The Obama administration is still thinking bank nationalization. In the latest twist to the saga of troubled American megabanks, the New York Times reported on April 19 that administration officials are considering converting bailout loans to the 19 biggest U.S. banks into shares of common stock, allowing them to stretch further the estimated $134.5 billion remaining of the $700 billion bank bailout fund passed by Congress last October.
There's something fundamentally wrong with the world when a country known for being the very embodiment of Old World socialism — Sweden — serves up an object lesson in capitalism to the United States. Amid all the global furor surrounding government bailouts, rescue packages for corporations deemed "too large to fail," and scandalous executive bonuses shelled out with taxpayer dollars, tiny Sweden has been quietly doing the right thing where its own pivotal domestic automaker, Saab, is concerned.
It's official: the Obama administration intends to nationalize the entire financial sector. If there were any lingering doubts as to the intentions of President Barack Obama and Treasury Secretary Timothy Geithner, they were dispelled by an announcement on March 26 detailing the Treasury Department's new "framework for regulatory reform."
The Obama administration is now in the business of subsidizing the auto parts industry. In yet another slug of taxpayer money intended to prevent the collapse of GM and Chrysler, the Treasury announced on April 8 it was making available $5 billion in short-term financing for auto parts suppliers. The money is intended to keep manufacturers and suppliers of parts to GM and Chrysler afloat while the beleaguered automotive giants struggle for survival.
The U.S. Citizenship and Immigration Services (USCIS) announced on April 8 it has received enough H-1B applications to meet the congressionally mandated cap of 85,000 H-1B visas for fiscal year 2009. The H-1B visas are given to foreign workers in “specialty occupations” (science, engineering, law, medicine, computer programming, etc.) where U.S. employers have filed petitions claiming there are not qualified U.S. applicants to fill the jobs.
“The U.S. may suffer further job losses in the coming months” began the April 3 Bloomberg.com story on federal government reports that the U.S. economy shed an estimated 633,000 jobs in March. The same federal report also revised upward the estimate of job losses for January by nearly 100,000, to 741,000 (the earlier estimate for January was 655,000 jobs lost). The unemployment rate now stands at 8.5 percent, the highest in more than 25 years.
In a move heralding the Obama administration’s most aggressive intervention in the business sector to date, the federal government has forced GM CEO Rick Wagoner to step down. The change in leadership was announced by GM in a statement released in Wagoner’s name on Monday. In it, the former CEO said the government asked him to leave. “On Friday I was in Washington for a meeting with administration officials,” Wagoner begins. “In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have.”
On February 4, Rep. Rosa DeLauro (D-Conn.) introduced the Food Safety Modernization Act of 2009 (H.R. 875) in the House. Its stated objective sounds rather benign — even beneficial: "To establish the Food Safety Administration within the Department of Health and Human Services to protect the public health by preventing food-borne illness, ensuring the safety of food, improving research on contaminants leading to food-borne illness, and improving security of food from intentional contamination, and for other purposes."
For the fourth time in six months, the federal government is giving billions of taxpayer dollars to AIG, following the latter’s announcement of a $61.7 billion fourth quarter loss — this despite the massive bailout shoveled AIG’s way by the Bush administration last September. By the terms of this latest lifeline (“life support” would be a more apt metaphor, since the patient has been clinically dead for many months), the federal government is extending an additional $30 billion in loans to the former insurance giant and allowing more lax repayment terms on an additional $38 billion credit line from the Federal Reserve.
Figuring prominently in President Barack Obama’s newly released budget proposal for fiscal 2010 is another massive bank bailout. The Bush administration’s gargantuan $700 billion bank boondoggle was bad enough, but President Obama, not to be outdone, is proposing a positively pantagruelian $750 billion in additional relief for America’s beleaguered money-center banks.
Though the Obama administration continues to deny it, the U.S. government continues to move closer to nationalizing the nation’s largest banks. The last week of February the Federal Reserve and the Treasury Department both announced that the federal government may convert the shares of preferred stock it already owns in Citigroup and other banks into common shares, thereby acquiring voting rights and a greater measure of outright control over the institutions.