And Then There Was One - Obama's Top Economic Adviser Goolsbee to Step Down

Austan Goolsbee, Obama's top economic adviser will step down. Couldn't have anything to do with that dismal jobs report now could it?

This leaves only Treasury Secretary Tim Geithner as the last remaining original Obama appointee. Of course G.E. is still there, although the offshore outsourcer left along with Larry Summers.

Larry Summers, former director of the White House National Economic Council, stepped down at the end of last year to return to his teaching job at Harvard University.

Christina Romer, his predecessor as CEA chair, left last August, also to return to academia, and Peter Orszag resigned as White House budget director last July.

While Goolsbee was better than others, unfortunately he stayed in denial on the trade deficit. He also denied the jobs crisis to the point of proclaiming this month as a bump in the road to recovery. Literally the BLS commissioner had to correct him as well as others echoing such feel good don't worry sentiment, indirectly. Sorry folks, the BLS says the pathetic jobs data is not due to weather. The jobs crisis is clearly not a blip, not a bump in the road.

Groundhog Day as Obama "Probes" Oil Speculation

We have another non-action action by the Obama administration, this time in the form of a probe on oil speculation:

Obama said he’s asked his attorney general and U.S. government agencies to work with state attorneys general to monitor for gasoline-price gouging, “to make sure that nobody is taking advantage of working families at the pump.”

Obama also said he’s willing to tap into the U.S. Strategic Petroleum Reserve “should the situation demand it” but declined to answer a question of what price would trigger a release.

Earlier France proclaimed oil speculation is unacceptable and Senator Nelson (D-FL), is calling for a hearing as well as a Congressional coalition on derivatives and oil speculation.

This is like 2008 Ground Hog Day. Back then we also had congressional testimony on oil speculation as well as bills introduced in Congress.

But then the financial crisis and recession happened, global oil demand collapsed, yet derivatives were never addressed. There is supposedly the ability for the CFTC to act, yet....this regulatory agency never does.

A portion of Senator Nelson's letter to the CFTC:

WSJ Reporting $20 Billion Mortgage Principle Reduction or Be Fined White House Plan

The Wall Street Journal is reporting the Obama administration is planning on levying $20 billion in civil fines on mortgage services for foreclosure fraud in order to force the Banks to reduce principle on mortgage modifications by a similar total amount. In other words, we're gonna fine you by a big whopping sum if you don't actually help homeowners, reduce mortgage principal and take the loss. Of course absurd mortgage backed securities and investors remain unscathed.

The Obama administration is trying to push through a settlement over mortgage-servicing breakdowns that could force America's largest banks to pay for reductions in loan principal worth billions of dollars.

Terms of the administration's proposal include a commitment from mortgage servicers to reduce the loan balances of troubled borrowers who owe more than their homes are worth, people familiar with the matter said. The cost of those writedowns won't be borne by investors who purchased mortgage-backed securities, these people said.

If a unified settlement can be reached, some state attorneys general and federal agencies are pushing for banks to pay more than $20 billion in civil fines or to fund a comparable amount of loan modifications for distressed borrowers, these people said.

Obamacare Ruled Unconstitutional in Virginia

A Federal Judge in Virginia just ruled Obamacare unconstitutional.

A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and insuring that appellate courts will receive contradictory opinions from below.

Obama to Freeze Federal Employee's Pay for 2 Years

Surely this is a Populist move. The Obama administration is planning on Ordering Pay Freezes for Federal Workers.

The president’s proposal will effectively wipe out plans for a 1.4 percent across-the-board raise in 2011 for 2.1 million civilian federal government employees, including those working at the Defense Department, but the freeze would not affect the nation’s uniformed military personnel. The president has frozen the salaries of his own top White House staff members since taking office 22 months ago.

The pay freeze will save $2 billion in the current fiscal year that ends in September 2011, $28 billion over five years and more than $60 billion over 10 years, officials said.

Federal employees only make up about 2-3% of the total workforce. There was a USA Today article which got people's panties get all in a bunch about the low unemployment rate and much better pay for Federal employees versus private ones.

Some lawmakers are planning to use the lame-duck session that starts Monday to challenge the president's plan to give a 1.4% across-the-board pay raise to 2.1 million federal workers.

It seems this move by the Obama administration is to head 'em off at the pass. This stops the GOP wanting to make this an issue as well as avoids a 10% pay cut for Federal Employees. Instead of course, doing something to raise the pay of the private sector.

Here are some statistics from the USA Today article:

Poverty Hits Record for 2009, 1 in 7 Americans are Flat Broke

The United States is looking at record poverty rates for 2009, according to the Associated Press. AP interviewed demographers, for information on an upcoming Census report, to be released this Thursday. 1 in 7 Americans lives in poverty, something not seen since the early 1960's.

Interviews with six demographers who closely track poverty trends found wide consensus that 2009 figures are likely to show a significant rate increase to the range of 14.7 percent to 15 percent.

Should those estimates hold true, some 45 million people in this country, or more than 1 in 7, were poor last year. It would be the highest single-year increase since the government began calculating poverty figures in 1959. The previous high was in 1980 when the rate jumped 1.3 percentage points to 13 percent during the energy crisis.

Among the 18-64 working-age population, the demographers expect a rise beyond 12.4 percent, up from 11.7 percent. That would make it the highest since at least 1965, when another Democratic president, Lyndon B. Johnson, launched the war on poverty that expanded the federal government's role in social welfare programs from education to health care.

Demographers also are confident the report will show:

_Child poverty increased from 19 percent to more than 20 percent.

_Blacks and Latinos were disproportionately hit, based on their higher rates of unemployment.

Goolsbee to Head Obama's Council of Economic Advisers

After Christina Romer's departure, Goolsbee to Lead Council of Economic Advisers:

President Barack Obama will name Austan Goolsbee, a longtime adviser and an architect of his campaign's economic message, to be chairman of the White House Council of Economic Advisers at a White House press conference Friday, an administration official said Thursday night.

Is Obama going to grow a pair & demand China float their currency?

Is this more great sounding rhetoric or is Obama going to get serious about China and their currency manipulation?

The administration has told Chinese officials that currency policy will be high on its agenda this year for economic talks with China, a senior official said on Wednesday. The White House is also weighing whether to designate China as a country that manipulates its currency, when the Treasury Department issues its semiannual report on foreign currencies in April.

President Obama signaled the tougher line on Wednesday, telling Democratic senators that the United States needed “to make sure our goods are not artificially inflated in price and their goods are not artificially deflated in price; that puts us at a huge competitive disadvantage.”