April 8, 2009
Posted: 12:07 AM ET
By WILLIAM MCGURN
Has your 401(k) lost half its value? Have you kissed goodbye to the bonus you were hoping to use to pay junior's college tuition? Do you lie awake at night, worrying there's a pink slip with your name on it?
Cheer up. Even in these hard economic times, Democrats across the nation are working on plans that will turn some of you into instant millionaires.
There's only one catch. You're not actually going to be bringing in a million-dollar income. But the tax man is going to treat you just as though you did.
That's the message coming out of Albany, N.Y., where a newly ascendant Democratic majority led by Assembly Speaker Sheldon Silver forced a deal with the Democratic governor to impose a new "millionaires' tax." The beauty is that to pay this tax, you won't have to make anywhere near a million dollars. If you make even $300,000 a year, the cash-strapped Empire State will consider you a millionaire.
E.J. McMahon of the Albany-based Empire Center for New York State Policy explains the politics. "You get people picturing some greedy Wall Street fat cat whose pockets are stuffed with TARP money, but you end up hitting the guy who owns the local hardware store whose income is also his working capital. By the time everyone realizes what just happened, it's too late to make adjustments without creating an even bigger budget hole - which, of course, can always be solved with a bigger tax."
April 7, 2009
Posted: 04:13 PM ET
In 2006, the State Department reported terrorism killed 28 US citizens. That same year, the CDC estimated obesity killed 112,000.
Picking up where Supersize Me left off, Steven Greenstreet's doc Killer at Large tries to figure out how we got this fat this fast. Something to think about...
March 30, 2009
Posted: 08:49 AM ET
Ten years ago the cover of Time magazine featured Robert Rubin, then Treasury secretary, Alan Greenspan, then chairman of the Federal Reserve, and Lawrence Summers, then deputy Treasury secretary. Time dubbed the three “the committee to save the world,” crediting them with leading the global financial system through a crisis that seemed terrifying at the time, although it was a small blip compared with what we’re going through now.
All the men on that cover were Americans, but nobody considered that odd. After all, in 1999 the United States was the unquestioned leader of the global crisis response. That leadership role was only partly based on American wealth; it also, to an important degree, reflected America’s stature as a role model. The United States, everyone thought, was the country that knew how to do finance right.
How times have changed.
Never mind the fact that two members of the committee have since succumbed to the magazine cover curse, the plunge in reputation that so often follows lionization in the media. (Mr. Summers, now the head of the National Economic Council, is still going strong.) Far more important is the extent to which our claims of financial soundness — claims often invoked as we lectured other countries on the need to change their ways — have proved hollow.
March 23, 2009
Posted: 08:30 AM ET
By NY Times columnist Paul Krugman
Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.
This is more than disappointing. In fact, it fills me with a sense of despair.
After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.
And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.
It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street. And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.
Posted: 07:22 AM ET
By Tim Geithner, U.S. Secretary of the Treasury
The American economy and much of the world now face extraordinary challenges, and confronting these challenges will continue to require extraordinary actions.
No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk. Those decisions have caused enormous suffering, and much of the damage has fallen on ordinary Americans and small-business owners who were careful and responsible. This is fundamentally unfair, and Americans are justifiably angry and frustrated.
The depth of public anger and the gravity of this crisis require that every policy we take be held to the most serious test: whether it gets our financial system back to the business of providing credit to working families and viable businesses, and helps prevent future crises.
Over the past six weeks we have put in place a series of financial initiatives, alongside the Recovery and Reinvestment Program, to help lay the financial foundation for economic recovery. We launched a broad program to stabilize the housing market by encouraging lower mortgage rates and making it easier for millions to refinance and avoid foreclosure. We established a new capital program to provide banks with a safeguard against a deeper recession. By providing confidence that banks will have a sufficient level of capital even if the outlook is worse than expected, more credit will be available to the economy at lower interest rates today - making it less likely that the more negative economy they fear will take place.
March 20, 2009
Posted: 08:45 AM ET
By SEAN COCKERHAM
Gov. Sarah Palin is refusing to accept more than 30 percent of the federal economic stimulus money being offered to Alaska, including dollars for schools, energy assistance and social services.
The news Thursday drew anger from those who accused Palin of putting her national political aspirations ahead of the state's interests, and admiration from others who say she has courage to turn down money that would expand government. The state Legislature will have an opportunity to override her decision.
Palin is not taking about $288 million of the $930.7 million that Alaska is due in the federal stimulus. Palin said she is accepting the federal stimulus money that would go for construction projects, but not funding directed at government operations.
"We are not requesting funds intended to just grow government," Palin said. "In essence we say no to operating funds for more positions in government."
Filed under: Economy
Posted: 07:55 AM ET
The homeless men and women shuffle across the frozen ground of the tent camp and surround a steel drum burning wood. They use the flames to cook food and to stay warm.
The tents they live in are small, covered by tarps and plastic sheeting to keep water out. Several tents are collapsed under the weight of a recent snowfall.
For Bruce Beavers, however, this camp is just about the best place in the world he could be living right now.
"This is a place for people who lose their jobs, lose their houses, to have some kind of structure and for them to get back out in the world," he says.
Set up in the parking lot of a church near Seattle, Washington, the camp houses anywhere from 50 to 100 homeless people each day.
Residents call it Nickelsville. The name takes a page from the infamous "Hooverville" shantytowns of the Great Depression that were named for a president many thought did not care about their economic hardships.
Filed under: Economy
March 18, 2009
Posted: 11:22 AM ET
By political columnist Tucker Carlson via The Daily Beast
Jon Stewart’s recent attack on CNBC’s Jim Cramer was so brilliantly performed, so smoothly produced and cruelly compelling, almost nobody noticed that it didn’t make sense. The climax came as Stewart put up a number of grainy clips of Cramer describing how to artificially (and unethically) depress a company’s stock price. The video was damning. Cramer looked sweaty.
Stewart summed up the significance of what Cramer had said on the tape: “You can draw a straight line from those shenanigans to the stuff that was being pulled at Bear and at AIG, and all this derivative market stuff,” he said sternly.
Except that you can’t draw any such line. In the video, Cramer hadn’t mentioned derivates or securitized loans or credit default swaps, or any of the other exotic financial instruments that caused the fall of AIG and the current recession. There’s no evidence that Jim Cramer had anything to do with any of that, and Stewart didn’t offer any.
Before Cramer could defend himself, Stewart moved on to a new charge: Cramer and his colleagues at CNBC had known that the financial sector was in imminent danger of collapse, but had pretended otherwise—a ruse that Stewart described as “disingenuous at best and criminal at worst.”
Filed under: Economy
Posted: 07:44 AM ET
Donald Trump, chairman and president of The Trump Organization and the executive producer of NBC's "Celebrity Apprentice," spoke with LKL last night about the public's furor with AIG, the Bernie Madoff saga and the nation's economic woes.
Here's a portion of the interview:
Larry King: We have public anger over the AIG bonuses. Is it justified?
Donald Trump: Well, it's unbelievable anger. I heard people saying things that you wouldn't even believe - a very major senator saying that the people that did this should commit suicide. That's a pretty strong statement, I would say.
It is very bad politics in terms of what AIG did. They took $165 billion in money from the government and now they're going around giving out bonuses and giving people bonuses that really, in many cases, did not do a very good job and, in many cases, took the bonus and left right after the bonus. The bonuses were supposed to hold these people together and hold them into the company.
I think it's a very, very foolish thing that they did, and certainly should have used a different name if they had to do something.
King: We - the collective we - we the people, own 80 percent of AIG. Should we allow it to fail?
Trump: Well, Larry, now that you're in for $160 billion, it's a lot harder to walk away. I think AIG has the politicians right where they want them. Frankly, I think letting Lehman fail was far worse than letting AIG fail.
March 17, 2009
Posted: 10:02 AM ET
By Washington Post columnist Richard Cohen
What Jon Stewart needs is Jon Stewart. He could use a droll comedian to temper his ferocity and correct him when he's wrong, as he was about the financial media, particularly CNBC and its excitable analyst Jim Cramer. They didn't cover up the story of financial shenanigans. They didn't even know it existed.
For proof, I can offer some names. Let's start with Maurice "Hank" Greenberg, who was instrumental in building what is now probably the world's most reviled corporation, AIG. He resigned as chairman and CEO in 2005, but still it is logical to assume that few people knew more about the company than Greenberg. He kept much of his net worth in AIG stock. He's now lost much of that worth.
Or take Richard Fuld. He is the former chairman of Lehman Brothers, which, as we all know, is no more. He lost about $1 billion.
Or take Citigroup's former chairman, Sanford Weill. He lost about $500 million.
Or take all the good people at Bear Stearns, the company Cramer adored almost to the bitter end. They went down with their stock.
Filed under: Economy
Go Behind The Scenes
LARRY KING LIVE'S Emmy-winning Senior Executive Producer Wendy Walker knows what it takes to make a great story.
With anecdotes, provocative emails, scandals, show transcripts and insights into Walker's long working relationship with Larry King, her new book PRODUCER issues readers an invitation to listen in on the most intriguing conversations on the planet.