The faces of financial disaster

If you don't know the faces pictured here, learn them. If any of them ever try to kiss your baby, punch him in the maw. Yet another way Talking Points Memo does the world a service. Thank you, Josh Marshall & Co.!



(TOH to my dad!)

Before you commit to "the bailout failed"...

See, I know that what bailout there has been has not ENDED the economic crisis, but to say "it failed" is not convincing. What would have happened had we NOT injected billions into the financial services industry? Check out this recollection from Rep. Paul Kanjorski about the initial purpose of the bailout. Fear mongering or fact?

Austan Goolsbee: FOUND

I don't know why I'm so enamored of Austan Goolsbee (aside from his sexy/geeky name). This wunderkind of the Obama campaign's economic advisors, I suspect Goolsbee of being a genius, and I was a little brokenhearted when his name didn't appear in the ranks of the new Obama administration.

But Goolsbee has been found. Per NPR via AP, Goolsbee will direct Obama's outside economic advisory board:

Obama Names Outside Economic Advisory Board

NPR.org, February 6, 2009 · Choosing from corporate boardrooms, labor unions and academia, President Obama named a team of outside economic advisers Friday that he says he will turn to for help in boosting the sagging U.S. economy.

As promised in November, the president signed an executive order that creates the Economic Recovery Advisory Board, headed by former Federal Reserve Chairman Paul Volcker.

Obama introduced members of the team at a White House ceremony Friday morning. Volcker will serve as chairman. Austan Goolsbee, one of three members of the president's Council of Economic Advisers, will be the group's staff director and chief economist.

Board members include:

William H. Donaldson, who served as SEC chairman from 2003 to 2005
Roger W. Ferguson, Jr., president and CEO of the TIAA-CREF retirement fund
Robert Wolf, chairman and CEO of the financial services firm UBS Group Americas
David F. Swensen, CIO of Yale University
Mark T. Gallogly, founder and managing partner of the investment advisory firm Centerbridge Partners LP
Penny Pritzker, chairman and founder of Pritzker Realty Group
Jeffrey R. Immelt, CEO of General Electric
John Doerr, a partner with the venture capital firm Kleiner, Perkins, Caufield & Byers
Jim Owens, chairman and CEO of the heavy equipment manufacturer Caterpillar Inc.
Monica C. Lozano, publisher and CEO of the Spanish-language newspaper La Opinion
Charles E. Phillips Jr., president of the computer software maker Oracle Corp.
Anna Burger, secretary-treasurer of the Service Employees International Union and chairwoman of the labor coalition Change to Win
Richard L. Trumka, secretary-treasurer of the labor organization AFL-CIO
Laura D'Andrea Tyson, who served as a key economic adviser to President Bill Clinton and is dean of the Haas School of Business at the University of California, Berkeley
Martin Feldstein, George F. Baker Professor of Economics at Harvard University

The announcement came as employers eliminated 598,000 jobs in January, the most since the end of 1974, and the unemployment rate soared to 7.6 percent.

In a statement, the White House said the board will offer independent advice in regular briefings to the president, vice president and their economic team.

The White House said the board's initial focus will be programs to "jump-start economic growth."

From NPR reports and The Associated Press

Do you want a middle-class tax cut?

If you know me (and I don't flatter myself: you probably only read this blog if you know me), then you are middle class, or even "working class" (read: the verbotten words "lower class").

Do you want a tax cut?

See, here's the thing: I would take a tax cut, but I don't need a tax cut. If the nation is in such dire financial straights, I'll give up my tax cut to ease the deficit and still spend money. After all, we have a steady income: I can still shop. And the tax cut wouldn't represent enough money for me to buy a new car or anything. It would amount to - what? - $100 a month? What are we talking about here?

The tax cut aspect of the Obama Administration's proposed economic stimulus package is pretty fuzzy - as all tax cut plans seem to be - and is steeped in politics from both sides of the aisle. Personally, I'm more interested in seeing significant infrastructure spending. I've been bitching about that forever. But Professor Krugman makes a good arguement in yesterday's Times:

...there’s a problem with a public-investment-only stimulus plan, namely timing. We need stimulus fast, and there’s a limited supply of “shovel-ready” projects that can be started soon enough to deliver an economic boost any time soon. You can bulk up stimulus through other forms of spending, mainly aid to Americans in distress — unemployment benefits, food stamps, etc.. And you can also provide aid to state and local governments so that they don’t have to cut spending — avoiding anti-stimulus is a fast way to achieve net stimulus. But everything I’ve heard says that even with all these things it’s hard to come up with enough spending to provide all the aid the economy needs in 2009.

What this says is that there’s a reasonable economic case for including a significant amount of tax cuts in the package, mainly in year one.

I don't know about that. Because we need as much economic stimulus as we can get, you think a middle class tax cut that will not be spent, but saved, is something we HAVE to do? I'm not convinced.

By the way, you are still OBLIGED to read Krugman as long as this financial crisis persists. If you haven't, DO IT.

Bush Admin's bait and switch

See this big shiny thing here?! Over here! The humongous $700 billion "bailout bill" that is going to scare the crap out of you?? Pay close attention to it! Very close!

... And don't notice this $140 billion bank giveaway that we're going to do while you aren't looking.

This gem from yesterday's Washington Post made me so angry I had to wait until today to even write anything about it. Here are some key details about what the Administration took from our Federal coffers and gave away to our shambles of a banking system:

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

..."It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice.

...No one in the Treasury informed the tax-writing committees of Congress about this move, which could reduce revenue by tens of billions of dollars. Legislators learned about the notice only days later.

DeSouza, the Treasury spokesman, said Congress is not normally [my emphasis] consulted about administrative guidance.

Because, you know, the circumstances we're now in are just, you know, normal.