By Max Ehrenfreund:
The Senate confirmed Steven T. Mnuchin as treasury secretary Monday evening, putting an end to a contentious and protracted debate while adding another former banker to President Trump's roster of advisers.
Mnuchin ran a bank, OneWest, that foreclosed on tens of thousands of Americans amid the financial crisis, and Democrats had argued that he would not represent the financial interests of ordinary Americans in office. Mnuchin and his allies said OneWest's foreclosures were largely in accordance with federal guidelines.
As treasury secretary, Mnuchin will be responsible for managing the nation's day-to-day finances and will have to carry out a broad order from his new boss to review the rules imposed on the financial sector through the Dodd-Frank law of 2010. Also, he'll oversee a report to Congress on whether foreign countries are manipulating their currencies, due in April.
Beyond these immediate tasks, Mnuchin will confront broader questions, assuming an influential position in a new administration that has not clearly signaled how the president will approach the economy. The agenda that Republican lawmakers and several of Trump's advisers favor — tax relief, deregulation and limited economic intervention by the federal government — is in some respects at odds with Trump's populist and protectionist rhetoric, especially on whether the government will impose new barriers to global trade.
Mnuchin, a Hollywood financier and a former partner at Goldman Sachs, will join several other former bankers with senior positions in Trump's administration, including Transportation Secretary Elaine Chao, White House chief strategist Stephen K. Bannon and National Economic Council Director Gary Cohn. The White House's reliance on Wall Street in staffing the administration has drawn criticism from Democrats.
“For someone who pledged to drain the swamp and advocate for working people, President Trump’s nomination of Mr. Mnuchin to be Secretary of the Treasury amounts to another broken promise,” Sen. Tim Kaine (D-Va.), the former vice-presidential candidate, said in a statement. “His complicity in the 2008 financial crisis raises serious doubts.”
The Full Story (February 13, 2017)
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Tuesday, May 16, 2017
Monday, April 17, 2017
Washington Post: After Trump Moves to Undo Financial Regulations, Sanders Calls Him ‘a Fraud’
By Mike DeBonis:
“This guy is a fraud,” Sanders (I-Vt.) said on CNN’s “State of the Union.” “This guy ran for president of the United States saying, ‘I, Donald Trump, I’m going to take on Wall Street. These guys are getting away with murder.’ Then suddenly he appoints all these billionaires, his major financial adviser comes from Goldman Sachs, and now he’s going to dismantle legislation that protects consumers.”
Trump on Friday signed an executive order ordering a review of U.S. financial regulatory laws and regulations, and he acknowledged a coming assault on the 2010 package of regulatory revisions known as Dodd-Frank. His chief economic adviser, Gary Cohn, and his nominee for treasury secretary, Steve Mnuchin, are alumni of the Goldman Sachs investment bank.
* * *
“This is a guy who ran for president saying, ‘I’m the only Republican [who’s] not going to cut Social Security, Medicare and Medicaid,’ and then he appoints all of these guys who are precisely going to cut Social Security, Medicare and Medicaid,” Sanders said in an apparent reference to Trump’s nominees to lead the Office of Management and Budget and the Department of Health and Human Services — both of whom have advocated for cutbacks in entitlement spending.
“Man, this guy, he is a good showman, I will give you that,” Sanders continued. “He is a good TV guy, but I think he’s going to sell out the middle class and the working class of this country. … It is one thing if you run a campaign that says, ‘Look, I think Wall Street’s great. I think the drug companies are great. I think we have to cut Social Security, Medicare and Medicaid,’ and if people want to vote for that, that’s fine. That’s democracy. But you have a president who I think in a totally fraudulent campaign said that ‘I’m going to stand up for the working people.’
“Look at his Cabinet: We’ve never had more billionaires in a Cabinet in the history in the country. Look at his appointees: These are people who are going after the needs of working families, the elderly, the children, the sick and the poor. That is called hypocrisy.”
The Full Story (February 5, 2017)
“This guy is a fraud,” Sanders (I-Vt.) said on CNN’s “State of the Union.” “This guy ran for president of the United States saying, ‘I, Donald Trump, I’m going to take on Wall Street. These guys are getting away with murder.’ Then suddenly he appoints all these billionaires, his major financial adviser comes from Goldman Sachs, and now he’s going to dismantle legislation that protects consumers.”
Trump on Friday signed an executive order ordering a review of U.S. financial regulatory laws and regulations, and he acknowledged a coming assault on the 2010 package of regulatory revisions known as Dodd-Frank. His chief economic adviser, Gary Cohn, and his nominee for treasury secretary, Steve Mnuchin, are alumni of the Goldman Sachs investment bank.
* * *
“This is a guy who ran for president saying, ‘I’m the only Republican [who’s] not going to cut Social Security, Medicare and Medicaid,’ and then he appoints all of these guys who are precisely going to cut Social Security, Medicare and Medicaid,” Sanders said in an apparent reference to Trump’s nominees to lead the Office of Management and Budget and the Department of Health and Human Services — both of whom have advocated for cutbacks in entitlement spending.
“Man, this guy, he is a good showman, I will give you that,” Sanders continued. “He is a good TV guy, but I think he’s going to sell out the middle class and the working class of this country. … It is one thing if you run a campaign that says, ‘Look, I think Wall Street’s great. I think the drug companies are great. I think we have to cut Social Security, Medicare and Medicaid,’ and if people want to vote for that, that’s fine. That’s democracy. But you have a president who I think in a totally fraudulent campaign said that ‘I’m going to stand up for the working people.’
“Look at his Cabinet: We’ve never had more billionaires in a Cabinet in the history in the country. Look at his appointees: These are people who are going after the needs of working families, the elderly, the children, the sick and the poor. That is called hypocrisy.”
The Full Story (February 5, 2017)
Thursday, April 13, 2017
Rolling Stone: Extreme Vetting, But Not for Banks
By Matt Taibbi:
The Full Story (February 3, 2017)
Donald Trump, the man who positioned himself as the common man's shield against Wall Street, signed a series of orders today calling for reviews or rollbacks of financial regulations. He did so after meeting with some friendly helpers.
Here's how CNBC described the crowd of Wall Street CEOs Trump received, before he ordered a review of both the Dodd-Frank Act and the fiduciary rule requiring investment advisors to act in their clients' interests:
"Trump also will meet at the White House with leading CEOs, including JPMorgan's Jamie Dimon, Blackstone's Steve Schwarzman, and BlackRock's Larry Fink."
Leading the way for this assortment of populist heroes will be former Goldman honcho Gary Cohn, now Trump's chief economic advisor.
Dimon, Schwarzman, Fink and Cohn collectively represent a rogues gallery of the creeps most responsible for the 2008 crash. It would be hard to put together a group of people less sympathetic to the non-wealthy.
Trump's approach to Wall Street is in sharp contrast to his tough-talking stances on terrorism. He talks a big game when slamming the door on penniless refugees, but curls up like a beach weakling around guys who have more money than he does.
* * *
These companies are now so enormous that they can't keep track of their own positions. Also, in sharp contrast to the propaganda about what brainy people they all are, many of them lack even the most basic understanding of the potential consequences of deals they might be making.
The leadership of AIG, for instance, basically had no clue how its derivatives portfolio worked, despite the fact that they had $79 billion worth of exposure. Similarly, then-CEO Chuck Prince of Citigroup told the Financial Crisis Inquiry Commission that a $40 billion mortgage position "would not in any way have excited my attention." Both companies ended up needing massive bailouts.
Not only can they not keep track of their own books, they already blow off regulators whenever they get the chance. Take JPMorgan Chase's "London Whale" episode, in which some $6.2 billion in losses in one portfolio accumulated practically overnight. In that case, Dimon simply refused to give the federal regulators routine, required reports as to what was going on with his bank's positions, probably because he himself had no idea how big the hole was at the time.
"Mr. Dimon said it was his decision whether to send the reports to the OCC," a regulator later told the Senate.
This is the same Jamie Dimon about whom Trump said today, "There's nobody better to tell me about Dodd-Frank than Jamie Dimon, so thank you, Jamie."
The enduring lesson of the financial crisis is that in markets as complex as this one, the most extreme danger is in opacity. The big problem is that these egomaniacal Wall Street titans want markets as opaque as possible.
This is why they want to get rid of the fiduciary rule, because they don't think it's anyone's business if they choose to bet against their clients (as Cohn's Goldman famously did), or overcharge them, or otherwise screw them.
The Atlantic: Trump Begins to Chip Away at Banking Regulations
By Gillian B. White:
Hours later, as promised, the president issued a memorandum that sets in motion his plan to scale back the provisions of Dodd-Frank and repeal the upcoming fiduciary rule—the latest in his slate of executive orders aimed at decreasing regulations. Named for Senators Barney Frank and Chris Dodd, the bipartisan act—formally, it’s the Dodd–Frank Wall Street Reform and Consumer Protection Act—was responsible for creating more stringent rules regarding bank capitalization (that is, the amount of money that banks must have on hand), increasing compliance and reporting standards for banks, introducing stricter mortgage requirements, creating the Financial Stability Oversight Council (FSOC) and the Consumer Financial Protection Bureau (CFPB), and curbing excessive risk-taking and the existence of too-big-to-fail institutions on Wall Street.
Despite Trump’s calls for “cutting a lot,” Friday’s executive order is actually more of a command to review Dodd-Frank than to dismantle it. According to the order, the Treasury Secretary—Trump’s pick, the former Goldman Sachs banker Steve Mnuchin, has yet to be confirmed—will be tasked with meeting with various agencies that oversee and implement Dodd-Frank’s regulations, such as the Securities and Exchange Commission, in order to find areas to be amended. That review is slated to be completed in 120 days, though there is little guidance on the what regulations or portions of the law will be most likely to change.
But while the executive order might seem less severe than others issued by Trump, that certainly doesn’t mean that the impact won’t be as important. “I think this is the opening salvo in their attack on consumer and investor protection,” says Michael S. Barr, a law professor at the University of Michigan and one of the architects of the Dodd-Frank Act. Barr says that despite the fact that the executive order on financial regulations seems gradual, the administration has already been quite aggressive when it comes to chipping away at financial-sector regulations. “They’ve already started,” he told me, citing recently-passed legislation that would get rid of one provision of Dodd Frank requiring oil companies to disclose payments to foreign governments.
The Full Story (February 3, 2017)
Hours later, as promised, the president issued a memorandum that sets in motion his plan to scale back the provisions of Dodd-Frank and repeal the upcoming fiduciary rule—the latest in his slate of executive orders aimed at decreasing regulations. Named for Senators Barney Frank and Chris Dodd, the bipartisan act—formally, it’s the Dodd–Frank Wall Street Reform and Consumer Protection Act—was responsible for creating more stringent rules regarding bank capitalization (that is, the amount of money that banks must have on hand), increasing compliance and reporting standards for banks, introducing stricter mortgage requirements, creating the Financial Stability Oversight Council (FSOC) and the Consumer Financial Protection Bureau (CFPB), and curbing excessive risk-taking and the existence of too-big-to-fail institutions on Wall Street.
Despite Trump’s calls for “cutting a lot,” Friday’s executive order is actually more of a command to review Dodd-Frank than to dismantle it. According to the order, the Treasury Secretary—Trump’s pick, the former Goldman Sachs banker Steve Mnuchin, has yet to be confirmed—will be tasked with meeting with various agencies that oversee and implement Dodd-Frank’s regulations, such as the Securities and Exchange Commission, in order to find areas to be amended. That review is slated to be completed in 120 days, though there is little guidance on the what regulations or portions of the law will be most likely to change.
But while the executive order might seem less severe than others issued by Trump, that certainly doesn’t mean that the impact won’t be as important. “I think this is the opening salvo in their attack on consumer and investor protection,” says Michael S. Barr, a law professor at the University of Michigan and one of the architects of the Dodd-Frank Act. Barr says that despite the fact that the executive order on financial regulations seems gradual, the administration has already been quite aggressive when it comes to chipping away at financial-sector regulations. “They’ve already started,” he told me, citing recently-passed legislation that would get rid of one provision of Dodd Frank requiring oil companies to disclose payments to foreign governments.
The Full Story (February 3, 2017)
Talking Points Memo: It Was Never Populism. It's Nationalism.
By Josh Marshall:
Today at the White House CEO event President Trump, leaning on the say-so and presence of big Wall Street CEOs, started ripping up the reforms put in place to prevent a repeat of the 2008 financial crisis. “We have some of the bankers here. There’s nobody better to tell me about Dodd-Frank than Jamie, so you’re going to tell me about it,” Trump told JPMorganChase CEO Jamie Dimon.
This should tell us several things. The most important is that 'populism' has always been the wrong name for what Trumpism represents. The unifying message of Trumpism is nationalism, and particularly an aggressive, zero-sum nationalism. It is also summed up simply in "Make America Great Again." The style may be 'populist' in some generic sense. But the message and agenda is nationalism. That is the focus around which all the actions of these rancorous 13 days come together into a unified whole - aggressive attacks on friends and foes alike, threats of tariffs against non-compliant foreign states, clampdowns on immigration, etc.
You'll notice that President Trump often talks about "workers" but it is almost always in the vein of protecting American workers from abuse by foreigners. Especially since the Trump virtually never speaks about wages. And he never spoke about wealth inequality, financial security provided by programs like Medicare and Social Security, let alone worker protections or labor unions. One might add job security, affordable education for children and retirement security generally to the list of the undiscussed. The real theme is one Trump articulated clearly yesterday in his National Prayer Breakfast speech: "We have to be tough. It's time we're going to be a little tough, folks. We're taking advantage of by every nation in the world virtually. It's not going to happen anymore. It's not going to happen anymore."
We may say that Trump is flipflopping or being hypocritical by embracing the individuals, policies and priorities of the country's financial elite, who he notionally campaigned against. Both are true in a way. But that doesn't tell us enough. The Trump message was about nationalism, power and aggression against the nations of the world who are 'taking advantage of" us and laughing at us. That kind of aggression against outsiders, with their domestic counterparts, the 'elites', can overlap with economic concerns. They're quite distinct.
But a proper understanding of Trumpism is also a political opportunity for Democrats. Trump is cozying up to the Wall Street barons he campaigned against. He's about to throw 25 million Americans off their health care. “We expect to be cutting a lot out of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money,” he said again today, while he also talks about vast tax cuts for his wealthy friends and tax increases for many ordinary working and middle class families. This is a perfect evocation of government by the richest, for the richest, by the rich - and from the President's own lips. The complete indifference to the supposed interests of the people who voted for him has so many examples it's almost comical. Democrats need to be building this storyline now.
The Full Story (February 3, 2017)
Today at the White House CEO event President Trump, leaning on the say-so and presence of big Wall Street CEOs, started ripping up the reforms put in place to prevent a repeat of the 2008 financial crisis. “We have some of the bankers here. There’s nobody better to tell me about Dodd-Frank than Jamie, so you’re going to tell me about it,” Trump told JPMorganChase CEO Jamie Dimon.
This should tell us several things. The most important is that 'populism' has always been the wrong name for what Trumpism represents. The unifying message of Trumpism is nationalism, and particularly an aggressive, zero-sum nationalism. It is also summed up simply in "Make America Great Again." The style may be 'populist' in some generic sense. But the message and agenda is nationalism. That is the focus around which all the actions of these rancorous 13 days come together into a unified whole - aggressive attacks on friends and foes alike, threats of tariffs against non-compliant foreign states, clampdowns on immigration, etc.
You'll notice that President Trump often talks about "workers" but it is almost always in the vein of protecting American workers from abuse by foreigners. Especially since the Trump virtually never speaks about wages. And he never spoke about wealth inequality, financial security provided by programs like Medicare and Social Security, let alone worker protections or labor unions. One might add job security, affordable education for children and retirement security generally to the list of the undiscussed. The real theme is one Trump articulated clearly yesterday in his National Prayer Breakfast speech: "We have to be tough. It's time we're going to be a little tough, folks. We're taking advantage of by every nation in the world virtually. It's not going to happen anymore. It's not going to happen anymore."
We may say that Trump is flipflopping or being hypocritical by embracing the individuals, policies and priorities of the country's financial elite, who he notionally campaigned against. Both are true in a way. But that doesn't tell us enough. The Trump message was about nationalism, power and aggression against the nations of the world who are 'taking advantage of" us and laughing at us. That kind of aggression against outsiders, with their domestic counterparts, the 'elites', can overlap with economic concerns. They're quite distinct.
But a proper understanding of Trumpism is also a political opportunity for Democrats. Trump is cozying up to the Wall Street barons he campaigned against. He's about to throw 25 million Americans off their health care. “We expect to be cutting a lot out of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money,” he said again today, while he also talks about vast tax cuts for his wealthy friends and tax increases for many ordinary working and middle class families. This is a perfect evocation of government by the richest, for the richest, by the rich - and from the President's own lips. The complete indifference to the supposed interests of the people who voted for him has so many examples it's almost comical. Democrats need to be building this storyline now.
The Full Story (February 3, 2017)
Thursday, March 30, 2017
Washington Post: Closing Doors on Trade Isn’t Smart Negotiating
By WaPo Editorial Board:
Mr. Trump now turns his attention to the North American Free Trade Agreement, under which the flow of goods and services among the United States, Canada and Mexico has multiplied many times over since the pact took effect in 1994. Mr. Trump talks endlessly and extravagantly of jobs “stolen” by Mexico under NAFTA, and much manufacturing work has migrated from American factories to Mexican ones. A renegotiation of NAFTA, which Mr. Trump claims to want, beginning with upcoming conversations with the leaders of Mexico and Canada, is not inherently a bad idea. What relationship wouldn’t benefit from a tuneup after a quarter-century? Specifically, there may be a need to revisit NAFTA’s “domestic content” rules to make sure products that flow tariff-free among the three countries truly originate within one of them.
That assumes Mr. Trump comes to the table in good faith and with a balanced view of relevant facts. His fixation on high-profile automobile plant sitings in Mexico — coupled with his repeated threats of a “border tax” on firms that exercise their rights to produce there — does not inspire confidence.
Automation, not trade, is the real culprit in manufacturing job loss. And while NAFTA has surely created winners and losers within the United States, overall it has not been the horrific deal Mr. Trump suggests. The combined trade deficit with Mexico and Canada was $73.4 billion in 2015 (the most recent full year for which data exist). Subtract petroleum and it shrinks to $13.9 billion, a rounding error for the $18 trillion U.S. economy. Chances are that the deficit will shrink as American oil producers crank up for exports.
A smart negotiator would take all that into account before risking trade wars that might do far more damage to American companies, workers and consumers than the status quo allegedly does.
Full Story (January 24, 2017)
Mr. Trump now turns his attention to the North American Free Trade Agreement, under which the flow of goods and services among the United States, Canada and Mexico has multiplied many times over since the pact took effect in 1994. Mr. Trump talks endlessly and extravagantly of jobs “stolen” by Mexico under NAFTA, and much manufacturing work has migrated from American factories to Mexican ones. A renegotiation of NAFTA, which Mr. Trump claims to want, beginning with upcoming conversations with the leaders of Mexico and Canada, is not inherently a bad idea. What relationship wouldn’t benefit from a tuneup after a quarter-century? Specifically, there may be a need to revisit NAFTA’s “domestic content” rules to make sure products that flow tariff-free among the three countries truly originate within one of them.
That assumes Mr. Trump comes to the table in good faith and with a balanced view of relevant facts. His fixation on high-profile automobile plant sitings in Mexico — coupled with his repeated threats of a “border tax” on firms that exercise their rights to produce there — does not inspire confidence.
Automation, not trade, is the real culprit in manufacturing job loss. And while NAFTA has surely created winners and losers within the United States, overall it has not been the horrific deal Mr. Trump suggests. The combined trade deficit with Mexico and Canada was $73.4 billion in 2015 (the most recent full year for which data exist). Subtract petroleum and it shrinks to $13.9 billion, a rounding error for the $18 trillion U.S. economy. Chances are that the deficit will shrink as American oil producers crank up for exports.
A smart negotiator would take all that into account before risking trade wars that might do far more damage to American companies, workers and consumers than the status quo allegedly does.
Full Story (January 24, 2017)
Time: President Trump Wants to Kill These 17 Federal Agencies and Programs. Here's What They Actually Cost (and Do)
By Taylor Tepper:
To put this in context: The total cost, per American, of the following 17 programs said to be on the chopping block is $22.36 per year-- of which more than a third comes from a single clean-energy program. By contrast, housing subsidies, like the mortgage interest deduction, which are disproportionately used by the wealthy, cost $296.29 per American.
Here's a list of the various federal agencies reportedly on the chopping block, along with some of their key initiatives -- and some of the jobs supported.
* * *
International Trade Administration
Budget: $521 million
Cost per American: $1.60
The ITA helps American businesses sell more products to overseas markets. One beneficiary was the Iron Fist Brewing Company, located in Vista, California. A representative of the San Diego U.S. Export Assistance Center connected with the brewery at a convention in 2013, and helped them export to Australia, Canada, Finland, Hong Kong, among others. Iron Fist hired two more employees thanks to new export revenue, the ITA reports.
Manufacturing Extension Partnership
Budget: $142 million
Cost per American: $0.43
This is a so-called public-private partnership that helps small to medium-size manufacturers become more efficient, build new products, and improve sales and marketing techniques. Missoula, Mont.-based organic soap wholesaler Botanie used their local MEP affiliate to help keep pace with their growing business -- by, for instance, using more sophisticated technologies to track inventory. The MEP says it helped Botanie save $280,000 and retain six jobs.
Office of Community Oriented Policing Services
Budget: $286 million
Cost per American: $0.88
The majority of COPS' annual budget is dedicated to hiring more police personnel to help local communities improve their policing. Last October, the Justice Department announced $119 million in grant funding for 184 law enforcement agencies across the country -- resulting in 900 created or saved jobs, the office reports. Among the recipients was the Dallas Police Department, which had lost five officers in an ambush a few months earlier; it got $3.1 million to hire 25 officers.
To put this in context: The total cost, per American, of the following 17 programs said to be on the chopping block is $22.36 per year-- of which more than a third comes from a single clean-energy program. By contrast, housing subsidies, like the mortgage interest deduction, which are disproportionately used by the wealthy, cost $296.29 per American.
Here's a list of the various federal agencies reportedly on the chopping block, along with some of their key initiatives -- and some of the jobs supported.
* * *
International Trade Administration
Budget: $521 million
Cost per American: $1.60
The ITA helps American businesses sell more products to overseas markets. One beneficiary was the Iron Fist Brewing Company, located in Vista, California. A representative of the San Diego U.S. Export Assistance Center connected with the brewery at a convention in 2013, and helped them export to Australia, Canada, Finland, Hong Kong, among others. Iron Fist hired two more employees thanks to new export revenue, the ITA reports.
Manufacturing Extension Partnership
Budget: $142 million
Cost per American: $0.43
This is a so-called public-private partnership that helps small to medium-size manufacturers become more efficient, build new products, and improve sales and marketing techniques. Missoula, Mont.-based organic soap wholesaler Botanie used their local MEP affiliate to help keep pace with their growing business -- by, for instance, using more sophisticated technologies to track inventory. The MEP says it helped Botanie save $280,000 and retain six jobs.
Office of Community Oriented Policing Services
Budget: $286 million
Cost per American: $0.88
The majority of COPS' annual budget is dedicated to hiring more police personnel to help local communities improve their policing. Last October, the Justice Department announced $119 million in grant funding for 184 law enforcement agencies across the country -- resulting in 900 created or saved jobs, the office reports. Among the recipients was the Dallas Police Department, which had lost five officers in an ambush a few months earlier; it got $3.1 million to hire 25 officers.
Tuesday, March 28, 2017
The Hill: Trump, GOP Set to Battle on Spending Cuts
By Alexander Bolton:
One likely target is the Legal Services Corporation, a federal agency providing financial support for civil legal aid to low-income people.
Conservatives have long sought its elimination, arguing it has become beholden to liberal causes and noting the Congressional Budget Office has included its defunding as an option to the Senate and House. Eliminating it would save nearly $400 million next year.
But Sen. Orrin Hatch (Utah), a senior Republican on the Judiciary Committee, this week warned that it’s not a battle worth fighting.
“I think that would be hard thing to do. Even if you wanted to do that, you couldn’t get it through the Senate,” he said.
President Reagan tried to abolish the agency shortly after taking office in 1981 but ran into a wall in Congress.
“It’s been repeatedly tried, but the reality is it’s the only way that a lot of poor folks, especially rural poor, get any kind of legal help,” said Jim Dyer, who served for 13 years as the Republican staff director of the House Appropriations Committee.
“It’s almost like they sat down over there and dragged out all of their old wish list, most of which of has been discarded, and said to themselves, 'Let’s put it on the table and see who salutes,'” he added.
Another proposal embraced by Heritage and the RSC budget plans is the elimination of the essential air service program, a program that subsidizes rural airports serving sparsely populated communities.
Sen. Lisa Murkowski (R-Alaska) said she would pull out all the stops to fight for it.
But Sen. Orrin Hatch (Utah), a senior Republican on the Judiciary Committee, this week warned that it’s not a battle worth fighting.
“I think that would be hard thing to do. Even if you wanted to do that, you couldn’t get it through the Senate,” he said.
President Reagan tried to abolish the agency shortly after taking office in 1981 but ran into a wall in Congress.
“It’s been repeatedly tried, but the reality is it’s the only way that a lot of poor folks, especially rural poor, get any kind of legal help,” said Jim Dyer, who served for 13 years as the Republican staff director of the House Appropriations Committee.
“It’s almost like they sat down over there and dragged out all of their old wish list, most of which of has been discarded, and said to themselves, 'Let’s put it on the table and see who salutes,'” he added.
Another proposal embraced by Heritage and the RSC budget plans is the elimination of the essential air service program, a program that subsidizes rural airports serving sparsely populated communities.
Sen. Lisa Murkowski (R-Alaska) said she would pull out all the stops to fight for it.
Monday, March 27, 2017
Chicago Tribune: Trump's Team Suspended a Mortgage Insurance Rate Cut
By Andrew Khouri:
If you are shopping for a home and planned to use an FHA-backed loan, it means you will be paying the same premium rate for required mortgage insurance that you would have since January 2015.
For most borrowers getting an FHA-backed loan that means that after paying an upfront insurance fee, you will pay 0.85% of your loan amount for premiums each year. The Obama administration had planned to drop that rate to 0.60%. In 2014, the rate was 1.35%, after several increases to shore up FHA finances after the housing crash.
If the recent cut had gone into effect as expected Jan. 27, the California Assn. of Realtors estimates borrowers in the state using FHA loans would have saved an average of $860 a year.
The Full Story (January 23, 2017)
If you are shopping for a home and planned to use an FHA-backed loan, it means you will be paying the same premium rate for required mortgage insurance that you would have since January 2015.
For most borrowers getting an FHA-backed loan that means that after paying an upfront insurance fee, you will pay 0.85% of your loan amount for premiums each year. The Obama administration had planned to drop that rate to 0.60%. In 2014, the rate was 1.35%, after several increases to shore up FHA finances after the housing crash.
If the recent cut had gone into effect as expected Jan. 27, the California Assn. of Realtors estimates borrowers in the state using FHA loans would have saved an average of $860 a year.
The Full Story (January 23, 2017)
Friday, March 24, 2017
New York Times: Trump Abandons Trans-Pacific Partnership, Obama’s Signature Trade Deal
By Peter Baker:
Mr. Trump may also move quickly to renegotiate the North American Free Trade Agreement. He is scheduling meetings with the leaders of Canada and Mexico, the two main partners in that pact, which was negotiated by President George Bush and pushed through Congress by President Bill Clinton. While Nafta has been a major driver of American trade for nearly two decades, it has long been divisive, with critics blaming it for lost jobs and lower wages.
But free-trade advocates said that in canceling the Pacific pact, Mr. Trump lost an agreement that had already renegotiated Nafta under more modern rules governing intellectual property, internet access and agriculture, since both Mexico and Canada were signatories. He also undercut Mr. Obama’s so-called pivot to Asia and, critics said, essentially ceded the field to China, which was not part of the agreement.
“There’s no doubt that this action will be seen as a huge, huge win for China,” Michael B. Froman, the trade representative who negotiated the pact for Mr. Obama, said in an interview. “For the Trump administration, after all this talk about being tough on China, for their first action to basically hand the keys to China and say we’re withdrawing from our leadership position in this region is geostrategically damaging.”
Some Republicans agreed, but only a few would publicly challenge the president. Senator John McCain of Arizona called the decision “a serious mistake” that would hurt America. “It will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it,” he said in a statement.
Mr. Trump may also move quickly to renegotiate the North American Free Trade Agreement. He is scheduling meetings with the leaders of Canada and Mexico, the two main partners in that pact, which was negotiated by President George Bush and pushed through Congress by President Bill Clinton. While Nafta has been a major driver of American trade for nearly two decades, it has long been divisive, with critics blaming it for lost jobs and lower wages.
But free-trade advocates said that in canceling the Pacific pact, Mr. Trump lost an agreement that had already renegotiated Nafta under more modern rules governing intellectual property, internet access and agriculture, since both Mexico and Canada were signatories. He also undercut Mr. Obama’s so-called pivot to Asia and, critics said, essentially ceded the field to China, which was not part of the agreement.
“There’s no doubt that this action will be seen as a huge, huge win for China,” Michael B. Froman, the trade representative who negotiated the pact for Mr. Obama, said in an interview. “For the Trump administration, after all this talk about being tough on China, for their first action to basically hand the keys to China and say we’re withdrawing from our leadership position in this region is geostrategically damaging.”
Some Republicans agreed, but only a few would publicly challenge the president. Senator John McCain of Arizona called the decision “a serious mistake” that would hurt America. “It will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it,” he said in a statement.
Wednesday, March 22, 2017
Washington Post: President Trump Signs Order to Withdraw From Trans-Pacific Partnership
By Ylan Q. Mui:
“This abrupt action so early in the Trump administration puts the world on notice that all of America's traditional economic and political alliances are now open to reassessment and renegotiation,” said Eswar Prasad, trade policy professor at Cornell University. “This could have an adverse long-run impact on the ability of the U.S. to maintain its influence and leadership in world economic and political affairs.”
The TPP was one of former president Barack Obama’s signature efforts, part of a broader strategy to increase American clout in Asia and provide a check on China’s economic and military ambitions. Several of the executives Trump met with Monday initially had supported the agreement, while the chief architect of the administration’s trade policy, Commerce secretary nominee Wilbur Ross, was also once a booster for the deal.
But ending TPP was one of the clarion calls of Trump’s campaign, part of a global backlash against the drive toward greater internationalization that has defined the world economy since the end of World War II. British Prime Minister Theresa May, who is in the midst of navigating her country’s own break from established trading partners, is slated to visit with Trump later this week. A White House spokesman said meetings with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto are in the works.
The Full Story (January 23, 2017)
“This abrupt action so early in the Trump administration puts the world on notice that all of America's traditional economic and political alliances are now open to reassessment and renegotiation,” said Eswar Prasad, trade policy professor at Cornell University. “This could have an adverse long-run impact on the ability of the U.S. to maintain its influence and leadership in world economic and political affairs.”
The TPP was one of former president Barack Obama’s signature efforts, part of a broader strategy to increase American clout in Asia and provide a check on China’s economic and military ambitions. Several of the executives Trump met with Monday initially had supported the agreement, while the chief architect of the administration’s trade policy, Commerce secretary nominee Wilbur Ross, was also once a booster for the deal.
But ending TPP was one of the clarion calls of Trump’s campaign, part of a global backlash against the drive toward greater internationalization that has defined the world economy since the end of World War II. British Prime Minister Theresa May, who is in the midst of navigating her country’s own break from established trading partners, is slated to visit with Trump later this week. A White House spokesman said meetings with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto are in the works.
The Full Story (January 23, 2017)
Monday, March 13, 2017
Bloomberg: Trump Reverses Obama's Mortgage Fee Cuts on First Day
By Joe Light:
Soon after Donald Trump was sworn in as president, his administration undid one of Barack Obama’s last-minute economic-policy actions: a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers.
The new administration on Friday said it’s canceling a reduction in the Federal Housing Administration’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year.
* * *
“This action is completely out of alignment with President Trump’s words about having the government work for the people,” said John Taylor, president of the National Community Reinvestment Coalition, through a spokesman. “Exactly how does raising the cost of buying a home help average people?”
Sarah Edelman, director of housing policy for the left-leaning Center for American Progress, in an e-mail wrote, “On Day 1, the president has turned his back on middle-class families -- this decision effectively takes $500 out of the pocketbooks of families that were planning to buy a home in 2017. This is not the way to build a strong economy.”
The Full Story (January 20, 2017)
Soon after Donald Trump was sworn in as president, his administration undid one of Barack Obama’s last-minute economic-policy actions: a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers.
The new administration on Friday said it’s canceling a reduction in the Federal Housing Administration’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year.
* * *
“This action is completely out of alignment with President Trump’s words about having the government work for the people,” said John Taylor, president of the National Community Reinvestment Coalition, through a spokesman. “Exactly how does raising the cost of buying a home help average people?”
Sarah Edelman, director of housing policy for the left-leaning Center for American Progress, in an e-mail wrote, “On Day 1, the president has turned his back on middle-class families -- this decision effectively takes $500 out of the pocketbooks of families that were planning to buy a home in 2017. This is not the way to build a strong economy.”
The Full Story (January 20, 2017)
Tuesday, March 7, 2017
Washington Post: European Leaders Shocked as Trump Slams NATO and E.U., Raising Fears of Transatlantic Split
By Michael Birnbaum:
The possibility of an unprecedented breach in transatlantic relations came after Trump — who embraced anti-E.U. insurgents during his campaign and following his victory — said in weekend remarks that the 28-nation European Union was bound for a breakup and that he was indifferent to its fate. He also said NATO’s current configuration is “obsolete,” even as he professed commitment to Europe’s defense.
Trump’s attitudes have raised alarm bells across Europe, which is facing a wave of elections this year in which anti-immigrant, Euroskeptic leaders could gain power. Most mainstream leaders have committed to working with Trump after his inauguration Friday, even as they have expressed hope that he will moderate his views once he takes office. His continued hard line has created a painful realization in Europe that they may now have to live without the full backing of their oldest, strongest partner. The European Union underpins much of the continent’s post-World War II prosperity, but skeptics have attacked it in recent years as a dysfunctional bloc that undermines finances and security.
* * *
The full ramifications of a potential breakdown in transatlantic ties are so extensive, they are difficult to total. U.S. guarantees form the backbone of European security. The United States and the 500-million-people-strong European Union are each other’s most important trade partners. For decades, European nations and the United States have worked tightly together on issues of war, peace and wealth.
Trump appears skeptical that the European Union matters to American security or economic growth.
The Full Story (January 16, 2017)
The possibility of an unprecedented breach in transatlantic relations came after Trump — who embraced anti-E.U. insurgents during his campaign and following his victory — said in weekend remarks that the 28-nation European Union was bound for a breakup and that he was indifferent to its fate. He also said NATO’s current configuration is “obsolete,” even as he professed commitment to Europe’s defense.
Trump’s attitudes have raised alarm bells across Europe, which is facing a wave of elections this year in which anti-immigrant, Euroskeptic leaders could gain power. Most mainstream leaders have committed to working with Trump after his inauguration Friday, even as they have expressed hope that he will moderate his views once he takes office. His continued hard line has created a painful realization in Europe that they may now have to live without the full backing of their oldest, strongest partner. The European Union underpins much of the continent’s post-World War II prosperity, but skeptics have attacked it in recent years as a dysfunctional bloc that undermines finances and security.
* * *
The full ramifications of a potential breakdown in transatlantic ties are so extensive, they are difficult to total. U.S. guarantees form the backbone of European security. The United States and the 500-million-people-strong European Union are each other’s most important trade partners. For decades, European nations and the United States have worked tightly together on issues of war, peace and wealth.
Trump appears skeptical that the European Union matters to American security or economic growth.
The Full Story (January 16, 2017)
Monday, February 27, 2017
Washington Post: Trump Has Stacked The Deck Against Himself
By Michael Gerson:
He has promised a tax cut that will, by one estimate, reduce federal revenue by $7 trillion over 10 years. He has promised an infrastructure initiative that may cost an additional trillion. He has promised to rebuild the military. He has effectively promised not to make changes in Social Security and Medicare. And he has promised to move swiftly toward a balanced federal budget.
Taken together, these things can’t be taken together. Trump has made a series of pledges that can’t be reconciled. If he knew this during the campaign, he is cynical. If he is only finding out now, he is benighted. In either case, something has to give.
Congress and the country normally get a first glimpse of presidential priorities in the administration’s initial budget — hashed out internally, translated into legislative-speak by experts and published in a hefty book.
It makes for stupefying reading. It is a useful document nonetheless. The budget book throws an ocean of campaign pledges against the rocky shore of fiscal reality. Proposals and pledges must be forced into a pie chart. Anyone’s gain, it turns out, is someone’s loss.
The Full Story (January 12, 2017)
He has promised a tax cut that will, by one estimate, reduce federal revenue by $7 trillion over 10 years. He has promised an infrastructure initiative that may cost an additional trillion. He has promised to rebuild the military. He has effectively promised not to make changes in Social Security and Medicare. And he has promised to move swiftly toward a balanced federal budget.
Taken together, these things can’t be taken together. Trump has made a series of pledges that can’t be reconciled. If he knew this during the campaign, he is cynical. If he is only finding out now, he is benighted. In either case, something has to give.
Congress and the country normally get a first glimpse of presidential priorities in the administration’s initial budget — hashed out internally, translated into legislative-speak by experts and published in a hefty book.
It makes for stupefying reading. It is a useful document nonetheless. The budget book throws an ocean of campaign pledges against the rocky shore of fiscal reality. Proposals and pledges must be forced into a pie chart. Anyone’s gain, it turns out, is someone’s loss.
The Full Story (January 12, 2017)
Thursday, February 16, 2017
Washington Post: How a Week of Tweets by Trump Stoked Anxiety, Moved Markets and Altered Plans
By Philip Rucker and Danielle Paquette:
From his glimmering Manhattan tower, President-elect Donald Trump launched a 7:30 a.m. missive to his 18.9 million Twitter followers: “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!”
Trump’s demand ricocheted across social media in some 18,000 retweets. Then came the fallout: Google searches about GM spiked by 200 percent. GM’s stock value declined by 24 cents to $34.60 a share. And at corporate headquarters in Detroit, GM executives sprang into action. They had a reputation to save — and facts to correct.
At 9:10 a.m. landed a statement from one of the world’s biggest corporations: “All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio.” The automaker added that it assembles a hatchback Cruze model in Mexico but that it is for “global markets” and that only 4,500, or about 2 percent, were sold on American soil.
From his glimmering Manhattan tower, President-elect Donald Trump launched a 7:30 a.m. missive to his 18.9 million Twitter followers: “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!”
Trump’s demand ricocheted across social media in some 18,000 retweets. Then came the fallout: Google searches about GM spiked by 200 percent. GM’s stock value declined by 24 cents to $34.60 a share. And at corporate headquarters in Detroit, GM executives sprang into action. They had a reputation to save — and facts to correct.
At 9:10 a.m. landed a statement from one of the world’s biggest corporations: “All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio.” The automaker added that it assembles a hatchback Cruze model in Mexico but that it is for “global markets” and that only 4,500, or about 2 percent, were sold on American soil.
Monday, February 13, 2017
Rolling Stone: Trump Nominee Jay Clayton Will Be the Most Conflicted SEC Chair Ever
By Matt Taibbi:
That Clayton has been a devoted legal slave to the usual Wall Street monsters over the years is obviously concerning, though not terribly unusual.
What makes this situation somewhat unique is the fact that this incoming SEC chief is also married to a broker at Goldman Sachs – his wife Gretchen is a wealth management advisor. This means that a significant portion of Clayton's family income while in office will presumably be coming from a company he is charged with policing.
This is both far less common and a much bigger problem than you'd think. As one former congressional aide put it to me today, "Clayton will be the most financially conflicted SEC chairman in history."
Remember, at the Republican convention last year, Trump supporters heckled Ted Cruz's wife, Heidi, for being a Goldman Sachs employee.
Where are all those furious Trump supporters now that their idol has put the husband of a Goldman broker in charge of the SEC? Pretty quiet. You can hear the crickets chirping all across America today.
The Full Story (January 5, 2017)
That Clayton has been a devoted legal slave to the usual Wall Street monsters over the years is obviously concerning, though not terribly unusual.
What makes this situation somewhat unique is the fact that this incoming SEC chief is also married to a broker at Goldman Sachs – his wife Gretchen is a wealth management advisor. This means that a significant portion of Clayton's family income while in office will presumably be coming from a company he is charged with policing.
This is both far less common and a much bigger problem than you'd think. As one former congressional aide put it to me today, "Clayton will be the most financially conflicted SEC chairman in history."
Remember, at the Republican convention last year, Trump supporters heckled Ted Cruz's wife, Heidi, for being a Goldman Sachs employee.
Where are all those furious Trump supporters now that their idol has put the husband of a Goldman broker in charge of the SEC? Pretty quiet. You can hear the crickets chirping all across America today.
The Full Story (January 5, 2017)
Thursday, February 9, 2017
Washington Post: Donald Trump is Claiming Credit for Saving U.S. Jobs. Does He Deserve It?
By Philip Bump:
Dow Chemical
What Trump said: At a rally last month, Trump introduced Dow chief executive Andrew Liveris, whom the president-elect tapped to run the American Manufacturing Council.
Liveris told the crowd that his company would be creating jobs in Michigan.
“We're going to invest a new state-of-the-art innovation center in Michigan,” he said. “We're going to put an R-and-D center in place. This decision. . . . Because of this man. And these policies. We could have waited. We could have put it anywhere in the world. Several hundred jobs, on top of the thousands. We aren't waiting.”
What really happened: The “thousands” mentioned by Liveris appears to refer to existing Dow jobs in the state. In a subsequent news release, the company offered more details. “The innovation center will support approximately 200 research and development jobs in Michigan,” it read, “including 100 newly created jobs while repatriating 100 jobs from other Dow facilities throughout the globe to Midland.”
The Full Story (January 3, 2017)
Dow Chemical
What Trump said: At a rally last month, Trump introduced Dow chief executive Andrew Liveris, whom the president-elect tapped to run the American Manufacturing Council.
Liveris told the crowd that his company would be creating jobs in Michigan.
“We're going to invest a new state-of-the-art innovation center in Michigan,” he said. “We're going to put an R-and-D center in place. This decision. . . . Because of this man. And these policies. We could have waited. We could have put it anywhere in the world. Several hundred jobs, on top of the thousands. We aren't waiting.”
What really happened: The “thousands” mentioned by Liveris appears to refer to existing Dow jobs in the state. In a subsequent news release, the company offered more details. “The innovation center will support approximately 200 research and development jobs in Michigan,” it read, “including 100 newly created jobs while repatriating 100 jobs from other Dow facilities throughout the globe to Midland.”
The Full Story (January 3, 2017)
Wednesday, February 1, 2017
National Review: Conservatism in the Era of Trump
By Tim Alberta:
All of this is a gamble, of course, as Trump’s ideology is disjointed at best and his core philosophy on the appropriate role of government is anyone’s guess. So while his presidency represents a prime opportunity for conservatives to influence the direction of the party and the country, it also threatens to redefine Republicanism in a way that is hostile toward traditional concepts of limited government. In some areas, no doubt, Trump’s agenda will mesh nicely with these principles. When it inevitably does not, conservatives will find themselves facing a quandary: Fall in line and risk damaging the credibility of conservatism, or push back and risk provoking a thin-skinned and Twitter-addicted president.
Further complicating things is the fact that Trump dominated — in the primary and general elections — those districts represented by Congress’s most conservative members. They once believed they were elected to advance a narrowly ideological agenda, but Trump’s success has given them reason to question that belief. Knowing this, GOP leadership officials are betting that Trump’s popularity among conservative constituents will make their representatives less obstructionist and therefore less influential in the upcoming Congress.
* * *
The Full Story (December 21, 2016)
All of this is a gamble, of course, as Trump’s ideology is disjointed at best and his core philosophy on the appropriate role of government is anyone’s guess. So while his presidency represents a prime opportunity for conservatives to influence the direction of the party and the country, it also threatens to redefine Republicanism in a way that is hostile toward traditional concepts of limited government. In some areas, no doubt, Trump’s agenda will mesh nicely with these principles. When it inevitably does not, conservatives will find themselves facing a quandary: Fall in line and risk damaging the credibility of conservatism, or push back and risk provoking a thin-skinned and Twitter-addicted president.
Further complicating things is the fact that Trump dominated — in the primary and general elections — those districts represented by Congress’s most conservative members. They once believed they were elected to advance a narrowly ideological agenda, but Trump’s success has given them reason to question that belief. Knowing this, GOP leadership officials are betting that Trump’s popularity among conservative constituents will make their representatives less obstructionist and therefore less influential in the upcoming Congress.
* * *
Consider Trump’s stated intention to seek a $1 trillion dollar infrastructure package soon after taking office. At a conservative forum one week after the election, Labrador told reporters that any such bill “has to be paid for” with spending cuts or revenues from elsewhere, “and if Trump doesn’t find a way to pay for it, the majority of us, if not all of us, are going to vote against it.” Otherwise, conservatives reasoned, it would be no different than the Obama stimulus package they once railed against. But their thinking has shifted in the weeks since. According to several members, there has been informal talk of accepting a bill that’s only 50 percent paid for, with the rest of the borrowing being offset down the road by “economic growth.” It’s an arrangement Republicans would never have endorsed under a President Hillary Clinton, and a slippery slope to go down with Trump.
The Full Story (December 21, 2016)
Monday, January 30, 2017
Washington Post: Trump’s OMB Pick Seems Poised to Ignite a Worldwide Financial Crisis
By Catherine Rampell:
Whatever their differences on line-item details, though, Mulvaney and the president-elect have at least one major thing in common: an alarming openness to defaulting on the federal debt.
As you may recall, during the campaign Trump repeatedly flirted with the idea of defaulting on U.S. debt obligations. In a CNBC interview in May, he suggested that his experience in offloading private debt would translate nicely to federal obligations. That is, he’d simply persuade the country’s creditors to accept less than full payment.
“I would borrow knowing that if the economy crashed you could make a deal,” he said.
When the financial press freaked out, he walked back the language — only to revive it a month later.
Mulvaney has also questioned the need to preserve the country’s sterling reputation as a borrower.
The Full Story (December 20, 2016)
See also.
As you may recall, during the campaign Trump repeatedly flirted with the idea of defaulting on U.S. debt obligations. In a CNBC interview in May, he suggested that his experience in offloading private debt would translate nicely to federal obligations. That is, he’d simply persuade the country’s creditors to accept less than full payment.
“I would borrow knowing that if the economy crashed you could make a deal,” he said.
When the financial press freaked out, he walked back the language — only to revive it a month later.
Mulvaney has also questioned the need to preserve the country’s sterling reputation as a borrower.
The Full Story (December 20, 2016)
See also.
Washington Post: On New York’s Fifth Avenue, Trump’s White House North
By Paul Schwartzman:
The Full Story (December 18, 2016)
On most days, crowds of tourists, rank-and-file New Yorkers and candidates seeking jobs with the new administration endure a maze of checkpoints, barricades and police command posts on the traffic-choked streets that bound Trump Tower.
* * *
Protecting Trump during his transition is costing New York taxpayers upward of $500,000 a day, a price that has triggered no small amount of outrage from Mayor Bill de Blasio and prompted one city lawmaker to politely urge the president-elect to decamp to another one of his properties, perhaps in Florida.
An overwhelming majority of New York City voters rejected Trump’s candidacy, and many grouse at the prospect of their city becoming his presidential backdrop. But Cindy Adams, a New York Post gossip columnist and longtime Trump friend, said she would understand if he preferred his home town to Washington, which she dismissed as overpopulated by fashion-challenged lawmakers who wear “plastic shoes with rubber soles.”
“The White House is smaller than where he’s used to living,” Adams said. “He doesn’t even have a proper ballroom there. You get 11 people into the Red Room and it’s crowded.”
The Full Story (December 18, 2016)
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