FedUpUSA

Archive for January 12th, 2010

White House Changes Stimulus Job Accounting

New method will make it impossible to track ones saved or created

WASHINGTON – The White House has abandoned its controversial method of counting jobs under President Barack Obama’s economic stimulus, making it impossible to track the number of jobs saved or created with the $787 billion in recovery money.

Despite mounting a vigorous defense of its earlier count of more than 640,000 jobs credited to the stimulus, even after numerous errors were identified, the Obama administration now is making it easier to give the stimulus credit for hiring. It’s no longer about counting a job as saved or created; now it’s a matter of counting jobs funded by the stimulus.

That means that any stimulus money used to cover payroll will be included in the jobs credited to the program, including pay raises for existing employees and pay for people who never were in jeopardy of losing their positions.

The new rules, quietly published last month in a memorandum to federal agencies, mark the White House’s latest response to criticism about the way it counts jobs credited to the stimulus. When The Associated Press first reported flaws in the job counts in October, the White House said errors were being corrected and future counts would provide a full and correct accounting of just how many stimulus jobs were saved or created.

Numbers published last month identified more than 640,000 jobs linked to stimulus projects around the country. The White House said the public could have confidence in those new numbers, which officials argued proved the administration was on track to keep Obama’s promise that the stimulus would save or create 3.5 million jobs by the end of this year.

But more errors were found, with tens of thousands of problems documented in corrected counts, from the substantive to the clerical. Republicans have used those flaws to attack what so far is the signature domestic policy approved during Obama’s presidency.

The new rules are intended to streamline the process, said Tom Gavin, spokesman for the White House’s Office of Management and Budget. They came in response to grant recipients who complained the reporting was too complicated, from lawmakers who complained the job counts were inconsistent and from watchdog groups who complained the information was unreliable, Gavin said.

“We’re trying to make this as consistent and as uniform as we possibly can,” he said.

The new stimulus job reports will continue to offer details about jobs and projects. But they were never expected to be the public accounting of Obama’s goal to save or create 3.5 million jobs, Gavin said.

The quarterly job reports posted on the Web site for the Recovery Accountability and Transparency Board reflect only a fraction of the jobs created under the program and can’t account for job creation stemming from other stimulus programs such as tax rebates and other federal aid, the spokesman said.

But the result of the new rules will be that future claims of job creation from the stimulus will be even more misleading, said Rep. Darrell Issa, the ranking Republican on the House Oversight and Government Reform Committee.

“It is troubling that the administration is changing the rules and further inflating the Recovery Act’s impact and masking the failure of the stimulus to produce sustainable economic growth or real job creation,” Issa said in a letter sent last week to the government board monitoring stimulus spending.

Recipients of recovery money no longer have to show that a job would have been lost without the stimulus help, and they no longer are required to keep an ongoing tally of jobs saved or created. The new rules allow stimulus recipients to limit the job tally to quarterly reports, making it impossible to avoid double-counting a job that was created in one quarter and continued into the next.

Issa wants the Recovery Board, the government’s independent oversight panel, to change how it identifies the count of stimulus jobs and to add a note on its Recovery.gov Web site explaining that there is now a different definition for what constitutes a job under the stimulus.

David Rosenberg: Forget The Unemployment Rate, The Real Nightmare Is The EMPLOYMENT Rate

Joe Weisenthal

How The Hell Is This Legal? (Front-Running)

Posted by Karl Denninger

Obama: Time To Keep Your Promises

Posted by Karl Denninger

Do you want to have a Republican House – and possibly Senate – come November?

No?

Then you better put a stop to this crap.

The Fed is telling a bailout watchdog not to share documents requested as part of a House investigation into the bailout of failed insurance conglomerate American International Group Inc.

A letter from the special inspector general for the financial bailout to California Rep. Darrell Issa says, the Fed “has directed us not to provide you with the documents it has provided to us.”

Your own party is having none of this:

Jan. 12 (Bloomberg) — Edolphus Towns, chairman of the House Oversight and Government Reform Committee, said he will issue today a subpoena to the Federal Reserve Bank of New York for documents related to American International Group Inc.

“This subpoena will provide the Committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout,” Towns said in an e-mailed statement.

I know you didn’t solicit my advice, but I’m good at providing unsolicited advice in this regard.  I tried to warn John McCain prior to the election that his standing with the TARP/EESA “bailout nation” BS would cost him the election, and it did.

Most of The American People have no problem with anyone making an “unholy” amount of money provided they do so legally, without ripping anyone off. 

I know few people who object to a farmer who works his entire life to provide for himself and his family, manages his crops, makes a lot of money, socks it away, and retires to enjoy his last years in comfort.

I know few people who object to the American who invents something new and never-before seen, like an automobile, an operating system for a computer or a new gadget that everyone wants and buys, becoming rich as a consequence.

But nobody, except for the criminal banking cabal on Wall Street and their paid shills, finds it acceptable to sell worthless trash as “money good” securities to states, retirees, pension funds and ordinary people simply trying to guarantee that they have a decent retirement income, whether those securities are bonds and CDOs backed by mortgages made to people who the sellers of the money knew couldn’t pay or whether they’re Internet bubble companies that never had a snowball’s chance in Hell of being able to sell anywhere near enough product or service to cover their expenses.

Americans find it even more outrageous when, after doing the above, that very same criminal banking cabal got caught holding too much of their garbage and faced bankruptcy – so they forced the American people to bail them out while at the same time jacking up ordinary Americans’ interest rates on credit cards to 29.9%, imposing new and outrageous fees, and then paid out tens of billions of dollars in bonuses!

One very small piece of this scam is in fact AIG and the role of the NY Fed in both the “regulation” of the banks under its purview during the time that AIG was selling what later proved to be worthless credit default swaps to those institutions under its regulatory umbrella and, later, “negotiating” a back-door transfer of funds from the US Taxpayer to bail out those very same regulated firms that bought worthless “protection” for the purpose of claiming that their risky “assets” were in fact money good.

For the NY Fed to now claim that Tim Geithner knew nothing of the negotiations, public filings and transactions between AIG and these institutions, both prior to the blow up and after it happened, stretch credulity.  After all these institutions were specifically under the regulatory authority of the NY Fed in the years prior to this crisis and the NY Fed’s charter explicitly includes oversight and management of systemic risk posed by these firms to the banking system as a whole.

You, President Obama, ran on the platform and claim that you were coming to Washington to, in part, STOP THE LOOTING AND START PROSECUTING.

Well Mr. President, there’s a hell of a lot of looting that has taken place, and yet we’ve seen damn little prosecuting.

Millions of Americans have been dispossessed of their homes due to jobs lost in the economy during this mess, and there is no indication at all that the job problem is going to go away any time soon.  Indeed, we are now back where we were in 1983 in terms of the percentage of the population that is employed and contributing to the Federal Tax Base, yet the total debt outstanding in the US is, as a percentage of GDP, twice as high.

Every American invested in the public markets has just completed a “lost decade” in which they have in fact lost money over a 10 year time, and that’s without counting inflation.  These are not small losses – about 35% if you were in the S&P 500, 35% in the DOW and more than half in the Nasdaq 100.

Pension plans, both public and private, have been decimated.  Your core constituents, including organized labor of all stripes have taken it in the shorts as a direct and proximate consequence of the outrageous and pernicious fraud heaped upon the public debt and equity markets.

When you add all of this up Mr. President virtually every American has been touched by this mess.  Lower-income earners have lost their jobs, middle-income workers have lost jobs, homes and retirement security and upper-income earners have suffered all of the above plus in many cases had their nest eggs literally stolen by scammers like Madoff.

Yet thus far you have focused your prosecutorial attention on Madoff, Stanford and a handful of others – all of whom attacked “high wealth” people.

Here’s a hint Mr. President:

The rest of the nation is pissed off and tired of the excuses and lies, and we know who was responsible for all of the bogus securities and lending activity – and it wasn’t Madoff.

Fraud is against the law Mr. President.  It always has been.  You need no new laws, you have plenty of existing ones.

It is my belief that there are literally tens of thousands of people and hundreds of companies, including some very large public ones, you should have under investigation if not indictment right here and now. 

You can, right here and now, solve your flagging popularity problem.  You need only give a speech that is roughly this:

My Fellow Americans.

The last three decades have been marked by outrageous scams and frauds throughout our financial system.  This is not a partisan political issue and has consumed both Democrat and Republican administrations and Congresses alike.

As of today, that era has ended.

To those who believe that blowing bubbles, making homes unaffordable for the common man in this country or driving stock prices to ridiculous levels based on hype and false claims is a means to become wealthy, your days of being able to strip the wealth of the common American have come to an end.

Those federally-chartered institutions that promote a “bubble economy” based on unreasonable and unsustainable levels of debt will find that this administration will do everything in our power to revoke those charters.  This includes but is not limited to The Federal Reserve.

To those who have ripped people off, including those who marketed and sold worthless securities, those who claimed to have “protection” against market events when they knew the person they bought from had no money to pay, or who worked together to make loans and sales to people through the use of various lies, such as falsely overstating incomes, you will soon be facing a jury of your peers.

I am today directing the FBI and Department of Justice to open and begin investigations, starting at the top. Each and every one of the large financial institutions in this country, including the banks, GSEs and their officials that operate under a federal charter or banking license will face a forensic audit.  We will identify and bring to justice all of those who have robbed this economy of its vitality and stolen your futures.  Where possible we will claw back every penny of these individuals and firms’ wealth so as to provide you with whatever compensation we can recover.  Those firms who have committed wrongdoing will be broken up and their officials barred from serving in the banking or securities industries in the future.

Our own administration and the people in it will be subject to this investigation, as will all members of Congress, the lobbying firms and interests that interact with our government.  There will be no sacred cows and no rocks that will be left unturned.

We will investigate homebuilders, realtors, appraisers and mortgage brokers.  We will look into the FHA, Ginnie Mae, Fannie Mae and Freddie Mac and determine exactly how all of these loss-producing loans came to be made.  Where we can identify persons or corporate procedures that led investors, firms or people to be misled, we will bring charges.

The days of theft and fraud from the American public, followed by demands to be bailed out when these scams and schemes reach the end of their rope, are over.  Civil and criminal penalties have and do exist for these offenses, and they will be enforced to the fullest extent of the law.  

All Americans deserve to be able to invest with confidence and rely on the statements and publications put forward to them.  Americans deserve to be told the truth.  When Americans are ripped off, they deserve justice.  Beginning today, every American will receive exactly that.

The days of the “Wild West” on Wall Street and K Street alike are over.

Thank you.

If you don’t, and soon, you will have a Republican Congress come November, and in 2012, you will be headed home to Chicago, where you can live in the bankrupt State of Illinois – bankrupted, in no small part, by the same fraud and rip-offs that have infested the rest of this nation.

You’ve had a year to survey the landscape.

It is now time to keep your promises.

We, the voters and citizens of this nation, are not asking any longer.

We’re now demanding you do so.