Keeping in mind that the “beige book” report from the Federal Reserve yesterday is only a compilation of anecdotal reports from businesses across the country, any conclusions in that report that the economy “continued to expand moderately,” and that it “continued to improve, on balance,” should be viewed with extreme caution. For buried in the report were the comments that “the housing sector remains a significant drag on the economy" and that "activity in residential real estate and new home construction remained slow across all Districts.”
With the announcement by Reuters that former Federal Reserve Chairman Paul Volcker was going to resign shortly from the Obama administration came the temptation to reminisce about Volcker’s influence during the late '70s and early '80s when inflation exceeded 13 percent and interest rates on short-term government Treasury bills hit 21.5 percent.
The United States' current corporate tax rate is far from competitive. Average combined state and federal corporate taxes are 39.2 percent, second highest among industrialized nations, just under Japan's 39.5 percent rate. But this positioning is about to change. On December 16, 2010, Prime Minister Naoto Kan approved a five percent cut on Japan's corporate tax, lowering the rate to under 35 percent.
When Bloomberg polled so-called real estate “experts” about the housing market, they expected a slight pull-back in housing prices of perhaps 0.2 percent when compared to a year ago. Instead, the Case-Shiller Index showed prices dropped four times greater than expected: “The biggest year-over-year decline since December 2009,” according to the group.
Despite their huge numbers and cultural and financial impact on the economy, the Baby Boomers (born between 1946 and 1964) have largely been unwilling to face fiscal reality. Robert Samuelson, a frequent writer for Newsweek, noted back in 2007 that “We [he is a Boomer] are trying to pillage our children and grandchildren, putting the country’s future at risk in the process. On one of the great issues of our time, the costs of our retirement, we have adopted a policy of selfish silence.”
As many as 98 banks, which took in a total of $4.2 billion from the Troubled Asset Relief Program (TARP), may fail anyway, according to a study of third quarter earnings by the Wall Street Journal. Although the federal government originally promised to use TARP funds only to help healthy banks, the Wall Street Journal’s study tells a rather different tale. The banks in question are hamstrung by “eroding capital levels, a pileup of bad loans and warnings from regulators,” much of them stemming from risky commercial real estate loans gone sour.
Earlier this month the Recover Progress Report summarized, "As of December 1, $466.8 billion of the $787 billion stimulus has been committed to states; $333.8 billion has been paid out." The $787 billion American Recovery and Reinvestment Act of 2009 (ARRA), signed into law by President Obama on February 17, 2009, has been largely forgotten, despite millions of taxpayers' dollars being consumed every day.
Despite being verbally abused and legislatively hamstrung ever since the start of the Obama administration, those CEOs arriving at the Blair House Wednesday for another Summit meeting with the President seemed in good spirits. In a pre-announcement, White House spokeswoman Jen Psaki, was all smiles: “[This] working session is an opportunity for the president to continue building strong partnerships in the business community.”
America is in the throes of economic hardship. Certain regions of the country, the once thriving Great Lakes Region, the greatest industrial area in the world, and energy-producing states, such as West Virginia and Louisiana, have been particularly hard hit.
"Greed, for a lack of a better word, is good. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit," says a disdainful Michael Douglas, in Oliver Stone's 1987 blockbuster movie Wall Street. This embellished train of propaganda is typical of populist bureaucrats and Hollywood socialites. All corporations are "evil, capitalist thugs" who rob the poor and exploit the middle class, they say. But omitted is the fact that these "evil, capitalist thugs" are the stimulators of job growth and contributors to economic prosperity.
Twenty-six-year-old Mark Zuckerberg, founder of the social networking website Facebook, has been selected as Time magazine’s Person of the Year for 2010. Facebook, which began in 2003 as a small insider website at Harvard University where Zuckerberg was a student, has exploded over the past two years to become arguably the Internet’s most used address, with nearly 600 million individuals having Facebook accounts and projections for a billion members by 2012.