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The main part of the $447 billion jobs plan proposed by President Obama in a speech to Congress on Sept. 8, 2011, is to reduce social security taxes. At a cost of $240 billion in government revenues in 2012, the Obama jobs plan proposes cutting the 6.2% social secuirty tax -on worker income up to $106,800- down to 3.1%. The current tax cut which expires in December 2011 cut the tax down to 4.2%. Analysts estimate this could generate over 500,000 jobs in 2012.

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Saying that these countries had significantly cut imports from Iran, the U.S. government gave exemptions from the sanctions on Iran to 10 European countries and Japan. Exemptions were given to Belgium, Britain, Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland and Spain. This leaves 11 countries facing possible sanctions including China, India and S. Korea, with negotiations underway with these three major importers. The sanctions law passed by the U.S. Congress gives the government room to avoid damage to global oil markets and U.S. allies.

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A fight in the U.S. Congress with an unusual alliance between the Obama administration, the Judiciary Committee, and Speaker Boehner up against Senate Majority leader Mitch McConnell ends with the passage of the USA Freedom Act, which requires court approval for government to look at collected bulk data in phone calls. Republican Rand Paul fought hard against both factions to end the bulk surveillance altogether. The Act was passed in the House earlier. It cleared the Senate June 2nd 2015 with 67 in favor and 32 opposed.

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The Bush administration's and Paulson's thinking that letting the government buy parts of the banking system was unthinkable, as recently as late September, may have led to squandering of valuable time. Now Paulson is following Gordon Brown's lead in planning an injection of capital in banks in return for equity stakes, using much of the $700 billion Congress has authorized, and Paulson says the package that passed Congress gives Treasury all the authority it needs to do so. The failure to be open to this thinking earlier may have cost valuable time in addressing this crisis. And now there are second thoughts on whether it was wise to let Lehman fall into bankruptcy, because the Administration had not correctly anticipated or calculated the true cost of the Lehmann bankruptcy in terms of the way it created a crisis in the rest of the financial system. Paulson has still not taken Gordon Brown's lead in guaranteeing lending between the banks which the British are doing as part of their plan. Is the administration too slow in its response and a bit wrongheaded or stubborn headed as each step of the crisis has moved faster than its ability to respond, and its response being one step behind. Frederic Mishkin of Columbia University a former Fed Governor says, "if you delay and create uncertainty, the amount of money you have to put up goes up." It appears from Paulson's remarks over time first turning down proposals for capital injection into banks for equity stakes, and now in making that route central to his plan, that Paulson and Bernanke simply did not anticipate the shutting down of credit markets and the collapse of stock market prices that occurred, and they had no backup plan prepared for a situation such as this. And on top of this the backup plan they went out to sell to Congress turned out to be short on details and in this sense naive for the amount requested. And then by refusing to consider alternatives such as capital injection for equity stakes, it was wrong headed, if not closed minded. William Poole who retired in August as President of the Federal Reserve Bank of St. Louis, says that " I am not aware that Treasury presented any evidence on auctions that have been successful when they are used for assets that are so heterogenous", referring to the reverse auctions that would take weeks to set up and would be terribly complicated to buy up troubled assets, as part of the plan presented to Congress in but 3 pages. Now the plan appears to be to let Fannie and Freddie, which were given $100 billion by the Treasury as authorized by Congress, to move ahead with the purchase of troubled mortgage securities, something for which Fannie and Freddie have the capabilities. In the end the crisis in confidence and near panic generated in the markets and the climate of fear may go way beyond the actual losses incurred from debt securities, and some of this may be the result of a clumsy and poorly thought out approach by Bernanke and Paulson. The cost of fixing the problem will be higher and the recession more prolonged because of this. It is a situation of capable people blinded by ideological reasons to see what is happening and in Bernanke's case not making enough of a case to Treasury about his reservations and his own thinking that capital injection was the right approach, as people familiar with the early planning say Bernanke argued that it would be easier and more efficient to inject capital directly into banks. ...

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Amy Goldstein spends time in Janesville, Wisconsin, in U.S. vice presidential candidate Paul Ryan's congressional district, and talks to local people to give a glimpse of life in Janesville after the closing of the GM plant and the 2008 financial crisis. She looks at the effects of long-term unemployment and cuts in services in communities such as Janesville as a public policy scholar at the Woodrow Wilson International Center for Scholars, while on leave from the national staff of the Washington Post. Ryan was first elected to the U.S. Congress in 1998, about a decade before the closing of the GM plant, and has been reelected to Congress each time for 7 consecutive terms. Goldstein says Janesville is typical of the communities across America that have suffered job losses- the loss of more jobs in manufacturing than any other sector, a greater impact of job loss for men than women, and a large impact on people who had less education but well paid jobs. As shown by the recent settlement for a Caterpillar plant in Joliet, Illinois, and across the U.S. manufacturing landscape, older workers who enjoyed higher wages are retiring with newer workers coming in at a lower wage, which is improving U.S. manufacturing competitiveness but also increasing the importance of education for higher paying jobs....

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A Defense Department biannual report that is mandated by Congress points to little improvement in the last 6 months in Afghanistan. In 92 districts studied for the their support of the Afghan government or opposition to it, not one supported the government. In 44 districts the people were neutral in this evaluation. The number of districts sympathetic to the insurgency increased to 48 in March 2010 from 33 in December 2009. Clearly the Afghan government of Karzai has little support in the country and this remains the major question: whether this war can be successful in the face of this fact and its continuance, and whether the merits of expenditure of time, effort, resources and lives to keep a government like this in power makes sense for America's security interests. About $6.6 billion is allocated by Congress for the training of Afghan security forces. But the Afghan police force consists of mostly illiterate and poorly trained persons and virtually nonexistent judicial system. Combine this with corruption, incompetence and threats and this force is really ineffective. Overall the Afghan security forces once trained don't appear from this report to be able to sustain themselves in the face of an insurgency whose "operational capabilities and organizational reach are qualitatively and geographically expanding", and with "strength and ability of the shadow governance to discredit the authority of the Karzai government increasing."...

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President Trump signed the Hong Kong Human Rights and Democracy Act passed with near unanimous support by the U.S. Congress. The original U.S. law on Hong Kong passed in 1992 requiring yearly reports on the autonomy of Hong Kong for it to get the "special status" granted to it. This requirement for yearly reports expired in 2007. This requirement is now reinstated. The law signed by Mr. Trump requires the State Department to certify Hong Kong' autonomy annually. The WSJ describes it as a "grim trigger" strategy" which would cause damage to Hong Kong capital markets and is of a magnitude that makes it less likely to be used. Mr. Trump pointedly remarked that he had signed it "out of respect for Mr. Xi, China and Hong Kong," and Mr. Trump has shown respect so far for the protesters but also shown respect for Mr. Xi and China in the middle of the unending nature of the protests. The new Act does not give Mr. Trump any additional powers than he already has. It only changes one aspect of relations- it makes Hong Kong relative autonomy a part of permanent high level issues in China - U.S. relations, including trade and Hong Kong's status as financial center. ...

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President Trump's focus in the State of the Union message in 2020 in the U.S. Congress was on what he had done for U.S. prestige and perception- "In three short years, we have shattered the mentality of American decline and we have rejected the downsizing of America's destiny. We have totally rejected the downsizing." "We are moving forward at a pace that was unimaginable just a short time ago, and we are never going back." The theme of the speech- "The Great American Comeback." No longer were other nations be allowed to take advantage of America, American interests would come first, and this also meant blue collar working families and middle class. Trade deals with Mexico and Canada, trade deal with China, reversing of the trade deficit, bringing back about 12,000 of the 60,000 thousand factories lost over two administrations Democratic and Republican of the last 16 years with many more factories in the pipeline, increasing jobs and incomes in an unprecedented way, were all the focus of the speech. The president basically sidestepped the impeachment for Ukraine policy and implementation, and focussed on the optimism from reversing American decline in trade, jobs, and manufacturing under past Republican and Democratic administrations.   ...

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Human faces behind the Bailout Plan. Senator Dodd Senate banking Committee Chairman, has 34 years in Congress. He was elected to the House in 1974 and moved to the Senate six years later. His father became a senator afte serving as an assistant to the lead prosecutor in the Nuremberg Trials.

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The Obama administration's misleading statements about the true nature of events during the attack on the U.S. consulate in Benghazi, Libya. Intelligence officials providing testimony to Congress say there were no spontaneous demonstrations before the attack as stated in the administration's version, and efforts to protect the diplomatic mission were stymied by the State Dept and officials in the Obama administration. A dangerous situation was left without the needed attention and action, leading to the tragedy for America's diplomatic mission and the loss of life for brave diplomats helping the Libyan people struggle for freedom.

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The OECD sharply cut its eurozone growth forecast to 0.3% in 2012, well below the 2% growth forecast it put out in May 2011. The U.S. growth forecast was cut to 1.8% from the 3.1% predicted earlier. This has serious implications for the eurozone because it means the worsening of budget deficits in the eurozone, leading to more austerity measures and spending cuts, leading to a downward spiral as this affects growth. It also has implications for growth in the U.S., if the super-committee appointed by Congress mandates additional cuts in spending.

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ig changes in transportationpolicy will change the way Americans move around. Its not just the auto industry that is being remade. US transportation policy is being shaken up and is in for big cahnges. The head of the House Transportation and Infrastructure committee is a Minnesota Democrat Rep. Janes Oberstar, he is suggesting Congress steer $30 billion to highways and bridges and $12 billion to transit as part of the $85 billion being discussed for transportation spending in the stimulus plan. This would be a much higher percentage than what transit secured for many years.

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The virtues of bipartisan support for the elected President in achieving the goals in his mandate from the people. The Gingrich effort during the Clinton Presidency and the Cantor effort in Congress for Republicans to vote against the Stimulus Plan, do not follow the pattern of bipartisan support for the President that has been the usual experience. There are dangers in this type of action especially at a time like this with high unemployment, rising foreclosures, and global financial crisis, and it appears to have been a poorly thought out response.

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How short sellers target Citigroup and work havoc with its share price losing half its value in afew days. The need for reinstating the uptick rule but a mystery that no action has been taken. And Paulson scores himself as a ten from 1 to 10 in a question from Alan Murray at the WSJ CEO Council, even as lack of comprehensive action on foreclosure prevention, the failure to reinstate the uptick rule, and time lost in the debate in Congress and afterwards over buying up toxic assets, remain a mystery.

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In the current situation where the "too big to fail" problem for banks has only worsened since the crisis with the remaining banks even larger after mergers, and no dividing wall between speculative trading in securities and the utility banking of collecting deposits and making loans, the country depends on regulators to do the job of supervision. Regulatory reforms have faced resistance from the banking industry and the reforms have been watered down in Congress. It is in this environment that Patrick Parkinson takes on the job of head of bank supervision at the Federal Reserve. He will work with Daniel Tarullo, the Fed governor who heads the committee of governors overseeing bank supervision. But he is also one of the old faces at the Fed when the Fed failed in its role of bank supervision. From 1993 to 1998 he was the top staff advisor to the Fed chairman, for matters considered by the President's Working Group on Financial Markets.

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Bret Stephens in the NYT points out that the Iran Nuclear Deal did not have the support it needed to become a lasting agreement. He cites a Pew poll at the time of the deal showing 21% supporting it and 49% not supporting it. It lacked the two thirds support needed in Congress for a treaty to be passed. It was a J.C.P.O.A. or Joint Comprehensive Plan of Action not an Executive Agreement or a Treaty, says Stephens. France initially called for stronger safeguards so that the Agreement would limit the development of nuclear weapons. Only later did France and the EU come into acceptance of the deal.  Stephens points out the efforts to renegotiate the deal coming from the EU, and cites this as showing that a better deal could have been negotiated. Since the deal the conflicts in the Middle East have continued to grow, so that the constructive developments of advancing Iran's economic development and reducing the role of military conflicts were not addressed, say experts skeptical of the deal. ...

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The slowing job market without layoffs and yet robust, is giving new flexibility ot the US central bank, the Fed. Jerry Powell at Fed does not plan to cut rates and will keep rates steady. This mean housing affordability is affected though the problems in housing have to do with a lack of supply and factors such as retired people hanging on to larger homes and not downsizing. Overall this is a period of robust job growth and moderating inflation, and is a result of the huge investments Biden and Congress in bipartisan way are making to provide industry support to compete with China and in infrastructure investments that yield benefits for overall economic growth and productivity. This is true for investments in science and CHIPS Act.

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The NYT editorial says the negative feedback loop of foreclosures begetting falling house prices, which beget more foreclosures, and further weaken banks, is well under way. One way to have broken this, was to enable good types of loan modifications, which reduce the principal for homeowners and reduce payments significantly. Sheila Bair at FDIC says 32% of prior payments is about the right amount. The bad types of loan modifications that lead to no reduction in principal, and put homeowners back in redefault because of large payments that homeowners "under water" or a lost job cannot afford, have so far been the dominant kind of loan modification. At present 14 million homeowners are "under water," in that their homes are worth less than what is owed on the mortgage. One of the crucial measures which would have enabled this, has not been pushed by the Obama administration through Congress. This was to pass an amendment that allowed bankruptcy judges to modify troubled mortgages. Banks which have taken billions of dollars in loans from the federal government were allowed to lobby aggressively to kill this amendment, and the Obama administration did little to push this amendment in Congress. 12 Senate Democrats joined 39 Senate Republicans to block a vote on the amendment. Says the NYT editorial "when the time came to stand up to the banking lobbies and cajole yes votes from reluctant senators-the White House did'nt. When the measure failed there wasn't even a statement of regret." This could turn out to be a major mistake, because as the NYT points out voluntary loan modifications have shown poor results. The administration's plan to provide incentives for loan modification is untried and tested, and may not produce significant results. With 14 million homeowners under water, and spiralling foreclosures, the situation may get out of control and seriously damage the economy. After the moratorium in home foreclosures ended there is expected to be a big surge in foreclosures, with estimates of 290,000 to 341,000 foreclosures in March, 2009. If this is allowed to continue it will undo all the good work in other areas, the stimulus spending, rebuilding the auto industry and other steps. It will also be more difficult to reverse as valuable time passes and the cost of the crisis escalates. A consensus among many experts was that stronger action in connection with the banks was required, and Martin Feldstein has warned about the danger posed by foreclosures since early 2008, see links....

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This exceptional report in the New York Times shows the results of a NYT investigation into Trump's taxes. Trump used a $916 million loss on his tax return for 1995. This was at a time when casino losses had mounted in Atlantic City and Trump was having financial difficulties. Trump used a tax avoidance maneuvre that was considered stretching the law by tax experts. Under tax law when debt is cancelled it has to be reported as taxable income. When Trump had some of this debt cancelled for his casinos, he would normally have had to show it as taxable income. He used a tax maneuvre to not show this taxable income- to be able to show a loss of the magnitude of $916 million for 1995 tax returns. The cancelled debt would make it possible to wipe out $50 million in taxable income for 18 years, says the NYT report. Trump used the losses of $916 million to offset other income from branding, television. Trump's debate comments to Hillary Clinton was why she had not closed the loopholes he had used. Hillary Clinton was one of the senators who had this loophole closed when legislation was passed in 2004. According to Mr. Buckley, the former chief of staff for Congress's Joint Committee on Taxation, this violated a key principle of American tax law, that you cannot deduct someone else's losses. Only the bondholders for the casinos who cancelled some of Trump's debt should be allowed to use these losses according to that principle. So Buckley says of Trump's tax return maneuvring- that "he was double dipping big time." What does it mean for the average citizen- it simply increases his tax burden. ...

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The Barney Frank proposal in Congress are getting a hearing from the Treasury and the Bush administration as his aides and Treasury officials are beginning negotiations for the Federal Government to step in in a big way to help homeowners avoid foreclosure and preserve capital for lenders who would also be hurt by foreclosures.

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Work requirements is one area in which Biden and McCarthy have a point of agreement in the debt ceiling discussions. Biden says he has supported work requirements in the past. Biden also says he would do nothing that affects health benefits. Under Biden the jobs market is the best it has been for over two decades which makes it easier to have some sort of work requirement for people able to work before they can collect government aid benefits. This makes an agreement possible in which Biden and McCarthy continue discussions with Biden building some form of rapport with a Congressman he has known in the past from his days in the US Congress. An agreement he pulls together would then have the support of most Republicans and be passed with the help of all Democrats. This would meet with opposition from a small faction of the Republican party, opposition that McCarty has become accustomed to including the prolonged voting it took to get himself elected as Speaker. McCarthy and most Republicans are in favor of Ukraine and the EU support for Ukraine at a critical time. They including Mitch McConnell who is present in the negotiations would not want to do anything that spirals America into a financial crisis during a Ukraine counteroffensive with Biden and Scholz's support that could end the war in Ukraine. Biden probably shared the concerns of his G7 counterparts with the Republicans about this. McCarthy and Biden could then simply say they only worked to do the possible and move on to the bigger battle in 2024. ...

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Speaker Mike Johnson says democracy is "messy," as Rep. Greene of Georgia calls for a resolution for him to step down for violating a rule that no legislation would be brought up that lacks majority support. Only 101 Republican members of the House supported it less than half. How then would the funding of the federal government its departments of defense, homeland security, education, health, operate as the deadline for funding it is tonight? This is left unsaid. One can see the Senate and House live on C-SPAN television at this very moment. It appears that the older senior members of the Republican party have not done a good job of talking to their younger less experienced colleagues and building agreement, that the mediocrity of leadership in both parties for the past three decades, even four, is the cause. Unstable politics in the Republican party as it is split with older senior members on  one side and younger many first time elected organized by the Freedom Caucus group on the other.  Many are from the Southern states and some from rustbelt midwest showing the deep divides that still shape the US. Democrat Steny Hoyer the House Minority leader who has worked in Congress for over 40 years called it on the House floor, and he said its a harsh word delaying and "dissemble." Democrats call for compromise to govern, the compromise was finally reached today March 22 to pass the $1.2 trillion spending bill with something for each side or somethings that both sides wanted, funding at border and child care. ...

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In this exhibit in the Library of Congress Herblock in the Washington Post lampoons the efforts in 1952 of Senators Joseph McCarthy and Jenner to place unfounded criticism on Adlai Stevenson the Democratic candidate for president. The 1952 campaign for president in the US is reminiscent of the campaigns since 2016, 2020, 2024. In 1952 the US was engaged in the Korean War and there was increasing fatigue with that war as Communist China pushed back Gen. MacArthur's forces and the armies moved back and forth across the Korean peninsula. Eisenhower offered to go to Korea to find an end to the war. The Korean War comes only a few years after China became a People's Republic in 1949 under the Communist party led by Mao-tse-tung and the Berlin Crisis. This led to an effort by Senator Joseph McCarthy and Senator Jenner in the 1952 campaign to make all sorts of criticism much of it unfounded about Adlai Stevenson who had just been elected Governor of Illinois. Eisenhower was a much respected figure and had planned not to run or run as an Independent and only agreed under much persuasion from Dewey and the Eastern Establishment (New York and Boston). Eisenhower had led American forces in the Western Command under George Marshall and president Harry Truman and had not sought the presidency only to have his name placed on the ballot in New Hampshire. In the middle of a campaign Eisenhower (Ike) did not openly refute McCarthy and Jenner but had showed considerable discomfort with their unfounded rhetoric and tactics. ...

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Key takeaways from XI's speech to the 20th Party Congress of the CCP, China's Communist Party, are shown in the Guardian. Xi presented a vision of continuity. Goals that were seen as significant were self-reliance in science and technologies and building China's capacity for innovation by building up its capabilities in science education. This was stated as the main driver of future growth. It does not favor decoupling with the US even though the US sees it in its own interest and that of its working class to bring home manufacturing and rebuild supply chains for American self reliance - the pandemic showed the weakness of free markets approaches that ignored this. A promise to step up regulation on income distribution and wealth accumulation, to cut down the growing inequality gap that developed in the last two decades of hypergrowth.  To focus on the quality of economic growth after lessons learned on climate change. To double down on the zero covid policy. He lauded the "all out war on the virus." To continue the battle against "corruption on a scale unprecedented in our history." "Corruption is the biggest cancer that harms the vitality and affects the combat effectiveness of the party, and anti-corruption is the most thorough self-revolution. As long as there is the soil and conditions for corruption, the fight against corruption will not stop for one moment." ...

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Democrats are on a rapid schedule, and would like to pass abudget resolution by April 3, 2009. Democrats were generally enthusiastic about the first budget, and say they plan to move it quickly through both Houses of Congress. Democrats may have an easier time passing the budget than other legislation, because under Senate rules the key steps in the budget process can't be filibustered, and Democrtats have significant majorities in both chambers of Congress. Another good sign is that Democrats like Rep. Jim Cooper of Tennessee, aprominent Blue Dog in the fiscally conservative Blue Dog coalition, had high praise for the President's budget blueprint, saying it got rid of the gimmicks of previous years like not including the cost of the wars in Iraq and Afghanistan. Under Bush the wars were paid for in socalled supplemental bills. "This is more honest than any budget in many, many years. That means its also ugly. I welcome the honesty. I think its time for Americans to grapple with fundamental problems, and not pretend that wars are free and things like that." He praised the courage to make an accurate diagnosis, and he likes the fact that the deficit is projected out for 10 years. What is not not as copnspicuous is the use of optimistic assumptions in the projections out over 10 years as the economy is assumed to recover quickly which no be the case....