Category Archives: Free Market

President Obama’s Saturday YouTube Address 02/13/10

white house gov logoWhiteHouse.gov—The President, having just signed the “Pay As You Go” law, discusses the importance of this fundamental rule to getting budget deficits in check. Ensuring that new spending and tax cuts are offset was a important factor in creating the budget surplus of the late 1990’s.
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Filed under Bailout, Banking, Barack Obama, Cabinet, Capitalism, Change, Democrats, Economics, Economy, Free Market, Greed, Jobs, Lobbyist, Media and Entertainment, Money, Mortgages, News, Obama Administration, Partisan Politics, Politics, Pres. Barack Obama, Presidents, Republicans, Senate, Small Business, Uncategorized, Video/YouTube, Weekly YouTube Address

President Clueless? Not so fast…

Posted by: Betsm

Reports claim Obama kisses up to the bankers in an interview. Critics on the left erupt! Here’s why they shouldn’t

President Barack ObamaPretty clever, those Bloomberg folks! First they buy BusinessWeek. Then BusinessWeek gets an interview with President Obama. Then, one day before the interview is to run, Bloomberg scoops its sister publication by excerpting a couple of choice nuggets suggesting Obama is cuddling up to the banks.

President Barack Obama said he doesn’t “begrudge” the $17 million bonus awarded to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon or the $9 million issued to Goldman Sachs Group Inc. CEO Lloyd Blankfein, noting that some athletes take home more pay…

“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”

Unsurprisingly, two of Obama’s harshest critics on banking policy — from the left — immediately went ballistic. Simon Johnson called it “a major public relations disaster” and Paul Krugman, in a post titled “Clueless,” said “you would think that Obama would understand the importance of acknowledging public anger over what’s happening” and declared that “we are doomed.”

Hmm. Maybe we should read the entire interview before rending our hair and screaming doom and disaster? If there’s one thing we know about the president, it’s that he is pretty good with nuance and capable of making complex, multifaceted arguments. His performance during his meeting with the House GOP two weeks ago should provide all the evidence we need for that.

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Read the entire article by Andrew Leonard @ Salon

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Filed under Bad Journalism, Banking, Barack Obama, Blogging, Capitalism, Democrats, Economy, Free Market, Media and Entertainment, Money, News, Opinions, Partisan Politics, Politics, Pres. Barack Obama, Presidents, Republicans, Uncategorized

Fed posts record profit of $46.1B for last year

WASHINGTON — The Federal Reserve made a record profit of $46.1 billion last year, reflecting money made off its extraordinary efforts to rescue the country from the worst economic and financial crisis since the 1930s, the central bank announced Tuesday.

The windfall gets turned over to the Treasury Department.

It marks the biggest profit on record dating back to 1914 when the Fed was created. The previous record profit – of $34.6 billion – was registered in 2007. In 2008, the Fed reported a profit of $31.7 billion.

The Fed says the bigger profit was primarily due to increased income from the securities it held last year.

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Filed under Bailout, Banking, Economics, Economy, Free Market, Stimulus, TARP, Uncategorized

Let’s Be Fair to Bernanke– hindsight’s 20/20

posted by Ogenec
While neither the Fed nor the Treasury got everything right, they did far better than the Monday-morning quarterbacks would have us believe

By Steven Rattner
Thursday, December 3, 2009.

When the Senate Banking Committee welcomes Federal Reserve Chairman Ben Bernanke for his confirmation hearing today, the questioning is sure to be sharp, yet another chapter in the unceasing second-guessing of the government’s handling of the Wall Street meltdown.

Almost since the first cracks in Wall Street’s facade appeared more than two years ago, commentators and politicians of all stripes have questioned whether the Fed and, equally, the Treasury made proper decisions as they faced the worst financial crisis in 75 years.

It is very much the Banking Committee’s responsibility to satisfy itself about Bernanke’s qualifications and the overall management of the financial crisis. It is also appropriate for other oversight groups to conduct their own inquiries.

But much of the barrage of criticism is unfair, and some of it is simply ignorant.
Take, for example, the drumbeat of criticism for the decision to let Lehman Brothers fail. Conveniently forgotten by critics is the fact that until the consequences of Lehman’s bankruptcy became evident, the refrain from all quarters after the bailout of Bear Stearns in the spring was that the next floundering bank needed to be allowed to fail to teach Wall Street a lesson (preserve “moral hazard,” to use the jargon).

Shortly after Lehman’s filing, Allan Meltzer, a distinguished monetary economist, commended the Fed for letting Lehman go, telling PBS that “within a few days, just a few days, Barclays was there buying up some of Lehman’s assets.” A year later, Meltzer had a different view: “Allowing Lehman to fail without warning is one of the worst blunders in Federal Reserve history.”

More recently, a government oversight report came out swinging against the handling of the AIG bailout, suggesting in particular that the Fed and the Treasury should have demanded concessions from the banks that were counterparties to AIG’s hundreds of billions of dollars of credit insurance contracts.

That criticism sounds good, but like much after-the-fact commentary, it’s off-base. Once the Fed and the Treasury concluded (correctly) that an AIG bankruptcy posed unacceptable systemic risks, the government immediately lost any bargaining power to demand concessions. The result was a very unfortunate windfall for the counterparty banks, but what was the realistic alternative?

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related story:
Unexpected drop in jobless rate sparks optimism
WASHINGTON (AP) — A surprising drop in the November unemployment rate and in job losses cheered investors Friday and raised hopes for a sustained economic recovery.

source:

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Filed under Bailout, Banking, Economy, Free Market, Timothy F. Geithner (Sec of Treasury), Uncategorized

No Longer “To Big Too Fail”

posted by GeoT

By Karey Wutkowski

WASHINGTON, Oct 23 (Reuters) – The Obama administration plans to unveil on Monday a new plan for dealing with troubled financial giants, said a senior U.S. lawmaker, who also mentioned potentially big changes for the insurance industry.

Too Big To Fail

Too Big To Fail

Barney Frank, chairman of the House Financial Services Committee and a chief architect of the financial regulation overhaul, declined on Friday to give details on the administration’s new bill, which would give the government the power to dismantle large financial companies that get into crises.

The new draft bill is expected to take a tougher stance toward troubled financial firms than the administration’s original plan, and may take out some language that would allow for temporary bailouts.

Giving the government “resolution authority” would serve as a rebuttal to the concept that some firms are too big to fail. Federal Reserve Chairman Ben Bernanke on Friday highlighted the need for this authority as well as other measures to reduce the likelihood that one firm could destabilize the financial system.

Frank also said Congress is discussing whether to create an optional federal charter for insurers.

Rep. Barney Frank (D-NY)

Rep. Barney Frank (D-NY)

Insurance companies are currently regulated by the states.

“If we do get into national chartering it will be in life insurance … and maybe large commercial entities,” Frank said during remarks to a banking symposium.
He said lawmakers would not likely try to federally regulate property and casualty insurers, however.

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Filed under Bailout, Banking, Capitalism, Democrats, Economics, Economy, Free Market, Republicans, Stimulus, TARP

Largest Solar Power Plant In U.S. Rises in Sunshine State

posted by GeoT
goinggreen
Testing will soon be complete, and the facility will begin directly converting sunlight into energy, giving Florida a spot in the solar energy limelight


ARCADIA, Fla. – Greg Bove steps into his pickup truck and drives down a sandy path to where the future of Florida’s renewable energy plans begin:

DeSoto Next Generation Solar Energy Center in Ardacia, Fla

DeSoto Next Generation Solar Energy Center in Ardacia, Fla

Acres of open land filled with solar panels that will soon power thousands of homes and business.

For nearly a year, construction workers and engineers in this sleepy Florida town of citrus trees and cattle farms have been building the nation’s largest solar panel energy plant. Testing will soon be complete, and the facility will begin directly converting sunlight into energy, giving Florida a momentary spot in the solar energy limelight.
The Desoto Next Generation Solar Energy Center will power a small fraction of Florida Power & Light’s 4-million plus customer base; nevertheless, at 25 megawatts, it will generate nearly twice as much energy as the second-largest photovoltaic facility in the U.S.

The White House said President Barack Obama is scheduled to visit the facility Tuesday, when it officially goes online and begins producing power for the electric grid.

As demand grows and more states create mandates requiring a certain percentage of their energy come from renewable sources, the size of the plants is increasing. The southwest Florida facility will soon be eclipsed by larger projects announced in Nevada and California.

“We took a chance at it and it worked out,” said Bove, construction manager at the project, set on about 180 acres of land 80 miles southeast of Tampa. “There’s a lot of backyard projects, there’s a lot of rooftop projects, post offices and stores. Really this is one of the first times where we’ve taken a technology and upsized it.”

Despite its nickname, the Sunshine State hasn’t been at the forefront of solar power. Less than 4 percent of Florida’s energy has come from renewable sources in recent years. And unlike California and many other states, Florida lawmakers haven’t agreed to setting clean energy quotas for electric companies to reach in the years ahead. California, New Jersey and Colorado have led the country in installing photovoltaic systems; now Florida is set to jump closer to the top with the nation’s largest plant yet.

The Desoto facility and two other solar projects Florida Power & Light is spearheading will generate 110 megawatts of power, cutting greenhouse gas emissions by more than 3.5 million tons. Combined, that’s the equivalent of taking 25,000 cars off the road each year, according to figures cited by the company.

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Filed under Capitalism, Change, Climate Change, Economy, Energy, Environment, Free Market, Sciences

President Obama Announces Initiatives For Small Banks/ Businesses, Pay Cuts for Execs

Oct. 21 (Bloomberg) — President Barack Obama plans to announce new measures to open up credit for small businesses, including capital injections for community banks to spur lending, the administration said.

Community banks with less than $1 billion in assets will be eligible for lower-cost capital if they submit a small business lending plan and document their lending in quarterly reports, according to a White House fact sheet.

If approved by regulators, these banks would pay the government an initial 3 percent dividend on the injection, instead of the previous 5 percent rate.

Obama also will seek legislation raising the limits for Small Business Administration loans from $2 million to $5 million and as much as $5.5 million for manufacturing.

The president will visit a small business in Maryland this afternoon to make the announcement, White House press secretary Robert Gibbs said.
Full Story Here:

Obama Announces Help for Small Businesses

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US to Order Steep Pay Cuts at Firms That Got Most Aid

WASHINGTON — Responding to the growing furor over the paychecks of executives at companies that received billions of dollars in federal bailouts, the Obama administration will order the companies that received the most aid to deeply slash the compensation to their highest paid executives, an official involved in the decision said on
Wednesday.

Under the plan, which will be announced in the next few days by the Treasury Department, the seven companies that received the most assistance will have to cut the cash payouts to their 25 best-paid executives by an average of about 90 percent from last year. For many of the executives, the cash they would have received will be replaced by stock that they will be restricted from selling immediately.

And for all executives the total compensation, which includes bonuses, will drop, on average, by about 50 percent.

The companies are Citigroup, Bank of America, the American International Group, General Motors, Chrysler and the financing arms of the two automakers.
More Here: New York Times

MSNBC Reports on Executive Pay Cuts:

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Related Stories:

Federal plan to spur small-business lending unveiled

Obama to refocus bailout on small businesses

Treasury To Make TARP Money Available For Small Business Lending

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