Archive for the ‘rescue’ Category

Obama’s stimulus doesn’t work for me

January 28, 2009

Republicans insisted Wednesday that their own economic stimulus plan, focusing on tax relief, would create twice as many new jobs – 6.2 million – as the plan Obama is pushing, while costing about half as much.

As a business owner, here’s how I see the economy.

“We” Americans got where we are by spending too much money we didn’t have.  Now “we” as a nation propose to spend even more to get out of this box.

It makes no sense to me.

There are real dangers in inflation, loss of value in the dollar and other ills with such a huge debt — much of it owned by China.  And China may resist buying even more….

I can’t hire or buy more equipment or inventory becaue I have no certainty that the economy will improve for, oh, say three years.

The spending I see in the stimulus won’t do anything for me; unless maybe I can get some free condoms at family services.

The Republican idea of tax cuts would at least allow me to plan my budget for a year or two.

Whatever plan can really make jobs is a good idea: but we have to have lasting jobs and not just hire every Spanish speaking guy at the 7-11 so he can fix roads.  He’ll send a lot of that pay home to somewhere else…

And the speed we’ve decided is necessary for the lawmaking associated with the stimulus has never before yielded good law….

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(AP) 

House Republican leaders are standing firm in their opposition to the stimulus plan that President Barack Obama is asking Congress to approve.

Just ahead of a House vote that they’re expected to lose along party lines, Republicans insisted Wednesday that their own plan, focusing on tax relief, would create twice as many new jobs – 6.2 million – as the plan Obama is pushing, while costing about half as much.

House Minority Leader John Boehner said Republicans remain “disappointed” in the stimulus plan coming to a vote. He says it includes a “lot of wasteful spending that won’t create jobs.”

He says the GOP plan for “fast-acting tax relief” would “create jobs and preserve jobs in America.”

Economic Emergency: Just Miles From The White House See The Growing 3rd World

January 24, 2009

It isn’t Barack Obama’s fault.  And there is nothing wrong with the “Third Word.”  But it is not a great thing that just a few miles from the White House the global economy is turning neighborhoods from poor to poorer.

Unemployment is growing and businesses are closing.  I saw angry people honking their car horns in anger at a formerly well ordered intersection today.

The scene reminded me of Bolivia.

In China, “dentistry” can be found on the street; that is where the poor and without health insurance get cavities filled.

An immigrant friend of mine today went to a dentist to get help for an emergency.  He came home without the benefit of treatment.

He had no health insurance and the dentist wanted $1,000…..

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President Obama Goes to Radio to Explain Economic Rush

By PHILIP ELLIOTT, Associated Press Writer

President Barack Obama took to the airwaves Saturday to promote his economic aid plan in what’s-it-mean-to-me terms: thousands of better schools, lower electricity bills, health coverage for millions who lose insurance.

It was the latest appeal from the new president for a massive spending bill designed to inject almost $1 trillion into the economy and fulfill campaign pledges. As lawmakers consider an $825 billion plan and Obama woos them with an eye toward a second economic package, he used his first radio and Internet address from the White House to update the public about his goals.

“Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future,” Obama said in a five-minute address.

“In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse.”

Read the rest:
http://news.yahoo.com/s/ap/20090
124/ap_on_go_pr_wh/obama_economy

From CNN:
http://www.cnn.com/2009/POLIT
ICS/01/24/obama.economy/index.html

See and hear the President’s address:
http://www.americablog.com/2009/0
1/president-obamas-first-weekly-radio.html

In this Jan. 23, 2009 file photo, President Barack Obama speaks ... 
In this Jan. 23, 2009 file photo, President Barack Obama speaks to reporters during a meeting about the economy with Congressional leaders, in the Roosevelt Room of the White House in Washington. From left are, House Minority Leader John Boehner of Ohio, House Speaker Nancy Pelosi of Calif. and the president. Obama on Saturday Jan. 24, 2009 laid out more pieces of an economic plan he says would add 3,000 miles of electrical lines, increase security at 90 ports and double the United States’ renewable energy capacity within three years.(AP Photo/Charles Dharapak, File)

Fool Chief Justice Gets “Do Over” With President; Treasury Nominee “Do Over” With His Taxes and Nation’s Economy

January 22, 2009

Chief Justice John Roberts, who botched his single minute (actually more like 25 seconds) in the national spotlight, got another try Wednesday.  He re-administered to oath of office to President Barack Obama.

I don’t think John Roberts is a fool.  But he made a damned fool mistake when he went to the inauguration without a cue card.  Having given many oaths of office myself, I never went without a 3×5 index card with the oath typed upon it.  Roberts should have asked an expert, like a police officer, about how best to administer an oath….

John Roberts: go stand over in the corner with the President’s designated Treasury nominee who failed to properly pay his taxes….Timothy F. Geithner.

“Careless mistakes,” Geithner said.  “Careless” like Mr. Roberts.  I don’t like it.

I like guys that get the simple things right.  Roberts has four years to get ready for the next one.  In my view, Geithner should be sent home and never allowed to supervize the IRS that will roast me for the same fool thing he’s done….

Geithner’s “next one” is the saving of the American economy.  And his work record to date, even excusing his tax lapses, isn’t spectacular, unless you got some of the government give away money….

Geithner and Roberts are both fools.  But at least Roberts appears to be an ethical fool….

John E. Carey
Peace and Freedom

The Senate will probably confirm the President’s Traesury nominee…

Michelle Malkin thinks the tax caper is a show stopper….
http://michellemalkin.com/2009/01/13/obamas-treasury-secretary-tax-rules-for-thee-but-not-for-me/

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“Transparency and the rule of law will be the touchstones of this presidency,” Obama said.

Among other things, Obama said he would issue a pay freeze for his senior staff.

How about for tax evasion, Mister President?

Obama Stresses Transparency, Ethical Conduct to New Administration
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Read the rest:
Obama, Biden: Fight Scandal, Corruption, Bad Government Please….

 Democratic Scandals Boring, Less Sexual, But Genuine

Carville’s 2009 Predictions: Stand By For More Democrat Scandals

Timothy Geithner testifies before the Senate Finance Committee ...
Fool Timothy Geithner testifies before the Senate Finance Committee on his nomination to be US Treasury Secretary at the Dirksen Senate office Building in Washington, DC. Geithner apologized Wednesday over past tax transgressions….  He wants to run the IRS so he can make sure you pay your taxes….”I was careless”….(AFP/Mandel Ngan)

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From the New York Times:

Chief Justice John G. Roberts Jr. re-administered the oath to Mr. Obama on Wednesday evening, one day after the two men stumbled over each other’s words during the inauguration ceremony at the Capitol.

For their do-over, the two men convened in the White House Map Room at 7:35 p.m. for a brief proceeding that was not announced until it was completed successfully.

“Are you ready to take the oath?” Chief Justice Roberts said.

“I am,” Mr. Obama replied. “And we’re going to do it very slowly.”

Read the rest:
http://www.nytimes.com/2009/01/
22/us/politics/22oath.html

 
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Chief Justice John G. Roberts Jr. re-administering the oath of office to Barack Obama on Wednesday in the White House.  Pete Souza/The White House

U.S. Losses May Reach $3.6 Trillion; Banking System “Effectively Insolvent”

January 21, 2009

U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.

By Henry Meyer and Ayesha Daya
Bloomberg

“I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007, according to data compiled by Bloomberg.

President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration, Roubini told Bloomberg News. Congress last year approved a $700 billion rescue fund, of which half remains to be disbursed.

Bank of America Corp., the largest U.S. bank by assets, posted a quarterly loss of $1.79 billion last week, its first since 1991, and received $138 billion in emergency government funds. Citigroup Inc. posted an $8.29 billion fourth-quarter loss, completing its worst year, and plans to split in two under Chief Executive Officer Vikram Pandit’s plan to rebuild a capital base eroded by the credit crisis.

‘Bankrupt’ System

“The problems of Citi, Bank of America and others suggest the system is bankrupt,” Roubini said. “In Europe, it’s the same thing.”

Stocks in Europe, Canada and Brazil dropped yesterday on speculation government efforts to shore up the financial industry will fail to stem the deepening global recession. The U.K.’s Royal Bank of Scotland Group Plc said it expects to post a loss of as much as 28 billion pounds ($41 billion) for 2008 and the government got ready to raise its stake in the lender.

Oil prices will trade between $30 and $40 a barrel all year, Roubini predicted.

“I see commodities falling overall another 15-20 percent,” Roubini said. “This outlook for commodity prices is beneficial for oil importers, it’s going to imply that economic recovery might occur faster, but from the point of view of oil exporters, this will be very negative.”

Oil has tumbled 77 percent from its July high of $147.27 as the global economy sinks into recession, straining the budgets of crude exporters. Saudi Arabia, Oman and Dubai, the second- largest sheikdom in the United Arab Emirates, have said they will post budget deficits this year.

Crude oil for February delivery fell to $32.70, down 10.4 percent from last week’s close and the lowest since Dec. 19, on the New York Mercantile Exchange today. The contract traded at $33.37 a barrel at 10:45 a.m. London time.

Only 11% of CEOs Expect Economic Upturn in First Half of 2009

January 19, 2009

About 89 percent of business Chief Executive Officers interviewed don’t expect any change in the economy during the first six months of the year.

From: Business Courier of Cincinnati

CEO confidence in the nation’s economy has reached an new low, says the Conference Board’s latest quarterly report. The survey of about 100 top executives in a wide range of industries declined to its lowest level since the Conference Board began questioning the chiefs in the second quarter of 1976.

Twenty-four of the 100 executives surveyed said they were confident about the economic situation in the fourth quarter, down from 40 who replied that way in the third quarter.

The fourth quarter responses marked the second time since the survey began that the New York-based Conference Board’s measure dipped below 30. The low point came in the second quarter of 1980, when it was 29 and the economy was declining into a deep recession and inflation was heating up.

“The erosion in CEO confidence is a reflection of the rapid and severe deterioration in economic conditions experienced in the final months of 2008,” Lynn Franco, director of board’s Consumer Research Center, said in the release.

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“It appears that business leaders are optimistic about areas they can control, such as their own business, but have a less positive viewpoint of issues outside of their control,” said Chuck Martin, CEO of NFI Research.
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“There certainly is lots of gloom and doom in the media,” said one respondent. “And clearly we have major economic issues before us on a national scale… my hope is that political leadership transitions will provide greater clarity and spur people to gain confidence in our country and economy.”

Visit BusinessExaminer.com

U.S. mayors skeptical of city help in stimulus plan

January 18, 2009

U.S. mayors on Saturday welcomed the $825 billion stimulus plan introduced in Congress this week, but worried that much of the assistance would stop at the state level and not reach cities.

“This stimulus package is a good start, it’s a great start. I would like to see more money directly allocated to cities and not passed through,” Los Angeles Mayor Antonio Villaraigosa said at the U.S. Conference of Mayors convention.

Reuters

Mayor Abram Wilson of San Ramon, California, put it more bluntly, saying, “You’re going to give the money to the state and we’re not going to see it.”

The stimulus plan introduced by Democrats in the House of Representatives includes increased spending on public transit repairs, as well as loans for updating sewers. Cities would also get a boost in school spending. The plan adheres largely to measures requested by President-elect Barack Obama, who takes office on Tuesday.

Obama wants to spend hundreds of billions of dollars to jolt the country out of a deepening recession. He has stressed that an economic recovery package must include public works and assistance for states and local governments, which have had to make steep spending cuts as their revenues decline.

States face the worst economic downturn in a quarter of a century and their financial health is likely to worsen through 2009, the National Governors Association said last month. Cities, too, are grappling with dwindling property tax revenues due to the housing downturn at the same time as they find it harder to take out debt in the municipal bond market.

INFRASTRUCTURE, NOT SHORTFALLS

Dallas Mayor Tom Leppert said the plan would help his city’s transit system buy buses that rely on alternative energy. He said he worried funds would end up plugging holes in state budgets instead of being spent on job-creating efforts such as infrastructure projects.

“If we take these dollars … and we put it in for cities or states simply to make budget shortfalls, we’re in the same position next year as we were last year,” Leppert said.

He also said some of the stimulus measures may pass through state governments so slowly that cities will have to wait years to get assistance.

Under the stimulus proposal released on Thursday, $87 billion would go to helping states cover the costs of Medicaid, the healthcare program for the poor, in the hopes of freeing up money for states to spend on other programs. A further $21 billion would go to building schools and $30 billion would be dedicated to highway and bridge construction projects.

House Speaker Nancy Pelosi has said the economic recovery bill will be voted on in February. An aide to the House Ways and Means Committee told the mayors that the House was working closely with the Senate to craft similar bills so the final measure can be quickly signed into law.

Read the rest:
http://news.yahoo.com/s/nm/20090117
/us_nm/us_usa_economy_stimulus_mayors_1

China May Have Mafia View of Obama Stimulus: “Someday We Break Your Legs”

January 18, 2009

We can learn simple truths from the way the mob or Mafia view things.

That is probably why Las Vegas Mayor Oscar Goodman proposed a $60 million mob museum be included in the Obama stimulus plan.

School economics is one thing.  Street economics is sometimes the same and sometimes different.

The New President and the Congress are now talking about the biggest “rescue” or “stimulus” or “bailout” of the economy in the history of the world.  The deal is financed by “government spending” which is really borrowed money which is debt.

Or we just print more money which means inflation and the money is worthless.

A bank employee counts US dollar bank notes. The euro fell sharply ...

When America borrows, who pays?  First, I guess, and correct me if I’m wrong, China lends the money to the U.S.

China already “owns” as of October, 652.9 billion dollars in US Treasury bonds.

Now President-elect Barack Obama has proposed a stimulus bill expected to total at least 775 billion dollars that he has acknowledged would drive the US deficit significantly higher — and require financing from overseas.

Actually, as  David Gregory said on NBC’s “Meet the Press” on Sunday, the total “bailout” is going to be $2 Trillion from late 2008 until the end of 2009.

And China has already signaled that is may slow the rate of funding U.S. debt, stimulus, rescue and other shenanigans by any name.

Why?  China wants to solve its own economic problems first and China is starting to doubt that American can repay.

Why?  To repay the debt, the average U.S. worker, at some time in the future, will have to earn a lot more and pay a lot more in taxes.  The tax debt per family will exceed $20,000.

But what will Americans DO to earn more?  Make cars at GM?  Hardly. About 70% of our American economy is consumer spending.  So we tax store clerks more?

So, to put this in the most basic terms: the U.S. is borrowing huge amounts of dough from the mafia.  There is some doubt that it can be paid back.  If it doesn’t get paid back the pay-back price will increase.  Finally, if it doesn’t get paid back, “they own you” or “they break your legs.”

So China will own the U.S.

Or break our legs.  Or balls.

Someday, maybe, America will have to make a concession.  Give up some oil?  A chunk of land?  Taiwan?  Guam? Something we really think is important….

Read the rest:
Obama, Congress, Stimulus Mix Overlooks: China’s Slowing US Bond Appetite
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 U.S. “Bailout” Results Uncertain; But China Says Its Stimulus is Working Already
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Can The U.S. Pay Back This Huge Debt?
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 Europeans Deplore Huge Debts, Spending to Solve Current Economic Crisis
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 Obama Offered Republicans ‘Input’ On Stimulus: But “Oh My God” Is Response To Pelosi Bill
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Obama’s Stimulus: Routine Repairs; Lacks “Power to stir men’s souls”

China’s “Grand Strategy”: U.S. Out Of Asia?

 Will China Play By Global Rules? Maybe Not….

Don’t forget the “toxic bank assets.”

Addressing these assets was the original purpose of the Troubled Asset Relief Program, the formal name of the $700 billion bailout plan the Bush administration unveiled as the credit crunch spun out of control. It was later abandoned in favor of taking equity stakes in banks, which was seen as a more direct and rapid way to help.

But as the economy worsens and banks continue to rack up multi-billion dollar losses, the incoming Obama administration will face tough choices in deciding what to do with the $350 billion remaining in the bailout plan. There are many who want a piece of the pie, and there may not be enough money to go around.

From CNN:
http://money.cnn.com/2009/01/16/news/econo
my/Tarp_take2/index.htm?postversion=2009011716

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One critic of the stimulus is Rep. Jerry Lewis from California.
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“We have serious concerns about its size, scope, and astronomical cost,” said Representative Jerry Lewis, the top Republican on the Appropriations Committee. “This legislation appears to blanket government programs in spending with little thought toward real economic results, job creation, or respect for the taxpayer.”

The spending plan would add to the $1.2 trillion deficit the government was already projected to run this year.

See:
http://news.yahoo.com/s/bloomberg/2009
0115/pl_bloomberg/atvv00bkoyg

Marlon Brando as Don Vito Corleone, the Godfather.

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From the Associated Press

Barack Obama and his congressional allies are gambling that the largest public spending program since World War II and a new round of tax cuts will pry the economy from the recession’s iron grip and avert another Depression.

But what if they’re wrong?

Some conservative economists say the additional stimulus might only prolong the grief at best, triggering runaway inflation down the road and resulting in an even more bloated bureaucracy.

“I think the economy will recover regardless of what Washington does. But the long-term effect here will be to reduce the standard of living of the next generation because they will be saddled with all this debt,” said Chris Edwards of the libertarian-leaning Cato Institute.

Even without the new spending proposed by Mr. Obama, the U.S. has a $1.2 trillion budget deficit this year, he noted. “If that isn’t already enough of a Keynesian stimulus, what is?”

Early 20th-century British economist John Maynard Keynes argued that government should intervene to avoid depressions by increasing its spending and controlling interest rates. President Franklin D. Roosevelt based many of his New Deal spending initiatives on Keynesian theory.

The skeptics offer this as Exhibit A: The trillions hurled at the problem last year by Congress, the Bush administration and the Federal Reserve have yet to yield many tangible results.

In short order last week, Congress cleared the way for a new $350 billion installment of bailout cash for the financial industry while House Democrats rolled out details of a $825 billion two-year stimulus package.

Allen Sinai, the president of Decision Economics, a financial consulting firm, said even with Mr. Obama’s aggressive spending program, the economy seems unlikely to show a true recovery this year in terms of sustainable gains by consumers and businesses.

“There are forces going on that are 1930s-like,” he said. “There is incredible asset deflation, a huge loss in wealth by households. In the ’30s, even when funds became available from the financial system to borrow, the pessimism by consumers and businesses was so great that no one wanted to spend.” He wouldn’t rule out a repeat of that mind-set.

Some economists who are not fans of Keynesian economics or stimulus packages argue that FDR’s New Deal, highly touted today as a model for job creation, did little to spur a U.S. recovery.

“It was finally World War II that finally ended the Great Depression,” said Bruce Bartlett, a White House economist in the Reagan administration and a top Treasury official in the first Bush administration. He is the author of a study that says nearly all postwar stimulus packages passed by Congress came too late to be of much help, and just increased the deficit and fueled inflation

Mr. Obama shrugs off the skepticism and casts his stimulus package as the right formula for creating long-lasting, well-paying jobs, despite its big cost.

Obama Urged to Move Swiftly to Rescue Banks

January 18, 2009

President-elect Obama’s advisors have provided few details about how they will attack the banking crisis.

The financial meltdown is the most serious to confront a new president since Franklin D. Roosevelt entered the White House in 1933.

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By Stephen Labaton
The New York Times

A growing chorus of officials and Wall Street executives have urged President-elect Barack Obama to move immediately to shore up the banking industry as its crisis deepens.

With Citigroup, Bank of America and many other large financial institutions continuing to hemorrhage billions of dollars, the central issue Mr. Obama faces is how to relieve banks of rapidly deteriorating assets.

In a speech last week at the London School of Economics, Ben S. Bernanke, the chairman of the Federal Reserve, raised three proposals that Obama transition officials are said to have been considering to cleanse the largest banks of their biggest problems. One would involve the purchase by the government of troubled assets. A second would provide guarantees and agreements to absorb some of the losses in exchange for warrants or other compensation. A third would involve the creation of “bad banks” that would buy the declining assets for cash or stock in the new entity.

Mr. Obama has vowed in generalities to move swiftly. In an interview last week on “This Week” on ABC, he said he had asked his team “to come together, come up with a set of principles around how we are going to maintain transparency, what are we going to do in terms of housing, how are we going to target small businesses that are under an enormous business crunch.”

Likewise, advisers to Mr. Obama have provided few details about how they will attack the banking crisis.

The financial meltdown is the most serious to confront a new president since Franklin D. Roosevelt entered the White House in 1933.

On March 5 of that year, a day after he became president, Roosevelt responded to the devastating string of bank failures by declaring a bank holiday that closed all banks and halted all financial transactions, allowing the start of the arduous process of restoring public confidence in the system.

None of Mr. Obama’s advisers are suggesting a bank holiday. But like Roosevelt’s move, the details of the Obama administration’s rescue efforts are expected to begin to emerge quickly after the new president takes office.

On Wednesday, the day after the inauguration, Timothy F. Geithner, the nominee for Treasury secretary, is certain to be asked about the administration’s plans at his confirmation hearing before the Senate Finance Committee.

Read the rest:
http://www.nytimes.com/2009/01/18/
us/politics/18assets.html