salon.com — Two major settlements between ten big banks and the government Monday totaling over $20 billion aimed to clear up allegations of widespread malpractice relating to the mortgage crisis. But what at first looks like great news for the 4 million Americans forced into foreclosure between 2009 and 2010, the settlements may be a greater boon to banks than burned homeowners.
propublica.org — The Independent Foreclosure Review was supposed to be a full and fair investigation of the big banks' foreclosure abuses, and it was trumpeted as the government's largest effort to compensate victimized homeowners. Federal regulators, who designed the review, forced banks to spend billions to carry it out. Millions of homeowners were eligible and hundreds of thousands submitted claims. But Monday morning, the very regulators who launched the program 18 months ago announced that it had all been a massive mistake and shut it down. Instead, 10 banks have agreed to pay a total of $3.3 billion in cash to the 3.8 million borrowers who had been eligible for the review. That's an average of around $870 per borrower. But typical of a process that's been characterized by confusion, delays and secrecy, regulators said the details of how the money will be doled out were not yet available.
washingtonmonthly.com — In the web-wide effort to identify winners and losers in the “fiscal cliff” battle, one of the arguments we’ve heard cited most often is that George W. Bush was the big “winner” because his signature tax cuts finally became part of permanent law, not some temporary budget measure. This conceit, in fact, has become a big part of the progressive case that Obama got rolled. Like Republicans rationalizing votes for the tax bill, these progressives are pretending most Americans got the Bush tax cuts all over again, shiny new and fiscally lethal as they were the first time around. And both sides are using the word “enshrined” to refer to the magical effect the vote had on the tax cuts first enacted in 2001. Sorry, I don’t buy it.
alternet.org — Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem. What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations. With such a banal name, and boring and difficult to read line items in the bill, few political operatives have bothered to pay attention to this part of the bill. But it is critical to understanding what is going on. So without further ado, here are eight corporate subsidies in the fiscal cliff bill that you haven’t heard of.
When taxpayers pay more to the government than the economy receives in public spending, the effect is like paying banks more than they provide in new credit. The debt volume is reduced (increasing the reported savings rate). The resulting austerity is favorable to the financial sector but harmful to the rest of the economy.
alternet.org — Corporate tax rates must be lowered in order to create economic growth: this is a key argument made by CEOs and their political allies while they push for a fiscal cliff deal. That was in the Bowles-Simpson plan, and members of Fix the Debt are pushing for that too, along with a territorial tax system. This desire is deeply held in much of Washington. Never mind for a moment the obvious problem with lowering tax rates as a means of fixing the long-term debt. Would allowing corporations to pay less taxes really mean more hiring? Luckily we have some interesting case studies. Several of the CEOs pushing this idea actually run companies that pay extremely low corporate tax rates, well below the statutory 35 percent rate—or pay none at all. So, via the invaluable Institute for Policy Studies, let’s see what kind of job creation these folks did while enjoying very low corporate tax rates.
jaredbernsteinblog.com — Secretary Geithner was met at the door in January of 2009 by a financial market meltdown and correctly undertook reversing that as his first job. That part of the market has recovered. The job market has not. But “wait a minute!” you say. That’s the labor secretary’s job—the secretary of the Treasury is responsible for financial markets, making sure our borrowing costs stay low (so s/he must worry about the budget deficit), international trade—stuff like that, right? Wrong! Or, at least only partially right. S/he must recognize the linkages between all of the above and the largely unfinished business of economic recovery. That is, in every policy matter, the new secretary must envision a new client.
prospect.org — In his first post-election press conference, President Barack Obama said voters had awarded him only one mandate: to help middle class families and those striving to reach the middle class. In line with fulfilling this charge, the administration’s top priority would be creating manufacturing jobs and rebuilding the nation’s schools and infrastructure. An early bellwether of the president’s commitment to this will be his selection of a replacement for Timothy Geithner, who is expected to step down as Treasury secretary early next year. The nomination presents an opportunity for a White House course correction, finally putting Main Street ahead of Wall Street.
slate.com — Look. Uncertainty is an intrinsic feature of reality. Business executives do not currently know what fiscal or regulatory policy will look like in 2017 and there is absolutely nothing that can be done to alter this fact. Executives in 1952 did not know what 1957 would look like and executives in 1992 did not know what 1997 would look like. There's no certainty about domestic public policy, there's no certainty about foreign crises, there's no certainty about technological trends, there's no certainty about consumer tastes, there's no certainty about anything. Life is hard. But Google's managed to build a lucrative business around web search and advertising without certainty. Apple and Samsung have built lucrative smartphone businesses without certainty. They pay the CEOs the big bucks because it's hard to know how to make successful products in an uncertain world. That's the job.
commondreams.org — Ed Haislmaier, a senior scholar at the Heritage Foundation, made himself famous in this video where he appears to be assaulting people protesting a conference organized by Fix the Debt. While this act of bad temper may be uncharacteristic of the public behavior of this corporate-sponsored crusade to cut Social Security and Medicare, it does reflect the way in which they hope to bully their agenda through the political process. The line from Fix the Debt, an organization that includes the CEOs of many of the country's largest corporations, and allies like the Washington Post is that we better have cuts to Social Security and Medicare because they say so. Everyone knows that cuts to these programs are hugely unpopular across the political spectrum. The Fix the Debt strategy was explicitly to wait until after the election. They would then go into high gear pushing their agenda of cutting Social Security and Medicare regardless of who won the elections.