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- Weekend Newsbites: Sat./Sun. February, 27/28, 2010
- No "Employer Provided" Pensions
- Barker's Newsbites: Friday, February 26, 2010
- Barker's Newsbites: Thursday, February 25, 2010
- Barker's Newsbites: Wednesday, February 24, 2010
- Well... Cross Romney Off The List...
- Barker's Newsbites: Tuesday, February 23, 2010
- Hey Folks... If You Happen to See Ads Let Me Know
- When Even "The Good Guys" Are Full Of...
- Even if I Weren't Already in a Bad Mood I'd Still ...
- Barker's Newsbites: Monday, February 22, 2010
- Barker's Newsbites: Friday, February 19, 2010
- Peggy Noonan Makes Me Sick
- Barker's Newsbites: Thursday, February 18, 2010
- Barker's Newsbites: Wednesday, February 17, 2010
- Barker's Newsbites: Tuesday, February 16, 2010
- Barker's Newsbites: Monday, February 15, 2010
- Happy Presidents Day!
- Barker's Newsbites: Friday, Feb. 12, 2010
- Barker's Newsbites: Thursday, Feb. 11, 2010
- Barker's Newsbites: Wednesday, Feb. 10, 2010
- Barker's Newsbites: Tuesday, Feb. 9, 2010
- Barker's Newsbites: Monday, Feb. 8, 2010
- Barker's Newsbites (Weekend Edition): Feb. 6 & 7, ...
- So... I'm reading Frank Luntz's new book...
- Could Pat Buchanan Be Right...??? Be Afraid... Be ...
- American Justice - Or Lack Thereof
- You've GOT to Read This Book...!!!
- Barker's Newsbites: Friday, 2/5/10
- Does This Make ANY Sense To ANYONE...???
- Barker's Newsbites: Thursday, 2/4/10
- Barker's Newsbites: Wednesday 2/3/10
- My Advice to Prospective Republican Members of Con...
- Stupid Republicans? Here's a List of 22
- A New Feature: "Barker's Newsbites"
- One of my Sisters-in-Law Once Asked Me...
- Happy February!
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February
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About Me
- William R. Barker
- Pearl River, NY High School Class of '81; Northeastern University, Boston, MA Class of '87.
32 comments:
http://www.reuters.com/article/idUSN239866720100223?type=marketsNews
The number of mass layoffs by U.S. employers edged up in January as manufacturers stepped up job cuts...
The Labor Department said the number of mass layoff actions - defined as job cuts involving at least 50 people from a single employer - increased by 35 to 1,761.
A total of 182,261 workers were affected last month. In January, 486 mass layoff events were reported in manufacturing, resulting in 62,556 workers filing claims for state unemployment benefits. It was the first increase in mass layoffs in manufacturing since August.
Since December 2007, when the worst recession in 70 years started, the U.S. economy has shed 8.4 million jobs.
Payrolls have declined every month since then except for last November...
* AND OF COURSE THE ARTICLE OFFERS NO EXPLANATION NOR EVEN THEORY AS TO WHY LAST NOVEMBER WAS THE EXCEPTION...
Employers last month cut 20,000 jobs after laying off 150,000 workers in December, while the unemployment rate fell to 9.7 percent from 10 percent.
* YEAH... WE'VE DISCUSSED THIS BULL$HIT "FALL" IN UNEMPLOYMENT PREVIOUSLY. BOTTOM LINE, UNEMPLOYMENT ACTUALLY ROSE - IT DIDN'T FALL. THE NUMBERS "FELL" DUE TO TECHNICAL "REVISIONS" IN THE DATA. IN OTHER WORDS... THE 9.7% NUMBER IS AS PHONY AS THE THREE DOLLAR BILL.
In the 26 months to January, a total 53,739 mass layoff events were effected and involved 5,425,101 workers, the Labor Department said.
http://finance.yahoo.com/news/Regulators-report-27-percent-rb-3180263608.html?x=0&.v=1
The number of "problem" U.S. banks jumped 27% during the fourth quarter of 2009...the highest level since 1993...
The FDIC set aside an additional $17.8 billion during the fourth quarter for expected bank failures.
Regulators have closed 20 U.S. banks so far this year and 185 since January 2008, as banks continue to struggle with loan portfolios stocked with souring loans.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaeViPPUVSw4
Ballooning debt is likely to force several countries to default...according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big American banks.
* WHO IN 2008 PREDICTED...??? (*SNORT*) HEY... I PREDICT THAT THE SAINTS ARE GOING TO WIN THE 2010 SUPERBOWL. (THE 2010 SUPERBOWL...)
* HARVARD... (*SMIRK*)
Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years,” Rogoff, a former chief economist at the International Monetary Fund, said at a forum in Tokyo yesterday. “I predict we will again.”
* WOW. SOUNDS LIKE THE PROFESSOR HAS BEEN... ER... READING THE PAPERS FOR THE LAST YEAR OR SO; HE'S OBVIOUSLY HEARD OF DUBAI AND GREECE. (*SNORT*)
The U.S. is likely to tighten monetary policy before cutting government spending, sending “shockwaves” through financial markets, Rogoff said in an interview after the speech. Fiscal policy won’t be curbed until soaring bond yields trigger “very painful” tax increases and spending cuts, he said.
* DUH...!!!
The U.S. is facing an unprecedented $1.6 trillion budget deficit in the year ending Sept. 30... “Most countries have reached a point where it would be much wiser to phase out fiscal stimulus,” said Rogoff...
* TELL OBAMA... TELL PELOSI... TELL REID... I ALREADY KNOW ALL THIS...!!!
(*SHAKING MY HEAD IN DISGUST*)
Rogoff, 56, said he expects Greece will eventually be bailed out by the IMF rather than the European Union.
* TRANSLATION: GREECE WILL BE BAILED OUT COURTESY OF THE U.S. TAXPAYER. (*SMIRK*)
...said Rogoff. “I don’t think Europe’s going to succeed.”
* THAT'S WHAT I SAID BACK IN 1986 AS AN INTERN TO A THEN-MEMBER OF THE BRITISH HOUSE OF COMMONS. (*SHRUG*)
The IMF forecast in November that gross U.S. borrowings will amount to the equivalent of 99.5% of annual economic output in 2011. The U.K.’s will reach 94.1% and Japan’s will spiral to 204.3%. ... Japanese fiscal policy is “out of control,” [Rogoff] said.
So far concerns about the euro zone’s ability to withstand the deteriorating finances of its member nations have outweighed the U.S.’s deficit woes, propping up the dollar.
“The more they suck in Greece, the lower the euro goes, because it’s not a viable plan,” Rogoff said. “Clearly the dollar is going to go down against the emerging markets -- there’s going to be concern about inflation and the debt.”
The dollar has surged more than 9 percent against the euro in the past three months. Ten-year Treasuries yielded 3.72 percent as of 10:16 a.m. in New York.
The U.S. government will delay any efforts to contain the deficit until Treasury yields reach around 6 percent to 7 percent, Rogoff said.
“The U.S. is in a state of paralysis in its fiscal policy,” he said. “Monetary policy will tighten first, and I don’t think it’s the right mix.”
President Barack Obama’s administration is proposing a $3.8 trillion budget for fiscal 2011...
OOPS!
Posted TWO separate newsbites in the above comment by mistake.
Anyway...
(*SMILE*)
BILL
http://www.breitbart.com/article.php?id=CNG.2e7f9c5cda143522fcbf439aa9438fae.2a1&show_article=1
Bonuses paid to Wall Street securities industry employees in New York rose 17% to $20.3 billion in 2009, state officials said Tuesday.
New York State Comptroller Thomas DiNapoli said total compensation at the largest securities firms grew even faster and industry profits could hit a record amount after unprecedented losses in 2008.
* THIS IS NOT CAPITALISM. THIS IS OLIGARCHY ECONOMICS.
The bonus pool figures - which only reflect amounts paid to those who work in New York City - fell 47% in 2008 but rose sharply last year as the sector recovered.
* AS "THE SECTOR" RECOVERED.
* "THE SECTOR" IS THE PROBLEM! AS I'VE EXPLAINED TIME AND AGAIN, THESE ARE NOT "REAL" PROFITS; THESE ARE THE WAGES OF CRONY CAPITALISM WHERE THOSE IN GOVERNMENT (TREASURY, THE FED, CONGRESS, THE ADMINISTRATION) WORK HAND IN HAND RIGGING THE GAME FOR THE BENEFIT OF THEIR CRONIES IN THE "PRIVATE" SECTOR.
The figures also showed that broker-dealer operations of New York Stock Exchange member firms earned a record $49.9 billion through the first three-quarters of 2009.
* THINK ABOUT THIS... NO REAL WEALTH IS BEING CREATED; MIDDLEMEN ARE SIMPLY TAKING A CUT OF THE BOOKKEEPING SLIGHT OF HAND.
[P]rofits could exceed $55 billion In 2009, nearly three times greater than the previous record. In 2008, the industry lost a record $42.6 dollars.
* "PROFITS" FROM DOING WHAT EXACTLY... FROM TRADING...??? "PROFITS" FROM CAPITAL GAINS - WHICH ARE IN ESSENCE TAKING YOUR CHIPS OFF THE POKER TABLE WHEN YOU'RE AHEAD...??? THE "WEALTH" BEING CREATED IS JUST PAPER... IT'S NOT JOBS... IT'S NOT CONCRETE ASSETS... (*SIGH*)
The report showed compensation at the major firms Goldman Sachs, Morgan Stanley, and JPMorgan Chase Investment Bank, which are more diversified than traditional broker-dealers, increased by 31% in 2009 and average compensation rose by 27% to more than $340,000.
* SO LET'S RECAP: AS THE REAL ECONOMY CONTINUES TO CIRCLE THE DRAIN THE "FINANCE" ECONOMY PAYS OUT 31% INCREASES IN COMPENSATION. IF YOU FOLKS READING THIS DON'T SEE THE DISCONNECT... (*SHRUG*) (*PURSED LIPS*0
Wall Street accounted for 24% of the wages paid to workers in New York City in 2008 even though it accounted for only five percent of the jobs...
(*FEELING SICK TO MY STOMACH*)
http://www.reuters.com/article/idUSTRE61M18K20100223
The number of American soldiers killed in Afghanistan has reached 1,000, an independent website said on Tuesday...
Icasualties.org said 54 U.S. troops were killed this year in Afghanistan, raising the casualties to 1,000...
http://www.breitbart.com/article.php?id=CNG.ccdef4d9c5c22fbb6b91d67ede90c7bb.e41&show_article=1
The US-led offensive in southern Afghanistan is progressing at a slower pace than expected due to Taliban resistance and deadly roadside bombs, US defense chiefs said on Wednesday.
The chairman of the US Joint Chiefs of Staff, Admiral Mike Mullen, and Defense Secretary Robert Gates also expressed condolences over the deaths of Afghan civilians in a [mistargeted] NATO air strike... ...[the] NATO air strike that killed up to 27 Afghan civilians was under investigation... It was the third mistaken NATO air raid reported by Afghan officials in a week...
http://www.google.com/hostednews/canadianpress/article/ALeqM5h0QC7bditrEb3wYz_6_b-gsGGDxA
An unapologetic Danny Williams says he was aware his trip to the United States for heart surgery earlier this month would spark outcry, but he concluded his personal health trumped any public fallout over the controversial decision.
In an interview with The Canadian Press, Williams said he went to Miami to have a "minimally invasive" surgery for an ailment first detected nearly a year ago, based on the advice of his doctors.
"This was my heart, my choice and my health," Williams said late Monday from his condominium in Sarasota, Fla.
"I did not sign away my right to get the best possible health care for myself when I entered politics."
The 60-year-old Williams said doctors detected a heart murmur last spring and told him that one of his heart valves wasn't closing properly, creating a leakage.
He said he was told at the time that the problem was "moderate" and that he should come back for a checkup in six months.
Eight months later, in December, his doctors told him the problem had become severe and urged him to get his valve repaired immediately or risk heart failure, he said.
His doctors in Canada presented him with two options - a full or partial sternotomy, both of which would've required breaking bones, he said.
He said he spoke with and provided his medical information to a leading cardiac surgeon in New Jersey who is also from Newfoundland and Labrador. He advised him to seek treatment at the Mount Sinai Medical Center in Miami.
That's where he was treated by Dr. Joseph Lamelas, a cardiac surgeon who has performed more than 8,000 open-heart surgeries.
Williams said Lamelas made an incision under his arm that didn't require any bone breakage.
(*SHRUG*)
http://www.suntimes.com/business/currency/2064546,CST-NWS-gas23.article
Gas prices are headed up to above $3 a gallon for regular, and experts say it isn't because of higher demand.
[P]rices are climbing even after millions of Americans got pink slips and kept their cars in the driveway.
* SO... MY CHARGER HAS A 19-GAL. TANK. LAST TIME I FILLED UP IT COST ME $2.40/GAL. IN JERSEY. SO... .60-CENTS TIMES 19 EQUALS...
* YOU GET THE POINT, KIDS; THE STAGFLATION IS COMING - JUST AS PREDICTED.
* FUNNY HOW THE GOVERNMENT DOESN'T INCLUDE "LITTLE THINGS" LIKE... OH... FUEL AND FOOD PRICES INTO THEIR INFLATION CALCULATIONS, HUH?
(*SMIRK*)
http://online.wsj.com/article/SB10001424052748704454304575081732384684088.html?mod=WSJ_hp_mostpop_read
The Senate voted to advance a $15 billion job-creation package Monday...as five Republicans voted to end debate on the Democratic bill, including newly elected Sen. Scott Brown of Massachusetts.
* POINT #1 - IT'S NOT A JOB-CREATION PACKAGE; IT'S A SPENDING PACKAGE LIKE ANY OTHER SPENDING BILL.
* POINT #2 - THE AMERICAN PEOPLE WANT CONGRESS TO STOP SPENDING MONEY - NOT CREATE NEW WAYS TO SPEND MONEY!
Mr. Brown was joined in voting yes by fellow Republican Sens. Olympia Snowe and Susan Collins of Maine, George Voinovich of Ohio and Christopher Bond of Missouri.
* FELLOW "REPUBLICANS" MY ASS!
"This vote was not about jobs. I wish it were," Sen. Orrin Hatch (R., Utah.) said.
* WHEN EVEN ORRIN FRIGG'N HATCH HAS THE WIT TO SEE A SNOW-JOB WHEN HE'S CAUGHT IN THE MIDDLE OF IT THAT TELLS YOU ALL YOU NEED TO KNOW ABOUT WHAT A PATHETIC WASTE OF MONEY THIS BILL REPRESENTS - MONEY WASTED IN SEARCH OF POLITICAL COVER, NOT OUT OF SINCERE BELIEF THAT THROWING GOOD MONEY AFTER BAD WILL ACTUALLY WORK ALL OF A SUDDEN.
The vote represented a successful gamble by Mr. Reid. Earlier this month, Sens. Max Baucus (D., Mont.) and Charles Grassley (R., Iowa) proposed an $85 billion jobs bill that had bipartisan support. But some Democrats complained that the legislation was loaded with extraneous provisions designed to win Republican votes.
* $15 BILLION IS BAD ENOUGH; $85 BILLION WOULD HAVE BEEN WORSE. (SEE... SEE WHAT "BIPARTISANISM" REPRESENTS...?!?!)
The House passed a $154 billion jobs bill late last year...
* SPEAKING OF DUMB AND DUMBER... RECALLING ELEMENTARY SCHOOL MATH... 154>85.
(*HEADACHE*)
http://online.wsj.com/article/SB10001424052748704454304575081521241772924.html?mod=loomia&loomia_si=t0:a16:g2:r2:c0.107784:b30968408
President Barack Obama's health plan adds about $75 billion to the 10-year cost of the Senate health-overhaul bill, and includes new taxes...
(*SIGH*)
* FULL SPEED AHEAD - IN THE WRONG DIRECTION!
(*SMIRK*)
The bill passed by the the Senate on Dec. 24 would cost $871 billion over 10 years, according to the Congressional Budget Office. Mr. Obama's plan would cost about $950 billion over that period, the White House said.
The proposed tax on high-value or "Cadillac" health plans would start in 2018 under Mr. Obama's plan, five years later than the Senate bill. As a result, the tax would raise $120 billion less than the Senate bill envisioned—about $30 billion over a decade compared with $149 billion in the Senate bill. Mr. Obama would also spend more subsidizing lower earners when they buy health coverage and give more support to states to pay for expanding Medicaid.
* NOPE... THIS ISN'T AN "ONION" SATIRE; THIS IS THE REAL NEWS... THIS IS FROM TODAY'S WSJ.
To pay for the increased spending, the proposal would make deeper cuts to Medicare Advantage...
* YEP! AGAIN... YOU'RE READING THIS CORRECTLY!
Also, Mr. Obama would increase the fees for companies and individuals who don't comply with the mandates in the bill. Employers who fail to offer coverage would pay a fine of $2,000 per employee, up from $750 per employee. Small employers are exempt from the fine.
* HMM... THAT'S INTERESTING. DID YOU NOTICE THAT AFTER NOTING FEES WOULD INCREASE FOR BOTH COMPANIES AND INDIVIDUALS THE PARAGRAPH THEN WENT ONLY ONLY TO COMMENT ON HOW COMPANIES WOULD BE EFFECTED - NO CLARIFICATION ON HOW INDIVIDUALS WOULD BE EFFECTED...???
Wealthy taxpayers would have to pay Medicare taxes on unearned income such as interest and dividends under the president's plan. Currently, Medicare taxes only apply to earned income.
* AGAIN... NAKED CLASS WARFARE. DISGUSTING. ABSOLUTELY DISGUSTING
http://online.wsj.com/article/SB10001424052748704454304575081322884457424.html?mod=WSJ_Opinion_LEFTTopOpinion
[By Ron Wyden (D-OR) and Judd Gregg (R-NH)]
[W]e are introducing the Bipartisan Tax Fairness and Simplification Act of 2010.
The IRS estimates that each year Americans spend nearly $194 billion and 6.6 billion hours on tax compliance. Under our simplified approach, most taxpayers will be able to use a straightforward and shortened one-page 1040 IRS form to file their federal income taxes.
We reduce the number of tax brackets from six to three—15%, 25% and 35%—and simplify the tax code for individuals and families by eliminating the alternative minimum tax. By nearly tripling the standard tax deduction, creating new opportunities for tax-free saving, and eliminating restrictions on personal exemptions and itemized deductions, under our proposal most Americans with an annual income of up to $200,000 will fare as well or better than they do under the current system. Furthermore, they won't have to worry about maintaining the records and receipts necessary to document itemized deductions.
In order to encourage investment, our legislation would exempt taxpayers from paying taxes on the first 35% of their long-term capital gains income. To qualify as a long-term gain, investments would have to be held for at least six months for the first $500,000 of capital gains, and for at least one year for capital gains after the first $500,000.
Another key element of our proposal is a flat corporate tax rate. Currently, U.S. corporations are at a competitive disadvantage internationally. They pay the second highest tax rate in the industrialized world. Our legislation would reduce the top corporate tax rate, which can exceed 35%, and replace the existing six corporate rates and eight brackets with a single flat rate of 24%. This will cut the U.S. corporate rate by nearly 30% and, for the first time in nearly a decade, give American corporations a competitive tax advantage over foreign competitors in Canada, Germany, France and many other countries.
Our legislation also eliminates tax incentives that encourage American businesses to keep more of their foreign earnings overseas and export jobs by repealing the rule that allows U.S. companies to defer taxes on foreign income. And we take a hard line on corporate welfare by directing the Congressional Budget Office to examine the roughly $90 billion that the federal government spends to subsidize businesses directly and indirectly each year. These steps not only make the tax code simpler and fairer for everyone, they reduce opportunities for individuals and businesses to cheat the system and avoid paying their fair share.
* I'M CERTAINLY NOT ABOUT TO ADVOCATE THE PLAN AS IS - HOWEVER... IT IS AT LEAST A PLAN, A MOVE IN THE RIGHT DIRECTION.
http://online.wsj.com/article/SB10001424052748704259304575043573979877134.html?mod=WSJ_Opinion_AboveLEFTTop
The first step in treating Washington's spending addiction is for the political class to admit it has a problem. This means being honest with taxpayers about the debts politicians are racking up.
Today, Members of Congress have an opportunity to set out on the road to recovery by agreeing to co-sponsor the Accurate Accounting of Fannie Mae and Freddie Mac Act. Authored by Representative Scott Garrett (R., N.J.), the bill would require that taxpayers receive an honest accounting of their exposure to the failed housing behemoths.
The Obama Administration has refused to provide such an accounting in its official budget, which is indefensible under traditional rules for government-sponsored entities. As the Congressional Budget Office (CBO) pointed out last month, since the government placed Fan and Fred in conservatorship and Treasury took controlling ownership stakes in 2008, "those actions make Fannie Mae and Freddie Mac part of the government and imply that their operations should be reflected in the federal budget."
Taxpayers have been rightly appalled at the $111 billion they've been forced to contribute to these failed housing projects since the takeover, but that figure doesn't begin to describe the taxpayer obligations. Unlike the White House, CBO at least takes a stab at a fair accounting. Its estimates suggest that the toxic twins will consume almost $380 billion from the 2008 takeover through 2020.
But even CBO is only counting the costs of the subsidies that Fan and Fred pour into the housing market. This is the estimated cost to taxpayers resulting from the more than $5 trillion of mortgages that Fan and Fred own or guarantee. CBO is also guessing how much taxpayers will lose when Fan and Fred modify mortgages to serve Obama housing policy... What is clear is that no one in official Washington is counting the $1.6 trillion in corporate debt issued by Fan and Fred as taxpayer debt... This means that when President Obama recently signed an increase in the federal debt limit to a record $14.3 trillion, he was running the limit on Washington's credit card up closer to $16 trillion.
Garrett's bill would require the White House to acknowledge the true costs of Fan and Fred in its annual budget and in calculations of the federal debt.
Mr. Obama need not wait for Congress to send the Garrett bill to his desk. He can order the White House budget office to embrace honest accounting today and bring Fannie and Freddie on the federal budget. We can think of no better way to demonstrate his alleged enthusiasm for transparency and seriousness when it comes to deficits and debt.
Fan and Fred's longtime Congressional protector, Barney Frank, can also take a baby-step toward reform. The Massachusetts Democrat, who recently said that he now favors abolishing the two mortgage giants as they currently exist, hasn't laid out a plan to do so. While he's working on it, he can at least agree to inform taxpayers about the costs.
http://online.wsj.com/article/SB10001424052748704751304575079260144504040.html
The first anniversary of the Obama stimulus package generated a lot of discussion about whether and how much the package (originally estimated at $787 billion but now priced at $862 billion) moderated the recession. These are complex questions, and their answers require more than merely counting the quantity of goods and services that the government purchased or the number of people that the government hired.
We need to ask whether the government's spending reduced or enhanced private spending and whether public-sector hiring lowered or raised private hiring. This requires an empirical model based on the history of past fiscal actions in the U.S. or other countries. The administration must have such a model, but my own analysis makes me skeptical about the numbers they've reported about GDP increases and saved jobs.
[V]iewed over five years, the fiscal stimulus package is a way to get an extra $600 billion of public spending at the cost of $900 billion in private expenditure. This is a bad deal.
The fiscal stimulus package of 2009 was a mistake. It follows that an additional stimulus package in 2010 would be another mistake.
* THE MAJORITY OF THE ARTICLE IS AN EXPLANATION OF THE MATH - HOW THE AUTHOR ARRIVED AT HIS CONCLUSION; I URGE READERS TO FOLLOW THE LINK AND READ THE OP-ED IN ITS ENTIRETY.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521876
The Tea Party movement shares certain key interests of the conservative movement, yet it is a phenomenon independent from the conservative movement. That's a good thing.
The Tea Party movement brings millions of new people to the political arena who have not previously been involved. They bring more energy, enthusiasm and excitement to politics than we've seen in the last 100 years.
The Tea Party is a revolution of the fed-up middle-class Americans. It is directed at Republican and Democratic incumbent politicians. It is against establishment institutions (think big business, Wall Street, mainstream media, Hollywood, higher and lower education, unions, legal community, organized religion, nonprofits, etc.) that have sided with quasi-socialism, crony capitalism and political favoritism at the expense of constitutionalism.
It is against those who have used and abused their power and trust to gain electoral and financial advantage for themselves and their friends without regard to how it would affect tax-paying, hardworking Americans, their children and their grandchildren. It is a response to political arrogance.
Tea Partyers are different from many traditional conservatives, who too often have operated as an appendage of the GOP. In that regard, they are independent from the current conservative movement, per se.
Tea Partyers are a great asset to the cause of small, limited, constitutional government, and are therefore a natural ally of the conservative movement. They put principle above loyalty to politicians. They are the new conscience of the small, limited, constitutional government cause.
And, as Sarah Palin has witnessed after announcing her support for John McCain in his Senate race, Tea Partyers brook little sympathy for political inter-indebtedness.
They will also not be content to support establishment Republicans who grow the size of government a little slower than Democrats. They want to turn America back to the small-government, constitutional principles of our Founders. Republicans who are not totally committed to reversing decades of quasi-socialism, or who do not thoroughly embrace a constitutional republic, are not safe.
Tea Partyers will insist on operating much more than previous conservatives on offense, not on defense. Specifically, they want "boat-rocking" candidates who will support changing many of the Republican leaders (think of Washington, D.C., Republicans' support of Dede Scozzafava in New York's 23rd Congressional District).
Some who have toiled in the conservative movement for years or decades won't always like what they hear from our brothers and sisters in the Tea Party movement. They'd be unwise, however, not to listen. They'd be less wise not to reflect on where we've come as a movement, and who our friends really are.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521870
The president has unveiled a reform plan of his own ahead of Thursday's bipartisan summit. But it's no better than the lousy Democratic proposals that Americans have already dismissed.
The Obama plan appears to be based on the bills that were passed last year in the House and in the pre-Scott Brown Senate. While it leaves out the public option that was included in the House legislation, it adds a wrinkle that's just as harmful: price controls on insurance premiums.
It seems the White House is cynically using the new wrinkle to take advantage of the anger toward insurance companies. The good news is that wrinkle should smooth out once opponents explain why restrictions on premium increases will leave the public with less coverage, as insurers will have no choice but to ration benefits.
The opponents — hopefully every Republican holding elected office — could start by repeatedly pointing out that Larry Summers, President Obama's chief economic adviser, not a GOP operative, said: "Price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time."
The opposition should also ceaselessly tell the public that the ultimate consequence of premium caps on health insurance — if not the ultimate goal of the Democrats — is the collapse of the industry.
Private firms will leave the market when government restrictions make it unreasonably hard to make a profit. That will happen when the caps are combined with the inevitable federal mandates outlining the wide array of conditions that insurers must pay for and the rules that govern how coverage is sold.
New York has bitter experience with coverage rules. Since the early 1990s the state has forced insurers to provide insurance to people who are already sick and required them to set premiums at the same rate for all customers despite differences in age and health.
New York's market hasn't yet crumbled, but only because insurers have been able to increase premiums. New York now has, at roughly $9,000 a year on average, the highest rates in the country.
Soaring premiums can't happen in a regime in which they are capped. When caps are added to mandates, insurers have nowhere to go but out of the health insurance business.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521873
The reconciliation procedure was hatched out of the Congressional Budget and Impoundment Control Act of 1974 to limit filibustering on budget bills — in other words, to prevent fiscally conscious senators from curbing Congress' big spending ways.
That's bad enough, especially now that the president and the Democratic Congress have decided to spend America into the black hole. But nothing in the 1974 budget act, or the amendments made to it since, can be construed as applying to the thousands of pages of legislation to revamp one-sixth of the economy.
New regulations on health insurance companies, to name just one aspect of the bill, have nothing to do with spending or revenues, the debt limit or any other budget-related matter. Using reconciliation on health care is as absurd as using it to send a constitutional amendment to the states for ratification, or to pass a treaty, or to confirm a Cabinet secretary or Supreme Court justice.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521877
During bad times, the blame game is the biggest game in Washington. Wall Street "greed" or "predatory" lenders seem to be favorite targets to blame for our current economic woes. When government policy is mentioned at all in handing out blame, it is usually blamed for not imposing enough regulation on the private sector.
Is there any evidence [though] that people on Wall Street were any less interested in making money during all the decades and generations when investments in housing were among the safest investments around? If their greed did not bring on an economic disaster before, why would it bring it on now? As for lenders, how could they have expected to satisfy their greed by lending to people who were not likely to repay them?
An increased demand for housing does not automatically mean higher housing prices. In places where supply is free to rise to meet demand, such as Manhattan in the 1950s or Las Vegas in the 1980s, increased demand simply led to more housing units being built, without an increase in real prices — that is, money prices adjusted for inflation.
What led to a boom in housing prices was increased demand in places where supply was artificially restricted. Coastal California was the largest of these places where severe legal restrictions on building houses led to skyrocketing housing prices.
Just between 2000 and 2005, for example, home prices more than doubled in Los Angeles and San Diego, in response to rising demand in places where supply was not allowed to rise to meet it. At the height of the housing boom in 2005, the 10 areas with the biggest home-price increases over the previous five years were all in California. That year, the average home price in California was more than half a million dollars, even though the average size of the homes sold was just 1,600 square feet.
If the housing boom was so localized, how did this become a national problem? Because the money that financed housing in areas with housing price booms was supplied by financial institutions across the country and even across the ocean. Mortgages made in California were sold to nationwide financial institutions, including Fannie Mae and Freddie Mac, and to firms on Wall Street that bundled thousands of these mortgages into financial securities which were sold nationally and internationally.
The problem was that, not only were these mortgages based on housing prices inflated by the Federal Reserve's low-interest-rate policies, but many of the homebuyers had been granted mortgages due to federal government pressure on lenders to lend to people who would not ordinarily qualify, whether because of low income, bad credit history or other factors likely to make them bigger credit risks.
This was not something that federal regulatory agencies permitted. It was something that federal regulatory agencies — under pressure from politicians — pressured and threatened lenders into doing in the name of "affordable housing."
The housing market collapse was set off when the Fed returned interest rates to more normal levels. But it was a financial house of cards that was due to collapse, sending shock waves through the economy. It was just a matter of when - not "if."
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521869
The media breathlessly report an "unexpectedly" large increase in unemployment applications with inflation rising "faster than expected." Given the wasteful spending spree we've been on, what do they expect?
The economic gurus at major media outlets such as Reuters are having a dickens of a time explaining why the economy is not responding to the massive doses of monetary steroids we've been injecting. Last Thursday, after the Labor Department announced that claims for state unemployment benefits increased by 31,000 to 473,000, Reuters reported that the surge was "unexpected."
We were also told "prices paid at the farm and factory gate rose a faster than expected 1.4% from December after a 0.4% gain in December, as higher gasoline prices and unusually cold temperatures helped boost energy costs."
These analysts are shocked — shocked! — that this hopey-changey thing isn't working out. But when you have an economic policy that consists of taking money out of the economy to redistribute, after subtracting government overhead and borrowing the rest from places like China, these numbers should not be "unexpected."
Government has been sucking all the economic oxygen out of the room. The White House announces the establishment of a debt commission led by two retired politicians after submitting a fiscal 2011 budget with a $1.36 trillion dollar shortfall.
Don't we already have a debt commission — called Congress?
What did we elect them to do?
Isn't it a tad disingenuous to freeze 12% of federal spending after you increased it by 20% across the board your first year?
Remember the triumphant announcement that GDP grew by 5.7% in the fourth quarter? Harm Bandholz, an economist at UniCredit Research in New York, says that "GDP growth is artificially inflated by government stimulus and the inventory cycle rather than driven by final demand, which usually goes hand in hand with an improvement in the labor market."
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=521868
The 2006 Secure Fence Act mandated the "possible" construction of a long wall to protect our frontier.
Four years later, no wall, just a new seven-year delay. This is an embarrassment.
It was almost a prelude to the Tea Parties now sweeping the nation. Millions of Americans, reacting to brazen demonstrations on U.S. soil by illegal immigrants, mobilized themselves to rouse Congress to do something about millions of illegal immigrants pouring into the U.S.
Citizen activists shut down the Capitol Hill switchboard with their calls, formed border watches and marched in the streets. As a result, a shaken Congress scrapped its widely detested McCain-Kennedy comprehensive immigration bill with its amnestylike features in 2005. Instead, it passed Rep. Duncan Hunter's Secure Fence Act of 2006.
"We hear you, loud and clear," said reform bill advocate John McCain.
Today, it's a different attitude from Congress and the government that carries out its laws. Knowing the potency of popular sentiment, the government hasn't had the nerve to seek to repeal the fence outright. But all signs suggest that it never wanted this built. With bureaucratic delays, cost overruns, general incompetence and a "can't do" spirit, officials have effectively scuppered the fence without politically costly legislation.
The Los Angeles Times reported Monday that electronic portions of the 1,951-mile fence bordering Mexico, slated for completion by 2011, won't be ready for another seven years. Radar, cameras, satellite signals — all the things that were supposedly "better" than a real fence, we find, are about as viable as wind power and switchgrass ethanol.
The fact is, fences work. Activists and bureaucrats argue that they don't work perfectly, but even scalable barriers slow down illegal border activity — unlike Homeland Security's current alternative, which is doing nothing.
Saudi Arabia, too, had a problem with illegal immigrants...some 400,000 illegals from Yemen...so from 2003 to 2008 it built the Saudi-Yemen Barrier... Today, the 1,100-mile southern border has a network of sandbags, concrete-filled pipelines and electronic detection equipment. The result was effective enough to encourage the Saudis to begin another on their northern border.
[C]ountries...poorer in resources and expertise than the U.S., managed to actually get something done fast enough to make a difference to a pressing problem.
It took the U.S. a tad more than eight years from the announcement in 1961 to put a man on the moon. Now we can't build a fence in seven?
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Holder-admits-nine-Obama-Dept-of-Justice-officials-worked-for-terrorist-detainees-offers-no-details-84799487.html
Attorney General Eric Holder says nine Obama appointees in the Justice Department have represented or advocated for terrorist detainees before joining the Justice Department. But he does not reveal any names beyond the two officials whose work has already been publicly reported.
Holder's admission comes in the form of an answer to a question posed last November by Republican Sen. Charles Grassley. Noting that one Obama appointee, Principal Deputy Solicitor General Neal Katyal, formerly represented Osama bin Laden's driver, and another appointee, Jennifer Daskal, previously advocated for detainees at Human Rights Watch, Grassley asked Holder to give the Senate Judiciary Committee "the names of political appointees in your department who represent detainees or who work for organizations advocating on their behalf…the cases or projects that these appointees work with respect to detainee prior to joining the Justice Department…and the cases or projects relating to detainees that have worked on since joining the Justice Department."
In his response, Holder has given Grassley almost nothing. He says nine Obama political appointees at the Justice Department have advocated on behalf of detainees, but did not identify any of the nine other than the two, Katyal and Daskal, whose names Grassley already knew. [I]t is possible that there are more than nine political appointees who worked for detainees. Holder tells Grassley that he did not survey the Justice Department as a whole but instead canvassed several large offices within the organization.
Bottom line: Holder revealed no names beyond the two already publicly known. He revealed no cases from which Justice political appointees recused themselves.
http://corner.nationalreview.com/post/?q=OWI5NjMwOGI2Mzc3ZTcyNzE1NjI0NzY0ZjQ4YWU0NDc=
[By Mark Steyn]
I pretty much said what I had to say about the Fort Hood massacre in the first couple of weeks, because it was perfectly obvious within about 48 hours that 14 people (including an unborn child) had died so that "diversity" might live. As is the way, the official version is taking longer to catch up to what anyone not marinated in brain-eating PC mush could see from the get-go. The Boston Globe has a story on a new army report, unfortunately completed too late for last month's whitewash:
QUOTING --
An obvious “problem child’’ spouting extremist views, Hasan made numerous statements that were not protected by the First Amendment and were grounds for discharge by violating his military oath, investigators found. . .
In searching for explanations for why superiors did not move to revoke Hasan’s security clearances or expel him from the Army, the report portrays colleagues and superiors as possibly reluctant to lose one of the Army’s few Muslim mental health specialists.
The report concludes that because the Army had attracted only one Muslim psychiatrist in addition to Hasan since 2001, “it is possible some were afraid’’ of losing such diversity “and thus were willing to overlook Hasan’s deficiencies as an officer.’’
(END QUOTE)
You'll recall the cringe-making response to the massacre by the embarrassing General Casey, the Army's chief of staff:
QUOTE --
What happened at Fort Hood was a tragedy," said Gen. Casey, the Army's chief of staff, "but I believe it would be an even greater tragedy if our diversity becomes a casualty here."
(END QUOTE)
The fact that a grown man not employed by a U.S. educational institution or media outlet used the word "diversity" in a non-parodic sense should be deeply disturbing. "Diversity" is not a virtue; it's morally neutral: A group of five white upper-middle-class liberal NPR-listening women is non-diverse; a group of four white upper-middle-class liberal NPR-listening women plus Sudan's leading clitorectomy practitioner is more diverse but not necessarily the better for it. For 30 years we have watched as politically correct fatuities swallowed the entire educational system, while we deluded ourselves that it was just a phase, something kids had to put up with as the price for getting a better job a couple years down the road. The idea that two generations could be soaked in this corrosive bilge and it would have no broader impact was always absurd. When the chief of staff of the United States Army has got the disease, you're in big (and probably terminal) trouble.
http://nrd.nationalreview.com/article/?q=M2FhMTg4Njk0NTQwMmFlMmYzZDg2YzgyYjdmYjhhMzU=
* FOLLOW THE LINK. THE PIECE IS TOO BIG TO EFFECTIVELY EXCERPT. I'LL GIVE YOU A TEASER... BUT THIS ARTICLE IS REALLY WORTH READING IN ITS ENTIRETY.
What do we, as American conservatives, want to conserve? The answer is simple: the pillars of American exceptionalism. Our country has always been exceptional. It is freer, more individualistic, more democratic, and more open and dynamic than any other nation on earth. These qualities are the bequest of our Founding and of our cultural heritage. They have always marked America as special, with a unique role and mission in the world: as a model of ordered liberty and self-government and as an exemplar of freedom and a vindicator of it, through persuasion when possible and force of arms when absolutely necessary.
The survival of American exceptionalism as we have known it is at the heart of the debate over Obama’s program.
At stake isn’t just a grab bag of fiscal issues, but the meaning of America and the character of its people: the ultimate cultural issue.
The late Seymour Martin Lipset defined [The American Creed] as liberty, equality (of opportunity and respect), individualism, populism, and laissez-faire economics. The creed combines with other aspects of the American character — especially our religiousness and our willingness to defend ourselves by force — to form the core of American exceptionalism.
Liberty is the most important element of the creed. To secure it, the Founders set about strictly limiting government within carefully specified bounds. Immediately upon the collapse of British government in America, the states drew up written constitutions and neutered their executives. They went as far as they could possibly go to tame the government — indeed, they went farther, and had to start over to get a functioning state. But even this second try produced a Constitution that concentrated as much on what government could not do as on what it could.
The Founders knew what men were capable of, in the positive sense if their creative energies were unleashed and in the negative sense if they were given untrammeled power over others. “It may be a reflection on human nature,” Madison wrote in a famous passage in Federalist No. 51 describing the checks in the Constitution, “that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.”
The Constitution’s negative character reflected its basic goal: to protect people in their liberty. In stark contrast, European constitutions, even prior to World War II, established positive rights to government benefits. As Mary Ann Glendon notes, these differences “are legal manifestations of divergent, and deeply rooted, cultural attitudes toward the state and its functions.”
* ANYWAY... THAT'S ALL YOU GET. SERIOUSLY... THE PIECE IS WELL WORTH READING IN ITS ENTIRETY.
http://blogs.abcnews.com/thenote/2010/02/house-gop-we-have-a-plan-.html?utm_source=twitterfeed&utm_medium=twitter
ABC's Jonathan Karl reports: The White House is challenging Republicans to produce a health care plan. [Funny thing...] Republicans already have. The House GOP plan has been online for several months. According to the the Congressional Budget Office, it would reduce premiums by 10 percent...
Here are the highlights of the House GOP bill, provided by John Boehner's office:
Let families and businesses buy health insurance across state lines.
Allow individuals, small businesses, and trade associations to pool together and acquire health insurance at lower prices, the same way large corporations and labor unions do.
Give states the tools to create their own innovative reforms that lower health care costs (this will also help deal with coverage for folks with pre-existing conditions).
End junk lawsuits that contribute to higher health care costs by increasing the number of tests and procedures that physicians sometimes order not because they think it's good medicine, but because they are afraid of being sued.
* The plan can be found at: http://www.gop.gov/solutions/healthcare
http://www.nytimes.com/2010/02/22/opinion/22healthintro.html?pagewanted=all
[By Charles Kolb, President of the Committee for Economic Development]
Health care reform should have two critical goals: reducing costs and covering more people.
Our existing employer-sponsored system [is] a pre-World War II dinosaur awaiting extinction...
Congress should not micromanage people’s health care decisions by imposing price controls or setting up more bureaucracy. Rather, it should introduce competition to the insurance market... Then Americans would be able to shop for health insurance and pocket what they save by choosing lower-priced plans. Appropriate risk adjustment — a mechanism by which insurers who cover more sick people are compensated by insurers who cover fewer of them — could reduce the incentive of some insurance companies to sign up only the healthy.
Congress should also end the current tax exemption for employer-sponsored insurance coverage. This change would encourage people to pay more attention to the price of their health insurance. And it would provide the money that will be needed to help underwrite coverage for the uninsured.
Finally, no backroom deals — for pharmaceutical companies, individual members of Congress or anyone else.
http://www.nytimes.com/2010/02/22/opinion/22healthintro.html?pagewanted=all
[By Doctor William (Bill) Frist - former Senate Majority Leader]
President Obama, Harry Reid and Nancy Pelosi have failed at health care reform. They have failed because they fundamentally don’t believe in markets, incentives and the power of hundreds of millions of people to make smart choices about their health. It’s just not in the Democratic leaders’ DNA.
The most powerful way to reduce costs (and make room to expand coverage) is to shift away from “volume-based” reimbursement (the more you do, the more money you make) to “value-based” reimbursement - align the incentives of doctors, hospitals, pharmaceutical makers and other health care providers through value-based purchasing.
The Congressional plan to squeeze reimbursement to nurses, doctors and hospitals by imposing top-down budgeting in Washington won’t work. It won’t change anyone’s behavior, and it will eventually lead to rationing, which undercuts innovation and medical research.
This is not rocket science. You simply need to pay people to do a good job, demand measurable outcomes and adopt proven standards of practice and information technology. Reward value, not volume.
Medicare and private insurance companies should reimburse providers not for each discrete service they provide but for managing a patient’s condition over an entire episode of care. In my own field, transplantation, for example, a payer should not separately reimburse 56 different nurses, doctors, pharmacies, imaging centers and hospitals. Instead, it should pay a heart transplant team a fixed sum (adjusted for risk) based on the diagnosis of “heart failure requiring transplantation.” The disbursement of that payment would then be made at the local level, where value can be most accurately determined, and waste most likely eliminated.
Health care providers could then compete on the basis of efficiency and success. Markets work. We should use them to drive behavior toward the goals of sustainable value in medical treatment and affordable health care for all Americans.
http://agenda.nationalreview.com/post/?q=ODk3YzYyMzMwZWU2OTY3YWY3ZTQ4NWU2YWVkOTA2OTY=
GOP = AARP?
There is a real danger that the GOP will become "the party of AARP."
This means that while the energy of activists may be pushing the Republicans to the right on size-of-government issues, the concerns of their central constituency could end up pulling them inexorably leftward on entitlements. (There’s a reason that even South Carolina’s Jim DeMint, in the midst of a CPAC stemwinder, paused to allow that one of the things government “has” to do is “keep our promises to our seniors.”)
This wouldn’t be a terrible things if Social Security and (especially) Medicare accounted for, say, ten percent of the federal budget. But where the size of government — and if we ever want to cut the deficit, the burden of taxation — is concerned, they’ll be the whole ballgame soon enough. And if the Republican Party depends too heavily on over-65 voters for its political viability, we could easily end up with a straightforwardly big-government party in the Democrats, and a G.O.P. that wins election by being “small government” on the small stuff (earmarks, etc.) while refusing to even consider entitlement reform. That’s a recipe for one of two things: Either the highest taxes in American history and a federal government that climbs inexorably toward 30 percent of G.D.P., or a Greece or California-style disaster.
This is the main reason why I've argued that a premature Republican comeback might actually be a bad thing for conservatives — if the party wins a war of inches by outpromising Democrats on Medicare, it'll prove a Pyrrhic victory.
One irony is that Republicans are in a sense doing what Ross and I recommended in Grand New Party: we wanted the party to pursue policies that reflected the economic interests of their working and middle class base. Rather than a program centered on reforms designed to make the welfare state transparent and sustainable, this has meant something very different in practice.
http://www.forbes.com/2010/02/22/public-pension-fund-personal-finance-siedle-underfunding.html?boxes=Homepagelighttop
Here's a scary financial fact: The nation's $2.3 trillion in state and local pension assets are currently a half-trillion dollars short of what they'll need to pay out promised benefits. Here's an even scarier financial fact: These funds are overseen by people who lack basic money management skills, who are frequently swayed by political pressure--and who are counting on hiking your taxes to fill the breach if they come up short.
The average public fund trustee, it bears noting, was appointed not because of his financial acumen but because he is a political or public union heavyweight--or because nobody else wanted the job.
[A] state audit of the North Carolina state treasurer's office found million-dollar and billion-dollar mistakes in reporting investment results for the most recent fiscal year. The audit said the errors occurred "because new staff prepared the information, and their work was not effectively supervised and reviewed."
In Kentucky a proposal has been floated that would require two of the three members appointed by the governor to the Kentucky Retirement Systems board to possess 10 years of "investment experience." Defining what constitutes "investment experience" apparently is contentious. If passed, the new requirement would be one of the few of its kind.
[T]he neophytes overseeing public pension plans are not subject to comprehensive federal or state regulation or to the strictures that the Securities and Exchange Commission imposes on private sector money managers. Making matters worse still, Wall Street's most talented hucksters regard public pensions as possibly the dumbest institutional investors around and compete fiercely to foist on them the latest in over-priced money management services and toxic assets.
Whoever came up with the idea that trillions of dollars should be handed over to funds managed by political hacks and government employees--with taxpayers on the hook for any deficits--must have been out of their minds. It was a prescription for disaster, and a disaster is what we face.
http://www.businessweek.com/news/2010-02-23/secret-aig-document-shows-goldman-sachs-minted-most-toxic-cdos.html
When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention. Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup.
Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.
These were the deals that pushed the insurer to the brink of insolvency -- and were eventually paid in full at taxpayer expense.
The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year, even when AIG wanted it released.
That lack of disclosure shows how the government has obstructed a proper accounting of what went wrong in the financial crisis, author and former investment banker William Cohan says.
The document Issa made public cuts to the heart of the controversy over the September 2008 AIG rescue by identifying specific securities, known as collateralized-debt obligations, that had been insured with the company. The banks holding the credit-default swaps, a type of derivative, collected collateral as the insurer was downgraded and the CDOs tumbled in value.
The public can now see for the first time how poorly the securities performed, with losses exceeding 75 percent of their notional value in some cases. Compounding this, the document and Bloomberg data demonstrate that the banks that bought the swaps from AIG are mostly the same firms that underwrote the CDOs in the first place.
The banks should have to explain how they managed to buy protection from AIG primarily on securities that fell so sharply in value, says Daniel Calacci, a former swaps trader and marketer who’s now a structured-finance consultant in Warren, New Jersey. In some cases, banks also owned mortgage lenders, and they should be challenged to explain whether they gained any insider knowledge about the quality of the loans bundled into the CDOs, he says.
“It’s almost too uncanny,” Calacci says. “If these banks had insight into the underlying loans because they had relationships with banks, originators or servicers, that’s at the least unethical.”
The identification of securities in the document, known as Schedule A, and data compiled by Bloomberg show that Goldman Sachs underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured -- more than any other investment bank. Merrill Lynch & Co., now part of Bank of America Corp., created $13.2 billion of the CDOs, and Deutsche Bank AG underwrote $9.5 billion.
These tallies suggest a possible reason why the New York Fed kept so much under wraps, Professor James Cox of Duke University School of Law says: “They may have been trying to shield Goldman...
* TO BE CONTINUED...
* CONTINUING...
As details of the coverup emerge, so does anger at the perceived conflicts. Philip Angelides, chairman of the Financial Crisis Inquiry Commission, at a hearing held by his panel on Jan. 13, questioned how banks could underwrite poisonous securities and then bet against them. “It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars,” he said.
Janet Tavakoli, founder of Tavakoli Structured Finance Inc., a Chicago-based consulting firm, says the New York Fed’s secrecy has helped hide who’s responsible for the worst of the disaster. “The suppression of the details in the list of counterparties was part of the coverup,” she says.
E-mails between Fed and AIG officials that Issa released in January show that the efforts to keep Schedule A under wraps came from the New York Fed. Revelation of the messages contributed to the heated atmosphere at the House hearing.
“What date did you know there was a coverup?” Republican Congressman Brian Bilbray of California demanded of Geithner. Lawmakers used the word coverup more than a dozen times as they peppered Geithner with questions.
The government has committed more than $182 billion to AIG and owns almost 80 percent of the company.
In late November 2008, the insurer was planning to include Schedule A in a regulatory filing -- until a lawyer for the Fed said it wasn’t necessary, according to the e-mails. The document was an attachment to the agreement between AIG and Maiden Lane III, the fund that the Fed established in November 2008 to hold the CDOs after the swap contracts were settled.
AIG paid its counterparties -- the banks -- the full value of the contracts, after accounting for any collateral that had been posted, and took the devalued CDOs in exchange. As requested by the New York Fed, AIG kept the bank names out of the Dec. 24 filing and edited out a sentence that said they got full payment.
Before the New York Fed ordered AIG to pay the banks in full, the company was trying to negotiate to pay off the credit- default swaps at a discount or “haircut.”
By March 2009, responding to a request from Christopher Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs, AIG released the names of the counterparty banks. In a filing later that month, AIG included Schedule A, showing bank names while withholding all identification of the underlying CDOs and the amounts of collateral each bank had collected. The document had more than 800 redactions.
In May 2009, AIG again filed Schedule A, this time with about 400 redactions. It revealed that Paris-based Societe Generale got the biggest payout from AIG, or $16.5 billion, followed by Goldman Sachs, which got $14 billion, and then Deutsche Bank and Merrill Lynch. It still kept secret the CDOs’ identification and information that would show performance.
“This is something that belongs in the public domain because it was done with public money,” Issa says. “The public has the right to know what was done with their money and who benefited from it.” Now, thanks to Issa, the list is out, and specific information about AIG’s unraveling can be learned from it.
Tavakoli also says that the poor performance of the underlying securities (which are actually specific slices or tranches of CDOs) shows they were toxic in the first place and were probably replenished with bundles of mortgages that were particularly troubled. Managers who oversee CDOs after they are created have discretion in choosing the mortgage bonds used to replenish them.
“The original CDO deals were bad enough,” Tavakoli says. “For some that allow reinvesting or substitution, any reasonable professional would ask why these assets were being traded into the portfolio. The Schedule A shows that we should be investigating these deals.”
http://www.freep.com/article/20100216/OPINION05/100216047/1068/OPINION/Declining-unions-increasing-stranglehold?GID=Fa1cxbcUXb49tGeUWBInXpPPuV2wHMKZu/iIszFlMNU%3D
The new figures on union membership are out from the federal Bureau of Labor Statistics.
As the latest BLS statistics reveal, more union members – 7.9 million – now work for the government than the 7.4 million union members working for companies in the private economy, which has five times more workers. This imbalance has profound consequences for all workers, and for democracy itself.
The unions work three shifts, and spend considerable funds, to help elect politicians. The politicians, in turn, reward unionized government employees with higher salaries and benefits. Those must be paid for in taxes, and the process puts higher spending and taxes on autopilot.
Workers in the public sector have a stake in the expansion of government, and union bosses, unelected by the public, enjoy considerable leverage with lawmakers. Witness demands by Andy Stern (SEIU) and Rich Trumka (AFL-CIO) to exempt unions from the tax increase on high-cost health insurance plans in the president’s health care program.
Union membership is out of balance in other ways. According to the BLS, about half of the 15.3 million union members live in only six states: California, New York, Illinois, Pennsylvania, Michigan and New Jersey...
Figures alone do not tell the whole story about the unlevel playing field in labor. To boost flagging membership, the unions want to dump the secret ballot in favor of “card check,” in which a union gains certification through signatures on union cards. Some politicians favor this change, a blatant disregard of the democratic process.
Governments also reserve work for unions – and exclude non-union labor – through measures such as Davis-Bacon and project labor agreements, or PLAs. Since the November 2008 elections 25 PLAs have been proposed for local governments in California. Uncompetitive and declining in the private sector, unions want to leverage government into giving them a monopoly.
That does not translate to a level working field, which government is supposed to ensure. The lesson of the BLS figures is that a movement in decline can increase power by leveraging government. That may be good for union bosses and their political allies but not for most American workers and certainly not for democracy itself.
http://www.timesonline.co.uk/tol/news/uk/article7038550.ece
The United States has unveiled plans for its new $1 billion high-security embassy in London — the most expensive it has ever built.
[T]he price puts the London embassy above the US’s most fortified missions, including the Baghdad embassy, which cost $600 million but required a further $100 million of work on air conditioning, and the Islamabad embassy, still under construction, which has cost more than $850 million.
http://www.humanevents.com/article.php?id=35746
Author Lawrence Vance has inventoried America's warfare state.
We spend more on defense than the next 10 nations combined.
Our Navy exceeds in firepower the next 13 navies combined. We have 100,000 troops in Iraq, 100,000 in Afghanistan or headed there, 28,000 in Korea, over 35,000 in Japan and 50,000 in Germany. By the Department of Defense's "Base Structure Report," there are 716 U.S. bases in 38 countries.
Chalmers Johnson, who has written books on this subject, claims DOD is minimizing the empire. He discovered some 1,000 U.S. facilities, many of them secret and sensitive. And according to DOD's "Active Duty Military Personnel Strengths by Regional Area and by Country," U.S. troops are now stationed in 148 countries and 11 territories.
Estimated combined budgets for the Pentagon, two wars, foreign aid to allies, 16 intelligence agencies, scores of thousands of contractors in Iraq and Afghanistan, and our new castle-embassies: $1 trillion a year.
While this worldwide archipelago of bases may have been necessary when we confronted a Sino-Soviet bloc spanning Eurasia from the Elbe to East China Sea, armed with thousands of nuclear weapons and driven by imperial ambition and ideological hatred of us, that is history now.
It is preposterous to argue that all these bases are essential to our security. Indeed, our military presence, our endless wars and our support of despotic regimes have made America, once the most admired of nations, almost everywhere resented and even hated.
Liquidation of this empire should have begun with the end of the Cold War. Now it is being forced upon us by the deficit-debt crisis.
Republicans will fight new taxes. Democrats will fight to save social programs. Which leaves the American empire as the logical lead cow for the butcher's knife.
Indeed, how do conservatives justify borrowing hundreds of billions yearly from Europe, Japan and the Gulf states -- to defend Europe, Japan and the Arab Gulf states?
Is it not absurd to borrow hundreds of billion annually from China -- to defend Asia from China?
Is it not a symptom of senility to borrow from all over the world in order to defend that world?
In their Mount Vernon declaration of principles, conservatives called the Constitution their guiding star. But did not the author of that constitution, James Madison, warn us that wars are the death of republics?
Under Bush II, conservatives, spurning the wisdom of their fathers, let themselves be seduced, neo-conned into enlisting in a Wilsonian crusade that had as its declared utopian goal "ending tyranny in our world."
How could conservatives whose defining virtue is prudence and who pride themselves on following the lamp of experience have been taken into camp by the hustlers and hucksters of empire?
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