Mirrored: 25th of January 2012, 22:27 Original: news.firedoglake.com Views: 67 Settings: Loading the mirror...
Link: index: FDL News Desk IFrame [IMG] * [IMG] * About us * Advertise * Contact Us * Send Comments/Tips * Home * My FDL * Firedoglake * TBogg * La Figa * Book Salon * FDL Action * The Dissenter * Pam's House Blend * Elections * FDL TV * Just Say Now IFrame [IMG] Latest Blogs Other Bits and Pieces on the State of the Union By: David Dayen Wednesday January 25, 2012 1:16 pm Let's briefly go through a few of the other proposals in last night's State of the Union Address, none of which will come to pass this year if they include an act of Congress, but which offer some insights regardless: o The broader mortgage refi plan: HARP 2 is already operative, and Fannie and Freddie borrowers with hi LTVs can already, over the next few months, refinance into smaller rates on their mortgages. This is mainly a stimulus measure than a chance to keep people in their homes. Now the President has put forward a bigger refi plan that would cover the whole market rather than just the GSEs. And while government can't fix the problem on its own, responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief. And that's why I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates. (Applause.) No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit and will give those banks that were rescued by taxpayers a chance to repay a deficit of trust. (Applause.) A bank tax - known as the Financial Crisis Responsibility Fee - was already rejected when attached to deficit reduction. It won't get more popular in Congress when attached to debt deleveraging. But the idea is to put money in the pockets of homeowners and reduce slightly the burden of their underwater loans (we're talking about $250 a month here), paid for by banks. So yes, I'd support that, despite the handful of votes it would get in Congress. o Lower college costs: This plan to mandate that colleges work to lower their costs or face less federal funding is pretty sensible. I'm not as sure about raising the dropout rate, but studies show it to be a positive step for children. It also could lower performance in schools, which could have a rolling impact on other students, however. o Manufacturing taxes: I'm on the record supporting a strong manufacturing base. The Administration's plans to encourage insourcing and discourage outsourcing are nice, but they were also nice when I heard them in 2004 in John Kerry's campaign. This just feels like a perpetual promise on the part of national Democrats. o The Buffett rule: This has more meat on its bones now: Tax reform should follow the Buffett Rule. If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. It would probably just be a heck of a lot easier to raise the capital gains tax rate to align it with the top individual tax rate, maybe with a small exemption up to a certain dollar amount so it doesn't hurt the non-existent poor investor. That's what is driving inequality and tax unfairness in large measure. o War costs for infrastructure: I thought this was a shrewd frame: In the next few weeks, I will sign an executive order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home. You're talking about $500 billion in war savings at this point. That could fund quite a bit of infrastructure, including school modernization. Jared Bernstein was particularly in favor of this point. o Energy. Sometimes it's good that Congress is a brick wall, like when the President is talking about exploding the production of natural gas. But Obama did say that "I'm requiring all companies that drill for gas on public lands to disclose the chemicals they use." That would be an advance, as I understand it. And the EPA is moving in the direction of regulating fracking based on sound science already. Why is all this important at all if it will amount to nothing? As Jared says: If you're playing the long game here, and given partisan dysfunction, that's the only game in town, the speech was another brick in the foundation the President began to build in Osawatomie, one I've followed up on in numerous places on this site. We can and should argue about the details-your blueprint might be very different than the President's (mine is outlined in the previous link and parts 1 and 2 in that series). But you're either on the bus or you're off the bus on this stuff. That is, you either recognize the need for such an economic blueprint or you don't. The President does; his opponents do not. That, in a nutshell, was the contrast in tonight's speech, and it's what the campaign will ultimately come down to as well. The more crass point that can be made is that the proposals in the speech were generally extremely popular, and popular proposals should be at the heart of the national conversation. It's the only way they'll actually get enacted someday. read post comment on thisNo Comments Tags: Barack Obama, taxes, energy, infrastructure, inequality, manufacturing, refinancing, State of the Union, higher education, natural gas, Buffett rule, capital gains tax, war funding, bank fee IFrame [IMG] Fed to Keep Interest Rate Low Through 2014 By: David Dayen Wednesday January 25, 2012 12:15 pm The Federal Open Market Committee, the policymaking arm of the Federal Reserve, released their policy statement for January, and it suggests additional monetary accommodation in the years ahead. In fact, it forsees maintaining the extraordinarily low federal funds rate of between 0 and 1/4% until at least the end of 2014. This means that the recovery remains fragile and requires additional monetary aid. The Fed saw "some slowing in global growth" since its last meeting in December, as well as an elevated unemployment rate in the US, a depressed housing sector and slower growth in business investment. They see a lot of downside risks to the economy, due to "strains in global financial markets," particularly in Europe. But the main point is that the Fed has a dual mandate on unemployment and inflation, and they see themselves missing both targets - unemployment will be too high and inflation will "run at levels at or below" their mandate. Thus the need for monetary accommodation. They actually lowered their estimates for GDP growth in 2012, but also lowered their estimates on unemployment. The Fed now sees unemployment between 8.2 to 8.5% by the end of the year. I think we can make sense of this by saying that the Fed does not expect the low labor force participation rate to grow in the coming year. The current 8.5% unemployment rate comes in large measure from that low labor force participation rate, and if it grew, you'd see a higher rate of unemployment. Here's the key section of the release: To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions-including low rates of resource utilization and a subdued outlook for inflation over the medium run-are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability. This was a nearly unanimous vote, and it sets the stage for a QEIII down the road. But I wouldn't call that policy boldness so much as policy necessity. read post comment on this1 Comment Tags: economy, Federal Reserve, Europe, monetary policy, inflation, GDP growth, quantitative easing, interest rates WI-Gov: Walker Leads in First Head-to-Head Polls of Recall By: David Dayen Wednesday January 25, 2012 11:35 am Despite the vulnerabilities of Scott Walker in the upcoming recall election, he also has plenty of advantages. It's very difficult to recall a governor, it's only been done twice in American history. Because of the rules governing the recall, Walker can continue to raise unlimited campaign funds until the date is set for the recall. And he has used this time to raise millions of dollars and already start running ads defending his tenure. What's more, there's no consensus candidate yet on the Democratic side to consolidate support. And all of that is playing out in the first head-to-head poll of the recall election. Walker leads all potential opponents by anywhere from 6-10 points, though he barely scrapes the 50% threshold seen as important for incumbent viability. The poll finds Walker ahead of Milwaukee Mayor Tom Barrett by a 50 percent to 44 percent margin. Walker leads the only announced Democratic candidate, former Dane County Executive Kathleen Falk, with a 49 percent to 42 percent margin. Walker leads former Congressman David Obey by 49 percent to 43 percent. Janesville Democratic State Senator Tim Cullen receives 40 percent to Walker's 50 percent. While Walker consistently leads his Democratic opponents, the size of the lead is within the poll's margin of error for all but Cullen. Professor Charles Franklin, director of the Marquette Law School Poll and visiting professor of law and public policy at Marquette Law School, noted, "The old line `you don't beat somebody with nobody' is true. Other polls have asked only if Governor Walker should be recalled and have found closer races. But in the end, some specific Democrat will face Governor Walker. This poll is the first of the year to match specific potential Democratic challengers against the governor. The results show a competitive race but one in which Governor Walker starts with an advantage." The poll also has Barack Obama up on Mitt Romney statewide 48-40, so I don't think it's a poll that oversamples Republicans. One positive in the poll is that Walker has a 95% name ID, while only 61% have an opinion of Barrett, 44% for Falk, 42% for Obey and 18% for Cullen. So all the Democrats at least have some room to make a favorable opinion. Of these potential candidates, only Falk has so far declared that she's running. But ultimately, this is a referendum on the incumbent - literally so - and Walker is right at 50%. What's more, the poll shows that independents have a favorable view of Walker by 54-34, and respondents believe that the changes in Wisconsin will make the state better off by 54-40. One vulnerability for Walker is this: The poll asked respondents about job creation strategies. Asked if legislation aimed at increasing jobs in the state had succeeded, 31 percent said the legislation had increased jobs, though 44 percent said it had made no difference and 16 percent said the policies had decreased jobs. Walker actually has a terrible jobs record, and Wisconsinites see that. But they have not yet been sold on the recall. And Walker will have millions of dollars to use to convince the public otherwise, and paint the recall effort as a radical takeover of the state. It will not be a cakewalk. read post comment on this2 Comments Tags: jobs, unions, labor, Wisconsin, Scott Walker, recall, WI-Gov, Tom Barrett, Kathleen Falk There's Already a Financial Fraud Task Force By: David Dayen Wednesday January 25, 2012 10:57 am I have some additional reporting on the financial fraud unit that will be co-chaired by Eric Schneiderman, and how he will approach it. But before I get to that, I want to pick up on something that came up when I appeared on Sam Seder's Majority Report radio program today. The thing is, and this [...] read post comment on this18 Comments Tags: financial industry, mortgages, securitization, financial fraud, Eric Schneiderman, Lanny Breuer, Robert Khuzami, UMOSA, origination, Tony West Europe Has a Growth Problem By: David Dayen Wednesday January 25, 2012 10:21 am With the Greek debt situation still in flux, it's worth looking at the real problem in Europe, which of course has nothing to do with the special problem of Greek debt. It's a growth problem. There is a palpable sense of hope at the annual Davos World Economic Forum that the euro zone is edging [...] read post comment on this2 Comments Tags: economy, Europe, austerity, Greece, Britain, GDP growth, default, Angela Merkel US Resolves to Deal with Non-Afghan Nationals at Bagram Prison By: David Dayen Wednesday January 25, 2012 8:55 am The focus on Guantanamo over the past couple years has been misplaced. In fact, the number of detainees there has been dissipating somewhat. The detainees at Bagram Air Force Base in Afghanistan, by contrast, have exploded, with detainees captured throughout the world moved over to Bagram - and shielded from any habeas proceedings - rather [...] read post comment on this1 Comment Tags: Barack Obama, Afghanistan, war machine, Guantanamo, indefinite detention, prisons, Bagram Indiana Democrats Gamely Holding Out on Right to Work By: David Dayen Wednesday January 25, 2012 8:15 am Indiana Democrats in the State House walked out again to deny a quorum, as Republicans attempted to pass their right-to-work bill and clear the last hurdle before moving the bill to Mitch Daniels for his signature. The House tried and failed to come in at both 1:30 p.m. and 3:30 p.m., as not enough representatives [...] read post comment on this4 Comments Tags: Democrats, unions, labor, Indiana, right to work, quorum Obama Announces Trade Enforcement Unit to Inquire on Illegal Chinese Trade Practices By: David Dayen Wednesday January 25, 2012 7:35 am Outside of the horrendous gambit of announcing a fraud investigation that appears designed to fail, Obama gave a decent enough speech last night. I liked the specificity on the Buffett rule - a minimum effective tax rate of 30% for millionaires - and the alternative minimum tax for corporations (a nice counterpoint to the far-right [...] read post comment on this19 Comments Tags: Barack Obama, economy, China, trade, currency, manufacturing, NAFTA Public Citizen Petitions Federal Regulators to Break Up Bank of America By: David Dayen Wednesday January 25, 2012 6:55 am If financial regulators want to prove that they're willing to take the necessary steps to protect the public and not the banks, they will soon have a great opportunity. Today, Public Citizen will send a formal petition to the Federal Reserve Board of Governors and the Financial Stability Oversight Council, asking them to "recognize that [...] read post comment on this10 Comments Tags: financial industry, banking industry, FinReg, regulations, Federal Reserve, Bank of America, systemic risk, FSOC, Public Citizen The Schneiderman Gambit: Financial Fraud Unit Appears Designed to Fail, and Grease Skids for Foreclosure Fraud Settlement By: David Dayen Wednesday January 25, 2012 6:15 am I'll pepper in my thoughts on the State of the Union Address throughout the day, but I would be remiss if I didn't start with the announcement of a Unit on Mortgage Origination and Securitization Abuses (UMOSA) to investigate bank practices during the financial crisis. The unit will be co-chaired by Eric Schneiderman, the New [...] read post comment on this50 Comments Tags: Barack Obama, financial industry, foreclosure fraud, mortgages, state AG investigation, global settlement, progressive groups, securitization, financial fraud, Eric Schneiderman, State of the Union, Kamala Harris, Lanny Breuer, UMOSA, Robert Khuzami Live Blog: President Delivers State of the Union Address By: David Dayen Tuesday January 24, 2012 5:00 pm Tonight at 9pm ET, the President will deliver the State of the Union Address at the beginning of his run for re-election. Unlike Obama's other addresses to joint sessions of Congress I wouldn't expect this one to produce much in the way of a legislative blueprint. It's an election year and most of the major [...] read post comment on this359 Comments Tags: Barack Obama, financial industry, taxes, housing, obstructionism, criminal justice, inequality, State of the Union, Mitch Daniels << Previous Entries ________________________________ [ Search ] IFrame [IMG] LATEST POSTS * Other Bits and Pieces on the State of the Union * Fed to Keep Interest Rate Low Through 2014 * WI-Gov: Walker Leads in First Head-to-Head Polls of Recall * There's Already a Financial Fraud Task Force * Europe Has a Growth Problem * US Resolves to Deal with Non-Afghan Nationals at Bagram Prison * Indiana Democrats Gamely Holding Out on Right to Work * Obama Announces Trade Enforcement Unit to Inquire on Illegal Chinese Trade Practices * Public Citizen Petitions Federal Regulators to Break Up Bank of America * The Schneiderman Gambit: Financial Fraud Unit Appears Designed to Fail, and Grease Skids for Foreclosure Fraud Settlement DAVID DAYEN ON TWITTER Advertisement IFrame [IMG] IFrame [IMG] FOLLOW FDL NEWS DESK Follow @FDLNewsDesk IFrame [IMG] Subscribe to News Desk's RSS Feed >> More Firedoglake feeds Become a member of Firedoglake News. 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