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E. Gerald Corrigan, Who Helped Ease ’87 Stock Crash, Dies at 80

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As president of the Federal Reserve Bank of New York, he favored flooding the financial system with cash to restore confidence among investors.E. Gerald Corrigan, who as the aggressive president of the New York Federal Reserve Bank helped cushion Wall Street’s crash in the late 1980s, died on May 17 in a memory-care center in Dedham, Mass. He was 80.The cause was complications of Alzheimer’s disease, his daughter Elizabeth Corrigan said.As president of the Federal Reserve Bank in Minneapolis from 1980 to 1984 and then of the New York Fed from 1985 to 1993, Mr. Corrigan used his prerogatives as a regulator to help resolve national and global financial crises, and to remedy some of the causes of episodic market instability.“He played a crucial role providing the psychological reassurance for a few critical days after the stock market crash,” Paul A. Volcker, the former Federal Reserve Board chairman, said when Mr. Corrigan retired from the Fed in 1993, referring to his actions after the Dow Jones industrial average dropped more than 22 percent in a single day in October 1987.In that upheaval, Mr. Corrigan urged the Fed chairman, Alan Greenspan, to reassure the markets that the Federal Reserve would pump whatever money was necessary into the financial system to reduce volatility. He also played vital roles in other crises: He helped the Fed to address the collapse of the investment bank Drexel Burnham Lambert in 1989 and of Salomon Brothers in 1991, and to deal with rising inflation, emerging market debt and the need to regulate worldwide credit risk.After Mr. Corrigan retired from the Fed, he joined Goldman Sachs, where he became managing director in 1996 and later chairman of the firm’s international advisers, co-chairman of its business standards committee and the first nonexecutive chairman of its commercial bank, now known as Goldman Sachs Bank. He retired from Goldman in 2016.Edward Gerald Corrigan, known as Jerry, was born on June 13, 1941, in Waterbury, Conn. His father, Edward, was a restaurant manager. His mother, Mary (Hardy) Corrigan, was a librarian.He earned a Bachelor of Social Science degree in economics from Fairfield University in Connecticut in 1963. At Fordham University in New York, he received a master’s degree in economics in 1965 and a doctorate in the same subject in 1971. (Years later, he donated $5 million to each university to establish professorships.)After teaching for a year at Fordham, he joined the Federal Reserve Bank of New York as a researcher in 1968 while still working on his doctorate. When Mr. Volcker, the New York Fed’s president, became chairman of the Federal Reserve Board in 1979, he recruited Mr. Corrigan as a special assistant.During his tenure at the Fed, Mr. Corrigan was named chairman of the Basel Committee on Banking Supervision by the governors of the world’s central banks, a position he held from 1991 to 1993. He also served as vice chairman of the Federal Open Market Committee from 1984 to 1993. In 1992 he was named a co-chairman of the Russian-American Bankers Forum, which helped the former Soviet Union develop a market-driven banking and financial system.In addition to his daughter Elizabeth, Mr. Corrigan is survived by another daughter, Karen Corrigan Tate, from his marriage to Linda Barlow, which ended in divorce; his wife, Cathy Minehan, who was president of the Federal Reserve Bank of Boston from 1994 to 2007; his stepchildren, Melissa Minehan Walters and Brian Minehan; a sister, Patricia Carlascio; and five grandchildren.Mr. Corrigan’s romance with Ms. Minehan raised questions of a possible conflict of interest when she was at the Fed and he was at Goldman Sachs in the mid-1990s, but he said at the time that they had consulted lawyers to prevent leaks of sensitive information that might benefit his company.During his stewardship, the Fed was criticized for failing to curb abuses by the scandal-scarred Bank of Credit and Commerce International. But Mr. Corrigan said when he retired that “if it wasn’t for the Fed, there is a pretty good chance that B.C.C.I. would still be in business.”In his remarks in 1993, Mr. Volcker said Mr. Corrigan had “a good conceptual understanding of the financial world, but most importantly he knows how to get things done.”“That’s a rare quality in the bureaucratic world in which he has grown up,” Mr. Volcker added.When the market crashed in 1987, for example, Fed officials planned to deliver a turgid technical response.“I said that’s the last damn thing we need,” Mr. Corrigan was quoted as saying in Sebastian Mallaby’s “The Man Who Knew: The Life and Times of Alan Greenspan” (2016). “What we need is a statement that has about 10 words in it.”Mr. Greenspan took Mr. Corrigan’s advice, saying (in 30 words) that the Fed would make available whatever money was needed while Mr. Corrigan importuned major banks to continue lending to undergird the markets.When Mr. Corrigan retired from the Fed, he said he would take a job in private industry where “I’ll try to limit myself to working six days a week, instead of seven.” The aftermath of the market crash in 1987, he said, had been his most memorable moment.“In terms of my pulse rate,” he said, “that one takes the prize.”Mr. Corrigan at a meeting of a European Union committee in Brussels in 2010 to discuss the Greek economy. George Gobet/AFP — Getty Images More

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    Missing Foreign Workers Add to Hiring Challenges

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    Fewer foreign people have been able to work in the U.S. amid the coronavirus, leaving a hole in the potential labor force.Neha Mahajan was a television journalist in India before her husband’s job moved her family to the United States in 2008. She spent years locked out of the labor market, confined by what she calls the “gilded cage” of her immigration status — one that the pandemic placed her back into.Ms. Mahajan started working after an Obama administration rule change in 2015 allowed people on spousal visas to hold jobs, and she took a new job in business development at an immigration law firm early in 2021. But processing delays tied to the pandemic caused her work authorization to expire in July, forcing her to take leave.“It just gets to you emotionally and drains you out,” said Ms. Mahajan, 39, who lives in Scotch Plains, N.J.Last week brought reprieve, if only temporarily. She received approval documents for her renewed work authorization, enabling her to return to the labor force. But a process that should have taken three months stretched to 10, leaving her sidelined all summer. And because her visa is linked to her husband’s, she will need to reapply for authorization again in December when his visa comes up for renewal.Hundreds of thousands of foreign workers have gone missing from the labor market as the global coronavirus pandemic drags on, leaving holes in white-collar professions like the one Ms. Mahajan works in and in more service-oriented jobs in beach towns and at ski resorts. Newcomers and applicants for temporary visas were initially limited by policy changes under former President Donald J. Trump, who used a series of executive actions to slow many types of legal immigration. Then pandemic-era travel restrictions and bureaucratic backlogs caused immigration to drop precipitously, threatening a long-term loss of talent and economic potential.Some of those missing would-be employees will probably come and work as travel restrictions lift and as visa processing backlogs clear, as Ms. Mahajan’s example suggests. But the recent immigration lost to the pandemic is likely to leave a permanent hole. Goldman Sachs estimated in research this month that the economy was short 700,000 temporary visa holders and permanent immigrant workers, and that perhaps 300,000 of those people would never come to work in the United States.Employers consistently complain that they are struggling to hire, and job openings exceed the number of people actively looking for work, even though millions fewer people are working compared with just before the pandemic. The slump in immigration is one of the many reasons for the disconnect. Companies dependent on foreign workers have found that waves of infections and processing delays at consulates are keeping would-be employees in their home countries, or stuck in America but simply unable to work.“Employers are having to wait a long time to get their petitions approved, and renewals are not being processed in a timely manner,” said Stephen Yale-Loehr, an immigration lawyer who teaches at Cornell Law School. “It’s going to take a long time for them to work through the backlog.”Worker inflows had already slowed sharply before the pandemic, the result of a crackdown by the Trump administration that made it harder for foreign workers, refugees and migrant family members to enter the United States. But the pandemic took that decline and accelerated it dramatically: Overall visa issuance dropped by 4.7 million last year.Many of those visas would have gone to short-term visitors and tourists — people who likely will come back as travel restrictions lift. But hundreds of thousands of the visas would have gone to workers. Without them, some employers have been left struggling.Guests at Penny Fernald’s inn on Mount Desert Island in Maine had to swing by the front desk to pick up towels this summer. Turndown service was limited, because only one of the four foreign housekeepers Ms. Fernald would employ in a typical summer could make it through a consulate and into the country this year.Vacationers who wanted a reimagined Waldorf salad at Salt & Steel, a nearby restaurant, needed to call ahead for reservations and hope it wasn’t Sunday, when the short-staffed restaurant was closed.“This was the busiest season Bar Harbor has ever seen, and we turned people away nightly,” said Bobby Will, the chef and co-owner of Salt & Steel.He usually hires a few foreign workers who perform day jobs for other local businesses then work for him at night. This year, that was basically impossible. He found himself down six of 18 workers. He modified dishes to make them easier to plate — a lobster risotto with roasted chanterelles and hand-placed garnished became a seafood cassoulet — but labor-saving innovations were not enough of a fix. He ultimately had to close on Mondays, too, and he estimates that he missed out on $6,500 to $8,000 in sales per night.“It’s just been extremely difficult for Bar Harbor,” he said of his town, a summer tourism hot-spot nestled between Frenchman Bay and Acadia National Park.Many immigrants are missing from the labor market, causing staffing shortages both in white-collar professions and in more service-oriented jobs in vacation spots like Old Orchard Beach, Maine.Tristan Spinski for The New York TimesThe Biden administration lifted a Trump-era pandemic ban on legal immigration in February, and the number of foreign nationals coming into the United States on visas has been recovering this year. Monthly data show a nascent but incomplete rebound.But some visa categories that weren’t deemed high priority, including many temporary work authorizations, have been waiting long months for approval. Travel limitations tied to the pandemic have kept other foreign workers at home.The State Department reported that as of September, nearly half a million people remained in its immigrant visa backlog, compared with roughly 61,000 on average in 2019..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}It is not clear what the 2020 drop in immigration and the slow crawl back to normalcy will mean for the country’s labor pool going forward. The Goldman Sachs estimate that the U.S. is short 700,000 foreign workers was based on a rough methodology. The Congressional Budget Office estimated late last year that 2.5 million fewer people would immigrate in the 2020s than it had estimated before the pandemic. Immigration tends to build on itself as legal permanent residents bring in family members, so this decade’s decline is expected to lead to another 840,000 fewer immigrants between 2031 and 2040.The “reduction occurs in part because of travel restrictions and reduced visa-processing capabilities related to the pandemic,” the office wrote in its September 2020 long-term budget outlook.Either number amounts to a relatively small sliver of the American work force, which is today 161 million people strong. But from an economic perspective — and from the viewpoint of many American businesses — the timing could hardly be worse. America’s population is aging, and fertility rates have been declining. Work force growth in recent years has been heavily driven by immigrants and their children. Fewer immigrants means fewer future workers.Unless businesses can figure out how to produce more with fewer people, a future in which the nation’s working-age population grows more slowly means that the economy is likely to have less room for expansion.The pandemic immigration slump isn’t the cause of that economic sclerosis, but it could cause the condition to progress faster.While millions of Americans remain out of work and potentially available for jobs, employers say hiring has been complicated by pandemic aftershocks. Some households lack child care or are afraid of virus resurgence. Others are rethinking careers in backbreaking industries after a perspective-shifting collective public health trauma. Often immigrants work jobs that struggle to attract native workers.Some companies are reluctant to pay enough to attract locals. Ms. Fernald did receive some applications for housekeeping positions, but she pays $16.50 per hour and the applicants had hoped for $20 to $23.Even for those who were willing to pay what would-be laborers demand — Mr. Will paid cooks $22 per hour and guaranteed 10 hours a week in overtime — it was difficult to make up for missing local exchange student workers and temporary seasonal employees from abroad. He’s hoping hiring will be easier in 2022.“Honestly, I don’t know what to expect,” he said.Ms. Mahajan in New Jersey offered a glint of hope that some sort of normalcy could return, but also apprehension that it will not.“I couldn’t believe it — I was like, ‘Wow,’” she said of the moment she received her approval. But the relief may be short-lived since her visa is inextricably linked to her husband’s lapsing one.“Even before summer, I could be back in the same situation,” she said. “This is like an infinite rut.” More

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    Finance Executives Say Risk of Default Is Already Damaging the Economy

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    Shortly after the C.E.O.s met with President Biden, Senator Mitch McConnell said he would allow Democrats to raise the debt ceiling enough to push a potential default to December.Finance executives met with President Biden as an Oct. 18 debt-ceiling deadline inched closer, warning that a U.S. default would threaten the global economy. Senate Republicans have promised to filibuster a long-term suspension of the borrowing limit.Doug Mills/The New York TimesPresident Biden met with finance executives on Wednesday as he continued to try to put maximum pressure on Senate Republicans to raise the debt ceiling before Oct. 18, the date the Treasury Department has said the United States would go into default.Shortly after the meeting, Senator Mitch McConnell, the minority leader, seemed to relent from his opposition to allowing Democrats to lift the ceiling in the short term through regular channels. He said he would “allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December.”The White House dismissed Mr. McConnell’s statement as an informal offer and said the president would rather Republicans allow a vote on a spending bill to go forward.The executives all warned that the economy would be threatened should the country default on its debts for the first time in history.“It’s already beginning to cause some damage in the economy,” Jane Fraser, the chief executive of Citigroup, told the president. “It will hurt consumers. It will hurt small businesses.”“It’s not an exaggeration to say that even small distortions in the Treasury market can cost taxpayers tens of billions of dollars over many years,” she added, referring to the market for bonds issued by the Treasury Department.Mr. Biden, seeking to convey the consequences to everyday Americans, asked the executives to explain what would happen if the United States went into default for only a day or two.“Certainly, as we know, there are hundreds of millions of investors that are involved in the markets today that have put their hard-earned savings into the markets,” said Adena Friedman, the chief executive of Nasdaq. “And we would expect that the markets will react very, very negatively.”Mr. McConnell of Kentucky had long said Democrats must use a more complicated process known as reconciliation to overcome Republican opposition to raising the debt ceiling. In his statement on Wednesday, he reiterated that the reconciliation process was the only option he supported for a longer-term increase in the limit, unless “Democrats abandon their efforts to ram through another historically reckless taxing and spending spree.”The financial sector had been projecting a grim two weeks ahead. A report released by Goldman Sachs said that there was little reason to believe Congress would meet the Oct. 18 deadline, but that “the public and financial market response would likely force a quick political resolution.”Senate Democrats are still weighing their options for a path forward. Jen Psaki, the White House press secretary, told reporters on Wednesday that the White House did not want to keep prolonging things with an extension. “We don’t need to go through a cumbersome process that every day brings additional risks,” Ms. Psaki said.Asked why the White House does not support a short-term debt ceiling increase that could, at least temporarily, calm financial markets, Ms. Psaki replied, “Why not just get it done now?” She said Mr. Biden and Mr. McConnell had not yet spoken about the debt limit.The budget process of reconciliation would most likely involve two marathons of politically charged votes that Mr. Biden has predicted would be “fraught with all kinds of potential danger for miscalculation.” Democrats say there is no guarantee that Republicans wouldn’t drag those votes out to inflict procedural and political discomfort.Understand the U.S. Debt CeilingCard 1 of 9What is the debt ceiling? More

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    China’s Biggest ‘Bad Bank’ Tests Beijing’s Resolve on Financial Reform

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    Chinese regulators say they want to clean up the country’s financial system, but a state-owned conglomerate may ultimately get in the way.HONG KONG — BlackRock gave it money. So did Goldman Sachs.Foreign investors had good reason to trust Huarong, the sprawling Chinese financial conglomerate. Even as its executives showed a perilous appetite for risky borrowing and lending, the investors believed they could depend on Beijing to bail out the state-owned company if things ever got too dicey. That’s what China had always done. More