Research

This morning on MSNBC’s “Morning Joe,” Austan Goolsbee, a member of Obama’s Council of Economic Advisors, declared that the Obama-Dodd financial regulation bill outlawed bailouts:

The thing is, it's crazy. I'm sure that if i call up the staff from Senator McConnell's office and show them where it outlaws bailouts … They'll stop saying that once they determine that it is specifically outlawed in the bill.

We suggest that Goolsbee read the bill because it does in fact continue bailouts. The language in the bill is very clear:

• On page 35, a new “Financial Oversight Council” would determine which firms are “too big to fail”: “The Council, on a non-delegable basis and by a vote of not fewer than 2⁄3of the members then serving, including an affirmative vote by the Chairperson, may determine that a U.S. nonbank financial company shall be supervised by the Board of Governors and shall be subject to prudential standards, in accordance with this title, if the ... more
  
  

If the Obama-Dodd financial regulatory reform bill is supposed to put the hammer down on Wall Street, why are big Wall Street firms like Goldman Sachs endorsing many of the provisions in the Obama-Dodd financial regulation reform bill? Let’s start with all of the money from big banks that helped build the current Congressional Democrat majority and Obama’s election to the White House. Since 2005:

• Obama took in over $24 million from financial services companies
• The DNC took in over $30 million from financial services companies
• The DCCC took in over $19 million from financial services companies
• The DSCC took in over $35.6 million from financial services companies
• Senate Majority Leader Harry Reid (D-NV) took in over $1.4 million from financial services companies
• Senate Banking Committee Chairman Chris Dodd (D-CT) took in over $1.8 million from financial services companies

(And for Dodd, that wasn’t all: he received sweetheart mortgage discounts from Countrywide, despite denying it ... more

Yesterday on NBC’s “Meet The Press,” Obama’s Treasury Secretary Tim Geithner repeated the administration’s claim that their so-called “fee on banks” will “cover any losses” associated with the bank bailouts. But on Friday, Sen. Max Baucus (D-MT) told Congressional Quarterly [subscription required] that this tax on Americans’ savings will be used to pay for Obama’s binge spending, in an aptly titled story, “Bank Tax Seen As Potential Cushion For Cost Of Other Bills”:

Senate Finance Committee Chairman Max Baucus is adding a $90 billion bank tax proposal to the mix of potential budgetary offsets for upcoming legislation … How the money will be used depends on whether and how quickly lawmakers can coalesce around a version of the tax that can become law. “The Senate’s hungry for offsets” Baucus said. “Whichever [bill] comes along first tends to soak it up.”

Baucus’s comments mirror that of Rep. Barney Frank (D-MA) who said back in January that Obama’s savings tax will be used to raise ... more

Is Obama’s binge spending putting us in imminent danger? That’s what Rudolph Penner of the Urban Institute says in today’s San Francisco Chronicle:

“In my judgment, a crisis could occur next week or 10 years from now,” said Rudolph Penner, an Urban Institute economist who co-chaired a huge budget report sponsored by the National Academy of Sciences and the National Academy of Public Administration. “I don't really think we can go much beyond 10 years.”

We’ve already seen signs that Obama’s binge spending is causing problems in the economy.  Previously we’ve highlighted the fact that investors are becoming increasingly leery of buying U.S. treasurys as concerns about our debt grow. As a result, the yield on U.S. treasurys has been increasingly rising, with the ten-year note hitting 4% today.  The Wall Street Journal explains why this is cause for concern for Americans:

The yield on the 10-year Treasury is a basis for calculation of mortgage rates, and higher yield leads to higher ... more

President Ronald Reagan once joked, “The 10 most dangerous words in the English language are, ‘Hi, I'm from the Government, and I'm here to help.’”  Well, in today’s Wall Street Journal, Obama Commerce Secretary Gary Locke does his best attempt to deliver those 10 words with a straight face with “Don’t Believe The Writedown Hype:”

President Obama began his campaign to reform the American health-care system focused on three goals: protecting Americans' choice of doctors and health plans, assuring quality and affordable health care for all Americans, and reducing costs for families and businesses.

The new comprehensive health-care legislation meets these goals, and will significantly benefit American businesses by slowing and eventually reversing the tide of crippling premium increases washing over our nation's employers.

The reality is, unfortunately, that Sec. Locke’s words are rightly delivered on April Fools’ Day, because they are an attempt to fool the American people into ... more

This past week, we’ve been warning you about the devastating consequences of President Obama’s binge spending, from our credit rating being threatened to higher costs on our debt. Despite the Obama administration’s insistence that our credit rating will stay intact, The Philadelphia Inquirer’s editorial board reminds us that credit downgrades can happen to countries:

President Obama's proposed $3.83 trillion budget for the coming fiscal year would borrow 42 cents of every $1 spent. The federal deficit is expected to rise this year to 10.6 percent of gross domestic product, its highest level since 1946. And the fiscal future looks even dimmer … A credit downgrade can, and does, happen. Credit problems in Portugal and Greece have forced those nations to cut back drastically on government programs, leading to public unrest.

But The Philadelphia Inquirer’s editorial board notes that there even warning signs here at home: Obama could’ve learned the lessons of states like New Jersey and ... more

Last Saturday, we told you how President Obama’s recess appointment of Craig Becker to the National Labor Relations Board was a bailout to his union paymasters, with more job-killing bailouts to come. The bailout continued today when the White House Office of Management and Budget issued new guidance that proposes to grow the number of unionized government jobs by broadening the “the definition of jobs that should be performed by government workers instead of private contractors.” Here is the reasoning:

The proposed guidance is built around the general principle that the more critical a function is, the greater the need for internal capability to maintain control of the agency’s mission and operations. This is most obviously the case where the function is critical to achievement of the agency’s core mission, but even for functions that may not be viewed as critical, such as functions that are not directly involved in performing the core mission, the agency may determine that the ... more

Yesterday, we highlighted the fact that the government had a hard time selling treasuries this week, as investors have become increasingly worried about our debt.  As a result, the yield on treasuries was raised which Former Federal Reserve Chairman Alan Greenspan called a “canary in the mine,” warning that there may be additional hikes in interest rates.  Bloomberg reports:

Higher yields reflect investor concerns over “this huge overhang of federal debt which we have never seen before,” Greenspan said in an interview today on Bloomberg Television’s “Political Capital With Al Hunt.” “I’m very much concerned about the fiscal situation,” said Greenspan …  An increase in long-term interest rates “will make the housing recovery very difficult to implement and put a dampening on capital investment as well.”

This week Pelosi pushed Obama’s government-run health care bill through the House, which is already causing disastrous effects on businesses and threatening the jobs of many ... more

“"Unlike Congress, we don't get to borrow from the Chinese," Florida State Senator J.D. Alexander said yesterday in his explanation of the tough choices legislators in the Sunshine State have to make in that state’s forthcoming budget.  And while he is right about Congress, this morning’s Wall Street Journal makes clear that the cost of borrowing time and money from the Chinese is going up.  The government had trouble selling our debt to finance President Obama and the Democrat Congress’ binge spending this week because demand, especially from foreign investors, was weak. 

One economist noted that the low demand for treasuries is because investors are worried about the high deficits we are facing now:

While this could be just ‘noise’ in the markets, ‘I think it involves a greater, long-term concern about deficits in the U.S. last 10 or 20 years, about Social Security being in a deficit,’ said Brian Fabbri, chief economist North America at BNP Paribas. ‘And all of the concerns about ... more

In 2009, the Obama administration diverted $50 billion from the TARP bailout fund to be used to modify the home loans of a portion of the 8 million Americans facing foreclosure. The intention was for the government to step in between banks and homeowners behind on their payments and prevent foreclosures by arranging for better terms on behalf of borrowers. As Rene Merle at the Washington Post reports, Obama is having trouble living up to those promises:

The Treasury Department initially said the program, known as Making Home Affordable, would reach as many as 4 million struggling borrowers. But Neil Barofsky, special inspector general for the Troubled Assets Relief Program, said in a report issued Tuesday that Treasury now expects only 1.5 million to 2 million homeowners to get mortgage relief. . . But so far, fewer than 200,000 borrowers have received permanent loan modifications.

This is yet more evidence of why the Obama Democrats’ philosophy of “more government is the solution” ... more