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Tear Down Those Tax "Shrines" by Ed Kilgore, Washington Monthly | January 3, 2013
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. read more »8 Huge Corporate Handouts in the Fiscal Cliff Bill by Matt Stoller, alternet.org | January 2, 2013
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. read more »Why Today's Fiscal Squeeze Imposes Needless Austerity by Michael Hudson, nakedcapitalism.com | January 2, 2013
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. read more »Meet Five CEOs Who Prove That Lower Corporate Taxes Don't Equal More Hiring by George Zornick, alternet.org | December 17, 2012
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. read more »The New Treasury Secretary Must Have a New Client by Jared Bernstein, jaredbernsteinblog.com | December 17, 2012
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. read more »Not Another Wall Street Puppet by Timothy A. Canova, prospect.org | December 12, 2012
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. read more »Dear CEOs: Please Stop Whining About Uncertainty by Matthew Yglesias, slate.com | December 11, 2012
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. read more »The Budget Thugs: What Do They Know About the Economy? by Dean Baker, commondreams.org | December 11, 2012
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. read more »Wall Street's Creative Extraction by Wallace Turbeville, prospect.org | December 6, 2012
The financial sector provides a crucial function to society. It accommodates the movement of funds from investors to businesses, governments and individuals who use the capital for productive purposes. If the financial sector does this efficiently, the cost to the users of capital will be close to the price demanded by investors. The financial sector will have extracted amounts for providing the “capital intermediation pipeline” that are commensurate with the service provided. If asked, most people would say that the cost of capital intermediation must have gone down in recent decades. After all, advances in technology and quantitative analysis must have made the process less expensive. But they have not. Capital intermediation is now more costly than it was in the days of James Pierpont Morgan. read more »Goodbye To All That by Josh Marshall, talkingpointsmemo.com | December 6, 2012
President Obama made public comments to this effect in front of the Business Roundtable. And various other commentators have reported it. But it’s turning out to be far more important than the jousting over tax rates that President Obama is saying flatly that he will not negotiate under any circumstances over raising the national debt limit. Though there’s still a lot of back and forth over it, Republicans realize that the top marginal tax rate is going up. Given this defeat, House Republicans are saying they’ll regroup around the debt limit and force the president’s hands when they have all the power. This assumes a replay of 2011. But the President says he won’t negotiate under any circumstances. And his top advisors say he’s adamant on the point — not just because of the current impasse but to take hostage taking over the national debt off the table for good. read more »
The Latest
Citigroup Says It Didn't Use 'Robo-Signers,' Still Faces Increased Risk Due to Sour Mortgages, Huffington Post | October 19, 2010
Top Citigroup executives sought to assure investors and the public Monday that the firm's foreclosure process and its handling of key documents in securitizing home mortgages is "sound," despite growing concerns over how lenders may have skirted the law when bundling home mortgages, selling them and kicking delinquent borrowers out of their home.
Don't Believe The Bank Lobby: Foreclosure Fraud Is Bad For Homeowners And The Economy, ourfuture.org | October 19, 2010
The bank lobby is spreading a host of silly myths about the foreclosure fraud outbreak in an effort to downplay the scandal and minimize concerns over potential bank losses that have emerged in the blogosphere. Housing Wire’s Paul Jackson spouts most of them in his post today. more »
The Feds New Bubble (Masquerading As A Jobs Program), tpmcafe.talkingpointsmemo.com | October 19, 2010
Wall Street Money Flows to GOP, blogs.wsj.com | August 11, 2010
Republicans candidates collected about 70% of the political donations from the employees and political accounts of financial services firms in June, the most recent month in which records are available, according to the nonpartisan Center for Responsive Politics. That’s a reversal from March, when Democrats collected 70% of the donations from Wall Street.
The AIG Bailout Scandal , The Nation | August 10, 2010
The government’s $182 billion bailout of insurance giant AIG should be seen as the Rosetta Stone for understanding the financial crisis and its costly aftermath. more »
Democrats Seek Allies in U.S. Consumer Agency Debate, Reuters | August 10, 2010
Nominees Will be Crucial in Enactment of New Wall Street Law, thehill.com | August 10, 2010
President Obama will have the opportunity over the next year to dramatically remake the leadership at the nation’s financial regulators. The president’s appointments on bank regulation, insurance rules and consumer financial protection will have broad power to carry out the 2,300-page financial overhaul enacted by Obama last month.
Basel Capital Rules May Prompt Banks to Shrink Trading, OCC's Dugan Says, bloomberg.com | August 5, 2010
The new rules being negotiated by regulators in the Basel Committee on Banking Supervision would have a greater impact on the firms’ so-called trading books, which include stocks, bonds and other securities, Dugan said in an interview. Loans and other debt held until maturity in their banking books would be less affected.
Bank Failures Up 5 More to 108; Florida’s Tally at 20, ecreditdaily.com | August 3, 2010
Dodd, Frank Plan Congressional Hearings on Basel Bank-Capital Regulations, bloomberg.com | July 29, 2010
Christopher Dodd and Barney Frank, authors of the U.S. financial overhaul, plan hearings on the status of global talks to revise bank-capital standards amid worries that proposed rules are being watered down. more »
