Blankfein dismisses any suggestion that Goldman needed to be bailed out, and, by extension, rejects any notion that the firm is now profiting from public support. Sure, he took $10 billion from Washington’s Troubled Asset Relief Program (Tarp). But the bank has since repaid the cash, with healthy interest — 23%. Goldman also benefited from the federal bail-out of the huge US insurance firm AIG. Goldman had bought $20 billion worth of insurance from AIG and received billions of dollars — perhaps as much as $13 billion — when Washington pumped $90 billion into the stricken giant. But Blankfein insists Goldman was “hedged” against any AIG losses, in the best possible way — with cash.

Of course, Goldman’s profits have been driven in large part by its access to cheap federal dollars, and the firm may have gone under were it not for its status as a “too big to fail” firm. But Blankfein told the Times that he is just a banker “doing God’s work.” And evidently God’s work — bonuses and all — cannot be questioned.

The AP’s Calvin Woodward was not fooled, and today released a piece telling readers to “beware the math” coming from the Republicans and calling it “satisfyingly simple but highly misleading”:

First, the naysayers’ calculations ignore the value of the work produced. Any cost-per-job figure pays not just for the worker, but for material, supplies and that worker’s output — a portion of a road paved, patients treated in a health clinic, goods shipped from a factory floor, railroad tracks laid. Second, critics are counting the total cost of contracts that will fuel work for months or years and dividing that by the number of jobs produced only to date.

As Woodward wrote, “dividing apples by oranges won’t settle” whether or not the stimulus package has been a success.

The New York-based investment bank Goldman Sachs has “set aside $16.7 billion for compensation and benefits in the first nine months of 2009,” which is a 46 percent increase from last year. But according to a Goldman adviser, Wall Street’s record pay is necessary “to achieve greater prosperity and opportunity for all”:

A Goldman Sachs International adviser defended compensation in the finance industry as his company plans a near-record year for pay, saying the spending will help boost the economy. “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” Brian Griffiths, who was a special adviser to former British Prime Minister Margaret Thatcher, said yesterday at a panel discussion hosted by St. Paul’s Cathedral in London.

At the same time that Wall Street’s pay has skyrocketed, pay cuts in other sectors “are occurring more frequently than at any time since the Great Depression.”

While record bonuses may indeed spur spending on million dollar apartments in New York City, the growth in Wall Street pay — and the growing share of national income that is going to the richest Americans — has not translated into shared prosperity. Consider, “back in 1985, the average annual salary for all workers across the country was actually a bit higher than the average [Wall Street] bonus ($19,000 to $13,970),” but “while the average bonus soared almost 14 times higher (by 2006), the average salary has essentially been stagnant since the mid-1980s.”

Goldman Sachs is able to make its current profits ($3.19 billion last quarter) — and thus pay huge bonuses — because of government programs aimed at reviving the economy, which allow the company to make “big bets using cheap dollars.” As Simon Nixon wrote, the profits “aren’t the due rewards for exceptional skill but gifts from taxpayers.”

Thus far, Fox contributor Juan Williams seems to be the only one acknowledging the truth, saying that Fox consists of “conservative audience-oriented programming. And I don’t think anybody is going to debate that.” The Wonk Room has more.

If we can do health care reform…that really does limit the growth in health care cost, then what’s left is a problem that we can deal with with fairly moderate policy. Things that would be politically impossible right now, but economically aren’t hard at all. [...]

You would end up still with the U.S. having lower taxes than almost all other OECD countries. And you’d end up with our social programs enhanced, not reduced, because we’d have universal health care coverage and some other improvements in the social safety net, and we would be good for the foreseeable future. All of this hinges on being able to actually talk about tax increases, even modest ones, without it being political suicide. It requires that you be able to talk about spending health dollars wisely and not have people start screaming about death panels.

Watch it:

The Wonk Room has more.

In a speech before the business organization Commerce Lexington, McConnell explained that the reason for such uncompromising opposition is that workers don’t actually want to join unions due to the “very enlightened management in this country now”:

McConnell said the AFL-CIO wants the measure approved because “private sector union membership has declined from a high of 35 percent in the 1950s to 7.5 percent now.” That has happened “because we have very enlightened management in this country now, treating employees better and employees have decided they don’t want to pay the dues.”

McConnell has already made his personal opinion that EFCA will “Europeanize America” well known, and with this rhetoric, he has officially aligned the entire Republican position on EFCA with that of the Chamber of Commerce (which has said that EFCA is a “no-compromise” piece of legislation). But if McConnell truly thinks that the reason more workers aren’t joining unions is because of “enlightened management,” he hasn’t been paying any attention to the reality of working and organizing in America.

For starters, an AFL-CIO survey found that there are 60 million American workers who say that they would join a union if they could. The reason that they can’t is because employers threaten to close plants in 57 percent of union organizing drives and threaten to cut wages and benefits in 47 percent, while ultimately firing pro-union workers 34 percent of the time.

As Kate Bronfenbrenner, Director of Labor Education Research at the Cornell School of Industrial and Labor Relations pointed out, over the last 20 years “employer opposition [to unionization] has intensified…and the nature of campaigns has changed so that the focus is on more coercive and punitive tactics designed to intensely monitor and punish union activity.”

And in addition to anti-union campaigns, management in this country is engaged in a whole host of other labor violations. Yesterday, a new survey came out in which 68 percent of low-income workers reported being subject to a pay violation in the previous work week alone. This isn’t meant to paint the entire business community with a broad stroke — as there are surely plenty of companies that don’t engage in this sort of behavior — but the problem is far more widespread than McConnell and the rest of the Republican party are evidently willing to concede. And just like with health care reform, the GOP has already decided that it’s not interested in discussing a solution.

Cross-posted on The Wonk Room.

[T]hat’s what a lot of economists are saying. Our stimulus package is retarding the day of growth not accelerating the day of growth.

Watch it:

Actually, economists participating in the latest monthly Bloomberg News survey said that “recovery from the worst recession since the 1930s has begun as President Barack Obama’s fiscal stimulus — derided as insufficient and budget-busting months ago — takes effect“:

The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey. Analysts lifted their estimate for the third quarter by 1.2 percentage points compared with July, the biggest such boost in surveys dating from May 2003.

Analysts say that the stimulus added at least 1 percentage point to economic growth in the second quarter of this year (though the economy still contracted). “The signs of the stimulus are there,” said Allen L. Sinai, chief economist at Decision Economics. “Government — federal, state and local — is helping take the economy from recession to recovery. I think it’s the primary contributor.”

Transcript:

ROVE: Well, I think economists are saying that the recession appears to be on the edge of being over, but we’re gonna have shaky retail sales and we’re gonna have unemployment persist into next year, we’re gonna have unemployment continue to go up. So it’s not going to feel like good economic times — and we aren’t. It just simply means that we’ve stopped declining. We’re plateuing, we may be able to start growing a little bit.

I thought it was interesting, though, notice that the headline in the Wall Street Journal this morning is about growth in Europe, and Germany, and France. Remember when president Obama went to the G8 and said ‘you oughta try you oughta pass a stimulus package like we did?’ And both of them said forget it. Well, their economies are recovering faster than our economy is. And that’s what a lot of economists are saying. Our stimulus package is retarding the day of growth not accelerating the day of growth.

This $20,000 fee was paid every month this year, February through June. The Wonk Room has more.

In response to the column, Specter wrote a Letter to the Editor claiming that his stance on EFCA has been consistent:

I have no hesitancy in stating my own views. I have voted to have the Senate consider the modification of labor law to reform the way unions are certified and to provide procedures for negotiating first contracts. Earlier this year, I made a floor statement opposing giving up the secret ballot and suggesting the last-best-offer procedure on arbitration. My views on this subject have been consistent, and suggestions to the contrary by those intending to run against me are incorrect.

As Dan Hirschhorn at PA2010.com pointed out, “only Specter knows what his true views are, and while they may be consistent, his actions on the legislation have been anything but.”

Indeed, Specter was a co-sponsor of the bill and voted for cloture when the Senate considered it in 2007. However, earlier this year (before switching parties), Specter took to the Senate floor to announce that he would vote against cloture. Even after the party switch, Specter released a statement emphasizing that “my position on Employees Free Choice (Card Check) will not change.”

But last month, Specter addressed a crowd of union activists and told them “I believe you’ll be satisfied with my vote on this issue.” So the only thing Specter has really been consistent on is a consistent willingness to wobble back and forth on the issue.

Cross-posted on The Wonk Room.

FAIZ: Remember back in October, November, December, January of this year, when Karl Rove and so many Republican pundits were going on TV and saying the market is failing because of President Obama? That the market was reacting because President Obama was now in office? What happened to that? Have their memories just completely been forgotten here?

FREIRE: I think that’s a brilliant strawman you made up. I can’t remember anyone saying that.

FAIZ: Are you kidding me?

The set reacted with uproarious laughter to Friere’s convenient memory loss. “I can’t believe JP doesn’t remember that,” said MSBNC’s Tamron Hall. “People were tracking the stock market and how many days Obama had been in office and comparing the two.” Co-host David Shuster chided Freire’s “selective amnesia.” Watch it:

For J.P.’s benefit, here’s a reminder of some right-wing rhetoric regarding Obama and the stock market:

KARL ROVE: “How much of it is the market saying, ‘You know what? The economy is not in a good place and we’re looking at the future, and how much confidence should we have in the team that’s coming to make the economy better?’” [Fox News, 11/20/08]

THE WALL STREET JOURNAL: “Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama’s policies have become part of the economy’s problem.” [3/9/09]

LOU DOBBS: “[T]he stock market has lost 20 percent since this president was sworn in. He has his own bear market. That’s the definition of a bear market, a 20 percent decline. This is now the Obama bear market.” [CNN, 3/9/09]

SEAN HANNITY: “Obama, since he’s elected, has tanked the markets.” [Fox News, 3/10/09]

A slew of Fox News pundits, in fact, had blamed stock market downturns on Obama. Today, the Dow closed above 9,000 for the first time since early January. We’re eagerly awaiting conservative proclamations of the Obama bull market. The GOP’s more recent efforts to blame job losses on Obama ring as hollow as the “Obama bear market” attacks did.

The editorial says that “American public opinion came to the defense of the secret ballot when it was about to be junked. It needs to stay vigilant against these sly little provisions intended to achieve the same end”:

Have you noticed? Political parties supposedly dedicated to the workers’ welfare have a way of undermining their rights. They may begin by bullying management but wind up dictating to labor, too. And everybody else. For a European example to beware, note the sad history of the grandly named National Socialist German Workers Party, aka Nazis.

WFI’s Mark McKinnon has previously warned that EFCA is equatable with “tyrannies and socialism.” The group will not identify its funders, but National Journal reported that is likely funded by big retailers such as Wal Mart and Home Depot. The Center for Union Facts, another anti-EFCA front group that is run by super-lobbyist Rick Berman, also linked approvingly to the editorial.

The number continued to be cited on cable last night and this morning, with Fox News even claiming that $23 trillion will be the final cost of TARP alone. But Barofsky himself appeared on CNN to explain that the actual outstanding amount for the financial rescues is closer to $3 trillion, including loans that have yet to be repaid. Watch a compilation:

Barofsky’s report clearly states that “these numbers may have some overlap, and have not been evaluated to provide an estimate of likely net costs to the taxpayer”:

[S]ome of the programs have been discontinued or even, in some cases, not utilized. As such, these total potential support figures do not represent a current total, but the sum total of all support programs announced since the onset of the financial crisis in 2007.

But this doesn’t go far enough in explaining how unlikely we are to ever come close to spending so much money. As Floyd Norris explained in the New York Times, Barofsky’s estimate “assumes that every home mortgage backed by Fannie Mae or Freddie Mac goes into default, and all the homes turn out to be worthless. It assumes that every bank in America fails, with not a single asset worth even a penny. And it assumes that all of the assets held by money market mutual funds, including Treasury bills, turn out to be worthless.” If this doomsday economic scenario were ever to occur, the American currency would be rendered worthless.

Media Matters pointed out that both USA Today and the CBS Evening News used the same misleading number. And as Norris put it, publishing such a meaningless number makes Barofsky seem like nothing more than “an irresponsible headline hunter.”

Cross-posted on The Wonk Room.

Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data — without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries. Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don’t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

Between 1979 and 2006, the inflation-adjusted after-tax income of the richest 1 percent of households increased by 256 percent, compared to 21 percent for families in the middle income quintile. Despite these numbers, Democratic leaders, “bowing to unease among lawmakers and governors in their own party,” are reconsidering the House Ways and Means committee’s proposal to implement a surtax on the richest one percent of Americans as a way of financing a portion of health care reform. The Wonk Room has more.

Over the ten year window from 2001-2010, the Bush tax cuts gave the richest one percent of Americans about $715 billion in tax breaks. This comes out to about $518,000 per household over ten years or about $51,800 per year. The proposed surtax, meanwhile, would raise $544 billion from households making more than $350,000 per year. The Wonk Room has more.

And where is the Governor on this? Does the governor like this bailout nonsense? Oh, I think he does. Does he like that stimulus check? How much of the stimulus check have you seen to create jobs in New Jersey?

According to Recovery.gov, New Jersey has been allocated $5,304,193,676 in recovery act money, which is already starting to work its way through the economy. The Newark Star Ledger reported that an “inordinate” amount of bids were made by construction companies seeking the $389 million in funding for roadway projects that the state has received, and work has begun on a $69 million project to upgrade I-95. A $6.7 million project to upgrade guardrails in Middlesex County has also been fastracked due to the stimulus. “We’ve just been shuffling out funds to do this work over a bunch of years,” Middlesex County Engineer John Reiser said.

Much of [the money] has followed a well-worn path to places that regularly collect a bigger share of federal grants and contracts, guided by formulas that have been in place for decades and leave little room for manipulation…The imbalance didn’t start with the stimulus. From 2005 through 2007, the counties that later voted for Obama collected about 50% more government aid than those that supported McCain, according to spending reports from the U.S. Census Bureau.

Adam Hughes, the director of federal fiscal policy for the non-profit OMB Watch, explained that “it would be almost inconceivable for [the spending imbalance] to be the result of political tinkering.” But did this stop Fox News from picking up the story and promoting it in the exact same way as the right-wing bloggers? No, of course not.

Today, Fox News’ Stuart Varney premised an entire segment on the right-wing’s false claim, and wouldn’t concede the point, even when former Texas Rep. Martin Frost referenced the above sections of the USA Today story. Watch it:

A fair reading of the article supports the simple conclusion that economically-distressed areas voted for Obama.

This is not the first time that Fox has picked up a conspiracy theory from conservative blogs and run with it. But it’s a particularly egregious example since the second paragraph in the referenced article counters the conspiracy. Sean Hannity sent out a tweet about the non-story today.

Cross-posted at The Wonk Room.

HOST: So if not this process by the administration, the creation of the CFPA, how would the Financial Services Roundtable go about assessing and remedying this…

TALBOTT: Sure, sure. We’re not for any regulation. In fact, we have some proposals, but what we don’t want to do is separate out the regulation of the entity from the regulation of the product, which is what the CFPA would do.

Watch it:

Ever since the administration first suggested creating the CFPA, the financial services and business lobbies have been up in arms, claiming that the agency will drive up costs for consumers and limit which financial products they can use. As part of a wider multi-million dollar lobbying campaign, the industry plans to run “Harry and Louise” style ads saying that the CFPA will amount to government “telling you what you can and can’t buy.” Republicans have bought into this frame, claiming that the CFPA will “decide whether or not we can be trusted with a credit card.”

In reality, the CFPA would “take consumer regulatory responsibility of financial products from seven other agencies and centralize it in one office that is empowered to make rules, examine balance sheets, [and] issue subpoenas.” It’s designed to ensure that all financial products (from mortgages to credit cards) are transparent, with disclosure forms that are clear and fair, thus protecting consumers from exploitation and predatory lending.

The financial services industry claims that it has consumers’ best interests in mind, but as Talbott’s unwitting admission reveals, what it’s really interested in is a return to the free-wheeling practices that contributed to the economic meltdown.

Cross-posted at The Wonk Room.

Previously, no one had rebuked the Chamber’s approach. But last night, Jeffrey Immelt, Chairman and CEO of General Electric, appeared on Charlie Rose and said that businesses spending money to obstruct legislation like this is “just lunacy“:

From a business standpoint, the notion that businesses are going to put a bunch of money in ads to protect the status quo is just lunacy. It’s just not what we should be doing right now. Like I said, when I think about health care in a GE context, we’re going to win some, we’re going to lose some on health care. But I think it would be totally inappropriate for GE to be saying we don’t need health care reform right now. We do.

Watch it:

It’s in the interest of big business to get health care costs down, a notion that Immelt seems to grasp. As Igor Volsky pointed out, our health care system — by leaving so many uninsured and not embracing new technologies or comparative effectiveness research — “inflates health care costs and expects businesses to pick-up the tab.” General Motors CEO Rick Wagoner has admitted that a national health care program could have helped the auto industry avert financial disaster.

So are there any other corporation’s out there that also think the Chamber’s campaign is lunacy? Or do the likes of Nike, UPS, and Duke Energy all believe that the Chamber is really doing what’s best for business?

Cross-posted on The Wonk Room.

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, called for “further study” of Obama’s proposals within minutes of the president’s announcement yesterday. Representative Joseph Crowley, a Democrat on the tax-writing House Ways and Means Committee, said he’s wary because the tax changes would hurt Citigroup Inc., his New York district’s largest private-sector employer.

The Wonk Room provides some facts to help inform “wary” Democrats.

At some point the senators in this chamber will decide the bankers shouldn’t write the agenda for the United States Senate. At some point the people in this chamber will decide the people we represent are not the folks working in the big banks, but the folks struggling to make a living and struggling to keep a decent home.

Watch it:

The American News Project noted that the Mortgage Bankers Association was “in a celebratory mood” at its annual meeting this week because “a massive lobbying campaign” against cram-down appeared to be working.