December 2009

Homeowners getting hit a second time

You're in debt up to your eyeballs. You can't keep up with the mortgage and you are going to lose your home. It doesn't get any worse than that, right? Wrong.

Lawyers for troubled Staten Island homeowners say they are beginning to see examples of clients who go to the bank to take out money and find that their accounts have been frozen or wiped out by other banks or debt collectors -- the entities holding second mortgages on houses already in default on the first and primary mortgage. Some are learning the lender or debt collector has already gone to court and secured a judgment to garnish paychecks.

Why can't this guy get a loan?

This guy's story typifies what is wrong with U.S. economic policy on a host of fronts.

Noel Davis wants to make wind turbines in Indiana. He wants to open up a manufacturing plant.

Sounds good right? Manufacturing, green energy, domestic production....

So, why can't this guy get a loan? From Manufacture This:

Noel explains that, in addition to waiting for a loan guarantee from the Department of Energy, he must then get funding from investors. The irony is that, at a time when credit is tight, many investors are putting scarce resources into Chinese projects, not American.

U.S. Mint suspends sales of gold coins...again

The gold price may be correcting, but the physical buying has never been higher.

"The United States Mint has depleted its inventory of 2009 American Buffalo One Ounce Gold Bullion Coins. ... No additional inventory will be made available. As additional information becomes available regarding 2010-dated American Buffalo One Once Gold Bullion Coins, you will be notified." So said a memorandum issued Friday to authorized purchasers of U.S. Mint gold coins and reported by Jim Sinclair..

Treasury Department Revises TARP losses to $42B, down from $270B

The U.S. Treasury has revised it's losses on TARP according to the New York Times:

The Treasury Department expects to recover all but $42 billion of the $370 billion it has lent to ailing companies since the financial crisis began last year, with the portion lent to banks actually showing a slight profit, according to a new Treasury report.

The new assessment of the $700 billion bailout program, provided by two Treasury officials on Sunday ahead of a report to Congress on Monday, is vastly improved from the Obama administration’s estimates last summer of $341 billion in potential losses from the Troubled Asset Relief Program. That figure anticipated more financial troubles requiring intervention.

Must Read Posts - Sometimes you just can't say it better for 12.06.09

On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.

Sometimes though, one cannot say it better but miss those who did.

Must Read #1

Calculated Risk has a table, using a method similar to Okun's Law from researcher Jan Hatzius, to show what kind of GDP growth is required to generate jobs. 6% GDP growth just to drop the unemployment rate to ~8%. See this post on how Okun's Law is not correlating well this recession.

Must Read #2

Vampire Economics?

This story caught my eye. The New York Times outlines how each blood donation, paid out at $30 a pop, generates $300 in pharmaceutical products.

Blood donation centers concentrate in extremely poor areas, with high health issues including drug addiction.

So, get this, Mexicans are crossing the border twice a week to donate blood, to earn $60 a week. It's more money than what they can make on wages in Mexico!

Twice a week, Ms. Delgado, the mother of three young girls, walks across the bridge from Piedras Negras, Mexico, where she lives, to Eagle Pass and enters a building just two blocks from the border.

Inside, for about an hour, Ms. Delgado lies hooked to a machine that extracts plasma, the liquid part of the blood, from a vein in her arm. The $60 a week she is paid almost equals her husband’s earnings.

“This is like another income,” she says.

RUBIN'S RUBES: Matt Taibbi's slapdown of the Obama Administration

In the December issue of Rolling Stone the journalist Matt Taibbi hits yet another grand slam exposing the murky world of Wall Street and Washington politics ("Obama's Big Sellout").  Taibbi provides a detailed and thoughtful analysis on the myriad connections between numerous Obama appointees and Robert Rubin, the Obama presidential campaign's economic advisor, and former Clinton Treasury Secretary who led the charge for the passage of the Gramm-Leach-Bliley Act of 1999, to create the megamerger that was to become Citigroup.

Rubin then left the Clinton Administration to lead Citigroup in their tumultuous downfall.

Below is a very brief synopsis of some of Taibbi's salient points.  Any and all remarks in parenthesis are mine, and should not be attributed to Taibbi's article.

Sunday Morning Comics - recovery.gov edition

Brought to you by Chinese Caulking and Insulation Manufacturing - Americans! Caulk your windows! It will stimulate your economy! (after all it will only cost $23 billion dollars)
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!

 

Recovery.gov or Better Know a Made Up District

 

A policy idea worthy of consideration - Tie corporate profits to U.S. job creation

Les Leopold has written a piece on The Huffington post, Tie Wall Street Profits and Bonuses to the Unemployment Rate. This is similar to what the Horizon Project has alluded to, in addition to policy ideas Ralph Gomory and Margaret Blair have presented to Congress on the problems with executive pay and corporate governance.

Leopold proposes a steep windfall tax on executive pay and bonuses, tied directly to the U.S. unemployment rate:

Friday Movie Night -Manufacturing a Better Future for America

hot buttered popcorn It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

 

Since hearing how putting in some insulation or yet more teachers (read voters) and pickin' up trash is magically going to generate 10.9 million jobs (the number needed to get back to pre-recession employment levels), I thought this talk by the Alliance for American Manufacturing on how to rebuild the U.S. economy was in order. They have an excellent plan for infrastructure projects which would generate GDP, add to the national economy, over the long term, in addition to providing Americans with high skills jobs.

Manufacturing a Better Future for America

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