Today, during markup of legislation before the House Financial Services Committee that would create a Consumer Financial Protection Agency (CFPA), Republicans proposed an amendment that would give all of the other federal bank regulators — including the Federal Reserve or the Comptroller of the Currency — the ability to veto CFPA rules that threatened the “safety and soundness” of financial institutions.

Rep. Jeb Hensarling (R-TX) explained that he supported the amendment because the health of a financial institution “ought to trump” concerns regarding consumers, all of the time:

The safety and soundness of the system, taxpayer protection, ought to trump the ability to ban financial products. And let’s face it, I understand the chairman said that this new CFPA would not have the ability to set goals, but if you control the product mix, if you can ban products, if you can modify their terms, of what some have estimated could be as much as 10 to 15 percent of our economy, then yes, I conclude you can adversely impact the safety and soundness of these institutions.

Watch it:

So if it can’t outright prevent the CFPA from being created, the GOP would like to ensure that it’s a toothless agency that can’t stand up to the bank regulators. (Hensarling presents this as “taxpayer protection,” ostensibly suggesting that, if the banks can make money however they see fit, they’ll never need another taxpayer funded bailout.) But the CFPA will only work if it is on equal footing with the bank regulators, with adequate abilities to write and enforce regulations.

This is because many of the products that led to the economic crisis were premised on obfuscation and taking advantage of consumers — credit cards with retroactive rate hikes, mortgages with payments that exploded after a set number of years, or overdraft fees to which consumers are automatically subjected. As Adam Levitan pointed out at Credit Slips, “the market drives the introduction of bad consumer credit products.” “Some of this obfuscation is through fine-print. Some is through product design, as complexity and exploitation of consumers’ cognitive biases can mask pricing,” he wrote.

And these actions are often very profitable, which is why the bank regulators didn’t want to stop the banks from using them. Overdraft fees, for instance, could rake in $38.5 billion for the banks this year. Those billions render the banks incredibly safe and sound, but they come at the expense of consumers. And under the Republican proposal — which will come up for a vote tomorrow — the same exact practices would be allowed to continue, and regulators at the CFPA could do nothing but scream from the sidelines.

At The American Prospect, Tim Fernholz noted that Sen. Chuck Grassley (R-IA) has engaged in a bit of confusing rhetoric regarding regulatory reform. Grassley seems to simultaneously believe that the Federal Reserve should do nothing but monetary policy, but shouldn’t have its consumer protection responsibilities removed and placed within a new Consumer Financial Protection Agency (CFPA).

As Fernholz wrote, “thank goodness Grassley is not on the relevant committee” (the Senate Banking Committee). However, Grassley is not the only one with this contradiction running through his head. Sen. Jim Bunning (R-KY) is struggling with the same thing, and has a seat on the Banking Committee, from which he announced today that he sees “very little chance of getting a consumer protection agency past this committee.” And his reasoning is that the Fed already has consumer protection duties that it simply didn’t use:

In 1994, we handed the Federal Reserve the power to regulate all banks and mortgage brokers on the loans that they make. That’s all of them! In 1994 they didn’t do a thing…Now, why would we write a new protection agency, if they’re not using the power we have to the Federal Reserve to start with?…They didn’t do their job, and now you want to create a new institution because the Federal Reserve didn’t do their job. I say you’re wrong to create a new institution. We should insist that the Federal Reserve does their job.

Watch it:

But just a few months ago, Bunning declared that the Fed should not be designated as a systemic risk regulator for the financial system because “the Fed has proven they can not be trusted with the power they have. They get it wrong, do not use it, or stretch it further than it was ever supposed to go.” In fact, he “promised to do everything in his power to stop the Fed.”

So the Fed has proven that it can’t be trusted, but it should still be trusted to protect consumers? There’s an odd dynamic at work here, because Bunning’s diagnosis is spot-on — he just comes to the wrong conclusion. The Fed undeniably failed to police the consumer market, even though it clearly had such powers. It received regulatory authority over mortgage lending in 1994, but didn’t release its “Guidance on Nontraditional Mortgage Product Risks” until 2006. This lackadaisical approach to consumer occurred not just within the Fed, but with all of the federal bank regulators.

Therefore, we should take consumer protection duties away from all of them and place them within a new agency, which will have no mission other than watching out for consumers. But Republicans — who love to hate the Fed the rest of the time, because it plays well politically — are willing to give the Fed another swing of the bat when it comes to protecting consumers.

In September, ThinkProgress dissected how Glenn Beck’s successful character assassination campaign against former White House environmental adviser Van Jones was fueled by Americans for Prosperity’s Phil Kerpen, who had taken credit for notifying Beck of some of Jones’ past comments. On his Fox News show yesterday, Beck followed Kerpen’s lead once again, this time in an assault on net neutrality.

In a segment featuring Kerpen last night, Beck warned his audience that the Obama administration “just might be trying to take over the media.” “This is a big week, isn’t it, for freedom of speech?” Beck asked Kerpen, who said that it was because “the FCC on Thursday is going to decide what the future of the Internet looks like”:

KERPEN: It is a very big week because the FCC on Thursday is going to decide what the future of the Internet looks like, if it looks much like the past 10 years where you have private competition and pretty much people can do what they want on the Internet or whether we have a much, much heavier government hand. And they’re going to take the first step on that Thursday.

BECK: OK. I want to start just real quick – Net neutrality, because it happens on Thursday. This is that everybody should have free Internet, right?

KERPEN: Well, essentially. You know, they dress it up the way they dress up a lot of their things. They turn it upside-down by saying that evil corporations, phone and cable corporations are going to block what we can do block or we can say.

Beck then used net neutrality as a jumping off point to outline how he believed the Obama administration was trying to shut down freedom of speech. “You have a freedom of speech or the government. You can’t really have both,” said Beck. Watch it:

When he introduced Kerpen, Beck described him as “the chairman of Internet Freedom Coalition,” an alliance of conservative groups that opposes all taxes and regulations related to the internet. Kerpen’s group released a Beck-like conspiracy chart today that attempts to expose the so-called “Obama Information Control Hierarchy.” Hours before Kerpen appeared on Beck’s show, he pushed the idea that net neutrality is a threat to freedom of speech in his daily podcast, warning that regulation would lead to “a government-owned and controlled network” and eventual “content restriction” that would “decide that certain speech is out of bounds.”

Beck also appears to have no idea what net neutrality actually means. Science Progress aptly explained it last year:

At the most basic level, net neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet; all content on the Internet is equally accessible, and once a person pays for access to the Internet, they alone get to choose how they use it. This means that providers should not be allowed to block access to certain sites or applications, or charge different customers different amounts for services.

Kerpen, from whom Beck apparently cribbed his understanding of the concept, claims that there is no reason to be concerned about internet service providers blocking access or charging customers differenty. “Proponents of net neutrality rely on the scare tactic that big bad cable and phone companies will block access to Web sites and cause other mischief unless the benevolent federal government rides to the rescue, and soon,” wrote Kerpen on FoxNews.com earlier this month. “But they’ve been ringing this alarm for the better part of a decade and none of the horrors they warn us about have happened.” In fact, in 2007 it was revealed that Comcast had disrupted peer-to-peer file-sharing traffic on its network, leading to an FCC investigation. There was also an incident where “Verizon Wireless denied Naral Pro-Choice America, an abortion rights group, access when the group asked to the carrier to allow Verizon customers to sign up for text-messaging alerts.”

Transcript: Read more

The Senate Banking Committee held a hearing today to discuss whether or not Congress should extend and broaden an $8,000 first-time homebuyer tax credit that was included in the economic stimulus package. If Congress doesn’t act, the credit will expire on Nov. 30.

The credit’s leading champion has been Sen. Johnny Isakson (R-GA), a real-estate industry favorite who was actually called before the committee to testify. Isakson told the committee that extending the credit is “our way out” of the current recession, and warned that if the credit is not extended, the U.S. economy will tumble into a “dramatic and awful situtation”:

If we don’t do the housing tax credit, in my personal opinion, and extend it through midyear next year and take away the first-time homebuyer means test and raise the income qualification, we will have a dramatic and awful situation in the United States of America from which recovery is going to be even more difficult than we’ve experienced already…I think it’s our way out.

Watch it:

As I’ve pointed out before, the credit is targeted poorly, and is a very expensive and inefficient way to stabilize housing prices. And Isakson’s proposals to open the credit to all buyers (instead of only first-time buyers) and remove the credit’s income cap will turn it into a government subsidy to rich homebuyers who would have bought their homes anyway.

The National Association of Home Builders, which favors extending and broadening the credit, calculated that such a move will only cause about 383,000 additional sales through 2010. At the expected $40 billion total price tag for the program, this breaks down to $104,400 per additional home sold. And to be fair, the hearing was a bipartisan love-fest for the credit, with both parties lavishing praise onto it.

If Congress is actually worried about a “dramatic and awful situation,” it might want to take a look at some of the latest foreclosure data. After all, in terms of foreclosures, the last three months were the “worst three months of all time”:

During that time, 937,840 homes received a foreclosure letter…That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008…Most disturbing is that all foreclosures — not just repossessions — are rampant despite efforts to corral them. Not only has the Obama administration’s Making Home Affordable foreclosure prevention program taken a bite out of REOs but lenders themselves have scaled back repossessions over the past few months to give the program time to work.

At the end of the day, there’s little chance that the credit will promote additional home sales, and it may even artificially prop up housing prices, prolonging the economic crisis by delaying the housing market from hitting bottom. The credit undeniably makes for great politics, but in terms of policy, the money would be far better spent on foreclosure prevention efforts or neighborhood stabilization.

Today, CNN obtained a memo from Conservatives for Patients’ Rights (CPR) sent to tea party organizations and conservative think tanks urging a coordinated approach to attacking health reform. The memo argues that a synchronized messaging strategy will help “to deliver a decisive ‘knock out’ punch” to health care legislation. CPR was started this year by health clinic and hospital executive Rick Scott, who helps to self-fund advertisements dishonestly smearing health reform. Although Scott has focused his attention on killing the public option, he has never acknowledged working directly with the health insurance industry.

However, yesterday CPR filed its third quarter lobbying disclosures with the U.S. Senate, revealing that the Swift-Boat style attack group has contracted veteran health insurance lobbyist Brian McManus. McManus, while at the same time advising CPR, is currently the Director of Federal Affairs at the Council for Affordable Health Insurance (CAHI), a private health insurance trade group advocating Health Savings Accounts. So while CPR has paid McManus at least $60,000, he continues to also collect an income from a private insurer-backed group.

CPR’s call to target an anti-reform message comes on the heel of news that Senate Republicans plan to kill reform by delaying a vote for as long as possible. A Roll Call article today explains that the GOP plan is to “delay, define and derail” health reform:

Senate Republicans, acknowledging they lack the votes to block a health care reform bill outright, have implemented a comprehensive political strategy to delay, define and derail. [...] The Republicans also plan to use the time between now and a final floor vote to deliver a narrowly focused message via a series of floor speeches, press conferences and media appearances. And even though GOP Members will discuss their counterproposals for health care reform, criticism of the Democratic bill will be the priority.

Despite the “hatchet job” report last week distorting the Finance Committee bill, the health insurance industry has tried to pretend it still supports reform. However, with the revelation that industry operative McManus is working with CPR, it appears the overall strategy for the insurers is to have Republicans slow down debate so that attack groups will have more time to air ads undermining reform.

McManus has a history of coordinating efforts among right-wing outside groups with lobbyists inside DC to advance legislation favorable to the private health insurance industry. After serving as the Vice President of Golden Rule, a subsidiary of health insurer giant UnitedHealth, McManus founded the “Health Care Freedom Coalition,” a network of astroturf front groups and think tanks. The Coalition works in tandem with organizations like FreedomWorks to promote a deregulation approach to health reform that would hurt consumer protections while adding to insurer profits.

ThinkProgress has documented how insurers have long used a “two-faced” campaign to, on the one hand present themselves to the public as committed to producing change, while at the same time orchestrating front-group based attacks on reform.

There was some good news on the regulatory reform front today, as Rep. Melissa Bean (D-IL) has agreed to drop an amendment to the House Financial Services Committee’s reform legislation that would have prevented state governments from enforcing regulations that go further than those set by the federal government:

In a piece of political theater, Bean now plans to introduce the amendment and then to withdraw it, according to people familiar with the matter. She then plans to engage in a scripted conversation with [Committee Chairman Barney] Frank, in which both are to affirm the importance of further discussions about the issue. Bean can then reintroduce the amendment once the bill comes before the full House, but lobbyists on both sides say they regard the battle as over.

But is anything really “over” when it has yet to come before the Senate? Indeed, while the bill without federal preemption for national banks is “likely to pass the House,” the Washington Post reported that “it faces an uncertain future in the Senate, where financial lobbyists regard some moderate Democrats as more sympathetic to their concerns.”

There is also a second preemption amendment that is alive and well in the Financial Services committee, which would allow federal preemption “when a state law has a ‘discriminatory effect’ on national banks.” The amendment would also “allow the Office of the Comptroller of the Currency (OCC) to determine if a state law prevents or interferes with a national bank’s business.”

This is a terrible idea, as the OCC has repeatedly issued specific exemptions for national banks. In 1999, the OCC “said national banks did not need to comply with a California law limiting the fees banks could charge for ATM withdrawals.” And then, in 2000, “it lifted a Rhode Island law limiting changes in the interest rates on credit cards.” Finally, in 2002, the OCC “overrode a Texas law that barred banks from charging check-cashing fees.” Meanwhile, the current OCC head, John Dugan, has a very dim view of states that want to rein in national banks, saying that “we have a system that works fine in terms of examination and enforcement of consumer protection.”

And while Bean has shelved her amendment for the time being, I wouldn’t be as quick as the Post to declare that the big banks are “losing power on Capitol Hill.” After all, mortgage cram-downs — which the banks bitterly opposed — passed the House, only to be ultimately defeated by a furious lobbying campaign in the Senate. Bean backing down is a good thing, but it’s by no means the end of the preemption debate.

This morning, activists from the Yes Men troupe claiming to represent the U.S. Chamber of Commerce announced the organization was reversing its years of opposition to any climate bill before Congress, saying in jest that the “Kerry-Boxer Bill is a good start to a strong climate bill.” CNBC and the Fox Business Network cited the many companies who have quit the Chamber as a reason for the fictional about-face.

The Chamber of Commerce quickly tried to quash the reports that it had reversed its “Scopes monkey trial” stance. Chamber of Commerce official Eric Wohlschlegel broke into the press conference held by the Yes Men at the National Press Club, shouting, “This guy is a fake!” After a “mild shoving match at the podium,” Wohlschegel told reporters, “It is a very sad day.” U.S. Chamber of Commerce official Thomas J. Collamore decried “public relations hoaxes” and called for “law enforcement authorities to investigate this event”:

Public relations hoaxes undermine the genuine effort to find solutions on the challenge of climate change. These irresponsible tactics are a foolish distraction from the serious effort by our nation to reduce greenhouse gases.

Of course, it is the U.S. Chamber of Commerce and other right-wing corporate groups that have been spending hundreds of millions of dollars supporting “public relations hoaxes” to “undermine the genuine effort to find solutions on the challenge of climate change.” As PG&E Chairman and CEO Peter Darbee explained his company’s departure from the Chamber, “extreme rhetoric and obstructionist tactics seem to increasingly mark the Chamber’s stance on this issue.”

It’s doubtful that the Chamber — chaired by race-baiters and corrupt global warming deniers — will now be decrying clean coal carols, climate skeptics, fearmongering, and broken economic analyses as it spends over $100 million a year to lobby Congress.

A few weeks ago, Sen. Tom Harkin (D-IA) said that he’s still vying for a vote on the Employee Free Choice Act (EFCA) this fall. “I’m pushing for it,” he said. “I think it’s something that we have to do.”

Harkin is one of a handful of negotiators trying to craft a compromise version of EFCA that will prove palatable to a group of centrist Democrats, among them Sen. Blanche Lincoln (D-AR). But speaking before the Arkansas Chamber of Commerce today, Lincoln “received a round of applause” for saying that business and labor — not Congress — should be crafting the legislation. From the Associated Press:

Sen. Blanche Lincoln says business and labor groups, not lawmakers, should be the ones to work out a compromise on a union organizing bill. Lincoln said that she still opposes the Employee Free Choice Act and doesn’t think the legislation should be considered while lawmakers are dealing with health care and other issues…Lincoln said any compromise would need to come from business and labor groups.

Big Business and its ally, the U.S. Chamber of Commerce, have derided EFCA, calling it “a firestorm bordering on Armageddon,” saying that retailers who don’t oppose EFCA “should be shot,” and telling workers that unionizing means their benefits will be “thrown out the window.” With her approach, Lincoln is not only abdicating her responsibilities as a lawmaker to those special interests, but she is basically giving the business community a veto over any legislation that other lawmakers might craft.

And unfortunately, a stalemate over EFCA would be just fine with the business community, because under our current system for forming a union, employers hold all the cards. For example, they are able to force employees to attend closed-door meetings to hear anti-union messaging, or compel employees to participate in anti-union discussions with their own supervisors. Employers threaten to close plants in 57 percent of union organizing drives, threaten to cut wages and benefits in 47 percent, and ultimately fire pro-union workers 34 percent of the time, while facing penalties that do nothing to deter such behavior, illegal as it is.

Meanwhile, unionized workers in Arkansas make an average of $1.26 per hour more than their non-unionized counterparts, a 7.7 percent increase. If Arkansas were to see unionization merely climb back to 1983 levels, workers there would earn an estimated $166 million more in wages and salaries per year. And consider this: “If Arkansas’ workers were rewarded for 100 percent of their increases in labor productivity between 1980 and 2008…average wages would be $23.29 per hour — 42.4 percent higher than the average real wage in 2008.”

Last month, Sen. Mitch McConnell (R-KY) said that EFCA was unnecessary “because we have very enlightened management in this country.” Is that how Lincoln sees it as well, despite the myriad benefits that EFCA could bring to workers in her state?

Today, for the first time in American history, half of all U.S. workers are women and mothers are the primary breadwinners or co-breadwinners in nearly two-thirds of American families. As recently as 1969, women made up only one-third of the workforce, marking just how much of a shift has occurred in the last few decades.

Last year, only one in five families with children (20.7 percent) consisted a traditional male breadwinner with a female homemaker, compared to 44.7 percent in 1975. And the current recession has only accelerated this workforce transformation, as men have lost three out of four jobs since it began in December 2007.

These changes have important ramifications for U.S. economic policy going forward — not that we’ve done much so far to acknowledge them. To that end, the Center for American Progress, in partnership with Californa First Lady Maria Shriver, released The Shriver Report: A Woman’s Nation Changes Everything. The report looks at the changing American workforce, and how policy can adapt to the new economic reality. “Institutions need to adapt to who the American family is today,” Shriver said on Meet The Press yesterday. “They need to get smarter. They need to get more progressive.”

First up, of course, is getting the pay gap under control. Women still make just 77 cents on the dollar compared to their male colleagues, which over the course of a career, will deprive a woman of $434,000 in lifetime earnings. With women more often becoming the primary breadwinner, this poses an obvious problem. The Paycheck Fairness Act, which prohibits retaliation against employees who actively seek knowledge regarding the pay rates of their coworkers, could help in this area.

But the problems don’t end there. As Ann O’Leary and Karen Kornbluh wrote “nearly all of our government policies—from our basic labor standards to our social insurance system—are still rooted in the fundamental assumption that families typically rely on a single breadwinner.” For instance, the U.S. is the only industrialized country without any requirement that employers provide paid family leave, while many employer-sponsored benefits are not designed with pregnancy or caregiving in mind.

Kornbluh and O’Leary advocated updating America’s social insurance policies (like expanding the percentage of the workforce covered by the Family and Medical Leave Act), and increasing support to families for child care, early education and elder care. “All families need real support when there is no longer a wife at home to provide these services free of charge. And our government should not stop at solving the child care crisis: Families also need real support and aid in providing elder care,” they wrote.

Read more about The Shriver Report: A Woman’s Nation Changes Everything in today’s Progress Report.

In the last few days, a flurry of banks have released their earning statements for the third quarter of this year, and the differences between the banks that are doing well and those that are doing poorly highlights just how little of the banking sector’s recovery — and the recent Dow surge — is trickling down to the rest of America.

On the one hand, Goldman Sachs made $3.19 billion in the last three months. On the other, Citigroup lost $3.2 billion and Bank of America lost $1 billion. And the difference is, while Citi and BofA are still getting clobbered by losses on consumer items like mortgages and credit cards (to the tune of $8 billion and $9.6 billion, respectively), Goldman is reaping the benefits of its trading business:

Bumper third quarter profits at Goldman Sachs and another loss for Citigroup on Thursday highlighted the gap between the financial resilience of Wall Street and the woes of Main Street, fresh evidence that two Americas are emerging from the crisis. The diverging performance of investment banks such as Goldman and the retail banking operations of the banks such as Citi is problematic for an Obama administration that wants a strong Wall Street but is also under pressure to tackle the plight of ordinary people.

As Kevin Drum noted, “[Goldman] made better bets than the other guys, but the kind of business that would indicate a recovering economy is still very much in the tank.”

But the problem is not simply that Goldman is making money trading currencies, commodities, and risky over the counter derivatives. It’s that Goldman is doing it thanks to significant government support. As National Economic Council Director Larry Summers explained, “there is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support.” And indeed, Goldman “has had a lot of help”:

Critics charge that the lion’s share of Goldman’s profits comes from making big bets using cheap dollars printed by a Fed…It received $13 billion in the costly, widely questioned September 2008 rescue of insurer AIG. It has sold $22 billion in federally guaranteed debt under a plan the feds started to restore capital markets activity.

Perhaps most troubling is the fact that, in order to gain access to much of the government’s financial rescue effort, Goldman converted from an investment bank to a bank holding company (essentially an institution that, at least in part, takes deposits and lends). But its business activities “haven’t changed at all.” In fact, Goldman’s earnings report shows no sign of any lending activity whatsoever.

As Alan Schram, the Managing Partner of the Los Angeles based investment firm Wellcap Partners, wrote, “now that they are a regular commercial bank they actually trade more, which makes sense: if the US Treasury covered my losses, I would also be happy to take major risks.” And in the meantime, Citi and BofA’s mounting losses reveal that consumers aren’t any better off.

Today, the House Financial Services Committee began to debate the legislation that would create a new Consumer Financial Protection Agency (CFPA). Predictably, Republicans — who are staunchly opposed to the agency — broke out their false arguments about the agency restricting credit and eliminating jobs, but they also decided to tap into some of the GOP-generated “czar” hysteria by claiming that the CFPA’s director will be a “financial product approval czar”:

Rep. Jeb Hensarling (R-TX): [Consumers] have to go on bended-knee to this new federal czar for financial services product approval and beg that they can have a credit card or a mortgage.

Rep. Spencer Bachus (R-AL): The legislation gives this new agency and it’s czar-like chairman power to impose both fees and taxes on all financial products, which they broadly design.

Watch it:

First, like so many of the “czars,” the CFPA’s Director would be appointed by the President, but then confirmed by the Senate. Here’s the pertinent text in the bill (Section 112, page 20):

But more importantly, the point of the agency is not to approve mortgages or credit cards for individuals. The CFPA Director will not pull up John Smith’s credit report and decide whether or not he can have a Visa. Much like the Credit Cardholder’s Bill of Rights that was signed into law earlier this year (which placed outright bans on certain unfair practices), the CFPA will be able to ban products deemed deceptive or predatory.

For instance, as Federal Reserve Chairman Ben Bernanke advocated, no-doc loans (in which mortgages are given to consumers without any documentation supporting incomes or assets) should be done away with. Ditto for pay-day loans that have interest rates that climb to 400 percent or signing up consumers for exorbitant overdraft protection without actually telling them.

And of course, a lot of the subprime lending that led to the housing bubble — essentially the kind of lending that “occurs when the lender’s business model is based on making profits based on fees and defaults, not on the normal performance of a loan” — should be banned, as they have no legitimate purpose other than driving profits for mortgage lenders at the expense of borrowers. I’m willing to bet that their aren’t many homeowners who will be saddened to find that they can no longer access loans which result in them owing more on their house five years into their mortgage, despite making monthly payments. But that’s exactly what the GOP is advocating for.

Earlier this month, White House Communications Director Anita Dunn commented that Fox News is “opinion journalism masquerading as news.” She then defended those remarks on CNN’s Reliable Sources, saying that “the reality of it is that Fox News often operates as either the research arm or the communications arm of the Republican Party. And it’s not ideological.” “What I think is fair to say about Fox is — and certainly the way we view it — is that it really is more of a wing of the Republican Party,” Dunn added.

Of course, the network has pushed back on Dunn’s assertions, arguing that “its news hours — 9 a.m. to 4 p.m. and 6 to 8 p.m. on weekdays — are objective.” Fox Political Analyst Brit Hume added that “if Fox News really were a GOP mouthpiece, the White House would not be attacking it.”

However, Fox’s “objective” news hosts have also, quite literally, been GOP mouthpieces on the issue of the economic stimulus package and job creation. In July, House Republicans took to the floor to repeat the mantra “where are the jobs?” And Fox’s anchors, led by America’s Newsroom co-host Bill Hemmer, have adopted the phrase as their own, repeating it over and over on their news shows (on both Fox News and the Fox Business Network). Watch a compilation:

While asking the question again and again, Fox hasn’t seemed interested in finding the answer. After all, officials in many states — including North Carolina, Alabama, California, Idaho and Ohio — have been steadily reporting the number of jobs they’ve created. And today, a new report from the Recovery Accountability and Transparency Board, which oversees the stimulus implementation, stated that “about 30,000 jobs have been directly created or saved by contractors who received money from the federal stimulus program.”

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.”

Today, the House Financial Services Committee began marking up regulatory reform legislation, and the first topic of debate was regulation of derivatives, the trading instruments made infamous by, among others, American International Group (AIG) and Lehman Brothers.

As proposed by Committee Chairman Barney Frank (D-MA), the legislation would require that derivatives dealers and companies heavily involved in speculative derivatives trading to list their activity on electronic exchanges, to provide some transparency to the opaque derivatives market. The legislation would also require companies to have more capital on-hand to protect against derivatives losses.

As Frank said, the lesson of recent years has “been that the systemic risk of not having this or a lot of this on exchanges is a negative.” Frank’s approach also matches up with that taken by the House Agricultural Committee, which shares jurisdiction over derivatives with Financial Services.

However, during the markup Republicans made it abundantly clear that they oppose the legislation, claiming that it will be a “job killer,” which will ultimately cause a “decrease in the American dream.” Watch a compilation:

Back when the Republicans first released their vision from regulatory reform, I wondered how seriously they would take regulation of derivatives. And here we have the answer: not very.

The concern that Republicans ostensibly have is that companies who legitimately use derivatives (so-called end-users) to hedge risks would find their access to derivatives restricted by a transparent market. Not only is that a silly argument — as transparency should help the legitimate users of derivatives to have better price information — but the legislation exempts companies “that use derivatives for commercial reasons to protect against risk” from participating in the exchanges. Companies would only lose that exemption “if regulators see a pattern of activity that places other participants in the transactions at risk.”

Let’s remember this chart, which shows that the vast majority of derivatives are used by traders — not by corporate end-users:

So by trying to scale back regulation, the GOP (wittingly or not) is doing the work of the Wall Street banks that use derivatives as a money-making end in themselves, not as a means to protect themselves. The committee plans to vote on the derivatives overhaul tomorrow.

A lot of the discussion regarding the health of the economy has centered on the unemployment rate of 9.8 percent. But the economic crisis is not only affecting those who have lost their job. As the New York Times reported today, “pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression”:

The Bureau of Labor Statistics does not track pay cuts, but it suggests they are reflected in the steep decline of another statistic: total weekly pay for production workers…representing 80 percent of the work force. That index has fallen for nine consecutive months, an unprecedented string over the 44 years the bureau has calculated weekly pay, capturing the large number of people out of work, those working fewer hours and those whose wages have been cut. The old record was a two-month decline, during the 1981-1982 recession.

However, things are looking up on Wall Street, where “major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high”:

Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did the peak year of 2007, according to an analysis of securities filings for the first half of 2009 and revenue estimates through year-end by The Wall Street Journal. Total compensation and benefits at the publicly traded firms analyzed by the Journal are on track to increase 20% from last year’s $117 billion — and to top 2007′s $130 billion payout. This year, employees at the companies will earn an estimated $143,400 on average, up almost $2,000 from 2007 levels.

So it seems as if the worry that Wall Street compensation would climb back to 2007 levels were misguided — pay is, in fact, set to eclipse the 2007 highs. Financial firms told the Journal that “they need competitive pay packages, pointing to threats from non-U.S. companies, private-equity firms and hedge funds.” A Goldman Sachs spokesman said that “the easiest way to destroy the firm would be if we didn’t pay our people….Destroying a profitable enterprise would not be in anybody’s interest.”

Of course, I don’t know that it’s in anybody’s interest — save for the bankers themselves — to have a return to pre-crisis pay. But most insulting about this resurgence in pay is that Wall Street’s return to profitability has been driven, at least in part, by “the continuing effects of various government aid programs.” And while the administration’s “pay czar” has the ability to regulate pay packages at the seven companies still receiving extraordinary pay, there is nothing in place to rein in the rest of Wall Street, even as benign a measure as “say-on-pay,” which would mandate that shareholders hold a non-binding vote their companies pay packages.

Simply put, this is another example of the government’s extraordinary efforts to rescue Wall Street putting recovery there on a much faster timetable than everywhere else — and without the regulatory reform designed to remedy Wall Street’s ills being in place.

When reports emerged that the Obama administration was looking at additional spending measures to spur job creation in the wake of September’s employment report, Republicans immediately claimed that the administration was simply “preparing to push for more of the same flawed tax-and-spend policies,” while advocating yet another variation of its standard collection of tax cuts.

But Bruce Bartlett — former economic adviser to President Reagan and a Treasury Official under President Bush Sr. — hasn’t gone down that road and thinks that the Republican party “no longer has a credible economic policy.” He’s particularly put off that the party “continues to advocate tax cuts even though the recent Bush tax cuts led to only mediocre economic growth and huge deficits.”

“So much of what passes for conservatism today is just pure partisan opposition,” Bartlett has said. “What remains is a caricature — that there is no problem that more and bigger tax cuts won’t solve.” And when CNBC’s supply-side ideologue Larry Kudlow (a former Reagan official himself) asked Bartlett whether tax cuts would have been preferable to stimulus spending, Bartlett replied with this:

I don’t think tax cuts would have done any good whatsoever for the current economic problems that we have today. The problem is workers don’t have incomes to tax, because they’re unemployed, corporations don’t have profits to tax, because they’re losing money, and investors are sitting on huge capital losses, not capital gains…I think that today we have the same set of problems that we had in the 1930′s with a lack of demand, and we need to get monetary policy mobilized and that requires spending in the economy to increase and that’s what will get us out of the crisis.

Watch it:

Bartlett certainly befuddled Kudlow, who could only say “I don’t understand your analysis…What is it you’re saying here?”

But Bartlett is absolutely right — private spending has collapsed, consumers are saving more than ever, and government is the only entity available to fill the output gap, or the difference between what the U.S. is able to produce and what it’s able to sell. And with unemployment still creeping upward (and the underemployment rate at 17 percent), its becoming clearer that current spending still may not be filling that gap.

According to a new Economic Policy Institute-Hart Research poll, 71 percent of Americans support putting unemployed people back to work at government-funded public service jobs that help meet community needs (the number actually rises to 74 percent when the example of President Franklin Roosevelt’s Civilian Conservation Corps is invoked). With so many idle resources, it simply makes sense for them to be employed in a useful manner, a notion which Bartlett accepts, much to Kudlow’s chagrin.

Of course, even Kudlow doesn’t actually have any problem with government spending — as long as that spending is concentrated on Wall Street.

Earlier this year, the business lobby went into high gear to prevent the Obama administration’s plans for corporate tax reform, with the Business Roundtable promising to spend “whatever it takes” to ensure that the reforms never saw the light of day. That determination seems to have had some effect, as the Wall Street Journal reported today that administration “has shelved a plan to raise more than $200 billion in new taxes on multinational companies following a blitz of complaints from businesses.”

As the Journal noted, the particular reform in question — which would have limited the ability of corporations to defer taxation on profits that they earn overseas — drew the ire of the corporate world, and “companies ranging from Microsoft Corp. to General Electric Co. to International Business Machines Corp. put the topic at the top of their Washington agendas.”

Meanwhile, the CBO has predicted that this year’s “dramatic fall in corporate profits, combined with tax breaks designed to offset the burden of the economic recession, will drive corporate tax revenues down by more than 50 percent this year, to just $139 billion.” And, as Professor Joann Weiner pointed out, “even if corporations were not chalking up losses, the federal government would still face a shrinking tax base due to changes in the organizational structure of U.S. businesses”:

Since companies can essentially choose their form of taxation, largely through relatively permissive federal and state tax laws, it’s no wonder that the U.S. has one of the largest shares of income earned in non-corporate form…Profitable companies have an incentive to organize in a tax-favored form, while unprofitable companies have an incentive to remain in corporate form where they may one day offset future profits with today’s losses.

Currently, just 12 cents out of every federal dollar comes from corporate tax revenue. David Weidner, meanwhile, noted that “corporate income tax as a share of gross domestic product has fallen from 6% in 1951 to about 2% last year,” and that “the decline is mostly due to a shrinking corporate tax rate.”

Because of the administration’s move, not only does the U.S. lose $200 billion (over ten years) that could have gone towards remedying long-term budget deficits, but the drive to fix our nonsensical corporate tax code has stopped cold before it really got underway. Some administration aides did say that the tax deferral may be revisited “as part of a broader tax overhaul sometime next year,” but I’m worried that the business lobby will only feel emboldened by its ability to prevent reform and come out even stronger next time.

After months of publicly supporting health care reform, insurers are warning Congress that under the Baucus health care bill, “the cumulative increases in the cost of a typical family policy…will be approximately $20,700 more than it would be under the current system.”

The industry has issued a new report arguing that the weak personal responsibility requirement, taxes on health care providers, spending reductions in Medicare and taxes on high-value health plans will increase “the cost of coverage for both single and family policies in the individual, small group, large group, and self-funded insurance markets.”

Ezra Klein and Jonathan Cohn dispute the report’s methodology here and here, but it’s worth pointing out that industry’s argument that reform will increase insurance premiums for all Americans is simply untrue. It could also backfire. As Rep. Anthony Weinder (D-NY) explained this morning on MSNBC, “the health insurance lobby today fired the most important salvo in weeks for the public option“:

If you have the health care industry complaining that we’re going to raise costs because of these changes, it is them putting us on notice that we haven’t put enough cost containment in the bill. You know, the health care industry themselves is putting out a whole report saying that. That should be a tell to the Baucus team that you know what, maybe it’s time for them to go back and revisit the public option. In a strange way, and look, obviously they didn’t mean this, the health insurance lobby today fired the most important salvo in weeks for the public option, because they have said, as clear as day, left to their own devices, according to their own number crunchers, they’re going to raise rates 111%.

The reality is, some reform provisions would tend to make premiums higher than current-law premiums; other provisions would “tend to make them lower.” Americans from different income brackets will pay different amounts for health care, but on the whole, the Baucus bill, which provides affordability subsidies for Americans between 133-400% federal poverty line, will offer health insurance policies that are far more affordable than what the insurance industry report predicts.

Here is a comparison between the non partisan Congressional Budget Office’s analysis of the cost of premiums in the Exchange and the industry’s report. As it points out, under reform, Americans — even those that don’t qualify for a subsidy — will have far more affordable insurance options than industry’s “average” suggests:

Insurer Analysis: Premiums In 2016	CBO Analysis: Premiums In 2016 (Exchange)
$21,300	$14,400

Still, the Baucus bill must do more to control health care spending and lower premiums in the private market. After all, Congress shouldn’t force Americans to purchase unaffordable coverage. But for all their concern about ‘average health care costs’, insurers have a poor track record of controlling prices. As Families USA points out, insurers are “like a poker player who complains about his hand when, in fact, he is the dealer.”

Indeed, despite complaining about high health care premiums, insurers have lobbied against system-wide cost containment. They’ve spent millions of dollars opposing a public option that could reduce health case spending by some $150 billion and are even suing the state of Maine to increase premiums.

The insurance lobby is “conveniently forgetting that they imposed significant premiums increases during the past decade that are making health coverage unaffordable for families and businesses.” Now, since they’ve published a report promising to increase health insurance premiums even higher, the Senate must insert a public option mechanism (along with other cost-containment provisions) to competitively lower rates and keep the private health insurers honest.

Cross posted at The Wonk Room.