Economy News

Obama Said No To Cantor’s Can-Kicking

10:15 pm EST July 13th, 2011 | Economy | 33 Comments

I’m no fan of the concessions Obama has offered to the GOP in order to get the debt ceiling raised, but he’s stated over and over again that kicking the can a couple feet down the road just isn’t going to do — yet that’s what the GOP apparently offered up again.

It was the fifth straight day of talks, but the first in which attendees, speaking on background, were willing to admit that steps were taken backwards. According to multiple sources, disagreements surfaced early, in the middle and at the end of the nearly two-hour talks. At issue was Cantor’s repeated push to do a short-term resolution and Obama’s insistence that he would not accept one.

“Eric don’t call my bluff. I’m going to the American people on this,” the president said, according to both Cantor and another attendee. “This process is confirming what the American people think is the worst about Washington: that everyone is more interested in posturing, political positioning, and protecting their base, than in resolving real problems.”

They don’t even seem to know who the heck is in charge over on the GOP side. Is it Boehner? Cantor? Or, more likely, people like Limbaugh?

Hell, even with the blue dogs jammed in her side, Nancy Pelosi got bills through the House. Boehner can’t even get a lightbulb bill passed.

Topic: Eric Cantor, John Boehner, President Obama

Yet Another Way George W. Bush Helped To Cause The 2008 Financial Crisis

4:57 pm EST July 12th, 2011 | Conservative, Economy, Republicans | 72 Comments

One of the things progressives and conservatives often don’t appreciate is the power a presidential administration has over policy simply by the people they choose to hold vitally important jobs within the government.

America is a massive country, and besides the legislative process, it takes a lot to keep it working. As such, its always best if you appoint competent, capable people to help you run the government.

In the case of George W. Bush, there were three kinds of people he installed in the government. The smallest group was actual, competent people. Very few of these were in place during the Bush years.

The second group of people were the totally incompetent. That includes people like Michael Brown, who had no business running FEMA or Donald Rumsfeld, who got more American servicemen killed as a result of bungled war planning than probably any Secretary Of Defense in U.S. History.

The third, and often most damaging group, were ideologically conservative zealots — people who drink the right-wing kool-aid so much that they would rather bend reality than face it. This group, of course, included the President and Vice-President themselves.

It is this group of people who perverted the Justice Department, made a mockery of diplomacy at the State Department, botched military operations at the Pentagon, and made a general mess of things while running the country. Granted, some people in the Bush administration were incompetent ideological zealots. Alberto Gonzales comes to mind.

(I would also argue there aren’t nearly enough ideological people in the Obama administration.)

In this third group were the people executing the administration’s policy of supporting deregulated commerce, admittedly a holdover from the Clinton era – showing us that badly conceived conservative economic policy knows no party.

In this NY Times profile of outgoing FDIC chair Sheila Bair, we get a taste of what Bush’s policies had done to actual regulation of the work being done in the mortgage industry:

Arriving at the F.D.I.C. that summer, Bair found an agency that was floundering. “There hadn’t been any bank failures in a long time,” she said. “We were in this so-called golden age of banking, regulation had fallen out of favor and the F.D.I.C., which had a reputation as a tough regulator, had fallen on hard times.” Its budget had been slashed, employees had been let go and morale was terrible. Except for a 10-second handshake, she never even spoke to Henry Paulson her first year or so in office.

Alone among the regulators, though, the F.D.I.C. began to home in on subprime lending. By 2006, the subprime industry was running amok, making loans — many of them fraudulent, with hidden fees and abusive terms — to just about anyone with a pulse. Most subprime loans had adjustable interest rates, which started low but then jumped significantly after a few years, making the monthly payments unaffordable for many homeowners. The lenders didn’t care because they sold the loans to Wall Street, which bundled them into mortgage-backed bonds and resold them to investors.

Curbing subprime-lending abuses should have been the job of the Federal Reserve, which has a consumer division. But the Fed chairman, Alan Greenspan, with his profound distaste for regulation, could not have been less interested. The other bank regulators, the Office of the Comptroller of the Currency, which oversees national banks, and the Office of Thrift Supervision, which regulates the savings-and-loan industry, should have cared, too. But their responses to the growing problem were at best tepid and at worst hostile. (The O.C.C. actually used its federal powers to block efforts by states to curb subprime abuses.) By the time Bair got to Washington, the O.C.C. had spent a year devising “voluntary subprime guidance” for the banks it regulated, but it had not yet gotten around to issuing that guidance.

Ah, “voluntary” regulation, the regulatory version of Bush’s famous “you covered your ass” statement about the threat of terrorism before 9/11. Even Bush’s SEC chairman, Chris Cox (I would place him in the incompetent appointment category) admitted that expecting our modern robber barons to police themselves was the height of folly.

But that’s what they did here, instead of providing oversight of an industry, they left the industry to its own devices – ignoring the warning signs, then using our money to bail out their pals.

If we had in our government people who truly believed their jobs were about helping America, instead of the zealotry of the Bush era, we’d be much better off today.

Topic: 2008 Financial Crisis, George W. Bush

The Warning Light Is On

10:26 am EST July 8th, 2011 | Economy, History | 124 Comments

The jobs report today came out and the numbers are anemic. Yes, we’re adding jobs (as opposed to the massive losses in the final months of the Bush administration), but it isn’t remotely enough. The stimulus wasn’t big enough and it wasn’t focused enough on job growth. This is a result of America being stuck in a conservative posture on economics, from the President on down to the congress.

The answer now is not “cut the deficit.” It never has been. Sometimes you just want to take our leaders and turn their heads away from cable news and the op-ed columnists and say, “Look, dammit, this problem needs fixing and people don’t give a crap if the Wall Street Journal editorial board is happy!”

The really sad thing is, like many of the problems affecting America, we know what the right thing to do is. There are many national problems screaming for us to fix them. We were able to do this in the past, but a witch’s brew of conservatism and Democratic paralysis is contributing to our ship sinking while we slap ourselves on the back for arranging the deck chairs in an impressive orientation.

On problems like employment, economy, education, health care, the environment, national security, etc., we know what has to be done but there hasn’t been the political will and leadership to do them. Our failures to act on the most important issues of today are damaging America in ways we will feel for generations.

This country fought and defeated a depression, the British monarchy, and the Nazis. This country landed on the moon, cured Polio, and created one of the most powerful economic engines in the history of man. We ought to be able to handle the problems we’ve got today.

But we can’t. Or, more honestly, we won’t.

What the Hell?

No Matter Who Threatens Social Security (Including Obama), It’s Filibuster Time

10:31 pm EST July 6th, 2011 | Economy | 15 Comments

If I’m being charitable, I’ll just assume the White House is floating a trial balloon in order to make the eventual Republican rejection look even worse. AKA “we even offered to cut social security!” But if there’s any reality to this proposal, I hope that at the very least a senator like Bernie Sanders and the few remaining Senate Dems who aren’t spineless or bought off will filibuster.

As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

We’ve broken enough stones in America on the backs of the middle class and the poor. We bailed out the uber-wealthy and didn’t attach any strings as they collapsed the global economy.

No more.

People Support Taxing The Rich To Fix The Deficit

3:06 pm EST July 6th, 2011 | Economy | 72 Comments

Of course, this means that the Democrats will capitulate completely…

Poll data by the Democratic-aligned Public Policy Polling released Wednesday said voters in Ohio, Missouri, Montana and Minnesota back hiking taxes on the wealthy — even for people with incomes as low as $150,000.

The respondents were asked: “In order to reduce the national debt, would you support or oppose raising taxes on those with incomes over $1,000,000 a year?”

Nearly 80 percent of voters in the four states backed the idea.

Topic: Taxes

Executive Pay Up 23%, They Can Afford A Tax Increase

11:41 am EST July 3rd, 2011 | Business, Economy | 107 Comments

The executives are making money by the bucketload, as the average American’s wages stay the same. Even in downturns, these people are raking it in, but the right says we should engage in “austerity” while the leisure class lives it up. Talk about unsustainable.

The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.

Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.

They can afford a tax increase. They can live with one less Cessna, one less expensive painting, one less diamond earring, one less big-screen LCD tv, one less Ferrari. They can afford it.

Our democracy can’t afford giving them even more breaks. Not anymore.

Topic: Taxes

Make Them Pay, They Can Afford It

10:33 pm EST July 1st, 2011 | Economy | 62 Comments

As I’ve noted before I fully expect for Senate Dems to cave when the fit hits the shan, but the sentiment here is right.

The resolution offered by Senate Majority Leader Harry Reid (D-Nev.) on Thursday asks lawmakers to sign off on a “Sense of the Senate” that “any agreement to wealthier taxpayers should reduce the budget deficit should require that those earning $1,000,000 or more per year make a more meaningful contribution to the deficit reduction effort.”

The measure comes as Democrats argue tax breaks for businesses and the wealthy should be eliminated to help close the deficit. Republicans say such tax increases would hurt the economy.

Reid’s bill, S. 1323, is entitled “Sense of the Senate on Shared Sacrifice.”
It makes a series of findings that set up an argument for why wealthier people should pay more taxes to reduce the deficit.

The very rich have it amazingly easy in America. There is nothing wrong about bringing what they pay in taxes back to what it was in the past. We seem to have done quite well during the economic booms of the 1990s and 1940s, the supposed onerous taxes on the Paris Hilton set didn’t seem to inhibit the great economic engine of America from generating wealth.

Conservatives insist that an increase in taxation on the uber-wealthy would be some sort of shackles on the nation. But reality says otherwise.

From a political point of view, the Democrats would be wise to note that there’s already one party in America that nakedly does the bidding of the robber barons, they don’t need to help.

Topic: Taxes

VIDEO: Senate Dems Attack The Private Jet Exemptions

1:58 pm EST June 30th, 2011 | Democrats, Economy | 28 Comments

Granted, I’m sure at the end of the day the Senate Dems will disappoint me and capitulate, they’re at least saying something about it now.

Topic: U.S. Senate

If US Government Defaults, Eric Cantor Stands To Profit

1:32 pm EST June 29th, 2011 | Economy, Republicans | 37 Comments

I wish I weren’t so cynical that I would actually believe that the majority leader of the US House Of Representatives would actually push us to financial chaos in order to personally profit. But I am that cynical because I’ve watched these people for years now.

Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively “shorts” long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)

According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor’s office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.

Topic: Eric Cantor, US House

Corporate Jet Republicans

12:09 pm EST June 29th, 2011 | Economy | 19 Comments

A few times in his press conference today, President Obama made reference to coporate jets and the people that own them. As he said, this is a class of people who can easily afford slightly increased taxes, and they should if it means the future solvency of the United States.

Conservatives on Twitter weren’t having this! How dare Obama say anything about corporate jets, how could he? How could he single out the uber-wealthy instead of promising to throw a low-class minoritiy into a wood chipper? How the heck could he not?

Frankly, Obama was a little too tepid in singling out the people who tanked our economy and didn’t even get so much as a slap on the wrists.