Bashing big banks is all the rage this week, with White House officials and New York Attorney General Andrew Cuomo scolding Wall Street fat catsahead of the Financial Crisis Inquiry Commission, which gets underway Wednesday.At issue is what level of bonuses are appropriate for publicly traded firms that posted record profits in 2009 thanks to the government’s largess and after being rescued in 2008.

Simon Johnson, professor at MIT’s Sloan School of Management and former chief economist of the IMF, says there’s a simple solution to this seemingly complex problem: “People working at our largest banks – say over $100 billion in total assets – should get zero bonus for 2009.”

Looking back, all the big firms were saved by the various government programs, including  Goldman Sachs and Morgan Stanley were allowed to convert to bank holding company status in 2008, Johnson says. “There were unconditional bailouts for all our big banks – it was a decision made on the fly in the crisis. Let’s not second-guess,” he says. “But no way that strategy implies, requires, or is consistent with the banks then paying all that money out to their employees.”

By contrast, when the government instituted a similar “recapitalization” strategy for banks after the Latin America debt crisis of the early 1980s, the banks retained the money to help rebuild their balance sheets, he recalls. “In this case they’re going to pay out 40% [of profits] – that’s not good economic policy.”

And if the “too big to fail” banks insist on paying bonuses for “retention” purposes or other reasons he deems fallacious, Johnson says they should be subject to a “steeply progressive windfall income tax” — paid by the employees and not the firms, as is the case with the U.K.’s recently announced 50% bonus tax.

Chinese car shoppers

BEIJING (AP) — China overtook the United States as the biggest auto market in 2009 and automakers should see more strong growth this year, an industry group reported Friday.

Boosted by Beijing’s stimulus, 2009 passenger car sales soared to 10.3 million and total vehicle sales are estimated at 13.6 million, the China Passenger Car Association said. That represents growth of about 45 percent from 2008.

“This is even better than anyone expected,” the group’s general secretary, Rao Da, said at a news conference in Shanghai.

By contrast, U.S. sales of cars and light trucks plunged 21 percent in 2009 to 10.4 million as a shaky economy kept buyers away from showrooms. It was the first time any country bought more cars than Americans.

The Chinese group’s data were in line with forecasts by J.D. Power and Associates of 12.7 million sales of cars and light trucks and 900,000 bigger vehicles in 2009 for a total of 13.6 million. The company in early 2009 expected sales of 9 million vehicles but raised that as Beijing rolled out measures to boost demand.

“It’s very, very strong growth, far beyond the expectations we had in the early part of 2009,” said John Bonnell, a J.D. Power analyst.

China’s status as the top auto market is yet another sign of its rapid rise as a global economic power. After a two-decade economic boom, it is believed to have passed Germany last year as the biggest exporter and is expected to overtake Japan soon as the second-largest economy after the United States.

Global automakers including General Motors Co., Ford Motor Co. and Germany’s Volkswagen AG looked to China to help drive revenues as demand elsewhere plunged and U.S. automakers laid off workers and shuttered factories. Volkswagen says China is its biggest market.

GM says 2009 sales by the company and its local partners in China rose 67 percent last year, while Ford says sales were up 44 percent.

China, with 1.3 billion people and a growing urban elite, was long expected to become the top auto market but not until as late as 2020. That date moved up as the U.S. crisis dragged down sales while China continued to grow with the help of a 4 trillion yuan ($586 billion) government stimulus.

Economic growth accelerated to 8.9 percent over a year earlier in the third quarter and the government says it should be 8.3 percent for the full year.

Beijing boosted purchases by slashing sales taxes on smaller, fuel-efficient cars and spending $730 million on subsidies for buyers of SUVs, pickup trucks and minivans. Stimulus spending on building highways and other public works also helped to boost sales of trucks used in construction.

China’s monthly purchases exceeded those of the United States for all but two months last year.

Rao said auto sales in 2010 could grow by another 20 percent so long as China’s economic recovery continues and oil prices stay stable. Bonnell said J.D. Power expects a lower but still healthy growth of 6 to 7 percent.

“The temptation is to say that with 45 percent growth in 2009 there must be a payback in 2010,” Bonnell said. “But all indications are the government wants to continue to stimulate things, and our expectation is they will succeed in doing that.”

Automakers are looking to first-time buyers in smaller Chinese cities to help drive sales as incomes outside the country’s prosperous east coast rise.

“People there are getting richer and can afford cars. Younger people can work for two or three years and with the help of their parents can buy a car,” Rao said. “Being able to afford a car in China is not so difficult any more. People with an average salary can afford to buy a car.”

China’s small but ambitious automakers are starting to expand abroad and some have set up factories in Ukraine, Iran and other developing markets. Some want to break into U.S. and Western European markets but have yet to satisfy safety and emissions standards.

“We don’t see that they are ready, that they are achieving these levels of quality or safety,” said Bonnell. “There is no indication that next step is right on the horizon.”

Associated Press researcher Ji Chen in Shanghai contributed to this report.

PUTRAJAYA: Datuk Seri Najib Tun Razak has condemned the attacks made on three churches in the Klang Valley but has asked the public not to start pointing fingers at who may have been responsible for the attacks.

The Prime Minister said he viewed the matter seriously as these actions could jeopardise harmony, adding that the Government would take all possible action to prevent such incident from recurring.

At the same time, Najib had directed the Inspector-General of Police Tan Sri Musa Hassan to beef up security and surveillance at places of worship.

“We must not allow the peace and the understanding that we have among Malaysians of various ethnic backgrounds and faiths be threatened by anyone or any parties.

Datuk Seri Hishammuddin Tun Hussein and IGP Tan Sri Musa Hassan at a press conference at Bukit Aman on Friday.

“As I have said before, whatever problems that arise, we must use the right channel and method to solve it. Our action must not be against the law as this can jeapordise harmony,” he told reporters after chairing the fourth Northern Corridor Implementation Authority (NCIA) on Friday.

Also present were Deputy Prime Minister Tan Sri Muhyiddin Yassin and Chief Secterary to the Government Tan Sri Sidek Hassan.

Najib also reminded the public not to point fingers on who the perpetrators behind the church attacks were but should allow the authorities to conduct a thorough investigation into the matter.

“Action will be taken against those responsible based on facts and the law,” he said.

Asked if there were fears of retaliation due to the incident, the Prime Minister said the authorities must nip the problem in the bud.

“I hope with statements and action taken by the police, people will not take law into their hands. The IGP will report to me on the incident once there are evidence and new developments,” he added.

Umno Youth head Khairy Jamaluddin at the Tabernacle Church in Desa Melawati on Friday

Other public figures have come out to condemn the arson attacks against the two churches.

Urging all parties to remain calm, they also asked for swift police action to ensure the situation does not get out of control.

In the meantime, the MCA is offering the Metro Tabernacle Church the use of its hall at Wisma MCA for its services this Sunday, vice-president Datuk Seri Dr Ng Yen Yen said.

The MCA, through its religious bureaus, will find an immediate place for the Metro Tabernacle to relocate, she said.

“This is the act of a very small group of Malaysians. We need to come together and work against any form of violence.

MCA vice-president Datuk Seri Dr Ng Yen Yen at the Metro Tabernacle Church in Desa Melawati on Friday.

“Do not leave it to the Government or the police alone; the rakyat (people) must come together and stand up for each other,” she said.

MCA national youth chairman Datuk Dr Wee Ka Siong also condemned the attacks, saying the movement is saddened.

“Such despicable acts serve no purposes in bridging differences, and … will ultimately destroy initiatives to help shore up harmony between the various faiths in Malaysia.

“MCA Youth urges all decent minded Malaysians not to let the mercury rise further, and pray in our own ways, that peace will prevail,” he said in a statement.

Kedah Gerakan’s youth wing condemned the acts as despicable and shameful, and described the wrongdoers as cowards trying to cause disunity.

“Our country had came a long way since independence in promoting unity among Malaysians, despite the differences in race and religion.

“As such, all Malaysians should unite to condemn these cowardly attacks that threaten national unity,” said the wing’s chief Tan Keng Liang.

“As an act of good faith in condemning the arson attacks, I hope that the Government would consider assisting, including financially, the churches in repairing the damage caused by the despicable act of arson,” he added.

Gerakan central committee member Dr Hsu Dar Ren described the arson as “a wanton attack on the freedom of practice of religions which we should all treasure and protect in this multiracial society of ours.”

“I hope politicians on both sides of the divide will refrain from fanning emotions and instead try their best to cool the temperature down and let the judicial process run its course,” he said.

Opposition leader Datuk Seri Anwar Ibrahim described the attacks as heinous and said such actions were against the teachings of Islam.

“Islam teaches its followers to respect the places of worship of other religions. I urge all parties to remain calm. I have full faith that Malaysians will be able to resolve the matter without any conflict,” he said in a statement.

Selangor Mentri Besar Tan Sri Khalid Ibrahim, who was at the Assumption Church, condemned the attack, describing it as a cowardly act.

“I urge the police to give protection to all churches and conduct a thorough investigation on the attack on the Assumption Church,” he added.

Khalid also said that he was grateful to the church authorities, who had given their reassurance that they would not react to the arson attack.

“I appeal to the people in Selangor to refrain from any further such action, which will only cause further trouble for all people,” he added.

Umno Youth Chief Khairy Jamaluddin said it was a dark day for Malaysia.

“This is a despicable act. This is not the Malaysia I know,” said Khairy, who visited the Metro Tabernacle Church in Desa Melawait in Kuala Lumpur, which was attacked by arsonists early Friday.

He urged the police to act swiftly.

Saying that Barisan Nasional Youth strongly condemned the action, Khairy Jamaluddin added that whatever the feelings of anyone on the issue of the usage of the word “Allah” in the Herald, the irresponsible action of those who destroy places of worship should not be defended by Muslims.

“If Muslims are responsible for this incident, they should be ashamed and remorseful because clearly Islam advises Muslims to respect other religious beliefs.

“Malaysia is a multiracial country. There will be arguments and misunderstandings over issues which touch on race and religion.

“What is important is the people should resolve any problems with maturity and respect for each other’s sensitivity,” he said in a statement.

Selangor PAS termed the arson attacks as cowardly acts.

“We view the news of the attacks on churches, including in Selangor, with sadness and regret. Such attacks have never happened in our country and they do not at all reflect our culture, tradition or the religious beliefs of Malaysians.

“Selangor PAS sympathises with the affected churches and urges all PAS members in the state to remain calm and patient and pray for the safety of all,” its state Information chief Roslan Shahir Mohd Shahir said in a statement.

The Muslim Professionals Forum described this as “the cowardly and utterly senseless act of a group of misguided, chauvinistic bigots.”

“This act of arson, committed presumably in the name of Islam, desecrates the very religion it purports to protect. The Holy Quran unequivocally prohibits destroying the houses of worship of all religions, as warned in Surah Al-Hajj, Verse 40,” its board of directors said in a statement.

“During the reign of Umar ibn Al-Khattab, the second righteous caliph, the religious freedom of the citizens of Ilya (Jerusalem) and the sanctity of their synagogues and places of worship were confirmed, they said.

Muslim Professionals Forum urged the authorities to immediately conduct an impartial and thorough investigation to identify, apprehend and punish the perpetrators.

It also urge individuals, organisations and political parties to refrain from further issuing provocative and inflammatory statements related to the high court verdict.

“We also urge all Malaysians to empathise and stand in solidarity with our Christian community in their hour of grief and need, and urge all peace-loving Malaysians to maintain composure and let cool heads prevail,” they said in their statement.

Social activist Datin Paduka Marina Mahathir said it was very important for all Muslim Malaysians to condemn the act whole-heartedly.

“This is not what Islam is about. The leadership must play its role and come out and tell the people not to condemn houses of worship,” she told reporters at the church site.

Veteran DAP leader Lim Kit Siang said all political party leaders should take a common stand to condemn the attacks.

They should condemn “in the strongest possible terms the spate of church attacks in the wake of the ‘Allah’ controversy and ensure that there is no further escalation.

“As Prime Minister, Datuk Seri Najib Razak should immediately impress on the Home Minister Datuk Seri Hishammuddin Hussein to take all urgent and necessary measures to protect the good name of the country or be held responsible for any undesirable consequences,” he said.

Wangsa Maju Member of Parliament Wee Choo Keong said he was very shocked.

“The Prime Minister and Inspector-General of Police mus take immediate action to protect all places of worship regardless of their religion.

“We do not want to inflame the present tensions in the country or the country’s unity will be set back many years — this is a test for the Prime Minister and his 1Malaysia vision,” he said.

In Miri, Sarawak political leaders condemned the attacks as well, callling for the swift restoration of common sense and wisdom to prevent any escalation of violence.

Senior Iban state leader Datuk Peter Nyarok Entrie said his party, the Sarawak Progressive Democratic Party (SPDP), viewed the arson as an attack against the 1Malaysia concept and an attack against all peace-loving Malaysians.

“SPDP, a multiracial and multi-religious party that is made up of Muslims and non-Muslims, is shocked and saddened that the dispute over the use of the name ‘Allah’ in the peninsula had erupted into violence,” he said.

Nyarok, who is deputy president of SPDP, said there was a need to restore calm and order in the Klang Valley.

Parti Rakyat Sarawak (PRS) president and state Minister Datuk Seri Dr James Masing said the issue should not have been blown out of proportion.

“Politicians should stay out of this matter and leave it to the religious bodies of the respective religions to sit down and discuss a mutually acceptable way to resolve this,” he said.

Masing said Sarawak and Sabah do not have such controversies because people of all faiths and races were mature enough to accept each others’ beliefs.

Assistant state minister Datuk Daud Abdul Rahman, from the Parti Pesaka Bumiputra Bersatu, also stressed the need for common sense to prevail, saying that the state government has always practised tolerance and acceptance when it comes to handling issues of religious and racial nature.

Keadilan Sarawak chairman Baru Bian said the usage of Allah’s name became blown out of context in the peninsula because of political meddling.

He said this is a non-issue in Sarawak despite the name being used widely by all religions in the state for so many decades.