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Monday, November 24, 2008
Will Jan. 20 ever get here?
The Atlanta Journal-Constitution
I don’t know if there’s a way out of this economic mess. But I do believe that Barack Obama is giving us our best shot at finding one.
He has named smart, experienced, hard-headed people to important positions. He seems to be thinking things through (although in uncharted waters like this, “decision-making” can be an inflated term for making an educated guess). He recognizes that a leadership vacuum exists at a critical point in our history, and he is attempting to fill it as best he can given that he won’t take office for almost two months.
Perhaps best of all, he understands the seriousness of the situation, and wants the American people to understand it as well.
“There are no shortcuts or quick fixes to this crisis, which has been many years in the making - and the economy is likely to get worse before it gets better,” he said today. “Full recovery won’t happen immediately. And to make the investments we need, we’ll have to scour our federal budget, line-by-line, and make meaningful cuts and sacrifices as well - something I’ll be discussing further tomorrow.”
In effect, Obama is serving much the same role in this crisis that President Bush served in the aftermath of 9/11, when Bush effectively rallied the nation behind him. And I suppose that’s a cautionary tale, because as later events demonstrated, getting the atmospherics right helps only in the short term; getting the decisions right and the people right is a lot tougher and more important in the long term.
For weeks before the election, it seemed like Nov. 4 couldn’t get here soon enough. But that was nothing compared to the wait for Jan. 20.
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Obama may delay tax hike on most affluent
The Atlanta Journal-Constitution
Given how bad things have gotten — and how quickly — this move to delay a tax increase on the richest Americans probably makes a lot of sense.
WASHINGTON (Reuters) - President-elect Barack Obama may consider delaying a campaign promise - to roll back tax cuts on high-income Americans - as part of his economic recovery strategy, two aides said on Sunday.
David Axelrod, the Obama campaign strategist who was chosen to be a senior White House adviser, was asked if the tax cuts could be allowed to expire on schedule after tax year 2010 rather than being rolled back by legislation earlier.
“Those considerations will be made,” he said on “Fox News Sunday.”
Bill Daley, an adviser to Obama and Commerce secretary under former President Bill Clinton, said on NBC’s “Meet the Press” that the 2010 scenario “looks more likely than not.”
President George W. Bush’s tax cuts are set to expire at the end of 2010. After that they would revert to 2001 levels, when the top individual tax rate was 39.6 percent.
It’s also important to remember that this “radical Marxist” Obama merely proposed to return the top tax rate to where it was for most of the ’90s, not raise it to 80 or 90 percent, as some of the hysteria might have you believe.
The president-elect will announce his economic team in a noon press conference in Chicago, and will no doubt address the larger issues at that point.
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Congratulations! Overnight, you became the proud owner of Citigroup
The Atlanta Journal-Constitution
WASHINGTON - (Dow Jones) - U.S. federal regulators Sunday agreed to inject an additional $20 billion into Citigroup Inc. (C) and back up to $306 billion worth of the giant bank’s assets in a bid to help stabilize the firm and the broader financial system.
In exchange for the rescue, Citigroup will issue preferred shares to the federal government, adhere to executive pay limits and implement a government program designed to help make home loans more affordable for struggling borrowers….
Under the broad rescue package, the Treasury and the FDIC will provide protection against the possibility of unusually large losses on an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup’s balance sheet.
…..According to a term sheet officials released Sunday, Citigroup must absorb all losses in its portfolio up to $29 billion in addition to its existing loss reserves. The federal government will absorb 90% of losses above that - it’ll take on the first $5 billion through funds provided in the $700 billion bailout plan Congress approved last month and the next $10 billion would come from the FDIC.
Those printing presses down at the Mint must be rolling 24 hours a day…
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