"Cash For Clunkers" Does Little To Help The Environment
(CBS)
This was, after all, one of the primary justifications that the Obama administration offered for the program. "This gives consumers a break, reduces dangerous carbon pollution and our dependence on foreign oil, and strengthens the American auto industry," President Obama said last month.
Other Democrats have touted the idea as a way to reduce CO2 emissions. Rep. John Dingell of Michigan predicted in June that the legislation "will result in meaningful reductions in vehicle fleet carbon emissions and fuel consumption." And to Rep. John Olver from Massachusetts, cash-for-clunkers will "pave the way toward a lower-carbon future." Time magazine already is calling the program a "green success."
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Why Home Prices Will Continue To Fall
4809381In the last week, a slew of economic reports and news articles have suggested that the U.S. housing market has bottomed out.
Don't believe it. More pricey areas, often in large metro areas, still have plenty of room to fall.
You wouldn't know it from Tuesday's release of the National Association of Realtors' index, which showed that nationally pending home sales had increased from the levels of one month ago.
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Don't believe it. More pricey areas, often in large metro areas, still have plenty of room to fall.
You wouldn't know it from Tuesday's release of the National Association of Realtors' index, which showed that nationally pending home sales had increased from the levels of one month ago.
Continue »
Bernanke Fights House Bill To Audit The Fed
(AP)
During an appearance on PBS's NewsHour, which will be aired this week on local PBS stations, Bernanke said the proposed legislation would interfere with the central bank's independence. "I don't think the American people want Congress running monetary policy," he said. "And I think that's very very critical for people to understand." (See transcript below.)
This is an odd claim. If you read the bill (H.R.1207), it simply amends existing law to say "under regulations of the Comptroller General, the Comptroller General shall audit" the Federal Reserve Board and its member banks.
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Minimum Wage Hike Could Lead To Job Losses
(CBS)
We're about to live through that experiment in applied economics. On Friday, the U.S. minimum wage is set to increase from $6.55 an hour to $7.25 an hour. That makes it 11 percent more expensive for businesses to employ a minimum-wage worker.
(The last time the minimum wage was increased was July 2008 as part of the second-to-last step in a series of increases required by a law enacted the year before. This week's increase is the last.)
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Is The Worst Of The Economic Storm Over? Here's Why Not
(IStockPhoto)
Consider the evidence: the Dow Jones Industrial Average leapt about 7.3 percent this week to its biggest weekly gain since March. Positive earnings or upbeat remarks from Intel, Goldman Sachs, and JPMorgan Chase have contributed to the optimism. During the past five days, stock market bears have been roasted alive.
Yet. And but. There is another side to the story, which is the lackluster state of much of the rest of the economy. Heavy consumer debt loads have not vanished. Neither have the housing market's woes, and still-to-come price declines in many areas. CIT Group's potential demise -- for once, a Wall Street firm that didn't get a bailout -- is further evidence that the plague of financial contagion has not run its course.
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Why Not Bail Out CIT? Some Lessons Learned
(AP Photo/Bebeto Matthews)
No longer. The federal government has rebuffed pleas from CIT Group, which lends to small and midsized companies, for more bailout cash.
The result has been a scramble for dollars on the part of CIT's clients and reports of a possible bankruptcy filing as early as Friday. CIT recently hired the Skadden Arps law firm, which is known for its work on mergers and bankruptcies.
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Obama's Planned Financial Overhaul: No Sure Thing
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In the first few weeks of the then-new Obama administration, Treasury Secretary Timothy Geithner announced a sweeping but vague overhaul of the U.S. financial system. The stock market showed what it thought of that idea by tumbling nearly 400 points.
Don't expect a repeat of that exercise when Geithner and President Obama announce another regulatory revamp on Wednesday: their aides have tried to avoid the possibility of surprising the market by assiduously leaking details. After a week of disclosures, bit by bit, the broad outlines of tomorrow's news may turn out to be the least-surprising White House announcement this summer.
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In the first few weeks of the then-new Obama administration, Treasury Secretary Timothy Geithner announced a sweeping but vague overhaul of the U.S. financial system. The stock market showed what it thought of that idea by tumbling nearly 400 points.
Don't expect a repeat of that exercise when Geithner and President Obama announce another regulatory revamp on Wednesday: their aides have tried to avoid the possibility of surprising the market by assiduously leaking details. After a week of disclosures, bit by bit, the broad outlines of tomorrow's news may turn out to be the least-surprising White House announcement this summer.
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Investors Rebuke Feds: Get Ready For Higher Interest Rates
(AP Photo/Susan Walsh)
The plan dreamed up by the Obama administration and the Federal Reserve for an economic recovery included a big bet: that interest rates would remain extremely low. That would, they hoped, spur borrowing and lending, encourage mortgage refinancing, and even lend support to housing prices.
We're already seeing signs that this bet may not pay off. One came on Wednesday, when long-term interest rates hit a high for the year when investors forced the Treasury Department to offer higher interest rates. Another may come on Thursday afternoon if investors remain leery of the Treasury's attempt to auction 30-year bonds.
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Microsoft Warns Of Tax Law Consequences
Microsoft CEO Steven Ballmer offered an unwelcome economics lesson to the Obama administration this week: Higher taxes have consequences that Washington policy-makers may not especially like.
Ballmer said on Wednesday that if Congress enacts President Obama's plans to impose higher corporate taxes, it makes sense for Microsoft to move jobs offshore.
"It makes U.S. jobs more expensive," Ballmer said, according to Bloomberg News. "We're better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S."
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Ballmer said on Wednesday that if Congress enacts President Obama's plans to impose higher corporate taxes, it makes sense for Microsoft to move jobs offshore.
"It makes U.S. jobs more expensive," Ballmer said, according to Bloomberg News. "We're better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S."
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Inflation Could Be Coming To A U.S. Dollar Near You
(iStockphoto)
Fed Chairman Ben Bernanke told CBS News in March that he saw "green shoots" of economic recovery beginning to sprout, including in mortgages and business lending.
Now it seems like those "green shoots" that were beginning to appear may have been rooted in inflation.
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Will New Law Make Credit Cards More Expensive?
(AP)
Ever since the extent of this economic crisis became clear, Washington politicians have been informing us that keeping a torrent of credit flowing to consumers and businesses justifies government bailouts and other extraordinary measures.
President Obama recently pledged to "focus on restoring the flow of credit that is the lifeblood of a growing global economy." House Majority Leader Steny Hoyer, a Democrat, said during the debate over last fall's TARP bailout that, without it, "credit, the lifeblood of any economy, might dry up across America." And the Treasury Department claims to be ensuring that credit is "flowing again to entrepreneurs and business owners."
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Unemployment Rate Calls Stimulus Claims Into Question
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Early this year, as the U.S. Congress prepared to debate a $787 billion spending bill that's better known as the stimulus plan, President Barack Obama claimed that immediate action was necessary to prevent unemployment from skyrocketing.
"Experts agree that if nothing is done, the unemployment rate could reach double digits," Mr. Obama said in a January 24 radio address. "If we do not act boldly and swiftly, a bad situation could become dramatically worse." The same month, his economic advisors released a report saying that, without the stimulus, unemployment would hit around 8.5 percent by April 2009, and 7.8 percent with it.
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Early this year, as the U.S. Congress prepared to debate a $787 billion spending bill that's better known as the stimulus plan, President Barack Obama claimed that immediate action was necessary to prevent unemployment from skyrocketing.
"Experts agree that if nothing is done, the unemployment rate could reach double digits," Mr. Obama said in a January 24 radio address. "If we do not act boldly and swiftly, a bad situation could become dramatically worse." The same month, his economic advisors released a report saying that, without the stimulus, unemployment would hit around 8.5 percent by April 2009, and 7.8 percent with it.
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Obama Aides Take Axe To Chrysler's Budget
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The Obama administration appears to have reminded Chrysler about the cost of accepting government bailouts: with federal funds comes federal control.
A report this week in Advertising Age said that Chrysler wanted to spend $134 million in advertising over the nine-week duration of its bankruptcy. But Mr. Obama's auto-industry task force sliced that figure in half.
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The Obama administration appears to have reminded Chrysler about the cost of accepting government bailouts: with federal funds comes federal control.
A report this week in Advertising Age said that Chrysler wanted to spend $134 million in advertising over the nine-week duration of its bankruptcy. But Mr. Obama's auto-industry task force sliced that figure in half.
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It's A Good Time To Work For Uncle Sam
(AP Photo/Charles Dharapak)
President Obama's call last year for "shared sacrifice" doesn't extend to federal employees, at least based on the details of his administration's 2010 budget released this week.
At a time when the official unemployment rate is nearing double digits, and 6.35 million people are receiving unemployment benefits, the U.S. government is on a hiring binge.
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Why The Housing Bubble Didn't Mess With Texas
(AP Photo/David Zalubowski)
Over at the Wall Street Journal, Nick Timiraos asks: "Why Didn't the Housing Bubble Mess With Texas?"
One possibility, the Journal suggests, is Texas' ban on prepayment penalties. But then again, some bubblicious states had them too.
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