More Hands Out

“The contagion spreads”: familiar headlines since September, and yet Monday’s papers show some unlikely quarters for hand-wringing and pleading. For instance, did you know that big office buildings and sprawling office parks are looking for government support, too? Yes, citing lobbying efforts and a letter to Henry Paulson, the Wall Street Journal says that property developers want to get a piece of the $200 billion program to help car, student, and credit-card loan providers. Accompanying the piece is a familiarly shaped graph: climbing numbers of commercial real estate loans refinanced during the roaring 2000s, followed by a crash this year. Like residential mortgages, the commercial mortgage-backed securities have come to a “virtual shutdown,” and big swaths of commercial real estate loans are coming due in 2009.

A wondrous world of freely trading nations is apparently the latest shibboleth at risk. The Washington Post rounds up the latest protectionist moves by countries from Russia and France to Algeria and, yes, the United States. The Post notes that states at November’s G20 summit in Washington promised to keep free trade alive in the next year, but many didn’t even wait “for the ink to dry on the summit agreement before reversing course.” India is slapping tariffs on soybean-oil imports, and Russia upped the charge for foreign cars by 35 percent. The U.S.’s infraction? The bailout for the auto industry, which could go against the spirit of free-trade agreements. The Post also reminds us of a little-noticed move on Friday—the U.S. has filed a complaint against China at the WTO for “allegedly offering unfair support of its export industry”—and dishes that Rep. Xavier Becerra, who was touted as President-elect Obama’s trade representative, was worried that his issues wouldn’t get a fair shake. “My concern is how much weight this position would have had, and I reached the conclusion that it would not be a top priority, or even second or third priority,” the Post quotes Becerra telling La Opinion newspaper.

The situation also provokes laments across the pond, with the Economist calling both for “political leadership” to conclude the Doha round of trade negotiations and for stimulus measures for all protectionist-inclined economies. The Financial Times' Clive Crook hopes that Obama will at least make “a private intellectual commitment” to free trade.

With the U.S. and Canada delivering short-term bailouts for GM and Chrysler by Saturday, some media focus has shifted to non-U.S. manufacturers. The Financial Times and the Journal both report on pending operational losses at Toyota, which could total $1.68 billion for 2008-09. “Unfortunately, I cannot see now where the bottom will be,” CEO Katsuaki Watanabe ominously warned. Suzuki and Daihatsu also announced production cuts today, and the planned opening of Toyota’s Prius hybrid plant in Mississippi will probably be postponed. Meanwhile, a Business Week correspondent goes down to Lincoln, Ala., home of a Honda plant, where he finds that the narrative we’ve been told—bloated Big Three wages, worthy and nimble Japanese carmakers—doesn’t mean that the two aren’t connected. Declining UAW wages could hurt workers at Japanese companies; Many parts suppliers serve both sets of companies.

Meanwhile, reporters continue to untangle new connections in the alleged Bernie Madoff Ponzi scandal. The New York Times reports that while Fairfield Greenwich Group investors may have been among the hardest hit (the firm says that its clients had $7.3 billion invested with Madoff), the firm itself made off pretty well. “Internal documents from Fairfield show that the firm has taken more than $500 million in fees since 2003 alone from the money it placed with Mr. Madoff.” Fairfield apparently promised to check in on Madoff-invested funds weekly, but it’s unclear if it ever did. When Faifield itself was on the market, one prospective buyer of a share of Fairfield got wind of how fishy the whole operation was: "I asked them to tell me about the manager of the fund Sentry (a Fairfield feeder account for Madoff), and I was told, 'We don't really talk about him.' "

Finally, in tough labor times, it’s never too late for a New York Times trend story with no hard data but a bunch of good little stories about how firms are trying to prevent layoffs with temporary furloughs or voluntary pay cuts. Brandeis University’s professors are taking a 1 percent pay cut: “ ‘What we are doing is a symbolic gesture that has real consequences—it can save a few jobs,' said William Flesch, the senate chairman and an English professor.” Even the academy, it appears, will come to our aid.