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America has embraced Lemon Socialism.
The federal government -- that is, you and I and every other taxpayer -- has taken ownership of giant home mortgagors Fannie and Freddie, which are by now basket cases. We've also put hundreds of millions into Wall Street banks, which are still flowing red ink and seem everyday to be in worse shape. We've bailed out the giant insurer AIG, which is failing. We've given GM and Chrysler the first installments of what are likely to turn into big bailouts. It's hard to find anyone who will place a big bet on the future of these two.
It gets worse. While Washington debates TARP II, the Federal Reserve Board continues to buy or guarantee or provide loans for a vast and growing pile of questionable financial and corporate assets, much of which are likely to be worth far less than the Fed has paid or guaranteed or accepted as collateral. We're talking big money here -- so far over $2.4 trillion. (The entire TARP -- parts I and II -- in combination with the proposed stimulus package come to just over $1.5 trillion.)
President Barack Obama will get a daily economic briefing, similar to the national security briefing he receives every morning.
White House spokesman Robert Gibbs on Thursday said Obama wants to know the most up-to-date-information as he and his top aides work on reviving the struggling economy. The new administration is facing skyrocketing home foreclosures and job layoffs, tightening credit and a weakening dollar.
Gibbs says economic adviser Lawrence Summers briefed Obama, Vice President Joe Biden, chief of staff Rahm Emanuel and other top advisers Thursday morning. He says that briefing and future closed-door meetings will help Obama make decisions about how to best move forward.
"I tend to think Obama is up to the task of repairing all the destruction brought about in a mere eight years by George Bush. But, as we always must ask, does he have the political will to do so?"
One wonders, looking at America after eight years of George W. Bush's destructive policies and actions, why anyone would want to go through the struggle to win the presidency. A quick survey of the United States among the world's nations should be enough to discourage anyone from wanting to wade through the cesspool of a presidential campaign only to find a congregation of crocodiles waiting at its end.
From its high point shortly after the 9/11 attacks, when the sympathy of the civilized world was with us, America's image around the world has been systematically shredded by Bush and his cabal of neocons, along with other assorted right-wing policymakers.
Below are excerpts from a letter Lawrence Summers, director-designate of the National Economic Council, sent to the leaders of the House and Senate about President-elect Barack Obama's reforms to the Troubled Asset Relief Program.
These are the changes that Barack Obama is committed to making happen. In particular, he will call for:
• Use our full arsenal of tools to get credit flowing again to families and businesses.
The Day the Earth Still Stood: What Will Obama Inherit? | TomGram
By Tom Engelhardt
Gazillions of Americans descended on Washington. The rest of us were watching on TV or checking out streaming video on our computers. No one was paying attention to anything else. Every pundit in sight was nattering away all day long, as they will tomorrow and, undoubtedly, the next day about whatever comes to mind until we get bored. And in the morning, when this post is still hanging around in your inbox, you'll be reading your newspaper on… well, you know… the same things: Obama's speech! So many inaugural balls! Etc., etc.
Pelosi Open to Prosecution of Bush Administration Officials
By Bill Sammon | Fox News
House Speaker Nancy Pelosi is receptive to the idea of prosecuting some Bush administration officials, while letting others who are accused of misdeeds leave office without prosecution, she told Chris Wallace in an interview on "FOX News Sunday."
"I think you look at each item and see what is a violation of the law and do we even have a right to ignore it," the California Democrat said. "And other things that are maybe time that is spent better looking to the future rather than to the past."
Report: Over 8 in 10 corporations have tax havens
Eighty-three of the nation's 100 largest corporations, including Citigroup, Bank of America and News Corp., had subsidiaries in offshore tax havens in 2007, and some of the companies received federal bailout funding, a government watchdog said Friday.
The Government Accountability Office released a report that said Bank of America Inc., Citigroup Inc. and Morgan Stanley all had more than 100 units in countries that maintain low or no taxes. The three financial institutions were included in the $700 billion financial bailout approved by Congress.
Insurance giant American International Group Inc., which has received about $150 billion in bailout money, had 18 subsidiaries. JPMorgan Chase & Co. had 50 units and Wells Fargo & Co. had 18; both financial institutions received government bailout money.
The PDA conference in DC picked up again this morning with a panel on healthcare not warfare, which is PDA's name for its state and national campaigns for single-payer health coverage.
PDA is doing superb work, and you can join a PDA Issue Organizing Team to advance any of the following issues:
End the War, Redirect Funding
Health Care for All
* Single Payer Health Care
* Reproductive Rights
* Economic Justice
Clean, Fair, Transparent Elections
* Clean Elections
Stop Global Warming
* Global Warming
You can simply sign up for information here.
You can fund these efforts here.
Floridians: Here's How You Can Help Avoid State Budget Cuts for Critical Services | Press Release
Deep budget cuts, totaling $2.8 billion dollars (YES, that is billion with a "B"), were enacted during the special meeting of the Florida legislature.
Without thoroughly considering the consequences to their actions, some short-sighted state leaders have proposed tapping the Lawton Chiles Endowment Fund in order to balance the budget. This is an unacceptable proposition because the Chiles Endowment provides critical funding for Pre-K Education, Medicaid Nursing Expenditures, Higher Education, Criminal and
Civil Justice services, Agencies for Persons with Disabilities and many, many more services Floridians desperately need now and for years to come.
In 2008, Florida's Governor Charlie Crist was given the power to use $354 million of the funds, and given an ounce (which was already a BIG mistake), the Governor now would like to take a pound...$600 million from the Chiles Fund.
Indiana State Senator Files Gold Money Bill | Press Release
State Senator Greg Walker of District 41, (R-Columbus), has officially filed a Bill that would allow Indiana to offer its citizens a choice of Gold (and Silver) coin or the Electronic equivalent in payable and receivable transactions with the state. This bold bill will finally bring Indiana back into conformance with the Constitution for the United States of America which states "No state shall...make any Thing but gold and silver Coin a Tender in Payment of Debts..." Article 1, Section 10.
The Indiana Honest Money Act will be voluntary for citizens, but mandatory for certain, specialized businesses and will allow Indiana to fund the Treasury with enough assets insuring that no current state funds will need to be earmarked. S.B. 453 is NOT a replacement for Federal Reserve Notes, but more of a competing, Constitutional currency and an insurance policy for our current, tenuous "money" system.
NATIONAL CALL-IN DAY Thursday, January 15
Call Congress to support HR 676 -- Single Payer Healthcare
United For Peace and Justice encourages you to join this nationwide Congressional call-in day. This is the second such call-in day, organized by the Leadership Conference for Guaranteed Healthcare-National Single Payer Coalition. The first call-in day on December 22 was a tremendous success, and thousands of calls were made. In fact, by 11:00 AM that morning, Senator Kennedy's office reported to have already received over 1,000 phone calls in support of HR 676 which calls for more than the Massachusetts-style healthcare reform.
Now is the time to expand this effort. Everyone is being asked to make their calls to the Washington, D.C. offices of the House of Representatives.
Even before word came on Tuesday that Citigroup might split into pieces to shore up its finances, an unpleasant message was moving through Congress and President-elect Barack Obama’s transition team: the banks need more taxpayer money.
In all likelihood, a lot more money.
Mr. Obama seems to know it; a week before his swearing-in, he is lobbying Congress to release the other half of the financial industry bailout fund. Democratic leaders in Congress seem to know it, too; they are urging their rank and file to act quickly to release the rescue money. And Ben S. Bernanke, the chairman of the Federal Reserve, certainly knows it.
By Dave Lindorff
Congress should do now what it should have done back in the fall: kill the Wall Street bailout program.
After wasting $350 billion on a program that was misrepresented from the outset, and investing hundreds of billions of dollars in failing financial institutions that it could have bought outright for less than it was investing in them (AIG was worth only a few billion dollars in total at the time that the government bailed the company out with an initial investment of $85 billion and Citicorp today is worth less than the $45 billion the government has invested in that failing firm), the Treasury Department, now acting at the direction not of the Bush administration and outgoing Treasurer Hank Paulson, but the Obama administration, is asking for the other half of the Troubled Assets Relief Fund (TARP).
Behind the debate over remaking U.S. financial policy will be a debate over who’s to blame. It’s crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion.
There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history—a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it’s crucial to get the history straight.
What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road—we had what engineers call a “system failure,” when not a single decision but a cascade of decisions produce a tragic result. Let’s look at five key moments.
By David Bacon, New America Media
OAKLAND, Calif. -- Twelve unions met in Washington, D.C., last week, and announced they're considering rejoining the two labor federations, the American Federation of Labor/Congress of Industrial Organizations (AFL-CIO) and Change to Win (CTW). The two had split apart five years ago.
The initiative came from the incoming Obama administration, which told union leaders it didn't relish the idea of dealing with competing union agendas.
Many progressive labor activists greeted the idea with a sigh of relief. "Dividing the labor movement was never a good idea to begin with," says Bill Fletcher, former education director for the AFL-CIO and now director of field services for the American Federation of Government Employees.
House Democrats Introduce Legislation To Expand Health Care Coverage to Millions of Children
WASHINGTON, DC —Today House Democratic leaders introduced legislation to expand the State Children’s Health Insurance Program, which provides health insurance currently for more than 7 million children. This legislation will protect coverage for those children and expand it to include an additional 4 million children who would otherwise be uninsured.
“As our nation moves deeper into a recession, millions of American families are joining the ranks of the uninsured,” said Energy and Commerce Health Subcommittee Chairman Pallone. “For the last two years, President Bush blocked our efforts to strengthen SCHIP, but change is coming to Washington. This week, the House should once again show its commitment to ensuring more Americans have access to affordable and quality health care by passing legislation that will reach 11 million American children.”
REASON 1: Treasury Says It Doesn't Need the Money
REASON 2: "New" Conditions Are Filled With Loopholes & Omissions
REASON 3: Congress Still Abdicating Its Oversight Responsibilities
REASON 4: Nobody Has Explained Why This Is the Best Way to Spend $350 Billion
By David Sirota
By CBS News
WASHINGTON, Jan. 12, 2009(CBS) When Congress passed the $700 billion dollar bailout, the whole idea was to buy failed mortgage assets.
But once the bill became law on October 3, Henry Paulson's Treasury Department moved quickly on an entirely different front: Give bailout money to select banks to help them buy competitors. It was largely under the public radar, with only anonymous government officials acknowledging the strategy, CBS News investigative correspondent Sharyl Attkisson reports.
During the hearing on Nov. 13, Sen. Chris Dodd, D-Conn., called it "confounding to me."
Rep. Dennis Kucinich, D-Ohio, said it "breaks with congressional intent."
But CBS News has learned the banking industry was clued-in from the start.
President Bush has presided over the weakest eight-year span for the U.S. economy in decades, according to an analysis of key data, and economists across the ideological spectrum increasingly view his two terms as a time of little progress on the nation's thorniest fiscal challenges.
The number of jobs in the nation increased by about 2 percent during Bush's tenure, the most tepid growth over any eight-year span since data collection began seven decades ago. Gross domestic product, a broad measure of economic output, grew at the slowest pace for a period of that length since the Truman administration. And Americans' incomes grew more slowly than in any presidency since the 1960s, other than that of Bush's father.
The $10 trillion hangover:
Paying the price for eight years of Bush
By Joseph E. Stiglitz and Linda J. Bilmes | Harper's Magazine
In a new article in Harper’s Magazine, Linda Bilmes and Joseph Stiglitz estimate that the cost of undoing the Bush administration’s economic choices, from the wars in Iraq and Afghanistan to the collapse of the financial system, soaring debt, and new commitments to interest payments and Medicare, all add up to over $10 trillion.
Senate Allies Fault Obama on Stimulus
By PETER BAKER and DAVID M. HERSZENHORN, NY Times
WASHINGTON — President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.
Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation’s energy infrastructure rather than cutting taxes.
Just hours earlier, Mr. Obama called for speedy passage of the stimulus measure, warning that the recession “could linger for years” if Congress did not pass his plan within weeks.
With the recession in full swing, U.S. employers shed 524,000 jobs in December, the government reported Friday, and a rapidly deteriorating economy promised more significant losses in the months ahead. December's job losses brought the total for 2008 to 2.6 million, spanning a recession that started 12 months ago.
The unemployment rate jumped to 7.2 percent in December from 6.8 percent in November and 5 percent last April, when the recession was four months old and just beginning to bite. More than 11 million Americans are now unemployed, and their growing ranks seem likely to put pressure on President-elect Barack Obama and Congress to act quickly on a stimulus package that mixes tax cuts and public spending.
Vice President Dick Cheney said Thursday that he sees no reason for President George W. Bush to pre-emptively pardon anyone at the CIA involved in harsh interrogations of suspected terrorists. "I don't have any reason to believe that anybody in the agency did anything illegal," he said.
In an interview with The Associated Press, Cheney also said that Bush has no need to apologize for not foreseeing the economic crisis.
"I don't think he needs to apologize. I think what he needed to do is take bold, aggressive action and he has," Cheney said. "I don't think anybody saw it coming."
By Dave Lindorff
The real cost of the Bush Administration’s trillion-dollar bailout of Wall Street is becoming painfully apparent as the incoming Obama administration attempts desperately to make a case for its own $800-billion economic stimulus package, while warning about “trillion dollar deficits as far as the eye can see.”
On its own merits, all other considerations aside, with the economy slipping into a sinkhole, President-elect Barack Obama’s call for $800 million in stimulus spending should be a slam dunk for Congress. The problem is, Congress already caved in a hurry and approved nearly that same amount--$700 billion—in a matter of days when Bush’s Treasury Secretary Hank Paulson and his Federal Reserve Board Chair Ben Bernanke said they needed the money to prevent a collapse of the financial industry, as the nation’s biggest banks, investment banks and insurance companies teetered on the brink of insolvency last fall.
Prof. Linda Bilmes: "So, in another words, we have amassed more debt over the past eight years than we have under all the previous forty-two presidents combined."
~Chip's Quip: "Hell of a job, Bush! How did our 'first MBA President' work out for us?" Remember when the Republicans were touting that as a presidential credential?
In a new article in Harper’s Magazine, Linda Bilmes and Joseph Stiglitz estimate that the cost of undoing the Bush administration’s economic choices, from the wars in Iraq and Afghanistan to the collapse of the financial system, soaring debt, and new commitments to interest payments and Medicare, all add up to over $10 trillion. Interview Transcript:
By Katrina vanden Heuvel, The Nation
Poverty is on the rise, record numbers of people are relying on food stamps and we've seen no relief for the foreclosure crisis. There are increasing rates of child abuse and domestic violence linked to this recession. State governments don't have financial resources to cope at the exact moment when those resources are most needed. Nineteen states and the District of Columbia have lowered Medicaid payments or eliminated people from eligibility. The senior economist of the International Monetary Fund recently warned of another Great Depression
We don't need a stimulus, we need a recovery. And that means investing $1 trillion over the next two years.