Free Markets, Free People
Apparently the “pay czar” is about to release a report that the Wall Street bonuses, paid by financial firms that had received bailout money, were largely “unmerited”.
With the financial system on the verge of collapse in late 2008, a group of troubled banks doled out more than $2 billion in bonuses and other payments to their highest earners. Now, the federal authority on banker pay says that nearly 80 percent of that sum was unmerited.
In a report to be released on Friday, Kenneth R. Feinberg, the Obama administration’s special master for executive compensation, is expected to name 17 financial companies that made questionable payouts totaling $1.58 billion immediately after accepting billions of dollars of taxpayer aid, according to two government officials with knowledge of his findings who requested anonymity because of the sensitivity of the report.
Of course, that is Mr. Feinberg’s opinion. However I don’t know his opinion about this, reported in March of this year:
Fannie Mae is due to pay retention bonuses of between $470,000 and $611,000 this year to some executives, despite enormous losses at the government-backed mortgage company. Fannie’s main rival, Freddie Mac, also plans to pay such bonuses but hasn’t yet provided details.
I know what my opinion is, but of course our government won’t talk about these two entities – both of which had a key, if not major role in the financial collapse. You see, if they investigated this with an eye toward actually figuring out how that collapse transpired, it would inevitably lead back to those two institutions and the Community Reinvestment Act. And that would lead to calls for “accountability”, a standard to which only generals and the “little people” are held. With government and politician’s popularity rating already below that of used car salesmen, they’d prefer to pretend it all happened on Wall Street.
Not that anyone should be particularly surprised by that.
This journolist stuff is fabulous. I guess EVERYBODY gets all tough and manly on message boards. #
The Senate just pulled the plug on including cap-and-trade, even on a limited basis (only utilities). Any energy bill will be a scaled back version not including climate change legislation.
Senate Democrats pulled the plug on climate legislation Thursday, pushing the issue off into an uncertain future ahead of midterm elections where President Barack Obama’s party is girding for a drubbing.
Rather than a long-awaited measure capping greenhouse gases — or even a more limited bill directed only at electric utilities — Senate Majority Leader Harry Reid (D-Nev.) will move forward next week on a bipartisan energy-only bill that responds to the Gulf of Mexico oil spill and contains other more popular energy items.
And, if the “drubbing” comes through – as it should – the possibility of that window opening again any time soon is poor.
But that doesn’t mean the Dems won’t at some point attempt it again – whether supported by the people or science.
I mean, look how many times they took a run at health care.
Yes, that’s what 128 Democrats in the House are sure will be the way to lower the deficit in coming years:
As both political parties worry about the growing federal deficit, an unlikely proposal is returning from last year’s divisive healthcare debate: the "public option."
Creating a major government health insurance program was roundly rejected last year, but 128 House Democrats are pushing to reconsider the idea, contending that it would hold down federal spending.
Anyone – what are Medicare and Medicaid? Well, yes, you’re right, they’re "government health insurance programs". And how solvent are they? Well, you’re right again – they’re not. Both have unpaid future liabilities in the tens of trillions of dollars.
So explain to me how, after these two "government health insurance programs" have been mismanaged to the point of impossible future liabilities, giving the government the rest of the population will, as CBO claims "save the government $68 billion between 2014 and 2020.
Yeah, see, I’m not on board with this idea at all – seems to me to be more smoke and mirrors. I’d love to the reasoning behind the CBO’s findings. Oh, wait, how about this:
The government’s administrative costs would be lower than private insurers’, proponents say, and it could pay hospitals and doctors less.
No, their admin costs are not "lower" and that’s been pointed out ad naseum for quite some time. They just passed the "doc fix" and there is no stomach (or spine) to cut doctor’s pay in the Congress and they risk all sorts of problems if they cut pay to hospitals.
So yes, I’m right – smoke and mirrors.
Let’s see how they play this hand of vapor as Democrats try again – before the window closes for good – to move us another step closer to single payer with nothing more than hot air promises as a basis for their arguments.
Of course you an find “experts” who will point to each and say that’s our future. USA Today has a list of them in an article which explores the title question. It appears most believe it will be the latter – a slow recovery. But some are worried about signs that the present situation compares very closely with the 1930s.
And, in many ways it does. We continue to see weakness everywhere. And it appears until we get the housing market squared away (housing starts down 5% this month) and some other areas cleaned up, plus get some hiring going on, it is going to continue to be rough out there.
Jobs continue to be key to the recovery (we are a consumer driven economy – no job, no money. No money, no consumption) so the faster we can employ the jobless, the faster we see the recovery take off. However, that’s a huge undertaking:
The national unemployment rate stands at 9.5%, or more than 14 million Americans, says the Department of Labor, far below the peak unemployment rate of 25% during the Great Depression. But those numbers don’t fully convey the jobs weakness. Another 8.6 million people are working part time because they can’t get full-time jobs. And 3.8 million, discouraged by the dearth of job opportunities, are out of work but were not counted as unemployed.
So while not at 25%, we’re most likely somewhere in the 14% range in real terms (not the politically motivated U3 of 9.5%).
"If you’re not making money, it’s pretty hard to spend it," or pay bills, Johnson says. "There’s no fuel in the economic engine to make it grow. People are spending less and saving more."
This, of course, is where the impetus comes from to claim if the people can’t spend, the government should. We’ve seen, first hand, how that’s worked out – unemployment went up and stayed up. And “more” wouldn’t have made any difference as is now being argued.
The answer isn’t government spending – not in a consumer driven economy. No, the way you help solve this problem, if you’re government, is to incentivize business expansion and thereby hiring to drive consumer spending. Instead, the policies of this administration, at least to this point, have businesses on the sidelines sitting on both their hands and their money.
Further crimping the outlook for future growth is the fact that cash-rich U.S. companies, despite improving profitability, are still leery of the recovery and are reluctant to deploy that money to grow or hire new workers.
"Companies have pared their expenses dramatically, upgraded their technology, improved their profit margins," Johnson says. "But they are not hiring more people, because they would have to see greater demand to do so."
Once again, the government can’t create that “greater demand” via “stimulus”. That demand has to come from consumers. Those are the customers businesses rely on to generate demand, and with about 14% in the unemployment/underemployment mix, that demand simply isn’t there – or, at least, not enough to expand and hire.
Catch 22? In a way. So what can government do?
Cut business taxes. Get out of the way. Provide incentives to expand and hire (accelerate capital equipment depreciation for instance, if bought now).
There are lots of ways short of spending us into oblivion that the government can positively effect the market and the business climate. Unfortunately, as Mort Zuckerman has stated and the business community as a whole believe, we have an “anti-business” administration in charge right now – and that further unsettles the situation. Perception being reality, as long as the business community believe that, not much is going to change.
So, there’s your day’s sunny outlook on the economic front. As Donald Luskin says:
"The only way to get out of debt is to earn money," Luskin says. "The only way to get out of recession is to grow. If you kill growth, you are" in trouble.
And right now, we’re in trouble.
Not the usual fare for this blog, but what they heck. I recently signed up for Netflix. Having a PS3 – yes an old geezer like me likes gaming and the fact that it is a Blue Ray player – I can do instant selection and streaming via my PS3 or on my laptop.
I believe the price is $8.99 a month (they have various plans) for a “single disc”, but unlimited watching. They have a lot of content that I haven’t seen available via that method – especially TV shows sans commercials. Some I’ve seen, some I haven’t and some I’m enjoying viewing again (for instance all the Firefly episodes – why didn’t that series stick?).
Noticed this today from the Netflix CEO:
In terms of streaming content, we are rapidly expanding our TV shows available for streaming and since our last call we have added thousands of TV episodes from new deals with Fox, MTV Networks and Warner Television. These shows include all seasons of “24,” “Futurama,” “Lie To Me,” “The Chapelle Show,” “Nip/Tuck” and “Veronica Mars,” and in a few weeks all seasons of “The Family Guy” will be available to stream as well. We see TV shows as equally important to our franchise as movies.
And, there’s more:
As we evolve from DVD by mail into streaming, the role of exclusive content changes….At this point we can start to afford some major TV shows and movies on an exclusive basis, and plan going forward on a mix of more-expensive exclusive content and lower-cost non-exclusive content. Our willingness to license some higher-priced exclusive content will open up new licensing opportunities for us…[we] are looking for more exclusive deals, especially on TV shows, as well as non-exclusive content.
So with the percentage of their customers using the streaming media option, its just going to get better.
I just dropped HBO, Showtime and Starz (saving a lot of money) from Direct TV. I no longer have to look at their listings and then record what I want to watch. Now I just browse the Netflix selections and watch what I want. If you’re a PS3 owner they send you a “streaming disc” you have to use to watch on your TV (not necessary for your laptop). The interface works quite well. Yup, for $8.99 per month, a very satisfied customer.
All right – back to the dismal world of politics.
I'm just going from meeting to meeting today. Theoretically, that accomplishes something, I'm just not sure what. #
So much for "post-racial".
I’m sure you’ve been watching the goings on for the last few months – the race baiting, the Black Panther case – or lack thereof – the NAACP calling the Tea Party "racist" with little or no proof, the "journolist" appeal to call those on the right "racist" in order to blunt criticism of Obama and finally, the Shirley Sherrod case.
Essentially, both sides need to take a breath. But even with a breath, it is clear that there is nothing "post-racial" about the climate in this country. Ben Smith’s take:
The America of 2010 is dominated by racial images out of farce and parody, caricatures not seen since the glory days of Shaft. Fox News often stars a leather-clad New Black Panther, while MSNBC scours the tea party movement for racist elements, which one could probably find in any mass organization in America. Obama’s own, sole foray into the issue of race involved calling a police officer “stupid,” and regretting his own words. Conservative leaders and the NAACP, the venerable civil-rights group, recently engaged in a round of bitter name-calling that left both groups wounded and crying foul. Political correctness continues to reign in parts of the left, and now has a match in the belligerent grievance of conservatives demanding that hair-trigger allegations of racism be proven.
Yeah, heaven forbid that proof be demanded – in the past all it’s taken is yelling “racist” and the deed is done. Now suddenly, proof of the word is demanded? Outrageous.
But to the bigger point – if this is a ‘national conversation’ about race, I’d sure see it when we’re yelling at each other. The absurdity of all of this has gotten beyond amusing. It’s now destructive.
“I thought we were going to move beyond this,” said Abigail Thernstrom, a conservative historian of race and a Bush appointee to the U.S. Commission on Civil Rights, who called the current racial climate “a catastrophe.”
“There’s a kind of heightened racial consciousness that’s very worrisome. It’s not good for us, it’s not good for the very fabric of American society,” she said, objecting in particular to the claims of racism against the tea party movement.
Yup – I think there were a lot of us who hoped we were beyond this. But for some, racism and race is big business. Take Jesse Jackson. In fact take Jesse Jackson recently on the LeBron James kerfuffle. It was he who made the comparison to plantation owners and slaves. Nothing the owner of the Cleveland Cavaliers had said that remotely reminded anyone of someone talking about a “runaway slave” as Jackson portrayed it. But Jackson’s mind is focused on one area and one area only – everything is racial to him, even a business disagreement.
While there may be plenty to criticize in the way Dan Gilbert handled the situation and what he said about James, but to an impartial observer, it had nothing to do with race. It was a tantrum by an owner who felt this particular players hadn’t played up to his potential in the playoffs and blasted him. But “plantation owner” and “runaway slave”? Give me a freakin’ break.
One of the things I said would help sooth racial tensions was the passing of my parent’s generation – they may have been the “greatest generation” because of WWII, but there was a lot of bigotry within that generation as well (my parents being a very interesting exception). Now I’m of the opinion that a lot of this will begin to cool when the generation of race hustlers, like Jackson, and race baiters, like Al Sharpton, meet their reward.
It’s a pity really – this should be old news. We should be watching documentaries about this and shaking our heads sadly.
Instead, we have a new 21st century race war going on. And I believe much of the blame falls on the Obama administration and Holder’s DoJ.
Regardless though, it’s pitiful.
Cap-and-trade is on life support. Or so says Politico, and, frankly, the clock. With the August recess rapidly approaching and no bill yet on the floor of the Senate, it appears that the Senate won’t be passing an “Energy and Climate” bill this session.
That’s mostly because of the cap-and-trade provisions and the greenhouse emissions portion of the bill. Because of those provisions, the necessary Republican votes simply aren’t there. The bill, sponsored by John Kerry and Joe Lieberman, is scaled back from the original intent to have cap-and-trade apply to a broader sector of industry to only the energy industry.
As you might imagine, that industry isn’t at all pleased with the focus solely on them. Lieberman and Kerry haven’t yet convinced them to sign on to the bill nor have they found the sweetners which would entice them.
Meanwhile, apparently some of the Republicans in the Senate have made it clear that this rush through of major legislation shouldn’t happen:
“He’s waiting until we have, like, two or three days to tackle a subject that usually takes seven or eight weeks,” GOP Conference Chairman Lamar Alexander said of Reid. “That makes it very difficult.”
“Can I be very candid with you?” Sen. George Voinovich (R-Ohio) asked. “This whole thing is very cynical. Anybody who’s been in the Senate for any period of time knows there’s no way — no way — an energy bill can get done between now and the election or even now and the end of the year.”
The “he” referred too in the quote is, of course, Senate Majority leader Reid. And apparently – at least it seems so now – the “we’ve got to rush this through” ploy is not going to carry the day.
Some Senators think that Reid should take the cap-and-trade provisions out of the bill:
“If they’re serious about bringing it up next week, they’ve got to show it soon,” said Bill Wicker, spokesman for Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.). “You can’t release it late Friday and expect people to read it and be prepared to debate it on Monday.”
But of course, Reid and the Democrats have never really cared one whit about debate or, in fact, anyone having the chance to read anything. Witness the health care fiasco and even the financial regulation bill. Both over 2,500 pages and what passed for “debate” was a farce.
Lieberman still hopes that the Senate will deal with the bill – even in a lame duck session. Calling them “big and important issues regarding energy independence, pollution reduction, job creation”, he hopes the Senate won’t be constrained by some “artificial schedule.” But time doesn’t stand still for anyone and reality is reality. The possibility that this will pass this session isn’t at all good – and that’s good.
Says one source:
A former Senate Democratic aide said climate advocates need to start gearing up for 2011, which will require a big push from Obama, Democratic control of the House and support from Senate Republicans to have any chance of success. “The window is definitely almost shut, and if it closes without action in the next few weeks, a lot of advocates will need to take stock about when this could be realistically attempted again,” the former staffer said.
When can it realistically be attempted again? In it’s present form not until the Democrats again have an overwhelming majority in the Senate. And that, hopefully, won’t be for decades if at all.
In a version with cap-and-trade stripped out of it? My guess would be something heavily influenced by the GOP will pass in the next Congress (and that should be, relatively speaking, “a good thing”).
.@ewerickson on Sherrod: If the left gets a pass on race, the right has to fight back. | But fairly, not dishonestly. Or we're no better. #
I really want to know if Breitbart edited the Sherrod/NAACP video to make her look bad. If so, that's despicable. #
.@CMDeB: This is not helpful. Tea Party Scalds GOP Candidate in Va. | Not helpful to whom? GOP, or limited government principles? #