Fausta's Blog

American and Latin American Politics, Society, and Culture

July 19, 2010 By Fausta

How about the jobs killed or prevented?

First, Ed’s post:
TARP audit claims Obama admin destroyed “tens of thousands” of jobs in dealer closures

Last year, while the Obama administration seized two of the nation’s three main domestic auto manufacturers, it also shut down thousands of dealerships across the country, supposedly to stabilize GM and Chrysler.  A new report from Neil Barofsky, the Inspector General of the TARP program, calls into question that decision.  In a sharp rebuke to the White House, Barofsky says that the action needlessly cost tens of thousands of jobs and extended an already-disastrous downturn in employment:

President Obama’s auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded.

The report by Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result.

“It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” the report said.

Moe Lane gives you

The short version?  Having the government do your restructuring for you isn’t necessarily the brightest thing in the world.  Particularly when there’s a variety of conflicting objectives.  At least, if what you’re trying to do is actually create a better version of your company; if your goal is to use government fiat to streamline the operations of your newly government-owned automobile manufacturer it apparently works out just fine.

It’s all about incompetence; you mean to tell me that having two guys in charge whose entire automotive industry was driving a car, and being a union negotiator, wouldn’t work? Who’d have thunk it!

Speaking of jobs, Caroline Baum notes that Obama Omits Jobs Killed or Thwarted from Tally

“If the administration wants to take credit for ‘jobs created or saved,’ it should also accept responsibility for ’jobs destroyed or prevented,’” said Bill Dunkelberg, chief economist at the National Federation of Independent Business.

That would mean accepting responsibility, which they are not about to do.

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Filed Under: Barack Obama Tagged With: bailout, Cash for clunkers, Fausta's blog, GM, TARP, unemployment

June 17, 2010 By Fausta

More Than 90 Banks Miss TARP Payments: You don’t say?

More Than 90 Banks Miss TARP Payments

The number of banks missing their TARP payments rose for the third straight quarter. In February, 74 banks deferred their payments; 55 deferred last November.

SNL Financial’s analysis found 20 banks have missed four or more payments since the program began in 2008, while eight banks have missed five payments.

Under the TARP program, the U.S. Treasury invested in preferred shares issued banks looking for funds. The banks were to make regular dividend payments to the Treasury, and have the right to repurchase the shares at some point in the future.

While many of the largest U.S. banks easily repaid billions in TARP aid, more than 600 smaller banks still hold $130 billion from the program, created at the height of the financial crisis.

The costs of TARP are going to be a lot more than was initially predicted. Cafe Hayek saw this coming, and points out the final tallyi isn’t in yet… unlike the media, which keeps talking about how Jobless Claims Rise, Unexpectedly.

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Filed Under: business, economics, economy Tagged With: bailout, banks, budget, Fausta's blog, TARP

April 6, 2010 By Fausta

How many trees died for the eggs? and a roundup

Michelle Obama’s Mirror’s Blog reports,

By all accounts this was the best Eggroll ever. Unprecedented, actually. For one reason, this is the first year we sent the kiddies home with wooden eggs in place of candy filled plastic eggs from China.

The White House couldn’t give the kids candy, so trees had to die. Mexican trees, that is.

Foreign Ownership of U.S. Debt Continues to Grow. Take a look at the graph (click for larger):

Women go topless in protest, then get angry when men ogle

For old-school GOP, a hard lesson on fiscal issues

The message for the GOP establishment is clear — be careful what you wish for. For too long, it turned up its nose at the grassroots activism of social conservatives and said they should focus on fiscal issues that unite the party. Now, the grassroots activism of fiscal conservatives is driving the debate in races across the country. This popular movement for limited government and fiscal responsibility might well sweep the Democrats out of power in November — but it might also sweep some establishment Republicans out with them.

Time for the full truth about TARP

Geography of a recession:

And if you weren’t depressed enough already, How America might get a VAT of its own. Why – in addition to having yet more taxes to separate you from your hard-earned money – is this depressing? Because, as a friend and I were discussing yesterday,

wait until the folks at the IRS get their hands on the regulations for the application of the new tax

Irwin Seltzer explains the world of Small Bras and the Value-Added Tax
Taxing consumption sounds easy. Wait until government starts to carve out the political exceptions.

WORLD:
Jordanian King (Son of Black September) Abdullah Piles on Israel, while Phyllis checks out what Biden had to say.

Colombians Detained For Spying On Venezuela’s Electricity Grid, via Vlad

Meet Inzulaya and his friend Inchavastro

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Filed Under: Colombia, Democrats, economics, economy, Honduras, Jordan, USA, Venezuela Tagged With: Easter, Easter Eggs, Fausta's blog, foreign debt, TARP, Value Added Tax, VAT, White House

July 21, 2009 By Fausta

Obscene: $24 TRILLION in bailouts

This is complete insanity:
$23.7 Trillion to Fix Financial System?
In New Report, Neil Barofsky Says It’s Possible Government Could Spend $23.7 Trillion to Fix Financial System

“The total potential federal government support could reach up to $23.7 trillion,” says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government’s efforts to fix the financial system.

Yes, $23.7 trillion.

“The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn’t even imaginable,” said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. “If you spent a million dollars a day going back to the birth of Christ, that wouldn’t even come close to just $1 trillion — $23.7 trillion is a staggering figure.”

Granted, Barofsky is not saying that the government will definitely spend that much money. He is saying that potentially, it could.

At present, the government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis.

Now think about this:
The annual gross domestic product of the United States is just over $14 trillion.

Oversight? An anticuated concept:

And Barofsky points out the at the non-TARP programs, which are far larger than the TARP itself, do not come with the strings that the high-profile TARP money itself comes with, including executive compensation, and they don’t necessarily require congressional approval. And beyond the ability to tally their costs, Barofsky has no authority as an auditor over the non-TARP programs.

Stacy explains who is Barofsky:

While AmeriCorps IG Gerald Walpin made headlines Friday with his lawsuit, this week the IG spotlight is on SIGTARP — Neil Barofsky, the special inspector general for the Wall Street bailout rushed through Congress last October. Monday, Barofsky issued a report accusing Treasury Secretary Timothy Geithner of “rejecting ‘common sense’ by not requiring banks receiving billions of dollars in government money to say how they are using the money.”

Unlike Walpin and two other ex-IGs whose cases are involved in the smoldering scandal known as “IG-Gate,” SIGTARP is still on the job. However, last month, Sen. Chuck Grassley (R-Iowa) sent Geithner a stern letter asking about “a dispute over certain Treasury documents that were being withheld from SIGTARP auditors on a specious claim of attorney-client privilege.”

Clearly, Barofsky’s office is experiencing the same kind of obstructions and pressures that other IGs have encountered since the Obama administration brought “The Chicago Way” to Washington. With Democrats on a deficit spending spree, watchdogs like Barofsky are the last line of defense against wholesale fraud and corruption in the use of taxpayer dollars.

Go read the rest of Stacy’s post.

————————————————–

I’ll be on the road for the next two days. Posting will be sporadic, but keep an eye out for a Tuesday night tango.

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Filed Under: Barack Obama, Democrats, economics, economy Tagged With: bailout, budget, Fausta's blog, Neil Barofsky, TARP

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