Where do the kinds of jobs that will grow the economy come from? Can the federal government simply create them through more spending? We are about to find out — yet again.
More than $16 billion of investors’ money evaporated in Ponzi schemes in 2009, according to the Associated Press. Although the names Bernie Madoff and Allen Stanford were in the headlines in 2009, many other Ponzi schemes were uncovered as the economy declined, making continued payouts to investors impossible.
GMAC Financial Services, the former financial arm of General Motors, is set to receive yet more federal bailout funds as the year draws to a close. According to a Reuters report, GMAC will get roughly $3.5 billion in additional federal government money to help cover losses on the mortgage market. Mortgage-related assets, considered the key to GMAC’s return to profitability, comprise roughly a third of GMAC’s total $178 billion balance sheet.
Little noticed (so far) by the American public, a Christmas Eve announcement by the Obama administration to expand the amount of bailout monies available to ailing mortgage giants Fannie Mae and Freddie Mac is already stirring controversy among Capitol Hill lawmakers sick of fueling the bailout gravy train at the expense of an increasingly restive voter base.
The prime architect of the Federal Reserve was German immigrant Paul Warburg. Arriving in America in 1902 with brother Max, he married into the family controlling Kuhn, Loeb and Company, America’s prime international banking firm. By 1907, he was earning $500,000 annually, an enormously generous salary at a time when there was no income tax and inflation had not begun eroding the value of the dollar.
When MSNBC headlined the report that existing home sales surged by 7.4 percent in November (according to the National Association of Realtors), it suggested that such an improvement boosted “recovery hopes.” Others jumped on the recovery bandwagon, including Treasury Secretary Timothy Geithner, and former Vice Chairman of the Federal Reserve Board Alan Blinder.
Transportation Secretary Ray LaHood announced on December 21 that beginning this spring the federal government is going to impose hefty fines on airlines that keep passengers stranded on the tarmac without food, water, or letting them get off the plane. LaHood called this “President Obama's Passenger Bill of Rights.”
Ford Motor Company disclosed on December 21 that it is offering to buy out 41,000 United Auto Workers (UAW) union members with early retirement deals as the company attempts to reduce payroll costs and return to profitability by 2011.
Chinese officials have once again publicly stated their intention to buy less U.S. Treasury debt, according to the December 18 Shanghai Daily newspaper. "The U.S. current account deficit is falling as residents' savings increase, so its trade turnover is falling, which means the US is supplying fewer dollars to the rest of the world," Zhu Min, deputy governor of the People's Bank of China, said. "The world does not have so much money to buy more U.S. Treasuries."