Jon Stewart once again nails exactly how we feel.\

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Op-Ed Columnist - Climate of Change - NYTimes.com

Paul Krugman is FINALLY happy. (And we all know that Obama was tailoring his economic policies to make Krugman happy.... LOL.)

Elections have consequences. President Obama’s new budget represents a huge break, not just with the policies of the past eight years, but with policy trends over the past 30 years. If he can get anything like the plan he announced on Thursday through Congress, he will set America on a fundamentally new course.

The budget will, among other things, come as a huge relief to Democrats who were starting to feel a bit of postpartisan depression. The stimulus bill that Congress passed may have been too weak and too focused on tax cuts. The administration’s refusal to get tough on the banks may be deeply disappointing. But fears that Mr. Obama would sacrifice progressive priorities in his budget plans, and satisfy himself with fiddling around the edges of the tax system, have now been banished.

For this budget allocates $634 billion over the next decade for health reform. That’s not enough to pay for universal coverage, but it’s an impressive start. And Mr. Obama plans to pay for health reform, not just with higher taxes on the affluent, but by putting a halt to the creeping privatization of Medicare, eliminating overpayments to insurance companies.

On another front, it’s also heartening to see that the budget projects $645 billion in revenues from the sale of emission allowances. After years of denial and delay by its predecessor, the Obama administration is signaling that it’s ready to take on climate change.

And these new priorities are laid out in a document whose clarity and plausibility seem almost incredible to those of us who grew accustomed to reading Bush-era budgets, which insulted our intelligence on every page. This is budgeting we can believe in.

Read the rest at NYTimes.com.

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Two Documents You Should Read to Better Understand the Crisis

As a white-collar criminologist and former financial regulator much of my research studies what causes financial markets to become profoundly dysfunctional. The FBI has been warning of an 'epidemic' of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds. When the person that controls a seemingly legitimate business or government agency uses it as a 'weapon' to defraud we categorize it as a 'control fraud' ('The Organization as 'Weapon' in White Collar Crime.' Wheeler & Rothman 1982; The Best Way to Rob a Bank is to Own One. Black 2005). Financial control frauds' 'weapon of choice' is accounting. Control frauds cause greater financial losses than all other forms of property crime -- combined. Control fraud epidemics can arise when financial deregulation and desupervision and perverse compensation systems create a 'criminogenic environment' (Big Money Crime. Calavita, Pontell & Tillman 1997.)

Read more on HuffPo.

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Obama unveils budget blueprint - CNN.com

The budget for fiscal year 2010 includes substantial investments in health care reform, renewable energy and education.

The budget also includes big cuts for some programs, setting the stage for major political battles as political patrons fight to save budget items in the months ahead.

Based on the proposed budget, the administration projects the deficit for fiscal year 2009 will reach $1.75 trillion, or 12.3 percent of U.S. gross domestic product. That's a record in dollar terms and is the highest as a share of GDP since World War II.

Read the budget (pdf)

More from CNN.com.

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Face of the Day

Obama listening to House Republicans. They crowded around to ask for his autograph and then proceeded not to vote for the stimulus bill.

Jerks.

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Paul Krugman on the myth of wealth creation

Last week the Federal Reserve released the results of the latest Survey of Consumer Finances, a triennial report on the assets and liabilities of American households. The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.

At one level this should come as no surprise. For most of the last decade America was a nation of borrowers and spenders, not savers. The personal savings rate dropped from 9 percent in the 1980s to 5 percent in the 1990s, to just 0.6 percent from 2005 to 2007, and household debt grew much faster than personal income. Why should we have expected our net worth to go up?

Yet until very recently Americans believed they were getting richer, because they received statements saying that their houses and stock portfolios were appreciating in value faster than their debts were increasing. And if the belief of many Americans that they could count on capital gains forever sounds na�ve, it’s worth remembering just how many influential voices — notably in right-leaning publications like The Wall Street Journal, Forbes and National Review — promoted that belief, and ridiculed those who worried about low savings and high levels of debt.

Thanks Paul.

Read more at NYTimes.com.

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Don't miss a credit card payment, or the APR could soar - Los Angeles Times

Oh look, Americans are already paying to bail out banks...Oh yeah, we HAVE been paying for their junkets all these years.

Even in the best of times, carrying a balance on your credit card is a risky -- and costly -- proposition. These days, it can be downright foolish, at least if there's a chance you might miss a payment or two.

Millions of cardholders have recently received letters from the likes of Citibank, Bank of America Corp., Wells Fargo & Co. and American Express Co. notifying them that their interest rates are going up, in some cases to 30% if a single payment is missed.

JPMorgan Chase & Co., the nation's largest issuer of plastic, has begun charging hundreds of thousands of cardholders a $10 monthly fee for having carried large balances for more than a couple years.

Why? In part it's because default rates are rising and banks are dealing with additional risk. But lawmakers and consumer advocates say the higher rates also reflect banks' massive losses from betting wrong on the housing boom, and they're basically sticking credit card customers with the tab.

At a Senate Banking Committee hearing last week, Sen. Christopher J. Dodd (D-Conn.), the committee chairman, said lenders are "gouging" customers to boost their bottom lines.

"The list of questionable actions credit card companies are engaged in is lengthy and disturbing," he said.

At the same time, rising layoffs and tough economic conditions have caused many people to lean more heavily on their plastic -- sometimes too heavily.

Corona resident Louis Martinez, 39, is carrying about $45,000 in debt on eight credit cards. He says it's not that he's been deliberately reckless. Rather, the debt piled up after his wife got sick several years ago and half the family's income disappeared.

"What can you do?" Martinez asked. "You still want to provide for your family."

He said he grows more anxious with each bank letter that arrives warning him of potential interest-rate increases.

"I've never missed a payment," Martinez said. "But with the way things are now, I wonder every day how I'm going to get through the month."

By ratcheting up the pressure on customers, major banks -- some of which have received billions of dollars in bailout cash from taxpayers -- are making it likely that a growing percentage will be forced to either default on their obligations or seek bankruptcy protection.

Last week, letters arrived at the homes of Citibank cardholders throughout California warning that their rates could rise to 29.99% if they miss a single payment -- even for cards with low-low-low introductory rates.

Citi customers have the right to decline any such rate hike. But if they do, their account will be closed as soon as the card expires. And that's one of the more generous conditions offered by a leading bank.

Other lenders say cardholders who don't want higher rates can close their accounts immediately and pay off the outstanding balance.

Samuel Wang, a Citi spokesman, blamed the rate hike on the "difficult market environment" and "severe funding dislocation." In other words, business has gone down the tubes.

Citi lost $18.7 billion last year and received $45 billion in bailout cash from taxpayers.

"In light of these unprecedented developments and others, Citi is repricing a group of customers in our Citi-branded consumer credit card business in the U.S. to appropriately manage these risks," Wang said. "We are carrying out this repricing in order to continue lending in this environment."

American Express cited a similar rationale to explain why it had raised interest rates by up to 3 percentage points for millions of cardholders last month.

"It was because of the challenging environment that we're in and the cost of doing business," said Desiree Fish, a company spokeswoman.

You can read more in the Los Angeles Times.

You know what kills me about the whining about "losing top talent" if you cap CEO bonuses? Into what OTHER industry do they think they're going to go? Who the heck do they think is going going to pay such absurdly, obscenely, outrageously huge "bonus" sums for abject FAILURE?

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Obama's poll numbers still high-- take that Rush Limbaugh

"With Barack Obama’s victory in passing a massive stimulus package marred by days of bad press—as not a single House Republican backed the bill, his Health Czar went down in flames and his second pick for Commerce Secretary walked away—the administration has been cut down to size, and lost some of its bipartisan sheen.

Such, at least, has been the beltway chatter, but so far the numbers don’t back it up.

Obama’s approval rating remains well above 60% in tracking polls. A range of state pollsters said they’d seen no diminution in the president’s sky-high approval ratings, and no improvement in congressional Republicans’ dismal numbers.

And that’s before the stimulus creates billions of dollars in spending on popular programs, which could, at least temporarily, further boot Obama’s popularity.

“It’s eerie—I read the news from the Beltway, and there’s this disconnect with the polls from the Midwest that I see all around me,” said Ann Seltzer, the authoritative Iowa pollster who works throughout the Midwest."

Read more on Politico.com.

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Martin Wolf on slaying zombie banks

FT.com / Columnists / Martin Wolf - Why Obama’s new Tarp will fail to rescue the banks.

"The correct advice remains the one the US gave the Japanese and others during the 1990s: admit reality, restructure banks and, above all, slay zombie institutions at once. It is an important, but secondary, question whether the right answer is to create new “good banks”, leaving old bad banks to perish, as my colleague, Willem Buiter, recommends, or new “bad banks”, leaving cleansed old banks to survive. I also am inclined to the former, because the culture of the old banks seems so toxic.

By asking the wrong question, Mr Obama is taking a huge gamble. He should have resolved to cleanse these Augean banking stables. He needs to rethink, if it is not already too late."

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Arianna Huffington: Why is Obama Reluctant to Kill the Zombie Banks Threatening Our Economy?

Arianna Huffington: Why is Obama Reluctant to Kill the Zombie Banks Threatening Our Economy?:

"The big problem is Geithner is acting as if the crisis we are facing is a crisis of liquidity when, in fact, it's a crisis of insolvency. As Ann Pettifor puts it on HuffPost: 'Much of Wall Street is effectively insolvent. It's not that these banks lack cash or capital -- it's just that they're never going to meet all their financial liabilities -- i.e. repay their debts. Ever.'

Trying to prop these zombies up, as Geithner seems intent on doing, will lead to what Roubini calls 'a royal rip-off of the taxpayer' and the risk of 'turning a U-shaped recession into an L-shaped near-depression.'"

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Lessons From Japan in Stemming a Crisis

Ummmm, I have a really bad feeling about this. Anyone else feel like this is familiar sounding?

The Obama administration is committing huge sums of money to rescuing banks, but the veterans of Japan’s banking crisis have three words for the Americans: more money, faster.

The Japanese have been here before. They endured a “lost decade” of economic stagnation in the 1990s as their banks labored under crippling debt, and successive governments wasted trillions of yen on half-measures.

By then, Tokyo’s main Nikkei stock index had lost almost three-quarters of its value. The country’s public debt had grown to exceed its gross domestic product, and deflation stalked the land. In the end, real estate prices fell for 15 consecutive years.

More alarming? Some students of the Japanese debacle say they see a similar train wreck heading for the United States.

“I thought America had studied Japan’s failures,” said Hirofumi Gomi, a top official at Japan’s Financial Services Agency during the crisis. “Why is it making the same mistakes?”

Many American critics of the plan unveiled Tuesday by Treasury Secretary Timothy F. Geithner said the plan lacked details. Experts on Japan found it timid — especially given the size of the banking crisis the administration faces.

More at the NYTimes.com.

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Judd Gregg Withdraws as Commerce Secretary nominee

What is the freakin' problem here?

"'I couldn't be Judd Gregg and serve in the Cabinet. I should have faced up to the reality of that earlier,' Gregg said. 'I've been my own person and I began to wonder if I could be an effective team player. The president deserves someone who can block for his policies. As a practical matter I can contribute to his agenda better--where we agree--as a senator and I hope to do that.'

'The fault lies with me,' Gregg said in an interview with Politico, refusing to discuss any conversations he has had with Obama himself. Asked if he felt the decision would be an embarrassment for the president, Gregg said, 'I may have embarrassed myself but hopefully not him.'

More in the round-up from HuffPo.

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Deal Reached: $789 Billion

Get it to his desk. Now.

Moving with lightning speed, key lawmakers announced agreement Wednesday on a $789 billion economic stimulus measure designed to create millions of jobs in a nation reeling from recession. President Barack Obama could sign the bill within days.

'The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill,' said Senate Majority Leader Harry Reid, one of the participants in an exhausting and frenzied round of bargaining.

The bill includes help for victims of the recession in the form of unemployment benefits, food stamps, health coverage and more, as well as billions for states that face the prospect of making deep cuts in their own programs.

It also preserves Obama's signature tax cut _ a break for millions of lower and middle income taxpayers, including those who don't earn enough to pay income taxes."

More from the AP.

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Mark Morford on American Monsters

Mark Morford has a screed today that pretty much hits all the points that I've been thinking about....

Whatever you call it, there's a bitter tang in the air, a nasty streak of anti-Everythingism, a collective bullet of disgust and frustration that's most violently aimed at the most precious American commodity of all: the rich, the overly entitled, the uberwealthy, the manicured bankers and CEOs and Wall Street cash jockeys we used to cherish like royalty but who now smell vaguely of death and foreclosure and Bernie Madoff.

Read more on SFGate.com.

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How The World Almost Came To An End At 2PM On September 18

Frightening.

On Thursday (Sept 18), at 11am the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there.

If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.

Read more over at Zero Hedge.

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Obama Press Conference-Video

Helen Thomas, who had been snubbed by Bush in his final years, asked if Obama knew of any countries in the Middle East that already have nuclear weapons. Obviously, she meant: Israel (which reportedly has them). He said he wouldn't want to say but any escalation now would be bad. She interrupted him twice in mid-answer, pressing the point. And at very end she was still pressing.

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Polls say Obama Stimulus Effort Backed By Huge Majority

Remember those days of endlessly checking polls? Guess we're going to have to do daily checks again. Jake Tapper of ABC points out that under-reported in the press is that Obama's stimulus plan has HIGH approval ratings (67%), while Republicans DISAPPROVAL ratings on the same issue are high (58%).

Sixty-seven percent of the American people approve of how President Obama's handling his efforts to pass an economic stimulus bill, as opposed to 48% for Democrats in Congress and 31% for congressional Republicans.

In addition, the disapproval rating for Congressional Republicans remains a 'staggeringly high' 58%. And the public continues to view the package as a matter of paramount concern. 51% of those polled consider the plan's passage to be 'critically important,' with 'Only 16% say it is 'not that important.''

Read more details, plus an interesting analysis of Republican stimulus bill changes on HuffPo.

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Obama's Elkhart, Indiana Town Hall Event

I'm watching this guy right now and he's brilliant. This format is perfect for him, but more importantly, it's a visceral reminder to the Republicans of what's happening in real America. Plus he just got a little dig in there at John McCain with his seven (eight, nine?) houses.

President Obama has left Washington today to appeal directly to main street for the backing of his stimulus plans. He's holding a town hall event in Elkhart, Indiana first. The local paper - The Elkhart Truth - has more information on the event. The full text of Obama's remarks is below.

On Tuesday, Obama will be in Fort Myers, Florida. HuffPost is providing live video streams of the Indiana event.

You can watch Obama's Elkhart, Indiana Town Hall Event on HuffPo.

Visit msnbc.com for Breaking News, World News, and News about the Economy

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Obama on the networks today

Barack Obama is slated to sit down with the five major television news networks tomorrow, a media play that is almost certain to be part of a broader effort to sell his stimulus package to the American public.

The president will conduct interviews in the Oval Office with ABC, CBS, NBC, CNN and FOX News on Tuesday afternoon, according to the official White House schedule. The sitdowns come at a delicate time for the president, with concern mounting in Democratic circles that much of the debate over the stimulus has been dominated by the GOP.

More on HuffPo.

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Paul Krugman on Economic Prognostication

I love Krugman's snark-iness. In his op-ed "Lest We Forget":

"A few months ago I found myself at a meeting of economists and finance officials, discussing — what else? — the crisis. There was a lot of soul-searching going on. One senior policy maker asked, “Why didn’t we see this coming?”

There was, of course, only one thing to say in reply, so I said it: “What do you mean ‘we,’ white man?”

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