Why are Palin, Perry and Jindal refusing to talk to Biden about the stimulus?
Why are Palin, Perry and Jindal refusing to talk to Biden about the stimulus?
In a new article, Time’s Michael Scherer describes how Vice President Biden has been aggressively reaching out to mayors on the their use of stimulus money. “My rear end is on the line just like yours,” said Biden on a recent conference call with five mayors and county executives. “I’m the guy in charge of this deal. So if this doesn’t work, it’s me.” In a follow-up blog post, Scherer reveals that Biden has talked to “dozens of mayors and 47 of the 50 state governors about the Recovery Act”:
One interesting fact that didn’t make it into the story. Since March, Biden has talked, usually in conference calls, to dozens of mayors and 47 of the 50 state governors about the Recovery Act. The three governors who have not yet been on the line, though they have been invited: Alaska’s Sarah Palin, Texas’ Rick Perry and Louisiana’s Bobby Jindal. You can draw your own conclusions.
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Dick Armey: Obama ‘May Be The Greatest Economic Illiterate’ Of Any Modern President
Dick Armey: Obama ‘May Be The Greatest Economic Illiterate’ Of Any Modern President
In this month’s episode of Rep. Walter Jones’s (R-NC) TV show, Washington Watch, Jones hosted Dick Armey, former House Majority Leader and current chairman of the right-wing astroturf group FreedomWorks. About halfway through their conversation, Jones suggests that President Obama could have benefited from taking several months off in the beginning of his presidency to study public policy with “experts.” Armey disagrees, saying that Obama has no interest in “understanding of how the world really works” and warning that Obama “may be the greatest economic illiterate of any president of modern time”:
JONES: I was hoping that Mr. Obama…would say to the American people, “You know, these problems…are so complex that I’m going to take the first two or three months, I’m going to bring in certain people from different parts of the country who are experts with this and this and that. And then I’m going to try to come back to you the American people the first of April with some ideas and plans for this country.” … I wish he had just maybe taken a little bit of time and try to analyze some of these deep seeded problems. [...]
ARMEY: I think with this president its even worse than that. He is more interested in income redistribution than he is in prosperity. … He’s got a whimsical notion of how things ought to turn out. Without any understanding. Economics is a very deep and complex discipline of understanding and I’m afraid we have a president right now who may be the greatest economic illiterate of any president of modern time. Not that he’s not capable of understanding. But I don’t believe he cares to understand.
Watch it:
Armey’s own views on the economic crisis are often dictated by his lobbying interests. He has been a vocal critic of the Bush administration’s creation of the toxic asset relief program (TARP) in his capacity at FreedomWorks. But despite that, Armey’s lobbying firm DLA Piper has represented several of the greatest beneficiaries of TARP and other government interventions in the last year: AIG and Merrill Lynch. As Pat Garofalo writes, “it’s a safe bet that DLA Piper wasn’t enlisted to push for tougher regulations or more stringent capital requirements.”
As the Obama administration works to devise effective and nuanced regulations to prevent a financial crisis like that of last fall’s from recurring, Armey is advocating more of the same tired deregulation ideas that set the American economy up for failure in the first place. “We want to end burdensome government regulation and rely on the marketplace as an efficient regulator of business activity,” Armey’s FreedomWorks website states.
Steele’s latest analogy: Do you want to get ‘saved from the sharks,’ but ‘picked up by a bunch of pirates?’
Steele’s latest analogy: Do you want to get ‘saved from the sharks,’ but ‘picked up by a bunch of pirates?’
RNC Chairman Michael Steele is known for his creative analogies. In April, he declared that regional differences in the GOP were just like people who wear their hats in different ways, a metaphor he used again at a recent College Republican conference. On Frank Beckman’s radio show on Wednesday, Steele broke out a new metaphor to describe why he thinks its bad for government to step in and help save jobs in private industries:
BECKMAN: And the people who are out of work, you know, they’re not much concerned right now about, about who saves them, whether it’s the private sector or public, they just want to be saved.
STEELE: Yeah, that’s true, but there’s a danger that lies in that. And I think that’s where an appreciation, if not an education, of the consequences of certain policies has got to get talked about and people really need to understand. You know, it’s like the guy who, you know, is in the water and you know, he wants to get saved from the sharks, but then — from the sharks — but then he gets picked up by a bunch of pirates or, you know, or some bad guys. You know, what’s worse being in the water or being in the boat where they’re beating the heck out of you every day? So, you know, the reality of it is, it does matter who saves you.
Listen here:
Transcript: More »
Boehner admits that stimulus will ‘create much-needed jobs.’
Boehner admits that stimulus will ‘create much-needed jobs.’
In the days before Congress voted on and President Obama signed the American Recovery and Reinvestment Act, House Minority Leader John Boehner (R-OH) repeatedly derided the legislation as “generational theft,” and declared, “When it comes to slow-moving government spending programs, it’s clear that it doesn’t create the jobs.” But as Media Matters Action Fund notes, Boehner has changed his tune. In a little-noticed statement released Monday, Boehner highlighted the Obama administration’s recent order that the Ohio Department of Transportation redirect $57 million to shovel-ready projects. Boehner admitted that such stimulus projects do, in fact, “create much-needed jobs“:
The stated intent of the so-called stimulus package was to create jobs, and certainly a $57 million slush-fund studying projects did nothing to achieve that goal. With Ohio’s unemployment rate the highest it’s been in 25 years, I’m pleased that federal officials stepped in to order Ohio to use all of its construction dollars for shovel-ready projects that will create much-needed jobs.
Jim Cramer: ‘I think everybody wishes that Obama would just kind of go away for a little bit.’
Jim Cramer: ‘I think everybody wishes that Obama would just kind of go away for a little bit.’
Today on MSNBC, CNBC commentator Jim Cramer discussed a New York Times poll that shows many Americans want the Obama administration to address the growing budget deficit. Cramer claimed that Americans aren’t buying into health care reform right now because “it just means tax increases, and there’s got to be someone who pays for it.” According to Cramer, the solution that “everybody” wants is for Obama to “go away”:
But until we get the economy moving again, I think everybody wishes that Obama would just kind of go away for a little bit.
Watch it:
If Cramer looked closer at the poll, it also shows that 57 percent of the American public approve of what Obama is doing on the economy overall. Of course, Cramer is someone who claimed that Obama’s policies have resulted in “the most, greatest wealth destruction I’ve seen by a president” and is known for his irresponsible financial cheerleading (e.g. “Bear Stearns is not in trouble“). Maybe it’s not Obama who Americans want to “just kind of go away for a little bit.”
Transcript: More »
Major Media Headlines Pretend That Latest Polls Show Obama’s Policies Are Unpopular
Major Media Headlines Pretend That Latest Polls Show Obama’s Policies Are Unpopular
Today, two new national polls were released, one by the New York Times and CBS, the other by the Wall Street Journal and NBC. News headlines quickly settled on a theme: The polls showed that President Obama’s policies were suddenly unpopular:
“Sticker Shock — Obama still popular; his policies, not so much” [ABC's The Note]
“Polls find rising concern with Obama on key issues” [Reuters]
“Polls Show Declining Support For Obama Decisions” [U.S. News & World Report's Political Bulletin]
“Obama’s popularity: Problems testing it” [Chicago Tribune's The Swamp]
“Is ‘Smooth Sailing’ Over for Obama?” [Washington Post]
The headlines have little to no relation to the actual data in the polls, both of which found broad approval for Obama’s foreign policy and economic agendas. From the New York Times/CBS poll:
5. Do you approve or disapprove of the way Barack Obama is handling the economy? 57% approve, 35% disapprove
8. Do you approve or disapprove of the way Barack Obama is handling the threat of terrorism? 57% approve, 27% disapprove
16. So far, do you think Barack Obama’s policies have made the economy better, made the economy worse or haven’t his policies had any effect on the economy yet? 32% say better, 15% say worse
And from the Wall Street Journal/NBC poll:
4b. Do you generally approve or disapprove of the job that Barack Obama is doing in handling the economy? 51% approve, 38% disapprove
4c. Do you generally approve or disapprove of the job that Barack Obama is doing in handling foreign policy? 54% approve , 36% disapprove
9. Which ONE of the following statements best describes your feelings toward Barack Obama?
Like personally and approve most policies…………… 48%
Like personally but disapprove of many policies ……27%12. And how confident are you that Barack Obama has the right set of goals and policies to improve the economy––extremely confident, quite confident, only somewhat confident, or not at all confident?
Extremely confident………………………. 20%
Quite confident …………………………. 26%
Only somewhat confident ………………….. 24%
Not at all confident …………………….. 29%
Similarly, 68 percent agree with Obama’s view that Guantanamo detainees should be charged with a crime or released back to their home countries, as opposed to only 24 percent who think they should be detained indefinitely. As Glenn Greenwald notes, “The view that detainees should be charged with crimes or released is often depicted as the fringe ‘Far Left’ view. Like so many views that are similarly depicted, it is — in reality — the overwhelming consensus view among Americans.”
Perhaps the most bizarre headline came from USA Today’s blog, The VAL: “Poll: Obama down, cousin Cheney up.” The poll cited showed that 60 percent of Americans have a favorable view of Obama. By contrast, only 27 percent viewed Cheney favorably — while 30 percent viewed him “very negatively.”
Rove: Bush Administration Has ‘No’ Responsibility For Current Budget Deficits
Rove: Bush Administration Has ‘No’ Responsibility For Current Budget Deficits
Last night on Fox News, former top Bush adviser Karl Rove chastised President Obama for his economic recovery package Congress passed last February and criticized him for his new proposal to enact “pay as you go” budgeting rules — paying for spending increases by either raising taxes or budget cuts.
“This is a cosmetic gesture. This guy is going to run up a $1.8 trillion deficit. That’s what it’s projected to be this year,” Rove complained. But when host Greta Van Susteren asked if the Bush administration is responsible for any of the deficit, Rove replied, “No.”:
VAN SUSTEREN: Do you take some responsibility, meaning you, the Bush eight years, for this…
ROVE: No.
VAN SUSTEREN: You take absolutely no responsibility? Because…
ROVE: No.
Watch it:
Rove’s denial is odd, not only because the Bush administration turned President Clinton’s budget surplus into massive deficits and left with nearly half a trillion dollars in the hole, but also because Bush presided over the largest debt increase of any U.S. president in history. But the timing of Rove’s denial is odd as well because the New York Times published yesterday the results of an examination of Congressional Budget Office reports going back almost a decade which found that Obama “is responsible for only a sliver of the deficits” and most of his adminstration’s contribution to the deficit is a result of continuing Bush policies:
About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.
Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.
“In other words,” Matt Yglesias writes, “the very high deficits are not Obama’s fault according to any normal way of assessing political blame.” See Yglesias’s pie chart illustrating the Times’s story here.
Before voting against stimulus, Bennett requested millions in stimulus funds for his state.
Before voting against stimulus, Bennett requested millions in stimulus funds for his state.
This morning, USA Today reported that two days before he voted against the economic stimulus package Sen. Bob Bennett (R-UT) requested over $180 million in stimulus money from the EPA and the Department of Agriculture. Bennett, attempting to explain this apparent contradiction, told USA Today that “as long as it passed and they’re handing out money, they might as well hand it out where it will do some good.” But in a statement he released after voting against the bill, Bennett claimed the recovery legislation could do no good. “The only thing this bill will stimulate is the national debt,” said Bennett:
The economy is in serious trouble, and we need to do the very best we can to restore confidence in our economy and in our future. Our country desperately needs a stimulus package, but I don’t think the bill passed today is the right medicine. I regret that this opportunity to put our economy back on track has been squandered. We should have passed a bill that focused on fixing housing, helping taxpayers keep more of their hard earned money through permanent tax cuts, and spending only on projects that would genuinely stimulate the economy and create jobs. Unfortunately, the only thing this bill will stimulate is the national debt.
USA Today also found that 13 other Republicans who had voted against the stimulus had also requested stimulus funding for their states or districts.
South Carolina Supreme Court orders Sanford to accept stimulus funds.
South Carolina Supreme Court orders Sanford to accept stimulus funds.
After waging a months-long war against the American Recovery and Reinvestment Act, Gov. Mark Sanford (R-SC) lost his final battle yesterday, when the state supreme court ordered him to accept the $700 million in stimulus funds he had opposed. The court, in a unanimous decision made “with blazing fast speed,” took extra steps to try to ensure Sanford obeys their ruling:
The S.C. Supreme Court also took the rare step of issuing a writ of mandamus, which orders the governor to apply for the money. [...]
As for issuing the writ of mandamus, the other four justices said that “while we recognize and respect Governor Sanford’s sincerely held beliefs concerning (the federal law), those convictions do not alter the ministerial nature of the legal duty now before him.”
The justices added that the decision to issue a writ is “an extremely delicate one.”
$185 million will go to K-12 education this year, on July 1, and $100 million will go to state colleges. “I’m very excited that our schools and our teachers and our education system will be getting the funds that are so desperately needed here in South Carolina, and I’m glad the court case went our way,” said 18-year-old South Carolina student Casey Edwards, who filed the lawsuit.
Cheney Acknowledges Passing The Buck On GM: Bush Didn’t ‘Want To Be The One Who Pulled The Plug’
Cheney Acknowledges Passing The Buck On GM: Bush Didn’t ‘Want To Be The One Who Pulled The Plug’
Last night on Fox News, Vice President Cheney admitted that the Bush administration deliberately decided to pass the buck on GM and let President Obama deal with the problem. Cheney admitted that he thought the “right outcome was going to be bankruptcy,” but that President Bush didn’t want to “be the one who pulled the plug.” Instead, the Bush administration put together a costly auto bailout to stem the tide until President Obama took office:
CHENEY: Well, I thought that, eventually, the right outcome was going to be bankruptcy. … And the president decided that he did not want to be the one who pulled the plug just before he left office.
VAN SUSTEREN: Why?
CHENEY: Well, I think he felt, you know, these are big issues and he wouldn’t be there through the process of managing it, but in effect, would have sort of pulled the plug on GM and that was one of the first crises the new administration would have to deal with. So he put together a package that tided GM over until the new administration had a chance to look at it, decide what they wanted to do.
VAN SUSTEREN: But it’s cost us billions to get — I mean, you know —
CHENEY: It has. … And now the government owns a big chunk of General Motors. That bothers me. I don’t like having government own those kinds of major financial enterprises. I think it’s — it does damage to our long-term economic prospects when we get government involved in making those kinds of decisions.
Watch it:
When announcing his $17.4 billion auto bailout in December 2008, Bush said that “bankruptcy now would lead to a disorderly liquidation of American auto companies.” Cheney is now saying that they were thinking about bankruptcy all along, but instead used billions of dollars of taxpayer money to push their problems onto the Obama administration.
Even former Republican senator Rick Santorum last week went on Greta’s show and chastised the Bush administration, saying that officials “blew it” for punting the problems onto Obama:
SANTORUM: President Bush blew it. You know, he went out and convinced the Congress to give him a bunch of money to save the financial sector and then decided to take a little piece of that and give it to General Motors and Chrysler. Why? He punted. He basically said, I don’t want this failure to be on my watch. I want to let Obama deal with it. And we all knew at the time that letting Obama deal with it means the government’s going to come in and run the show, and that’s exactly what’s happened.
Of course, even though Obama has managed to prevent a “disorderly liquidation of American auto companies,” it isn’t good enough for Cheney. Of course, Cheney offered no alternative vision during last night’s interview.
Transcript: More »
Sen. Cornyn rejects Rep. Sessions’s claim that Obama is deliberately sabotaging the economy.
Sen. Cornyn rejects Rep. Sessions’s claim that Obama is deliberately sabotaging the economy.
Earlier this week, Rep. Pete Sessions (R-TX) told the New York Times that the Obama administration intended to “‘diminish employment and diminish stock prices‘ as part of a ‘divide and conquer’ strategy to consolidate power.’” He added that Obama’s agenda was “intended to inflict damage and hardship on the free enterprise system, if not to kill it.” Yesterday, Sen. John Cornyn (R-TX) rejected Session’s conspiracy theory:
“I don’t know where he’s coming from on it,” Sen. John Cornyn said Wednesday. “I’d like some sort of clarification about what he meant.”
Cornyn explicitly rejected the idea that Obama wants higher unemployment, lower stock prices and general economic malaise. “Absolutely not,” Cornyn told Texas reporters. [...]
“A lot of what he’s doing is going to have disastrous consequences,” Cornyn said. “I’m very concerned about his policies, but I don’t agree that it’s intentional.”
House Republicans: Look How Many Layoffs We Helped Create
House Republicans: Look How Many Layoffs We Helped Create
Today, the Washington Post reported that “eleven weeks after Congress settled on a stimulus package that provided $135 billion to limit layoffs in state governments, many states are finding that the funds are not enough and are moving to lay off thousands of public employees.” Washington state will be forced to layoff several thousand educators and Massachusetts which “cut 1,000 positions late last year, just announced 250 layoffs, with more likely to come soon.”
Apparently missing the article’s point — that the stimulus should have included more budget stabilization funding for states — the House GOP featured the article on their website today, suggesting that the report vindicated their unanimous opposition to the recovery act. Later in the day, they linked to the article on twitter and gleefully quipped, “Look how many layoffs the stimulus created“:
In reality, of course, the economic recovery didn’t “create” layoffs at the state level. Had the recovery plan included no money at all for state level budget stabilization — as the House Republicans proposed — layoffs of public servants at the state level would have been far more widespread.
Further, as the Post makes clear, it was members of the Republican party and several conservative Democrats sympathetic with the Republican line on the recovery package that actively lobbied for reductions in state budget stabilization funding by $40 billion:
But in the Senate, the stabilization funding was cut by $40 billion to secure the support of the three Republicans who were needed for a filibuster-proof 60 votes — Sens. Susan Collins and Olympia J. Snowe of Maine and Sen. Arlen Specter of Pennsylvania — as well as to gain the support of conservative Democrats such as Sen. Ben Nelson of Nebraska
Susan Collins (R-ME) defended her efforts to slash the state stabilization funding, saying, “The fundamental purpose of the stimulus bill is to save and create jobs and help get our economy moving again. … The bloated House-passed bill stood no chance of passing the Senate.”
Limbaugh agrees with Sessions: Obama’s ‘objective is unemployment.’
Limbaugh agrees with Sessions: Obama’s ‘objective is unemployment.’
Earlier today, ThinkProgress highlighted NRCC Chairman Pete Sessions’ (R-TX) claim that President Obama is intentionally trying to “‘diminish employment and diminish stock prices‘ as part of a ‘divide and conquer’ strategy to consolidate power.” Sessions’ paranoid theory got a powerful endorsement today from the de facto leader of the conservative movement, Rush Limbaugh. Noting new budget deficit projections out of the White House, Limbaugh declared that “the objective is unemployment.” “Think forced reparations here if you want to understand what actually is going on,” added the right-wing talker. Listen here:
Transcript: More »
Gov. Perdue: Georgia Can’t Afford Supply-Side Economics During The Recession
Gov. Perdue: Georgia Can’t Afford Supply-Side Economics During The Recession
During the debate over the economic stimulus — while most state budgets were deeply in the red — the House GOP unanimously opposed the recovery package, arguing in favor of more tax cuts for the wealthy. Highlighting a schism in the party, however, several GOP governors, such as Gov. Arnold Schwarzenegger, Gov. Charlie Crist (FL), and John Huntsman (UT), readily accepted the federal aid.
In a comment marking a break with the Reagan-embracing hard right, Georgia Gov. Sonny Perdue (R) raised skepticism about the GOP philosophy of using supply-side tax cuts to plug budget deficits:
In essence, Perdue said the economic theories espoused by Ronald Reagan and Jack Kemp — that lower taxes actually generate more government revenue — are a gamble that don’t have a place in Georgia. Not in hard times.
Here’s what Perdue said, as aired on Friday: “Georgia’s a balanced budget state. And it’s very difficult to do the stimulus-type bills in a state that’s starved for revenue and cash at the same time. So that kind of destroys a supply-side theory within a state government.”
Listen here:
Perdue was responding to pressure from Republican state legislators to sign the “Jobs, Opportunity, and Business Success Act of 2009,” a businesss tax cut-centered bill that would cost $340 million a year in lost revenue. True to conservative form, the legislation cuts the state capital gains tax in half. The bill would also be a “substantial tax increase on most low- and middleincome Georgians,” notes the Institute on Taxation and Economic Policy
Indeed, supply-side tax cuts tilted towards big business and the wealthy are anti-stimulative during a deep recession, and do not lead to appreciable gains in revenue for cash-starved budgets.
Perdue’s comments mark a stark departure from the rhetoric of the House GOP leadership, Govs. Bobby Jindal (R-LA) and Mark Sanford (R-SC), and Newt Gingrich — all of whom are resistant to anything other than tax cuts. In an interview with Time, Rep. Patrick McHenry (R-NC) said of the GOP, “Marginal tax rates are the lowest they’ve been in generations, and all we can talk about is tax cuts.”
It remains to be seen, of course, if Perdue will buckle to right-wing pressure and sign the supply-side legislation. Perdue signed significant business tax breaks just last week.
Rep. Pete Sessions: Obama wants to ‘diminish employment’ in order to consolidate power.
Rep. Pete Sessions: Obama wants to ‘diminish employment’ in order to consolidate power.
At the beginning of April, a Fox News poll asked respondents whether they believed that President Obama “wants the financial crisis to continue so government can take over more businesses and grow the federal government.” Only 23 percent said that they thought Obama wanted it to continue, but that minority view was recently endorsed by a top-ranking Republican official. Rep. Pete Sessions (R-TX), the chairman of the NRCC, told the New York Times that he believes President Obama aims to “‘diminish employment and diminish stock prices‘ as part of a ‘divide and conquer’ strategy to consolidate power”:
His counterpart at the House Republicans’ committee, Representative Pete Sessions of Texas, may indeed face an uphill fight with his argument that Mr. Obama is not trying to create jobs. In an interview, Mr. Sessions cited rising unemployment in asserting that the administration intended to “diminish employment and diminish stock prices” as part of a “divide and conquer” strategy to consolidate power.
Mr. Sessions, in his seventh term, said Mr. Obama’s agenda was “intended to inflict damage and hardship on the free enterprise system, if not to kill it.” By next fall, he predicted, voters may regain appreciation for the era of Republican governance when “many dreams were achieved,” the size of the economy doubled and employment and financial markets hit record levels.
Kristol Issues Another Correction: I Was Wrong To Blame Obama For Stock Market Declines
Kristol Issues Another Correction: I Was Wrong To Blame Obama For Stock Market Declines
In discussing the state of the economy this morning on Fox News Sunday, conservative commentator Bill Kristol noted that the stock market has performed reasonably well over the last several months. “The market’s up 35 percent in the last two months, which is pretty amazing,” Kristol said. He then noted that those Republicans — including himself — who were “chortling” about the stock market’s significant decline just after President Obama’s inauguration would now be forced to admit that they were wrong:
Republicans who were chortling over that 20 percent drop in the stock market the first month or two of [Obama's] administration are going to be, fairly enough, hoist on our own petard by the fact that now Obama’s getting this big stock market rally. … I — no one should base anything on this forecast — but in my view the short term is surprisingly bullish, but medium-long term very worrisome.
Watch it:
Indeed, a key talking point of the right-wing in late 2008 and the early part of 2009 was that the significant decline in the stock market was evidence that Obama’s approach to economic recovery was already failing. Kristol himself penned a column in the Weekly Standard entitled “Don’t Worry, Be Happy: Obama gives the markets the back of his hand.” In it, Kristol argued that Obama’s failure to base his entire economic agenda on ensuring day-to-day gains in the markets on Wall Street demonstrated he had already failed at governing:
So the stock market drops over 25 percent since Election Day, almost 20 percent since Inauguration — and Barack Obama tells the American people at his press conference Tuesday not to “spend all your time worrying about that.” [...]
The stock market is about real money, about the real livelihoods of real. … I’m told almost every theme in Obama’s speech last Tuesday night was focus-group tested–and the speech played pretty well politically. But the markets weren’t impressed. Isn’t it time for Obama and his team to get up the nerve to stop playing politics and to govern?
Kristol, of course, was not alone in making this argument. Sean Hannity, Rush Limbaugh, and Republicans in Congress all got on board. The question now is whether or not Kristol’s conservative brethren will follow his lead and issue a correction.
Banks successfully lobbied Fed to make ’stress tests’ less stressful.
Banks successfully lobbied Fed to make ’stress tests’ less stressful.
This week, the government released the results of the stress tests performed on the nation’s 19 largest banks. According to the report, Bank of America’s $34 billion hole was the largest. The Wall Street Journal reports, however, that the Fed Reserve initially estimated Bank of America’s figure at more than $50 billion. Over the last few weeks, a number of banks successfully lobbied the Fed to make the stress tests less stressful:
The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation’s biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.
In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.
The Wonk Room’s Pat Garofalo notes that one interesting element of the announcement last week is that the banks will now have the opportunity to convert government debt into equity if the need arises, leaving the taxpayer on the hook for a larger bailout of the banks.
Financial and housing industries paid lobbyists more than $42 million to defeat mortgage cram-down legislation.
Financial and housing industries paid lobbyists more than $42 million to defeat mortgage cram-down legislation.
Last week, the Senate voted 45-51 to defeat a proposal to change bankruptcy law and allow bankruptcy judges to cram-down mortgage payments. As Pat Garofalo has explained, cram-downs help homeowners by enabling these judges “to lower mortgage payments for those who owe more than their home is worth and have exhausted all other options.” Prior to the vote, Sen. Dick Durbin (D-IL) — who sponsored the amendment — took the floor and decried the powerful banking industry that was working to defeat the provision. Indeed, as Jane Hamsher now reports, lobbyists received more than $42 million to defeat such legislation this year:
A review of lobbying reports filed indicates that finance, insurance and real estate (FIRE) interests paid over $42 million to lobbyists who worked to defeat mortgage write-down in bankruptcy (cramdown) in the first quarter of 2009, as well as other anti-consumer legislation such as capping credit card interest rates.
Sixty organizations filed lobbying reports for the first quarter of 2009 indicating that they had paid lobbyists to work on the issue (see chart). Because lobbying reports don’t break down how much money was devoted to lobbying on a specific issue it’s not possible to break down a total spent on cramdown alone, but lobbying against H.R. 1106, H.R. 200 and S. 61, the Helping Families Save Their Homes Act was a priority for those organizations and lobbyists listed.
According to Durbin, between now and 2012, 8 million homeowners may lose their homes in foreclosure.
Corporate Hedge Fund Lawyer Who Attacked Obama Now Clams Up: ‘I Have No Comment’
Corporate Hedge Fund Lawyer Who Attacked Obama Now Clams Up: ‘I Have No Comment’
Tom Lauria, a lawyer representing “a small group of speculators” who forced Chrysler into bankruptcy because they wanted a few more cents on the dollar, made a stunning allegation against the Obama White House on a conservative talk show last Friday.
Lauria claimed that one of his former clients — Perella Weinberg — withdrew its opposition to the government deal because the White House threatened “that the full force of the White House press corps would destroy its reputation if it continued to fight.”
Lauria was not a first-hand witness to the alleged threat. Both the parties involved — the White House and Perella — disputed Lauria’s accusation. Nevertheless, ABC’s Jake Tapper reported Lauria’s claims, and his story was propagated on Fox News and Rush Limbaugh’s show.
Now, Tom Lauria is clamming up, refusing to stand by his earlier accusations against the White House. Neil Cavuto pressed him last night on Fox Business:
LAURIA: I have a former client in connection with this matter who is a client in connection with other matters who doesn’t appreciate all the attention that’s been brought to bear on that. So I have no further comment on that topic.
CAVUTO: Alright, well, this issue was raised by you. And now you’re not gonna talk about it?
LAURIA: I have no further comment. [...] I really don’t want to talk about this topic at this point. [...]
CAVUTO: You started out making a comment, and now you dropped it. It’s just weird, that’s all I’m saying.
This morning on Fox News, host Megyn Kelly tried another approach. “Can I ask you this? Have you made public statements that are untrue?” Lauria would not even dispute that he is lying. Instead, he said, “The truth is gonna come out.”
Lauria was asked eight separate times in two appearances on Fox to explain his earlier comments. And eight separate times, he refused to stand by his story. Watch it:
The right-wing media will undoubtedly continue pushing the story, despite the fact that there are now no sources who say it is credible or defend it.
Frank: Democrats Blocking Progressive Financial Reforms Should Be Kicked Out Of The Party
Frank: Democrats Blocking Progressive Financial Reforms Should Be Kicked Out Of The Party
Last week, Sen. Dick Durbin’s (D-IL) “cram-down” amendment — which would rewrite bankruptcy law to allow judges to renegotiate mortgages with banks — was rejected 45-51 by the Senate. Twelve Democratic senators voted against the bill, after furious lobbying from the mortgage and banking sectors. The financial sector had funneled millions into the coffers of Democratic senators who voted nay, leading Durbin to decry that banks “own” Congress.
This weekend, on the Bill Maher Show, Maher suggested to Rep. Barney Frank (D-MA) that progressive Democrats fighting against moneyed interests form a new party: “Let’s be honest, the Democratic party, starting in the 90’s, also became the party of business and Wall Street. So what we really need is another party that’s the progressive party.”
Frank objected, saying, “We who don’t feel that Wall Street should call the shots are in the majority of the Democratic party.” Frank then suggested that the “minority” in the party that is blocking progressive financial reforms break away to form a third party:
FRANK: Yes, I agree with you that I wish there were more Democrats on one side. But what you’re saying on the Democratic side, who are on the side you want, should leave to become the second party. No, I’m the first party. Let the minority, who doesn’t agree with us, let them become the second party.
Frank suggested six times during the interview that Democrats cozying up to the financial sector form their own voting bloc. Watch it:
Even with the setbacks, Frank said that progressives should be happy that legislation protecting credit card holders against abuses — which “the banks hated” — passed the House. “If the Senate doesn’t do that, people have a right to be frustrated. But again, the answer is, kick out the minority, don’t kick out the majority,” he urged.
Notably, the influence of big business is also causing centrist Democrats to attempt to neuter President Obama’s ambitious health care reform and clean energy economy proposals.
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