On Friday, Newsweek.com's Conventional Wisdom gave an approving up-arrow to Congress for brow-beating Detroit auto executives. The magazine lauded the Democratic Congress for having "rediscovered what oversight means."
The Washington Post is directing a December 8 plea to the incoming Obama administration. The Post wants to raise the federal gas tax so high that it will stop people from driving. The Post thinks this will serve our national security purposes and add more money to rebuild our nation's roads. Apparently, the Washington Post has the foolishly mistaken notion that federal gas tax receipts actually go where our Congress initially claimed it was going to go; our nation's roads. In fact, nearly half of the federal gas tax receipts goes to pork instead of roads and infrastructure.
But, despite the waste by government, here is the Washington Post trying to soak America's drivers even more by suggesting Congress raise the federal gas tax by 46 cents a gallon. The Post thinks that recently falling gas prices offers a "golden opportunity" for the government to emulate Europe and pile taxes high on each gallon purchased. The Post is obviously unaware that the US did not become the greatest nation on earth by emulating Europe!
Democrats, including president-elect Barack Obama and Senate Banking Committee Chairman Christopher Dodd, received more money in campaign contributions from Fannie Mae and Freddie Mac than any other members of Congress.
You couldn't tell that from an Associated Press article published Sunday which completely blamed Republicans for the lack of regulation and oversight of Freddie Mac.
"Talk about too big to fail," said managing editor of Time Richard Stengel on MSNBC's "Morning Joe" Dec. 4, who was on the program promoting the latest cover story for the magazine entitled, "The Case for Saving Detroit." Stengel:
"I find the fact that so many Americans are unsympathetic to Detroit to be kind of amazing," Stengel said:
We make the case that in fact the, you know, the Big Three have adapted in a lot of ways ... They haven't managed things well, they have too much capacity, but I mean, talk about being too big to fail in a way, right?
The fact is Americans don't understand what collateralized debt obligations are, yet they sort of said, ‘Okay, let's bailout all of these banks and AIG' and yet people feel like, ‘Hmm what about the big car manufacturers?
That was the warning from the mayor of Lansing, Mich., on CBS's "The Early Show" Dec. 2. "You know this is a sure prescription to go from recession to depression if you allow this auto industry, our manufacturing prowess, to fall by the wayside," Virg Bernero warned:
This industry is too important, not just to Lansing, Mich., but to the whole country. This is our manufacturing base. You know we were the arsenal of democracy. We've talked a lot about economic security, and that's number one, but what about national security? You know, we were the arsenal of democracy in World War II; it was the auto industry that helped turn us around. Can you imagine a country, I would ask, can you imagine America losing our manufacturing edge, not having that manufacturing prowess? That hurts our national security.
ABC correspondent Claire Shipman lauded President-Elect Barack Obama’s Treasury Secretary-Designate Tim Geithner on Tuesday’s Good Morning America: “It might not be immediately obvious, but insiders say the President-Elect and his pick for the top economic spot could have been separated at birth.” She later quoted The Economist’s line about the future top bureaucrat, that both Obama and Geithner “have a hipster, wonky cool about them,” and that both “like to relax by shooting hoops.” Shipman even played up the “hipster” label by stating how “[t]he new Treasury Secretary is also known to surf and skateboard.”
Shipman began her report by describing what Obama admired about Geithner, along with a personal anecdote about the federal bureaucrat: “Well, his smarts and his style -- that's what aides say appeal to Barack Obama, and here’s another clue about his character -- he’s an avid amateur photographer, and friends say that very much explains the way he likes to work. He likes to watch, observe, and then act.” She then gave her “separated at birth” line.
Later, the ABC correspondent played three clips of a close friend of Geithner, Professor Justin Rudelson of Dartmouth, who unsurprisingly spoke well of the Treasury Secretary-designate. Then, as Shipman gave some details about how Geithner “married his college sweetheart” and how “his father was his best man,” sweet piano music played in the background, as you might expect in a gushy biography.
The Associated Press can't even get it right in a three-paragraph item about a White House ceremonial event.
In a story Monday afternoon about President Bush's meeting with two Nobel Prize-winning scientists and Nobel Economics winner Paul Krugman, the unbylined AP writer claimed that Krugman opposed the government's financial bailout. Evidence abounds that this is not only not the case, but that Krugman wants the bailouts to be bigger, and to involve more direct government ownership.
Here are the first and third paragraphs from the story (link probably will not work after about a week):
Three 2008 Nobel laureates from the United States lined up with President George W. Bush on Monday for an Oval Office photograph to mark their achievements.
..... The third laureate at the White House was Paul Krugman of New York, who won the Nobel Memorial Prize in Economic Sciences for his work on international trade patterns. Krugman, a frequent critic of the Bush administration who opposed the recent $700 billion financial bailout, is a Princeton University professor and New York Times columnist.
Since Krugman's supposed opposition may become folklore shortly, it's best to take a cruise through Krugman's blog posts to show that the claim is terribly outdated and currently flat-out wrong:
Are the good folks at the New York Times breaking ranks and actually criticizing a decision by president-elect Barack Obama?
Such seemed to be the case Tuesday when the Gray Lady published, on the front page of the business section no less, an article highly critical of proposed Treasury Secretary Timothy Geithner.
Entitled "Where Was Geithner in Turmoil?", Andrew Ross Sorkin's piece actually pointed fingers at Obama's choice to head the Treasury department for his potential involvement in the nation's current financial crisis (emphasis added throughout):
During the presidential campaign, we constantly heard from Team Obama and the media (excuse the redundancy) was how Republican-inspired deregulation had let evil bankers and capitalists run roughshod over the economy and created the current credit mess.
Well, a lot of the deregulation was GOP-inspired, but that isn't what caused the situation that I like to refer to as The Great SUCKUP (The Seemingly Unlimited Cash Kitty Under Paulson).
What John Berlau has found at Reason Online is that the Clinton Administration loved 1990s financial deregulation so much that it cited it as a major accomplishment.
Neil Cavuto and Ben Stein had quite an argument about bailouts on FNC's "Cavuto on Business" Saturday morning that nicely covered the issues people on both sides of this contentious debate will likely be discussing around dinner tables this Thanksgiving, though hopefully with less screaming:
Though given a perfect opportunity to do so, Tom Brokaw on Sunday chose not to discuss the similarities between Franklin D. Roosevelt's refusal to work with President Herbert Hoover on solving the Depression before he was inaugurated in March 1933 and president-elect Barack Obama doing the same thing today with George W. Bush.
For those not familiar with the historical reference, the financial crisis at the time of the 1932 elections was so bad that banks were failing on almost a daily basis. As a result, Hoover felt the country couldn't wait until March when inaugurations used to take place to hear what Roosevelt's plan was to solve these problems, and wanted FDR and his economic team to come to the White House in order to work some things out together.
Sadly, Roosevelt refused, and although he claimed it was so that his hands wouldn't be tied once he officially became president, some historians feel FDR's delay was designed to allow the crisis to deepen so that it would become easier for him to get his policy proposals passed.
On Sunday's "Meet the Press," the fact that President Bush wants to work with Obama and his team concerning the financial crisis surfaced in discussion with former Reagan treasury secretary James Baker and former Clinton commerce secretary Bill Daley. Unfortunately, Brokaw chose not to address this seemingly-important historical comparison and precedent (video embedded below the fold, relevant section begins at 6:15, file photo):
Fox Business Network anchor Alexis Glick is frustrated by the way the government's $700 billion financial bailout is being used, and suggested on "Money for Breakfast" Nov. 21 that it was contributing to market declines.
"I mean, look, we are now at levels at least on the S&P that we haven't been since 1997. You know, people are pretty unhappy with how the TARP fund is going," Glick said in an interview with NYSE Euronex CEO Duncan Niederauer. "I mean, it's got to be - I'm frustrated, I mean I don't know about you."
It's not the first time that Glick has taken issue with the misuse of TARP, the Troubled Asset Relief Program (TARP).
Practically rubbing his hands in glee, Time magazine's Joe Klein exulted yesterday over Michigan Rep. John Dingell (D) losing out to the more liberal Rep. Henry Waxman (D-Calif.) for control of the powerful House Energy and Commerce Committee.
Apparently Klein is happy that under Waxman the committee will succeed in decreasing both domestic energy and commerce with fresh, strict regulations on America's automakers. From his Nov. 20 Swampland blog post at Time.com:
Remember the years of media flak President George W. Bush received for his alleged use for political gain of first the terrorist attacks of September 11, 2001 and then the related Afghanistan and Iraq Wars?
Will the press be as vociferous now? Incoming Obama Administration Chief of Staff Rahm Emanuel, speaking on Wednesday on and to the Wall Street Journal Digital Network, stated outright his desire to make political hay with the ongoing travails of the U.S. and global economy:
"You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before."
Wonder why President-elect Obama resigned from the Senate so early (while Vice President-elect Joe Biden remains an active member) and is hanging back, not wading into the debate over bailouts etc, and naming candidates for nearly every Cabinet post save Treasury (the man or woman who will have $350 billion to dispense when he/she walks through the door)?
"Well, we're not yet in anything remotely resembling the crisis, the scale of crisis of the Great Depression." When Franklin Roosevelt took office in 1933, 13 million Americans were unemployed. "That was 25 percent of the work force," Kennedy told Bloomberg host Tom Keene.
The professor laid out exactly what has changed since the troubled 1930s:
Earlier today, Christopher Booker at the UK Telegraph noted a "surreal scientific blunder," followed by an attempted cover-up, that should cause everyone to question the source's past and future credibility.
The source of the shoddy work is NASA's Goddard Institute for Space Studies (GISS), the outfit run by world champion globalarmist James Hansen. Hansen has in the past stated that "heads of major fossil-fuel companies who spread disinformation about global warming should be 'tried for high crimes against humanity and nature.'"
What Booker reports causes one to wonder what the appropriate punishment should be for committing drop-dead obvious errors and integrity-lacking follow-up.
Part of the punishment is surely the Telegraph's delicious headline, followed by Booker's criticism (bolds are mine):
In the name of gender equality, the Today show plumped this morning for government regulation forcing health care insurers to charge men and women the same for individual policies even though women cost insurers more because of greater use of services. Hasn't the financial crisis taught the MSM anything about the danger of government meddling in markets? No.
Insurers wind up paying out more in claims under women's policies than men's. Under the circumstances, charging women the same as men would make as much sense as FedEx charging a flat shipping fee no matter how big the box. But that didn't stop NBC medical editor Nancy Snyderman and Today weekend co-host Amy Robach from decrying the unfairness of it all this morning. Their solution? More government, of course. They want legislation to force insurers to charge the sexes the same.
So what exactly is the government doing with your money? Fox Business Network's Alexis Glick would like to know.
Treasury Secretary Henry Paulson announced Nov. 12 he would be redirecting the $700 billion bailout to focus on propping up financial institutions instead of buying troubled mortgage assets, which was the original intent of the rescue plan.
Glick, the host of FBN's "Money for Breakfast," told the CBS's "The Early Show" Nov 13 that the Treasury Department's move away from the original plan to buy up troubled mortgages "does not make sense" and was "actually pretty outrageous":
[T]he markets responded to that yesterday ... Look, the original intent of this Troubled Asset Relief Program was to purchase troubled assets. And I think the marketplace started to adjust several weeks ago when we started to see the size and magnitude of the capital injections.
It's not like Barack Obama is a socialist or anything. It's just that Thomas Friedman wants him to put a "government master" in charge of the country's biggest manufacturing sector. Friedman made his modest proposal in his New York Times column of today, and expanded on it during a Morning Joe appearance. [H/t reader Tom.]
British premier Gordon Brown, a former chancellor of the Exchequer -- analogous to the U.S. Secretary of the Treasury -- delivered a thinly-veiled entreaty to President-elect Barack Obama to eschew trade protectionism in a November 10 speech, reports Kevin Sullivan of the Washington Post Foreign Service. Post editors buried Sullivan's 18-paragraph article on page A15:
LONDON, Nov. 10 -- Prime Minister Gordon Brown on Monday warned that trade protectionism would worsen the global financial crisis, a remark widely perceived as aimed at U.S. President-elect Barack Obama.
In a speech lauding the "global power of nations working together," Brown called for "rejection of beggar-thy-neighbor protectionism that has been a feature in transforming past crises into deep recessions."
Obama's campaign rhetoric struck some allies as protectionist, particularly his calls for tax incentives to discourage companies from relocating jobs away from the United States.
A Financial Times reporter who endorsed Obama but worried about his economic policies has taken a fresh look at the President-elect's post-election economic policy ideas, and doesn't like some of the big ticket items he sees. [See related blog entry by Jeff Poor here]
In his November 10 op-ed "The choices that confront America," British journalist Clive Crook reserved some of his harshest criticism for Obama's openness to bailing out Detroit's floundering automakers (emphasis mine):
The greatest danger of all is that the valid case for a strong stimulus takes under its wing spending proposals that create an ongoing obligation, have no true investment rationale, and represent a waste of public money now and in the future.
The bail-out currently being sought by the big US carmakers falls squarely into this category. Managers and unions have conspired for years to drive US-owned, US-based car manufacturing into the ground. Now they seek public subsidy to pay for investments they should have undertaken in any case, and to sustain wages and benefits that comparably qualified workers in other industries cannot hope to enjoy.
Why a worker in a US-owned car factory deserves more generous treatment than any other kind of US worker escapes me. Asking those other workers to pay for these privileges seems to add insult to injury. Perhaps President Obama will be able to explain.
"I agree with you," economics reporter Louis Uchitelle said, also pointing out that it took two years before the government really "stepped in and acted" during the Depression - referring to Franklin Roosevelt's action.
Norris said one of the first lessons of the 1930s was that bailing banks out would "limit the damage of the financial crisis."
"If you go back just two or three years ago, you had this powerful argument that government was the problem.So there is emerging from this an understanding that markets and government are married whether they like it or not," Uchitelle said.
Who's going to be the leader of the financial world in the role of Treasury Secretary under President Obama? It may be Democratic New Jersey Gov. Jon Corzine, who has pushed for an additional economic stimulus package to the tune of $300 billion to support infrastructure projects.
CNBC's Carl Quintanilla asked Corzine outright on "Squawk Box" if he would accept a job in the Obama administration as Treasury Secretary. "If it's offered, governor, will you say no?" Quintanilla asked.
"Squawk Box" co-host Joe Kernan encouraged Corzine to consider accepting the job if offered, even as the former U.S. senator expressed his contentment as governor. "You could save the world" as Treasury Secretary, Kernan said.
As election results rolled in, the hosts on CNBC's election coverage speculated what a win by Democratic presidential nominee Sen. Barack Obama might mean.
CNBC "Kudlow & Company" host Larry Kudlow warned Obama shouldn't misinterpret the election results to unleash an attack on vital parts of the economy.
"My point is Obama can not go far to the left if he is winning states like Ohio and New Mexico and let's say Virginia and the others," Kudlow said. "In other words, these red states that are hotly contested are sending a message to Sen. Obama he must in fact govern as the moderate."
Reporter Clive Crook really likes Barack Obama and in a November 3 op-ed practically endorsed him for president. But, the Financial Times reporter worries, the Illinois senator has some loopy economic ideas.
Yes, your just read that correctly. A reporter for one of the Anglosphere's well-respected financial newspapers admits he'd vote for Obama were he an American citizen -- Crook is a subject of Her Majesty Queen Elizabeth II -- but he hopes his stump speech populism is all a vote-getting gimmick.
As you read this, imagine the clamor, if not outright outrage, if a conservative-leaning foreign journalist like say Mark Steyn endorsed McCain only to question his foreign policy prescriptions (emphases mine):
"Periods of crisis often beget bad policies," Lee E. Ohanian, an economist at the University of California, Los Angeles (UCLA) said in an interview with Reason.tv. The professor stressed that six weeks ago the fundamentals of the economy looked "pretty good," before bailout "rumors" caused "panic":
What I mean by fundamentals are the amount of factories and office buildings and capital equipment we have in place, there's no change in that. There is no change really in individuals' interest in working. We've got the same work force right now we had six weeks ago. Productivity is about the same as it was perhaps even higher. All those fundamentals of the economy are the same.
Ohanian said Gross Domestic Product growth over the last five to six quarters was "on average," and productivity growth was "very high"
Washington Post reporter Sholnn Freeman frontloaded his October 31 business section front page article, "Airfare Surcharges Stay Despite Oil Price Drop," not on examining the valid business reasons for why some airlines retain the fee but in citing a liberal politician seeking to grandstand the issue.:
When oil prices were rising rapidly, many financially-strapped airlines started adding special surcharges to ticket prices to cover the bill. So now that oil prices are falling, are the fees coming off? Not yet.
The lag is drawing complaints from air travelers, consumer watchdogs and a member of Congress. Sen. Robert Menendez (D-N.J.) is sending a letter to U.S. Transportation Secretary Mary E. Peters asking the department to investigate whether the charges "have any basis in reality or if they are being used to mislead travelers, reduce competition and increase fares."
It's obvious The Washington Post's "Style" section is broadening it horizons beyond fashion, music, books and other fluff, plus of course - Howard Kurtz's media column and the comics. The editors of that section are tackling important events that changed history by commemorating them as milestones.
Normally such attention is given to anniversaries that fall more under the definition of a landmark: the 25th, 50th, 75th, etc. But with the American public seeing the economy as the top issues in the presidential election - and the media tendency to compare current economic conditions to the Great Depression already well-established - the Post has deemed the 79th anniversary worthy of attention.
In 2004, economists at the University of California, Los Angeles (UCLA), studied the policies of President Franklin Roosevelt's New Deal and determined it actually prolonged the Depression by seven years.
Harold L. Cole and Lee E. Ohanian blamed anti-free market measures for the slow recovery in an article published in the August 2004 issue of the Journal of Political Economy.
Cole and Ohanian asserted that Roosevelt thought excessive business competition led to low prices and wages, adding to the severity of the Depression.
"[Roosevelt] came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies," Cole said in a press release dated Aug. 10, 2004.