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Obama and CEO Pay: $500,000 for $1 Trillion
Tweet Share on Facebook February 4, 2009 Comment (6)David Smick, author of The World is Curved, has this to say about Obama's executive compensation limits:
The important point: The Administration is offering the bankers an implicit deal. Even though senior executives from banks receiving government assistance will face limits on their salaries, the value of their personal shareholdings – where for most executives the big money is – will be potentially restored as bank stocks rise in response to the bailout. In many cases, those shareholdings are now all but worthless paper.
The Administration needs this political cover because it faces a horrible choice. The issue: The assigned price by the Treasury for the banks’ toxic assets in any bailout package that entails taxpayer funding. If officials value the toxic assets at too low a price, all bank stocks will collapse. The world would then declare the large U.S. banks insolvent. America would face financial Armageddon. On the other hand, valuing the toxic assets at an artificially high price (at the taxpayer’s expense) may save the banks but invites a political firestorm at a time when average folk are hurting. Thus the need for cover.
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Obama Adviser Chu: Global Warming May Force California to be Abandoned
Tweet Share on Facebook February 4, 2009 Comment (8)Here is the money graph, via Drudge, from an LA Times interview with Energy Secretary Steven Chu:
"I don't think the American public has gripped in its gut what could happen," he said. "We're looking at a scenario where there's no more agriculture in California." And, he added, "I don't actually see how they can keep their cities going" either.
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Feldstein: Obama and Tax Cuts
Tweet Share on Facebook February 4, 2009 Comment (3)Martin Feldstein makes the case for tax cuts. Let me also add this: Listening to Obama economic adviser Larry Summers on Meet the Press recently made me think that Team Obama wants to repeal ALL the Bush tax cuts, not just the ones on higher earners
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McCain: Obama Stimulus Bill Stiffs Average Americans
Tweet Share on Facebook February 4, 2009 Comment (13)John McCain hits the Obama stimulus bill hard on his Facebook page:
Recently, the Senate began debate on an economic stimulus package that is intended to get our economy back on track and help Americans who are suffering through these difficult times. Unfortunately, the proposal on the table is big on the giveaways for the special interests and corporate high rollers, yet short on help for ordinary working Americans. I cannot and do not support the package on the table from the Democrats and the Obama Administration. Our country does not need just another spending bill, particularly not one that will load future generations with the burden of massive debt. We need a short term stimulus bill that will directly help people, create jobs, and provide a jolt to our economy.
I believe we need to evaluate every bit of spending in this stimulus proposal with one important criteria - does it really stimulate the economy and help create jobs - if the answer is no, it does not belong in a so-called stimulus package. Furthermore, the stimulus must include significant direct relief to American workers in the form of payroll tax cuts and programs to help homeowners keep their homes. Finally, we need an end game to this stimulus so that when our economy recovers, these spending programs do not remain permanent and saddle our children with a skyrocketing national debt.
I appreciate the discussions President Obama is having with my Republican colleagues, but the time for talking has come to an end and we must now begin some serious negotiation. But as of yet, Republicans have not been given the opportunity to be involved. The House of Representatives passed a stimulus bill without a single Republican supporting it. In the Senate, the Democrat leadership is trying to jam the existing proposal through regardless of reservations from a number of members. With so much at stake, the last thing we need is partisanship driving our attempts to turn the economy around.
I have long been a fighter against wasteful spending in Washington and long an advocate for a balanced budget -- that will never change. I realize we face extraordinary challenges with our economy today, but that is not an excuse for more irresponsibly from Washington. I hope you will join me in saying no to this stimulus package as it currently exists by signing this petition. -
Rasmussen Poll: Americans Want Tax Cuts, Not Obamanomics
Tweet Share on Facebook February 4, 2009 Comment (23)Some fascinating polling results from Rasmussen:
1) The latest Rasmussen Reports national telephone survey found that 37% favor the legislation, 43% are opposed, and 20% are not sure.Two weeks ago, 45% supported the plan. Last week, 42% supported it.
2) Opposition has grown from 34% two weeks ago to 39% last week and 43% today. Sixty-four percent (64%) of Democrats still support the plan. That figure is down from 74% a week ago. Just 13% of Republicans and 27% of those not affiliated with either major party agree.
3) Seventy-two percent (72%) of Republicans oppose the plan along with 50% of unaffiliated voters and 16% of Democrats.
4) Despite the declining support, 78% say it is at least somewhat likely that the economic recovery package proposed by PresidentObama and congressional Democrats will become law during Obama's first 100 days in office. That figure includes 36% who say passage is Very Likely. That latter figure is down significantly from a week ago when 52% said passage of the legislation was Very Likely.
5) A stimulus plan that includes only tax cuts is now more popular than the economic recovery plan being considered in Congress. Forty-five percent (45%) favor a tax-cut only plan while 34% are opposed.
Me: Whatever the economic impact of the Obama plan, it is not a confidence builder. And that is a huge problem.
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Gallup: Only 38 Percent Support Obama Stimulus Plan
Tweet Share on Facebook February 4, 2009 Comment (13)A new Gallup poll finds that only 38 percent of Americans want the Obama stimulus plan passed without major changes. Nor do they have a whole lot of confidence in it:
While the majority of Americans favor Congress' passing some type of stimulus plan, there is remarkably little confidence on the part of the public that the plan would have an immediately positive impact on the U.S. economy. Americans are also pessimistic about the plan's potential positive impact on their own families' financial situations.
Me: This isn't that hard: a) cut payroll taxes; b) cut corporate taxes or put in an investment tax credit; c)suspend mark-to-market accounting; d) a capital gains tax holiday; e) loans to states and cites; f) targeted infrastructure spending.
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By 2010, It's Obama's Recession
Tweet Share on Facebook February 4, 2009 Comment (6)David Leonhardt of the NYT comes around to the point I made weeks ago: If this economy does not pick up relatively quickly, Obama and the Obamacrats will take an increasing share of the blame: "
The odds that, a year from now, Mr. Obama and Congress will regret not having been more aggressive seem bigger than the odds that they’ll think they overdid it. Why not redouble efforts to find a few other ways to spend money quickly? More than 50 mass transit agencies across the country are cutting services or raising fares, and the stimulus bill does nothing for them.
Today, the Obama administration can still blame the Bush administration for the economy’s condition. Next year, fairly or not, that won’t be so easy.
Me: Here is what I wrote on this issue of Obama being a one-termer because of the economyr:
Obama's election is often compared to that of Ronald Reagan's in 1980. Both gentlemen were voted in to fix an ailing economy. But the 1982 recession took a huge chunk out of the Gipper's popularity. He had just a 35 percent job approval rating at the start of 1983, just two months after Republicans lost 27 seats in the House in the midterm elections. But Reagan's presidency was saved by an amazing economic rebound. The economy surged at a 4.5 percent pace in 1983 and at a mind-blowing 7.2 percent clip in 1984 as unemployment dropped from a high of 10.8 percent in December 1982 to 7.2 percent in November 1984. The Long Boom was underway.
Reagan worked his magic with tax cuts. Obama is trying to do the same with government spending. But stimulus packages are only supposed to keep the recession from getting worse or morphing into a mini-depression. I don't think anyone expects that $500 billion in hot money to return America to prosperity. Only time (and the private sector) can do that, especially with a downturn caused by a credit crisisa and deflating asset bubble. And four years may not be enough time for the Obama presidency to traverse that long road or complete that steep climb. -
Goldman Sachs: Second Stimulus Package Needed
Tweet Share on Facebook February 4, 2009 Comment (3)The debate about the stimulus package reminds me of a line from the film "Ed Wood" about the world's worst movie maker: "Really? Worst film you ever saw. Well, my next one will be better."
You don't like the Obama plan, America? Well, we will probably get another one next year. Here is what Goldman Sach's analysis of the Obama stimulus package (House version) found (bold is mine):
The program’s maximum effect on real GDP growth would probably occur in the second and third quarters of 2009, when we estimate it would add about 3 percentage points to the annualized growth rate ... thereafter, the contribution to growth would fade gradually ... turning negative by the fourth quarter of 2010 ... the magnitude and timing of these effects was not substantially different relative to what we felt was implicitly contained in our forecast to warrant a change to our forecast that the US economy will stabilize around mid-2090, following a sharp further contraction this quarter, and grow at a below-trend pace through 2010. ... The key point, about which we are confident, is that the bill as passed in the House is unlikely to do much more than stabilize the US economy in the near term. Unless recovery in the private sector proves to be much stronger than we expect over the next two years, we think more stimulus will be needed before the end of 2010.
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Kudlow: Time for Geither to Go, Too
Tweet Share on Facebook February 4, 2009 Comment (2)CNBC's Larry Kudlow calls for a total house cleaning by the White House:
Ms. Killefer was appointed chief performance officer to monitor the incredible spending increases now under consideration for the so-called stimulus package. Similarly, Geithner is the chief performance officer of the U.S. economy. What does it say about him, that he neglected to pay taxes? What does it say to ordinary Americans that Geithner was in effect a tax cheat right up to the point he was appointed to one of the highest offices in the land? Will he ever be trusted? It is doubtful.
For all of Mr. Geithner’s apparent skills and knowledge and other professional qualifications, he still has a tremendous ethical problem. Pres. Obama has made much of the need for a new era of responsibility and ethics. Obama is right. But Mr. Geithner is wrong. He should follow Daschle and Killefer by submitting his resignation.
This is a matter of personal character and accountability. It is a matter of honesty. Too many of our leaders suffer big deficits in these areas.
Pres. Obama should wipe the slate clean with a Geithner resignation. No one is irreplaceable. There are no supermen. In fact, somewhat ironically, new commerce secretary Judd Gregg would make an excellent Treasury secretary.
It is time for Mr. Geithner to step down. -
Will Obama be the 2012 Democratic Nominee?
Tweet Share on Facebook February 4, 2009 Comment (4)It's been a rough start for President Obama, and already the online betting markets have taken notice. According to Intrade, there is an 85 percent chance he will be the Democratic presidential nominee in 2012, down from 92 percent a few weeks ago. To put that number in some perspective, it is about the same chance, according to Intrade, of "Slumdog Millionaire" getting Betting Picture at the Academy Awards -- but less than Heath Ledge winning Best Supporting Actor for "The Dark Knight."
Seriously: Geithner tarnished, Daschle out and the stimulus package apparently dead in the Senate. As to the last point, Sean West of the Eurasia Group, a risk analysis firm, makes a pretty good point:
President Obama's team rode into town knowing that it needed a massive stimulus package to stabilize demand. While the administration outlined general principles, from the start it seemed far more concerned with quick enactment and an impressive headline dollar value than it did with specific details. Indeed, the quickest way to steamroll passage through an assertive Congress is to give Congress control over details. Thus, Obama remained committed only to a broad outline-and didn't bat an eye when even his ally, Sen. John Kerry (D-MA), attacked Obama's signature $3,000 job creation tax credit, which eventually fell out of the package. While Obama has focused on face time and photo opportunities with Congress, he has done little to affect legislative detail, giving Congressional Democrats room to push forward a cornucopia of initiatives that they have wanted for years.
