Update: Anyone? Bueller? Market Mover Monday: Smoot-Hawley rises from the grave and TOTUS to ‘admonish’ and ‘push’ for his regulatory scheme today…
Update 2: BWAAAHAA!!! Bob Pisani of CNBC says the traders have been passing around the Ben Stein Smoot Hawley Tariff scene from Ferris Bueller on the floor this morning!! lol..
Update: OMG in his opening remarks TOTUS recognizes Barney Frank D-MA as the man who will be instrumental in leading our financial policies and regulatory reforms. OH NOES! The guy who gave FAN FRED a pass?
He mentions Paul Volcker (who seems to serve primarily as TOTUS’ figurative crucifix against the vampires of reality who note TOTUS is fumbling the economy and implementing disastrous policies) Why does Volcker let himself be used this way? Sad. TOTUS is touting him as the CHIEF of his council of something or other, and we all KNOW Volcker is being ignored..Our previous posts on Volcker here. And here is one of interest concerning his speech in February wherein he said ‘MOST aspects of capitalism will survive’.
Apparently no one ever told TOTUS you don’t start a land war with Asia and you don’t start a trade war with your banker..
TOTUS’ decision to put a tariff on Chinese Tire imports is well..untimely…to say the least. Timmeh Geithner just got back from another round of promising China we would restrain our deficit (AS IF!) and now here is TOTUS starting a trade war. At whose behest?? LABOR OF COURSE!!! Good grief! Our previous post on Smoot Hawley here
…China indicated Sunday it would restrict U.S. imports of chicken and auto products after Washington’s move to slap punitive sanctions on Chinese tire imports, raising tensions in a trade dispute ahead of two planned meetings between the countries’ leaders.
Citing a jump in Chinese imports, the Obama administration said Friday it would impose stiff tariffs on Chinese-made tires for the next three years, invoking a section of trade law that China agreed to as a condition for its joining the World Trade Organization in 2001. The move essentially would cut off the source of nearly 17% of all tires sold in the U.S. last year and hit cost-conscious consumers particularly hard, as retailers will have to find alternative sources for the lower-end tires that make up much of what China sends to the U.S….
And just to follow up, TOTUS will come on down to Wall St to give another lecture and remind everyone that they are bad bad people. Despite Sheila Bair’s resistance, TOTUS is leaning HARD on FDIC and SEC to give Treasury and the Fed expanded powers..
President Barack Obama, speaking on Wall Street Monday on the first anniversary of the crescendo of the financial crisis, will discuss the administration’s plans “to wind down government involvement in the financial sector,” will push for “immediate action” on regulatory changes need to prevent future crises and admonish Wall Street to avoid the practices that led to the crisis, an administration official said. The president’s remarks, follow similar comments from the Treasury and Federal Reserve aimed at blunting criticism that they lack an “exit strategy” for withdrawing their support for the financial system with speeches and documents timed for the first anniversary of the worst moments of the crisis.
More after the break:
Market Mover Thursday: Team Obama Budget Presser…Healthcare funding via new additional tax increases in 2011….
Uh oh. For a bunch of people who like to read about FDR, they seem to be repeating some well known policy decisions that increased the severity and duration of the Great Depression here, ie Smoot-Hawley talk tariffs and tax increases on sources of production….our previous posts here and here
The Obama administration will announce a 10-year, $634 billion reserve fund Thursday aimed at expanding health care coverage – and will pay for half the plan with a new tax hike on wealthy Americans that surprised health care advocates and angered Republicans.
This is NOT the rollback of the Bush tax cuts alone, this is a NEW tax increase to be effective concurrently with the expiration of the Bush tax cuts in 2011…a double whammy, the one-two punch….IMO a bad idea…this is exactly what happened before, they raised taxes before the recession was over and made a Depression…can they be this obtuse? Is it deliberate? Seriously!
Under current law, high earners who are in the 35 percent tax bracket can take deductions at that rate. Under Obama’s plan, they would be capped at 28 percent – meaning instead of getting $3,500 back from $10,000 in mortgage interest or other deductions, these taxpayers would get $2,800. The plan would phase in during fiscal year 2011, just as Obama plans to let the Bush tax cuts expire.
OMB chief Peter Orszag is to announce the plan while outlining Obama’s budget in a press conference Thursday.
8 ‘Goals’ for Healthcare Reform:
Ahead of the release of his budget Thursday, Obama has endorsed eight guiding principles for health reform, the White House officials said on the conference call. They stressed that they intend to work with lawmakers and other stakeholders on how to accomplish the goals, but the principles will lay down a marker for any congressional plan.
Other goals include maintaining choice of insurance and doctors, ensuring affordable coverage, protecting Americans financial health, investing in prevention and wellness, improving patient safety and quality of care and is fiscally responsible, sustainable and portable.
So how is the initiative funded on an ongoing basis? Dunno. He seems to expect to recoup itemizations people get now, but if they keep taxing the producers to death their income will dry up no? Yes, Big Dawg said so and we all did well with Big Dawg policy of growing the economy for everyone, not taking one person’s share to give to someone else…IMO…
And he’ll pay for half his plan — $318 billion over 10 years – with new tax hike on Americans making more than $250,000.
Obama had pledged throughout his campaign to roll back Bush tax cuts for Americans making more than $250,000 a year in fiscal year 2011 – a plan that also will be included in Thursday’s budget — but this is different, aimed at reducing the itemized deduction rate for those taxpayers.
Some advocates for universal health coverage said they were surprised to learn that Obama would turn to a tax increase to create a dedicated fund for his program.
Huh, Seems odd to eliminate a subsidy that incentivizes RURAL CARE doesn’t it?
The other half of the $634 billion would come from changes in savings in Medicare, including ending subsides to private insurance companies that participate in the Medicare Advantage programs in rural areas.
From experience in the health insurance field, I can say rural care is an area that can least afford cuts like this. Urban areas are served by many charities and government programs, and their very ‘urbanity’ draws physicians there.
Getting an excellent doctor to a tiny town, and getting the attention of charities and glamorous Hollywood fundraiser types for rural areas is not doable. Seems Obama is not as concerned with the RURAL POOR..Country Mouse City Mouse Class Warfare and it sucks…
The Declawed Buy American Amendment passes, it leaves things status quo, will Labor notice? We shall see…we need the language of the bill analyzed to see WTH it does exactly since Dorgan seems so chipper, is he trying to sell Labor into believing something has changed?! Or is there an alligator under the water lurking in this bill….
Senators agreed by voice vote tonight to clarify that the “Buy American” provision in the Senate’s version of the stimulus package should comply with existing treaties.
Then they rejected by a 31-65 vote a proposal by Sen. John McCain to strip the “Buy American” language from the bill. There is no such language in the House-passed stimulus.
McCain warned that the “Buy American” requirement for stimulus funds has “echoes of the disastrous Smoot-Hawley Tariff Act,” which many believe exacerbated the Great Depression.
Byron Dorgan D-NE challenges fate to strike trade, what an idiot IMO:
Sen. Byron Dorgan, D-N.D., the chief “Buy American” cheerleader said, “Both Mr. Smoot and Mr. Hawley are dead. … But this amendment is part of a debate that is alive on the floor of the Senate and across the country. Twenty thousand people a day are losing their jobs. Twenty thousand people a day.
Well that’s a relief, and a trade war against the global economy averted…
The vote expected tonight, via Forbes:
The U.S. Senate planned to vote late Wednesday on a softened “Buy American” plan as part of its nearly $900 billion economic stimulus bill, after President Barack Obama expressed concern the original language could trigger a trade war.
The proposed amendment adds language requiring that Buy American measures that have upset Canada, the European Union and other trading partners be “applied in a manner consistent with U.S. obligations under international agreements.”
The Senate was also expected to vote on an amendment offered by Senator John McCain, an Arizona Republican, that would prohibit any of the stimulus package funds from being subject to a Buy American requirement.
Congressional leaders, trying to quell a dispute over “Buy American” provisions in the stimulus package, are crafting a version that would apply only when they don’t violate trade rules, according to industry officials and a congressional aide. The lawmakers are reacting to a demand by the White House that the provisions satisfy U.S. obligations under the World Trade Organization.
Well it is always nice when we comply with out WTO and Trade Agreements ain’t it? Sheesh. MiM previous post on Smoot Hawley and Protectionism here….
The House Ways and Means Committee’s Democratic staff and aides to Senate Majority Leader Harry Reid, a Nevada Democrat, are working out the language, said a lobbyist who was briefed on the measure. The people familiar with the talks declined to be identified because the talks are confidential.
You know who is gonna be pixxed?, that’s right Labor. The very Labor that elected Teh One and demonstrated outside the Capitol today for EFCA/Card Check.
Obama told ABC News yesterday that he didn’t want any Buy American provisions that would violate trade rules.
“We need to make sure that any provisions that are in there are not going to trigger a trade war,” he said.
Now that Team Obama is in charge we at MiM bet Larry Summers and Judd Gregg will prevail over Hilda Solis and Pelosi, the same way Bob Rubin prevailed over Robert Reich in the Clinton Administration..IOW no EFCA, unless they plan to self destruct the economy…..
Steel companies, such as U.S. Steel Corp. and Nucor Corp., and labor unions are pushing language in the stimulus plan to mandate that projects use American-made iron, steel and other manufactured goods in building projects such as roads, bridges and tunnels.
“We’ve always said this doesn’t violate our trade laws,” said Robert Baugh, executive director of the Industrial Union Council at the AFL-CIO. “If they need to restate it, fine.”