The undertaker: Richard Shelby tries to provoke a run on Citibank
Richard Shelby proved that he is far too crazy to be in the United States Senate, when this morning on "This Week," he suggested a surprising fix to the banking crisis: close down Citigroup and other major banks. Writes George Stephanopoulos:
Sen. Richard Shelby, R-Ala., the top Republican on the Senate Banking Committee, said today on "This Week" that the government should let trouble banks fail.
"I don't want to nationalize them, I think we need to close them," Shelby told me this morning. "Close them down, get them out of business. If they're dead, they ought to be buried," he said. "We bury the small banks; we've got to bury some big ones and send a strong message to the market. And I believe that people will start investing [again] in banks."
Shelby didn't explain, nor was he asked, by the way, how pulling a Lehman Brothers on potentially dozens of megabanks would inspire investors to re-enter the markets, nor did he explain the particular free market principle behind having the federal government come in with the padlocks and shut down a private bank. George did ask Shelby if he had a particular hit list in mind:
I asked Sen. Shelby if he was referring specifically to Citigroup, the struggling bank that has received about $45 billion in taxpayer money.
"Well whatever. Citi's always been a problem child," said Shelby, who has long opposed giving federal TARP money to struggling banks.
But Thomas Donohue, head of the U.S. Chamber of Commerce, disagreed. "It's not practical to talk about closing a bank that is integrated throughout the whole global economy," he said. "It is practical to talk about buying some of those assets away from those banks and holding them in an institution that would have both public and private money."
Question: is it responsible, in the middle of a recession, for a United States Senator to suggest killing off major banks, by name? If there is a run on Citi, or a major sell-off, on Monday, would Shelby be to blame?
As bad as it gets (but not as bad as December or January)
The new jobless rate: 8.1 percent, is bad. The February figure: 651,000 jobs lost, is worse. But it turns out that December and January made that figure look like a walk in the park. The closing two months of George W. Bush's disastrous presidency saw the highest job losses since just after World War II:
The economy has lost 4.4 million jobs since the recession began in December 2007, with more than half coming in the last four months. Read full report.
Payrolls fell by 655,000 in January and by 681,000 in December, revised down by 161,000 from previous estimates.
The job losses in December were the biggest monthly decline in jobs since October 1949, when half a million steelworkers went on strike for higher pay.
Note, righties, when the recession began: December 2007. Bush time. Meanwhile, the figures for February are brutal:
The unemployment rate continued to trend upward in February for adult men (8.1 percent), adult women (6.7 percent), whites (7.3 percent), blacks (13.4 percent), and Hispanics (10.9 percent). The jobless rate for teen-agers was little changed at 21.6 percent. The unemployment rate for Asians was 6.9 percent in February, not seasonally adjusted.
And the losses occurred across every conceivable sector of the economy, with the exception of healthcare (up 27%):
Employment in professional and business services fell by 180,000 in February. The temporary help industry lost 78,000 jobs over the month. Since December 2007, temporary help employment has declined by 686,000, or 27 percent. In February, job declines also occurred in services to buildings and dwellings (-17,000), architectural and engineering services (-16,000), and business support services (-12,000).
Widespread job losses continued in manufacturing in February (-168,000). The majority of the decline occurred in durable goods industries (-132,000), with the largest decreases in fabricated metal products (-28,000) and machinery (-25,000). Employment in nondurable goods manufacturing declined by 36,000 over the month.
The construction industry lost 104,000 jobs in February. Employment in the industry has fallen by 1.1 million since peaking in January 2007. Two-fifths of that decline occurred over the last 4 months. Employment fell sharply in both the residential and nonresidential components of the industry in February.
Employment in truck transportation declined by 33,000 in February; the industry has lost 138,000 jobs since the start of the recession in December 2007. Nearly two-thirds of the decline (-88,000) occurred over the last 4 months. The information industry continued to lose jobs (-15,000). Over the last 4 months, employment in the industry has decreased by 76,000, with about two-fifths of the decline occur- ring in publishing.
While Obama's proposed budget will hit Bush hard in the wallet, just like other wealthy Americans, the main blow may be aimed at his reputation.
The 134-page spending plan opens with a 10-page preamble entitled "Inheriting a Legacy of Misplaced Priorities" that lays blame for many of today's problems at the doorstep of the former president.
"It is no coincidence that the policy failures of the past eight years have been accompanied by unprecedented Governmental secrecy and unprecedented access by lobbyists and the well-connected to policymakers in Washington. Consequently, the needs of those in the room trump those of their fellow citizens," the plan says.
But others get blamed in a broad-brush condemnation: "For the better part of three decades, a disproportionate share of the Nation's wealth has been accumulated by the very wealthy," the budget says. It blasts "a legacy of irresponsibility," adding, "It's our responsibility to change it."
Big up to Paul Krugman, who bitch slaps Country Bob Jindal's ridiculing of government spending on volcano tracking:
leaving aside the chutzpah of casting the failure of his own party’s governance as proof that government can’t work, does he really think that the response to natural disasters like Katrina is best undertaken by uncoordinated private action? Hey, why bother having an army? Let’s just rely on self-defense by armed citizens. The intellectual incoherence is stunning. Basically, the political philosophy of the GOP right now seems to consist of snickering at stuff that they think sounds funny. The party of ideas has become the party of Beavis and Butthead.
From the White House press office: excerpts of President Obama's speech tonight:
We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.
Well that day of reckoning has arrived, and the time to take charge of our future is here.
On the stimulus bill and his soon to be dropped budget:
The recovery plan and the financial stability plan are the immediate steps we’re taking to revive our economy in the short-term. But the only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren’t preparing our children and the mountain of debt they stand to inherit. That is our responsibility.
My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession.
Given these realities, everyone in this chamber – Democrats and Republicans – will have to sacrifice some worthy priorities for which there are no dollars. And that includes me.
But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.
Schumer to Jindal and Company: take it or leave it
The stimulus package is not an a la carte buffet, Bobby Jindal. Chuck Schumer informs the GOPers that if they don't want all of the money, they needn't take any of the money.
By the way, a Youtube commenter asks a salient question: since when is helping the unemployed "pork?"
Barney Frank added to the hardball tonight ... er ... on "Countdown" by mocking the Republican Naysaying governors by saying "some people define courage as a willingness to endure the suffering of others." He then asks what's with Jindal "denying working people who've lost their jobs through no fault of their own" unemployment benefits. He concludes: "if that's political courage, I hope they have more cowardice."
As you know, Section 1607(a) of the economic recovery legislation provides that the Governor of each state must certify a request for stimulus funds before any money can flow. No language in this provision, however, permits the governor to selectively adopt some components of the bill while rejecting others. To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation. It would also undermine the overall success of the bill, as the components most singled out for criticism by these governors are among the most productive measures in terms of stimulating the economy.
For instance, at least two governors have proposed rejecting a program to expand unemployment insurance for laid-off workers. Economists consistently rank unemployment insurance among the most efficient and cost-effective fiscal stimulus measures; by one frequently cited estimate, it provides an economic return of as high as $1.73 for every dollar invested. Thus, by denying this provision for their residents, these governors are not just depriving some of the neediest Americans of relief in a dire economy; they are undermining the overall stimulative impact of the package.
So go ahead, Bobby. Reject the money. I double dare you...
A new ABC/WaPo poll puts the president's approval rating at 68 percent. The GOP? Not so much.
Compared, the approval ratings fall this way:
President Obama - 68% Democrats in Congress - 50 Republicans in Congress - 38 (wah wah waaaaahhhhh....)
And the Post writes:
Overall, 68 percent of poll respondents approve of Obama's job performance, a finding that puts him on par with the average for the past eight presidents at this point in their tenures. Ninety percent of Democrats and 67 percent of independents approve of Obama's performance. Sixty-four percent said they approve of how Obama is handling appointments to the Cabinet and other top positions in the administration, despite tax problems and stumbles that have led to three of his top nominees withdrawing from consideration.
Although Obama has encountered near-unanimous GOP opposition to his stimulus plan in Congress and widespread criticism for a housing bailout plan that some say rewards people who have been fiscally irresponsible, 64 percent of those polled back the economic recovery package, and the same percentage support the mortgage proposal. The broad support for the recovery package comes as just 10 percent said the bill was too heavy on spending and too light on tax cuts, the primary contention of the Republican leadership in Congress.
Overall, 60 percent of poll respondents approve of how Obama is dealing with the economy.
About nine in 10 Democrats and seven in 10 independents said Obama is living up to the central promise of his campaign: bringing change to Washington. Most Republicans said he is not.
Half of all poll respondents said they approve of how congressional Democrats are doing their jobs, up 15 points from July and the highest marks they have received in nearly two years. Congressional Republicans also are being viewed more favorably, with 38 percent approving of their job performance, a 13-point improvement since the middle of last year.
Head to head, though, Americans put far more faith in Obama than in congressional Republicans: Sixty-one percent said they trust Obama more than the GOP on economic matters; 26 percent side with the Republicans in Congress. On that question, Obama's advantage is bigger than George W. Bush, Bill Clinton or George H.W. Bush ever had over the opposition party in the legislature.
Overall, Democrats maintain an edge of nearly 2 to 1 over Republicans as the party that Americans prefer to confront "the big issues" over the next few years.
A new CBS News/New York Times poll finds broad support for President Obama's mortgage rescue plan, though you wouldn't know it from CBS News' headline:
Poll: Public Wary Of More Bailouts
Really? Sounds grim (and this from the new home of an extremist like this.) But let's read on...
As President Obama pushes a $75 billion mortgage relief plan, sixty-one percent of those surveyed say the government should help homeowners, while just 20 percent oppose such help.
Hm... that doesn't match the headline...
But while 35 percent say Mr. Obama’s plan makes them feel relieved for people facing foreclosure, just as many are resent the beneficiaries of the program for needing to be rescued following what respondents see as irresponsible behavior.
Let's examine that, shall we? In the actual poll, rather than the story, 61 percent indeed say homeowners should be helped. But that includes 47 percent of Republicans (with just 31 percent opposed) and 59 percent of Independents, with just 24 percent opposed. Democrats approve of helping struggling homeowners by a wider 73-9 percent. As for resentment, the poll reads this way:
OBAMA’S PLAN TO AID HOMEOWNERS MAKES YOU FEEL… Relieved for people facing foreclosure 35% Resentful of irresponsible homeowners 35 Don’t know enough about plan yet 26
Not sure that means Americans are "increasingly resentful." It means that about one-third each feel relieved or resentful. Not exactly "public wary of more bailouts." What the poll does find is that a majority of Americans don't want to hand more money to banks: just 39 percent approve of that idea, versus 50 percent who disagree. The reason? 57 percent don't believe that giving money to the banks, who aren't lending the money (and who may actually be hiding it...) will help the economy.
On the other hand, a majority of Americans do oppose bailouts to corporate entities and banks, in other words, to the people they perceive as the villains in the economic collapse. Per CBS:
Fifty-nine percent say President Obama’s proposal to help banks would only help bankers, not all Americans.
There is widespread support for the president and Congress’ efforts to cap executive pay: Eighty-three percent say the government should limit executive salaries if companies get federal money. Just 11 percent say it should not.
Americans are even less supportive of a further bailout for the U.S. auto industry. (Automakers have already received loans from the government but say they may need more money to avoid bankruptcy.) Just 22 percent say the government should give more money to automakers, while 68 percent oppose any further aid.
But guess who isn't seen as the villain? That would be Barack Obama:
One month into his term, President Obama’s overall approval rating remains favorable, with 63 percent of Americans approving of the job he is doing as president. The figure is similar to the approval rating he received earlier this month.
Seventy-six percent of Americans are confident in Mr. Obama’s ability to make the right decisions about the economy, including nearly a third who are very confident.
More than half of Americans also approve of President Obama’s handling of foreign policy (57 percent) and Iraq (54 percent).
And 77 percent are optimistic about the next four years with Mr. Obama as president, including 57 percent of Republicans.
Meanwhile, the public appears to be tiring of the Republican political stunt-making when it comes to reviving the economy, and they are increasingly seen as partisan and obstructionist:
While the percentage of Americans who believe the president is trying for bipartisanship has slipped seven points from earlier this month, 74 percent still think he is trying to be bipartisan.
By contrast, just 45 percent say Congressional Democrats are trying to be bipartisan and 31 percent say Congressional Republicans are trying to do so.
Most of those surveyed say Republican opposition to the stimulus bill - it passed with the support of no House Republicans and just three Senate Democrats - results from politics.
Sixty-three percent say GOP opposition was for political reasons, while 29 percent say it was because the stimulus bill would be bad for the economy.
Americans say Mr. Obama should focus more on his positions than reaching across the aisle. Fifty-six percent say he should prioritize sticking to his policies, while just 39 percent say he should put bipartisanship first. Seventy-nine percent, however, say Congressional Republicans should prioritize bipartisanship.
In other words: throw the Republicans overboard. Back to the stimulus bill: the exact numbers are as follows:
IMPACT OF STIMULUS BILL ON ECONOMY (will make things) Better 53% Worse 13 No impact 24
And Americans have realistic expectations:
STIMULUS BILL’S EFFECT ON LENGTH OF RECESSION Will shorten significantly 19% Will shorten, not significantly 17 Will not shorten 50
Most of those surveyed assumed Obama's plans would improve the economy in 2 to 4 years.
BTW, the GOP has caught onto the public mood, and even Bobby Jindal was bending over backward to sound "bipartisan" during the governors' news conference today. Too late, my friend.
Ideology first: Jindal fires the first shot for 2012
Per ThinkP - Louisiana Gov. Bobby Jindal just says no to $100 million in stimulus money for unemployed residents of his state. Now THERE's a great way to improve his changes of getting the 2012 GOP presidential nomination by ... ensuring he is not re-elected governor of Louisiana???
And other Republican governors are preparing to follow suit, even as the White House goes around their colleages in Congress, dealing directly with more amenable governors and mayors. But can someone explain how punishing the people of one's state improves a politician's political fortunes? The GOP has caught itself in a hell of a trap: they can either be hypocrites and beg for the money they voted against, or be ideologues and hurt their own constituents.
Randi Rhodes Is On Her Own and Nova M Files for Bankruptcy. It comes to light now that the sticking point between Randi Rhodes and Nova M was her belief that her contract included helping her with legal costs which it did not. She is now rumored to be seeking a local radio gig and many believe she’s trying to get back to her old station – WJNO, West Palm Beach. As for Nova M, it was losing a lot of moolah — $100,000 per month. The founders and corporate officers — Sheldon and Anita Drobny — are filing for Chapter 7 bankruptcy liquidation for the company. Some of Nova M’s other talent — Mike Malloy, Nancy Skinner — continue in syndication as another person involved with Nova M from the beginning, Dr. Mike Newcomb, is reorganizing the network as On Second Thought Radio Network.
The radio business is in a tailspin right now, and Randi has had a lot of legal bills stemming from the lawsuit filed against her by Iraq contractor CACI. It's a big loss for the South Florida talk radio market, which frankly, wasn't that good to begin with. That say, let's all say a prayer for Thom Hartmann (number 10 on the Talkers "Heavy 100" and the number one non-winger show.) If he goes, I'm going to go back to listening to jazz CDs in the car.
UPDATE: Per astute reader Kurt, the rumor mill has it that 940 will flip to sports in March:
Though the station isn't confirming it, WINZ-940 will become a Fox Sports radio affiliate in March -- a move that will allow owner Clear Channel to reduce costs. WINZ now airs news, talk shows and live sports, including Heat games. The new lineup will include Fox shows such as Steve Czaban (6-9 a.m.) and Chris Myers (3-7 p.m.), Dan Patrick's syndicated program from 9 a.m. to noon and Jim Rome from noon to 3 p.m.
The good news: Dan Patrick and Jim Rome. The bad news? No more progressive talk in South Florida. And I also hear that more layoffs are likely coming at Clear Channel.
Charlie Crist expects Florida to benefit from his support of the stim. And that's all well and good. He did lend critical Republican support to President Obama when he needed it, and Florida does need the cash. But what's with the nine House GOPers who voted against the bill, and who are now clamoring for stim cash for their districts??? Hm??? From Politico's Glenn Thrush:
We're getting into broken record territory here on Republicans clamoring for stimulus money.
Indeed. The nine co-signed a letter with nine Democrats (all of whom voted "yes" on the stim" asking for a waiver so that Florida can receive the dough. The letter read:
“This critical funding is vital to protecting our schools from budget cuts and teacher layoffs. Because Florida has been hit especially hard by a rise in foreclosures, unemployment, and recent natural disasters, we are experiencing a crippling budget crisis. Now more than ever, we must invest in our state’s future,” said the letter.
The Republican co-signers: Adam Putnam, Ileana Ros-Lehtinen, Lincoln Diaz-Balart, Tom Rooney, Mario Diaz-Balart, Ginny Brown-Waite, Cliff Stearns, John Mica and Bill Posey.
The Dems: Suzanne Kosmas, Ron Klein, Alcee Hastings, Robert Wexler, Debbie Wasserman Schultz, Kathy Castor, Kendrick Meek, Alan Grayson and Corrine Brown.
It should be noted that the Diaz-Balarts, Hastings, Meek and Wasserman Schultz are longtime allies, and even had a non-aggression pact that kept the Dems from campaigning against the Repubs during the last campaign. But this is just unseemly.
Why the need for the waiver? Um... it's the cuts to education spending, stupid... In other words, Florida's notorious, constant education cuts, dating back to the Jeb Bush era, are now biting us in the butt. Florida may get a break, because part of the problem is a significant drop in enrollment in the state's schools. But we shall see.
Remember the story of the little red hen? The one who refused to participate in gathering the wheat, threshing it, making the flour, mixing the mash or baking it up, but was right ready to partake in eating the bread? Apparently, the little red hen was a Republican.
First, the House GOPers and all but three Republican Senators voted "no" on the economic recovery bill. Then, of course, we all found out that some of those same wingers are sending out press releases touting the goodies in the bill for their home districts. Hm. Nothing new. Well now, some governors, having caught on to the irony, are trying to de-hen themselves by turning down stimulus money. The better to be ideologically consistent (truthfully, I'd like to see Arizona and other states whose delegations opposed the bill get nothing, and then let's see what happens in 2010...) But here's the catch: many of the Republican governors (of some of America's poorest states, by the way,) are considering saying no to the money, knowing their states will get it anyway.
U.S. Rep. James Clyburn, D-S.C., the No. 3 House Democrat, said the governors _ some of whom are said to be eyeing White House bids in 2012 _ are putting their own interests first.
"No community or constituent should be denied recovery assistance due to their governor's political ideology or political aspirations," Clyburn said Wednesday.
In fact, governors who reject some of the stimulus aid may find themselves overridden by their own legislatures because of language Clyburn included in the bill that allows lawmakers to accept the federal money even if their governors object.
He inserted the provision based on the early and vocal opposition to the stimulus plan by South Carolina's Republican governor, Mark Sanford. But it also means governors like Sanford and Louisiana's Bobby Jindal _ a GOP up-and-comer often mentioned as a potential 2012 presidential candidate _ can burnish their conservative credentials, knowing all the while that their legislatures can accept the money anyway.
By the way, do you remember who pushed for BofA to complete the Merrill acquisition, effectively tainting its balance sheet with Lynch's toxic assets? You guessed it: the last-minute bank robbers of the Bush Treasury Department:
Friday, Jan. 16, 2009
Treasury, Bank of America reach bailout deal
By MARTIN CRUTSINGER AP Economics Writer
WASHINGTON (AP) - The government has extended a new multibillion-dollar lifeline to one of the country's biggest banks as officials continue to struggle with a serious crisis in the financial system.
After a marathon negotiating session, the Bush administration reached an agreement early Friday to provide Bank of America with an additional $20 billion in support from the government's $700 billion financial rescue fund.
The administration, the Federal Reserve and the Federal Deposit Insurance Corp. also agreed to participate in a program to provide guarantees against losses on approximately $118 billion in various types of loans and securites backed by residential and commercial real estate loans.
The bulk of these holdings were assumed by Bank of America when it acquired Merrill Lynch in a deal that closed earlier this year.
Bank of America had already been granted $25 billion from the bailout fund that Congress passed on Oct. 3, but found it needed more as it sought to cope with rising losses related to its acquisition of Merrill Lynch. ...
Politico reports that our friends the "Do Nothing" Republicans will attempt to turn their economic recovery lemons into lemonade by airing anti-legislation ads in 30 Democratic districts. Fair enough. But then, the online mag commits the cardinal old media sin: writing the narrative, instead of the facts. And usually, the MSM narrative favors the Republican position, whatever it happens to be (remember the "is it spending or stimulus" debate?) Politico's Patrick O'Connor writes:
The party’s campaign arm will start airing radio ads Friday in approximately 30 Democratic districts to argue that the bill violates the lawmakers’ campaign pledge to restore fiscal responsibility to Washington.
Public opinion, though slipping, currently favors President Barack Obama and his package of spending and tax cuts to bolster the retreating economy. So Republicans are making a long-term gamble that opposition to the package will look prescient two years from now if the economy is still struggling.
Slipping? Really? No, not really. Actually, public opinion favoring the economic recovery package is growing. Per Gallup:
Obama Has Upper Hand in Stimulus Fight Obama’s 67% approval rating on the stimulus is more than twice that of Republicans
PRINCETON, NJ -- The American public gives President Barack Obama a strong 67% approval rating for the way in which he is handling the government's efforts to pass an economic stimulus bill, while the Democrats and, in particular, the Republicans in Congress receive much lower approval ratings of 48% and 31%, respectively.
And more Gallup, which finds today that support for the plan is up among all party groups:
Public support for an $800 billion economic stimulus package has increased to 59% in a USA Today/Gallup poll conducted Tuesday night, up from 52% in Gallup polling a week ago, as well as in late January.
Over the same period, support for the stimulus package held steady among independents, with a slight majority in favor of it. The percentage of Republicans favoring the package rose slightly from 24% to 28%, but remains below the 34% support received in early January, before Congress began its formal consideration of the package.
The problem for the GOP is that because they spent eight years repudiating these core principles, they have no credibility now embracing said principles. Without the protection of those principles, the GOP simply looks like it wants to oppose for the sake of opposition at a time when the country is crumbling.
... after working most of Tuesday night, members and staff were plainly exhausted, and continued disputes over Obama’s school construction initiative delayed a planned meeting of the formal House-Senate conference on the bill.
“Like any negotiation this involved give-and-take, and if you don’t mind my saying so, that’s an understatement,” said Reid. Down to the end, the school modernization funds were a bone of contention for Sen. Susan Collins (R.-Maine), whose vote is pivotal to the president.
Last Friday, she had successfully eliminated all such money from the Senate bill. Wednesday she agreed to allow $10 billion as part of a $54 billion fiscal stabilization fund but argued that the $10 billion should not be confined to this single dedicated purpose.
After Reid’s announcement, an administration official said the issue was resolved, as did Collins. But House leaders, who had grown resentful of the Maine Republican’s veto power over the bill, remained unhappy—forcing the delay.
So what is Collins' problem?
The constructions funds are especially sensitive in poor, often minority school districts less able to finance new schools. Among the many spending cuts made last week in the Senate, the school construction issue was perhaps the most ideological.
For the Obama camp, it brings back New Deal memories of the Public Works Administration creating construction jobs and building schools across the country. But Collins has always resisted arguing that, in today’s world, it represents an expansion of the federal role in state and local affairs.
Uh-huh... yeah, why help those poor minority kids, when you can just move to Maine, where there are no poor minority kids...
BTW it appears that the Senate has also screwed over urban districts, in favor of the rural folk who don't like Barack Obama anyway, and who from what I can tell, don't want an economic stimulus plan... and of course, they've also screwed over the poor.
... House Energy and Commerce Committee Chairman Henry Waxman (D., Cal.) said the tentative deal calls for 65% of the money to be distributed according to the Senate’s more rural formula; 35% as the more urban House wanted.
In the same talks, the House appears to have preserved its higher 65% subsidy to help laid- off workers meet COBRA payments to maintain employer-provided health insurance; the Senate had proposed 50%. But the House agreed in turn to drop its proposal to increase Medicaid coverage to help lower income individuals face the same insurance dilemma and can’t afford to pay even a subsidized COBRA payment.
One issue is that liberals in the House are objecting to the amount of money in the bill for school construction. Sources say the bill includes $6 billion for school construction. Negotiators worked hard to find a way to put the provisions back in after the Senate eliminated all $16 billion in school construction money. But some key House Democrats say that's not enough.
Another problem, sources say, is that some House Democrats say the bill gives states too much discretion on how to use some of the money intended for education. Some Congressman are concerned that governors will not use the money to help poor school districts.
Some Senate Democrats are unhappy, too. Sen. Tom Harkin, D-Iowa, says there is just not enough money in the bill for school construction.
"Every school in America will get 10,000 bucks if they're lucky," Harkin said, guessing that might be enough to buy two energy efficient windows. "And what's that going to do for them?" he asked. "We're trying to add new heating facilities. We're trying to add renovations. And doing it by formula doesn't do it."
Harkin says he'd ultimately vote for it, but he doesn't like the concessions made to get the support of the moderate Republicans.
WASHINGTON - Moving with lightning speed, key lawmakers announced agreement Wednesday on a $789 billion economic stimulus measure designed to create millions of jobs in a nation reeling from recession. President Barack Obama could sign the bill within days.
"The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill," said Senate Majority Leader Harry Reid, one of the participants in an exhausting and frenzied round of bargaining.
The bill includes help for victims of the recession in the form of unemployment benefits, food stamps, health coverage and more, as well as billions for states that face the prospect of making deep cuts in their own programs.
It also preserves Obama's signature tax cut — a break for millions of lower and middle income taxpayers, including those who don't earn enough to pay income taxes.
However, House Speaker Nancy Pelosi was conspicuously absent from the news conference in which members of the Senate announced the agreement, and it was not clear whether she stayed away out of unhappiness or a scheduling conflict.
Officials had said previously that one of the final issues to be settled was money for school modernization, a priority of Pelosi as well as Obama and one on which they differed with Collins and other moderates whose votes will be essential for final Senate approval.
The WaPo reports on the new D.C. Don Corleone, Susan Collins' ... take:
"I'm particularly pleased that we have produced an agreement that has the top line of $789 billion," she said. "It is a fiscally responsible number that reflects our efforts to truly focus this bill on programs and policies and tax relief that will help turn our economy around, create jobs and provide relief to the families of our country."
Collins, one of three Republican senators whose votes for the bill yesterday gave it a filibuster-proof majority, also said that in the final version, "we were able to increase the amount of infrastructure spending," which she called "the most powerful component in this bill to create jobs." She said the bill contains about $150 billion for infrastructure including transportation, environmental, broadband and other projects.
More than 35 percent of the funding goes for tax relief, Collins said.
And a bit more on what they were fighting over:
Before the House-Senate conference, Democratic negotiators convened a final meeting with Senate centrists who had forced steep cuts in the spending portion of the stimulus plan -- which at one point last week had grown to almost $940 billion in new tax cuts and domestic spending.
Even after the Senate scaled down its version to $838 billion, approved 61-37 yesterday, the centrists continued to demand more reductions. Senate aides said the targets were reducing Obama's "Make Work Pay" tax cut of $500 a year for most individuals and $1,000 a year for most families, paring it down to $400 and $800, respectively.
Other reductions were likely in a $15,000 tax credit for all home purchases in the next year as well as a tax credit for the purchase of new cars, both of which were added to the Senate bill after little debate.
House Democrats have objected to wholesale deletions from their original bill during the Senate debate, but they appeared likely to see some return of aid to states that totaled $79 billion in their plan. The Senate reduced that figure to $39 billion. Senators also zeroed out a fund that would finance school construction, another priority for which House Democrats are pushing to restore funds.
The wrangling may be the reason that not just Pelosi, but also the White House, have withheld the kudos from what just might be a moderate mish-mash bill:
... in a bewildering _ if temporary _ turn of events, House Speaker Nancy Pelosi and the White House withheld immediate expressions of support, and the formal meeting of congressional bargainers who will need to ratify the deal was delayed.
At a news conference in the Capitol, Senate Majority Leader Harry Reid, flanked by moderate senators of both parties, said agreement had been reached on a compromise that "creates more jobs than the original Senate bill and costs less than the original House bill."
“Usually you go to conference and split the difference between the two houses — that may not be the case here,” Pelosi said. “At these conferences, my experience has been that the White House has a seat at the table — that they weigh in.”
Both Obama and Pelosi are hoping to restore significant stimulus spending eliminated by the Senate, especially $21 billion in school construction and technology grants, $10.3 billion in COBRA insurance and $8.6 billion in new Medicaid coverage for the unemployed.
Personally, I blame Harry Reid, who has given virtual veto power over the bill to Susan Collins.
The best thing about this country is that even with its faults, the goodness and decency of most people almost always outweighs the nastiness and callowness of the few. When times are toughest, Americans pull together to help each other, and to support our neighbors, whether it's helping to put the shutters up on the block during hurricane season, or crying for the victims of 9/11 from a thousand miles away. I suppose that's actually true of all human beings, American or not, but hey, let me have my gauzy, patriotic moment.
A prime example of the fundamental goodness of people: Ms. Hughes and her son now have a home. From the Huffpo:
If you were paying attention to Obama's stimulus push yesterday it was hard to miss Henrietta Hughes, a woman on the verge of tears who asked the President to help her with an "urgent need": homelessness. After the Florida town hall where Hughes talked to Obama, a local Fort Myers paper says she was offered a home by State Representative Nick Thompson's wife.
The house is in LaBelle, the first home Scere Thompson bought after law school. She told Hughes, “Just give me the opportunity to help you.”
Rep. Thompson, I should point out, is a Republican, Expect the wingers to try and use this act of kindness to prove that government can't solve problems, since the Rep's wife got to Ms. Hughes before President Obama could (ah, look! They're starting already...) They do that, because "conservatives," broadly written, believe that human beings are fundamentally evil. Everything else they believe proceeds from there. But the right can't have it both ways. They can't sneer at charity and simultaneously claim that charity begins at the GOP.
An interview with Ms. Hughes (before the gift) below:
Step one: take out everything House Republicans asked for
The negotiations are moving along on the House-Senate economic revitalization conference bill. Andrea Mitchell just reported that the gist of the changes are to add back in state grants that were stripped in the Senate (and we know the White House wants school construction money restored as well) and cutting back some tax cuts requested by Republican House members who wound up not voting for the bill. As Mitchell put it, the House GOP provisions were "the first to go." After all, Democrats got nothing in exchange for them.
In Fort Myers today: President Obama and Charlie Crist team up
Let me say again, though I think I've said it before, that Charlie Crist is a very, very smart man. And ambitious. He neutralized lingering questions about his sexuality (at least in the press) by marrying a girl. And he didn't just marry any gil -- he married a rich socialite whose public image and net worth can only help his political fortunes.
He ran and won in 2006 as a moderate Republican, and succeeded in winning over a good number of Democrats (he also won 18 percent of the Black vote.)
He has somehow gotten away with flitting off to Europe for a $400,000 junket, having neutralized the story with ... the wedding to a girl...
When McCain ran for president, Charlie backed him instead of Uncle "Loser" Rudy, and even suffered the indignity of getting onstage with Sarah Palin AND shucking for oil derricks off the coast of Miami, all in an attempt to become vice president.
And when that didn't work out, he went back to being a moderate, and most recently stepped out publicly in support of President Obama and the economic stimulus package, becoming the most prominent governor -- and the first prominent Republican in the country, to do so. He did it early, and he did it at the same time El Rushbo and his former candidate, John McCain, were doing everything in their power to play spoiler.
I want to start by thanking your governor, Charlie Crist, for joining us today. Governors understand our economic crisis as well as anyone; they're on the front lines dealing with it every day. And Governor Crist shares my conviction that creating jobs and turning this economy around is a mission that transcends party. When the town is burning, we don't check party labels. Everyone needs to grab a hose!
Governor Crist and governors across the country understand that. Mayors across the country understand that. And I think you understand that, too. Which is what I want to talk about today.
Crist's embrace of the stiumulus is good policy and good politics, especially for a guy who may yet run for Senate (against, among others, Kendrick Meek, who press released his "accompanying" of President Obama to Fort Myers "aboard Air Force One" yesterday, but who didn't get much of a photo op out of it, while Crist got to introduce the president), and who already has crossover appeal among Democrats, who sometimes appear to like him better than his own base does. In a state that's trending blue, pissing off a few GOP hardliners probably helps Crist, rather than hurting him, especially since his actions, unlike his silly "drill here, drill now" fakery, will likely result in billions of dollars flowing into the state, while his opponents are only promising to say no, and say it often.
Also in Politico: Crist says yes, Mel says no. (And wouldn't that contrast be helpful for a would-be GOP Senator running against the tide of Democratic salivating over 60 votes in the Senate... what if the 60th vote could be a guy named Charlie...?)
In his prime time press conference tonight, President Obama laid into the opposition party with a velvet glove, that happened to have a pretty tightly clenched fist beneath it. He chided members of the other ideological party whose opening or final negotiation position is that government should "do nothing" while the economy continues to head off a cliff, saying they are alone in that ideological fixation, while most economists and people of common sense are with him. The bottom line is that something must be done, and that only government has the spending wherewithall to do it. The Republican formulation that if we just stand far back enough from the edge, we won't hear the screams as loudly as the cart carrying our economic future goes over the side.
Obama made a simple, succinct, and forceful case for his economic recovery plan, uttering the world "stimulus" only twice, and seemingly unintentionally. He gave complex, intelligent answers to economic and foreign policy questions, and even one on A-Rod -- a nice change after eight years of dumbass. Okay, sorry, that was partisan of me. Not very Age of Obama... but what is? Calling on Sam Stein of the Huffpo. Nice work if you can get it, Sam...
The president also answered a question that's been vexing me and many other Democrats: who the hell cares about bipartisanship??? His answer: "I didn't do [all of that outreach to Republicans] for a few vote this week. I did it for the long term," and to build good will that he can use for the next four years. Full answer:
You know, when I made a series of overtures to the Republicans, going over to meet with both Republican caucuses, you know, putting three Republicans in my cabinet -- something that is unprecedented -- making sure that they were invited here to the White House to talk about the economic recovery plan, all those were not designed simply to get some short-term votes. They were designed to try to build up some trust over time.
Obama didn't take the bait from Helen Thomas when she asked him if any Middle Eastern countries have nukes (read: Israel) and he wouldn't be pinned down on a timetable for Afghanistan, negotiations with Iran, or whether his administration will allow the media to view the flag draped coffins of our fallen troops. Not quite transparency, but I can live with it.
UPDATE: The Huffpo has the full transcript of the presser. Representative clip:
As I said, the one concern I've got on the stimulus package, in terms of the debate and listening to some of what's been said in Congress, is that there seems to be a set of folks who -- I don't doubt their sincerity -- who just believe that we should do nothing.
Now, if that's their opening position or their closing position in negotiations, then we're probably not going to make much progress, because I don't think that's economically sound and I don't think what -- that's what the American people expect, is for us to stand by and do nothing.
There are others who recognize that we've got to do a significant recovery package, but they're concerned about the mix of what's in there. And if they're sincere about it, then I'm happy to have conversations about this tax cut versus that -- that tax cut or this infrastructure project versus that infrastructure project.
But what I've -- what I've been concerned about is some of the language that's been used suggesting that this is full of pork and this is wasteful government spending, so on and so forth.
First of all, when I hear that from folks who presided over a doubling of the national debt, then, you know, I just want them to not engage in some revisionist history. I inherited the deficit that we have right now and the economic crisis that we have right now.
Number two is that, although there are some programs in there that I think are good policy, some of them aren't job-creators. I think it's perfectly legitimate to say that those programs should be out of this particular recovery package and we can deal with them later.
But when they start characterizing this as pork, without acknowledging that there are no earmarks in this package -- something, again, that was pretty rare over the last eight years -- then you get a feeling that maybe we're playing politics instead of actually trying to solve problems for the American people.
All I can say is, this guy's got extraordinar swag... And no, I'm not fantasizing (sick, twisted wenches...)
Paul Krugman feels about the same way I do about the Senate "compromise" wrought by newly emboldened "centrist" Mafiosa Susan Collins of Maine. It sucks:
What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?
A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.
Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.
Yet the centrists did their best to make the plan weaker and worse.
One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.
The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.
On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.
All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.
Krugman blames the Obama administration's seeming obsession with bipartisanship for the worsening of the bill, and I agree. It's time to stop trying to coddle the opposition and start recognizing that there's a reason they are where they are. Giving Susan Collins a veto over the proposal so that she can play Cruella de Ville, demanding that no more money be given to those awful poor people and children, is a hell of a rotten negotiating position for the White House to be in.
WRONG. ABOUT. EVERY. F***ING. THING. From holding back the economic development of the early nation, to slavery, to the Civil War, to Jim Crow, to Segregation, to the minimum wage, to maximum hours, to workplace safety, to workers compensation, to food safety, to child labor, to isolationism, to the FDIC, to Social Security, to the union movement, to Red Baiting, to woman's suffrage, to anti-intellectualism, to workplace discrimination, to State's Rights, to the Voting Rights Act, to equal pay, to religious fundamentalism, to loving guns more than life itself, to anti-Catholicism, to anti-Semitism, to Vietnam, to the War on Terror, to birth control, to not taxing while really spending, to homophobia, to clean water, to environmentalism, to making the rubble bounce on brown people, to supporting torture, to police abuse, to global warming, to outlawing precious and blessed foreplay between consenting adults, generation after generation, they've been the assholes of the nation.
Sunday best: Michael Steele says work is not a job
On "This Week" today, the RNC's new, black face, confused the hell out of the rest of us, telling George Stephanopoulos that a job created by the government isn't really a job at all. It's "work," and work is most definitely NOT ... a job ... Confused? Read on:
STEELE: You've got to look at what's going to create sustainable jobs. What this administration is talking about is making work. It is creating work.
STEPHANOPOULOS: But that's a job.
STEELE: No, it's not a job. A job is something that -- that a business owner creates. It's going to be long term. What he's creating...
STEPHANOPOULOS: So a job doesn't count if it's a government job?
STEELE: Hold on. No, let me -- let me -- let me finish. That is a contract. It ends at a certain point, George. You know that. These road projects that we're talking about have an end point.
As a small-business owner, I'm looking to grow my business, expand my business. I want to reach further. I want to be international. I want to be national. It's a whole different perspective on how you create a job versus how you create work. And I'm -- either way, the bottom line is...
STEPHANOPOULOS: I guess I don't really understand that distinction.
STEELE: Well, the difference -- the distinction is this. If a government -- if you've got a government contract that is a fixed period of time, it goes away. The work may go away. That's -- there's no guarantee that that -- that there's going to be more work when you're done in that job.
STEPHANOPOULOS: Yes, but we've seen millions and millions of jobs going away in the private sector just in the last year.
STEELE: But they come -- yes, they -- and they come back, though, George. That's the point. When they go -- they've gone away before, and they come back.
Huh? Watch it and see if it makes more sense that way...
Now it appears what Steele was trying to say is that government-created infrastructure jobs, i.e., construction, road and bridge engineering and planning, etc., aren't "real jobs" because they're temporary, unlike the permanent, sustainable jobs created by the private sec...tor ... which just laid off 600,000 people last month... ohhhh.... hmmm.... problemo...
And just in case you think Steele just made that up on the fly, think again. He has said it before, and added that government has never ... EVER ... in the history of mankind... created a job. Seriously.
Stimwinder: Two Maines, a Pennsylvania, and a side of bacon
According to MSNBC, the three Republicans who have pledged to vote for the stimulus compromise bill are Arlen Specter, Olympia Snowe and Susan Collins. If Ted Kennedy comes back, which is shameful for him to have to do (as Atrios points out,) that would give the Democrats exactly 60 votes, which NBC says they need because the bill would raise the deficit. Not sure I trust them on that -- need to look it up. But there it is. Cue the food metaphors!
Sen. Ben Nelson, D-Neb., said the agreement was a bipartisan effort and cited the work of Collins and Specter.
"We trimmed the fat, fried the bacon and milked the sacred cows," Nelson said. He said the compromise included $350 billion in tax cuts that would reach 95 percent of all Americans.
Collins said negotiators cut more than $110 billion in "unnecessary spending" in the compromise package.
"Is it perfect? No. Every compromise reflects choices that are necessary to bring people together," she said.
Specter said he supported the deal even though parts of it "give me heartburn."
So it seems we have a deal. The punkdafied Democrats in the Senate, led by the compromise king, Harry Reid, have crafted a deal (apparently co-produced by Olympia Snowe of Maine and Ben Nelson of Nebraska.) The deal? Supposedly, it's 52% spending and 48% tax cuts -- up from the 30 percent tax cuts already forked over by the House.
So what's wrong with this picture? I can still remember taking the class dubbed "Ec 10" at Harvard, taught by former Reagan economic advisor Martin "Marty" Feldstein. One of the few tidbits of that course that I remember is this: people tend act, according to utility theory, according to what they think is best for them. And they can be made to act on what's best for others only to the extent that they see the good in an action for themselves. For instance: if you give a hungry person $100, they will probably buy food with it. If you give a full person $100, you will have a hard time convincing them to use the money for food. So why, pray tell, would you give a rich person a tax cut, putting more cash in their pockets, and assume that they will use the money to help out the jobless? What, I ask, is in it for them?
Answer: not much -- not in this economy. Tax cuts, even for the middle class, will likely be saved, not spent. Whereas, tax cuts to the poor are guaranteed to be spent back into the economy, because the poor need to spend.
Meanwhile, over on Capitol Hill, Republicans -- the losing party in the last two national elections -- have managed to scam more tax cuts out of the stimulus bill, by accusing Democrats, successfuly it turns out, of "spending rather than stimulating." Well, let's return to our "Ec 10" lesson, shall we? See, as it turns out, the definition of "stimulus" in ecoomic terms is ... um ... spending. Go figure.
As Media Matters points out, Republicans have succeeded in getting the media to frame the debate as either government spending or stimulation, with tax cuts placed in the column of stimulation. But the problem is, tax cuts are not stimulative. And spending is not just stimulative, it is the very definition of stimulation. As President Obama put it today, "that's the whole point! Watch:
And MM's Jamison Foser adds:
Fundamentally flawed stimulus coverageby Jamison FoserIf there's one fact that should be made clear in every news report about the stimulus package working its way through Congress, it is this: Government spending is stimulative. That's a basic principle of economics, and understanding it is essential to assessing any stimulus package. So it should be an underlying premise of the media's coverage of the stimulus debate. Unfortunately, that hasn't been the case. Indeed, reporters routinely suggest that spending is not stimulative.
Economist Dean Baker, co-director of the Center for Economic and Policy Research, explains: "Spending that is not stimulus is like cash that is not money. Spending is stimulus, spending is stimulus. Any spending will generate jobs. It is that simple. ... Any reporter who does not understand this fact has no business reporting on the economy.
"Unfortunately, many of the reporters who have shaped the stimulus debate don't seem to understand that.ABC's Charles Gibson portrayed spending and stimulus as opposing concepts in a question to President Obama: "And as you know, there's a lot of people in the public, a lot of members of Congress who think this is pork-stuffed and that it really doesn't stimulate. A lot of people have said it's a spending bill and not a stimulus."
That formulation -- "it's a spending bill and not a stimulus" -- is complete nonsense; it's like saying, "This is a hot fudge sundae, not a dessert." But nonsensical as it is, it has also been quite common in recent news reports. There's another problem with Gibson's formulation, though -- in describing the stimulus as a "spending bill," he ignores the fact that the bill contains tax cuts, too. Lots and lots of tax cuts. And those tax cuts, by the way, provide less stimulus than government spending on things like food stamps and extending unemployment benefits. It probably goes without saying that Gibson didn't ask if the bill would be more effective if the tax cuts were replaced by additional spending.
MSNBC's Mika Brzezinski, among others, has repeatedly suggested "welfare" provisions in the bill wouldn't stimulate the economy. This is the exact opposite of true; those provisions are among the most stimulative things the government can possibly do. There are some fairly obvious reasons why that is true, beginning with the fact that if you give a poor person $100 in food stamps, you can be pretty sure they're going to spend all $100 of it; but if you give a rich person $100 in tax cuts, they probably won't spend much of it at all.
But we needn't rely on logic and common sense to know that welfare spending is stimulative; economists study these things. One such economist is Mark Zandi of Moody's Economy.com, who served as an adviser to John McCain's presidential campaign. Zandi has produced a handy chart showing how much a variety of spending increases and tax cuts would stimulate the economy. According to Zandi, a dollar spent on increasing unemployment benefits yields $1.64 in increased gross domestic product, and a dollar spent on food stamps yields $1.73 in GDP. As for tax cuts, Zandi says the most effective form is a payroll tax holiday. A one dollar reduction in federal revenues as a result of such a tax holiday would produce a $1.29 increase in GDP -- far less than the benefit realized from extending unemployment benefits, increasing food stamps, providing general aid to state governments, or spending on infrastructure. ...
Now that a deal has apparently been done, let's hope that the 42% of the now $790 billion deal is tax cuts for the middle and lower middle classes.
Otherwise, it might be time to impeach Harry Reid.
The GOP continues to fiddle while the country burns. Today, Barack Obama continued his "calling out the losers" tour:
WASHINGTON – President Barack Obama decried as "inexcusable and irresponsible" the delay of his economic recovery legislation in Congress with an estimated 3.6 million Americans losing their jobs since the recession began.
Obama's remarks were some of his most direct and pointed in support of the massive economic package that the Senate considered Friday and tried to pare down below its $900-billion-plus price tag. Obama acknowledged it was not perfect and pledged to work with lawmakers to refine the measure, which he called "absolutely necessary."
"But broadly speaking, the package is the right size, it is the right scope, and it has the right priorities to create 3 to 4 million jobs, and to do it in a way that lays the groundwork for long-term growth," Obama said at a ceremony in the White House East Room.
The president named an outside economic team of advisers as the nation dealt with more bad news in the unemployment report for January. Employers slashed payrolls by 598,000, the most since the end of 1974, propelling the unemployment rate to 7.6 percent. The rate is the highest since September 1992.
"These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work," Obama said bluntly. "Now is the time for Congress to act."
Meanwhile, the staggering job losses that aren't phasing the GOPers, apparently, continue to bite the hell out of the rest of us.
Obama finally fires back (Senate Dems, not so much...)
After taking weeks of crap from Republicans who are busy braying for more tax cuts for the rich, while the country literally falls apart, President Obama finally hit back yesterday, while signing the State children's healthcare bill Dubya vetoed twice. Said Obama:
"In the past two days, I have heard criticisms of this plan that, frankly, echo the very same failed theories that helped lead us into this crisis in the first place," Obama said, before signing a children's health insurance bill.
He took aim at the "notion that tax cuts alone will solve all our problems" and warned against the idea that the economic crisis could be tackled with "half steps, and piecemeal measures and tinkering around the edges."
Obama also faulted unnamed opponents he said believe "that we can ignore the fundamental challenges like the high cost of healthcare and still expect our economy and country to thrive."
"I reject these theories, and by the way so did the American people when they went to the polls in November and voted resoundingly for change," the president said, in his most edgy partisan language in his two weeks in office.
Meanwhile, guess who is emerging as the face of the opposition in the Senate? John "Defeated in the Last Election" McCain. He had this to say about the bill:
"No bill is better than this bill, because it increases the deficit by over a trillion dollars," Senator McCain told CBS News, a day after Democratic leaders sent signals that they did not yet have the votes to pass the measure.
Really? No bill? And who might be blamed for the tanking economy if no bill passes? That's right: Republicans. Oh, and the spineless Democrats, led by the even more spineless Harry Reid, who purportedly form the Congressional majority. As this post by Tommy Christopher over at Political Machine puts it:
I had to chuckle a little when I saw Matt Lewis' similarly titled article (actually, it was less a chuckle, and more of a singular "Ha!"), because I was preparing to blast Senate Democrats for their utter lack of balls. As my trip to the inauguration proved, Democrats are more than willing to dance at them, but completely disinterested in having any of their own.
The Huffington Post reports that Senate Democrats are wandering around, decrying their lack of votes to pass the stimulus plan...
Only they don't need 60 votes. All they need is for Harry Reid to do his job and impose the old fashioned fillibuster rules. Which Republican will be willing to take the bait? And if they don't, the bill would pass on a straight up or down vote. Grow a pair, Dems.
Meanwhile, Obama floats an op-ed, reiterating his opposition to old, stale, failed tax cut policy.
Tired of getting your stimulus information from Rush Limbaugh? Here's what the stimulus package really contains, state by state. Download the file here. The Florida goody bag is as follows:
AMERICAN RECOVERY AND REINVESTMENT PLAN: THE IMPACT FOR FLORIDA
The American Recovery and Reinvestment Plan is a nationwide effort to create jobs, jumpstart growth and transform our economy for the 21st century. Across the country, this plan will help businesses create jobs and families afford their bills while laying a foundation for future economic growth in key areas like health care, clean energy, education and a 21st century infrastructure. In Florida, this plan will deliver immediate, tangible impacts, including:
• Creating or saving 218,300 jobs over the next two years. Jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector.
[Source: White House Estimate based on Romer and Bernstein, “The Job Impact of the American Recovery and Reinvestment Plan.” January 9, 2009.]
• Providing a making work pay tax cut of up to $1,000 for 6,890,000 workers and their families. The plan will make a down payment on the President’s Making Work Pay tax cut for 95% of workers and their families, designed to pay out immediately into workers’ paychecks. [Source: White House Estimate based on IRS Statistics of Income]
• Making 195,000 families eligible for a new American Opportunity Tax Credit to make college affordable. By creating a new $2,500 partially refundable tax credit for four years of college, this plan will give 3.8 million families nationwide – and 195,000 families in Florida – new assistance to put college within their reach. [Source: Center on Budget and Policy Priorities analysis of U.S. Census data]
• Offering an additional $100 per month in unemployment insurance benefits to 761,000 workers in Florida who have lost their jobs in this recession, and providing extended unemployment benefits to an additional 170,000 laid-off workers. [Source: National Employment Law Project]
• Providing funding sufficient to modernize at least 485 schools in Florida so our children have the labs, classrooms and libraries they need to compete in the 21st century economy. [Source: White House Estimate]
In addition to this immediate assistance for Florida, the American Recovery and Reinvestment Plan will help transform our economy by:
• Doubling renewable energy generating capacity over three years, creating enough renewable energy to power 6 million American homes.
• Computerizing every American’s health record in five years, reducing medical errors and saving billions of dollars in health care costs.
• Launching the most ambitious school modernization program on record, sufficient to upgrade 10,000 schools.
• Enacting the largest investment increase in our nation’s roads, bridges and mass transit systems since the creation of the national highway system in the 1950s.
Sheeeit, Florida's got a deficit, man! So Miss Charlie is backing (ahem) the stimulus plan, as are most of the nation's governors, R and D (and Ahnold, too.) See, governors are actually seeing the economic shitstorm close up, and many of them, including Crist, have balanced budget amendments that are forcing them to make deep cuts to things like education and health care. Bottom line: anything that puts money back into bleeding state coffers is welcome. Watch this MSNBC segment and by the way, tell me you don't think this guy is running for Senate...
Charlie Crist won the governorship with about 18 percent of the black vote, and a not insignificant share of white Democrats. Now that he's through auditioning to be John McCain's running mate, he has ditched the "drill here" crap and is returning to the bipartisan themes that got him in the door. Of course, Crist does have problems, including a certain European junket, and despite the wife, he's still gay. But the old model of red meat winger doesn't win beyond House races, and this guy has already proved he can win statewide. My take: he's running.
John Kerry did an outstanding job this morning on "Meet the Press," knocking down David Gregory's absurd "stipulation" that no one knows whether tax cuts or government spending make for superior stimulus (Kerry said "I won't stipulate to that at all," then pointed out that we've had eight years of Bush tax cuts plus neglect of our infrastructure and look what we've got to show for it...) and he slapped down Kay Bailey Hutchinson's talking points about the stimulus bill needing to incorporate Republican tax cut philosophy. Said Kerry: "we are not duty bound to accept something with which we fundamentally disagree." He added that when it comes to bipartisanship, President Obama has met with the GOP caucus, while he said he couldn't recall in eight years, President Bush meeting with Democrats on the Hill.
Waiting for the transcript to post.
Meanwhile, Gregory was true to form, quoting of all people, the right wing Heritage Foundation, for his facts on the deficit.
The economic stimulus plan passes with not a single Republican vote
Surprise! Bipartisanship doesn't exactly rule the day... but the package passes anyway:
With no Republican support, the House approved an $819 billion stimulus plan that will serve as the cornerstone of President Obama's efforts to resuscitate the economy, an early victory for the new president but still a disappointment because of the lack of Republican votes.
The measure passed 244 to 188, with 11 Democrats and 177 Republicans voting against it.
The two-year economic package includes $275 billion in tax cuts and more than $550 billion in domestic spending on roads and bridges, alternative-energy development, health-care technology, unemployment assistance, and aid to states and local governments. It would also provide up to $500 per year in tax relief for most workers and more than $300 billion in aid to states for funding to help rebuild schools, provide health-care to the poor and reconstruct highways and bridges.
Despite a last-minute lobbying campaign by Obama -- including coming to the Capitol yesterday for separate closed-door meetings with House and Senate Republicans -- Republicans opposed the measure and argued that it spent hundreds of billions of dollars on Democratic initiatives that would do little to stimulate the economy or create jobs.
House Speaker Nancy Pelosi (D-Calif.) heralded the legislation as the first down payment on Obama's pledge, in his inaugural address, to provide "bold and swift" action to revive an economy that is losing more than 500,000 jobs a month, including 65,000 layoffs announced just this week.
"He said he wanted action, bold and swift, and that is exactly what we are doing," Pelosi told reporters before the vote.
A $475 billion Republican alternative, which focused heavily on reducing individual and business taxes, was rejected largely on party lines. Rep. Cathy McMorris Rodgers (R-Wash.), a member of the GOP leadership team, ridiculed the Democratic plan as a "typical bill that is full of wasteful spending." ...
The GOP now has to hope that it doesn't work. Next up: the Senate debates their version (tomorrow) and then it's on to conference committee. What fun!
The GOP is scrambling to find a clean way of opposing the coming economic stimulus plan, because they know that once implemented, it has the potential to cement Democrats in power for a very long time. To understand why, you have to look at what its priorities are. Per the White House:
Doubling the production of alternative energy in the next three years.
Modernizing more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills.
Making the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized.
Equipping tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries.
Expanding broadband across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world.
Investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.
On education alone, we're talking about doubling the budget of the Bush-neglected Department of Education, and pumping $150 billion into the nation's schools and universities. That affects tens of millions of parents and potentially, nearly 100 million children and college students. That's not good news for the GOP. Nor is the significant shoring up in the stimulus plan for the jobless, and for troubled homeowners. Every dollar of individual aid to an American citizen is a potential vote lost for the GOP. That's what Rush and his fellow travelers fear most.
At the end of the day, most economists understand that with most people feeling too job insecure to spend money on non-necessities, and states in financial drought, the federal government is the only entity that can spend at the level needed to put a jolt into the economy. Spending is what we need now, and Republicans know it. But they also know that government spending is good politics, for Democrats.
Related: read the Congressional Budget Office's take on the stimulus package here. On interesting caveat is that the bill forbids spending stimulus dollars on such Miami-beloved things as horse and dog tracks. A good look, I'd say...
The U.S. economy is shedding jobs like dog hair ... unemployment has hit a 16-year high of 7.2 percent ... with 524,000 jobs lost in December alone (projections put it at 9 percent or more by next year):
The economy lost an astonishing 1.9 million jobs in the past four months alone, an acceleration in layoffs toward the end of a year that brought the biggest drop in employment in more than a half century.
For all of 2008, the economy shed 2.6 million jobs, the largest decline since a 2.75 million drop in 1945.
The December data pointed to a bleak start for 2009 and increased chances the economic downturn could become the longest since the 1930s.
Is the plan being limited by fear of debt? There are dangers associated with large-scale government borrowing — and this week’s C.B.O. report projected a $1.2 trillion deficit for this year. But it would be even more dangerous to fall short in rescuing the economy. The president-elect spoke eloquently and accurately on Thursday about the consequences of failing to act — there’s a real risk that we’ll slide into a prolonged, Japanese-style deflationary trap — but the consequences of failing to act adequately aren’t much better.
Is the plan being limited by a lack of spending opportunities? There are only a limited number of “shovel-ready” public investment projects — that is, projects that can be started quickly enough to help the economy in the near term. But there are other forms of public spending, especially on health care, that could do good while aiding the economy in its hour of need.
Or is the plan being limited by political caution? Press reports last month indicated that Obama aides were anxious to keep the final price tag on the plan below the politically sensitive trillion-dollar mark. There also have been suggestions that the plan’s inclusion of large business tax cuts, which add to its cost but will do little for the economy, is an attempt to win Republican votes in Congress.
Meanwhile, more proof that Bush's $700 billion TARP swindle was just that: a massive giveaway to the country's largest banks, in exchange for nothing. Nothing for mortgage holders, nothing for taxpayers, though they did give bonuses to their CEOs and dividends to their richest investors. Hopefully, Obama will scrap the plan and use the remaining $350 billion to beef up his stimulus plan.
Obama delivered his first major economic speech since becoming president this morning. First, he makes a couple of basic points:
This crisis did not happen solely by some accident of history or normal turn of the business cycle, and we won’t get out of it by simply waiting for a better day to come, or relying on the worn-out dogmas of the past. ...
... ow, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness.
And sets down a core Democratic principle worthy of FDR:
It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.
Here's video of the opening remarks:
Okay, now for the plan, which starts with the much mentioned "green jobs":
To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.
On health care, a plan that so far, is not exactly bold:
To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won’t save billions of dollars and thousands of jobs – it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.
I didn't read the word "universal" in there, or see dramatic change that doesn't sound strangely like something Jeb Bush would come up with ... okay, giving him and Tom Daschle the benefit of the doubt on that one, we move on to education:
To give our children the chance to live out their dreams in a world that’s never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We’ll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future.
To build an economy that can lead this future, we will begin to rebuild America. Yes, we’ll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we’ll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world. And it means investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.
And last but not least, cash to the starving states, and to taxpayers:
Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95% of working families will receive a $1,000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can’t find new ones, we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. Government at every level will have to tighten its belt, but we’ll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care.
It somehow doesn't sound as bold when you've been hearing essentially the same thing for a year, but hey, it's a step forward. Read the whole speech here.
With capitalist Washington forced to buy shares of major banks to stop them going bust after years of loose regulation, German Chancellor Angela Merkel, who grew up in Communist East Germany, was quoted in Focus magazine telling her Cabinet the following joke: "What's the difference between Communism and Capitalism? Answer: The Communists nationalised all the companies first -- and then ruined them."
Dec. 9 (Bloomberg) -- Republic Windows & Doors workers who staged a protest at the company’s Chicago factory won a victory today when Bank of America Corp. offered loans to the firm to resolve a pay dispute.
Bank of America said in a statement today that it was “prepared to provide a limited amount of additional” loans to Republic and “expressed concern” over “Republic’s failure to pay their employees the employee Claims to which they are legally entitled.” Workers were upset that they did not receive vacation pay when the plant shut down.
Workers blamed Bank of America, the biggest U.S. retail bank, for the factory’s Dec. 5 closure after it canceled a line of credit to the manufacturer, whose sales have been gutted by the housing slump. The Charlotte, North Carolina-based bank has received $15 billion from the U.S. Treasury as part of its effort to boost capital, while Merrill Lynch & Co., the securities brokerage it is buying, has gotten $10 billion.
The workers’ union has been planning a rally at noon tomorrow at the Bank of America building in downtown Chicago. The factory sit-in has become the center of the debate over how more than $700 billion in federal funds are used to help the world’s largest economy weather the worst economic decline since the 1930s. Government bailout money should be used to help businesses such as Republic rather than Wall Street firms and global banks, the United Electrical, Radio and Machine Workers of America, which represents the Republic workers, said on its Web site.
The worker sit-in at Chicago's Republic Windows and Doors enters its fifth day, as those facing layoffs demand severance and vacation pay. The problem: the company is out of cash, and its banker Bank of America, won't extend a line of credit, even after BofA received billions in bailout money from taxpayers. From today's Chicago Tribune:
A standoff between workers at Republic Windows & Doors and its owners and bank over the plant's closing stretched into a fifth day after talks produced no agreement despite considerable political pressure and threats of investigations.
The 240 union workers staging a sit-in at the plant on Goose Island in Chicago decided to stay put at least until negotiations between their representatives and company owners and Bank of America continue Tuesday afternoon.
On Monday, workers were visited by a parade of politicians, including Gov. Rod Blagojevich and U.S. Sen. Dick Durbin (D-Ill.), who voiced their support for the workers while threatening Republic and Bank of America with lost business, legal action and federal inquiry. At City Hall, Chicago aldermen called for hearings on Republic, which had received about $10.4 million in city redevelopment funds as of the end of 2007, according to city documents.
Workers have been occupying the building since its abrupt closing Friday. They are protesting the loss of what they said is vacation and severance pay they've earned and the lack of notice about the closing. The federal WARN Act requires 60-day notice of a plant's closing.
Many said Monday that they appreciated the encouragement and national attention, recognizing that their effort had tapped into concerns about job security in a declining economy.
"I'm not scared because I'm not alone on this," said Raul Flores, 25, who had worked at Republic for eight years. "We're strong and we're going to stay. This gives us the strength to keep going. This is going to be for everyone."
Durbin said he would raise questions in Washington about whether billions of dollars of federal bailout money given to struggling banks is being properly used. Gutierrez urged a federal investigation into the company's failure to make required severance payments.
"The taxpayer dollars going into these big banks are not for dividends, they're not for executive salaries, they're for loans and credit to businesses just like Republic so they can stay in business and so these workers won't be out on the street unemployed," Durbin said.
Bank of America cut its line of credit to Republic, which the company said forced the plant's closing last week. Blagojevich threatened that the state would suspend all business with the bank until the Republic matter was resolved. Aldermen and Cook County officials also proposed suspending business with the bank and withdrawing hundreds of millions of dollars. ...
Of course, the governor has got his own problems, but that's a whole 'nother post...
Republic says its business tanked because of a sharp decline in home building. BofA says Republic needs to "manage its own affairs." Dueling statements were issued yesterday, by the bank, a "don't look at us":
"We agree with the statements of public officials that Republic Windows and Doors should do all it can to honor its obligations to its employees and minimize the impact of failure on those employees.
We are reaching out to the management and ownership of the company to see what they can do to help resolve this issue.
As a creditor of the company, we continue to honor all of our agreements with the company and have provided the maximum amount of funding we can under the terms of our agreement.
By any objective measure, Republic Windows and Doors is unable to operate profitably given the challenges of the current economic climate and its industry. Public statements by management of the company have made this clear.
When a company faces such a dire situation, its lender is not empowered to direct the company's management how to manage its affairs and what obligations should be paid. Such decisions belong to the management and owners of the company.
Bank of America has worked with the company and shared our concerns about the company's situation and its operations for the past several months. It is unfortunate that the company has been unable to reverse its declining circumstances."
10/16/08 a- Republic presents plan for "orderly" wind down including ceasing manufacturing in January 2009. INFORMS BANK OF AMERICA OF POSSIBLE WARN ACT NOTICE ISSUES AND VACATION PAY. 10/15/08 a- Informed Bank of America that Republic had a 10/24/08R buyer for the existing Note for ±$3.0M, discount of $1.5M. 10/15/08 a- Offer rejected by Bank of America stating they believed they were "over" collateralized. 10/15/08 a- Bank of America demands plans for "orderly" wind down Republic. 10/18/08 a- Bank of America rejects plan and demands a shorter wind down period. 10/27/08 a- Republic responds with a new plan to cease operations January 2009. 10/29/08 a- Bank of America rejects plan. 11/25/08 a- Republic requests permission from Bank of America to issue vacation pay to all employees. 11/26/08 a- Bank rejects Company request to make vacation pay.
“They want the poor person to stay down,” said Silvia Mazon, 47, a mother of two who worked as an assembler here for 13 years and said she had never before been the sort to march in protests or make a fuss. “We’re here, and we’re not going anywhere until we get what’s fair and what’s ours. They thought they would get rid of us easily, but if we have to be here for Christmas, it doesn’t matter.”
The workers, members of Local 1110 of the United Electrical, Radio and Machine Workers of America, said they were owed vacation and severance pay and were not given the 60 days of notice generally required by federal law when companies make layoffs. Lisa Madigan, the attorney general of Illinois, said her office was investigating, and representatives from her office interviewed workers at the plant on Sunday.
And of course, from the president-elect:
At a news conference Sunday, President-elect Barack Obama said the company should follow through on its commitments to its workers.
“The workers who are asking for the benefits and payments that they have earned,” Mr. Obama said, “I think they’re absolutely right and understand that what’s happening to them is reflective of what’s happening across this economy.”
Question: why not designate Bank of America bailout funds to save this business?
Word broke on the Rachel Maddow Show tonight that House leaders appear to have reached a compromise on the auto bailout. And of course, in the finest tradition of the Democratic Party, the deal was made by caving in to George W. Bush:
WASHINGTON - Jolted by the loss of thousands of jobs, congressional Democrats and the White House reached for agreement Friday on about $15 billion in bailout loans for the beleaguered auto industry. President George W. Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis.
Several officials in both parties said a breakthrough on a long-stalled bailout came after House Speaker Nancy Pelosi bowed to Bush's demand that the aid come from a fund set aside for the production of environmentally friendlier cars. The California Democrat spoke to White House chief of staff Josh Bolten during the day to signal her change in position, they added.
The developments came as desperate auto executives pleaded for a second straight day with lawmakers for loans to help them survive, and the government reported the worst single month’s job loss in 34 years.
I liked Barney Frank's take. Saying we only have one president at a time greatly overstates the number of presidents we have. Why Nancy and company continue to do the lame duck's bidding is beyond me. The funds have to be given, but I can't for the life of me understand why the money couldn't have come from Henry Paulsen's $700 billion kitty. By the way, should it trouble us that the incoming Treasury Secretary reportely would like to get rid of the FDIC chairwoman, Sheila Blair, who has been the sole voice crying out for direct help to homeowners? (BTW Team Obama denies...)
WASHINGTON – An alarming half-million American jobs vanished virtually in a flash last month, the worst mass layoffs in over a third of a century, as economic carnage spread ever faster and the nation hurtled toward what could be the hardest hard times since the Great Depression.
Underscoring Friday's dismaying signs of a rapidly deteriorating economy, General Motors announced yet more job cuts, and a record number of homeowners were reported behind on mortgage payments or in foreclosure.
Somehow Wall Street found a silver lining, betting that so much bad news would force fresh government action to revive the foundering economy. The Dow Jones industrial rose 259 points.
Yeah. Leave it to Wall Street to find job losses attractive. It means productivity, or something like that... The bad news keeps on coming:
Staring at 533,000 lost jobs, economists were anything but hopeful. Since the start of the recession last December, the economy has shed 1.9 million jobs, and the number of unemployed people has increased by 2.7 million — to 10.3 million now out of work.
Some analysts predict 3 million more jobs will be lost between now and the spring of 2010 — and that the once-humming U.S. economy could stagger backward at a shocking 6 percent rate for the current three-month quarter.
"The economy is in a free fall," said Richard Yamarone of Argus Research. "It is as if someone flicked off the switch on hiring."
"It's a mess," said Mark Zandi, chief economist at Moody's Economy.com. "Businesses, battening down the hatches, are concerned about their survival and are cutting workers."
The Labor Department report showed monthly jobs losses of 533,000 spread across the economy, hitting construction firms, computer makers, auto dealers, clothing stores and banks and insurance companies alike.
The new data translate the steady stream of pink slip notices coming from companies as diverse as financial titans like the Carlyle Group to discount retailers like Linen 'n Things into evidence of broad economic weakness. The headline number alone -- the worst monthly job loss since Dec., 1974, amid a steep downturn and in the wake of an oil embargo by Arab states -- is likely to raise fresh concerns about the depth and length of an ongoing recession.
The number literally took my breath away this morning. And add to it the 422,000 Americans who stopped bothering to job hunt and the 600,000 manufacturing jobs we've lost this year, and you start to get a sense of the depth of the problem. Oh, and guess who noticed that we're in a recession? The bystander:
WASHINGTON – President George W. Bush publicly acknowledged for the first time Friday that the U.S. economy is in a recession and worried aloud that Detroit's Big Three automakers may not all survive their mounting troubles.
Four days after the long-suspected existence of a recession was made official, Bush used the word himself.
"Our economy is in a recession," Bush said flatly, speaking to reporters on the South Lawn only hours after the release of a government report showing the biggest month of job losses in 34 years. "This is in large part because of severe problems in our housing, credit and financial markets, which have resulted in significant job losses."
While repeatedly listing the serious problems in the economy, the White House has refused to embrace the actual term until Monday, when a panel for the National Bureau of Economic Research said the recession began last December and is ongoing.
Thanks, Dubya. Real helpful.
This will put a new complexion on the proposed auto bailout. It now, clearly, has to happen. The economy, and the states, simply cannot handle another 3 million unemployed, heaped on top of the millions already out here on a limb. And TPM points out, via the New York Times, that the news is even worse than it looks.
From Jack Welch on the overly solicitous "Morning Joe" this morning, to Sen. Robert Bennett of Utah a few minutes ago during the automakers hearing, the consensus on the right is that to save the American auto manufacturing industry, step one is to break the United Auto Workers Union. Step two: break American workers and force them to accept the model set up by Japanese automakers who operate in "right to work" (read: "right to pay you crappy wages") states in the American South. That model involves highly automated plants staffed by fewer, low skill, modestly educated workers, who make nearly half what GM, Chrysler and Ford workers, who are more skilled, and operate more technical machinery, earn per year. And no, it's not $70 an hour. That's a read herring. It's more like $28 on average, $14-15/hour to start.
Welch's latest Business Week column is out, in which he proposes that the U.S. automakers be shuttled into bankruptcy, with the federal government assuming stewardship of the various warranties offered on their cars. That way, Welch told his drooling, sycophantic audience on the set of "Morning Joe," the Big Three can finally rid themselves of the UAW, break their union contracts, and void the contracts they currently hold with suppliers. The beauty of Welch's idea is that it crushes middle class wages, and kills off the suppliers, too, forcing U.S. manufacturers to seek parts overseas, where workers make the preferred wage: subsistence. And of course, Welch also proposes the favored strategy of the "free marketeers": consolidation:
Talk about a fresh start. For more than a decade, U.S. carmakers have chipped away incrementally at massive legacy costs. But reorganization would open the doors to meaningful structural change through the renegotiation of contracts with creditors, dealers, and unions. And it would offer better odds of paying back taxpayers.
Once in Chapter 11, a merger would further galvanize real change. Three companies are too cumbersome to unite, and Ford has a two-tiered, family-owned structure, so we'll leave them out of this for now and propose GM and Chrysler join forces. Such a merger could create $15 billion in synergies from reduced capacity and overhead, money that could lower production costs and boost R&D spending. Granted, GM and Chrysler could lose share during the transition, but a merged entity would still end up with more than a quarter of the U.S. market.
Bennett, who pushed hard (video) for the passage of the Wall Street bailout and who brags about it on his website,, just sent my jaw dropping by proposing during the hearing, by proposing that instead of giving loans to the Big Three, the government give still more money to the banks, since after all, they are the ones to whom most of the automakers' debt is owed, and in his words, they "won't bee too happy" with the notion of switching out their debt holdings for equity in the companies. Wow. So the answer is: give more money to the very banks who brought us to the brink of economic collapse, since they, unlike the grunts in Detroit, are white collar, highly paid money changers.
Lame Duck Teasury Secretary Henry Paulsen insisted on talking again today, as did his boss, sending the markets south, as happens every time either of these clods drops jaw. Meanwhile, the latest brand new proposal out of George Bush's Washington sounds as lame as the first twothree ten. And as usual, it's focused on handouts to Paulsen's friends in the banking industry. The idea is artfully cloaked in the pretense of "helping Main Street":
The Federal Reserve and Treasury moved today to boost consumer spending and lower home mortgage rates, committing up to $800 billion to make it easier for households to borrow money for cars, tuition bills and new homes as part of a broad effort to rekindle economic growth.
The new program puts the balance sheet of the country's central bank behind two critical but troubled parts of the economy -- consumer spending and housing. It is largely separate from the $700 billion Troubled Asset Relief Program, administered by the Treasury Department and focused on shoring up the country's financial system.
Ah, that sounds lovely. But what this really is, is a bailout of wealthy investors:
A Treasury news release noted that in 2007, about $240 billion in car, student and other consumer loans had been packaged by the companies that issued them into larger securities and sold to investors, who then benefit from the flow of payments from borrowers. That system of packaging and reselling loans keeps money flowing to banks and other lenders, allowing them to make even more money available to consumers.
However it all but stopped over the past two months, leading to rising interest rates, a downturn in lending -- and a risk that economic growth could be dragged down even further.
The Fed said it would provide up to $200 billion to investors who put the money toward consumer loans in the form of credit cards, auto loans and student loans, as well as some forms of small business lending.
In other words, Uncle Sam is about to write a big, fat check to erase the risk that big investors took when they bought junk credit card and mortgage debt. Then, magically relieved of the burden of that bad paper, banks will suddenly decide to start lending packagable money again. Tada! But wait, there's more:
The Fed's consumer lending program is partially backed by $20 billion from the TARP, which will be used to absorb losses on the program up to that amount. The Fed loans to investors will earn interest and also a fee from those who take advantage of it.
Paulson said the initial $200 billion "is a starting point" and could grow over time.
In addition to consumer spending, the Fed announced it would buy up to $100 billion in mortgages held by Fannie Mae, Freddie Mac and the Federal Home Loan Bank in an effort increase the flow of money into the housing markets and lower interest rates. The Fed will also buy another $500 billion in bundles of mortgage-backed securities issued by the agencies.
The fact that TARP money is wrapped up in this is just one problem. The federal government is clearly going to have to become the spender of last resort, given that consumers aren't secure enough in our jobs to start buying things (or gassing up) any time soon. But for the government to use tax money to eliminate investment risk, and to bail out big investors, is criminal. Oh, and the banks that have been getting these shovels full of your money? They've been using them to bail out THEIR investors too, by paying dividends (something they plan to keep doing for the next three years), and they've been using their TARP money to pay bonuses to their executives, and even (hello, Citibank and Wells Fargo,) to buy other banks. I'd like to see the Big Three automakers even think about doing anything like that.
Meanwhile, the administration continues to reject a reasonable proposal from the head of the FDIC, which would directly help struggling homeowners stay out of foreclosure, while protecting taxpayers, all at a cost of just $40 billion -- a fraction of the $7 trillion estimated cost of all these serial bailouts of the rich.
The Paulsen regime's eagerness to hand out taxpayer cash to the investor class on their way out the door is so brazen, it's like a bank robbery in broad daylight, with the police holding open the vault door. And Paulsen and Bush used alarmism, and threats of a "Great Depression II" to scare Americans into going along with the $700 billion (and climbing) bank bailout. Meanwhile, the U.S. auto industry, with 3 million "regular folks' jobs" in the balance, isn't worthy of help. Fancy that.
From the Iraq money pit to the Bush tax cuts for the top 1 percent income earners to the Wall Street bailout, the Bush administration has been one, eight year long mugging; a reverse Robin Hood spree in which we, the middle class working people, are being robbed blind, right before our eyes, in order to give to the rich.
The bank that no one knew was failing lost half its stock value last week, and with $800 billion in deposits, and a heap of mortgages and other assets in jeopardy, Citibank is one of those "too big to fail" institutions. So here comes the bailout:
NEW YORK (CNNMoney.com) -- The U.S. government on Sunday announced a massive rescue package for Citigroup - the latest move to steady the banking giant, whose shares plunged in the past week on fears about its exposure to toxic mortgage securities.
The plan has two key features:
First, the U.S. Treasury and the Federal Deposit Insurance Corporation (FDIC) will backstop some losses against more than $300 billion in troubled assets.
Second, the Treasury will make a fresh $20 billion investment in the bank. The government has already injected $25 billion into Citigroup as part of the $700 billion bailout passed by Congress in October.
The government will take a stake in the bank, and President Lame Duck said this morning that more Citigroup style rescues could be in the cards. Okay... but wasn't Citigroup (which Dubya mistakenly called "Citicorp" during his brief press availability this morning) the same megabank that almost went to court with Wells Fargo over both banks' desire to buy smaller, equally troubled Wachovia? Let's take a walk back to October 6:
NEW YORK/WASHINGTON (Reuters) - Wells Fargo & Co and Citigroup Inc agreed on Monday to a 44-hour truce in their fight over regional bank Wachovia Corp after a weekend of legal wrangling.
Wells Fargo and Citigroup have been battling over the bank since Wells Fargo announced an offer Friday that bested Citigroup's proposal a week ago.
As part of their agreement on Monday to suspend all litigation, effective immediately, the three banks also said they would cease any formal discovery activities.
The increasingly bitter dispute has drawn in U.S. Federal Reserve officials looking to broker a deal. Sheila Bair, chairman of the Federal Deposit Insurance Corp (FDIC), said she expected an agreement "that serves the public interest" to be reached Monday, although the FDIC is not involved in the negotiations.
A person familiar with the situation said the various options discussed in the talks with the government included dividing up Wachovia between the two feuding companies. The source added that Wells Fargo would still like to buy all of Wachovia.
Citi, which announced a preliminary agreement to buy Wachovia's banking assets for $2.2 billion a week ago, was considering an offer for the entire bank, among other options, a person close to Citi said.
The source said Citi has no appetite to buy Wachovia's assets without some sort of government guarantee -- unlike Wells Fargo, which made a $15 billion counterbid for the entire bank on Friday. ...
... Citi said on Monday it is seeking more than $60 billion of damages from Wells Fargo. Citi said Wachovia would have collapsed on September 30 without its agreement to acquire most of its assets. ...
So let me get this straight: Just over a month ago, Citigroup was in a position to spend $2.2 billion buying Wachovia, and countless sums on lawyers to sue Wells Fargo for trying to buy it first, and now, they're broke? What gives? At the time of the ank dispute, Citi's shares were trading down 5.1 percent to $17.41. This morning, it opened at $5.99, having fallen 60 percent in a single week. And the bank is about to get $20 billion in cash from the fed. I guess they blew that $2.2 billion on something more pleasing than Wachovia?
Nancy Pelosi and her wussy counterpart from Joe Lieberman's very own, personal Senate lay down the law to automakers, demanding from them the same thing a bank would before lending anyone, let alone such a dubious client, money: a business plan.
Democratic leaders said Thursday that they want the struggling American car manufacturers to submit a business plan in the next two weeks in order to receive billions of dollars in emergency aid from the federal government.
Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.) said they would return in December to review the plans, which are due by Dec. 2. Congress would then return on Dec. 8 to consider a proposal to help the auto industry.
The leaders made the announcement after saying they would not accept a deal, worked out by Republican and Democratic senators from Rust Belt states, that would lift restrictions on $25 billion in money previously approved to help automakers retool their plants to make more fuel-efficient cars.
“Executives for auto companies have not been able to convince this Congress or the American people that this bailout will be the last,” Reid said.
Instead, they want automakers to come up with a plan that shows how they would use the money.
“Until they show us a plan, we cannot show them the money,” Pelosi said.
The Dow keeps plummeting, (below 8,000 -- losing nearly half its value this year...) along with the global markets. It's a crisis that it seems no entity, no agency of government can stop. General Motors' stock fell below FIVE DOLLARS for the first time in 60 years. FIVE... Jesus... analysts are projecting that the big three U.S. auto makers cannot all survive. At least one will go away completely, or be absorbed by another company... President Bush is making noises about doing something, but honestly, events have overtaken him, and everybody else... World finance chefs are holding an emergency meeting. Good luck with that.
BTW one astute blogger posted a chart plotting McCain's poll numbers against the S&P 500.
Fascinating. Clearly, this guy is going to need more than Bill Ayers to get back into the race. Or not:
As Pollster’s Steve Lombardo says, “The economic situation has virtually ended John McCain’s presidential aspirations and no amount of tactical maneuvering in the final 29 days is likely to change that equation.”
Meanwhile, Barack Obama slams McCain for "stoking anger and division" at a time like this ... Italy's Silvio Berlusconi walks back from his suggestion that world markets simply be closed.
The Dow got hammered again today. Nothing the Fed or the feds are doing is working... and with credit in seizure, J.D. Powers fears the global automobile market may completely implode by next year. So what's the problem? This from a good old fashioned conservative:
"The crisis we are entering is not due to a lack of credit. The core of the problem was our dependency on credit in the first place. A lack of credit is a symptom of our dependency on it. It is a crisis of Consumer Capitalism, the idea that Consumption can be the major source of growth in an economy. We must somehow transition to Producer Capitalism again. We have an entire economy, almost worldwide, based upon debt and consumption. It could not last because over time every dollar of debt created creates less and less GDP growth in the economy. Therefore, more and more debt must be created just to keep the same rate of economic growth. We are now literally consuming our economy to its death. The efforts to "get liquidity going" and the like, while maybe easing conditions in the very short term, weeks, are only going to make the collapse greater. It is simply adding more kindling to the bonfire of debt that is already raging."
Stuffed into the 451- page bill are more than $1.7 billion worth of targeted tax breaks to be doled out for a sty full of eyebrow-raising purposes over the next decade.
The special provisions include tax breaks for:
* Manufacturers of kids' wooden arrows - $6 million.
* Puerto Rican and Virgin Is- lands rum producers - $192 million.
* Wool research.
* Auto-racing tracks - $128 million.
* Corporations operating in American Samoa - $33 million.
* Small- to medium-budget film and television productions - $10 million.
Another measure inserted into the bill appears to be a bald-faced bid aimed at winning the support of Rep. Don Young (R-Alaska), who voted against the original version when it went down in flames in the House on Monday.
That provision - a $223 million package of tax benefits for fishermen and others whose livelihoods suffered as a result of the 1989 Exxon Valdez oil spill - has been the subject of fervent lobbying by Alaska's congressional delegation.
Lots of the breaks and set-asides are designed for "rural communities." Here's just a few from the Library of Congress summary of the bill:
The Senate passes the "economic rescue bill" by a wide margin, after loading it with good old fashioned gimmes (corporate and AMT tax cuts, rural school funding, raising the FDIC limit to $250,000, mental health parity and all the lard that makes John McCain's head spin, but which are the way business gets done in "Warshington." ... am I the only one who finds it ironic that the way to woo conservative Republicans is to give them more pork?) ... and they do it on the day Obama heads back to the Senate and gives a speech in the well. Poor McCain. He wasn't even involved, other than to vote for the package, too. The Senators are gratuitously thanking each other now. The House tries again on Friday. With the goodies packed in for them, they should approve.
... The Senate bill would raise Federal Deposit Insurance limits to $250,000 from $100,000, as called for presidential nominees Barack Obama and John McCain only hours earlier.
... The Senate measure will graft the bailout language to a tax bill it approved last week, on a 93-2 vote. It includes: a provision to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana and some $78 billion in renewable energy incentives and extensions of expiring tax breaks.
In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.
That wasn't enough earlier this year for the House, which insisted that there be complete offsets for the energy and extension part of the package.
The Senate version also may include a measure to require health plans for 51 or more employees to give equal treatment to mental health or addiction if they cover such illnesses. The House and Senate have passed similar mental health parity measures, but none has gone to Bush for his signature.
So its cookies and cream all around! And if Obama and Biden back it, Nancy P will be backed into a wee little corner. This as Pelosi and Harry Reid take the extraordinary step of attempting to come to the rescue of President Bush (a man no one trusts, in or out of his party...)
Other bailout news: two Yale professors say: why not just pay off all the delinquent mortgages? The Financial Times has more global doom and gloom. Meanwhile, in the WaPo, CFR conservative Michael Gerson excoriates Nancy Pelosi for her now infamous "mean-girl" speech, and then says this about House Republicans:
... whatever their provocations, pressures and justifications, House Republicans once again revealed the souls of backbenchers -- spouting their ideological purity from atop the ruins of the financial system. The temporary government purchase of bad mortgage debt is not equivalent to the liquidation of the kulaks. Serious conservative thinkers such as Ryan and Cantor, who chose to work within the legislative process, got many of the improvements they sought. But most House Republicans with ideological objections had nothing better to propose and no intention to try. They chose allegiance to abstract principles over practical reality. It is the political philosophy of Samson: Bring down the entire temple to make a political point. In this case, the president, their own congressional leadership, their own presidential candidate and the world economy are now wounded and struggling amid the rubble. I suppose the point is made. But it is a reminder of why Republicans are no longer trusted as the congressional majority.
If Newt is the roaster, is John Boehner the weenie?
John Boehner went all-in on the bailout bill, and got hosed. He failed to deliver more than 65 GOP votes, and looks like he can't whip worth a damn. Some are even questioning whether he could lose his leadership post to a more "conservative" conservative.
Former House Speaker Newt Gingrich was working aggressively behind the scenes to defeat the Wall Street rescue plan minutes before he himself released a public statement in support of the package, NBC's Andrea Mitchell reported on Tuesday.
Gingrich was whipping up votes for the opposition, Mitchell said, apparently without the knowledge of the current GOP leader, John Boehner, who was responsible for recruiting enough support from his caucus to help ensure the bill's passage. Ultimately, the GOP was only able to rally roughly a third of its members.
"Newt Gingrich," she said on MSNBC, "I am told reliably by leading Republicans who are close to him, he was whipping against this up until the last minute, when he issued that face-saving statement. Newt Gingrich was telling people in the strongest possible language that this was a terrible deal, not only that it was a terrible deal, it was a disaster, it was the end of democracy as we know, it was socialism -- and then at the last minute [he] comes out with a statement when the vote is already in place."
After the vote, Gingrich played the phony and lamented the non-passage of the bill. But not everybody was buying it, especially since Newt was one of the righties urging John McCain to kill the bill, and send out a press release... From the July 23 edition of The Hill:
Former Speaker of the House Newt Gingrich said Tuesday that any lawmaker who votes for the Bush administration's $700 billion bailout package, which he called a “dead loser,” will face defeat in November.
Gingrich (R-Ga.) said he thinks Treasury Secretary Henry Paulson is trying to scare lawmakers into passing the bailout plan quickly and without thorough study.
“I think what Paulson hopes to do is say, ‘If you don’t do exactly what I want you to do, the whole world’s going to collapse on Tuesday’,” Gingrich said.
The former Speaker, talking to reporters at a lunch, added that he expects Democratic presidential candidate Sen. Barack Obama (Ill.) to back the plan. He predicted that, if Republican presidential candidate Sen. John McCain (Ariz.) ends up opposing the administration proposal, there will be an overnight “emergence of a McCain/reform wing of the Republican Party.”
Gingrich said that occurrence would turn the election on its head, with Republicans running ads that feature Obama with President Bush on the same team in pushing for a “nightmare” bailout plan.
Newt also predicted, 6 days before the vote, that if the bill failed to pass on Friday, it would fail because lawmakers would read it on Saturday and cringe. How clairvoyant...
So what could Newty be up to? Is he preparing to run for president in 2012, as Mike Barnacle accused on "Morning Joe" yesterday? Could be. His big "Drill Here, Drill Now" gambit is heavily funded by the oil industry, whose money would also be useful in a national election, not to mention in key states like Louisiana, Florida and out West. If he runs, the scandal-plagued Gingrich would need to build a firewall on the libertarian right, to mitigate against any evangelicals who won't be able to force themselves to stomach him, as they are with McCain because of Sarah Palin. And he very much shored up that firewall with the 130 Republicans he denied to John Boehner. Now, they listen to Newt.
And Boehner? I'm sure Newt is saying, to hell with him. After all, they have a history:
House members are no strangers to political treachery either, although you need to go back nearly a decade to find a world-class example. To get rid of House Speaker Newt Gingrich (R-Ga.), a loosely organized band of co-conspirators proved less deft than their Roman legislative forebears did in mounting their secret scheme. Although the coup fell apart the day after it was launched, the reputations of almost all those involved -- including their intended victim -- never fully recovered.
A core group of rebels, drawn mostly from the large GOP class of '94, sought to find a way to oust the imperious speaker. But to do so, they needed help from the top Republican leadership. It soon came from Majority Leader Dick Armey (Texas), Majority Whip Tom DeLay (Texas), GOP conference Chairman John Boehner (Ohio) and Rep. Bill Paxon (N.Y.), then a trusted Gingrich capo.
The plan was to have Armey, DeLay, Boehner and Paxon -- each an independent actor with his own power base -- confront Gingrich with a fait accompli: step down or face being voted out of office. Armey, however, backed out when it appeared that Gingrich wanted Paxon to succeed him. In the murky aftermath, DeLay confessed his role, which helped to rehabilitate his reputation. Armey never did. And Paxon -- who was to Gingrich what Brutus was to Caesar -- was out of a leadership job. After the 1998 midterm elections, waged by congressional Republicans as a (failed) referendum on impeaching President Clinton, Gingrich himself was soon gone. (after spending some time in political purgatory, the former Speaker has once more become a hot commodity.)
With Armey and DeLay long gone, could this be Newt's little payback for the fourth member of the wolf pack, while enhancing his own presidential / populist portfolio in the process? You've got to wonder...
McCain should take no credit for the bailout bill, before its time...
Is it just me, or has John McCain lost it? He's suspending his campaign ... he's not suspending his campaign ... he won't debate ... he will debate ... he's headed back to Capitol Hill to lead House Republicans to pass the $700 Bush bailout bill ... but he's also dining at a posh hotel restaurant while the work is being done ... he won't phone it in ... but he conducted his "leadership" on the phone ... he takes all the credit for the bailout bill, until it doesn't pass, in which case it's Barack Obama's fault ... (but of course, this is no time for partisanship. although that, too, is Obama's fault...)
It's exhausting just keeping up with the stunts, twists, turns, backtracks and utter, careening craziness of the McCain campaign. Can you imagine the hot mess he'd be as president???
"To a certain extent, I think John gets hurt by [the bailout bill's failure]," said Ed Rollins, a CNN contributor who worked on former Gov. Mike Huckabee's primary campaign earlier this cycle. "He obviously, at the end of the day, said he was for it. But more important than that, he said he was the one who would bring them to the table and to a certain extent he will be viewed now as not being able to do that."
And when it comes to McCain's "leadership," apparently it had better be bi-partisan, because it sure doesn't extend to his own party:
Rollins added, "McCain is our nominee and [congressional Republicans] will do everything they can to help him, but they are not going to go over the cliff for him. They did that for Bush, and they thought that this measure was just too dramatic for their constituencies."
The GOP strategist spoke to the Huffington Post just an hour after the House failed to pass the $250 billion bailout package by a margin of 205 to 228. Republicans in that body were quick to cast blame on Speaker Nancy Pelosi for giving a "partisan" speech earlier on Monday -- a doubtful assertion given the benign text of Pelosi's remarks. When it came to McCain's leadership qualities, however, Rollins argued that the last week has left much to be desired.
"I think the reality is, he made a big show coming in and at the end of the day it really wasn't realistic for him," he said.
Damn. Well who can this guy lead? Joe Lieberman? Hell, even Lindsey Graham is getting worn out!
I don't blame John McCain for not rounding up enough Republican votes to get this bailout bill through the House of Representatives--he's not a member of the House, he's never held a leadership position and therefore doesn't know how to whip votes and finally--well, uh--there is one tried and true method for getting members of Congress to vote aye and McCain opposes it: a sweetener, like say, funding for a bridge in their districts. That is one reason why we have earmarks. McCain is opposed to giving away baubles for the greater good.
I do blame McCain for his puerile histrionics and for dragging this issue--which should have been above partisanship--into presidential politics. Let's make no mistake about it: his various gimmicks had absolutely nothing to do with the substance of the issue.He doesn't know all that much about the substance of the issue. The gimmicks were a failed attempt to make it seem as if he had powers, and knowledge, he didn't have. Clearly, he was in a more difficult position than Obama--the populist conservative wing of House Republicans was unwilling to take responsibility for the fruits of the deregulation that they promoted--and that might have required a more aggressive effort to move votes on his part, but the flailing about only confused Republicans (was he for, was he against?) and made matters worse.
Geez. I sure wish we had someone in the campaign who would bring some calm, sober leadership to this messy situation...
Barack Obama told a crowd in Westminster, Colo., not to panic at the House of Representatives' failure to pass the Bush administration's $700 billion bailout bill.
"It's important for the American public and for the markets to stay calm,” Obama said, “because things are never smooth in Congress, and to understand that it will get done.”
Who's really to blame for the mortgage and Wall Street Meltdown? Larry Kudlow and other conservatives blame the poor, minoritiesm and the 1977 Community Reinvestment Act. Now, here's the rest of the story:
Maybe he shouldn't have bothered ... John McCain suspended his campaign and rushed back to Washington to make the bailout deal happen. Well, funny thing, that...
The bailout fails. Here's how the win-loss column looks:
First, the winners:
Conservative House Republicans -
They beat back not just their own president, but the Democratic majority, Barney Frank, and Henry Paulson. If nothing much happens, and the economy doesn't go completely into the ditch, they'll look like geniuses. If the bottom falls out of the market, and small businesses can't get basic credit, or we do go into a deep recession, they'll be the goats.
Liberal Democrats -
Led by Dennis Kucinich and several members of the Black Caucus, they defied their leadership and held out for more bennies for the little guy. They now have a platform for their preferred solution, which channels FDR: help for homeowners, a federal jobs through infrastructure investment program, and the like. But they also risk taking the blame if things go to hell.
The angry populace -
Angry Americans likely scared many members into voting against the bailout. Now, they'll feel empowered. Again, if nothing happens: they're the smartest kids in the room. If the sky falls, they'll be left holding the bag ... literally.
The media -
They get to talk about this for another week. Jim Cramer should do really well, as should CNBC.
Barack Obama -
By steering clear of the entire mess, Obama can now claim a healthy distance, not only from the process, but also from the failure. Staying cool in a crisis: priceless.
Barney Frank (semi-winner...) -
Frank is more winner than loser on this one. Even though he led the failed effort, Frank emerged as a leading voice in the process, and bought himself a national platform to become the chief "I told you so" if the markets crater. He also will have a strong hand in the next negotiation, if things go badly on Wall Street and Main Street. On the other hand, if nothing much happens, he'll look like Bush's bitch.
... now, for the much longer list: the losers (in the approximate order of their loseriness)...
President Bush -
He's the single biggest loser in this whole, messy affair. In short: nobody believes him anymore, not even when he says we're headed into the next Great Depression. His credibility has been so shot through, by his pushing around Congress for seven years, and mostly, by the lies attending the invasion of Iraq, that he can't even convince 70 Republicans to do as he asks. What a pathetic end to the War Presidency.
Hank Paulson -
Probably as a residew of Bush's unpopularity and lack of credibility, Mr. Goldman Sachs reached way too far with his two page grab for dictatorial power. His bill was so outrageously bad, so audacious, that he probably doomed the result as much as anyone. Even a fixed-up Paulson bill wasn't palatable to many of members who rose to microphone today.
John Boehner -
The Boner's leadership position can't be considered secure if he couldn't whip more than 66 votes for a bill he helped negotiate. Also, he's not the star of the ascendant right wing of his party today, he's the enemy. Look for a leadership fight in the minority.
Nancy Pelosi -
Even though Barney Frank was equally visible, Pelosi ultimately had the responsibility for getting the bill passed, and she failed to build the bi-partisan consensus needed to do it. Already, she's become the chief culprit in the public statements of the GOP. Apparently, they didn't like her speech or something ... (since when do Republicans care about "nice?")
John McCain -
He injected himself into what turned out to be a failed process, where bi-partisanship only happened to the extent that the most liberal and most conservative House members voted against the bailout bill. And McCain's own campaign narrative suggested that he swooped into Washington to bring conservative Republicans along. By that standard, he failed as utterly as Boehner did -- and in far more high-profile fashion.
Those in the center in both parties lost big in the vote today, and they will be wringing their hands and nervously watching "Power Lunch" every day until November 4th.
Wall Street -
They got soundly spanked in the House of Representatives today, and it seems that nobody really cares what happens to their cherished investment houses and banks. They'll have to find another way to survive, probably by merger, perhaps by international takeover. And no matter what happens, they will be blamed.
Main Street -
With no uncertainty in the market, the credit crunch will continue. And those who are feeling puffy chested over defeating the bailout today, might have trouble getting basic credit, or find their paychecks harder to cash, tomorrow. What will they demand then? Meanwhile, the likelihood of average mortgage holders getting anything close to a bailout of their own remain somewhere between "slim" and "none."
Barney Frank just rose to plead with his fellow liberals on the Democratic side "not to throw out" the bailout bill because "it doesn't have everything they like." He said he is only in Congress because of his commitment to poor people, and that he fought for everything he could for the disadvantaged, but he added that if the bill fails, they get nothing.
Now, John Boehner is making his pitch, saying the "risk of doing nothing is too great" not to act, and acknowledging "nobody wants to vote for this ... I didn't come here to do this, to vote for things like this ... but these are the votes that separate the men from the boys, and the men from the women. These are the votes that your constituents sent you here to vote on their behalf."
He challenged his colleagues to "ask what's in the best interests of the country." He said that his judgment is that the House must vote for the bill, "to keep ourselves from the brink of an economic disaster."
Both men received healthy applause after their statements, but it's not at all clear that there are enough votes -- given the defections on the left and the right -- to pass this bill.
On the day that Citigroup swallowed Wachovia before it too, failed, and as world financial markets are cratering, the debate is on in the House over the, I must say, much improved, bailout bill (details, text). The debate is shaping up as one of the clearest cut dichotomies between liberalism and conservatism in recent memory. Conservatives in the House, including Ron Paul, are railing against the bill on the floor, decrying it as a quick slide toward government ownership of capital and socialism. Some are calling for even less deregulation, and, surprise, surprise, more corporate tax cuts.
Liberals are also railing, some decrying the bill as too helpful to Wall Street, but the consensus on the Democratic side is generally pro-government intervention, in keeping with the liberal belief that the government represents the backstop against economic meltdown at both the macro, and micro level.
Interestingly enough, a number of Black Caucus members are ranting that the bill doesn't have enough help for individual homeowners and to stop predatory lending, and some, including Sheila Jackson Lee of Texas, are urging a "no" vote.
But for the most part, most mainline Republicans and Democrats are indicating they will, however reluctantly, vote for the bill. Many are praising Rep. Barney Frank for creating a palatable compromise to Hank Paulsen's initial attempt at a massive power grab.
What's really interesting is the position of President Bush, who having pleaded for the bill's passage can now, clearly, finally, no longer call himself a conservative.
Located in the Portals project just east of the 14th Street bridge and overlooking the Washington Channel and its yacht moorings, the hotel is not convenient either to the marble corridors of Capitol Hill or the office buildings of downtown. The streets nearby are mostly deserted in the evenings.
The hotel's management seems to be counting on the draw of two high-profile restaurants to help to make the hotel a destination. The first, Café Mozu, the hotel's less formal restaurant, opened in March. The second, Cityzen, under the command of Eric Ziebold, formerly at the very highly regarded French Laundry under Thomas Keller, will open for dinner only in September.
Café Mozu belies the Washington rule that restaurants with views don't have very good food. The room is modern, serene, and full of light. Floor-to-ceiling windows look out--across a freeway--to the Washington Channel and the Jefferson Memorial. The hotel's Asian roots are alluded to in the restaurant's waiting area, built to evoke the veranda of a grand colonial hotel and furnished with white rocking chairs.
To run Café Mozu and serve as the hotel's executive chef, the Mandarin Oriental has hired Hidemasa Yamamoto, for many years chef of the Jockey Club on Massachusetts Avenue. Limited by the preferences of the Jockey Club's clientele--a coalition of politicians and cavedwellers who never got much beyond crabcakes, red meat, and chicken salad--Yamamoto never really had a chance to spread his wings. At Café Mozu, the menu is his own.
Yes, well it seems a satisfied palate is the best foundation for arms length deal-making. Even more about the fine dining establishment from the Mandarin Hotel website:
Lunch and dinner menus showcase irresistible selections such as Roasted five spices Duck, raisincouscous, orange scented curry jus”, Crispy Wild Salmon with fingerling potatoes, Brussels sprouts and haricots verts, Braised Pork Belly with sweet potato puree, baby onions and goat cheese polenta and Black Sea Bass with bok choy, string beans, snow bean sprouts and aromatic lemongrass broth.
Heavenly desserts from our pastry department include a Bitter Chocolate and Passion Fruit Mousse, Flourless Poppy Seed Cake, Lychee Crème Brulee and Champagne-Verbena Parfait.
Mmm-mm. Pass the bailout, AND the fingerling potatoes!! Hey, did you say couscous? John McCain LOVES coucous! (It's very down-home...)
By the way, why did the completely "fair and balanced" Politico feel the need to scrub its references to McCain's dinner? Per the Huffpo:
Politico reports (update: Politico has updated the article and removed the reference to McCain's dinner, but as you can see in this Google search, the reference was there in the original article):
As his colleagues worked on the deal at the Capitol Saturday night, McCain and his wife, Cindy, dined with Sen. Joe Lieberman and his wife, Hadassah, at CityZen, one of Washington's best restaurants. [Note: they got the right hotel, wrong restaurant...]
Could it be that Roger Simon has pulled yet another Ron Fournier on behalf of McCain? After all, Simon was almost alone among the pundits not working for Fox News, in saying that McCain was the winner of Friday's debate...
To be fair, McCain did say of his whereabouts last night:
I was working on all of the other stuff that I was working on, and contacting people, and working away."
Yeah, working away on a $300 bottle of wine (after which even Joe Lieberman probably sounded interesting...)
Thursday's seizure and sale is the latest historic step in U.S. government attempts to clean up a banking industry littered with toxic mortgage debt. Negotiations over a $700 billion bailout of the entire financial system stalled in Washington on Thursday.
Washington Mutual, the largest U.S. savings and loan, has been one of the lenders hardest hit by the nation's housing bust and credit crisis, and had already suffered from soaring mortgage losses.
Washington Mutual was shut by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. This followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept 15, the OTS said.
"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said.
Customers should expect business as usual on Friday, and all depositors are fully protected, the FDIC said.
Apparently, news leaks forced an early announcement. Usually, these things are done on Friday, so the auditors can spend the weekend going through the books. The bank has $307 billion in assets and $188 billion in deposits. What's also on tap here? Mega consolidation of U.S. banks:
... The largest previous U.S. banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984.
JPMorgan said the transaction means it will now have 5,410 branches in 23 U.S. states from coast to coast, as well as the largest U.S. credit card business.
It vaults JPMorgan past Bank of America Corp to become the nation's second-largest bank, with $2.04 trillion of assets, just behind Citigroup Inc. Bank of America will go to No. 1 once it completes its planned purchase of Merrill Lynch & Co.
John McCain goes to Washington, tries to look busy...
An unwittingly hilarious account of John McCain's "wince-worthy" return to Capitol Hill to "shepherd" the bailout process (and the lame attempts by Republicans to make him look relevant):
Sen. John McCain returned to Washington on Thursday after declaring that he has suspended his campaign, but he appeared largely detached from the flurry of negotiations on a $700 billion economic rescue package that appeared to be headed to a successful conclusion.
McCain's "Straight Talk Air" landed at National Airport just after noon, and McCain's motorcade sped toward the Senate. But by then, senior Democrats and Republicans were already announcing that a deal in principle had been reached.
That news appeared to be somewhat premature as House Republican leader John Boehner told his members that "no deal" had yet been reached. McCain arrived at 3:40 p.m. at the White House, where he and his rival, Sen. Barack Obama, were scheduled to meet with President Bush and congressional leaders at 4 p.m.
The leading Democratic negotiator on the Bush administration's $700 bailout plan accused John McCain of undermining the proposal and prodding House Republicans to lay out a wholly different approach that is opposed by the White House.
"This is the presidential campaign of John McCain undermining what Hank Paulson tells us is essential for the country," said Democratic Rep. Barney Frank, (D-Mass.), chairman of the House Financial Services Committee. "This is McCain at the last minute getting House Republicans to undermine the Paulson approach."
McCain really, really wants to help out ... I mean REALLY...
But for most of the afternoon, McCain has not visibly been part of the action on the issue. He was not present when House and Senate negotiators emerged from a two-hour meeting to declare success. That announcement was made by Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, Sen. Robert F. Bennett (Utah) and Frank.
McCain, by contrast, spent some time in his office with several Republican colleagues, briefly stopped at Boehner's office, then left for lunch at the Capitol's Mansfield Room before returning to his office in the Russell Senate Office Building.
Republican Rep. Spencer Bachus (Ala.) said he had spoken to McCain yesterday, had breakfast with two McCain advisers this morning and spoke to McCain again immediately after today's meeting. But, Bachus said, "John's not trying to call the shots for the House caucus, I can tell you that. He's just opposed to the plan in its present form."
Frank reacted angrily to Bachus's statements, insisting that lawmakers were well on their way toward an agreement they could put to a vote, and that this afternoon's meeting at the White House was largely irrelevent.
"We'll be glad to go and tell them there really isn't that much of a deadlock to break," Frank said. "But I'm always glad to go to the White House."
McCain aides expressed cautious optimism, saying that there is "no deal until there's a deal," but McCain made no comments to the reporters trailing him around the Capitol.
Maybe he should just find a Starbucks and wait till someone calls ... DOH! Not computer literate, so WiFi availability not enticing...
So, yes, apparently there is a deal ... and all before the presidential candidates even got to shoot the shizznit with Dubya...
The leaders of House and Senate banking committees reached a bipartisan agreement Thursday on the framework for legislation authorizing Treasury’s ambitious $700 billion rescue plan for the financial markets.
The final language of the bill must still be negotiated with Treasury, which watched nervously from the outside as the closed-door meeting ran close to three hours in the Capitol. But the announcement gives renewed momentum to the massive government intervention, which the administration badly wants approved before the markets open next week.
The plan would phase in the bailout, but still give Paulson virtually free reign with the first $350 billion. Also:
There is a greater emphasis on efforts not just to relieve Wall Street firms of their bad debts but also to help homeowners threatened by foreclosure. Companies that benefit from the plan would be expected to limit pay and severance packages for their executives, and community banks are expected to benefit from a new $3 billion tax break as a result of their stock losses in the government takeover of the two mortgage finance giants, Fannie Mae and Freddie Mac.
The announcement came just hours before a White House meeting planned for Thursday afternoon, at which President Bush and the two presidential candidates, Sens. John McCain and Barack Obama, are expected to meet with congressional leaders as well as some of the same lawmakers from the House Financial Services and Senate Banking Committees.
Nice picture, but where is our captain, John McCain??? Oh right ... the meeting... hope it helps!
McCain and Obama meet with Dubya today. Meanwhile, via an astute Politico commenter, a new SurveyUSA "snap poll" of 1,000 Americans finds little support for John McCain's debate delaying "time out" for his campaign. Key findings from the poll:
Should the debate be delayed? -- 50% say hold it as scheduled. -- 36% say hold as scheduled but make the focus of it the economy. -- 10% say delay it. -- 4% say they aren't sure.
Should the Presidential campaigns be suspended? -- 31% say continue campaigns as is. -- 48% say continue campaigns but focus on the economy. -- 14% say suspend campaigns. -- 7% say they aren't sure.
If Friday's debate is delayed, is that good or bad for America? -- 14% say good for America. -- 46% say bad for America. -- 35% say no difference. -- 6% say they aren't sure.
Going inside the tabs, it turns out those who support delaying Friday's debate tend to think McCain would win a debate with Obama, while those who support going forward, either as is or with a changed focus, think Obama would win. So again, the reactions are mostly partisan. Not exactly a win for McCain.
Mr. Coulter strikes again. His/her latest column? You're going to love the title:
They Gave Your Mortgage to a Less Qualified Minority
Yup yup. That's her headline. After that, s/he takes a moment to exonerate John McCain in the 1980s S&L crisis before getting to her point:
Even if McCain had been implicated in the Keating Five scandal -- and he wasn't -- that would still have absolutely nothing to do with the subprime mortgage crisis currently roiling the financial markets. This crisis was caused by political correctness being forced on the mortgage lending industry in the Clinton era.
Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."
Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.
Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named "Caylee."
Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact.
When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices.
In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded."
Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses.
A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it's gone off.
The sad thing is, Coulter's racist views are shared by a broad swath of her party. The rest of them just don't have the balls this guy does, to put it in print. Even sadder: her attempt to inject racial hatred into the public's attitudes on the financial crisis will work with a fair number of people. Never mind the fact that most of the people I know here in Florida who have had to short sell were not "welfare recipients with a good jump shot," they were high income individuals who either got laid off (or had a spouse get laid off,) or who, in that middle American "get rich quick" dream kind of scenario, tried their hand at "flipping," but started the game too late.
Most of the homes here in South Florida that were bought at inflated prices were purchased by middle class folks who spent their Hurricane Andrew insurance settlements to get out of Miami-Dade County and build a brand new home in the Broward burbs. Many of them used too little of the cash for their down payment, kitting out their homes instead, and then got in trouble via multiple refinancings.
In fact, refinancing is a key component of this crisis, and I doubt that Section 8 holders were the ones using their homes like a piggy bank. Regular middle class folks leveraged their home values to the hilt, pushed by appraisers who were willing to value homes at two, three times the real value. If Coulter is correct, then how can it be that housing advocates have been screaming all these years about a low income housing crisis, as condos and expensive homes went up all over the sunbelt, while nothing new was built in the inner city? Both things cannot be true -- that "welfare queens" bought all these homes and that people on welfare had no homes available to them.
Coulter's rant also presumes, as so many of her ilk do, that all or most black and brown folks are poor. In fact, prior to Andrew Cuomo taking the helm at HUD, even middle class African-Americans faced red-lining into "certain neighborhoods" and higher interest rates even if they had comparable, or even higher credit scores than their white counterparts (my mother sold real estate in the 1980s, and quit doing it because of her disgust with the practices.) Outside of income, minorities haven't substantially increased their homeownership stake since the S&L crisis:
Per the U.S. Census bureau:
Homeownership Rates by Race and Ethnicity of Householder
American Indian, Aleut, Eskimo
Asian or Pacific Islander
From 1999 to 2007, white homeownership jumped 2 percent, while black homeownership went up 1 percent -- meaning that the white race increased twice as quickly, if you're following "the math." and since fewer than half of blacks and Hispanics own homes, versus 75 percent of non-Hispanic whites, and combined, blacks and hispanics make up about one quarter of the U.S. population, it's statistically impossible for minorities to constitute the majority of delinquent homeowners, even if you're math skills are on the level of ... Ann Coulter.
(By the way, just as a sidebar, in 2006, some 9.8 million Americans received food stamps. Another 3.3 million received some form of public assistance. That included 3.4 million black people getting food stamps and 1.2 million receiving public assistance out of the approximately 11 million blacks classified as "in poverty" by the federal government. It included 5.5 million whites getting food stamps and 1.7 million receiving other public assistance, out of 56 million classified as at or near the poverty line.) Around 2.5 million white and non-white Hispanics received food stamps, plus another 980,000 who got public assistance (the numbers exceed 100 percent because Hispanics cross both racial lines.) All told,
Mr. Coulter also conveniently omits the fact that had there not been a junking of federal regulation in 1999 at the behest of John McCain's chief economic adviser Phil Gramm, even tens of thousands of bad loans wouldn't have infected the entire system, because there would have been no chop-shop derivatives flooding Wall Street; no loan selling and packaging, no appraisal hustling craziness. And the people shop and swapping those derivatives weren't a bunch of low income black people.
Coulter is clearly making a play to racialize the problem, the better to help the mostly white, mostly non college graduate, right wing talk radio consuming GOP base get excited about voting against the nigg... I mean, the "Democrat." She is one of those old-fashioned race baiters you read about in the history books, only Ann has the added cache of also being a hermaphrodite. Clever positioning.
Either way, Republicans who might wish to marginalize such a person have to contend with the fact that her view, in nearly as crass terms, has recently been articulated by such "mainstream" Republicans as Larry Kudlow and Neil Cavuto.
By the way, how anybody black can be a member of a party that contains Ann Coulter and her ilk, is beyond me.
The Obama campaign finally comes out with that joint statement, more than 12 hours after Obama contacted John McCain privately, to suggest they put one out, and nearly eight hours after McCain double-crossed him by rushing before television cameras to try his "suspend the campaign!" stunt. Here's the statement:
Joint Statement of Senator Barack Obama and Senator John McCain
“The American people are facing a moment of economic crisis. No matter how this began, we all have a responsibility to work through it and restore confidence in our economy. The jobs, savings, and prosperity of the American people are at stake.
“Now is a time to come together – Democrats and Republicans – in a spirit of cooperation for the sake of the American people. The plan that has been submitted to Congress by the Bush Administration is flawed, but the effort to protect the American economy must not fail.
This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. Now is our chance to come together to prove that Washington is once again capable of leading this country.”
And in a smart move, I think, the campaign has taken a cue from McCain, and gone their own way, with Obama releasing the following statement on his own:
Speaking for himself, Senator Obama outlined the following principles that he calls on Senator McCain to support:
I believe that several core principles should guide this legislation.
First, there must be oversight. We should not hand over a blank check to the discretion of one man. We support an independent, bipartisan board to ensure accountability and complete transparency.
Second, we need to protect taxpayers. There should be a path for taxpayers to recover their money, and to turn a profit if Wall Street prospers.
Third, no Wall Street executive should profit from taxpayer dollars. This plan cannot be a welfare program for CEOs whose greed and irresponsibility has contributed to this crisis.
Fourth, we must help families who are struggling to stay in their homes. We cannot bail out Wall Street without helping millions of families facing foreclosure on Main Street.
Fifth, we both agree that this financial rescue package should move on its own without any earmarks or other measures. We have different views about the need for other action, but this must be a clean bill.
This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. This is not a Democratic problem or a Republican problem – this is an American problem. Now, we must find an American solution.
Sound principles, and again, Obama waxes presidential, while McCain just goes bat crap crazy. As Chris Matthews said on Rachel Maddow's show tonight, the McCain strategy is that every time the compass needle points to "true north," which is change from the party that's screwed things up, McCain pulls a "razzle dazzle" play. As Chris then said, "do you want four years of razzle dazzle?"
The Obama campaign released a slew of comments slamming John McCain for his "stop the campaign, I want to get off" gambit. A few classics (besides Letterman, not to mention Jon Stewart, who's skewering him as we speak in the 11 p.m. broadcast of his show...)
Mickey Edwards, former Republican Congressman: “Oh, brother. What idiot came up with this stunt? It ranks somewhere on the stupidity scale between plain silly and numbingly desperate. McCain and Obama are both members of the senate and they're both able to help craft a solution if they wish to do so without putting the presidential campaign on hold; after all, I’m sure congressional leaders would be willing to accept their calls if they have some important insights to impart. And while one of them will eventually become president, neither one is president yet, nor is either one a member of the congressional leadership; I’m confident that somehow the administration and the other 533 members of congress will be able to muddle through without tapping into the superior wisdom and intellect of their nominees. Sorry, John; it really sounds like you're afraid to debate. This sounds like the sort of ploy we used to use in junior high school elections.” More
The Atlantic (Ambinder) “What is Politics?”: This is the time when politics matters the most, not the least. When the philosophical differences that each party organizes around are put to the test of reality. When conflict builds consensus, not by ignoring conflict. When the public craves answers and debate from their politicians. When the stakes of the presidential election could not be more acute. Comparative advantage: the best thing the presidential candidates can do now is to practice their politics honestly, not to abandon politics altogether -- itself, of course, a political move. Suspending your campaign basically says: all that over the past sixteen months? It wasn't important. Ignore what I said or did. Too late. The tough thing here for McCain is that nobody in Washington asked him to come back; nobody seems to need him to come back; and that Democrats simply do not trust John McCain's motives. More
TIME (Joe Klein): McCain suspends his campaign because of financial crisis? Oh please. Given today's poll numbers--even Fox has him dropping--it seems another Hail Mary (like the feckless selection of Palin) to try make McCain seem a statesman, which is difficult given the puerile tenor of his campaign's message operation. More
The New Republic (Jonathan Cohn): So, no, I don't think this is such a great idea. In fact, it feels to me a bit like McCain is trying to use this crisis as a way to prop up his political fortunes. More
TPM (Greg Sargent): If this version of events was true, McCain's public call for a suspension was anything but apolitical. If McCain had truly intended to keep this apolitical, he would have asked Obama to jointly suspend the debates and waited for Obama's private and definitive answer before going public. More
Obama says thanks, but no thanks, to the McCain to nowhere
Barack Obama responds to John McCain's indecent proposal:
The White House rivals maneuvered to claim the leadership role on the financial crisis that has overshadowed their campaign six weeks before Election Day. Obama said he would proceed with his debate preparations while consulting with bailout negotiators and Treasury Secretary Henry Paulson. McCain said he would stop all advertising, fundraising and other campaign events to return to Washington and work for a bipartisan solution.
"It's my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess," Obama said at a news conference in Clearwater, Fla. "It's going to be part of the president's job to deal with more than one thing at once."
Meanwhile, it's becoming clear that not only does McCain, who hasn't been to the Hill in five months, but suddenly has rediscovered his love for legislating, hope to forestall a potential Rick Davis campaign ad from the Obama side, not to mention keep from answering questions about the crisis (and take a respite from the polls) McCain is also hoping to use this window of media opportunity to try and lash himself to Obama, and gain political cover for whatever deal comes out of Capitol Hill:
Sen. Lindsey Graham, McCain's representative in debate negotiations, said McCain will not attend the debate "unless there is an agreement that would provide a solution" to the financial crisis. Graham, R-S.C., told The Associated Press that the agreement would have to be publicly endorsed by Obama, McCain, the White House and congressional leaders, but not necessarily given final passage by the House and Senate.
The Obama campaign has read this thing correctly, I think. And I wonder what voters in Mississippi would think if their debate, at one of their cherished universities, was called off do to bad atmospherics? (The university told the AP they are going ahead with preparations, and plan to hold a debate.) Meanwhile, when the McCain-centric Associated Press says this about you:
Even as McCain said he was putting the good of the country ahead of politics, his surprise announcement was clearly political. It was an attempt to try to outmaneuver Obama on an issue in which he's trailing, the economy, as the Democrat gains in polls. He quickly went before TV cameras minutes after speaking with Obama and before the two campaigns had hammered out a joint statement expressing that Congress should act urgently on the bailout.
And while McCain's campaign said he would "suspend" his campaign, it simply will move to Washington knowing the spotlight will remain on him no matter where he is.
... you know you're losing the media. And now, to the timeline of events, which is interesting to say the least:
Obama said he suggested they first issue a joint statement showing bipartisanship.
"When I got back to the hotel, he had gone on television to announce what he was going to do," Obama said.
McCain said he would return to Washington after addressing former President Clinton's Global Initiative session in New York Thursday. He canceled his planned appearance Wednesday on CBS' "Late Show With David Letterman" program and a meeting with the prime minister of India.
Barney Frank just suggested another scenario on MSNBC: that McCain is trying to "air drop himself in here tomorrow" to "set himself up to take credit for something that's going forward without him." Kind of like the G.I. Bill...
It's starting to look suspiciously personal for Hank Paulson, former chair of Goldman Sachs. First, Warren Buffett buys into the Wall Street firm, to the tune of $5 billion, indicating he must know a particular rescue of the firm is in sight. From ThinkProgress:
But the conflicts are also visible. Paulson has surrounded himself with former Goldman executives as he tries to navigate the domino-like collapse of several parts of the global financial market. And others have gone off to lead companies that could be among those that receive a bailout.
In late July, Paulson tapped Ken Wilson, one of Goldman’s most senior executives, to join him as an adviser on what to about problems in the U.S. and global banking sector. Paulson’s former assistant secretary, Robert Steel, left in July to become head of Wachovia, the Charlotte-based bank that has hundreds of millions of troubled mortgage loans on its books.
Goldman Sachs cashed in under Paulson, with earnings in 2005 of $5.6 billion; Paulson made more than $38 million that year. A 2005 annual report shows that “Goldman was still a significant player” in issuing mortgage bonds. The conflict of interest is increasingly clear today, as Bloomberg reports that “Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries” of Paulson’s bailout plan:
Jesus, this guy could almost be a McCain campaign operative.
Will Neil Cavuto be forced to walk back from his "lending to minorities caused the housing crisis" gaffe? Recall that on Sept. 18, Neil interviewed California Congressman Xavier Becerra (D-CA) and gave the now standard Republican talking point that the problem isn't Wall Street speculators and investment banks, it's Fannie Mae and Freddie Mac and their insidious practice of lending money to minorities to make them feel like homeowners... Neil? You're up:
CAVUTO: I just wonder, you know, with Congress holding all these hearings -- and you're right, there are a lot of them planned -- does anyone hold hearings on what you guys knew or didn't know or whether -- or whether you were ignorant or not? I mean, does anyone look at -- I know the buck stops with the president -- but at least it stops by you guys. What were you doing?
BECERRA: Well, we were trying to get answers from the administration. Unfortunately, it didn't seem like they were giving us a complete picture of what was going on. We can only know what the administration tells us about their administration of the government. But you're right.
CAVUTO: All right, but let me ask you -- but, Congressman, when -- when you and many of your colleagues were pushing for more minority lending and more expanded lending to folks who heretofore couldn't get mortgages, when you were pushing homeownership --
BECERRA: Neil, who did that?
CAVUTO: -- I'm just saying, I don't remember a clarion call that said, "Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster."
It would be nice if Cavuto was some sort of lone wolf, but it's actually a rather standard talking point on the right, that the real problem goes back to the days when do-gooders like Andrew Cuomo were running HUD, creating things like the "Community Reinvestment Act" and forcing poor, helpless banks to stop red lining black neighborhoods and denying home loans to qualified black applicants. Poor fools. Little did they realize they'd be left holding the bag for Phil Gramm and John McCain's deregulation of the securities markets.
The truth of the matter is, Fannie and Freddie are a drop in the bucket compared to the Wall Street "banks" that bundled bad mortgages and sold them as derivatives -- bad mortgages that went, not to "poor people" as Larry Kudlow and others charge, or to "minorities" alone, but to millions of perfectly white middle class Americans, and not a few people trying their hand at "house flipping." And the bad mortgages wouldn't have infected the entire system had they not been immediately sold off, chopped up, and turned into lucrative, air-thin derivative securities that were sold at inflated values to make people like Kudlow richer.
But that's too complicated for people like Neil, who like their politics simple, neat, and racist. Oh, and it's also a clever way to argue that the problem wasn't deregulation, it was overregulation...
So will Neil be disciplined by his bosses at Fox? When Sarah Palin gives a press conference...
Of course, he hasn't been going great guns on foreign policy, either, telling "60 Minutes" this weekend that he essentially endorses Sarah Palin's dangerously dimwitted view that the U.S. could well wind up at war with Russia over a NATO'd Georgia (not to mention saying she's "absolutely" ready to be president...)
Meanwhile, more bad news for the GOP. Voters in new polling blame them, surprise surprise, for the economic meltdown and the Wall Street bailout, including voters in the crucial swing state of Nevada. A new Suffolk University poll finds:
The poll shows that the toss-up state of Nevada remains just that, with Sens. John McCain and Barack Obama statistically tied at 46 percent and 45 percent, respectively.
When likely voters were asked who they figure is responsible for the current financial state on Wall Street, 41 percent blamed the Republicans, 16 percent tagged the Democrats, 27 percent said neither, and 16 percent couldn't decide who to blame.
And a new CNN poll finds voters across the U.S. tagging the GOP with the blame for the present crisis by a 2 to 1 margin.
By the way, did you hear the one about the McCain campaign manager who was paid $30,000 a month to lobby on behalf of Fannie Mae and Freddie Mac against stepped up regulation? Guess who Rick Davis was lobbying? John McCain!