Washington Hotlist » Economy

Democrats Refuse To Cut Taxes

Joshua Rosenstock — Thu, 08 Jan 2009 22:10:48 +0000

We have all seen this headline before, but one would think that in the midst of an extraordinary time in our history, some extraordinary measures would be taken. Instead, the Democrats in Congress are about to take the Bush recession and turn it into their own. Instead of utilizing new thinking to weather an unprecedented economic downturn, we are given more of the same.

The same Democrats that have been in power for years (Conrad, Kerry, Wyden, et. al.) refuse to acknowledge the new political reality. We just completed a change election cycle where the people have clearly said that they want something completely different from the status quo. Instead of recognizing and adapting to that change, Democrats are adhering to the same failed strategies of the past. Is it really against a Democrat’s DNA to cut taxes? Is there any other reason why someone who purports to be intelligent would say something as ludicrous as this:

“If I’m a business person, it’s unlikely if you give me a several-thousand-dollar credit that I’m going to hire people if I can’t sell the products they’re producing.”

Well, Senator Conrad, maybe it depends on what product you are talking about. How can someone be in charge of the federal budget when they lump all businesses together with idiotic blanket statements like this one? All this does is project the blame of the economy from the outgoing administration to the new one. Way to screw it up on Day One!

The Bush SEC: More Of The Same

Joshua Rosenstock — Wed, 17 Dec 2008 14:12:40 +0000

The Securities and Exchange Commission said Tuesday night that it had missed repeated opportunities to discover what may be the largest financial fraud in history, a Ponzi scheme whose losses could run as high as $50 billion.

The commission said it received credible allegations about the scheme at least nine years ago and will immediately open an internal investigation to examine why it had failed to pursue them aggressively.

Of course the SEC failed to pursue allegations of fraud. When your governing philosophy is that government does not work (which has been the credo of conservatives for decades) and you place anti-regulation advocates in positions where regulation is needed, a self-fulfilling prophecy of failure is bound to occur.

Even more disturbing is this typical piece of Washington cronyism:

One of the commissionâ€™s investigative teams that had examined the Madoff firm was headed by a lawyer named Eric Swanson, who served for 10 years as a lawyer at the commission and left in 2006 while he was an assistant director of the office of compliance inspections and examinations in Washington.

In 2007, Mr. Swanson married Shana Madoff, a niece of Bernard L. Madoff and daughter of his brother, Peter Madoff, the firmâ€™s chief compliance officer. Ms. Madoff is the firmâ€™s compliance attorney.

No wonder Madoff was able to get away with it! Why exactly would someone investigate his own family? Why was Mr. Swanson put in the position to do so in the first place? The SEC had absolutely no interest in doing its job and now all Americans from the wealthiest to the most poor are suffering the consequences. While attempting to cater to the wealthy, the Bush Administration has instead led our economy into its worst conditions since the 1930s, thereby reducing the wealth of his most loyal constituents. Instead of screwing over only Democratic Party voters, Bush has given the shaft to all Americans. Talk about a uniter!

The Securities and Exchange Act of 1934 was explicitly created to prevent these types of abuses from occuring. Unfortunately, it took another financial calamity to demonstrate how unserious its senior management was about carrying out its essential duties. Chairman Cox and his entire staff should be investigated.

So Much For Paulson The Wall Street Whiz

Joshua Rosenstock — Fri, 05 Dec 2008 16:34:09 +0000

Stock intended to eventually earn taxpayers a profit as part of the Bush administration’s massive bank bailout has lost a third of its value â€” about $9 billion â€” in barely one month, according to an Associated Press analysis. Shares in virtually every bank that received federal money have remained below the prices the government negotiated…If the government exercised all its warrants to purchase the stock today, it would lose money on 51 of its 53 agreements.

For those of you keeping score, that is a .038 batting average. It is one thing to lose money that you invested in the stock market. It is quite another when the federal government, led by former Goldman Sachs CEO Hank Paulson (a person that one would reasonably think would know a thing or two about investing), takes it from you and procedes to do the same thing. I hope we have all learned that these alleged geniuses on Wall Street, that made so much money for their clients during the boom days, are not geniuses at all but merely lucky and just happened to be in the right place at the right time.

Paulson Sounds Way Too Confident

Joshua Rosenstock — Thu, 20 Nov 2008 20:38:08 +0000

“By proactively addressing the problems we saw coming and being pragmatic enough to change strategy in the face of changed facts and despite the inevitable criticism â€” we prevented a far worse financial crisis.â€

What Hank Paulson calls pragmatism, I call making it up as he’s going along. After receiving $700 million for the “Troubled Assets” Relief Program, Paulson decided not to buy any troubled assets. After initially wanting to be above the law, he eventually learned the hard way that no one, not even Bush Administration Cabinet Secretaries, can be. After initially requesting $700 billion, Paulson decided to spend half of it. After allowing Lehman Brothers to fail (a Goldman Sachs competitor), he decided to bail out AIG (whose survival helps the bottom line of Goldman).

The cronyism and overconfidence of Hank Paulson has done nothing to relieve the credit crisis as stocks continue their plunge below 8,000. It is unknowable what would have happened had we rode this thing out a couple months and let the incoming administration handle it (a more appropriate course of action). Hank Paulson, who decried government intervention his entire career, should never have been put in charge of this bailout. I’m sure he will be back in an executive suite where he belongs in no time. He is just another emperor without any clothes (as we have learned that most of these alleged Wall Street wizzes are nothing more than lucky betters whose collective luck has all run out).

Quote Of The Day

Joshua Rosenstock — Thu, 13 Nov 2008 17:00:19 +0000

“The crisis was not a failure of the free market system. And the answer is not to try to reinvent that system. Many European countries had much more extensive regulations and still experienced problems almost identical to our own. History has shown that the greater threat to economic prosperity is not too little government involvement in the market but too much. It would a terrible mistake to allow a few months of crisis to undermine 60 years of success.”

Who Do You Believe?

Joshua Rosenstock — Thu, 30 Oct 2008 17:59:46 +0000

“The fundamentals of the ecomomy are strong.”

- John McCain

“The economy has taken a turn for the worse, big time. Consumption literally caved in. It is a prelude to much worse news on the economy over the next couple of quarters. The fundamentals around the consumer are all negative, and there are no signs of any help anytime soon, from anywhere.â€

- Allen Sinai, chief global economist for Decision Economics, a consulting and forecasting group.

McCain BS Line Of The Day

Joshua Rosenstock — Tue, 14 Oct 2008 18:22:50 +0000

â€œSo much of this decline in our markets and value destruction was due to the failure of Congress and the Administration to come out with a timely rescue package.â€

Another Typical Day For John McCain

Joshua Rosenstock — Tue, 16 Sep 2008 19:34:09 +0000

Earlier this year, Senator John McCain said that “the fundamentals of our economy are strong.” Now that the economy is collapsing before our eyes, he is finally being called on it by the mainstream media. To make up for yet another gaffe that demonstrates how out of touch McCain is, he apparently received a new memo from the Karl Rove disciples than run his campaign: “fundamentals” means American workers:

â€œWell itâ€™s obviously true that the workers of America are the fundamentals of our economy, and our strength and our future.â€™â€™

McCain continues by saying that “I know we can do it (fix the economy) and how to do it,â€ but “we need a commission to figure out what went wrong and how to fix it.” If he already knows what to do, why does he need a commission? Isn’t the whole point of presidential commissions to tell the president what to do? Now, there’s a solid example of bold leadership by a potential commander-in-chief: let someone else deal with the problem! Even more disturbing is the fact that McCain must be the only person in America that does not even know what went wrong.

Be on the lookout for another manufactured controversy regarding sexism, media bias and/or lipstick to gloss over this policy in the coming days.

Back To Reality

Joshua Rosenstock — Mon, 15 Sep 2008 14:02:32 +0000

Welcome to Washington Hotlist, the site for serious discussion about this presidential election. For the many of you that are concerned about the way Senator Obama used bad analogies involving lipstick and other such nonsense, feel free to pick up any mainstream media newspaper or turn on the television. With so many serious issues facing this country, there is no doubt that we have been failed miserably by the institutions that are supposed to provide real news to the voters. Instead, everything is gossip and our election process has been transformed into a very drawn out season of American Idol. As George Bush once famously said, “Is Our Children Learning?”

With the above in mind, I am attempting to singlehandedly be the source for serious individuals that actually care about issues and where the candidates stand for you, the voters. Here at Washington Hotlist there will be no talk of Sarah Palin’s children, distorted campaign commercials or any other Wonkette-type nonsense that has engulfed the most consequential election in my lifetime.

Today’s serious topic of the day: the continued meltdown of our economy. Two of our largest investment banks, Lehman Brothers and Merrill Lynch are about to kick the bucket, one to file for bankruptcy and the other to be bought by Bank of America. This is another sign that our federal government has failed to act as a regulator, not surprisingly considering the ideology of those in charge has been that free markets work and regulation is another form of communism. Well, we can all see how well that philosophy has worked. Businesses from the auto industry to financial services are lining up to be bailed out by the federal government.

In other words, your taxpayer dollars are going to save the balance sheets of companies that were recklessly managed while our nation is in debt arount $10 trillion. Maybe regulation isn’t such a bad thing after all and it would be interesting to hear the presidential candidates discuss what role the federal government should have in regulating the markets instead of the nonsense we are forced to listen to on a daily basis. Since oil has dropped from about $145/barrel to $96/barrel in the past 8 weeks, the ridiculous talk of suspending the gas tax and offshore drilling have also stopped, which goes to show you how completely arbitrary those policy positions were.

I hope you have enjoyed a discussion about what is actually going on in this country as opposed to the gossip currently transpiring on mainstream media outlets around the nation. Stay tuned to Washington Hotlist for more talk about boring subjects such as the economy, foreign policy and the Supreme Court (you know, nerdy stuff).

Another Awful Day For The Bush Economy

Joshua Rosenstock — Sat, 06 Sep 2008 03:35:54 +0000

First, there is this gem:

Senior officials from the Bush administration and the Federal Reserve on Friday called in top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, and told them that the government was preparing to place the two companies under federal control, officials and company executives briefed on the discussions said.

The plan, which would place the companies into a conservatorship, was outlined in separate meetings with the chief executives at the office of the companiesâ€™ new regulator. The executives were told that, under the plan, they and their boards would be replaced and shareholders would be virtually wiped out, but that the companies would be able to continue functioning with the government generally standing behind their debt, people briefed on the discussions said.

It is not possible to calculate the cost of any government bailout, but the huge potential liabilities of the companies could cost taxpayers tens of billions of dollars and make any rescue among the largest in the nationâ€™s history.

You may wonder how exactly the federal government is going to pay for such a massive bailout, and you would have a valid point considering:

The unemployment rate jumped to 6.1 percent in August, its highest level in five years, pushing the troubles of American workers to the center of the political debate as the presidential campaign enters its final weeks.

For the eighth consecutive month, the nationâ€™s employers shed jobs, 84,000 last month, the Bureau of Labor Statistics reported Friday. In all, 605,000 jobs have been lost since January. The steady rise in unemployment, from 5.7 percent in July and 5 percent in April, is one that many economists associate with recession.

So, let’s recap. The federal government, already in debt close to $10 trillion, is going to spend your tax dollars to bail out two failed quasi-governmental business entities at a time when less Americans have jobs.