Economy & Budget

According to the Drudge Report, Barack Obama is in the Virgin Islands, on vacation.

Hillary Clinton is explaining why she misremembered her trip to Bosnia a decade ago. Apparently, there were no bullets whizzing overhead after all.

John McCain laid out a perfectly sensible plan to deal with the mortgage crisis. His first principle seems to be “Don’t do anything really stupid,” which I think is a pretty good principle.

The stock market is in a tug-of-war between bargain-hunters who want to scoop up undervalued stocks and short-sellers who are bad-mouthing every company out there that might be vulnerable. Some Bear Stearns employees are hunting for those short-sellers so they can wring their necks. Read more...

Last week, I wrote about the successful Institute for Education/INFO policy breakfast with Ambassador Susan C. Schwab, United States trade representative. The ambassador has a critical mission in negotiating with foreign governments to create trade agreements, resolve disputes and participate in global trade policy organizations. The ambassador meets with governments, business groups, legislators and public interest groups to gather input on trade issues and explain the president’s trade policy positions.

Though free trade agreements involve a mutually agreeable pact by the foreign and U.S governments, both Sens. Hillary Rodham Clinton (D-N.Y.) and Barack Obama (D-Ill.) appear to be isolationists. Fear has grown in the U.S. that by engaging in a trade agreement, we run the risk of losing our competitive edge to developing countries. Since when has competition become a bad word? This fear may not be unfounded — but it is misguided. Job loss is not stealing jobs. It is competition. The race to be a low-wage country is not a race that the U.S should have any interest participating in. China has its share of job losses and factory closings — to Vietnam. The name of the game, today and for our future, is global competition. Innovation and the spirit of entrepreneurship will allow flexibility in creating new markets, new products and services. Read more...

When Congress returns from recess there will be an enormous debate about helping foreclosed homeowners and average Americans versus helping major investment houses at taxpayer expense.

For now, one point — the Fed-supported deal for J.P Morgan to buy Bear Stearns for $2 a share included one of the greatest fiascos in financial market history.

In the contractual agreement between J.P. Morgan and Bear Stearns is a "mistaken provision" that requires Morgan to guarantee Bear Stearns trades, even if Bear Stearns shareholders vote down the deal.

In short, if one believes the deal was urgently needed for Bear Stearns to avoid bankruptcy, the cost to J.P. Morgan of guaranteeing Bear Stearns trades, even if the deal is voted down, is catastrophic to Morgan. Read more...

Much has been said and written lately regarding the state of the economy and all the factors that have led us to the brink of recession. There’s no way I can do the situation justice in a mere 400 words, so let me just state that the economy needs a correction. To put it another way, what goes up must come down. And the longer the Fed and others try to defy economic gravity and keep a $13 trillion economy floating on nothing but speculative air, we’re delaying the inevitable. And the sooner we can get this correction behind us, the sooner prices can ease, markets will stabilize and some semblance of equilibrium can return to a skittish investor class.

This past week’s action on Wall Street is a perfect example: Following the Fed’s decision to pump $30 billion in guaranteed loans to prop up the floundering brokerage house Bear Stearns, traders jumped in glee, sending the market up hundreds of points. Just 24 hours later, however, traders gave all those gains back. The Fed’s actions had merely bought us a day’s worth of confidence. Yawn … Read more...

Here's my question: Will the CEOs and top financial managers whose sleazy wheeling and dealing has caused our economy to buckle get extra millions in bonuses?

How could this happen? How could all those highly educated, pinstriped captains of financial industry continue stand to stand there with straight faces and assure us they will lead us out of the wreckage they created? How is it no one is talking about their individual criminal accountability?

How are we supposed to believe anything these people tell us? How many times do we have to have our life savings stripped away by these conspirators in greed? Read more...

Ambassador Susan C. Schwab, United States Trade Representative, spoke at last week’s overflowing Institute for Education/INFO policy breakfast. IFE/INFO forum regular Craig Helsing referred to all five of her titles: doctor, dean, general, honorable and ambassador. Not bad! It was an honor to host her, especially with the pending free trade agreements and so much discussion on the free trade debate this 2008 primary season. Ambassador Schwab is at the nexus of Tom Friedman’s flat world.

President Bush’s last State of the Union address prominently featured trade talk. He spent more time on it than in any other State of the Union. It is a big issue on the campaign trail, especially for the Democrats. Nominees Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.) seem to be all over each other on this issue. Read more...

Our precious gold is at an all-time record high. Oil prices are consistently hitting new and incredible highs. The almighty dollar is consistently hitting new lows against other major currencies.

Have you really taken the time to step back and decipher the true impact of this? Flash! Baby boomers, it's now impossible for you to retire. Your pensions are woefully underfunded. Your 401(k) is drastically declining in value as you read this blog. The value of your home is in a free-fall. Your real estate and sales taxes are increasing. Your property and casualty insurance rate is soaring through the roof. Your sales tax is continuously increasing. Read more...

Whether it’s a couple million for their district or $25 million for their husbands (hey, she’s not the Speaker for nothing!), Democrats are still up to their old earmark ways, despite a bold pledge in the 2006 election to end “runaway spending.” Now, I know politicians’ promises last about as long as a New Year’s resolution, but c’mon, this is the singular issue that upsets Joe Six-Pack more than any other, in my opinion. And now I read this morning that Rep. David Obey — the KING of all Kings of spending — is sending around some lame, two-question survey to his fellow Democrats in what is nothing more than internal cover for his party to blow the lock of the Treasury. Read more...

The former CEO of Countrywide Financial, who more than any other living American is responsible for the foreclosure scandal, was paid more than $250 million of executive compensation.

Republican CNBC commentator Larry Kudlow was defending him and attacking those "populists" who think $250 million of personal wealth as compensation is a bit excessive, considering the beneficiary.

To my Republican colleagues on this Pundits Blog: Is this your party's platform for 2008?

Next thing you know, some of these Republicans will endorse the bird flu!

Jim Nussle knows the budget process as well as anybody. Not too many people go from House Budget chairman to Office of Management and Budget director in the course of a career. And now he faces congressional Democrats in the final year of the presidency. The trick for Nussle is to make this battle interesting enough to the press that they pay attention in an “American Idol”-type presidential campaign year.

The budget process is not very interesting. Outside the Beltway, people don’t know what reconciliation is. They don’t care about earmarks. They don’t know the difference between discretionary and entitlement spending. They just know that the dollar is weakening and that things cost more this month than they did last month. Read more...