Wage Controls To Be Instituted

It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies. - Washington Examiner

Geithner really is not afraid to express his "planner" views on the economy.

"Don't Fear" - We Won't Barry!

LONDON – President Barack Obama is telling people worried about the economy not to "shortchange the future because of fear of the present."

Obama said Wednesday he feels the best advice he could give to people everywhere would be to say that "despite the current hardships, we are going to get through this." He said people should plan "sensibly" for the future, no matter how difficult times are presently.

The president told a London news conference that "fear is not the way to go." He also took issue with comparisons of the current economic turmoil with the Great Depression in the United States in the 1930s, saying "this is not what happened to our grandparents generation." - Yahoo! News

Plan sensibly. You heard the man.

Soros Profiting Off Economic Crisis

A hedge fund manager who predicted the global credit crunch has said the financial crisis has been 'stimulating' and the culmination of his life's work.

George Soros, who predicted the global financial crisis twice before, was one of the few people to anticipate and prepare for the current economic collapse.

Mr Soros said his prediction meant he was better able to brace his Quantum investment fund against the gloabal storm.

But other investors failed to take notice of his prediction and his decision to come out of retirement in 2007 to manage the fund made him $US2.9 billion. - Dailymail.co.uk

What a dick!

Rethinking NAFTA

The North American Free Trade Agreement (NAFTA) has created much controversy and rightfully so. As with all subjects, there are positives and negatives and two sides to every story. After careful research I have determined that I am vehemently against NAFTA and similar trade agreements. In the following pages, I will discuss the background, history, benefits, horror stories, and other information regarding NAFTA. Hopefully, by the end of this paper, you will share the same opinion as me.
It is true that NAFTA has created numerous positive effects for the United States and its NAFTA trading partners, Canada and Mexico. It seems the U.S. has profited the most. The individuals who benefit the most from this agreement are few, mainly the CEOs of major corporations.
NAFTA is a trading alliance between three North American countries: The United States, Canada, and Mexico. It was signed into law on December 8, 1993 and implemented on January 1, 1994 by U.S. President Bill Clinton, Canadian Prime Minister, Brian Mulroney, and Mexican President Carlos Salinas. Politicians were convinced that NAFTA would provide great prosperity for all countries involved, which it has. Promoters of the agreement coaxed politicians into enacting it by telling them it would support free trade, removing all restrictive tariffs. This would “encourage the international flow of goods and capital.” President Clinton, himself had trouble convincing members of Congress to pass the divisive piece of legislation. He claimed that the agreement would truthfully benefit all Americans and this helped the legislation gain the faith of many politicians.
Without a doubt, we can all agree, good or bad, NAFTA has had some severe effects on all three countries. Economists argue that in each country prices have dropped on numerous products. On the other hand, other economists and social critics would fire back that jobs have decreased in all three countries, especially the United States. Since, NAFTA’s conception, thousands of workers have lost their jobs because company’s plants have been shifted overseas. These include manufacturing and assembling industries. This has caused many American interest groups and labor unions to protest NAFTA. In fact, President Barack Obama often met with labor workers, promising in his campaign to reform or even eliminate NAFTA to secure jobs for the working class. I doubt this will occur, but it just goes to show that it is an important and valued opinion here in the United States. Some statistics show rise in U.S. deindustrialization. From 1993 to 2001, there was only a small increase in manufacturing jobs: 476,000. Then from 1994 to 2007, there was a decrease in net manufacturing employment by 3,654,000.
Perhaps, those who have suffered the worst from NAFTA are the impoverished civilians of Mexico, particularly the farmers. Some would argue against that citing Mexico’s poverty rates dropping with increases in income through lower prices for food and other products. However, this is not true for the entire country. There are still many poor citizens, whom have been negatively impacted by NAFTA. As I mentioned before the farmers experience the bottom of the barrel. When food prices were falling they could no longer compete with the cheap imports from U.S. agribusiness, essentially costing them their occupations and ability to grow crops, such as corn. Thus, most of the farmers are forced into migrating to the city to find new jobs.
Canadian companies, much like American and Mexican companies, profit from NAFTA, however they are extremely concerned over several environmental and agricultural issues. Many Canadians are opposed to the provision that if an item is sold just once as a commodity, the government cannot prevent its sale in the future. Mainly, Canadians are concerned with their lakes’ and rivers’ water; they fear obliteration of their ecosystem and water supply.
In conclusion, NAFTA has created both prosperity and controversy for all three countries involved, but in the end it has and still does cause too much harm to too many individuals. It robs the Mexican farmer of his crops, the occasional American worker of his job, and serves as a possible threat to Canada’s ecosystem. Hopefully, now hearing some new facts, you can formulate a more well-informed opinion on this ongoing issue.

China's Global Currency Proposal

BEIJING – China is calling for a new global currency to replace the dominant dollar, showing a growing assertiveness on revamping the world economy ahead of next week's London summit on the financial crisis.

The surprise proposal by Beijing's central bank governor reflects unease about its vast holdings of U.S. government bonds and adds to Chinese pressure to overhaul a global financial system dominated by the dollar and Western governments. Both the United States and the European Union brushed off the idea.

The world economic crisis shows the "inherent vulnerabilities and systemic risks in the existing international monetary system," Gov. Zhou Xiaochuan said in an essay released Monday by the bank. He recommended creating a currency made up a basket of global currencies and controlled by the International Monetary Fund and said it would help "to achieve the objective of safeguarding global economic and financial stability." - Yahoo! News

Timothy Geithner, Secretary of the Treasury, "said the U.S. is "open" to a headline-grabbing proposal by the governor of the China's central bank, which was widely reported as being a call for a new global currency to replace the dollar, but which Geithner described as more modest and "evolutionary." Source: Politico

Fifteen Fold Increase In Monetary Base

The fed is planning moves that would more than double its balance-sheet assets by September to $4.5 trillion from $1.9 trillion. Whether expressing approval or concern over the fed’s intentions, most commentators fail to understand the real magnitude of the projected expansion of the US monetary base because they don’t take into account the amount of dollars circulating abroad.

At least 70 percent of all US currency is held outside the country, and this means the US monetary base is considerably smaller than the fed’s overall balance sheet. Take, for example, the true US domestic money supply at the beginning of September 2008, before the fed started its quantitative easing. From the Federal Reserve’s website, we know that currency in circulation was 833 Billion. This translates as 583 Billion dollars circulating abroad (70 percent), and 250 Billion dollars circulating domestically (30 percent). Since the bank reserve balances held with Federal Reserve Banks were 12 billion, that gives us a 262 Billion domestic monetary base as of September 2008. Now compare that to the projected US domestic monetary base for September 2009 which is 3,818 billion (4,500 billion – 583 billion (dollars circulating abroad) – 99 billion (other fed liabilities not part of the money supply)). The fed’s planned balance sheet expansion results in a 15-fold increase in the base money supply.

262 Billion = US monetary base as of September 2008 (minus dollars held abroad)
3,818 Billion = projected US monetary base in September 2009 (minus dollars held abroad)

3,818 Billion / 262 Billion = 15-Fold Increase in US monetary base - Market Skeptics

End the Fed!

Obama Guarantees Better Days Ahead

LOS ANGELES – Buoyed by adoring crowds far from Washington's political wars, President Barack Obama guaranteed Americans on Thursday that the nation's economy will recover, though he asked them for patience.

Obama looked every bit the campaigner as he sometimes mocked his GOP critics, and sometimes asked people to forgive his shortcomings. In general, his demeanor and message were more upbeat than in recent days when public fury over executive bonuses dominated Congress.

"We will come out on the other side stronger and a more prosperous nation," he said, acknowledging the nation's economic crisis. "That I can guarantee you. I can't tell you how long it will take, what obstacles we'll face along the way, but I promise you this: There will be brighter days ahead." - Yahoo! News

Okay, but you have nothing to do with the economy. It's the Congress, stupid!

Tax The Rich

Economic Conditions Deteriorated

Reports from the twelve Federal Reserve Districts suggest that national economic conditions deteriorated further during the reporting period of January through late February. Ten of the twelve reports indicated weaker conditions or declines in economic activity; the exceptions were Philadelphia and Chicago, which reported that their regional economies "remained weak." The deterioration was broad based, with only a few sectors such as basic food production and pharmaceuticals appearing to be exceptions. Looking ahead, contacts from various Districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.

Consumer spending remained sluggish on net, although many Districts noted some improvement in January and February compared with a dismal holiday spending season. Travel and tourist activity fell noticeably in key destinations, as did activity for a wide range of nonfinancial services, with substantial job cuts noted in many instances. - Federal Reserve Board

End the Fed! Except not yet. I have a competition I have to go to taking place inside of the Boston building next week. So after that...End the Fed!

Survey Results: Jews Blamed For Fin. Crisis

Los Angeles - The stereotype of the money-grubbing Jew goes back a long way. Zacchaeus was a greedy little tax collector. Fagin was a hideous creature who forced orphans into his organized network of pickpockets. And Shylock, perhaps the most infamous Jewish moneylender of all? Well his avarice ran so deep that he demanded a "pound of flesh" from an indebted Venetian merchant.

Canonized in the Christian Bible and two classics of English literature, these characters reinforce prejudices that Jews have struggled against for centuries. This scapegoating has been particularly venomous during difficult economic times. And these are those times.

The Anti-Defamation League (ADL) reported Feb. 10 that a survey of 500 people in each of seven European countries – Austria, France, Hungary, Poland, Germany, Spain, and Britain – found that 40 percent felt Jews have too much power in business and nearly a third blamed Jews for the global financial crisis. - Christian Science Monitor

Just when you thought the world was better than that...

AIG To Receive More Aid

"CHARLOTTE, N.C. - Struggling insurer American International Group Inc. will receive up to $30 billion in additional federal assistance in the fourth government rescue of the company, a person familiar with the matter told The Associated Press on Sunday.

The new infusion is intended to prop up AIG — once the world's largest insurer — as it is expected to announce $60 billion in quarterly losses early Monday, the source said on the condition of anonymity because the discussions are still ongoing.

The company, which is considered too large to fail, previously received about $150 billion in loans from the government, which now has an 80 percent stake in the company." - MSNBC

Hate to say it, but...no company is too large to fail.

Ron Paul to Bernanke: "What Would It Take?"

Haha. Gotta love Ron at the end there when he says to Barney Rubble, "You used up some of my time, remember?"

$410 Billion Spending Bill Proposed

WASHINGTON (AP) -- House Democrats unveiled a $410 billion spending bill on Monday to keep the government running through the end of the fiscal year, setting up the second political struggle over federal funds in less than a month with Republicans.

The measure includes thousands of earmarks, the pet projects favored by lawmakers but often criticized by the public in opinion polls. There was no official total of the bill's earmarks, which accounted for at least $3.8 billion.

The legislation, which includes an increase of roughly 8 percent over spending in the last fiscal year, is expected to clear the House later in the week.

Democrats defended the spending increases, saying they were needed to make up for cuts enacted in recent years or proposed a year ago by then-President George W. Bush in health, education, energy and other programs. - Yahoo!

Earmarks? Look Obama lied.

Health Care and the Stimulus

From Newsmax.com

...According to Smith, the stimulus bill contains over $100 billion of temporary Medicaid money. In an unprecedented use of Medicaid, that money will go to provide medical coverage for 1.2 million unemployed workers. What happens to those people in two years, when most of the temporary federal funding ends, is a major question. It will eventually lead to huge budget shortfalls when the federal spigot shuts off.

“It’s going to be very serious,” Smith says. “The GAO, the watchdog agency that works for Congress, has already said the current Medicaid program is unsustainable, and that states for the current program have to either cut spending or raise taxes by 7.6 percent every year to stay in balance.”

After the federal money is gone, Smith says, states will have to either drop millions of people from the rolls or face massive shortfalls. That probably means they’ll soon be back at the federal trough pleading for more money.

How does that stimulate the economy???!!!

How to Understand Trillion Dollar Debt

Actually, the deficit is on track to hit $1.2 trillion this year, but what's $200 billion among friends?

Seriously, what is it? To the average person, a number that big probably doesn't mean much. At some point long before the hundred-billion-dollar mark, large numbers simply become figures on the page, well beyond human scale and intuitive understanding. And yet as discussion about the economy and the impressive numbers that come along with it continue to dominate the news, it may be more important than ever to try to understand. Is a $700 billion financial-industry bailout a lot? Is a $775 billion economic-stimulus package enough? (See the worst business deals of 2008.)

Unfortunately, our puny human brains aren't particularly up to the task. Go back thousands of years and think about the simpler times of human existence.

Interesting article. Check it out here: http://www.time.com/time/business/article/0,8599,1870699,00.html?xid=feed-yahoo-biztech

Fin. Institutions Not Affected by Salary Caps

Feb. 5 (Bloomberg) -- Executives at Goldman Sachs Group Inc., JPMorgan Chase & Co. and hundreds of financial institutions receiving federal aid aren’t likely to be affected by pay restrictions announced yesterday by President Barack Obama.

The rules, created in response to growing public anger about the record bonuses the financial industry doled out last year, will apply only to top executives at companies that need “exceptional” assistance in the future. The limits aren’t retroactive, meaning firms that have already taken government money won’t be subject to the restrictions unless they have to come back for more.

C'mon Barry, I thought we could trust you with this.

Inconvenient Debt

Faux News is Vrai News after this.

Andrew Lahde Is The Man

Ladhe is a former hedge fudge manager who profited off of the subprime mortgage crisis. He then wrote a good-bye letter (which would make Chris DeCarlo smile):

“I was in this game for the money,” Lahde wrote in the two-page missive, saying he would now focus on his personal portfolio of unspecified millions. “The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Bros. and all levels of our government.

"On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt.

"At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant -- marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers."

Congress Gets A Raise

A crumbling economy, more than 2 million constituents who have lost their jobs this year, and congressional demands of CEOs to work for free did not convince lawmakers to freeze their own pay.

Instead, they will get a $4,700 pay increase, amounting to an additional $2.5 million that taxpayers will spend on congressional salaries, and watchdog groups are not happy about it. “As lawmakers make a big show of forcing auto executives to accept just $1 a year in salary, they are quietly raiding the vault for their own personal gain,” said Daniel O’Connell, chairman of The Senior Citizens League (TSCL), a non-partisan group. “This money would be much better spent helping the millions of seniors who are living below the poverty line and struggling to keep their heat on this winter.”

“As lawmakers make a big show of forcing auto executives to accept just $1 a year in salary, they are quietly raiding the vault for their own personal gain,” said Daniel O’Connell, chairman of The Senior Citizens League (TSCL), a non-partisan group. “This money would be much better spent helping the millions of seniors who are living below the poverty line and struggling to keep their heat on this winter.” - TheHill.com

Not surprising.

Recession = Official

WASHINGTON — It's official: The USA is in a recession that started in December 2007.

The committee of economists responsible for determining the dates of business cycles said Monday that they met by conference call on Friday, Nov. 28 and "the committee determined that a peak in economic activity occurred in the U.S. economy in December 2007.

" The peak marks the end of the expansion that began in November 2001 and the beginning of a recession." - USA Today

There's no recession for the CEOs!