Capital Commerce


January 2009


More Sunshine from the White House

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More optimism from the White House today. Excerpts (with particularly gloomy parts in bold):

This morning I'd like to talk about some good news and some bad news as we confront our economic crisis. The bad news is well known to Americans across our country as we continue to struggle through ...

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About Those Wall Street Bonuses ...

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Here is an interesting ideas from David Goldman of the Inner Workings blog:

Rather than claw back already-paid bonuses of about $18 billion, as some grandstanding Democrats suggest, Wall Street firms should issue common stock to employees in that amount and require them to invest the ...

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Michael Steele: New RNC Chairman

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I saw new RNC Chairman Michael Steele on Capitol Hill night. He didn't look like a guy who's inherited a big mess or guy with the weight of the world on his shoulders. He looked and sounded like he just nabbed the job of dreams and wants to start bright and early the next morning ...

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Obama Stimulus: Where's the Grandeur?

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Christopher Caldwell in the FT:

Stimulus, many economists have stressed of late, is about restoring what John Maynard Keynes called animal spirits. Keynes meant something like “morale”. But there is a more animal sense to “animal spirits” that appeals to the broad publi They are willing to ...

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Big Government and the GOP

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Rich Lowry makes some interesting points about the future of Big Government and the GOP:

I wonder if the excesses of the bailouts and the stimulus package will make big government politically vulnerable in a way it hasn't been in more than a decade by, 1) Again associating government ...

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A Pro-Growth Idea, Finally

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Ryan Ellis of Americans for Tax Reform passes this along about the idea to allow companies to repatriate foreign earnings:

Once again, Congress has the opportunity to use repatriation to inject much-needed and non-inflationary capital into the United States. According to Decision Economics,

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Hooverism: Protectionism on the Rise

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My guy Dan Clifton of the Strategas Group raises a warning flag:

Domestically, both the House and Senate stimulus packages contain “Buy American” provisions as a way to bolster the domestic steel industry, and other industries are lobbying for similar treatment. The House approved a ...

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The Fed's Risky Course

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Andy Busch of BMO Capital Markets is as concerned about the Fed monetizing federal debt as I am:

The actions by Ben Bernanke and the Fed will ensure that a recovery by the economy will not be choked off just as it begins.  However, there are dangers to this policy and the monetization ...

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10 Reasons to Whack Obama's Stimulus Plan

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Some people are going to oppose President Obama's ginormous stimulus package just because they're on a different political team. But when you look at the economic evidence, it sure seems like an economic recovery package that's heavy on government spending and light on tax cuts is just the opposite ...

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The 25 People Who Screwed Up the World

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Who are the 25 people most responsible for screwing up the global economy? The Guardian takes a (somewhat U.K.-centric) shot at identifying them:

1) Alan Greenspan, chairman of US Federal Reserve 1987- 2006

2) Mervyn King, governor of the Bank of England

3) Bill Clinton, former US president

4) Gordon ...

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Obama's Topsy-Turvy Stimulus Plan

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Again, my take on the Obama stimulus package: I think it needs to be flipped around. Instead of two-thirds spending and one-third (kinda-sorta) tax cuts, it should two-thirds real tax cuts (lower individual, corporate and capital gains rates) and a third for needed infrastructure like the energy ...

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China Recession: Unrest and Instability

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Economic analyst Ed Yardeni is also noticing Big Trouble in Little (Economic Growth) China:

So this is not an auspicious time to beat up on the Chinese as currency manipulators. Yet, that’s the first thing incoming Treasury Secretary Tim Geithner did just after paying some of his back ...

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Forget the Oath, Obama Needs an Economic Do-Over

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The four-year term of the 44th American president began with an Inauguration Day "do-over," so to speak. After President Obama and Chief Justice Roberts fumbled the 35-word presidential oath at high noon, they tried again later that evening, successfully the second time around. Now if only Obama ...

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Traveling Through Soviet America

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The London Times reports on an interesting economic study that looks at which parts of Great Britain have become overly dependent on government:

PARTS of the United Kingdom have become so heavily dependent on government spending that the private sector is generating less than a third of ...

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Obama Adviser Summers: Bush Tax Cuts Must Go

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It was very interesting what Larry Summers said on the Meet the Press today. Or, rather, what he didn't say. While Summers was adamant that the 2001 and 2003 Bush tax cuts must be repealed, he never used the qualifying "for wealthier Americans" or some such.  Maybe Obama is going to push to ...

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Microsoft Job Cuts: Layoffs Good News for Economy

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So Microsoft says it is cutting 5,000 jobs, or 5 percent of its workforce. (Apparently that $21 billion in cash on hand isn't burning a hole in its pocket.) Now no one likes to see people lose their jobs, especially in a tough economy when it is going to be tough to find another one. But I would ...

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A Vote Against Geithner for Treasury Secretary

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Superstrategist Ed Yardeni casts a vote against Tim Geithner for treasury secretary:

Thumbs down for Tim Geithner. That’s my vote. I don’t think he is qualified to be Treasury Secretary. He works too hard. Indeed, he is a workaholic. I prefer public servants who can get their jobs done during normal ...

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Should Obama Help Banks or Homeowners?

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My guy Andy Busch of BMO Capital Markets attacks the nationalization issue:

Circling this back to Geithner, there is a fundamental choice facing the US government and today we'll see how the designee responds.  The choice is over whether the government should nationalize the banks or not. 

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Do We Need Obama's Stimulus Plan?

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So we find out, at least according to the Congressional Budget Office, that only $136 billion of the $355 billion in proposed infrastructure spending would actually be spent by the end of 2010. Yet we are in a rush to approve it. Maybe it's time to look at all the other factors that will boost the ...

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Nancy Pelosi: Raise Taxes. Raise Taxes Now.

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Madam Speaker Nancy Pelosi didn't get the memo -- you know, the one that says tax increases during a recession is a terrible idea. This is her on Fox News:

I don't want them to wait two years to expire. We had campaigned in saying what the Republican Congressional Budget Office told us:

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An Inflation 'Tax Cut' Arrives

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I love it -- and actually kind of marvel at it -- how Larry Kudlow is able to somehow pick out the signal amidst all the noise. Amazing. He does it again here:

I noticed today that there is not much talk about the CPI amidst the hullabaloo of the government effectively nationalizing ...

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Krugman: Reagan Deserves No Credit for 1980s Boom

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Paul Krugman, the  NYTImes economics columnist, apparently wants to return top tax rates to 70 percent. After all, cutting taxes apparently had nothing to do with the economy's amazing comback a quarter century ago. Or so he tells Rolling Stone:

Remember the economic boom of 1984, which let Ronald ...

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And So a Light Shines in a Dark World

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Economist Mike Darda gives us a smidge of good news ... at the end:

Data released this week on industrial production (down at the fastest year-to-year pace since the 1973-1975 recession) and retail sales (down at the fastest annual pace in post-WWII history) embroider the fact that the ...

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What Kind of Stimulus, Mr. Obama?

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Economist Alllen Sinai Before the Senate Budget Committee today:

Federal government purchases have a strong and sharp impact on the economy initially, with the purchases impact multiplier for the first year estimated in a range of 1.4 to 1.8, and can significantly increase employment in the ...

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Geithner's Treasury Tax Woes: He's Too Big to Fail

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So Timothy Geithner, Barack Obama's pick for treasury secretary, failed to pay $42,000 in taxes and once employed a housekeeper whose work permit had expired. Although revelations similar to these killed the chances of some previous cabinet selections, Geithner is apparently regarded in Washington ...

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Big Media Distorts Bush Economic Record

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His presidency is almost over. But what is the true George W. Bush economic record? (Hint: It's not what most of the MSM are telling you.) First, here is a look at the President's own somewhat defiant (and, yes, a smidge self-serving) take on the matter during his final press conference:

In ...

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Bernanke: TARP is Not a $350 Billion Slush Fund

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Federal Reserve Chairman Ben Bernanke made it clear today that that the remaining $350 billion in TARP dough should be used to bolster the financial system -- not  the Big Three automakers, the porn industry, the media or any other thing Congress feels like offering a hand to. This from Michael ...

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Go Ahead, Save Your Tax Cut

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Michael Mandel likes the idea of cutting taxes for individuals:

But this conventional argument misses the whole point. Consumers have a massive hole in their balance sheets these days. Home prices are plunging, incomes are slowing, and many families have huge debts. Americans are ...

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Frozen Credit Markets: Pinking Up

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Maybe we don't need to spend that remaining $350 billion in TARP money after all (via Ed Yardeni):

The good news is that the Fed’s efforts to avoid a depression, caused by the credit crunch resulting from the demise of Lehman and Paulson’s TARP debacle, seem to be working finally:
(1)

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Why Obama is Causing a Liberal Freakout

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For many liberals, that Obamagasmic "tingle going up their legs" from the campaign season -- to paraphrase MSNBC's Chris Matthews -- may have crept upward into stomach-churning queasiness as Inauguration Day nears. Consider this counterfactual: If John McCain had won the 2008 presidential election ...

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Obama: Yes, We Can ... Eventually

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You can't do everything as once. The NY TImes lays out what will have to wait:

Although Mr. Obama has not publicly identified which priorities will have to wait, advisers and allies have signaled that they may put off renegotiating the North American Free Trade Agreement, overhauling ...

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Bush and the Budget Deficit

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A useful reminder of economic reality from Jim Glassman of JP Morgan Chase:

The US response to the economic crisis at the beginning of this decade is an affirmative lesson on how to address economic crises. The combined actions of the Bush Administration, the 2001 tax cut agreement,

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