Economy & Budget

A new poll conducted by Zogby International on behalf of conservative, nonpartisan government watchdog group Judicial Watch reports that 81.7 percent of Americans think political corruption played a "major role" in bringing about the current financial crisis.

"Our poll shows the presidential candidate who is best seen as able to combat Washington corruption should go on to win the Oval Office," Judicial Watch President Tom Fitton said. "Both Obama and McCain would do well to pay serious attention to the political corruption issue and better address it in the coming two weeks."

Both candidates have faulted the government with allowing the financial crisis to unfold, while McCain has especially made a point to accuse Washington of "corruption" and "greed."

A sparsely attended Senate Banking Committee hearing on Thursday began with a blistering attack on the Bush administration's fiscal policies by chairman Chris Dodd (D-Conn.).

Dodd said loose regulation, unscrutinized lending practices and especially greedy mortgage policies have triggered the stock market plunge and credit crunch. Due to the congressional recess, only Sens. Mike Crapo (R-Idaho), Robert Casey (D-Pa.), Robert Menendez (D-N.J.), Daniel Akaka (D-Hawaii), and Sherrod Brown (D-Ohio) were present.

Dodd took special aim at the mortgage market, saying federal regulators either ignored or didn't notice that high-risk mortgages were rampant despite falling housing prices and growing risks of foreclosures.

"It is clear that greed and avarice overcame sound judgment in the marketplace, causing some very smart people to act in very stupid ways," he said. "But what makes this scandal different from others is the abject failure of regulators to adequately police the markets."

Thursday's hearing will feature testimony from former Securities and Exchange Commission Chairman Arthur Levitt Jr. and former U.S. Currency Comptroller Eugene Ludwig.

-J. Taylor Rushing

While liberals and conservatives debate whether the current financial crisis was brought on by a lack of regulation or by borrower-friendly mortgage policies like the Community Reinvestment Act, President Bush today said that both are to blame.

"It's hard to explain to people how this happened," Bush said at a news conference in Virginia. "The truth of the matter is that the government, in good conscience, tried to convince people to buy homes but Fannie Mae and Freddie Mac, the instruments in Washington, were basically unregulated."

Bush sought to explain the $700 billion rescue plan passed by Congress, and signed into law last week, in the face of public skepticism over the package.

The chief executive at the helm of AIG when the federal government bailed out out the firm said he won't take his golden parachute.

"I do not intend to accept the payments available to me under the AIG severance plan," Robert B. Willumstad told the House Oversight and Government Reform Committee at a hearing today.

He added: "I don't believe AIG could have done anything differently."

"There was no private market solution to AIG's situation," he said.

Willumstad had been CEO for nearly three months when the government bailed out the firm in September.

-Klaus Marre

One third of Americans believe the country is already in a depression, according to a new USA Today/Gallup poll.

When U.S. adults were asked that question last month, just 12 percent of them said that the country was in a depression.

Economists have yet to declare the country to be in a recession, which is often defined as a decline in the real gross domestic product for two straight quarters. A depression is a sustained recession.

The economy grew at a rate of 2.8 percent in the second quarter.

Roughly two thirds of U.S. corporations paid no income taxes each year from 1998 to 2005, a new report from the Government Accountability Office (GAO) shows.

The GAO found that even more foreign-controlled corporations doing business in America paid none.

Among U.S. corporations, 65 percent paid no income taxes, whereas 68 percent of foreign-controlled companies paid none, yielding an average of 67 percent.

Corporations can claim zero taxable income in different ways. Most commonly, corporations claimed that tax deductions more than offset their positive incomes, before net operating losses were taken into account; that was how 52 percent of the corporations in question claimed zero liability on tax forms, the study found.

The economic stimulus plan has provided a spark for Wal-Mart, Costco and other sellers of cheap goods, but is providing less help to other retailers.

According to Bloomberg and other news services, Wal-Mart's sales rose 5.8 percent in June compared to last year, while Costco's sales rose 9 percent. Wal-Mart said its profits would be larger than anticipated.

Target's sales, in comparison, rose 0.4 percent.

Wal-Mart attributed the success to its prices, offerings and overall store experience.

Wal-Mart Watch, an advocacy group critical of the retailer, noted the jump in sales comes amid high gas prices and reports of job losses by the Labor Department.

Here are Wal-Mart's sales numbers.Below is the Wal-Mart Watch statement:

At a time when gas prices are soaring, jobs are being lost, wages are stagnating, and hard working American families are struggling to get by, Wal-Mart announced that its sales for June are up 5.8% from last year.

It's just another reminder that what's good for Wal-Mart is bad for America, something its Chief Financial Officer as much as admitted when he said "tough times are actually a good time for Wal-Mart." While Wal-Mart is no doubt celebrating its increased sales and the billions it will rake in this year, the rest of the country is struggling to get by.

Instead of celebrating, Wal-Mart should make real changes to support its workers that would make our country, and our economy, stronger.

-Ian Swanson

Top U. S. corporate executives don't think that the economy will improve until well after the inauguration of the next president, reports The Hill's Kristen Coulter.

The U.S. economy likely won't rebound until the second quarter of 2009, according to the Business Roundtable

The Commodity Futures Trading Commission (CFTC) today announced it would limit the trading of oil futures after a bipartisan group of senators called for such a measure earlier this month.

Democratic and Republican senators had alleged that futures speculation has helped to drive up the price of oil.

Sen. Dianne Feinstein (D-Calif.), one of the senators who led the call, lauded the decision today in a press release.

"Today

According to Rasmussen, 67 percent of Americans support oil drilling off the nation's coasts and 64 percent think it will lower gas prices.

House Minority Leader John Boehner's (R-Ohio) office circulated the poll today as House Republicans push drilling as their solution to high gas prices.

The federal government prohibits offshore drilling, and Republicans have called for the ban to be lifted. Rep. John Peterson (R-Pa.) will offer an amendment to lift the ban tomorrow at an Appropriations Committee markup, the leadership office said.

Republicans have accused Democrats of inaction on gas prices, while House Democrats have blamed oil companies and market manipulation for high prices. House Dems have passed legislation to create a Department of Justice task force to investigate and prosecute oil cartels, and Democratic senators have called for regulation of oil futures speculation.

Rasmussen surveyed 1,000 "likely voters" on June 13 for the poll.