Top Issues this Summer

There are several important issues on the domestic and foreign fronts this summer. Domestically, the big issues are the jobs and economy, BP oil spill, immigration, financial reform, and the debt. International issues topping the  list are Israel, Iraq, and Afghanistan.

Jobs and economy is number one because it is effected by all the other issues that follow. However, independently there are too many people that are long-term unemployed and we have no issue with discussing cutting or letting  expire unemployment benefits and other programs that assist these people in surviving. These jobs have been lost after other issues created problems. The first stimulus did create or save some jobs. We, however, need to do more to support small businesses which create most of the jobs.

The downturn began bcasue of the burst of the housing bubble which was fueled by many government and non-government actions. The overarching action that  created the environment for all that followed was the encouragement for all to own a home which accelerated under George W Bush's Ownership Society platform. This created the environment for the Federal Reserve to keep the interest rates too low for two long. The historically low interest  and other pressures preceded creation of various designer loan products and lending to borrowers that it should have been clear if an actual income analysis had been complete would not have qualified for the loan. It should not have surprised anyone that under these conditions many people would default on their mortgages and that eventually this condition could potentially leak into the prime mortgages. It is impossible to approve a No Doc or NINJA mortgage and not expect that there would be a default when income, assets, and liabilities were not examined in the approval process or underwriting were ignored.

Treasury: TARP has generated at least $16B in profit so far

With Citigroup and Wells Fargo repaying a total of $45 billion in funds they received through the Troubled Asset Relief Program, the total amount repaid to the program now stands at $164 billion, according to the Treasury Department. By the end of 2010, total repayments should exceed $175 billion, the Treasury estimated. "Taxpayers have already received over $16 billion in profits from all TARP programs and that profit could be considerably higher as the Treasury sells additional warrants in the weeks ahead," the department said in a statement. MarketWatch (12/23) , Reuters (12/24) , The Wall Street Journal (12/24)

Wall Street Must Change and the Debt Must Come Down

In a pre-taped exclusive interview with David Gregory for Meet the Press Treasury Secretary Timothy Geithner said two things must happen: Wall Street must change and the debt must come down. He also said that the growth that occurred was a positive sign but the recovery would take a while.

The indicators of a budding recovery were that GDP growth was at 3.5% for the third quarter and that job losses had slowed.  The reason the growth will remain sluggish is because other indicators released were lower than previous months.

Mr. Geithner repeated his admonition (AFP) that the debt was too high and must come down. The debt would be addressed as the economy continues to grow and policies would be decided as conditions dictated. The other important statement was that Wall Street must change. The regulatory proposal caused Wall Street to balk.

Three Cheers for the Obama Economic Team before Advancing to the Next Battle

We entered a severe economic downturn or “Great Recession”last September and have been losing higher numbers of jobs consistently, until recently, when the recent economic data has started to look better. While we are still losing far too many jobs the numbers are not increasing by as much or looking as bad as they once did. The stock market has had another streak of gains for the past four weeks.

When they entered office the Obama economic team, Treasury Secretary, Tim Geithner in particular weathered harsh criticisms from both the right and the left. They also resisted both the right-wing group that wanted to “let the banks fail” and the left-wing group that wanted to “nationalize the banks.” As a result of ignoring both of these groups they have proposed a balanced plan for regulatory reform.

However, there seem to still be rocky shoals ahead on the regulatory reform front. Today , according to The Washington Post, Sen. Mark Warner announced through an op-ed in the Financial Times that he cannot support the Treasury Department proposal because it does not actually create a strong single regulator. While the Treasury’s proposal simply merges the Office of the Comptroller of the Currency and the Office of Thrift Supervision to create the National Bank Supervisor. The “Nationalize the Banks” crowd will flock to Sen. Warner’s proposal because it appears tougher then the Treasury proposal, however, one large agency can cause as many issues.

School Choice Makes Strides in Louisiana

Jillian Melchior
New measures introduced by Louisiana policymakers make the forecast for more school choice positive, thanks to a $10 million initiative included in Gov. Bobby Jindal's (R) 2008-2009 budget.
The bill to carry out Jindal's initiative, HB 1347, introduced April 22 by state Rep. Austin Badon (D-New Orleans), would distribute scholarships through the Louisiana Department of Education and Board of Education to New Orleans students attending nonpublic schools.
"We must also provide educational scholarships to parents in Orleans Parish who often have no choice for their children other than the local failing school," Jindal said in his March 2008 Regular Session Opening Speech to the state legislature. "These scholarships follow a very simple and pure American principle--that every child has an equal right to good opportunities and a good education."