On Thursday night, Republicans in the US Senate succeeded in filibustering the newest draft of the $14 B auto bailout bill. The Bush Administration and Treasury Department moved quickly to assure everyone that they would not allow Chrysler and GM to fail, and that they were considering committing some of the $700 B financial bailout money to the cause. Many of the Republican senators who voted down the bill cited the United Auto Workers union as the reason for the breakdown of the bill. Oppositely, many union members have accused the senators in question of union busting. The Real News Network spoke to Mark Brenner, an expert on the US labor movement and auto industry, to get his opinion on the standoff.
Wall street numbers were up on Monday after news of Barack Obama’s infrastructure stimulus package and the proposed bailout of the big 3 US automakers. The DOW JONES was up almost 300 points and flirted with 9000 closing at 8,934.18. In an address on Saturday, the president-elect said his administration is going to act swiftly on a recovery plan and new stimulus package as soon as he is sworn in January. The package includes: Upgrading federal buildings to make them more energy efficient; the largest road and highway rebuilding program since the 1950’s; modernizing and upgrading school buildings across the US and upgrading both broadband Internet service and access for all. The Real News Network spoke to Editor of the Left Business Observer, Doug Henwood. Henwood says the stimulus can generate some growth but the structural problems in the US economy like wealth disparity needs to be addressed for long-term gain and that’s not going to be easy to do.
As the economic crisis continues to deepen, many are wondering if this recession will turn into a depression. Unemployment is up, the dollar is down, and US markets have lost nearly half their share values over the past year. The Real News Network spoke to economist Peter Schiff.
More than half a million jobs were lost in the US in November, the largest loss in a single month since 1974. Though initially the announcement had a negative effect on the markets, by the end of the day Wall Street again forgot about the little guy, the Dow closed up 260 points. The more than 1.2 million jobs lost over the past 3 months, and the 11th straight month of job losses, bring the unemployment rate to 6.7 per cent, the highest in 15 years. Also this week the Department of Agriculture released figures that show food stamp beneficiaries increased by 17 percent in the past year. That’s more than 31.6 million or 1 out of every 10 people in the US receiving food stamps or taking part in the Supplemental Nutrition Assistance Program. TRNN spoke to Dedrick Muhammad of the Institute for Policy Studies. Muhammad says that 6.7 percent is not the true unemployment number because it does not include the underemployed and those who have stopped looking for work. Muhammad also says that the bailout is a "trickle down" bailout, that by giving money to the wealthiest institutions somehow this is supposed to help the middle class and working class.
Communities crushed by the foreclosure crisis are dealing with hundreds, and sometimes thousands, of abandoned and deteriorating houses. As local governments scramble to grapple with the problem, Congress, who bailed out Wall Street to the tune of $700 billion, has provided little relief. Four billion dollars has been set aside by Congress to help communities buy up and repair foreclosed houses, but will it be enough?
With the credit crisis continuing to worsen, the US federal government is pledging a seemingly endless amount of money to shore up failing institutions hit hard by toxic assets. Federal government pledges now top $8 trillion with the most recent $800 billion announced Tuesday. The Real News Network spoke to journalist and author Nomi Prins.
On Monday, Treasury Secretary Henry Paulson and President George Bush announced they would be committing $20 billion in capital and guaranteeing a record $306 billion in risky assets now belonging to CitiGroup, at one time the world’s largest and most profitable financial institution. Meanwhile, Obama announced the twin towers of his economic team, Tim Geithner, current head of the New York Federal Reserve, and Larry Summers, former Treasury Secretary under Clinton, to head-up the Treasury and the White House National Economic Council respectively. In our interview with Timothy Canova, Timothy provides a historical analysis of Geithner and, in particular, Summers. He believes that a great deal of the current economic crisis can be put on Summers for his role as Treasury Secretary in the deregulation of the derivatives market, and Geithner for the refusal to re-regulate that market, and in doing so allowing it to grow to unthinkable proportions. He ends by noting that neither Summers nor Geithner have admitted openly that their actions and commitment to deregulation were wrong, something that Alan Greenspan did in a congressional hearing just last month.
In the first part of our discussion with Jim Stanford and Justin Fox, the two discuss what they see as the causes of the current crisis in the automotive industry, the importance of that industry to the North American economy, and debate the wisdom of allowing the companies in question to go bankrupt.
While everyone was debating the wisdom of giving $700B over to the US Treasury to divide amongst failing banks in late September, the Treasury Department silently changed the tax code and in doing so opened up an opportunity for banks to save billions when acquiring other banks. The Associated Press reports that, in some cases, banks will actually make money in the act of buying up their competitors. They point to Wells Fargo’s effort to acquire Wachovia, a deal that will cost roughly $15B but that, under the new tax code, will save Wells Fargo $20B. Danny Schechter believes that this is a prelude to the type of activities that can be expected from an empowered Treasury Department. He also points out that this is in line with the effect that the bailout bill itself is having, with the bailout money being used to acquire competitors instead of financing the flow of credit. Meanwhile, Danny says, the Democrats are claiming that the bailout process lacks transparency, after they promised during the bailout debate that they would ensure oversight while pushing the bill through Congress. Danny also indicates that all levels of government are stalling on what to do about the quickly sinking auto industry, a problem being made worse by the power vacuum in the White House as there are still two months before Obama takes over as president. At the end of the interview, Danny relays the rumors that Obama is looking to past administrations to fill his empty slot at the recently empowered…
Guardian: CEO’s of General Motors, Ford, and Chrysler paint a picture of an industry in crisis
Following the wrap of the G-20 summit, The Real News Network spoke to Prof. Leo Panitch, and economist, Doug Henwood about what was proposed at the meeting and what was accomplished. Henwood says its very difficult to imagine these varied countries coming together and ceding sovereignty to an international economic body. Panitch says it’s time to democratize the financial system while they’re on their back heels.
Panellists: Paul Lashmar is an investigative journalist and is currently undertaking a research project into the reporting in the UK of the sub-prime market prior to August 2007 for publication in Journalism Practice. He writes for various newspapers including the Independent on Sunday, The Guardian and The Evening Standard, and his specialist areas include terrorism, intelligence, organised crime, offshore crime, business fraud and the Cold War. Gillian Tett is an assistant editor of the Financial Times and oversees the global coverage of the financial markets. In 2007 she was awarded the Wincott prize, the premier British award for financial journalism, for her capital markets coverage. She was named British Business Journalist of the Year in 2008. Ann Pettifor is a political economist and author of The Coming First World Debt Crisis (Palgrave, 2006) and editor of The Real World Economic Outlook (Palgrave, 2003). She is a fellow of the new economics foundation (nef) in London and director of Advocacy International. Michael Blastland is a freelance writer and broadcaster and co-author of The Numbers Game: The Commonsense Guide to Understanding Numbers in the News, in Politics, and In Life. A journalist all his professional life, he started on weekly newspapers before moving to the BBC where he made current affairs programmes for Radio 4, such as Analysis and More or Less. Paul Mason is Newsnight's Economics Editor with a brief to cover an agenda that he sums up as: "profit, people and planet". He is also the author of…