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A.I.G. to Pay $100 Million in Bonuses After Huge Bailout
By Edmund L. Andrews and Peter Baker | NYTimes
Despite being bailed out with more than $170 billion from the Treasury and Federal Reserve, the American International Group is preparing to pay about $100 million in bonuses to executives in the same business unit that brought the company to the brink of collapse last year.
An official in the Obama administration said Saturday that Treasury Secretary Timothy F. Geithner had called A.I.G.’s government-appointed chairman, Edward M. Liddy, on Wednesday and asked that the company renegotiate the bonuses.
Administration officials said they had managed to reduce some of the bonuses but had allowed most of them to go forward after the company’s chief executive said A.I.G. was contractually obligated to pay them.
In a letter to Mr. Geithner, Mr. Liddy wrote: “Needless to say, in the current circumstances, I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them.”
The bonuses will be paid to executives at American International Group’s Financial Products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed by subprime mortgages.
Is the Economic Mess Going to Kill 100,000 Non-Profits?
By Eyal Press | Alternet
The intensifying economic crisis is crushing the budgets of vital non-profits across the country, and the consequences are devastating.
In the days between Christmas and New Year's Eve, Anthony Romero, executive director of the American Civil Liberties Union, sat at his desk in Lower Manhattan and reached out to people who had lavished generous donations on his organization during the long, benighted tenure of George W. Bush. It was a heady moment: the era of Dick Cheney, John Ashcroft and Alberto Gonzales was winding to a close, and Barack Obama was about to assume office, having vowed to rescind some of his predecessor's more egregious assaults on civil liberties.
But Romero wasn't phoning his supporters to share the joy -- he was calling to plead for cash after a season (actually, several seasons) of thwarted solicitations. Throughout the spring and summer, would-be donors had explained, over and over again, that they were too busy writing checks to the Obama campaign. By the time Obama mounted the stage to deliver his acceptance speech in Chicago on election night, many had become preoccupied with something else: the implosion of the economy. As Romero worked the phone from his office on the nineteenth floor of the downtown high-rise, around the corner from the New York Stock Exchange, he could feel the aftershocks of the collapse.
The Swiss government said Friday it would cooperate on cases of international tax evasion, breaking with a long-standing tradition of protecting wealthy foreigners accused of hiding billions of dollars in the Alpine nation.
The government insisted it would hold onto its cherished banking secrecy rules, but said other countries could now expect Swiss cooperation in cases where they provide compelling evidence of tax evasion.
"We want assistance to be restricted to individual cases to prevent fishing expeditions," President Hans-Rudolf Merz told a news conference, referring to the practice of seeking information about many individuals in the hope of discovering a few tax evaders.
Make Veterans Buy Insurance: Another Idea That Really Didn't Come from the Insurance Companies, Really
WASHINGTON (CNN) -- Veterans Affairs Secretary Eric Shinseki confirmed Tuesday that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance. MORE HERE.
The net worth of American households fell by the largest amount in more than a half-century of record keeping during the fourth quarter of last year, reflecting the blow families are taking from a plunging stock market and dwindling home prices.
The Federal Reserve said Thursday that household net worth dropped by a record 9 percent in 2008's October-December period compared to the third quarter. That was the biggest decline on records that go back to 1951.
The drop represented a loss of $5.1 trillion in family net worth, leaving the total at $51.48 trillion at the end of the year. Net worth represents total assets such as homes and checking accounts minus liabilities like mortgages and credit card debt.
Jobs, in particular, are a major concern for the Chinese authorities, who fear potential social unrest as millions of migrant workers’ jobs have fallen victim to the global slowdown. “We have reserved adequate ammunition,” Mr. Wen said, adding that China’s fiscal deficit is under control and the debt level still safe. “At any time, we can introduce new stimulus,” he said, quoted by Bloomberg News.
China, the world’s biggest holder of United States government debt, on Friday expressed concern about the safety of those assets as American deficits have ballooned with costly stimulus and bailout packages aimed at rescuing the economy..
By David Bacon, New America Media
LANCASTER, CA (3/11/09) -- After months of a media war supporting and condemning it, the Employee Free Choice Act was finally introduced into Congress again this week. The bill has been debated before, but with a larger Democratic majority, its chances of passage are much greater today, and President Obama has said he'll sign it. Employers, therefore, are fighting it as never before.
President Obama has recently threatened to rescind the "blank check" the Bush administration offered to big defense contractors. So now is the time when all that planning by Lockheed Martin and the other major arms manufacturers comes into play. One of that company's major weapons systems, the F-22 Raptor, is potentially on the chopping block. How convenient then that, in the midst of an economic meltdown, Lockheed just happens to have more than 1,000 parts suppliers for that jet carefully scattered across 44 states, all of which, as far as I know, have representatives in Congress. This is pretty typical.
Which came first, the chicken thief or the golden egg?
* Newly Formed 150,000-Strong Nurses' Union Pushes for Single-Payer Healthcare *
Three of the country's top organizations of direct care registered nurses have come together to form a new national nurses' union that is advocating for a single-payer national health insurance program. The new union unifies the California Nurses Association/National Nurses Organizing Committee, United American Nurses, and the Massachusetts Nurses Association into a 150,000-member association, making it the largest registered nurses union in US history. We speak with Geri Jenkins, a registered nurse and co-president of the union.
* Burn Your Health Insurance Bill Day: New Group Advocates Direct Action to Demand Single-Payer System *
Russell Mokhiber, editor of Corporate Crime Reporter, has just formed a new group called "Single Payer Action" that is advocating direct action to demand a single-payer health insurance system in the United States. Today, he is burning his health insurance bill outside the national meeting of the American Health Insurance Plans in Washington, D.C.
* Dr. Quentin Young, Longtime Obama Confidante and Physician to MLK, Criticizes Admin's Rejection of Single-Payer Healthcare *
While the Obama administration claims "all options are on the table" for healthcare reform, it's already rejected the solution favored by most Americans, including doctors: single-payer universal healthcare. We speak with Dr. Quentin Young, perhaps the most well-known single-payer advocate in America. He was the Rev. Martin Luther King's doctor when he lived in Chicago and a longtime friend and ally of Barack Obama. But he was noticeably not invited to Obama's White House healthcare summit last week.
Newt Gingrich is right: "It is European socialism transplanted to Washington." How else to describe an economy in which the government controls the entire financial center and is now supplying life support for the auto industry? That's on top of the existing socialist economy run by the military-industrial complex, which, thanks to George W. Bush, now absorbs upward of 60 percent of the non-entitlement federal budget.
Although we still have a way to go to catch up with the good parts of the European system, including universal healthcare, high-quality public education and decent working conditions, we do have a system that is now as socialist in budget size as Europe's. That part I get when I listen to the right-wingers on Fox News bemoaning the reversal of the Reagan Revolution. But what I don't understand is how in the world they can blame this startling turn of events on Barack Obama.
The vast majority of money allocated so far on President Obama's watch is an extension of Bush's banking bailout, which has committed trillions to failed Wall Street conglomerates. I certainly don't want to defend the bailout and personally think the banks and stockbrokers deserve to go belly up, but what does that mess have to do with Obama, who was in college when the Reagan Revolution launched the deregulation that allowed Wall Street to run wild?
Seven states posted unemployment rates larger than 10 percent in January, according to figures released Wednesday morning by the U.S. Bureau of Labor Statistics.
Michigan was saddled with the nation's highest jobless rate in January, 12.5 percent in statistics that were not seasonally adjusted. It had been the only state to rise above 10 percent during the previous month, December 2008.
Also topping the 10-percent mark in January were Rhode Island (11.4 percent unemployment), Oregon (10.9 percent), South Carolina (10.9 percent), California (10.6 percent), North Carolina (10.3 percent) and Nevada (10.2 percent).
Many of the biggest mortgage lenders in the U.S. have engaged in widespread, systematic schemes that ripped off hundreds of thousands of families seeking to buy a home, refinance or foreclose, according to lawsuits filed on behalf of consumers.
Scores of class-action lawsuits, from the 1990s and up to today, detail the illegal and questionable practices used by mortgage-lending companies that pushed millions into bad mortgages, then into bad refinancing loans and then into foreclosures with unfair fees.
The lawsuits have been filed by private attorneys and state attorneys general, and on behalf of NGOs.
By John F. Wasik, Bloomberg
March 11 (Bloomberg) -- It's time to stop kicking sand in the face of single-payer health care. It may be the strongest solution around to insure every American at a lower cost.
After decades of industry campaigns against this model -- dubbed by its critics as "socialized" medicine -- it's important to stop whining and evaluate the many economic benefits. Health care is a fundamental human right.
If President Barack Obama wants real change in American health care, he will have to get over the fear of even mentioning single-payer concepts. At his health-care summit last week, only the threat of a demonstration garnered late invitations for Oliver Fein and Congressman John Conyers, two leading proponents of the single-payer plan.
As the health insurance corporation lobbyists met in DC yesterday, doctors, nurses, and would-be patients protested outside, some of them for a mishmash of vague reform, most of them, including Congressman Eric Massa and the people in this video for single-payer healthcare, HR 676:
Of course the likely best outcome of a principled push for single-payer, the only solution with much chance of actually working, will be the inclusion of a public option in a hybrid reform bill. Moveon.org is, of course, going to promote whatever the president wants, but has produced the following advertisement that at least pretends to have complete confidence that a substantial public option will be part of it:
An auction of foreclosed homes in New York City on Sunday drew protesters who blamed banks for an epidemic of home losses and called for a moratorium on evictions and foreclosures.
Two dozen people marched outside a Manhattan convention center where Real Estate Disposition Corp was auctioning off several hundred foreclosed homes, chanting and carrying signs reading "Banks get bailed out, people get thrown out."
The group, Bail Out the People, plans to stage a major demonstration on Wall Street on April 3.
The International Monetary Fund warned on Tuesday that the world economy will likely contract this year in a "Great Recession" and African leaders said the financial crisis could undo hard-won social-economic gains.
"The IMF expects global growth to slow below zero this year, the worst performance in most of our lifetimes," IMF Managing Director Dominique Strauss-Kahn told African political and financial leaders in the Tanzanian capital.
"Continued deleveraging by world financial institutions, combined with a collapse in consumer and business confidence is depressing domestic demand across the globe, while world trade is falling at an alarming rate and commodity prices have tumbled," Strauss-Kahn added.
By Dave Lindorff
A few days ago, I sent off an article I had just written on assignment to the editor of a magazine which was preparing to run it. A few moments later, I got an email back: he had just been fired and the magazine was being shut down by the publisher. My story, for which I had expected to be paid $1500, was toast.
When I tried to write back a reply to the editor, I got a message saying that my email message was “undeliverable.”
I called the editor (who worked from home) on his cell phone and, still sounding shell-shocked, he informed me that immediately after notifying him, with no warning, that he was being axed, the publisher had eliminated his company email account and had blocked him from accessing the company’s server, thus effectively cutting him off from all the contacts he had developed over his years at the company.
By Jonathan Tasini
If you believe that a society cannot be truly democratic without a strong labor movement, and if you believe that the only way to build a fair economy is by making sure people can belong to unions, then, this is where a line must be drawn: Democratic Senators who block or undercut the Employee Free Choice Act should face well-funded primary challenges.
Today, Tom Harkin (D-IA), a member of the Senate Health, Education, Labor and Pensions Committee, and George Miller (D-CA), the chairman of the House Education and Labor Committee, will announce that they are introducing EFCA. There is no doubt that EFCA will pass the Congress and reach the president's desk. The question, in my mind, is: what will the bill say? Will it bear any resemblance to the version Miller and Harkin are introducing? Or will it be watered down? And that's where the primary threat comes in (by the way, I will be on CNBC today at 11:30 a.m. to discuss EFCA).
On CNN today I saw a report on the new phenomenon of tent cities, but the reporter later mentioned that a whole 10% of the people in the tent city in Sacramento were newly homeless. Then they interviewed one of the newly homeless who was careful to distinguish himself from the kind of people who are homeless by choice. Why no mention of the other 90% of the people there? Why no reporting on how they got there? And why has there been no reporting over the years?
Here's a newspaper article that follows the CNN approach:
'Tent cities' of homeless on the rise across the US
Homeless encampments dubbed "tent cities" are springing up across the US, partly in response to soaring numbers of home repossessions, the credit crunch and rising unemployment, according to a report.
An AIG report to the Treasury Department last month warned that if the government didn't come to its rescue again, its collapse would trigger a "chain reaction of enormous proportion" that would "potentially bankrupt or bring down the entire system" and make it impossible for AIG to repay the billions it already owed the U.S. government.
Four days later, AIG was given $30 billion in federal aid on top of the $130 billion it had already received.
Too big to fail? 5 biggest banks are 'dead men walking'
By By Greg Gordon and Kevin G. Hall | McClatchy
America's five largest banks, which already have received $145 billion in taxpayer bailout dollars, still face potentially catastrophic losses from exotic investments if economic conditions substantially worsen, their latest financial reports show.
Citibank, Bank of America , HSBC Bank USA , Wells Fargo Bank and J.P. Morgan Chase reported that their "current" net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31 . Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.
According to a report on home foreclosure issued Mar. 6, 2009 by the Congressional Oversight Panel charged with monitoring the use of bailout funds, the rate of home foreclosure is now three times its historic rate — "so large that it threatens the entire economy."
Panel chairwoman Elizabeth Warren joins Fresh Air to discuss the foreclosure problem — and what can be done about it.
The Congressional Oversight Panel was created in October 2008 to oversee the $700 billion Troubled Asset Relief Program (TARP). Warren was appointed chairwoman in the panel's first meeting. In December 2008, Warren criticized the bailout program for lacking a clear direction or approach.
A century and a half ago it was at the centre of the Californian gold rush, with hopeful prospectors pitching their tents along the banks of the American River.
Today, tents are once again springing up in the city of Sacramento. But this time it is for people with no hope and no prospects.
With America's economy in freefall and its housing market in crisis, California's state capital has become home to a tented city for the dispossessed.
The revised and upgraded unemployment figures released on Friday were nothing short of staggering: almost two million jobs lost in the past three months as the official unemployment rate rose to a quarter-century high of 8.1%. Nearly three million Americans are now officially unemployed for six months or more, while another 8.6 million are "working part time because they cannot find full-time employment." Just the previous day, the government released figures showing, not surprisingly, that food stamp recipients had also soared by another 700,000 in February -- 651,000 jobs had been lost that same month -- to a record total of 31.8 million.
While the nation’s economy flounders, business is booming for The GEO Group Inc., a private prison firm that is paid millions by the U.S. government to detain undocumented immigrants and other federal inmates. In the last year and a half, GEO announced plans to add a total of at least 3,925 new beds to immigration lockups in five locations. The Immigration and Customs Enforcement (ICE) agency and the U.S. Marshals Service, which hire the company, will fill the beds with inmates awaiting court and deportation proceedings.
What can $5 billion buy in Washington?
Quite a lot.
Over the 1998-2008 period, the financial sector spent more than $5 billion on U.S. federal campaign contributions and lobbying expenditures.
This extraordinary investment paid off fabulously. Congress and executive agencies rolled back long-standing regulatory restraints, refused to impose new regulations on rapidly evolving and mushrooming areas of finance, and shunned calls to enforce rules still in place.
Does anybody in the federal government know or could know “who, what, where and when” of the massive, complex, vertical, horizontal, global collapse of Wall Street and its planetary tentacles in over 100 countries abroad? Step forward if you exist! Uncle Sam needs you!
Is the multi-million dollar bailout of this financial mess and house of cards, this phantom wealth mummy hitting air beyond the federal governments’ salvage capability?
It is relatively easy to announce hundreds of billions of dollars of corporate rescue programs here and hundreds of billions of dollars of guarantees of corporate recklessness there and trillions of dollars of assorted stimulus, loan availabilities and foreclosure prevention initiatives in all directions. Now comes the rubber hitting the road.
A top UBS official told a Senate hearing on tax havens that the Swiss bank, which has been subpoenaed to turn over information on as many as 52,000 U.S. account holders, would not turn over the identities of possible U.S. tax cheats.
"UBS cannot disclose information to the IRS that would put its employees at serious risk of criminal prosecution under Swiss law," said Mark Branson, UBS' chief financial officer of wealth management.
"Because Swiss law prohibits UBS from producing responsive information located in Switzerland ... we believe that UBS has now complied with the summons to the fullest extent possible without subjecting its employees to criminal prosecution in Switzerland." Branson said.
Treasury Refuses to Identify Banks Taking $2.2 Trillion Taxpayer Bailout Bucks
Fed Refuses to Release Bank Data, Insists on Secrecy
By Mark Pittman and Craig Torres | Bloomberg