Archive for the ‘debt’ Category

Where Are the Leaders?

March 29, 2009

You wake up in the morning and once again the financial weather report calls for the Apocalypse followed by brief showers of despair. Seeking a ray of hope, you turn on the television and settle in to watch a Capitol Hill hearing. There in the hot seat is the man who holds the entire U.S. economy in his hands. And he looks like Harry Potter.

By David Rothkopf
The Washington Post

You wake up in the morning and once again the financial weather report calls for the Apocalypse followed by brief showers of despair. Seeking a ray of hope, you turn on the television and settle in to watch a Capitol Hill hearing. There in the hot seat is the man who holds the entire U.S. economy in his hands. And he looks like Harry Potter.
US bank chiefs to meet with President Obama

Go online, meanwhile, and you find the HTML version of the French Revolution, with left and right calling for poor Tim to be strung from a lamppost. You actually start feeling sorry for the guy. Arianna Huffington snipes that “the issue isn’t his delivery, it’s what he’s delivering.” Nobel Prize-winning economist Joseph Stiglitz concludes that Geithner’s plan “amounts to robbery of the American people.” Next you find Connie Mack, Republican senator from Florida, fulminating that “quite simply, the Timothy Geithner experience has been a disaster. . . . America needs and deserves a Treasury secretary who can truly lead us forward.”

On that point, at least, he’s right. We do need strong leadership. The world is in chaos. There are riots from Greece to China. Iceland has collapsed, and Mexico teeters on the edge. Pakistan is broke, melting down and awash in nukes. Yes, the stock market soared with Geithner’s toxic asset plan, but didn’t he and Obama dismiss Wall Street’s response when the first version of the bank bailout landed with a thud last month? Don’t we hate Wall Street? Obama and Geithner subsidize hedge funds on Monday and come back with heavy regulations on Thursday. What gives?

In this March 12, 2009, file photo Treasury Secretary Timothy ...

Gradually it becomes clear. This is not just a global economic crisis. It’s a global leadership crisis. Obama is still finding his footing, Gordon Brown is on his way out, Hugo Chávez is nuts and Wall Street management is larcenous. Isn’t there someone somewhere with decent values, a firm hand on the tiller and at least one big new idea? Where have all the leaders gone?

Read the rest:
http://www.washingtonpost.com/wp-dyn/cont
ent/article/2009/03/26/AR20090326034
22.html?hpid=opinionsbox1

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Gregg Goes From Bipartisan Symbol to Top Obama Critic

March 28, 2009

Sen. Judd Gregg, who was President Obama’s commerce secretary nominee until withdrawing his name from consideration, has emerged as the toughest critic of the president’s handling of the economy and has helped galvanize Republican opposition to Obama’s policies.

Fox News
At first, the relationship between President Obama and Sen. Judd Gregg looked like love at first sight, proof that opposites do attract.

Obama is a 47-year-old left-leaning Democrat who believes in the power of government to solve people’s problems. Gregg is a 61-year-old New Hampshire Republican who advocated limited government and made millions through business investments.

Their unlikely partnership seemed destined to transcend partisan lines and symbolize the change that Obama promised to bring to Washington.

But Gregg, who was Obama’s commerce secretary nominee until withdrawing his name from consideration, has emerged as the toughest critic of the president’s handling of the economy and has helped galvanize Republican opposition to Obama’s policies.

He warned on Monday that Obama’s $3.6 trillion budget proposal will lead to unsustainable debt levels and send the country on a fiscal path resembling that of a “banana republic.”

Gregg kept up his attacks on Obama’s budget request Saturday in the weekly Republican radio address, saying the path to prosperity is not the excessive spending proposed by the president but limited spending that holds down the growth of government, taxes and debt.

The senator said Obama’s proposals “represent an extraordinary move of our government to the left.”

He said Obama “is not trying to hide this; in fact, he is very forthright in stating that he believes that by greatly expanding the spending, the taxing and the borrowing of our government, this will lead us to prosperity.”

Like most relationships, this one began with mutual admiration, respect and trust, with flowery compliments flowing between each other.

At their first public appearance together a week-and-a-half before Valentine’s Day, Obama called Gregg “a master of reaching across the aisle to get things done. He will be an astounding addition, a trusted voice in my Cabinet and an able and competent ambassador … I can think of no finer steward for our nation’s commerce.”

In turn, Gregg praised Obama’s economic stimulus proposal to stabilize the economic slide and pull the country out of recession as an “extraordinarily bold, aggressive, effective and comprehensive plan.”

Read the rest:
http://www.foxnews.com/politics/first100d
ays/2009/03/28/gregg-goes-bipartisan-sy
mbol-obama-critic/

In his radio address Saturday, Gregg countered each of Obama’s policy principles:

— “It is the individual American who creates prosperity and good jobs, not the government.”

— “We believe that you create energy independence not by sticking Americans with a brand new national sales tax on everyone’s electric bill, but by expanding the production of American energy … while also conserving more.”

–“We also believe you improve everyone’s health care not by nationalizing the health care system and putting the government between you and your doctor, but by assuring that every American has access to quality health insurance and choices in health care.”

The Democratic Congress’s Cover-Up; Our Biggest Danger

March 28, 2009

With a bit of bookkeeping legerdemain borrowed from the Bush administration, the Democratic Congress is about to perform a cover-up on the most serious threat to America’s economic future.

David S. Broder
The Washington Post

That threat is not the severe recession, tough as that is for the families and businesses struggling to make ends meet. In time, the recession will end, and last week’s stock market performance hinted that we may not have to wait years for the recovery to begin.

The real threat is the monstrous debt resulting from the slump in revenue and the staggering sums being committed by Washington to rescuing embattled banks and homeowners — and the absence of any serious strategy for paying it all back.

The Congressional Budget Office sketched the dimensions of the problem on March 20, and Congress reacted with shock. The CBO said that over the next 10 years, current policies would add a staggering $9.3 trillion to the national debt — one-third more than President Obama had estimated by using much more optimistic assumptions about future economic growth.

Read the rest:
http://www.washingtonpost.com/wp-dyn/c
ontent/article/2009/03/27/AR2009032
702507.html?hpid=opinionsbox1

Republicans Respond To Obama Budget

March 28, 2009

Attacking President Barack Obama‘s grand spending plans, a GOP lawmaker who almost joined the Democrat’s Cabinet said Saturday the U.S. must live within its means or risk its tradition of passing a more prosperous country from one generation to the next.

“We believe you create prosperity by having an affordable government that pursues its responsibilities without excessive costs, taxes or debt,” Sen. Judd Gregg said in the Republican radio and Internet address.

By WILL LESTER, Associated Press Writer

Gregg, who accepted the job as commerce secretary but then withdrew his nomination because of “irresolvable conflicts” with Obama’s policies, has become one of the toughest critics of Obama’s handling of the economy.

“In the next five years, President Obama’s budget will double the national debt. In the next 10 years, it will triple the national debt,” said Gregg, R-N.H.

“His budget assumes the deficit will average $1 trillion every year for the next 10 years and will add well over $9 trillion in new debts to our children’s backs,” said Gregg, the top Republican on the Senate Budget Committee. “He also is proposing the largest tax increase in history, much of it aimed at taxing small business people who have been, over the years, the best job creators in our economy.”

Gregg said Obama’s proposals “represent an extraordinary move of our government to the left.”

He acknowledged that Obama “is very forthright in stating that he believes that by greatly expanding the spending, the taxing and the borrowing of our government, this will lead us to prosperity.”

In seeking to make the GOP case, Gregg said:

–“It is the individual American who creates prosperity and good jobs, not the government.”

–“We believe that you create energy independence not by sticking Americans with a brand new national sales tax on everyone’s electric bill, but by expanding the production of American energy … while also conserving more.”

–“We also believe you improve everyone’s health care not by nationalizing the health care system and putting the government between you and your doctor, but by assuring that every American has access to quality health insurance and choices in health care.”

He said the U.S. “has an exceptional history of one generation passing on to the next generation a more prosperous and stronger country, but that tradition is being put at risk.”

Obama Budget: 42% See Help; 43% See Hurt

March 27, 2009

Voters are evenly divided over whether President Obama’s proposed $3.6 trillion budget will help or hurt the economy.

The latest Rasmussen Reports national telephone survey found that 42% believe it will help the economy while 43% say it will hurt.

The data, combined with two earlier surveys tracking the topic, shows that opinion on both sides of the debate are fairly entrenched. The data also indicates that proposals for health care reform are likely to be the central front in the budgetary debate.

Read the rest from Rasmussen:
http://www.rasmussenreports.com/pub
lic_content/business/general_business
/voters_divided_as_to_whether_obam
a_budget_will_help_or_hurt_economy

Obama Talks About “Making Hard Choices,” But Budget Is “Have It All Now”

March 26, 2009

Do not, as some ungracious pastors do,
Show me the steep and thorny way to heaven;
Whiles, like a puff’d and reckless libertine,
Himself the primrose path of dalliance treads,
And recks not his own rede.
Hamlet, I, iii, 51-55

Standing before millions of cheering admirers on January 20, the newly christened President Obama decried “our collective failure to make hard choices and prepare the nation for a new age.” This idea — that our nation has suffered because we have punted for too long on difficult decisions — was a key theme during Obama’s campaign, and it has been repeated with the frequency of a corporate ad jingle in the early days of his presidency.

By Philip Klein
American Spectator

At last month’s White House Fiscal Responsibility Summit, Obama declared that, “In the coming years, we’ll be forced to make more tough choices, and do much more to address our long-term challenges.” He reiterated this point during Tuesday night’s primetime press conference.

“What I’ve said here in Washington is that we’ve got to make some tough choices,” Obama said. “We got to make some tough budgetary choices.”

Obama is correct in his diagnosis. The central failure of the Bush era was the belief that we can do everything we want — cut taxes, expand military and homeland security spending, fight two wars, give prescription drugs to senior citizens, increase federal funding for education and energy — and do it all without facing any long-term costs. It was a philosophy that was also reflected in Americans who bought houses that they couldn’t afford and financial institutions that issued loans on borrowed money at an unsustainable pace.

The $1.3 trillion deficit and the weakened economy that Obama is all too eager to remind us he inherited has been the direct result of a stubborn refusal to accept necessary tradeoffs and face the reality that we can’t have everything that we want.

Unfortunately, while he fancies himself a courageous leader, Obama’s budget does not reflect hard choices. He is telling the American people that we can spend trillions of dollars on an economic stimulus package, a housing bailout, and multiple financial bailouts without experiencing inflation or requiring broad tax increases. He is insisting that we can save money by providing health care for every American, that we can accomplish this without rationing care, and that the quality of medical treatment will improve. He is promising that we can save money by throwing more federal dollars into energy and that we can increase federal spending on education while cutting taxes on 95 percent of Americans.

The White House has not offered actual numbers to back up Obama’s claims about this utopian fiscal future, and the only numbers we do have undercut his points entirely.

Last week, the Congressional Budget Office released an analysis of his budget, and it found that his policies would more than double the public debt to $17.3 trillion by 2019, equal to a staggering 82.4 percent of the economy.

While Obama’s budget is named, “A New Era of Responsibility,” when questioned about his deficit claims, his first instinct is to point fingers. During Tuesday’s press conference, he snapped, “as I recall I’m inheriting a $1.3 trillion deficit.” This may be true, but since taking over, Obama has already increased the projected 2009 deficit to $1.8 trillion, according to the CBO. As comedian Jackie Mason quipped recently, “If I inherited a fire, does that mean I have to make the fire bigger and worse?”

Obama also reiterated his claim that he will cut the deficit in half within five years. It’s true that according to projections, the deficit will drop during that time period, but this argument is a red herring.

Given that the annual deficit will be jacked up to $1.8 trillion in 2009, cutting it in half within five years is no landmark achievement, because the deficits are expected to shrink naturally assuming the economy recovers. In fact, if we were simply to follow current laws, the CBO estimates that the cumulative deficits for 2010 to 2019 would be $4.4 trillion, or less than half the $9.3 trillion that would result from Obama’s budget. Also, while the deficit does decrease in 2011 and 2012, it starts to grow again the following year.

On the campaign trail last June, Obama declared that the Bush administration was “the most fiscally irresponsible administration in history.” At the time he made that statement, Bush’s record deficit was $413 billion in 2004. Yet according to the CBO, if Obama’s budget gets passed, the deficit will never be lower than $658 billion during his time in office should he serve two terms.

During Tuesday’s press conference, Obama argued that part of the reason that the CBO’s data is worse than the White House projections is that the CBO assumes a lower rate of economic growth. But even looking at the rosier estimates, the Obama administration still projects the public debt exploding from $8.4 trillion in 2009 to $15.4 trillion by 2019.

Related:
The Great Give Away of Taxpayer Money By Bigger and Bigger Government

The Great Give Away of Taxpayer Money By Bigger and Bigger Government

March 26, 2009

An eager 20 year old student asked me yesterday, “Uncle, who really pays for all this spending?”

“Well, your children and grandchildren, Dear,  I thought you knew,” I said.

This needs time to think in and sink in — since she hasn’t yet started a family….

This is a developing essay that is not yet complete….

So we’ve been wondering about all this Obama spending: what it is and what it means.

The president basically spent $1 billion per day in his first 50 days.

I wonder why we need paid “volunteers” so badly that we now have to pay for them?
 Federal Government Paying “Volunteers” To Teach Liberal Values

“You cannot carry on for ever squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt.”  This rings true for Americans even though it wan an admonishment to Britain’s Prime Minister Gordon Brown.
Warning to American Politicians, Via MEP Daniel Hannan to Gordon Brow

I wonder if the crisis in Mexico will mean a huge migration of Mexicans into the states…I mean way huger than ALREADY…and what will that cost?
 Mexico: “under sustained assault”; Could “collapse” — U.S. Military

“Worst-case scenario, Mexico becomes the Western hemisphere’s equivalent of Somalia, with mass violence, mass chaos,” said Ted Galen Carpenter, vice president for defense and foreign policy at the Cato Institute, a Washington-based think tank. “That would clearly require a military response from the United States.”
http://www.foxnews.com/story/0
,2933,491964,00.html

I wonder why the Pentagon can no longer refer to the “war on terror” and is already trying to figure out how to cut many billions from its budget; while Russia and China rearm?
China boosts military, cyberwarfare capabilities
.
 Gates readies big cuts in weapons
.
 Russia Pressing “Reset,” Medvedev Orders Military To Re-Arm
.
I wonder why ACORN, which gets federal taxpayers money, is hiring protesters with that money to go to the homes of AIG executives?
Did ACORN Organize Protests At Homes of AIG Execs?
.
ACORN Protesters At Homes of AIG Execs Similar To Lawlessness For UK Bank Exec?

When we make it much more simple to unionize through programs like card check, how will that impact the economy?  Well, FedEx might scrap plans to buy new jets from Boeing and the stimulus might hire many fewer workers….
Stimulus: Way Fewer Jobs Than You Thought

Just Wednesday FedEx said it might back off on billions of dollars of aircraft sales planned to go to Boeing.  The reason?  Card check.  FedEx is worried that fast unionization of its work force will dramatically change its bottom line.

Who benefits from all this U.S. debt?  Who buys our debt and who gets our interest payment?  The answer in one word is China.  The U.S. bailed out Freddie and Fannie with Taxperer money and now China is even buying the houses we once owned…
Chinese find opportunity in U.S. real-estate slump

I wonder how we will pay for “unknown unknowns” like 9-11 and Katrina?  Well, we’ll print more money…..
 Obama, Economy: So Much Uncertainty Spins Off More…. Uncertainty

There are still issues as yet untackled by Obama like immigration.  How will we deal with the vast numbers of illegals ou there?
What do I tell my legal immigrant family and friends?
.
Obama Believers Thought They’d Hear More On Immigration By Now

Immigration embers could turn into political fire for Obama

La Raza has a new best friend at Justice

I wonder how much our government will grow, what the government will cost us all and what freedoms we’ll lose in this Obama shake up?

There is a mind-set here that Americans can have eveything they want and now and without consequences.

Didn’t that thinking spark this “economic downturn”?

Read Michelle Malkin:
http://michellemalkin.com/2009/03/2
6/now-they-tell-us-ap-admits-that-po
rkulus-numbers-are-bs/

http://newworldliberty.wordpress.c
om/2009/03/25/maxine-waters-
proves-obama-is-a-fraud/

Related:
Obama Talks About “Making Hard choices,” But Budget Is “Have It All Now”

Warning to American Politicians, Via MEP Daniel Hannan to Gordon Brown

March 26, 2009

I don’t normally delve into the politics of the European Parliament, but this video of Conservative MEP Daniel Hannan stripping the bark off British Prime Minister Gordon Brown is worth noting. (“The devalued prime minister of a devalued government.”) Many American politicians might be hearing the same criticisms next year if the U.S. economy is still depressed even as the national debt soars. Here is a transcript:

Prime Minister, I see you’ve already mastered the essential craft of the European politician, namely the ability to say one thing in this chamber and a very different thing to your home electorate. You’ve spoken here about free trade, and amen to that. Who would have guessed, listening to you just now, that you were the author of the phrase ‘British jobs for British workers’ and that you have subsidised, where you have not nationalised outright, swathes of our economy, including the car industry and many of the banks? Perhaps you would have more moral authority in this house if your actions matched your words? Perhaps you would have more legitimacy in the councils of the world if the United Kingdom were not going into this recession in the worst condition of any G20 country?

The truth, Prime Minister, is that you have run out of our money. The country as a whole is now in negative equity. Every British child is born owing around £20,000. Servicing the interest on that debt is going to cost more than educating the child. Now, once again today you try to spread the blame around; you spoke about an international recession, international crisis. Well, it is true that we are all sailing together into the squalls. But not every vessel in the convoy is in the same dilapidated condition. Other ships used the good years to caulk their hulls and clear their rigging; in other words – to pay off debt. But you used the good years to raise borrowing yet further. As a consequence, under your captaincy, our hull is pressed deep into the water line under the accumulated weight of your debt We are now running a deficit that touches 10% of GDP, an almost unbelievable figure. More than Pakistan, more than Hungary; countries where the IMF have already been called in. Now, it’s not that you’re not apologising; like everyone else I have long accepted that you’re pathologically incapable of accepting responsibility for these things. It’s that you’re carrying on, wilfully worsening our situation, wantonly spending what little we have left. Last year – in the last twelve months – a hundred thousand private sector jobs have been lost and yet you created thirty thousand public sector jobs.

Prime Minister, you cannot carry on for ever squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt. And when you repeat, in that wooden and perfunctory way, that our situation is better than others, that we’re ‘well-placed to weather the storm’, I have to tell you that you sound like a Brezhnev-era apparatchik giving the party line. You know, and we know, and you know that we know that it’s nonsense! Everyone knows that Britain is worse off than any other country as we go into these hard times. The IMF has said so; the European Commission has said so; the markets have said so – which is why our currency has devalued by thirty percent. And soon the voters too will get their chance to say so. They can see what the markets have already seen: that you are the devalued Prime Minister of a devalued government.

Video:
Here is how Gordon Brown faced the heat at the EU:
http://www.youtube.com/wa
tch?v=94lW6Y4tBXs

British Prime Minister Gordon Brown reacts,  as he listens to ... 
British Prime Minister Gordon Brown reacts, as he listens to the debates, Tuesday March 24, 2009 at the European Parliament, in Strasbourg, eastern France. Brown called for global standards of financial regulation and insists every continent must pour enough funds into their economies to beat the crisis.(AP Photo/Christian Lutz)

Lesson for all Americans? California budget “fixes” meet trouble with voters

March 26, 2009
Five proposals are falling short of the support needed to pass. Only a plan to block pay raises for elected officials when the state is running a deficit has strong support.
By Michael Finnegan
Los Angeles Times
March 25, 2009
Five state ballot measures aimed at solving California’s budget crisis are falling short of the support needed to pass in the May special election, a sign that voters may force lawmakers into another fierce clash over tax hikes and spending cuts, according to a poll released Wednesday.

The state’s dismal economy has already partly unraveled the budget deal that Gov. Arnold Schwarzenegger and the Legislature reached last month, with a drop in tax collections leaving a new $8-billion shortfall. Rejection of the ballot measures would widen the gap to nearly $14 billion.

The least popular measure, Proposition 1C, is also the one that state leaders are counting on most for immediate fiscal relief: It would let the state borrow $5 billion against future lottery revenues. The cost, to be paid over decades, would be billions in new interest obligations, and less lottery money to meet future spending needs.

The poll by the nonpartisan Public Policy Institute of California found that Proposition 1C would lose in a rout if the May 19 election were held today, with 37% of likely voters in favor and 50% opposed.

Faring slightly better, but still decisively rejected, would be Proposition 1A. It would cap state spending while extending billions in temporary tax hikes for an extra two years. The survey found 39% of likely voters for the measure and 46% against it.

So far, Proposition 1A is the measure that has drawn the most attention. Conservatives on talk radio, enraged by the extension of the tax hikes, have made its defeat a top priority. Some labor unions are weighing whether to campaign against the spending cap.

The dynamics of the special election are volatile, and public opinion could swing dramatically once campaign advertising begins. The poll found more than 10% of likely voters are undecided on most of the ballot measures. Also, voter turnout is likely to be low, and it is unclear what mix of Californians will wind up casting ballots in the oddly timed election.

Read the rest:
http://www.latimes.com/news/local/la-me-
poll26-2009mar26,0,3460616.story

Obama, Economy: So Much Uncertainty Spins Off More…. Uncertainty

March 25, 2009

Barack Obama seem prepared to chage everything about everything.

Just today he set out to reform the tax code at the IRS.  Since Tim Geithner is busy and was never good at taxes anyway, Paul Volker will head a commission.

But Geithner added uncertainty of his own today saying it was OK by him if China replaced the dollar with something else as a reserve currency.  When the dollar pitched downward, Geithner had to ‘clarify’ his first statement to get markets going again.

But it is just part of an ever swirling vortex of change, tinkering and tampering that makes businesses and investors shudder.

We’ll provide health care to all, we’ll reform education, we’ll take care of climate change, we’ll do away with gas and oil and coal, we’ll….well it looks like we’ll do everything.  We’ll use embrionic stem cells to cure Alzheimer’s and Parkinson’s and then we’ll cure cancer.

And what will it all cost?  Who cares, really.  It isn’t our money……

Well, people do care like China, the nation that holds most of our debt….

Just today FedEx said it might back off on billions of dollars of aircraft sales planned to go to Boeing.  The reason?  Card check.  FedEx is worried that fast unionization of its work force will dramatically change its bottom line.

The Dow was way up today and then way down.  Why?  In one word?  Uncertainty.

Today on the Dow: uncertainty

“A weaker interest or wider spread in a Treasury deal today could certainly cause some angst,” said Warren Koontz, chief investment officer for large-company value stocks at Loomis Sayles & Co., which manages $106 billion in Boston. “As anxious as the market is after the run we’ve had here, it gives people an excuse to step back.”

Late on Wednesday the Associated press said this about the stock market today: “Trading was extremely erratic….Analysts said weak demand during an auction of government debt stirred up worries about how easily Washington will be able to raise money to fund its economic rescue program. The fear in the market is that the government might not be able to easily raise the hundreds of billions of dollars it needs.”

Anxious, cautious, uncertain, confidence: they are all part of the stew that’s boiling; which might be good and might not.

The economic recession gave us uncertainty enough.  Now the president has himself compounded the problem.

If the United States was an aircrft, Obama has already touched every dial and lever in the cockpit.  And what does that mean?  Only one thing for sure: Uncertainty.  And a lack of confidence.  That’s why businesses are not yet rehiring and people are holding on to their money.

First Obama said we were in a crisis and he was all gloom and doom.  Then he spoke of confidence and Biden even mentioned the “Obama factor” when the markets went up.  Last night he exhibited neither confidence nor gloom; but instead a kind of boredom.

The president is overexposed and not helping.  This is a time to lower uncertainty and emphasize confidence: and do the hard work necessary to move the nation forward.  Enough of the media events, press conferences and fake bipartisanship.  Get to work already.

Primum non nocere

*******************

The uncertainty that the president has mentioned himself,  just a little, is what militay people call the “unknown unknowns.”  While we have so much economic uncertainty compounded by self imposed uncertainty, we should have some money saved for a rainy day like an new war on terror, a troop deployment to the border with Mexico or some other really far out scenario…..Putin and Hu Jintao like American uncertainty and they aren’t the only ones…..We live in an uncertain world and we have added to the uncertainty since January….

**********************

FedEx Corp is threatening to cancel the purchase of billions of dollars worth of new Boeing Co cargo planes if Congress passes a law that would make it easier for unions to organize at the package-delivery company, the Wall Street Journal said.

FedEx may cancel plans to buy as many as 30 new Boeing planes should Congress pass a bill that would remove truck drivers, couriers and other employees at FedEx’s Express unit from the jurisdiction of the federal Railway Labor Act of 1926, the paper cited the company spokesman as saying.

In January, FedEx said its express unit exercised options to buy 15 more Boeing 777 freighters, worth $3.75 billion at list prices.

However, the company deferred delivery of some of the planes as the U.S. economy faces a bleak outlook.

FedEx’s actions raise the stakes in an increasingly bitter battle involving chief rival, United Parcel Service Inc, and the Teamsters union, which has been trying for years to organize at FedEx, the Journal said.

FedEx and Boeing could not be immediately reached for comment by Reuters.

******************

Bloomberg

Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China’s ideas for overhauling the global monetary system, only to drive it back up by affirming that it should remain the world’s reserve currency.

Geithner was initially asked at a Council on Foreign Relations event in New York about proposals from People’s Bank of China Governor Zhou Xiaochuan for a new international reserve currency. He said “as I understand his proposal, it’s a proposal designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that.”

The dollar slid as much as 1.3 percent against the euro within 10 minutes of news accounts of Geithner’s remarks. The U.S. currency was down 0.6 percent at $1.3553 as of 12:31 p.m. in New York.

Roger Altman, who worked with Geithner as deputy Treasury secretary in the Clinton administration, later asked Geithner whether he wanted to “clarify” his remarks.

“I’d like to ask one final question, in effect on behalf of the market,” said Altman, founder of Evercore Partners Inc. “Let me ask the question this way. Do you see any change over the foreseeable future in the basic role of the dollar as the world’s key reserve currency?”

‘Strong’ Dollar

Geithner responded by saying that “I think the dollar remains the world’s dominant reserve currency.” In an interview with CNBC broadcast after the event, the Treasury chief said that a “strong dollar” is in “America’s interest.”

In his earlier response, Geithner said an increased use of SDRs should be “rather evolutionary, building on the current architecture, rather than moving us to global monetary union.”

Those remarks don’t indicate Geithner favors moving to a system with the SDR as a reserve currency, strategist Lee Hardman at Bank of Tokyo-Mitsubishi Ltd. wrote in a note.

“That was the big concern amongst the confusion,” London- based Hardman said. “A move to an SDR-linked system away from the dollar would naturally lead to a reduction in the dollar’s share of global reserves.”

Geithner, a former Treasury undersecretary for international affairs and president of the Federal Reserve Bank of New York, which carries out U.S. interventions in currency markets, also said that “we will do what’s necessary to make sure we’re sustaining confidence in our financial markets.”

Bernanke, Obama

Geithner and Fed Chairman Ben S. Bernanke both told lawmakers yesterday that they expected the dollar to remain the most important global currency. President Barack Obama said at a news conference late yesterday that “the dollar is extraordinarily strong” because investors are confident in the ability of the U.S. to lead a worldwide recovery, and also rejected calls for a new global currency.

China is the largest foreign holder of U.S. Treasuries, and Premier Wen Jiabao earlier this month expressed concern about the value of its investment. Central bank governor Zhou this week advocated a “super-sovereign reserve currency” that’s disconnected from any individual nation.

Zhou said, in an essay posted on the PBOC’s Web site, that the IMF’s special drawing rights, a unit of account at the fund used for member countries’ reserves with the IMF, offer “light in the tunnel for the reform of the international monetary system.” He said the SDR has yet to be “put into full play due to limitations on its allocation and the scope of its uses.”

Geithner said in his interview with CNBC that “China is playing a very important stabilizing role in this financial crisis we’re seeing globally.” U.S. officials are “working very, very closely with them. I think they have a lot of confidence in the policies we’re pursuing,” he also said.

See Michelle Malkin:
http://michellemalkin.com/2009/0
3/25/wonderboy-strikes-again/