Saturday, February 14, 2009

WHO, Algeria Deny al-Qaeda Black Death

Al-Qaeda in the Maghreb was reported to have been stricken with bubonic plague in January. Forty terrorists were said to have died. I reported the story here and here.

Early February, Algeria and WHO denied any plague outbreak in the area known to be used by AQIM.

Algeria and the World Health Organization have separately rejected reports that a bubonic plague mishap killed dozens of al-Qaeda operatives at a base in the African state, Agence France-Presse reported today (see GSN, Jan. 21).

"No case of plague of any type has been recorded in any region of Algeria since 2003 in Oran," Algerian Health Ministry spokesman Slim Belkessam said yesterday.

The World Health Organization verified that the 2003 incident was the most recent Algerian case to be reported.

U.S. and British newspapers reported that a failed attempt to weaponize plague bacteria killed roughly 40 members of al-Qaeda in the Islamic Maghreb at a site about 60 miles east of Algiers.

Al-Qaeda dismissed the report in a statement on an extremist Web site.

A high-level U.S. intelligence official last month also rejected the plague report, but told the Washington Times that the extremists had apparently suffered exposure to some sort of biological or chemical agent (
Agence France-Presse/Google News, Feb. 4).
The denial text from AQIM is available as PDF at NEFA Foundation. Of course, denial by al-Qaeda is totally expected so it doesn't carry much weight.

As noted by Infidel Bloggers Alliance,

Anis Rahmani, an Algerian security expert, noted that AQIM had trouble making explosives from fertilizer - the complicated and expensive process of weaponizing plague bacteria was far beyond the capability of the cave-dwelling insurgents.
(...)

the very fact that no legitimate case has been reported suggests that this reported outbreak is unlikely... What can certainly be discounted is the possibility of AQIM conducting experiments in weaponizing the plague or other infectious diseases in their remote mountain hideouts.
This was most probably a false report based in a fact of some dead AQIM bad guys, but that does not mean we should let our guard down. Ineptitude at making fertilizer bombs doesn't translate to absolute incompetence in all things. Who knows, some of the terrorists could be fabulous chefs.





The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Congressional Leaders Retreat to Anywhere But Their Districts

Just hours after Congress passed the $787 billion Stimulus Package, Senators and Congressmen high-tailed it out of Dodge... ahhh, Washington, D.C. While Americans are split 54%/45% in favor of the Package, are leaving on Winter Break. Yeah, yeah, that's it, Winter Break. Couldn't possibly be they don't want to be around when Obama's large package is revealed.

Laurie Kellman, Associated Press, writes,

See ya!

The economic stimulus package all but signed, some lawmakers are headed to the Middle East and Europe as part of official congressional delegations. Congress is on a weeklong-President's Day recess, and that's time for large groups of members to represent the U.S. abroad on taxpayer-funded, fact-finding trips.

Several lawmakers in the House and Senate have extensive itineraries.

* House Speaker Nancy Pelosi, D-Calif., is traveling to Italy.

* Rep. John Tanner, D-Tenn., president of the NATO Paramilitary Assembly, is leading a trip to Brussels, with stops in Paris and Vienna.

* Sen. Ben Cardin, D-Md., who chairs the U.S. Helsinki Commission, is taking a group to Israel, Syria and Austria.

* Senate Foreign Relations Chairman John Kerry, D-Mass., is off to Syria, Egypt, Jordan, Israel and Lebanon.

The trips come after a stretch in which lawmakers lit into corporate chiefs of the banking and auto industries for their lavish lifestyles with the nation in recession. They also follow the House Democrats and Republicans annual retreats at exclusive resorts in Virginia.
The political memory of voters is very short and after a week with Congressional leaders out of the country, off the front lines, and out of the line of fire, will anyone remember how much this is going to cost?




The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Another Day Older and $787 Billion Deeper in Debt

The Senate passed the ersatz Obama Stimulus Package 60-28 on Friday with three turn-coat Republicans in tow. Earlier, the House of Representatives voted 246-183 to tax the hell out of Americans. No Republican vote was tarnished in the House.

At 1,071 pages, not one Senator or Congressman has actually read the entire bill because Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi rammed the bill through Congress without allowing time for anyone to read it. In the months to come plenty of people will read the bill.

From the Associated Press, here is just some of what is in the Stimulus Bill and if you are not stimulated, you are probably dead, unless you live in Chicago where death has never ended anyone's political participation. From the Associated Press:



Spending

AID TO POOR AND UNEMPLOYED

* $40 billion to provide extended unemployment benefits through Dec. 31, and increase them by $25 a week; $20 billion to increase food stamp benefits by 14 percent; $4 billion for job training; $3 billion in temporary welfare payments.

DIRECT CASH PAYMENTS

* $14.2 billion to give one-time $250 payments to Social Security recipients, poor people on Supplemental Security Income, and veterans receiving disability and pensions.

INFRASTRUCTURE

* $48 billion for transportation projects, including $27.5 billion for highway and bridge construction and repair; $8.4 billion for mass transit; $8 billion for construction of high-speed railways and $1.3 billion for Amtrak; $4.6 billion for the Army Corps of Engineers; $4 billion for public housing improvements; $6 billion for clean and drinking water projects; $7.2 billion to bring broadband Internet service to underserved areas; $4.2 billion to repair and modernize Defense Department facilities.

HEALTH CARE

* $24.7 billion to provide a 65 percent subsidy of health care insurance premiums for the unemployed under the COBRA program; $86.6 billion to help states with Medicaid; $19 billion to modernize health information technology systems; $10 billion for health research and construction of National Institutes of Health facilities; $1 billion for prevention and wellness programs.

STATE BLOCK GRANTS

* $8.8 billion in aid to states to defray budget cuts.

ENERGY

* About $50 billion for energy programs, focused chiefly on efficiency and renewable energy, including $5 billion to weatherize modest-income homes; $6.4 billion to clean up nuclear weapons production sites; $11 billion toward a so-called "smart electricity grid" to reduce waste; $6 billion to subsidize loans for renewable energy projects; $6.3 billion in state energy efficiency and clean energy grants; and $4.5 billion make federal buildings more energy efficient; $2 billion in grants for advanced batteries for electric vehicles.

EDUCATION

* $44.5 billion in aid to local school districts to prevent layoffs and cutbacks, with flexibility to use the funds for school modernization and repair; $25.2 billion to school districts to fund special education and the No Child Left Behind law for students in K-12; $15.6 billion to boost the maximum Pell Grant by $500 to $5,350; $2 billion for Head Start.

HOUSING

* $4 billion to repair and make more energy efficient public housing projects; $2 billion for the redevelop foreclosed and abandoned homes; $1.5 billion for homeless shelters; $2 billion to pay off a looming shortfall in public housing accounts.

SCIENCE

* $3 billion for the National Science Foundation for basic science and engineering research; $1 billion for NASA; $1.6 billion for research in areas such as climate science, biofuels, high-energy physics and nuclear physics.

HOMELAND SECURITY

* $2.8 billion for homeland security programs, including $1 billion for airport screening equipment.

LAW ENFORCEMENT

* $4 billion in grants to state and local law enforcement to hire officers and purchase equipment.

Taxes

NEW TAX CREDIT

* About $116 billion for a $400 per-worker, $800 per-couple tax credits in 2009 and 2010. For the last half of 2009, workers could expect to see about $13 a week less withheld from their paychecks starting around June. Millions of Americans who don't make enough money to pay federal income taxes could file returns next year and receive checks. Individuals making more than $75,000 and couples making more than $150,000 would receive reduced amounts.

ALTERNATIVE MINIMUM TAX

* About $70 billion to spare about 24 million taxpayers from being hit with the alternative minimum tax in 2009. The change would save a family of four an average of $2,300. The tax was designed to make sure wealthy taxpayers can't use credits and deductions to avoid paying any taxes. But it was never indexed to inflation, so families making as little as $45,000 could get significant increases without the change. Congress addresses it each year, usually in the fall.

EXPANDED COLLEGE CREDIT

* About $14 billion to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010. The credit is phased out for couples making more than $160,000.

CHILD TAX CREDIT

* About $15 billion to provide the $1,000 child tax credit to more families that don't make enough money to pay income taxes.

EARNED INCOME TAX CREDIT

* $4.7 billion to expand the Earned Income Tax Credit for low-income families with three or more children.

HOMEBUYER CREDIT

* $6.6 billion to repeal a requirement that a $8,000 first-time home buyer tax credit be paid back over time for homes purchased from Jan. 1 to Nov. 30, unless the home is sold within three years.

AUTO SALES

* $1.7 billion to makes sales taxes on paid on new cars, light trucks, recreational vehicles and motorcycles tax deductible through the end of the year.

RENEWABLE ENERGY INCENTIVES

* About 20 billion in tax incentives for renewable energy and energy efficiency over 10 years, including extending tax credits for energy produced from wind, geothermal, hydropower and landfill gas; grants to build renewable energy facilities; tax credits for purchases of energy-efficient furnaces, windows and doors, or insulation; tax credit for families that purchase plug-in hybrid vehicles.

BONUS DEPRECIATION

* $5 billion to extend a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.

REPEAL BANK CREDIT

* Repeal a Treasury provision that allowed firms that buy money-losing banks to use more of the losses as tax credits to offset the profits of the merged banks for tax purposes. The change would increase taxes on the merged banks by $7 billion over 10 years.

Debt Limit

DEBT LIMIT INCREASE

* Increases the statutory limit on the national debt by $789 billion, to $12.1 trillion.

* Additional debt costs would add about $330 billion over 10 years. Many provisions expire in two years.
Obama intends to sign the bill into law on Tuesday in Denver.

One sector of the economy is guaranteed to be greatly stimulated - trial lawyers. Let the lawsuits begin.






The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Friday, February 13, 2009

Obama Surrenders America to Iran


Obama, as a Democrat presidential candidate in July 2008, called for tougher sanctions on Iran. The Ahmadinejad regime had launched nine test missile capable of hitting Israel and the Strait of Hormuz through which 40% of the world's oil supply is shipped and Obama was assuring the world he would be tough.

"Iran is a great threat. We have to make sure we are working with our allies to apply tightened pressure on Iran."
Then Senator Obama declared that should he be elected president, more direct diplomacy warnings of much tougher economic sanctions would be combined.

"I think what this underscores is the need for us to create a kind of policy that is putting the burden on Iran to change behaviour, and frankly we just have not been able to do that over the last several years."
As far back as 2007, Obama introduced the Iran Sanctions Enabling Act of 2007, in the U.S. House of Representatives and U.S. Senate along with Reps. Barney Frank and Tom Lantos. The Act empowered Americans to apply pressure on Iran by creating lists of entities with business investments in Iran. Obama said of the bill,

"The Iranian government uses the billions of dollars it earns from its oil and gas industry to build its nuclear program and to fund terrorist groups that export its militaristic and radical ideology to Iraq and throughout the Middle East. Pressuring companies to cut their financial ties with Iran is critical to ensuring that sanctions have their intended result. All Americans can play a role in pressuring companies to cut their ties with the Iranian regime, a state sponsor of terror that is a threat to our allies in the region and international security, as a means of convincing Iran to fundamentally change its policies."
Geostrategy Direct, Feb 18, 2009 edition, via Gateway Pundit, is reporting that since Obama has received the keys to the White House, he is dropping all sanctions against Iran and will embrace the Tehran regime, i.e., surrender to Iran.

A few days ago, Israel held an election that could change the political climate in the Mideast. Israeli Defense Minister Ehud Barack, believes he has seen the change and it's coming from Washington, D.C., Israeli officials said.

The United States has abandoned its policy of sanctioning companies that aid Iran's nuclear and missile program, they said.

The officials said the new Obama administration of has decided to end sanctions against Iranian government agencies or companies that aid Teheran's missile and nuclear program. The officials said Israel has been informed of the new U.S. policy.
"We were told that sanctions do not help the new U.S. policy of dialogue with Iran," an official said.
(...)

Obama decided to end sanctions against Iran after determining that the U.S. measures had failed to block Teheran's missile or nuclear weapons program, officials said. Under the administration of former President George Bush, the United States accelerated sanctions on Iran in 2008.
(...)

A U.S. defense source said the White House would no longer enforce sanctions imposed by the Bush administration. The source said the decision has already been relayed to Iran.

"The administration has abandoned sanctions entirely," the U.S. source said. "It is a completely new ballgame."

Similarly, Obama has decided on a new U.S. ambassador to Syria and is expected to lift sanctions against a nation charged with aiding Al Qaida in Iraq and secretly building a nuclear reactor with North Korean assistance.
(...)

The sources said the Obama administration was expected to suspend U.S. sanctions on Syria's military and energy programs.







The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

STOP THE PRESSES!! Democrat Congressman Lied!

(Photo: Kanjorski, right, with Barney Frank)

The $500 mil run-on-the-bank, sudden and unexplained, didn't happen. Democrat Representative Paul Kanjorski creatively wove together actual events to make his own compelling story - he lied.

On Wednesday, Feb. 11, I and many others reported a story concerning the sudden loss of $500 million from American money-market accounts and no one knew what had happened, or where the money went. The story seemed believable because the story was told by a congressman on C-Span and maybe, like Fox Mulder, because we wanted to believe.

House Capital Markets Subcommittee chairman Rep. Paul Kanjorski (D-PA) explained on C-Span:

Look, I was there when the Secretary [of the Treasury] and the Chairman of the Federal Reserve came in to meet with the members of Congress about what was going on. It was about September 15th.

Here's the facts, and we don't even talk about these things. On Thursday, at about 11:00 in the morning, the Federal Reserve noticed a tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars was being drawn out in the matter of an hour or two.
It didn't happen. He lied. I'm shocked.

Felix Salmon, Conde Nast Portfolio writes (via Sweetness and Light):

With the Kanjorski Meme still spreading (see Ben Smith, Andrew Leonard, Moldbug, and more), I think I'm finally able to squash it with some hard figures: there never was a $500 billion outflow from any asset class in the space of a couple of hours or even weeks, and the Fed never shut down or froze any money-market accounts.

This is not the first time that Kanjorski has made these allegations. But first, it's worth going through the timeline.

On September 15, Lehman Brothers failed. The Reserve fund -- which was $64 billion that morning, and which had a substantial investment in Lehman debt -- saw $10 billion of withdrawals that day. The following day, September 16, it saw another $10 billion of withdrawals; on September 17, when withdrawals had reached a total of about $40 billion, it announced that redemptions would take "as long as seven days"; as we all know, that was massively overoptimistic.
(...)

The following day, September 18, was bad but not quite as bad, with withdrawals of $57 billion, according to Crane Data. By the 24th, according to ICI, the total was $3,456.2 billion -- a drop of another $93.1 billion from the 17th.
(...)

Substantially all of the outflows came from institutional accounts: retail investors never panicked. If you look at the weekly data for bank savings deposits, including money market deposit accounts, they stood at $3,167.4 billion on the 15th, and rose to $3,191.4 billion on the 22nd.

So where does the $500 billion outflow number come from? Would you believe: the Sunday New York Post, which on September 21 published a story headlined "Almost Armageddon" featuring this paragraph:


According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening [on Thursday]. The total money-market capitalization was roughly $4 trillion that morning.
Three days later, 9/24, Kanjorski held a Capital Hill meeting Treasury Secretary Hank Paulson. Kanjorski said:

I was talking to someone, one of my friends on Wall Street today, asking him to verify the money market run. It was anonymously reported in some of the New York papers, and I think I have evidence of it in some of our conversations, whether it was with you or with other experts, that between 11:00 and 11:30 on Thursday last, the money markets in the United States were hit by a run that amounted to about $500 billion of $4 trillion in accounts and that as I understand it, it was essential for the Federal Reserve to pump $105 billion into the system and to suspend operations or the money market accounts of the country would have, in fact, failed.
Read more with active links here.

There you have it. The Congressman's entire story is firmly ensconced in anonymity, ambiguities, and a-friend-of-a-friend-knows-somebody investigative prowess. We, I, should have known better than to believe the story. It was too good.

He's a Democrat politician for goodness sake! What were we I thinking!






The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Wednesday, February 11, 2009

RBS June 19 Warning and Sept 15 Run on the Bank

Normally, I don't read the financial news because it bores the daylights out of me. But last June, I saw an article about a report and warning issued by the Royal Bank of Scotland that shocked me to the core.

What the article was saying and what I was seeing in world markets were identical - in a matter of weeks, the entire financial system of the world began collapsing and there was nothing anyone could do to stop it. Upon further investigation, I learned that the RBS was the largest European holder of American mortgage debt. Austria, Sweden, Greece, and several other countries were financing the economies of the former Soviets states with credit loans far in excess of any country's ability to repay. Those loans would reach maturity and need to be paid in 2009. A market crash was the only conclusion.

This is the article from the Telegraph June 19, 2008:


RBS issues global stock and credit crash alert

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.
RBS was one of the early victims of the market crash, although they very clearly saw it coming. The upheaval was just to big to avoid. Few took the warning seriously and even three weeks later when American mortgages began to tumble, still the warnings were largely ignored.

UPDATE: The following has been determined to be a lie told by a Democrat tool.

Back in Sept 2008, the Treasury Secretary and the Chairman of the Federal Reserve Board met behind closed doors in an emergency meeting with representatives of Congress and the Bush Administration. At that meeting, the government leaders decided to pump $700 billion into the economy without oversight, or guarantees, or apparently much thought beyond something must be done quickly.

Doug Ross at Doug Ross @ Journal (h/t suek) asked why was there unanimous agreement across party lines and why $700 billion? "It turns out they were merely averting a "$550 billion bank run" and a global economic apocalypse."

House Capital Markets Subcommittee chairman Rep. Paul Kanjorski (D-PA) explained on C-Span:



Look, I was there when the Secretary [of the Treasury] and the Chairman of the Federal Reserve came in to meet with the members of Congress about what was going on. It was about September 15th.

Here's the facts, and we don't even talk about these things. On Thursday, at about 11:00 in the morning, the Federal Reserve noticed a tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars was being drawn out in the matter of an hour or two.

The Treasury opened up its window to help. They pumped a hundred and five billion dollars into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic out there. And that's what actually happened. If they had not done that, their estimation was that by two o'clock that afternoon, five-and-a-half trillion dollars would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.

Now we talked at that time about what would happen if that happened?

It would have been the end of our economic system and our political system as we know it.

And that's why, when they made the point that we've got to act and do things quickly, we did...

If you don't have a banking system, you don't have an economy.
For anyone looking for the beginning of the current monetary problem, stop looking. There is no beginning unless we go all the way back to the first barter exchange between two hominids millions of years ago. It's a continuum of boom and bust. We always remember the boom time, forget the busts, and are shocked when the next bust arrives. This credit bust was seen in 2006
and a few individuals and banking organs tried to deal with it then, but everyone was having too much fun to heed the warnings of the Chicken Littles.

However, during that electronic run on the bank on Sept 15, 2008, where did the money go? Who took it? What did those people do with the money? Has anyone traced the electronic trades? What is being done about it? Is anyone investigating?





The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Tuesday, February 10, 2009

Sen. Schumer - Americans Don't Care About Porky Amendments


What can anyone say after that?

He's a Democrat. He's a fool. But, I repeat myself.




The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Packaged Pork

The so called Stimulus Package is big and thick and does about the same thing as that image just planted in your head. But, on the way to the ultimate satisfaction or disappointment, as the case may be, we will all know full well we've been screwed.

Contrary to Obama's assertion during yesterday's press conference that "it does not contain, however, is a single pet project, not a single earmark, and it has been stripped of the projects members of both parties found most objectionable" NCPA lists all kinds of earmarked pork projects in Excess Pork.


The Congressional Budget Office (CBO) reports that only 7% of the stimulus spending in the House-passed American Recovery and Reinvestment Act (approx. $358 billion of the total) will be spent this year. By the end of 2010, only 38% will be spent. And by the end of 2011, only 67% will be spent. Click here to view a Washington Post story about the CBO Report.

Including both tax cuts and stimulus checks, only one-fifth of the total package will be spent in 2009.

* For $816 billion, we could cut payroll taxes for every American worker by $1,500. Click
here for Lawrence B. Lindsey’s Wall Street Journal column.

* The $825 billion stimulus package will exceed more than $1.1 trillion when adding in the interest ($300+ billion) between 2009-2019 to pay for it.

* More than 10 million people — many of whom are not poor and not children — will be added to Medicaid and other government health programs, permanently expanding these programs. Click
here for Kim Strassel’s Wall Street Journal column.

* Some specific line items in the stimulus bill:

ο $650 million for digital TV coupons
ο $600 million to buy new cars for the federal government
ο $6 billion for colleges/universities
ο $44 million for repairs to U.S. Department of Agriculture headquarters
ο $200 million for the National Mall, including $21 million for sod
ο $360 million for new child care centers at military bases
ο $200 million for “Leaking Underground Storage Tank Trust Fund Program”
ο $14 million for funding the Recovery Act

Accountability and Transparency Board and their Independent Advisory Panel which will consist of a total of 12 people.

ο $50 million for the National Endowment for the Arts (more than a 30% funding increase)
ο $1.1 billion to Amtrak
ο $30 billion for highway and bridge construction
ο $300 million to upgrade job training facilities that serve unemployed youth
ο $400 million for habitat restoration projects
ο $4.2 billion for the government to purchase vacant properties to reduce neighborhood blight
ο $1 billion for Community Development Block Grants. This is a catch-all fund for projects that don’t fit into other “stimulus” categories.
ο $200 million fund for rural areas to build “community facilities,” such as for healthcare, education, fire and rescue, day care, community centers, and libraries.

* Not specifically listed in the bill is a list of 18,750 projects, proposed by the U.S. Conference of Mayors. These are the sorts of projects that mayors said will be funded with money such as the non-descript Community Development Block Grant or the rural development money in the stimulus bill.

ο $2 million for North Miami households to switch to energy-efficient light bulbs $886,000 for a 36-hole “disk-golf” course in Austin, Texas
ο $33,725 for automatically flushing toilets in Sumter, SC $1.4 million children’s water park in Pine Bluff, Ark.
ο $500,000 dog park in Chula Vista, California
ο $6 million to construct three aquatics facilities ο
(Olympic pool, waterslide, water playground, bathhouse) in Shreveport, LA.
ο $320,000 for lights at the Brockton, Mass.little league ball field.
ο $50,000 for two (2) dog parks in Lewiston, Maine.
ο $325,000 to buy 25 new cars for the City of Dearborn, Mich.
ο $1.5 million to replace the Roseville, Minn., golf course clubhouse and maintenance shop.
ο $50,000 to purchase two (2) police cars for town of Friars Point, Miss.
ο $60,000 to hire two (2) new police officers in Friars Point, Miss. to drive the two (2) new cars.
ο $250,000 to replace gymnasium floor and repaint at South Rocky Mount, N.C. Community Center
ο $500,000 for public marina floating docks in Elizabeth, N.H.
ο $6 million for the Hawaiian Ocean View Estates Hurricane Shelter and Community Center
ο $1 million to seal coat the streets of Idaho Falls, Idaho.

A full list of the mayors’ projects can be found by
clicking
here.

* The plan establishes at least 32 new government programs at a cost of over $136 billion. That means more than a third of this plan’s spending provisions are dedicated to creating new government programs.
* The plan increases spending in at least 150 different federal programs, ranging from Amtrak to the Transportation Security Administration (TSA).
* The total cost of this one piece of legislation is almost as much as the annual discretionary budget for the entire federal government.
* The bill will cost each and every household $6,700 in additional debt, paid for by our children and grandchildren.
* The bill provides enough spending – $825 billion – to give $2,700 to every man, woman, and child in America.
* $825 billion is enough to give every person living in poverty in the United States $22,000.
* Although stimulus bill has been billed as a transportation and infrastructure investment package, in actuality only $30 billion of the bill – or three percent – is for road and highway spending. A recent study from the nonpartisan CBO found that only 25 percent of infrastructure dollars can be spent in the first year, making the one year total less than $7 billion.
* Much of the funding within the House Democrats’ proposal will go to programs that already have large, unexpended balances. For example, the bill provides $1 billion for Community Development Block Grants (CDBG)– a program that already has $16 billion on hand. States also are sitting on some $9 billion in unused highway funds – funds that Congress is prepared to rescind later this year.
* A scant 2.7 percent, or $22.3 billion of the overall package, is dedicated to small business tax relief.
* The Joint Committee on Taxation estimates that the legislation increases by seven million the number of people who get a check back from the IRS that exceeds what they paid in payroll and income taxes.
* The “Making Work Pay” tax credit at the center of the plan amounts to $1.37 a day, or about the price of a cup of coffee.
* Almost one-third of the “tax relief” in the stimulus bill is spending in disguise, meaning that true tax relief makes up only 24 percent of the total package – not the 40 percent that President Obama had requested.
Well, I'm feeling very stimulated.



Original PDF
Source National Center for Policy Analysis





The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Monday, February 09, 2009

Obama Holds First Prime Time Lecture

Obama held his first press conference/lecture tonight. He was asked 13 questions and answered at length as if he was back at the university conducting a seminar with a bunch of freshmen. The reporters, for their part, weren't much different from freshmen overly impressed by the professor.

Obama said the majority of economists say the government must act to control the marketplace. A large and quick influx of government spending of no less than $800 billion or more is needed. Because the economists have reached consensus, the debate is over.

In fact, Obama as much as said so in answer to the first question. His not so well hidden anger was on display. Essentially, Obama's position is that he is willing to listen to Republicans as long they agree with him, "I won, you lost." Furthermore, he said he would not "... return to the failed theories of the last eight years that got us into this fix in the first place, because those theories have been tested, and they have failed. And that's what part of the election in November was all about."

The press conference text in full (emphasis mine):

President Obama: Good evening, everybody. Please be seated.

Before I take your questions tonight, I'd like to speak briefly about the state of our economy and why I believe we need to put this recovery plan in motion as soon as possible.

I took a trip to Elkhart, Indiana, today. Elkhart is a place that has lost jobs faster than anywhere else in America. In one year, the unemployment rate went from 4.7 percent to 15.3 percent. Companies that have sustained this community for years are shedding jobs at an alarming speed, and the people who've lost them have no idea what to do or who to turn to.

They can't pay their bills. They've stopped spending money. And because they've stopped spending money, more businesses have been forced to lay off more workers. In fact, local TV stations have started running public service announcements to tell people where to find food banks, even as the food banks don't have enough to meet the demand.

As we speak, similar scenes are playing out in cities and towns across America. Last Monday, more than 1,000 men and women stood in line for 35 firefighter jobs in Miami [Florida]. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine.

And if there's anyone out there who still doesn't believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside-down because they don't know where their next paycheck is coming from.

And that is why the single most important part of this economic recovery and reinvestment plan is the fact that it will save or create up to 4 million jobs, because that's what America needs most right now.

It is absolutely true that we can't depend on government alone to create jobs or economic growth. That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life.

It is only government that can break the vicious cycle, where lost jobs lead to people spending less money, which leads to even more layoffs. And breaking that cycle is exactly what the plan that's moving through Congress is designed to do.

When passed, this plan will ensure that Americans who've lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage.

We'll also provide a $2,500 tax credit to folks who are struggling to pay the costs of their college tuition and $1,000 worth of badly needed tax relief to working- and middle-class families. These steps will put more money in the pockets of those Americans who are most likely to spend it, and that will help break the cycle and get our economy moving.

But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems, especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it's only helped lead us to the crisis we face right now.

And that's why we have come together around a plan that combines hundreds of billions in tax cuts for the middle class with direct investment in areas like health care, energy, education, and infrastructure, investments that will save jobs, create new jobs and new businesses, and help our economy grow again, now and in the future.

More than 90 percent of the jobs created by this plan will be in the private sector. They're not going to be make-work jobs, but jobs doing the work that America desperately needs done: jobs rebuilding our crumbling roads and bridges, repairing our dangerously deficient dams and levees so that we don't face another Katrina.

They'll be jobs building the wind turbines and solar panels and fuel-efficient cars that will lower our dependence on foreign oil and modernizing our costly health care system that will save us billions of dollars and countless lives.

They'll be jobs creating the 21st-century classrooms, libraries, and labs for millions of children across America. And they'll be the jobs of firefighters and teachers and police officers that would otherwise be eliminated if we do not provide states with some relief.

Now, after many weeks of debate and discussion, the plan that ultimately emerges from Congress must be big enough and bold enough to meet the size of the economic challenges that we face right now.

It's a plan that is already supported by businesses representing almost every industry in America, by both the Chamber of Commerce and the AFL-CIO. It contains input, ideas and compromises from both Democrats and Republicans.

It also contains an unprecedented level of transparency and accountability so that every American will be able to go online and see where and how we're spending every dime. What it does not contain, however, is a single pet project, not a single earmark, and it has been stripped of the projects members of both parties found most objectionable.

Now, despite all of this, the plan's not perfect. No plan is. I can't tell you for sure that everything in this plan will work exactly as we hoped, but I can tell you with complete confidence that a failure to act will only deepen this crisis, as well as the pain felt by millions of Americans.

Now, my administration inherited a deficit of over $1 trillion, but because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence.

Those are deficits that could turn a crisis into a catastrophe, and I refuse to let that happen. As long as I hold this office, I will do whatever it takes to put this economy back on track and put this country back to work.

I want to thank the members of Congress who've worked so hard to move this plan forward, but I also want to urge all members of Congress to act without delay in the coming week to resolve their differences and pass this plan.

We find ourselves in a rare moment where the citizens of our country and all countries are watching and waiting for us to lead. It's a responsibility that this generation did not ask for, but one that we must accept for the future of our children and our grandchildren.

The strongest democracies flourish from frequent and lively debate, but they endure when people of every background and belief find a way to set aside smaller differences in service of a greater purpose. That's the test facing the United States of America in this winter of our hardship, and it is our duty as leaders and citizens to stay true to that purpose in the weeks and months ahead.

After a day of speaking with and listening to the fundamentally decent men and women who call this nation home, I have full faith and confidence that we can do it, but we're going to have to work together. That's what I intend to promote in the weeks and days ahead.

And with that, I'll take some of your questions.

And let me go to Jennifer Loven at [The Associated Press]. There you go.

Question: Thank you, Mr. President. Earlier today in Indiana, you said something striking. You said that this nation could end up in a crisis without action that we would be unable to reverse.

Can you talk about what you know or what you're hearing that would lead you to say that our recession might be permanent when others in our history have not? And do you think that you risk losing some credibility or even talking down the economy by using dire language like that?

Obama: No, no, no, no. I think that what I've said is what other economists have said across the political spectrum, which is that, if you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of.

We saw this happen in Japan in the 1990s, where they did not act boldly and swiftly enough and, as a consequence, they suffered what was called the lost decade, where essentially, for the entire '90s, they did not see any significant economic growth.

So what I'm trying to underscore is what the people in Elkhart already understand, that this is not your ordinary, run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression.

We've lost now 3.6 million jobs, but what's perhaps even more disturbing is that almost half of that job loss has taken place over the last three months, which means that the problems are accelerating instead of getting better.

Now, what I said in Elkhart today is what I repeat this evening, which is, I'm absolutely confident that we can solve this problem, but it's going to require us to take some significant, important steps.

Step number one: We have to pass an economic recovery and reinvestment plan. And we've made progress. There was a vote this evening that moved the process forward in the Senate. We already have a House bill that's passed. I'm hoping, over the next several days, that the House and the Senate can reconcile their differences and get that bill on my desk.

There have been criticisms from a bunch of different directions about this bill, so let me just address a few of them.

Some of the criticisms really are with the basic idea that government should intervene at all in this moment of crisis. Now, you have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace. And, in fact, there are several who've suggested that FDR [President Roosevelt] was wrong to interfere back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.

Most economists almost unanimously recognize that, even if philosophically you're -- you're wary of government intervening in the economy, when you have the kind of problem we have right now -- what started on Wall Street, goes to Main Street, suddenly businesses can't get credit, they start paring back their investment, they start laying off workers, workers start pulling back in terms of spending -- that, when you have that situation, that government is an important element of introducing some additional demand into the economy.

We stand to lose about $1 trillion worth of demand this year and another trillion next year. And what that means is you've got this gaping hole in the economy.

That's why the figure that we initially came up with of approximately $800 billion was put forward. That wasn't just some random number that I plucked out of -- out of a hat. That was Republican and Democratic, conservative and liberal economists that I spoke to who indicated that, given the magnitude of the crisis and the fact that it's happening worldwide, it's important for us to have a bill of sufficient size and scope that we can save or create 4 million jobs.

That still means that you're going to have some net job loss, but at least we can start slowing the trend and moving it in the right direction.

Now, the recovery and reinvestment package is not the only thing we have to do. It's one leg of the stool. We are still going to have to make sure that we are attracting private capital, get the credit markets flowing again, because that's the lifeblood of the economy.

And so tomorrow my treasury secretary, Tim Geithner, will be announcing some very clear and specific plans for how we are going to start loosening up credit once again.

And that means having some transparency and oversight in the system. It means that we correct some of the mistakes with TARP [Troubled Asset Relief Program] that were made earlier, the lack of consistency, the lack of clarity, in terms of how the program was going to move forward.

It means that we condition taxpayer dollars that are being provided to banks on them showing some restraint when it comes to executive compensation, not using the money to charter corporate jets when they're not necessary.

It means that we focus on housing and how are we going to help homeowners that are suffering foreclosure or homeowners who are still making their mortgage payments, but are seeing their property values decline.

So there are going to be a whole range of approaches that we have to take for dealing with the economy. My bottom line is to make sure that we are saving or creating 4 million jobs, we are making sure that the financial system is working again, that homeowners are getting some relief.

And I'm happy to get good ideas from across the political spectrum, from Democrats and Republicans. What I won't do is return to the failed theories of the last eight years that got us into this fix in the first place, because those theories have been tested, and they have failed. And that's what part of the election in November was all about.

OK. Karen Boeing (ph) of Reuters?

Question: Thank you, Mr. President. I'd like to shift gears to foreign policy. What is your strategy for engaging Iran? And when will you start to implement it? Will your timetable be affected at all by the Iranian elections? And are you getting any indications that Iran is interested in a dialogue with the United States?

Obama: I said during the campaign that Iran is a country that has extraordinary people, extraordinary history and traditions, but that its actions over many years now have been unhelpful when it comes to promoting peace and prosperity both in the region and around the world, that their attacks -- or their -- their financing of terrorist organizations like Hezbollah and Hamas, the bellicose language that they've used towards Israel, their development of a nuclear weapon or their pursuit of a nuclear weapon, that all those things create the possibility of destabilizing the region and are not only contrary to our interests, but I think are contrary to the interests of international peace.

What I've also said is that we should take an approach with Iran that employs all of the resources at the United States' disposal, and that includes diplomacy.

And so my national security team is currently reviewing our existing Iran policy, looking at areas where we can have constructive dialogue, where we can directly engage with them.

And my expectation is, in the coming months, we will be looking for openings that can be created where we can start sitting across the table, face-to-face diplomatic overtures, that will allow us to move our policy in a new direction.

There's been a lot of mistrust built up over the years, so it's not going to happen overnight. And it's important that, even as we engage in this direct diplomacy, we are very clear about certain deep concerns that we have as a country, that Iran understands that we find the funding of terrorist organizations unacceptable, that we're clear about the fact that a nuclear Iran could set off a nuclear arms race in the region that would be profoundly destabilizing.

So there are going to be a set of objectives that we have in these conversations, but I think that there's the possibility at least of a relationship of mutual respect and progress.

And I think that, if you look at how we've approached the Middle East, my designation of George Mitchell as a special envoy to help deal with the Arab-Israeli situation, some of the interviews that I've given, it indicates the degree to which we want to do things differently in the region.

Now it's time for Iran to send some signals that it wants to act differently, as well, and recognize that, even as it has some rights as a member of the international community, with those rights come responsibilities.

OK. Chip Reid?

Question: Thank you, Mr. President. You have often said that bipartisanship is extraordinarily important, overall and in this stimulus package, but now, when we ask your advisers about the lack of bipartisanship so far -- zero votes in the House, three in the Senate -- they say, "Well, it's not the number of votes that matters; it's the number of jobs that will be created."

Is that a sign that you are moving away -- your White House is moving away from this emphasis on bipartisanship?

And what went wrong? Did you underestimate how hard it would be to change the way Washington works?

Obama: Well, I don't think -- I don't think I underestimated it. I don't think the -- the American people underestimated it. They understand that there have been a lot of bad habits built up here in Washington, and it's going to take time to break down some of those bad habits.

You know, when I made a series of overtures to the Republicans, going over to meet with both Republican caucuses, you know, putting three Republicans in my cabinet -- something that is unprecedented -- making sure that they were invited here to the White House to talk about the economic recovery plan, all those were not designed simply to get some short-term votes. They were designed to try to build up some trust over time.

And I think that, as I continue to make these overtures, over time, hopefully that will be reciprocated.

But understand the bottom line that I've got right now, which is what's happening to the people of Elkhart and what's happening across the country. I can't afford to see Congress play the usual political games. What we have to do right now is deliver for the American people.

So my bottom line when it comes to the recovery package is: Send me a bill that creates or saves 4 million jobs. Because everybody has to be possessed with a sense of urgency about putting people back to work, making sure that folks are staying in their homes, that they can send their kids to college.

That doesn't negate the continuing efforts that I'm going to make to listen and engage with my Republican colleagues. And hopefully the tone that I've taken, which has been consistently civil and respectful, will pay some dividends over the long term. There are going to be areas where we disagree, and there are going to be areas where we agree.

As I said, the one concern I've got on the stimulus package, in terms of the debate and listening to some of what's been said in Congress, is that there seems to be a set of folks who -- I don't doubt their sincerity -- who just believe that we should do nothing.

Now, if that's their opening position or their closing position in negotiations, then we're probably not going to make much progress, because I don't think that's economically sound and I don't think what -- that's what the American people expect, is for us to stand by and do nothing.

There are others who recognize that we've got to do a significant recovery package, but they're concerned about the mix of what's in there. And if they're sincere about it, then I'm happy to have conversations about this tax cut versus that -- that tax cut or this infrastructure project versus that infrastructure project.

But what I've -- what I've been concerned about is some of the language that's been used suggesting that this is full of pork and this is wasteful government spending, so on and so forth.

First of all, when I hear that from folks who presided over a doubling of the national debt, then, you know, I just want them to not engage in some revisionist history. I inherited the deficit that we have right now and the economic crisis that we have right now.

Number two is that, although there are some programs in there that I think are good policy, some of them aren't job-creators. I think it's perfectly legitimate to say that those programs should be out of this particular recovery package and we can deal with them later.

But when they start characterizing this as pork, without acknowledging that there are no earmarks in this package -- something, again, that was pretty rare over the last eight years -- then you get a feeling that maybe we're playing politics instead of actually trying to solve problems for the American people.

So I'm going to keep on engaging. I hope that, as we get the Senate and the House bills together, that everybody is willing to give a little bit. I suspect that the package that emerges is not going to be 100 percent of what I want.

But my bottom line is, are we creating 4 million jobs? And are we laying the foundation for long-term economic growth?

This is another concern that I've had in some of the arguments that I'm hearing. When people suggest that, "What a waste of money to make federal buildings more energy-efficient." Why would that be a waste of money?

We're creating jobs immediately by retrofitting these buildings or weatherizing 2 million Americans' homes, as was called for in the package, so that right there creates economic stimulus.

And we are saving taxpayers when it comes to federal buildings potentially $2 billion. In the case of homeowners, they will see more money in their pockets. And we're reducing our dependence on foreign oil in the Middle East. Why wouldn't we want to make that kind of investment?

Now, maybe philosophically you just don't think that the federal government should be involved in energy policy. I happen to disagree with that; I think that's the reason why we find ourselves importing more foreign oil now than we did back in the early '70s when OPEC first formed.

And we can have a respectful debate about whether or not we should be involved in energy policymaking, but don't suggest that somehow that's wasteful spending. That's exactly what this country needs.

The same applies when it comes to information technologies in health care. We know that health care is crippling businesses and making us less competitive, as well as breaking the banks of families all across America. And part of the reason is, we've got the most inefficient health care system imaginable.

We're still using paper. We're still filing things in triplicate. Nurses can't read the prescriptions that doctors -- that doctors have written out. Why wouldn't we want to put that on -- put that on an electronic medical record that will reduce error rates, reduce our long-term costs of health care, and create jobs right now?

Education, yet another example. The suggestion is, why should the federal government be involved in school construction?

Well, I visited a school down in South Carolina that was built in the 1850s. Kids are still learning in that school, as best they can, when the -- when the railroad -- when the -- it's right next to a railroad. And when the train runs by, the whole building shakes and the teacher has to stop teaching for a while. The -- the auditorium is completely broken down; they can't use it.

So why wouldn't we want to build state-of-the-art schools with science labs that are teaching our kids the skills they need for the 21st century, that will enhance our economy, and, by the way, right now, will create jobs?

So, you know, we -- we can differ on some of the particulars, but, again, the question I think the American people are asking is, do you just want government to do nothing, or do you want it to do something? If you want it to do something, then we can have a conversation. But doing nothing, that's not an option from my perspective.

All right, Chuck Todd. Where's Chuck?

Question: Thank you, Mr. President. In your opening remarks, you talked about that, if your plan works the way you want it to work, it's going to increase consumer spending. But isn't consumer spending, or overspending, how we got into this mess? And if people get money back into their pockets, do you not want them saving it or paying down debt first before they start spending money into the economy?

Obama: Well, first of all, I don't think it's accurate to say that consumer spending got us into this mess. What got us into this mess initially were banks taking exorbitant, wild risks with other people's monies based on shaky assets and because of the enormous leverage, where they had $1 worth of assets and they were betting $30 on that $1, what we had was a crisis in the financial system.

That led to a contraction of credit, which, in turn, meant businesses couldn't make payroll or make inventories, which meant that everybody became uncertain about the future of the economy, so people started making decisions accordingly, reducing investment, initiating layoffs, which, in turn, made things worse.

Now, you are making a legitimate point, Chuck, about the fact that our savings rate has declined and this economy has been driven by consumer spending for a very long time. And that's not going to be sustainable.

You know, if -- if all we're doing is spending and we're not making things, then over time other countries are going to get tired of lending us money and eventually the party's going to be over. Well, in fact, the party now is over.

And so the -- the sequence of how we're approaching this is as follows. Our immediate job is to stop the downward spiral, and that means putting money into consumers' pockets. It means loosening up credit.

It means putting forward investments that not only employ people immediately, but also lay the groundwork for long-term economic growth.

And -- and that, by the way, is important, even if you're a fiscal conservative, because the biggest problem we're going to have with our federal budget is if we continue a situation in which there are no tax revenues because economic growth is plummeting at the same time as we've got more demands for unemployment insurance, we've got more demands for people who have lost their health care, more demand for food stamps. That will put enormous strains on the federal budget, as well as the state budget.

So the most important thing we can do for our budget crisis right now is to make sure that the economy doesn't continue to tank. And that's why passing the economic recovery plan is the right thing to do, even though I recognize that it's expensive.

Look, I -- I would love not to have to spend money right now. I'd love -- you know, this notion that somehow I came in here just ginned up to spend $800 billion, you know, I mean, that wasn't -- that wasn't -- that wasn't how I envisioned my presidency beginning. But we have to adapt to existing circumstances.

Now, what we are going to also have to do is to make sure that, as soon as the economy stabilizes, investment begins again, we're no longer contracting but we're growing, that our mid-term and long-term budget is dealt with, and I think the same is true for individual consumers.

Right now, they're -- they're just trying to figure out, how do I make sure that, if I lose my job, you know, I'm still going to be able to make my mortgage payments? Or they're worried about, how am I going to pay next month's bills? So they're not engaging in a lot of long-term financial planning.

Once the economy stabilizes and people are less fearful, then I do think that we're going to have to start thinking about, how do we operate more prudently? Because there's no such thing as a free lunch.

So if -- if you want to get -- if you want to buy a house, then putting zero down and buying a house that is probably not affordable for you in case something goes wrong, that's something that has to be reconsidered. So we're going to have to change our -- our bad habits.

But right now, the key is making sure that we pull ourselves out of the economic slump that we're in.

All right, Julianna Goldman, Bloomberg?

Question: Thank you, Mr. President. Many experts, from Nouriel Roubini to Sen. [Chuck] Schumer [D-New York], have said that it will cost the government more than $1 trillion to really fix the financial system. During the campaign, you promised the American people that you won't just tell them what they want to hear, but what they need to hear.

Won't the government need far more than the $350 billion that's remaining in the financial rescue funds to really solve the credit crisis?

Obama: Well, the credit crisis is real, and it's not over. We averted catastrophe by passing the TARP legislation. But, as I said before, because of a lack of clarity and consistency in how it was applied, a lack of oversight in -- in how the money went out, we didn't get as big of a bang for the buck as we should have.

My immediate task is making sure that the second half of that money, $350 billion, is spent properly. That's my first job. Before I even think about what else I've got to do, my first task is to make sure that my secretary of the treasury, Tim Geithner, working with Larry Summers, my national economic adviser, and others are coming up with the best possible plan to use this money wisely in a way that's transparent, in a way that provides clear oversight, that we are conditioning any money that we give to banks on them reducing executive compensation to reasonable levels and to make sure that they're not wasting that money.

We are going to have to work with the banks in an effective way to clean up their balance sheets so that some trust is restored within the marketplace, because right now part of the problem is that nobody really knows what's on the bank's books. Any given bank, they're not sure what kinds of losses are there. We've got to open things up and restore some trust.

We also have to deal with the housing issue in a clear and consistent way.

I don't want to pre-empt my secretary of the treasury. He's going to be laying out these principles in great detail tomorrow.

But my instruction to him has been: Let's get this right. Let's create a template in which we're restoring market confidence.

And the reason that's so important is because we don't know yet whether we're going to need additional money or how much additional money we'll need until we've seen how successful we are at restoring a sense of confidence in the marketplace that the federal government and the Federal Reserve Bank and the FDIC, working in concert, know what they're doing.

That can make a big difference in terms of whether or not we attract private capital back into the marketplace. And ultimately the government cannot substitute for all the private capital that has been withdrawn from the system. We've got to restore confidence so that private capital goes back in.

OK. Jake?

Question: Thank you, Mr. President. My question follows Julianna's in -- in content. The American people have seen hundreds of billions of dollars spent already, and still the economy continues to freefall.

Beyond avoiding the national catastrophe that you've warned about, once all the legs of your stool are in place...

Obama: Right.

Question: ... how can the American people gauge whether or not your programs are working? Can they -- should they be looking at the metric of the stock market, home foreclosures, unemployment? What metric should they use when and how will they know if it's working or whether or not we need to go to a Plan B?

Obama: I think my initial measure of success is creating or saving 4 million jobs. That's bottom line number one, because, if people are working, then they've got enough confidence to make purchases, to make investments. Businesses start seeing that consumers are out there with a little more confidence, and they start making investments, which means they start hiring workers. So step number one: job creation.

Step number two: Are we seeing the credit markets operate effectively? You know, I can't tell you how many businesses that I talk to that are successful businesses but just can't get credit.

Part of the problem in Elkhart that I heard about today was the fact that -- this is the R.V. [recreational vehicle] capital of America. You've got a bunch of R.V. companies that have customers who want to purchase R.V.s, but even though their credit is good, they can't get the loan.

Now, the businesses also can't get loans to make payments to their suppliers. But when they have consumers, consumers can't get the loans that they need. So normalizing the credit markets is, I think, step number two.

Step number three is going to be housing. Have we stabilized the housing market? Now, you know, the federal government doesn't have complete control over that, but if our plan is effective, working with the Federal Reserve Bank, working with the FDIC, I think what we can do is stem the rate of foreclosure and we can start stabilizing housing values over time.

And the most -- the -- the biggest measure of success is whether we stop contracting and shedding jobs and we start growing again.

Now, you know, I don't have a crystal ball. And as I said, this is an unprecedented crisis. But my hope is that after a difficult year -- and this year is going to be a difficult year -- that businesses start investing again, they start making decisions that, you know, in fact, there's money to be made out there, customers or consumers start feeling that their jobs are stable and safe, and they start making purchases again, and, if we get things right, then, starting next year, we can start seeing significant improvement.

Ed Henry. Where's Ed? CNN, there he is.

Question: Thank you, Mr. President. You've promised to send more troops to Afghanistan. And since you've been very clear about a timetable to withdraw combat troops from Iraq within 16 months, I wonder, what's your timetable to withdraw troops eventually from Afghanistan?

And related to that, there's a Pentagon policy that bans media coverage of the flag-draped coffins from coming in to Dover Air Force Base. And back in 2004, then-Sen. Joe Biden said that it was shameful for dead soldiers to be, quote, "snuck back into the country under the cover of night."

You've promised unprecedented transparency, openness in your government. Will you overturn that policy so the American people can see the full human cost of war?

Obama: Your question is timely. We got reports that four American service members have been killed in Iraq today. And, you know, obviously, our thoughts and prayers go out to the families.

I've said before that -- you know, people have asked me, when did it hit you that you are now president? And what I told them was the most sobering moment is signing letters to the families of our fallen heroes. It reminds you of the responsibilities that you carry in this office and -- and the consequences of the decisions that you make.

Now, with respect to the policy of opening up media to loved ones being brought back home, we are in the process of reviewing those policies in conversations with the Department of Defense, so I don't want to give you an answer now before I've evaluated that review and understand all the implications involved.

With respect to Afghanistan, this is going to be a big challenge. I think, because of the extraordinary work done by our troops and some very good diplomatic work done by Ambassador [Ryan] Crocker in Iraq, we just saw an election in Iraq that went relatively peacefully and you get a sense that the political system is now functioning in a meaningful way.

You do not see that yet in Afghanistan. They've got elections coming up, but effectively the national government seems very detached from what's going on in the surrounding community.

In addition, you've got the Taliban and al Qaeda operating in the FATA [Federally Administered Tribal Areas] and these border regions between Afghanistan and Pakistan. And what we haven't seen is the kind of concerted effort to root out those safe havens that would ultimately make our mission successful.

So we are undergoing a thorough going review. Not only is Gen. [David] Petraeus -- now the head of CENTCOM -- conducting his own review; he's now working in concert with the special envoy that I've sent over, Richard Holbrooke, one of our top diplomats, to evaluate a regional approach.

We are going to need more effective coordination of our military efforts, with diplomatic efforts, with development efforts, with more effective coordination with our allies in order for us to be successful.

The bottom line though -- and I just want to remember the American people, because this is going to be difficult -- is this is a situation in which a region served as the base to launch an attack that killed 3,000 Americans.

And this past week, I met with families of those who were lost in 9/11, a reminder of the costs of allowing those safe havens to exist.

My bottom line is that we cannot allow al Qaeda to operate. We cannot have those safe havens in that region. And we're going to have to work both smartly and effectively, but with consistency in order to make sure that those safe havens don't exist.

I do not have yet a timetable for how long that's going to take. What I know is I'm not going to make -- I'm not going to allow al Qaeda or [Osama] bin Laden to operate with impunity, planning attacks on the U.S. homeland.

All right. Helene Cooper. Where's Helene? There you are.

Question: Thank you, sir. I wanted to ask you, on the next bank bailout, are you going to impose a requirement that the financial institutions use this money to loosen up credit and make new lending? And if not, how do you make the case to the American people that this bailout will work when the last one didn't?

Obama: Again, Helene -- and I'm trying to avoid pre-empting my secretary of the treasury. I want all of you to show up at his press conference, as well. He's going to be terrific.

But this relates to Jake's earlier question. One of my bottom lines is whether or not credit is flowing to the people who need it. Is it flowing to banks -- excuse me. Is it flowing to businesses, large and small? Is it flowing to consumers? Are they able to operate in ways that translate into jobs and economic growth on Main Street?

And the package that we've put together is designed to help do that. And beyond that, I'm going to make sure that Tim gets his moment in the sun tomorrow.

All right. Major Garrett, where's Major?

Question: Mr. President, at a speech Friday that many of us covered, Vice President Biden said the following thing about a conversation the two of you had in the Oval Office about a subject he didn't disclose.

"If we do everything right, if we do it with absolute certainty, if we stand up there and we really make the tough decisions, there's still a 30 percent chance we're going to get it wrong."

Since the vice president brought it up, can you tell the American people, sir, what you were talking about? And if not, can you at least reassure them it wasn't the stimulus bill or the bank rescue plan and if, in general, you agree with that ratio of success, 30 percent failure, 70 percent success?

Obama: You know, I don't remember exactly what Joe was referring to...

(LAUGHTER)

... not surprisingly. But let me try this out. I think what Joe may have been suggesting -- although I wouldn't put numerical -- I wouldn't ascribe any numerical percentage to any of this -- is that, given the magnitude of the challenges that we have, any single thing that we do is going to be part of the solution, not all of the solution.

And as I said in my introductory remarks, not everything we do is going to work out exactly as we intended it to work out. You know, this is an unprecedented problem.

And, you know, when you talk to economists, there's some general sense of how we're going to move forward. There's some strong consensus about the need for a recovery package of a certain magnitude. There's a strong consensus that you shouldn't put all your eggs in one basket, all tax cuts or all investment, but that there should be a range of approaches.

But even if we do everything right on that, we've still got to deal with what we just talked about, the financial system, and making sure that banks are lending again. We're still going to have to deal with housing. We're still going to have to make sure that we've got a regulatory structure, a regulatory architecture for the financial system that prevents crises like this from occurring again.

Now, those are big, complicated tasks. So I don't know whether Joe was referring to that, but I used that as a launching point to make a general point about these issues.

Question: (off mic)

Obama: I have no idea. I really don't.

Michael Fletcher from the Washington Post?

Question: Yes, thank you, sir. What is your reaction to Alex Rodriguez's admission that he used steroids as a member of the Texas Rangers?

Obama: You know, I think it's depressing news on top of what's been a flurry of depressing items when it comes to Major League Baseball. And if you're a fan of Major League Baseball, I think it -- it tarnishes an entire era, to some degree. And it's unfortunate, because I think there are a lot of ballplayers who played it straight.

And, you know, the thing I'm probably most concerned about is the message it sends to our kids. What I'm pleased about is Major League Baseball seems to finally be taking this seriously, to recognize how big a problem this is for the sport, and that our kids hopefully are watching and saying, "You know what? There are no shortcuts, that when you try to take shortcuts, you may end up tarnishing your entire career, and that your integrity's not worth it." That's the message I hope is communicated.

All right. Helen? This is my inaugural moment here.

(LAUGHTER)

I'm really excited.

Question: Mr. President, do you think that Pakistan and -- are maintaining the safe havens in Afghanistan for these so-called terrorists? And, also, do you know of any country in the Middle East that has nuclear weapons?

Obama: Well, I think that Pakistan -- there is no doubt that, in the FATA region of Pakistan, in the mountainous regions along the border of Afghanistan, that there are safe havens where terrorists are operating.

And one of the goals of Ambassador Holbrooke, as he is traveling throughout the region, is to deliver a message to Pakistan that they are endangered as much as we are by the continuation of those operations and that we've got to work in a regional fashion to root out those safe havens.
It's not acceptable for Pakistan or for us to have folks who, with impunity, will kill innocent men, women and children. And, you know, I -- I believe that the new government of Pakistan and -- and Mr. [President Asif Ali] Zardari cares deeply about getting control of the situation. We want to be effective partners with them on that issue.

Question: (off mic)

Obama: Well, Mr. Holbrooke is there, and that's exactly why he's being sent there, because I think that we have to make sure that Pakistan is a stalwart ally with us in battling this terrorist threat.

With respect to nuclear weapons, you know, I don't want to speculate. What I know is this: that if we see a nuclear arms race in a region as volatile as the Middle East, everybody will be in danger.

And one of my goals is to prevent nuclear proliferation generally. I think that it's important for the United States, in concert with Russia, to lead the way on this.

And, you know, I've mentioned this in conversations with the Russian president, Mr. [Dmitry] Medvedev, to let him know that it is important for us to restart the -- the conversations about how we can start reducing our nuclear arsenals in an effective way so that...

(CROSSTALK)

Obama: ... so that we then have the standing to go to other countries and start stitching back together the nonproliferation treaties that, frankly, have been weakened over the last several years. OK.

Question: Why do you have to speculate on who has...

(CROSSTALK)

Obama: All right.

Sam Stein, Huffington Post. Where's Sam? Here. Go ahead.

Question: Thank you, Mr. President. Today, Sen. Patrick Leahy [D-Vermont] announced that he wants to set up a truth and reconciliation committee to investigate the misdeeds of the Bush administration. He said that, before you turn the page, you have to read the page first.

Do you agree with such a proposal? And are you willing to rule out right here and now any prosecution of Bush administration officials?

Obama: I haven't seen the proposals, so I don't want to express an opinion on something that I haven't seen.

What I have said is that my administration is going to operate in a way that leaves no doubt that we do not torture, that we abide by the Geneva Conventions, and that we observe our traditions of rule of law and due process, as we are vigorously going after terrorists that can do us harm. And I don't think those are contradictory; I think they are potentially complementary.

My view is also that nobody's above the law and, if there are clear instances of wrongdoing, that people should be prosecuted just like any ordinary citizen.

But that, generally speaking, I'm more interested in looking forward than I am in looking backwards. I want to pull everybody together, including, by the way, the -- all the members of the intelligence community who have done things the right way and have been working hard to protect America and I think sometimes are painted with a broad brush without adequate information.

So I will take a look at Sen. Leahy's proposal, but my general orientation is to say let's get it right moving forward.

Mara Liasson?

Question: Thank you, Mr. President. If it's this hard to get more than a handful of Republican votes on what is relatively easy -- spending tons of money and cutting people's taxes -- when you look down the road at health care, and entitlement reform, and energy reform, those are really tough choices. You're going to be asking some people to get less and some people to pay more.

What do you think you're going to have to do to get more bipartisanship? Are you going to need a new legislative model, bringing in Republicans from the very beginning, getting more involved in the details yourself from the beginning, or using bipartisan commissions? What has this experience with the stimulus led you to think about when you think about these future challenges?

Obama: Well, as I said before, Mara, I think that old habits are hard to break. And we're coming off an election, and I think people want to sort of test the limits of -- of what they can get.
You know, there's a lot of jockeying in this town, and a lot of "who's up and who's down," and positioning for the next election.

And what I've tried to suggest is that this is one of those times where we've got to put that kind of behavior aside, because the American people can't afford it. The people in Elkhart can't afford it. The single mom who's trying to figure out how to keep her house can't afford it.

And whether we're Democrats or Republicans, surely there's got to be some capacity for us to work together, not agree on everything, but at least set aside small differences to get things done.

Now, just in terms of the historic record here, the Republicans were brought in early and were consulted. And you'll remember that, when we initially introduced our framework, they were pleasantly surprised and complimentary about the tax cuts that were presented in that framework. Those tax cuts are still in there.

I mean, I suppose what I could have done is started off with no tax cuts, knowing that I was going to want some, and then let them take credit for all of them, and maybe that's the lesson I learned. But there was consultation; there will continue to be consultation.

One thing that I think is important is to recognize that, because all these -- all these items that you listed are hard, that people have to break out of some of the ideological rigidity and gridlock that we've been carrying around for too long. And let me give you a prime example.

When it comes to how we approach the issue of fiscal responsibility, again, it's a little hard for me to take criticism from folks about this recovery package after they've presided over a doubling of the national debt. I'm not sure they have a lot of credibility when it comes to fiscal responsibility.
Having said that, I think there are a lot of Republicans who are sincere in recognizing that, unless we deal with entitlements in a serious way, the problems we have with this year's deficit and next year's deficit pale in comparison to what we're going to be seeing 10 or 15 years or 20 years down the road.

Both Democrats and Republicans are going to have to think differently in order to come together and solve that problem. I think there are areas like education where some in my party have been too resistant to reform and have argued only money makes a difference.

And there have been others on the Republican side or the conservative side who said, "No matter how much money you spend, nothing makes a difference, so let's just blow up the public school systems."

And I think that both sides are going to have to acknowledge we're going to need more money for new science labs, to pay teachers more effectively, but we're also going to need more reform, which means that we've got to train teachers more effectively, bad teachers need to be fired after being given the opportunity to train effectively, that we should experiment with things like charter schools that are innovating in the classroom, that we should have high standards.

So my whole goal over the next four years is to make sure that, whatever arguments are persuasive and backed up by evidence and facts and proof that they can work, that we are pulling people together around that kind of pragmatic agenda.

And I think that there was an opportunity to do this with this recovery package, because, as I said, although there are some politicians who are arguing that we don't need a stimulus, there are very few economists who are making that argument.

I mean, you've got economists who were advising [Sen.] John McCain [2008 Republican presidential candidate], economists who were advisers to George Bush, one and two, all suggesting that we actually needed a serious recovery package.

And so when I hear people just saying, "Ah, we don't need to do anything," "This is a spending bill, not a stimulus bill," without acknowledging that, by definition, part of any stimulus package would include spending -- that's the point -- then what I get a sense of is, is that there's some ideological blockage there that needs to be cleared up.

But I am the eternal optimist. I think that, over time, people respond to civility and -- and rational argument. I think that's what the people of Elkhart and the people around America are looking for. And that's what I'm -- that's the kind of leadership I'm going to try to provide.

All right. Thank you, guys.
Source: CNN




The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Sunday, February 08, 2009

Ethics and Responsibility in the Grown-up World

With nerves of steel and the calm of a responsible adult with the lives of 153 passengers and crew in his hands, US Airways Capt. Chesley Sullenberger neatly set his crippled Airbus into the icy waters of the Hudson River last month.

Taking this chance experience in stride and refusing to believe he did anything heroic, Sullenberger maintains he was just doing his job. Only a few Americans can claim to have been in a similar life or death situation. However, six out ten Americans do share something with Sullenberger - they take the responsibility to return their library books very seriously.

Aboard the stricken aircraft is the book Sullenberger borrowed from the Fresno State University library. It's now overdue. The good Captain contacted the library shortly after the emergency landing to inform them the book would probably not be returned, asking if he could get an extension and a waiver of late fees. The library readily agreed.

Dean of Library Services, Peter McDonald, told the Fresno Bee that he was bowled over by "Sully's sense of responsibility."

"Clearly this is a wonderful, feel-good story, and we honor Mr. Sullenberger both for what he did on the Hudson and for his quick response to a lost book."
McDonald demurred at revealing the book's title citing privacy issues adding that the borrower's name should have been kept confidential, too. McDonald continued

"But now that the story's broke, we thank him again and we will replace the book in his honor."
The book's subject? Professional ethics.

Huckster Obama and his administration of criminals and scofflaws could use several hundred copies of that book and massive doses of that right character stuff Sullenberger has in spades.

And remember, dear reader, support your local library and return the books in good condition.




The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.