talk about this," says MIT Sloan Prof. Simon Johnson. "They think it will scare people."