Federal Reserve Chairman Ben Bernanke reassured markets today by saying that the economic contraction will likely end late this year as Obama Administration stimulative policies take hold. He said the banks won’t have to be nationalized.
** OBAMA’S STATE OF THE UNION POSITIONING: Post-partisan progressive, opportunity out of crisis, lowering short-term expectations while raising long-term hope.
** EXCERPTS FROM TONIGHT’S OBAMA ADDRESS TO JOINT SESSION OF CONGRESS. We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.
Well that day of reckoning has arrived, and the time to take charge of our future is here.
Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that’s what I’d like to talk to you about tonight. …..
The recovery plan and the financial stability plan are the immediate steps we’re taking to revive our economy in the short-term. But the only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren’t preparing our children and the mountain of debt they stand to inherit. That is our responsibility.
In the next few days, I will submit a budget to Congress. So often, we have come to view these documents as simply numbers on a page or laundry lists of programs. I see this document differently. I see it as a vision for America – as a blueprint for our future.
My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession. Given these realities, everyone in this chamber – Democrats and Republicans – will have to sacrifice some worthy priorities for which there are no dollars. And that includes me.
But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity. ….
Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we’re starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade.
In this budget, we will end education programs that don’t work and end direct payments to large agribusinesses that don’t need them. We’ll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use. We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas. ….
I know that we haven’t agreed on every issue thus far, and there are surely times in the future when we will part ways. But I also know that every American who is sitting here tonight loves this country and wants it to succeed. That must be the starting point for every debate we have in the coming months, and where we return after those debates are done. That is the foundation on which the American people expect us to build common ground. ….
But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.
I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn’t tell anyone, but when the local newspaper found out, he simply said, ”I knew some of these people since I was 7 years old. I didn’t feel right getting the money myself.”
I think about Greensburg, Kansas, a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community – how it can bring jobs and businesses to a place where piles of bricks and rubble once lay. “The tragedy was terrible,” said one of the men who helped them rebuild. “But the folks here know that it also provided an incredible opportunity.”
And I think about Ty’Sheoma Bethea, the young girl from that school I visited in Dillon, South Carolina – a place where the ceilings leak, the paint peels off the walls, and they have to stop teaching six times a day because the train barrels by their classroom. She has been told that her school is hopeless, but the other day after class she went to the public library and typed up a letter to the people sitting in this room. She even asked her principal for the money to buy a stamp. The letter asks us for help, and says, “We are just students trying to become lawyers, doctors, congressmen like yourself and one day president, so we can make a change to not just the state of South Carolina but also the world. We are not quitters.”
** SCHWARZENEGGER SAID TO HAVE CONSIDERED PARTY SWITCH. Former LA Times reporter Joe Mathews, author of a biography of the former action superstar, reported today that former Governor Arnold Schwarzenegger was so frustrated with the Republican Party last year that he considered dropping his registration and becoming an independent.
Schwarzenegger’s office hasn’t commented on the specific report, but becoming an independent is something that has been discussed on occasion by members of Schwarzenegger’s various circles.
Schwarzenegger last addressed a California Republican Party convention in Palm Springs in 2007, at which he delivered a lecture urging the party to stop its veer to the right and move more toward the center. He was followed immediately by Texas Governor Rick Perry, who contradicted Schwarzenegger and gave the delegates a gust of the old-time religion.
Although he intervened in last year’s California presidential primary to help his friend John McCain lock up the nomination by knocking MItt Romney out of the race, he campaigned only once for McCain against Barack Obama. That was his customary election eve appearance in Columbus, Ohio, where he has extensive interests including the annual Arnold Classic.
** CALIFORNIAN SOLIS FINALLY CONFIRMED AS LABOR SECRETARY. After many delays, most of them centering on conservative Republican opposition to her staunch pro-union views, the US Senate this afternoon confirmed Los Angeles Congresswoman Hilda Solis as the new secretary of labor. The vote was 80-17.
Solis is an advocate of soc-called card check legislation, in which a union can be certified by getting a majority of workers to sign cards, rather than hold an election. This is a top priority for labor, but Senate Majority Leader Harry Reid of Nevada says it won’t be brought up in the Senate until late summer.
** BILL CLINTON: NATIONALIZE THE BANKS. Talking about the financial crisis with CNBC, former President Bill Clinton says that it’s time to nationalize banks. Although he doesn’t really want to call it that.
BECKY QUICK: Is there a chance that we could get pushed into nationalizing the banks? And would that be Japan all over again?
PRESIDENT CLINTON: No, it would not.
BECKY QUICK: It would not?
PRESIDENT CLINTON: No, it would not because if you look at what the FDIC does, they’re not running these banks for the long run, right?
BECKY QUICK: No.
PRESIDENT CLINTON: They are moving them. So I don’t know. I take the administration at its word. They are doing everything they can to avoid– having to do a takeover of the very largest banks. They believe that the banks that the FDIC and Sheila Bair, who I think has done a fabulous job, I think she’s great.
But the banks they took over were in, you know, they were wrecked, rot, they couldn’t be rescued. So I think the administration is trying to create conditions in which the– no other banks will descend that low. And they won’t have to take over any more, particularly the mega banks.
But the point I wanna make to everybody is whatever happens will probably be all right as long as we deal with it this year. That is, I would rather them do what they’re doing, which is trying to honestly deal with these banking problems this year and just get through it. ‘Cause in the end, we’re not gonna have a national banking system. We’re gonna have a system we got now. We’re gonna have the FDIC and all the backups and the Federal Reserve. And we’ll have private banks again. It’ll be all right whatever happens, if we’ll just go on and deal with it now carefully. And I appears to me that they’re doing that.
** WHAT OBAMA NEEDS TO DO TONIGHT. In a nutshell, in what is essentially a State of the Union address, President Barack Obama needs to lower expectations and raise hopes.
It’s a paradox.
** INITIATIVES SET FOR MAY 19TH CALIFORNIA SPECIAL ELECTION. Here’s what is on the California ballot coming out of the finally enacted compromise state budget deal.
Proposition 1A would create a spending cap based on the rate of growth over the past decade. If approved, it would extend the length of the state’s temporary tax hikes from two years to five.
Proposition 1B would change the state’s Proposition 98 education funding requirements for supplemental education payments to local districts due to recent budget cuts.
Proposition 1C would allow the state to borrow from future Lottery proceeds.
Proposition 1D would remove some funding from the so-called First 5 Commissions for children and family programs, derived from the increased tobacco tax under Proposition 10, to use for budget balancing.
Proposition 1E would remove some funding from the Mental Health Services Act, derived from the Proposition 63 income tax hike for millionaires, to use for budget balancing.
Proposition 1F would stop state elected officials from receiving pay raises when the state budget is in deficit.
** NEW COLUMN COMING UP … WHITMAN’S SAMPLER: EX-EBAY CEO JOINS THE CONSERVATIVE REPUBLICAN CULTURE.
NASA launched a rocket early this morning to place the first satellite to study greenhouse gas emissions into orbit around the earth. But the launch failed and the satellite landed in the ocean near Antarctica.
** OBAMA TODAY. President Barack Obama meets with Japanese Prime Minister Taro Aso and prepares to address the Congress and the nation in a major address at 6 PM Pacific.
The speech, which is not technically a State of the Union address as Obama has been president for only a month, will be roadblocked on all broadcast and cable news nets.
Obama will focus principally on the economic crisis, with additional elements of the speech dealing with health care, energy, and geopolitics.
Obama and Vice President Joe Biden meet with Defense Secretary Bob Gates in the Oval Office just prior to the unofficial State of the Union. They will discuss the situation in Afghanistan, on which the administration is continuing a strategic review. Gates said at the NATO defense ministers’ meeting last week in Poland that the US is open to a truce with the Taliban.
Japanese Prime Minister Taro Aso arrived in Washington last night. Today he is the first head of state to meet with President Barack Obama in the White House.
** FROM THE ARNOLD FILE. Governor Arnold Schwarzenegger is back in California today after a whirlwind trip to Washington for the winter meeting of the National Governors Association. After he and First Lady Maria Shriver attended a dinner in the White House Sunday night, he participated in a private meeting with President Obama and other governors in the White House yesterday morning and then appeared publicly with the president on the White House lawn.
Schwarzenegger and several other Republican governors, including Florida Governor Charlie Crist, are generally backing the Obama Administration in its efforts to stimulate the US economy.
Schwarzenegger has no planned public events today.
He’s preparing to start working with California voters to explain the controversial new state budget and deal with the economic crisis.
** FAR RIGHT FURY OVER CALIFORNIA TAX HIKES AND OPEN PRIMARY. Bill Bennett told conservative California Republican convention delegates meeting in Sacramento just what they wanted to hear today. In a speech that sounded exactly like what he was saying 20 years ago — aside from substituting Islamic terrorists for Soviet Communists as the big bad — the veteran right-wing pundit and former Reagan era education secretary soothed the audience by telling them that their ideology hadn’t really lost in November. Because John McCain didn’t run as a conservative. Enough of a conservative, that is. And, besides, Barack Obama won big because the education system has brainwashed younger voters.
However, much as they liked being pandered to by Bennett’s old-time religion, California’s far right Republicans are fit to be tied now. After half of their state convention, they’re engaging in a
festival of recriminations over a half dozen of their legislators breaking ranks to pass a big tax increase to help out the strapped state budget, as well as another 15 GOP legislators voting to pass an open primary system in the Golden State. The two moves are viewed as anathema by the far right. …
** CALIFORNIA: THE FAR RIGHT’S RITUAL DANCE ON THE EDGE OF THE CLIFF. Yes, it is Groundhog Day. Again. California governance is poised on the edge of a cliff, for the sixth day in a row one Republican vote shy of passing a budgetary mix of spending cuts, tax increases, borrowing, and various reforms, real and otherwise, to plug the state’s $41-plus billion gap over 18 months. Meanwhile, an increasingly conservative Republican Party in this state Barack Obama carried by 24 points dances about in a ritual purification ceremony, promoting non-existent budget solutions and launching coups against conservative party leaders who prove too pragmatic for the true believers.
Before getting to the unintentionally fascinating Republican politics, a word about the state budget. California has had a chronic budget problem dating back to the relatively short-lived dot-com boom, when it took on unsustainable spending programs and tax cuts, with both parties taking part in the party. Then Governor Gray Davis ended up going along, though he had told me he wouldn’t. The pressure from his own party was very strong.
When Arnold Schwarzenegger was swept into office in the 2003 recall, prompted mainly by Davis’s handling of the state’s electric power crisis early in the decade, the former action superstar promptly cut the car tax, to massive public approval. (Davis made two mistakes, incidentally, in the electric power crisis, which saw brief blackouts and skyrocketing rates in a partially deregulated system. First, in looking to Bill Clinton’s regulators (who didn’t help) and not immediately moving to long-term power contracts as the crisis began — Davis and his advisors shortsightedly didn’t want even a small increase in electric rates — and, later, in not moving very aggressively against merchant power generators manipulating the system.)
This combination of spending increases and tax cuts created a structural budget deficit, routinely papered over with accounting legerdemain and borrowing. The state made some progress, but everything went decidedly south with the advent of what is now the global economic crisis. Unlike the federal government, which can print money and borrow from China, as it did for eight years under George W. Bush, California has to balance its budget every year, or at least do a fairly convincing job of faking it. And unlike the federal government — and all but two other, much smaller states — California has the near unique requirement of a two-thirds vote of both houses of the Legislature to pass a budget or increase a tax. But not to cut a tax.
Enter the Republicans, who are getting more and more conservative as their ranks shrink. …
** AFGHANISTAN: RUSSIA TO THE RESCUE. In a very positive sign for the US effort in Afghanistan, Russian Foreign Minister Sergei Lavrov said that transit of US and NATO non-military supplies through Russia to troops in Afghanistan will begin within days.
Ironically, this comes on the 20th anniversary of the Soviet withdrawal from Kabul. And the man who commanded those Soviet forces, retired Lieutenant General Boris Gromov, warned the US today that a military surge in Afghanistan will not solve its problems there.
With our putative ally Pakistan increasingly unstable and jihadists carrying out many successful attacks on supply lines and convoys there — they seem to blow up the route over the legendary Khyber Pass every other week — alternative means of supply are increasingly necessary to sustain the US and NATO effort in Afghanistan.
That means, one way or another, Moscow, which can provide transit through its own territory and guarantee transit through Central Asian nations formerly part of the Soviet Union. There’s been a major dance underway for weeks on this, unreported by the conventional media, naturally. …
** “POST-PARTISANSHIP”: HOW IT WORKS, HOW IT DOESN’T. Back in 2007, when he was still an underdog candidate for president jousting with John Edwards (remember him?), Barack Obama said that he liked the “post-partisan” posturings of Governor Arnold Schwarzenegger, the idea that people should set aside their partisan differences to solve big issues. Now, as president, he’s adopted much the same tack, to the dismay of hyper-partisans of all stripes.
They ought to be dismayed, because it works. To a point.
But not in a linear sense.
Let’s take a look at how it went in California, and how it may go in Washington. … From my February 12th column.
** OH, ABOUT THAT “END” OF THE OBAMA HONEYMOON … From my February 9th column.
** OBAMA: RIDING WITH HISTORY. (NOTE: As Barack Obama was inaugurated as the 44th president of the United States, this column was the featured column on the top of the front page of the Huffington Post.) … From my January 19th Huffington Post column.
** 24/7 LIVE TV NEWS FEED FROM RUSSIA TODAY. Russia has re-emerged as one of the world’s great powers. Click here for a live TV news feed on your computer, bringing you English-language, jargon-free, fast-paced coverage of global and Russian news from the new Russia Today channel. You probably already know about CNN International, BBC World, and Al Jazeera. Russia Today, which also features culture, entertainment, and sports, is based in Moscow and is owned and operated by the TV Novosti division of Russia’s state news agency, RIA Novosti.
While it’s quite foolish to expect to see, say, criticism of Vladimir Putin on Russia Today, which I know as a former DemRussia advisor, the channel is very interesting nonetheless. With U.S. cable news chattering away as it does, this sort of respite can be informative. The NWN live link to RT does not constitute an endorsement of the channel’s views. It’s presented as an otherwise unavailable new media window.
** 24/7 LIVE TV NEWS FEED FROM AL JAZEERA. With the US entangled in two wars in the region, it’s valuable to keep up with news and perspectives from the leading Middle Eastern-based TV news network. Based in the Gulf Arab state of Qatar, Al Jazeera is very influential and more than a bit controversial.
Click here for a live TV news feed on your computer. The NWN live link to AJ does not constitute an endorsement of the channel’s views. It’s presented as an otherwise unavailable new media window.
** SCHWARZENEGGER’S CALIFORNIA. Here is my series of five columns on the governorship of Arnold Schwarzenegger for the Los Angeles Times in debate with Pulitzer Prize-winning former Times reporter/editor Bill Boyarsky, whose columns are also included.
Among them is what I’m sure is the first piece examining Schwarzenegger’s legacy as governor of California. Since he will actually be governor of California until 2011. No technology known to be disruptive to the space/time continuum was used in its preparation.
** TRACK GLOBAL AND NATIONAL ENERGY PRICES IN NEAR REAL TIME VIA BLOOMBERG ENERGY MARKET WATCH. After crashing over $147 for yet another record on July 11th, crude oil is trading in the $38 to $39 per barrel range.
The drop of $109 per barrel since the record high over the summer comes on acknowledgment that the weak US and global economy will cut future demand and on the easing of previous geopolitical tensions in the Middle East surrounding a supposed attack on Iran.
Your posts are welcome in the Forum.