Romney looks to give Bernanke the boot
“I’d be looking for somebody new.”
Those words from the U.S. Republican presidential candidate Mitt Romney may give Federal Reserve Chairman Ben Bernanke some pause – or at least thinking about some other job prospects if the GOP frontrunner wins the Nov. 6 election.
As we report, Romney, a former business executive who’s made the economy the cornerstone of his campaign, has made it clear that if he wins the White House he will try to replace Bernanke. The Fed chief’s term ends in January 2014 – a year after the next president takes office. Although Bernanke was nominated by Republican President George W. Bush, Democratic President Barack Obama give him second term in 2009.
Bernanke, who was back in the spotlight on Wednesday as he defended current U.S. monetary as being on track, has been both vilified and revered for his role amid the Great Recession that began in 2008. Critics contend he is pursuing a reckless money-printing binge that exposes the world’s largest economy to a dangerous inflation risks while his defenders credit him with bold moves to stimulate growth that prevented a repeat of 1929-level depression.
Romney is signaling he wants the Fed – and the economy — to take a different direction. And that means giving Bernanke the boot, he says.
Think brussels sprouts and cauliflower are agricultural commodities? Think again.
While the financial bailouts tossed to automakers, banks and other groups during the recent economic crisis left a funny taste in the mouth of some Americans, one former U.S. regulator hopes efforts to prevent another panic doesn’t go rotten.
The U.S. Commodity Futures Trading Commission is immersed in drafting dozens of rules to assist it in increasing oversight of the once opaque over-the-counter derivatives market, widely blamed for exacerbating the recent financial crisis.
Among the rules it must craft is what the definition of an agricultural commodity is? Of course, corn, cotton, soybeans and livestock, among other items, fall into this realm.
But what about those “other foods” such as brussels sprouts, artichokes, cauliflower, or anything with curry? A former CFTC chairman says they are “abhorrent to American sensibilities” and should be banned.
“Like every U.S. citizen, there are certain agricultural commodities that are abhorrent to me,” said Philip McBride Johnson, who is now with the law firm Skadden, Arps, Slate, Meagher & Flom.
In a comment letter to his former agency, he said there is a “natural link” between defining an agricultural commodity and a provision in a law that requires the regulator to protect the public by forbidding the listing of certain products that “are abhorrent to American sensibilities.”
Clearly banned under this act are financial products based on wars, terrorism, and assassinations. If Johnson has his way, regulators will be able to protect consumers from a dozen foods that don’t mesh with his palate.
The First Draft: Executive pay crackdown
For a quiet day, there was surprising consensus among editors about the top news — big-time bankers who got government bailout money are going to get their paychecks slashed.
The coverage was fairly straight, but there was a certain glee about the way the story made its way to the top spot in most newspapers.
“Pay slashed at bailout firms,” the Wall Street Journal headlined its story.
“U.S. will order pay cuts at firms with bailout aid,” The New York Times said.
“Obama ‘pay tsar’ to order deep cuts,” the Financial Times reported.
The networks were less charitable. CBS’s “The Early Show” flashed the headline “Big cuts for big shots” during its report, while ABC’s “Good Morning America” flashed the headline “Payback: Government to limit exec. salaries.”
According to unnamed Obama administration officials cited in most of the stories, the president’s adviser on executive compensation, Ken Feinberg, will soon recommend a plan that would cut overall compensation in half and would slash cash salary payouts by an average 90 percent.
This is also so stupid. You will NEVER be able to ‘control’ wages. I was thinking that the government should tax all compensation (not just salary, ALL compensation, the whole enchiladae) at 99.9999% once you earn more than 20 times the SALARY of the President. But these guys will just find ways to funnel the money overseas to create lavish nest eggs for themselves overseas.
The only option we as voters have is to ensure that NO incumbment gets re-elected during the next election cycles until all of Congress is replaced. All elected officials should go. They oversaw this fiasco and just sat idly watching it all go down. They should know, their jobs aren’t safe either.
Tell us what you really think Senator Grassley
WASHINGTON – How outraged can they be?
U.S. lawmakers are clearly outraged by the $165 million in bonuses being paid to executives at bailed-out insurer American International Group. For the last two days, they’ve been talking about it in press releases, at news conference and in speeches on the floor of the Senate and House.
But no one says it more colorfully and more bluntly than Republican Senator Chuck Grassley — so far.
“From my standpoint, it’s irresponsible for corporations to give bonuses, at this time, when they are so sucking the tit of the taxpayer,” Grassley said at a news conference on Tuesday.
Grassley, an Iowa farmer, is most likely just channeling what many taxpayers are thinking.
The U.S. Treasury and Federal Reserve has put up to $180 billion at AIG’s disposal to keep them afloat and prevent the insurance giant from sinking the global financial system. The company said it had contract obligations to pay out some $165 million in retention bonuses to employees.
Grassley on Monday had some other colorful comments about AIG executives saying they should perhaps adopt what he called the Japanese approach to taking responsibility for their actions and “resign or go commit suicide.”
Since Senator Grassley was chairman of the senate finance committee when this current financial mess started. during the Republican controll of congress, perhaps he should take is own advice, resign or go commit suicide. Over the years I have heard Grassley has made big talk but done little for America.
First Draft: Monday’s blue mood — AIG outrage
It’s on front pages, news shows and all over the Web: outrage at the bailout of AIG, the troubled insurance giant that — so far — has gotten $173 billion in U.S. taxpayer money and has given out $165 million in bonuses to the very executives who brought the company to its knees.
A quick Web search of “AIG outrage” for March 2009 gets 190,000 hits, ranging from Al Jazeera (“Outrage against AIG set to mount”) to USA Today (“AIG bonus outrage plays Treasury officials for saps”). Part of the outrage stems from the Obama team’s contention that there’s nothing they can legally do to stop these bonus payments.
Barney Frank, a Massachusetts Democrat who heads the House Financial Services Committee, came up with a plan in an interview on NBC’s “Today”: AIG’s execs can keep their bonuses but they don’t have to keep their jobs. “These people may have a right to their bonuses but they don’t have a right to their jobs foever,” is how Frank put it.
At the White House, President Barack Obama and Treasury Secretary Timothy Geithner are set to talk with small business owners about a plan to make it easier for them to borrow money.
Outside the Beltway, the mood turns from outrage to madness — the college basketball kind of madness that comes in March when the NCAA unveils its tournament field. The national championship is April 6 in Detroit.
Photo credits: The American International Group building in New York, March 2, 2009 file photo. REUTERS/Shannon Stapleton/Files
Duke’s guard Jon Scheyer (R) passes under the basket as Florida State guard Jordan DeMercy defends during men’s NCAA basketball action in Atlanta, Georgia March 15, 2009. REUTERS/Tami Chappell
excuse my lack of knowledge… but, how on earth could someone consider this W.Street lads TOP TALENTED?? if i do wrong on my business and got expelled by the market for that reason, do i get paid by the government…? some 250 years ago, those who were filling for bankruptcy were jailed in the Tower of London.
Bold budget boosts bailout
How do you buy $750 billion of toxic bank assets with only $250 billion of taxpayer money?
If you know to play U.S. budget rules like a violin.
President Barack Obama told Congress in passing this week he might need more money than lawmakers have already approved to stabilize banks and pull the economy out of the ditch.
How much? His budget virtuoso Peter Orszag said on Thursday he could support buying up to $750 billion in bad assets but only needed to set aside $250 billion to do it.
Regular US budget rules assume government credit subsidies will recoup some of their value. Appropriators budget for such items according to how much they think the government will lose — not the full amount of the credit.
Orszag explained his thinking on Thursday:
“Honest budgeting suggests, when you pay a dollar for a financial asset, that doesn’t make the government worse off by a dollar,” he said at a news conference. “It’s not the same thing as a net cost of a dollar, because you are getting something in exchange for it.”
Americans deserve this hell. We had a chance to nominate and elect a great leader. But we chose an inexperienced guy who gives great speeches. Guess what? This guy is so clueless about finance and money, he has to hire a Wall Street goon to decipher it for him.
I listened to this great leader, and his wise words have prevented me from losing any money in this entire debacle.
Pssh.
hint: Ron Paul
Fed staff in trouble, but cited for raise, too
It’s not just U.S. stocks that are on a roller coaster ride in reaction to congressional testimony by Federal Reserve Chairman Ben Bernanke and other top officials.
Fed staff stock plunged on Wednesday when they put their boss in an awkward position during Bernanke’s testimony before Congress on the financial bailout and efforts to stabilize the swooning economy.
Rep. Scott Garrett testily reminded Bernanke that he was still waiting for answers for a letter he sent in December.
“We need to move on some of these issues,” Garrett said.
“You have not received a reply?” Bernanke asked, sounding surprised.
When Garrett said he had not, the Fed chairman took time out from discussing the narrowly averted global financial meltdown to assure the lawmaker he would crack down on his wayward staff.
“After some concerns about this, I have asked staff to try to put a one-month limit on (response) time. And so, clearly, that has not been met in this case, and I will check up on the situation,” Bernanke said.
This new regime is giddy with its blank-check power. I’m frightened beyond words how the TRILLIONS of dollars the Democrats/Obama/Pelosi want to spend are just the tip of a growing iceberg of fiscal irresponsibility and demand on all Americans.
More taxes, more taxes, more taxes. The numbers presented in Obama’s new budget are foolhardy. They are fictional, and do not compute with the number of taxpaying Americans, even if you were to figure in all retired people, those in a coma, those in the war zone, and newborn infants paying income taxes to sustain the demands of this new budget. Overtaxing the “rich” has never worked. For the bloated amount of money Obama wants, there is not enough money to squeeze out of “rich folks.” There aren’t enough rich people in the country to pay for his grandiose budget. So, the taxes on average people will have to be raised – soon. We all will have to “put more skin in the game,” breaking yet another of his “promises.”
To quote economist and author Thomas Sowell, “The question is not what anybody deserves. The question is who is to take on the God-like role of deciding what everybody else deserves. You can talk about ‘social justice’ all you want. But what death taxes boil down to is letting politicians take money from widows and orphans to pay for goodies that they will hand out to others, in order to buy votes to get re-elected. That is not social justice or any other kind of justice.”
It was Thomas Jefferson who declared, more than 225 years ago, “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
When is a housing crisis like venereal disease?
If you’re among those upset that your taxpayer dollars may be spent in volume to rescue people who — for whatever reason — can’t make their mortgage payments, Federal Financial Analytics analyst Karen Shaw Petrou recommends thinking about it this way:
“Preventing foreclosures has a lot in common with treating syphilis. In both cases, you help some who are undeserving, but – in an economic collapse or a public-health emergency – one acts nonetheless. ”
Just as in an serious epidemic, you’d take care of the problem and leave moral judgements to others, the right course of action is to take action to halt the housing crisis and leave the debate about moral hazard to economists, she wrote in a note to clients on Friday.
Yes, it’s possible that under President Obama’s plan to prevent mortgage foreclosures, some borrowers who could make their current payments may score a “quickie refi” at potential taxpayer risk, Petrou says. Others may abuse a provision that allows judges to reduce the amount of principal on some loans, she adds.
But give the Obama plan credit for trying to be fair by trying to weed out the the undeserving by limiting relief in certain ways, Petrou writes.
And in any case, the current crisis is the “the financial equivalent of a mortal epidemic,” she says.
Plenty of time to lecture about practicing safe credit later.
idea has been used by the banks etc ,they bought cars and houses they could not afford.
First draft: Wall Street CEOs, Geithner head to Hill for grilling
When Treasury Secretary Timothy Geithner made his long-awaited speech on Tuesday to unveil the administration’s bank rescue plan, the stock market tanked. Traders said the nearly five percent drop was caused by a lack of specifics in Geithner’s announcement that the government would spend up to $2 trillion to mop up bad bank assets and revive lending.
The main newspapers had banner headlines about the biggest one-day drop for Dow industrials since Dec. 1.
So what will happen today when Geithner heads to Capitol Hill to testify before the Senate Budget Committee? The market will also be watching as top Wall Street CEOs appear in a hearing with the House Financial Services committe to defend their use of $176 billion in taxpayer funds.
President Barack Obama continues his push for the $800 stimulus bill outside of Washington, traveling today to nearby Springfield, Virginia to talk about how jobs will be created with the new plan.
Meanwhile, his emissaries push forward in their efforts to help lawmakers on Capitol Hill hammer out a compromise agreement between the House and Senate versions of the stimulus bill. Obama wants to have the final version on his desk by Feb. 16.
On a lighter note: morning talk shows are all raving about top dog Stump — a mellow, 10-year-old Sussex spaniel who made history as the oldest dog to win “Best in Show” at the Westminster Kennel Club Dog Show. Stump showed that age was no boundary — he came out of retirement and overcame a long illness to win the coveted award at the dog show.
how come the ceo,s of fanny may and freddie mack were not there lined up there as well?it might have been uncomfortable for some of the politicians, but this combination started problem.how are we expected to handle this hypocrisy.it always amazes me how thick skinned these politicians are.confidence in these people is so low.
The First Draft: Friday, Jan. 9
Who gets the billions?
The incoming Obama administration is preparing a major overhaul of the $700 billion financial bailout amid rising complaints in Congress that the payouts are not going to the right people.
The Washington Post reports that Treasury Secretary nominee Timothy Geithner and top Obama economic adviser Larry Summers have been looking at ways to broaden the bailout to include more help for homeowners facing foreclosure as well as to generate loans for municipalities, small businesses and consumers — and not just the financial giants that helped to create the mess.
Obama, meanwhile, is expected to formally announce his picks for top intelligence posts at a news conference around 10:45 a.m. EST. Obama’s choice to head the CIA, former chief of staff in the Clinton White House Leon Panetta, has drawn fire from some security insiders who complain that he lacks experience on intelligence matters.
Obama’s choice for labor secretary, California Rep. Hilda Solis, begins her confirmation hearing in the Senate, which may give clues on how unions — which largely backed Obama in the Nov. 4 election — will fare in the new administration.
Getting rid of Bernanke would be about as clueless as every other portion of Romney’s economic incompetence. He didn’t even move into Bain – with other people doing the investing – until he had a 100% salary guarantee in case he screwed up.
The man has the courage of the average bear – none! He has the competence of today’s Republican Party – none!
Part of the success story of the stimulus package has shown up around the country in basic manufacturing industries and continues. Half the credit goes to the halfway measures Obama was able to force past the Party of No – before it became the Party of Never. The other half goes to Bernanke and the availability of greenbacks for industrial revival.
Ohio steel being the best example. Unemployment down to 7.5% in that state.