December 19, 2008

CRASH TALK

Adrianne Appel, Inter Press Service - A new U.S. investigative panel is demanding answers from the U.S. Treasury about how the agency has spent money from the 700-billion-dollar bailout fund. The Congressional Oversight Panel, a four-person board authorized by Congress and led by consumer advocate Elizabeth Warren of Harvard Law School, is charged with finding out what Treasury has done with the billions it has already spent. The panel has begun gathering documents from Treasury and also is holding a series of public meetings across the U.S., to hear the public's concerns about the bailout and the economy. The panel expects to have some answers for Congress and the public by Jan. 9, when it will issue a report on its website, cop.senate.gov. The Warren panel lacks subpoena power but will work together with Special Inspector General Neil M. Barofsky, who will wield significant legal power, and the General Accounting Office, in auditing and overseeing the funds. "The public has a right to know how financial institutions that have received public money are using that money," the panel says. "Treasury should be responsible for holding individual institutions accountable for how they use the public's money." Dean Baker, Prospect - I hate to be rude, but after seeing endless new stories repeat the inaccurate claim that the compensation of UAW members is $70 an hour, it is striking that a news story on the closing of Washington news bureaus never discusses reporters' pay. If workers are losing their job, wouldn't the normal assumption be that their pay is higher than the market will bear? That is certainly how the loss of jobs in the auto industry and other manufacturing sectors is treated. Why is it different for journalists? Michel Chossudovsky, Global Research - The financial crisis is deepening, with the risk of seriously disrupting the system of international payments. This crisis is far more serious than the Great Depression. All major sectors of the global economy are affected. Recent reports suggest that the system of Letters of Credit as well as international shipping, which constitute the lifeline of the international trading system, are potentially in jeopardy. The proposed bank "bailout" under the so-called Troubled Asset Relief Program is not a "solution" to the crisis but the "cause" of further collapse. The "bailout" contributes to a further process of destabilization of the financial architecture. It transfers large amounts of public money, at taxpayers expense, into the hands of private financiers. It leads to a spiraling public debt and an unprecedented centralization of banking power. Moreover, the bailout money is used by the financial giants to secure corporate acquisitions both in the financial sector and the real economy. In turn, this unprecedented concentration of financial power spearheads entire sectors of industry and the services economy into bankruptcy, leading to the layoff of tens of thousands of workers. . . Paper wealth is transformed into the ownership and control of real productive assets, including industry, services, natural resources, infrastructure, etc. The real economy is in crisis. The resulting increase in unemployment is conducive to a dramatic decline in consumer spending which in turn backlashes on the levels of production of goods and services. Exacerbated by neo-liberal macro-economic policy, this downward spiral is cumulative, ultimately leading to an oversupply of commodities. Business enterprises cannot sell their products, because workers have been laid off. Consumers, namely working people, have been deprived of the purchasing power required to fuel economic growth. With their meager earnings, they cannot afford to acquire the goods produced. Christian Science Monitor - The housing market in California's Central Valley – and in other sharply deflated markets in parts of California, Nevada, Florida, and Arizona – is showing signs of new life. Prices have fallen so far that people of average salaries can afford to own homes again. Buyers are out in force. . . However, real estate agents remain wary given the number of vacant homes and expectations of more to be listed early next year. "The buyers are returning. And in such a strong way that, now, we are hearing in some cases there is multiple bidding, which hints that maybe pricing is reaching a bottom point," says Lawrence Yun, chief economist with the National Association of Realtors. "But inventory remains high. There is a lot of conflicting information." Boston Globe - Facing $114 million in state budget cuts, Boston Medical Center announced that 250 employees will be laid off or have their hours reduced and that patient services will be cut in key areas, including primary care, pediatrics, and geriatrics. More than half of the hospital's patients are low-income residents, so the reductions are likely to hit hardest on the city's most vulnerable, the immigrants, poor families, and senior citizens who receive free or subsidized care at the hospital, patient advocates said. The cuts were to take effect immediately.

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