Archive for economy

Obama Administration – Conflict of Interest Alert – Larry Summers

Once again, it is revealed that President Obama’s administration has proved less than stellar compared to his campaign promises of changing Washington DC.  Since swearing into office and to uphold the duties for which he was elected for, President Obama has made dubious decisions in choosing the appropriate people to fill the top posts in his administration.  Many were marred with tax scandals as they appeared before Congress and some had to withdraw their nominations due to allegations of unpaid taxes or great conflict of interests.  Even within 24 hours of declaring a new policy to stem conflict of interest, he had to make an executive exception to the nominated Deputy Director of Defense William Lynn, a former Raytheon executive.

The latest scandal to hit the Obama administration is Larry Summers, who has now reported receiving millions of dollars from the very same industry and corporate entities which he is assisting with his policy and regulatory advice to President Obama and Congressional leaders.  It was already with great controversy that Treasury Secretary was nominated given criticism that he failed as the President of the NY branch of the Federal Reserve system to watch over the financial system and avoiding collapse.  In addition, Geithner faced also back tax scandals.

Many critics believe that between Summers and Geithner, the two are a power couple that are too close to the industry to be impartial and to do what is right for the country and all Americans.  Meanwhile, the US Government is spending trillions in an unprecendeted effort to save the financial system.  But really, have other simpler, less costly to the American taxpayers and more effective been really explored or even contemplated?

Write to President Obama and demand for change and transparency.

Summers Earned Millions in D.E. Shaw Salary, Bank Speech Fees

By Timothy J. Burger and Kristin Jensen

April 4 (Bloomberg) — Lawrence Summers, director of President Barack Obama’s National Economic Council, earned millions working at a hedge fund and speaking to banks such as Citigroup Inc. that later received taxpayer bailout money.

Hedge fund D.E. Shaw & Co. paid Summers more than $5 million in salary and other compensation in the past 16 months, according to a financial disclosure form released by the White House yesterday. Summers served as a managing director at the New York-based firm. Summers, a former Treasury secretary, also earned more than $2.7 million in speaking fees.  [Read Full Article]

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State of US Economy After Trillions of Taxpayers Funds – Update

So how is the economy given all the money the US Taxpayer are pumping into the system?

How long will Americans wait for results before judging success or failure of their leaders during this crisis?

Take this poll.

Courtesy of CHRISTOPHER S. RUGABER – Apr 3, 2009

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THE STATE OF UNEMPLOYMENT

13.2 million: People unemployed in March 2009 — the most ever in records that date to 1948

12.8 million: Population of Illinois, President Obama’s home state

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A CITY’S WORTH OF JOB LOSSES

663,000: Net loss of jobs in March 2009

637,000: Population of Baltimore

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COLLEGE STILL COUNTS

4.3 percent: Unemployment rate for college graduates

9 percent: Unemployment rate for people who graduated from high school but did not attend college

13.3 percent: Unemployment rate for those with no high school diploma

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UNDEREMPLOYED

9 million: Number of part-time workers who would have preferred full-time work last month — the most in records dating to 1955

2.1 million: People without jobs who wanted to work, were available and had looked in the last 12 months, but had not looked in the last month.

15.6 percent: Unemployment rate including involuntary part-time workers and those who hadn’t looked in 12 months — the highest in records dating to 1994

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DOWNTURNS, THEN AND NOW

8.5 percent: Unemployment rate in March 2009

10.8 percent: Unemployment rate in December 1982, one month after deep recession ended

October 1983: Last time the unemployment rate was higher than the current level

59.9 percent: Portion of the total population that had jobs in February

July 1985: Last time the portion was this low

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MARCH UNEMPLOYMENT RATE BY GROUP

8.8 percent: Adult men

7 percent: Adult women

10.8 percent: Female heads of households

6.4 percent: Asians

7.9 percent: Whites

11.4 percent: Hispanics

13.3 percent: Blacks

21.7 percent: Teenagers

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RECESSION AS JOB KILLER

5.1 million: Net job losses since recession began in December 2007

651,000: Jobs lost in February 2009

741,000: Jobs lost in January 2009

681,000: Jobs lost in December 2008

122,000: Jobs lost in March 2008

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WHO’S SURVEYED

60,000: Number of households interviewed in the monthly Census Bureau survey from which the unemployment rate is extrapolated

40 percent: Portion of companies in the survey of businesses, from which payroll and job loss numbers are extrapolated, with fewer than 20 employees

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Team Obama’s Summers & Geithner’s “White” Wash of Bailout Banks to Avoid Bankruptcy Proceedings

While President Obama is jetting throughout Europe, more bad economic news have hit the fan.  Joblessness continue to be on the rise with sign of slowing, services provided by states such as unemployment benefits previously extended are quickly depleting, state and local taxes on the rise with fiscal budget deficits, and retirement and pensions plans are under pressure due to drop in value and the lack of contributions.

Critics continue to berate the Team Obama economic plan and its ability to solve the crisis as home prices continue to fall and there is lack of marketability of toxic assets to investors other than the banks themselves.  In the latest critical comments offered by experts, the supposed bank stress test move is nothing more than a “scam”, a white wash placebo to calm the American people.  This critique comes quickly on the heels of the news that FASB will relax and make changes to their “mark to market” accounting rules.

How long will American voters and taxpayers wait for results despite trillions of their money are going out the door to failed private corporations?  Take this poll.

The bank stress tests currently underway are “a complete sham,” says William Black, a former senior bank regulator and S&L prosecutor, and currently an Associate Professor of Economics and Law at the University of Missouri – Kansas City. “It’s a Potemkin model. Built to fool people.” Like many others, Black believes the “worst case scenario” used in the stress test don’t go far enough.

He detailed these and related concerns in a recent interview with Naked Capitalism. But Black, who was counsel to the Federal Home Loan Bank Board during the S&L Crisis, says the program’s failings go way beyond such technical issues. “There is no real purpose [of the stress test] other than to fool us. To make us chumps,” Black says. Noting policymakers have long stated the problem is a lack of confidence, Black says Treasury Secretary Tim Geithner is now essentially saying: “’If we lie and they believe us, all will be well.’ It’s Orwellian.”

The former regulator is extremely critical of Geithner, calling him a “failed regulator” now “adding to failed policy” by not allowing “banks that really need desperately to be closed” to fail. (On Saturday, Geithner said on Face the Nation, if banks need “exceptional assistance” in the future “then we’ll make sure that assistance comes with conditions,” including potentially changing management and the board, but did not say they’d be shut down.)

Black says the stress test must also be viewed in the context of Geithner’s toxic debt plan, which he calls “an enormous taxpayer subsidy for people who caused the problem.” The fact bank stocks have been rising since Geithner unveiled his plan is “bad news for taxpayers,” he says. “It’s the subsidy of all history.”

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