Plan Warns Of Perfect Storm For Economy
Global conspiracy theories are generally the specialty of socialists, schizophrenics and Hollywood producers. But over the past few months, they have also become conventional wisdom among private equity, hedge fund and venture capital lobbyists, who blame a worldwide union cabal for their recent regulatory troubles in the U.S., England and the European Union.
We thought the idea sounded as spacey as Democratic presidential hopeful Dennis J. Kucinich’s UFO sightings.
Well, we were wrong. Last week, the Service Employees International Union — a longtime private equity antagonist — announced a new ally in the land down under. Australian unions fear that the pending takeover by the U.S.-based Carlyle Group of Coates Hire, the Aussies’ largest equipment rental company, will result in lower wages and job losses. They’ve joined with the Washington-based SEIU to protest the deal.
Last month, SEIU representatives met with European and African unions to strategize a global response to private equity buyouts. A second strategy session is planned in London in a few weeks.
“Union workers have been saying we have to even up the odds here,” said Stephen Lerner, director of the SEIU Private Equity Project. “[Private equity firms] are running around the world, so we need to figure out how to work together around the world.”
President Bush says economic fundamentals are strong but expressed concerns over congressional talk of tax cuts. When the economy is weak, Bush said Washington must “make clear” to financial markets that “Congress is not going to raise taxes.”
Bush’s comments came at a White House press conference and in the midst of an administration effort to pump up its economic record and restore investor and consumer confidence.
During an eggs-and-bacon breakfast with reporters last week, Edward Lazear, chairman of the president’s Council of Economic Advisors, said the Bush administration’s economic track record has been “amazingly good” given the strong growth since the Sept. 11, 2001, terrorist attacks.
Naturally, the Democrat’s shadow White House — the Center for American Progress — was pitching a different message last week.
The center, headed by former Clinton administration chief of staff John Podesta, released a roughly 150-page economic plan for the next administration that included many of the standard Democratic policy initiatives: a cap-and-trade program for carbon emissions, expanded tax breaks for working families, a universal 401(k) plan and increased funding for alternative fuels, science and technology research
Gene Sperling, former economic adviser to President Bill Clinton, warned of “a lagging perfect storm” of economic misery that could hit next year.
The ingredients: skyrocketing housing loan interest rates, frozen credit markets, high winter oil prices and diminished home equity.
The next president may have to lower taxes to give the economy a jolt, Sperling suggested, but it shouldn’t become permanent, as Bush advocates for his 2001 rate reductions.
Connecticut Sen. Chris Dodd, who is languishing in the Democratic presidential primary’s second tier, came out swinging on a red-meat economic issue last week.
The Senate Banking Committee chairman reversed his trend of near inertia Nov. 28, unveiling a draft proposal to make consumer-friendly changes to the bankruptcy code. The plan would reverse key changes made in a controversial 2005 GOP revamp that made it harder for consumers to declare bankruptcy — reforms Dodd says “were written by the special interests, for the protection of special interests.”
The proposal was then converted into instant ammunition against most of his Democratic opponents. In a campaign release, Dodd bragged that he was one of only 25 senators to oppose the 2005 rerite while highlighting the voting records of his rivals on that bill and similar measures in 2000 and 2001.
All his rivals save Obama voted “yes” on at least one. Dodd voted “no” all three times. Dodd tries to claim he is the only Democratic candidate to “repeatedly vote against the so-called bankruptcy ‘reform’ bills,” but it’s a stretch: Obama was only in the Senate for the 2005 measure, and he voted “no.”
Dodd’s campaign claims the contrast in voting records shows that he is “the candidate that voters could trust to get results for working families.”
Maybe Dodd should keep the mud to a minimum. Presidential rival Sen. Joe Biden of Delaware, who looks bad on Dodd’s list as a three-time supporter of the GOP-pushed bankruptcy reforms, is a high-ranking member of the Senate Judiciary Committee — the panel that will review Dodd’s bankruptcy legislation when he introduces it.
So far, Dodd has reserved most of his gibes on the subject for John Edwards. Dodd went after Edwards during the Des Moines Black & Brown Forum over the weekend and followed up with a flurry of press statements slamming the former North Carolina senator for taking bankruptcy votes at odds with his campaign against poverty.
“The prospect of being ruined by big banks and the credit card companies is surely a ‘flyspeck’ to a multimillionaire like John Edwards,” the latest Dodd release said, referring to Edwards’ protest that his past votes amounted to that small quantity compared to his other anti-poverty work. “But for millions of American families, it is a stark reality because of politics like the ones he supported.”
In a debate, Edwards said he was wrong to support the bankruptcy bill. As for Dodd’s latest assault, the Edwards camp’s response: Yawn.