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Obama's new plan
Well, it's not really a new plan, it's kind of an extension of existing stimulus plans, but the president's trying to capitalize on the news that TARP will cost $200 billion less.
At a speech today, the Obama explained how he wants to create jobs and pay down the deficit with the newfound money. Here's a rundown of the proposals from NPR:
The president's latest initiatives would offer a one-year exemption for individuals on the capital-gains tax for new investments in small business stock. The administration would also extend expensing provisions for small businesses and the acceleration of the rate at which they can deduct the cost of capital expenditures.
It would provide additional funds for a wide range of infrastructure projects on highways, transit, rail, aviation and water.
Finally, the plan would include a so-called Cash for Caulkers incentive program that would provide rebates for consumers who make energy-efficient retrofits on their homes.
Republicans clearly aren't too keen on any of it:
Speaking on Tuesday, (House Minority Leader John) Boehner called Obama's plan "repulsive." He said that when TARP was formed, there was an understanding that all the money authorized probably would not be spent.
"Any money that wasn't spent was supposed to go toward the deficit," he said.
Rep. Jeb Hensarling (R-TX) called the initiative "further proof that TARP has morphed from an emergency injection of liquidity ... into a $700 billion slush fund to promote Democrats' political, social and economic agenda."
On one hand, help for small business is overdue. More attention on creating jobs is overdue. On the other hand, it's maddening that the government has fed the banks so much money, they've horded it to make profits and aren't lending, and now that everything looks fine for them, Main Street gets leftovers from their haul.
But that's not the only way to look at it. What do you think?
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For banks that were insolvent it seemed necessary to stop a full financial panic.
That said, the only reason to preserve Stock holder equity, was a quid pro quo for contributions and "friendships". Along the same lines to not give a proportional haircut to all counterparties does not make sense. This is a betrayal of fundamental principles of capitalism and democracy, and was cronyism pure and simple. Political contributions and invitations to networking weekends at personal homes, should not guarantee protection from poorly managed firms, either as a shareholder or for purchasing financial instruments.
If there had been any sort of organization in the set-up of TARP, the generous loans to the banks would have been contingent on them putting a helathy percentage of that cash back out into the community through personal and business loans. But, of course, planning was never one of the Bush Adminstration's strong points; the first priority of TARP was saving the rumps of the wheeler-dealers who'd made certain we had eight years of W and his Billionaire Boys Club. It's upsetting to see the banks hording that cash, but why not, since it was basically thrown at them with no real strings attached? So we're left with a "recovery" that -- in the eyes of the general public -- looks pretty indistinguishable from the recession since the jobless rate is still sky-high and looking for full-time work in most places is like mining for gold in the New York subway. By the way, do the Republicans ever support *anything* at all? All they ever seem to do is bitch and kvetch about anything Obama proposes yet when it comes time to offer their own solutions -- well, then it's time to find something new to complain about. Sure, now they're aghast at the size of the deficit but when it came to bankrolling "democracy on the march" a few years back, money was certainly no object.
"the first priority of TARP was saving the rumps of the wheeler-dealers who’d made certain we had eight years of W and his Billionaire Boys Club."
Democrats received more campaign contributions than republicans from the Wall Street big boys during all 4 of GWB's election cycles. Goldman gave 63% of their contributions to democrats as opposed to 37% to republicans. They upped that to 75% D (3:1) in 2008.
James, TARP was definitely rushed through and as a consequence, there just hasn't been much accountability. In a crisis, you have to expect a certain amount of on-the-fly policy making, but with TARP, it's still going on more than a year later.
Lot of myths:
1. Loans are given to banks so that they can lend. Not true. Loans are given to banks so that they can meet their reserve requirements. If they lend that money they will be insolvent again.
2. Small business are not getting loans. Not true. Small business without prospects are not getting loans. I heard some stories on NPR where small business dont have any work for next month and they expecting loans. Who in their right mind is going give money to a business that is clearly not going to survive.
But gb, we were sold on the idea that the banks needed all this liquidity so that they would start lending again. It still hasn't happened. Look at the latest figures: http://tinyurl.com/yhgy9rr
That being said, you do raise an important point. Businesses that need loans are in trouble because demand for their products and services has dropped off so much. So there's that chicken and egg thing again. There's some degree of flushing out of the system that's going on because the levels of leverage and lending during the boom were unsustainable. Good points.
What a bunch of dimwits! Green Jobs vs. Manufacturing, Obama VS Bush? You people dont see the big picture. The politicians on both sides are selling out the American middle class. We need more rules in effect to make lobbyist money/political contributions more transparent. We have them to blame for being in this mess now.
They should start by placing a Unemployment and Retraining tax Tarrif on any company who moves jobs overseas. Also no TARP or Fed grant money to companies that off shored jobs in the last 2 years.Because of the 15.4 million unemployed people since the first of the year. Also close ALL off shore tax loopholes were it is cheaper to off shore a job then it is to create one in this country. Small Business for job creation? If you%u2019re talking about min wage part time work for Teens and college students that%u2019s fine. But to raise a family in minimum wage and part-time work you would have to count of government food stamps to just eat. I bet 90% of those jobs got off shored to call centers for customer service for everything from credit cards, DSL/Cable, Digital TV, Cell phone , gas/electric utility to any customer service or computer help deck position. This is the state of America today. It is a national disgrace. It has completely destroyed the American middle class and ruin countless lives. It%u2019s all about cheap labor and corporate greed. It%u2019s about the corporate top getting dozen getting bonuses for %u201CCOST CUTTING%u201D = Selling out the american worker and off shoring jobs, the rest who retain jobs here in the US dont see a dime of that. As what the US should have done with banks, investment firms and wall street. We need MORE REGULATION and more rules in effect to make lobbyist money/politital contribuations more transparent to keep the jobs from being offshored. Is a national disgrace.
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