Bailouts

For general discussion and debate. Possible talking point: Here's change you can believe in!

The number of people in the U.S. who are in poverty is on track for a record increase on President Barack Obama's watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty.

Census figures for 2009 - the recession-ravaged first year of the Democrat's presidency - are to be released in the coming week, and demographers expect grim findings. [...]

The anticipated poverty rate increase - from 13.2 percent to about 15 percent - would be another blow to Democrats struggling to persuade voters to keep them in power. [...] (more stats follow)

CNN's Rick Sanchez took a very strong position about a White House promise on Monday only to have to backtrack and admit he was wrong 45 minutes later.

During Monday's "Rick's List," Sanchez challenged Republican National Committee communications director Doug Heye about his claim that the Obama administration said the unemployment rate wouldn't exceed eight percent if Congress enacted the President's stimulus bill.

"Doug, who made that promise?" asked a defiant Sanchez. "I never recall hearing the President of the United -- in fact, I recall the very first speech the President of the United States made after being sworn in and the very first thing he said to Americans was, expect unemployment to go into double digits."

The CNN host arrogantly continued, "I don't think you're right. Prove me wrong."

About 45 minutes later, Sanchez marvelously proved himself wrong (videos follow with transcripts and commentary):

Erin Burnett, one of CNBC's famed "money honeys," exaggerated the relative strength of the economy Sunday in order to boost the success of President Obama's stimulus plan.

Appearing on NBC's "Meet the Press," Burnett several times characterized this economic recovery as not only far stronger than any of the indicators suggest, but also "faster" than those in the recent past.

"Our recovery started more quickly than after any other recession in the past 25 years," the CNBCer told David Gregory and his panel.

Burnett later elaborated on this preposterous claim as fellow panelist Rich Lowry of the National Review shook his head on screen (video follows with transcript and commentary):

National Review's Rich Lowry on Sunday had a classic debate with Washington Post columnist E.J. Dionne about whether or not the tax cuts implemented by former President George W. Bush should be allowed to expire.

Dionne agrees with President Obama that they should only be extended for folks making less than $250,000 a year; Lowry thinks that raising anyone's taxes right now could send the country back into recession.

With this in mind, NBC's David Gregory opened the panel segment of "Meet the Press" with a discussion about the current state of the economy and how this issue might impact the upcoming midterm elections.

As he tossed the baton to Lowry and Dionne, one got the feeling Gregory was intentionally lighting a fuse he knew would result in some entertaining fireworks (videos follow with transcripts and commentary): 

New York Times columnist Tom Friedman on Sunday accused Barack Obama of badly misreading his Election Day mandate, and said the current White House is the worst communicating administration he's ever seen.

Appearing on the Roundtable segment of ABC's "This Week," Friedman blasted the President saying, "I'm for more health care. I'm glad we've extended it to more Americans. But the fact is there's a real, I think, argument for the case that Obama completely over-read his mandate when he came in."

Friedman continued, "He was elected to get rid of one man's job, George Bush, and get the rest of us jobs. I think that was the core thing, and by starting with health care and not making his first year the year of innovation, expanding the economy and expanding jobs, you know, I think looking back, that was a political mistake."

Moments later, the Times columnist said, "I've never seen a worse communicating administration" (video follows with partial transcript and commentary):

Can you imagine what would happen to the economy if top wage earners were taxed at 70 to 90 percent?

Former Clinton Labor Secretary Robert Reich can, and he thinks it's a great idea.

To be sure, many Americans were concerned that giving Democrats control of the executive and legislative branches of our government during an economic crisis could usher back in socialist tendencies first seen in this nation during the Depression.

Fears of such a leftward shift sparked a new powerful movement called the Tea Party.

With this in mind, Reich's op-ed "How to End the Great Recession" published in Friday's New York Times validates these concerns: 

Despite unemployment at 9.5 percent and millions of people having lost their jobs since Barack Obama was elected, Chris Matthews just doesn't understand why anyone would miss George W. Bush.

Without naming this week's PPP poll finding Ohioans would vote for Bush over Obama by the tally of 50 to 42 percent if a presidential election was held today, Matthews in the first segment of "Hardball" asked his guests, "Why would you want that back?"

When Time's Michael Scherer tried to explain logically why voters are disappointed with what Obama has done since Inauguration Day, Matthews wasn't having any of it (video follows with transcript and commentary):

The news out of Government/General Motors during the past couple of days hasn't been particularly good.

First, August sales results were disappointing. Second, it become known today that GM will attempt to go public on November 18, a later than originally hoped post-election date chosen to hopefully allow for another reported quarterly profit to boost investors' appetite for its shares.

As so often has been the case during Democratic administrations when unfavorable developments arise, the UK press has seen potential problems with the IPO, while the Associated Press has been acting as if all is well.

In two separate items, AP reporters couldn't even bring themselves to tell readers what the company's real August sales decline was.

In a report yesterday on the industry's awful August, reporters Dee-Ann Durbin and Tom Krisher were appropriately gloomy overall, but they massaged GM's reported result (bolds are mine throughout this post):

An amazing thing happened on the set of ABC's "This Week" Sunday: a liberal tried to extol the benefits of President Obama's unrestrained federal spending only to get completely smacked down by the entire panel.

Host Christiane Amanpour began the Roundtable segment of the program by showing some of last week's horrendous economic numbers, and opened the debate about what can be done to improve the current condition.

When Democrat strategist Donna Brazile got her turn at the plate, she uttered the same nonsense Americans have been hearing from her ilk for approaching two years: 

Congress is divided. They are afraid to put more money back into the system, although most Americans should know by now that the stimulus did create or save 2 million to 4 million jobs, averted the Great Depression 2.0, but Congress doesn't have the appetite to put more money into the system.

The other panelists - George Will, President of the Council on Foreign Relations Richard Haass, "Nightly Business Report" host Susie Gharib, and even Amanpour - weren't buying it (video follows with transcript and commentary): 

On the same day the Commerce Department dramatically revised down second quarter Gross Domestic Product estimates, New York Times columnist David Brooks published a stinging rebuke of Obama economic policies.

"The American stimulus package was supposed to create a 'summer of recovery,' according to Obama administration officials," wrote Brooks.

"Job growth was supposed to be surging at up to 500,000 a month," he continued. "Instead, the U.S. economy is scuffling along."

Scuffling is putting it mildly, for it was announced Friday that the GDP only grew by a pathetic 1.6 percent last quarter which was down from previous estimates of 2.4 percent.

With this in mind, Brooks' column was not only spot on, but a surprising indictment of everything the Obama administration has done since Inauguration Day:

Sometimes you just have to chuckle at the transparent motivations of business writers in the establishment press.

Two Associated Press reports from this afternoon, one from Stephen Bernard and another much lengthier piece from Jeannine Aversa, attempt to set the template for Friday morning's reportage: Despite all the bad news, including a serious downward revision to second-quarter economic growth, it's up to Big Ben Bernanke to calm everyone down, and magically return the economy to some kind of even keel.

No pressure there, big guy.

Aversa's earlier report lays it on especially thick:

Bernanke's top tool now may be power of persuasion

July's bad news in new home sales is even worse than it first appears.

The seasonally adjusted annual rate of 276,000 units is bad enough. That is an all-time low since records have been kept and 12% lower than June's annual rate. It's also lower than what analysts predicted by about the same percentage. The lazy business press is running with those figures.

But, as has been the case so many other times, it takes a trip to the raw (i.e., not seasonally adjusted) data, this time at the Census Bureau (large PDF), to fully comprehend the extent of the new-home market's collapse during this big, fat failed "Recovery Summer."

The raw data shows that 25,000 new homes were sold in the U.S. in July. That's not a typo, and it really is the figure for the entire country. Worse, that figure, the lowest July since records have been kept, is down by over one-third from July of last year, when the economy supposedly bottomed out, and by 42% from July 2008. I don't think you'll see those facts reported today.

Here is a graphic cap of a 10:07 a.m. report at Reuters carried at CNBC.com. It contains a jaw-dropper of a quote from an economist (red box is obviously mine):

The theater of the Sherrods continues.

Earlier today, Shirley Sherrod, who, according to the current version of ruling class wisdom, was prematurely evacuated from the USDA by Director Tom Vilsack, decided not to accept an offer to return to the agency.

Instead, according to Politico's Matt Negrin, "she hasn’t accepted the department’s offer to work there again, but that she wants 'some type of relationship' with it later." We wouldn't closure or anything, would we?

Five weeks or so have intervened since Andrew Breitbart posted a video excerpt of Sherrod's speech at an NAACP event. (It should be noted USAactionnews.com actually posted the video earlier; though their link has been taken down, their original July 15 tweet is here.)

In that time, the establishment press has either seriously downplayed or totally ignored the several important items relating to the background and outlook of Ms. Sherrod and her husband Charles.

David Gregory on Sunday finally got an answer to his question about extending the Bush tax cuts, but it certainly wasn't what he was expecting.

For those that have been watching "Meet the Press" this month, the host has been grilling his conservative guests about this issue ever since former Federal Reserve Chairman Alan Greenspan told him on August 1 that tax cuts don't pay for themselves.

Having badgered Senate Minority Leader Mitch McConnell (R-Ky.) about this earlier in the program with no success, Gregory broached the subject with former House Majority Leader Dick Armey in a subsequent segment.

With a hanging curveball coming into his wheelhouse, Armey whacked a long drive that still hasn't landed (video follows with transcript and commentary):

George Will on Sunday gave Robert Reich a much-needed history lesson about deficit spending and liberal myths concerning Franklin Delano Roosevelt and Herbert Hoover.

As the Roundtable segment on ABC's "This Week" moved to the current state of the economy, Reich predictably called for another stimulus package. 

"You can't even talk about stimulus because people say, 'Oh, that would create a deficit and that would generate inflation,'" declared one of the Left's favorite economists.

Fortunately for those actually interested in facts, Will was there to offer viewers the truth (video follows with partial transcript and commentary):  

For general discussion and debate. Possible talking point: America is becoming the Soviet Union!

Is he right? 

Here's how the Associated Press's Martin Crutsinger and Daniel Wagner reported the housing portion of their Tuesday report on the day's economic news ("Factories aid bumpy recovery, housing still weak"):

Single-family home construction, which represented nearly 80 percent of the market, fell 4.2 percent. And requests for building permits, considered a good sign of future activity, slid 3.1 percent.

... The July increase in housing construction pushed total activity to a seasonally adjusted annual rate of 546,000 units. Building activity in June was weaker than first reported. It fell 8.7 percent to an annual rate of 537,000 units, the slowest pace since October of last year.

"The bad news is that activity is likely to remain depressed for several years," said Paul Ashworth, senior U.S. economist at Capital Economics. "The good news, however, is that housing is so depressed it is hard to see activity falling much further from such a severely depressed level."

Well, okay, but the situation is already closer to a zero-out than it is to the levels we were seeing just a few years ago--or any time in the 50-plus years such records have been kept. Looking at the raw data on a historical basis, one finds that July 2010 was the worst July on record for the both stats the AP pair cited:

Are even the most liberal media members starting to realize the administration's "Recovery Summer" campaign was a complete joke?

Such appears to be the case for New York Times columnist Bob Herbert who on Saturday published a piece absolutely excoriating President Obama for not exclusively focusing on jobs after his inauguration last year:

The Obama administration seems to be feeling sorry for itself. Robert Gibbs, the president's press secretary, is perturbed that Mr. Obama is not getting more hosannas from liberals. Spare me. The country is a mess. The economy is horrendous, and millions of American families are running out of ammunition in their fight against destitution. Steadily increasing numbers of middle-class families, who never thought they'd be seeking charity, have been showing up at food pantries.  

That was just the beginning:

A liberal Huffington Post contributor and board member of the website's Investigative Fund rained on Ed Schultz's GM success story victory parade on Thursday.

After the MSNBC host crowed about the positive earnings report from the government-owned car company, he clearly expected that left-leaning guest Leo Hindery was going to join him in the celebration.

Quite to the contrary, the admittedly "progressive" Hindery, who has contributed almost $1.5 million to Democrats in the past ten years, quickly threw a heapin' helpin' of cold water on this party before it got started.

"I love being on this show. But I`m going to push back a little bit on your accolade for GM," he marvelously began. 

"There will be more jobs created in Mexico by the Big Three automobile manufacturers than will be created here in the United States" (video follows with transcript and commentary, pay particular attention to the smile being washed off Schultz's face):

Ed Schultz on Thursday blamed Republicans for all the unemployed people living in America today.

As he began the most recent installment of the "Ed Show" on MSNBC, the host said, "The Republican Party has been on a crusade against the middle class and the poor for the last 30 years. We're now seeing the wreckage of that race to the bottom line culture."

He disgracefully continued, "Today a government report showed weekly jobless claims at a five-month high. 484,000 new unemployment claims were filed in the week ending August 7th. And you know what folks, you can lay this right at the feet, right at the altar of the Republican Party."

Sadly, he wasn't close to done, claiming, "The people you see flooding the streets begging for help, begging for an opportunity are victims of the Republican agenda just to make sure that President Obama fails" (video follows with transcript and commentary): 

Unplanned but necessary "improvements," or induced corrections? I'll report; readers can decide.

My early afternoon post at my home blog dealt with Government/General Motors' profitability and CEO Ed Whitacre's "coincidental" step-down from his CEO position. That post originally noted two things that seemed problematic in the Associated Press's reporting about the company's plans for an initial public offering this year (the IPO is problematic thanks to Obamanomics, but that's not the topic here).

In the  AP's original report (since revised, which is why it's saved here at my web host for future reference, fair use and discussion purposes), reporters Tom Krisher and Dee-Ann Durbin, with assistance from Dan Strumpf, reported the following two items in supposedly relaying the results of a discussions with "Scott Sweet, senior managing partner of IPO Boutique in Tampa, Florida, which advises investors on IPOs," Whitacre, and unnamed government officials (bold is mine):

Comedian Jon Stewart on Wednesday joined the growing liberal chorus attacking Republicans for their concerns about rising taxes and exploding budget deficits.

The only thing different about the "Daily Show" host's approach was that he needed vulgarity to make his point.

Potentially even worse, Stewart in his opening segment Wednesday actually used CNN's Fareed Zakaria to support his view that letting the Bush tax cuts expire would be a good thing for the nation.

Ironically, that was the only thing remotely funny about this sketch (video follows with partial transcript and commentary, extreme vulgarity warning, see BMI's coverage as well):

Earlier today, NB's Lachlan Markey covered Bill O'Reilly's interview with the Fox Business Channel's Charles Gasparino.

In that interview, Gasparino confirmed what the New York Post reported in April of last year, namely that "GE Execs Encouraged CNBC Staff to Go Easy on Obama."

The suits at GE, including Chairman Jeff Inmelt, had a clear motivation for encouraging their reporters to lighten up, namely that "General Electric at the time was hoping to profit handsomely from policies that would benefit a few companies, including GE, at the expense of the majority of the economy"-- specifically cap and trade.

But speaking of motivation: What about former CNBCer Gasparino's?

The easy answer would be that sometime in the past two years he has seen the light and realizes his past reporting at CNBC was lacking in fairness and balance. Despite his move to Fox, there's reason to doubt that.

There are quite a few shaky assertions in Alan Zibel's Associated Press report yesterday about Freddie Mac's latest quarterly loss ($6 billion), its latest bailout installment request to the U.S. Treasury ($1.8 billion), and the cumulative taxpayer bailout amounts that have been paid out to Freddie Mac and big sister Fannie Mae thus far ($148.2 billion) -- too many to cover in a blog post.

So I'll concentrate on the howlers present in just a single paragraph near the end, wherein the AP reporter attempts to explain why the two formerly government-sponsored mortgage giants that are now government-bailout enterprises ran into the ditch. The verbiage pretty much states the meme that the establishment press seems to want the public to swallow about what went down, and who's to blame:

During the housing boom, Fannie and Freddie faced political pressure to expand homeownership and competitive pressure from Wall Street to back ever-riskier loans. When the market went bust, defaults and foreclosures piled up, and the government had to take them over.

As media make their case to the American people that the Bush tax cuts should expire, one of the strategies being employed is to claim that Republicans are refusing to "pay for" their extension.

A perfect example of this tactic was seen on Sunday's "Meet the Press" when host David Gregory badgered House Minority Leader John Boehner (R-Oh.) on this subject for over three minutes.

After playing a clip from the previous week's program when former Federal Reserve chairman Alan Greenspan said that he's against tax cuts "with borrowed money," Gregory proceeded to hammer his guest on this issue (video follows with transcript and commentary):

Despite unemployment sitting at 9.5 percent and over 3 million jobs lost since this President was inaugurated, Newsweek's Howard Fineman says the economic policies enacted by Barack Obama "were good ones and smart ones and saved the day."

Chatting with MSNBC's Keith Olbermann on Friday's "Countdown," Fineman was nicely set up by the shill asking the questions.

"Does anyone -- can anyone actually believe that the Democrats had then done nothing and had maintained that status quo that the current economic situation would be better instead of worse?"

With the ball positioned nicely on the tee, Fineman chunked a drive into the water on the left (video follows with transcript and commentary):

In what I believe is the first direct acknowledgment by the wire service of what so many have known for so long, the Associated Press's Tom Krisher wrote the following in an August 5 story about plans for an initial public offering by government-controlled General Motors (bolds are mine throughout this post):

Ever since the Obama administration gave the automaker a $50 billion dollar survival loan last year, many drivers have scorned the company and bought cars from rivals. Even though GM has cut costs, changed leadership, and reported its first quarterly profit since 2007, the resentment will linger as long as taxpayers have a 61 percent stake in the company.

Actually, the "resentment" goes back to December 2008, when the Bush administration bowed to pressure to use Troubled Asset Relief Program funds to "temporarily" loan a combined $13.4 billion to GM and Chrysler. Also, the total bailout dollars involved are at least $63 billion when GMAC is included, as it should be.

If you have relied exclusively on AP reports and its news feeds to subscribing publications since then, Krisher's assertion that "drivers have scorned the company" would more than likely be the first time you have seen an AP reporter record that observation.

Bad economic news just keeps piling up. Today, the news about jobless claims from the AP:

Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers.

The Labor Department said Thursday that new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.

Surprise!

And then, there's Gallup's small business indicator which would portend bad news in the next year:

George Will and Paul Krugman had another showdown about fiscal policy on Sunday, and the ABC contributor made it crystal clear to viewers that he doesn't agree with the perilously liberal New York Times columnist.

As the Roundtable segment of "This Week" moved to a discussion of whether more economic stimulus is needed versus deficit reduction, Krugman made his predictable request for the former.

After Will made a strong point about the economy being "unusually weak for a recovery after a severe downturn," he said one of the reasons is "the consumer in his native perversity has begun to save" rather than spend.

Krugman responded, "Just wanted to say, George, it's exactly what I would have done in describing it."

Will smartly countered, "Lest it be thought that Paul and I agree on something," and this is where the fun began (video follows with partial transcript and commentary): 

As President Obama travels to Michigan to visit General Motors and Chrysler assembly lines, the media assembly line continues mass-producing bias.

On July 30, both ABC and CBS ran stories on their websites promoting President Obama's trip to Michigan to "let you know the Detroit Big Three are in the black again." Both networks' stories claimed the "unpopular auto industry bailout has turned into an economic good-news story."

"Analysts say there is no doubt the bailout rescued these companies," ABC reported.

CBS ignored criticism of the bailouts, while ABC buried opposition from Sen. Bob Corker, R-Tenn., in the 27th paragraph after support from White House Press Secretary Robert Gibbs, Treasury Secretary Advisor Ron Bloom, and White House Council on Automotive and Community Workers head Ed Montgomery.