Tag Archives: Stimulus fraud

Freddie Mac posts $5.5 billion loss for third quarter

It says it will need more money, from guess who?

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Say, here’s a surprise: half the stimulus job money went to teachers

Most of these teachers wouldn’t really have been laid off, but it sure sounds good, and  The One knows how to reward the people who put him where he is. Obama, by the way, labelled as “calculator abuse” ABC’s figure of $160,000 per job “saved”. Of course he did.

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Will CBS join Fox and Edmunds.com on the White House enemies list?

CBS says Obama is fudging the numbers of jobs its “Stimulus” created. Lyndon Johnson knew he’d lost the American people when Walter Cronkite spoke out on Tet. I wonder if Obama is feeling the same eerie chill?

UPDATE: Is there room for Joe Biden on that list? He says jobs numbers “not 100% accurate”.

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Stimulus fun

Yesterday I pointed out that, using the fed’s own figures, each of the puny 30,000 jobs “created or saved” cost $74,000 – pretty pricey for a shovel-wielder. Michigan, though, has outdone itself, spending $1,550,000 for each of its 319 jobs. Now it is possible that there are 319 new millionaires in Michigan as I write, driving their Bentleys or even buying coats for poor folk at Burlington Warehouse. And it’s possible that around the county, 30,000 employees are savoring their tripling in pay.

It’s possible. It is also possible, however, and far more likely, that bureaucrats are having a fine time skimming off all this plunder and leaving crumbs for their charges. Years ago I read that for what we were spending on welfare we could give every poor man, woman and child $120,000 a year and still save money. That never happened, for some odd reason. Perhaps this time, it will.

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ABC News: Obama moving the stimulus goalposts

Oops! Did we say that the $780 billion stimulus package [that Cos Cob's Jim Himes voted for] was going to have an immediate effect? We meant to say, it won’t start until July 1st – the watch us grow!

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A $787 billion mistake?

I’m not as sanguineas this Forbes columnist that ur economy is beginning to reboundbut my liberal friends are, and if it is, then this guy’s right: we’ve only spent $37 billion of the Stimulus funds so far, much too little to have had an effect, so we didn’t need it and when it does show up in the pipeline it will do nothing but push up inflation and increase our debt, just as many economists and commentators said.

Given the rapid improvement in the economic outlook, and the slow rate of stimulus spending under the act thus far, most of the spending under ARRA will likely occur well after recovery is under way. A new CBO studyshows that through late May only about $37 billion has been spent, which is just under 10% of authorized spending under the ARRA. In fact, the Departments of Education, Transportation and Energy all have spent 2% or less of their allocations. Recovery is on the way, without massive government spending.

But wasn’t the whole idea for fiscal stimulus that there was no way we would recover without it? And didn’t Vice President Biden indicate that virtually all economists agreed with this view? Given the improving economic outlook, ARRA now represents a significant and very expensive public policy mistake. And in contrast to the vice president’s view about economists’ support for the program, it is well known that many of them who specialize in macroeconomic policy significantly criticized the need for substantial fiscal stimulus before ARRA was passed.

The economic arguments for ARRA were badly dated and erroneous. The stimulus bill was promoted under the old-fashioned Keynesian view that only the federal government is big enough to dig us out of the hole that we had gotten ourselves into, and digging us out of that hole required massive federal spending. But there was significant opposition to this premise by many economists who not only predicted that spending would be significantly delayed–with the bulk of spending not taking place until after recovery was well under way–but who also sharply disagreed with the premise that enormous increases in government spending were required to restore economic prosperity.

In fact, the 1930s Keynesian model that was used to sell the idea of fiscal stimulus to Americans was eliminated from economics decades ago.And this abandonment of Keynesian multipliers does not reflect any ideological or partisan issues that divide conservatives and liberal economists. Rather, it is because the old Keynesian model does not come anywhere close to meeting today’s standards for economic analysis.

Of course, I never believed this spending had anythig to do with a “crisis” except to use that scare word to seize power. We now have Government Motors, run by a 31 year old Obama politico, a Wage Czar, government controlled banks and nationalized medicine coming up. The economy can go its merry way – Obama and his crowd have gotten what they want.

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Dance with the Devil

Banks trying to give back federal money – bailout smacks of “social engineering”.  Well, duh!

[NYT} WASHINGTON — The list of demands keeps getting longer.

Financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote onexecutive pay packages. They must slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens.

As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds.

The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say, but others say the conditions go beyond protecting taxpayers and border on social engineering.

Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks like the TCF Financial Corporation of Wayzata, Minn., and Iberia Bank of Lafayette, La., as well as giants like Goldman Sachsand Wells Fargo.

They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. On Tuesday, Signature Bank of New York announced that because of new executive pay restrictions in the economic stimulus package, it notified the Treasury that it intended to return the $120 million it had received from the government only three months ago.

Other institutions like Johnson Bank of Racine, Wis., initially expressed interest in seeking bailout funds but have now changed their minds. Bank executives told The Milwaukee Journal Sentinel that one reason they rejected the government money was to avoid any disruption in the bank’s role in the local community, including supporting the zoo or opera company if they chose to.

One of the biggest concerns of the banks is that the program lets Congress and the administration pile on new conditions at any time.

The demands to modify mortgages or forestall evictions are especially onerous, some bank executives and experts say, because they could prompt some institutions to take steps that could lead to greater losses.

[snip]

But a growing chorus of industry experts are warning that asking weak banks to carry out the government’s economic and social policies could increase the drain on the public purse. These experts say that the financial assistance, while helpful in the short run, could force weak banks to engage in lending practices that will lose even more money, and that the government inevitably will become more heavily involved in dictating how banks do business.

UPDATE: The WSJ reports that investment bankers are leaving that industry, too.

The past week alone has seen the announcement of several high-profile departures: Jean Manas, head of Americas M&A for Deutsche Bank; Deutsche Bank media banker Fehmi Zeko; Goldman Sachs Group partner Joseph Ravitch; and UBSmanaging director Jeff Sine. They follow a parade of other senior bankers who have recently left big firms, including Robert Scully at Morgan Stanley, former UBS Vice Chairman Robert Gillespie, and George Ackert, the former head of Merrill Lynch’s transportation group.

In London, the exodus of talent has been no less acute than in New York. At Bank of America, for example, where bankers are grappling with both the financial downturn and a tumultuous takeover of Merrill Lynch, a raft of senior Merrill bankers have jumped ship. Many of them, including Mark Aedy, the recently named head of corporate and investment banking for Europe who was close to such blue-chip Merrill investment-banking clients as miner BHP Billiton, have left without another job lined up.

[snip]

In the past, many of these bankers would have been locked in place with stock options, accumulated after years of toiling from junior analyst to managing director. History is now of little concern as many firms are remade or wiped out by mergers, and stock options are mostly worthless. The market’s collapse has also laid bare tensions between traders who generated most of the firms’ outsize profits — and losses — over the past five years and the advisers who weren’t risking firm capital.

“I still believe in the investment-banking business, but it has become a bit of a boat anchor, in that there doesn’t seem to be a difference between an advisory banker who generates fees without capital and a [proprietary] trader whose job is like going to the casino every day,” said one senior banker who is still constrained by agreements with his former firm.

 

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